Council of the Law Society of NSW v Alkhair [2022] NSWCATOD 111

Council of the Law Society of NSW v Alkhair [2022] NSWCATOD 111

In this case Greg Walsh represented Mr Alkhair in respect of an allegation of professional misconduct made against him by the Law Society of NSW.

Rule 9 of Legal Profession Uniform Law Australian Solicitors Conduct Rules 2015 prohibits the disclosure by a solicitor of any information which is confidential to the client acquired by a solicitor in the client’s engagement. The rule provides that in certain circumstances, a solicitor may disclose information which is confidential to the client.

The solicitor was admitted on 13 February 2004. He had acted for Mr Navid Moraki and Mrs Moraki on the purchase of two properties at Warrigee and Castle Hill. The Moraki’s had entered into a loan agreement one Omar El-Cheikh dated 12 October 2016. Mrs Moraki borrowed $900,000 from Mr El-Cheikh based on the Castle Hill property as security,

The solicitor acted for Mrs Moraki in connection to the loan agreement. Mr Joseph Di Mauro of DSA Law acted for Mr El-Cheikh in connection with the loan agreement.

A dispute arose in respect of Mrs Moraki and Mr El-Cheikh in relation to the loan agreement and proceedings were commenced in May 2017 in the Supreme Court by Mr El-Cheikh and El-Cheikh Group Pty Limited against Mrs Moraki and Iconic Constructions Australia Pty Limited to recover the loan funds of $900,000. Those proceedings were heard by Kunc J.

A critical issue in the proceedings before NCAT was whether the solicitor had breached client confidentiality. He in his Reply had admitted that he had breached client confidentiality, however, this was on the basis of quite exceptional circumstances. 

The Tribunal referred to a number of important judgments including Riordan J and Babcock and Brown DIF Ill Global v Babcock & Brown International Pty Ltd [201 5] VSC 433. His Honour referred to an exception that manners of common or public knowledge between a client and a solicitor are otherwise confidential against all persons unless by reason of implied direction or otherwise, the solicitor was authorised to provide confidential information to a third party. There is no doubting that circumstances of confidence can lose its characterisation of confidential if it has been released into the public domain; Nash v Timber Corp Finance Pty Ltd (in Liq) in the matter of bankrupt estate of Nash [2019] FCA 957 at 77.

At the time of the solicitor speaking to Mr Di Mauro, he was aware that Mrs Moraki was denying the advance of monies by Mr El-Cheikh in the Supreme Court proceedings. However, Mr Di Mauro was not a partner, principal, director or employee of the solicitor’s law practice, or a person otherwise engaged by that law practice for the purposes of delivering or administering legal services in relation to Mr and Mrs Moraki. As such, the information provided by the solicitor to Mr Di Mauro was confidential to Mr and Mrs Moraki, in that it concerned communications between Mr and Mrs Moraki, and the solicitor in relation to or connected with the loan agreement.

An issue that arose was that the receipt of funds by Mrs Moraki pursuant to the loan agreement was a matter directly in issue in the Supreme Court proceedings. As such, the communications between the solicitor and Mr and Mrs Moraki were of a kind that they would expect to be kept confidential.

Greg Walsh on behalf of the solicitor raised three arguments in respect of the proper characterisation of the solicitor’s conduct.

Firstly, it was pointed out that the solicitor was simply stating in reality what was the obvious and that both Mr Di Mauro and the solicitor’s client were frequently parties to the disclosure of the nature and effect of instructions provided by Mrs Moraki in respect of the conveyancing and loan transactions for the Castle Hill property.

Greg Walsh also submitted that the disclosure to Mr Di Mauro by the solicitor involved open or shared communications, such that the Conduct Rules permitted that disclosure as far as the solicitor’s state of mind was concerned, it was submitted by Mr Walsh that having regard to conversations of Mr Moraki, the solicitor believed that there was no dispute by him that monies were owed to Mr El-Cheikh. Also, that such communications had been carried out by Mr El-Cheikh to Mr Di Mauro who was his solicitor in Supreme Court proceedings.

The solicitor conceded that he had not sought specific consent from the solicitor Mr Alameddenie to make disclosure of the otherwise confidential information to Mr Di Mauro.

Greg Walsh relied upon the decision of the NSW Court of Appeal in Marshall v Prescott [2015] NSWCA 110 and the passage from the judgment of Beazley P with whom MacFarlen JA and Emmett JA agreed. On behalf of the solicitor, it was contended that what had occurred was that of ‘shared information’ to the effect that monies had been advanced by Mr El-Cheikh under the loan agreement to enable the purchase of the property by Mrs Moraki.

The NCAT made findings that the solicitor had breached client confidentiality. However, there were a number of factors which were relevant to whether there was any implied authority to disclose confidential information to Mr Di Mauro. It was the finding of the Tribunal that the conduct which was established on the evidence and admitted by the Respondent were serious and went beyond merely falling short of a standard of competence and diligence that a member of the public was entitled to expect of a reasonably competent lawyer within the meaning of s.296 of the Uniform Law.

The solicitor was reprimanded and fined $4,000 and ordered to undertake appropriate courses so as to maintain the highest professional standards within the legal profession.

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