[1999] PNGLR 83

PAPUA NEW GUINEA

[national court of justice]

CANISIUS KARINGU

V

PAPUA NEW GUINEA LAW SOCIETY

waigani: kapi dcj
15, 23 April 1999

lawyers & practitioners – Lawyers Act 1986, s 45 (1) – Application to review a decision of the Council of Law Society – Lawyers (Trust Account) Regulations 1990, s 13 – Responsibility of partners to report the trust account opened in the name of the firm.

Facts

The plaintiff filed originating summons seeking to review the decision of the Law Society Council. The matter went before the National Court and in a ruling dated 18th September 1996; the Court ruled that the review should be pursued by way of a prerogative writ of certiorari under Order 16 of the National Court Rules. The Court dismissed the originating summons.

The plaintiff appealed to the Supreme Court (SCA 69 of 1996) and in a decision dated 30th October 1997; the Supreme Court quashed the decision of the National Court and reinstated the originating summons to be dealt with by the National Court. The originating summons is now before the court for determination on the merits.

The plaintiff, a lawyer, was practising law in partnership with Mr Sitapai in Port Moresby under the firm name Karingu Sitapai Lawyers. The plaintiff was suspended from practice for a period until January 1995. In early 1996, he applied for an unrestricted practising certificate pursuant to Part IV of the Lawyers Act. The Council of the Law Society (Council) first considered the application at its meeting of 14th March 1996 and declined to issue a certificate on the grounds that the plaintiff provided a report on one trust account only and not on all of the firm’s trust accounts. Subsequent to this, the plaintiff wrote to the Council giving an explanation that he and his partner had opened two trust accounts in the name of the firm. That he operated one trust account and Mr Sitapai operated the other. The report forwarded to the Council by the accountant was only in respect of the account, which he operated. The Council subsequently reconsidered its decision and maintained its position. The Council confirmed its position and accordingly declined to issue the practising certificate.

The issue in this case is; whether the plaintiff is required to provide a report in respect of the trust account operated by Mr Sitapai in the name of the firm? 

Held

1.	This question may be resolved by reference to the provisions of the Regulations. The Regulations deal with two situations; where a lawyer is practicing on his own and where lawyers are practicing in a partnership (see s 13(4) of the Regulations). Clearly, where the partnership is receiving money from clients in the name of the firm, all partners must be responsible for keeping the records of the account in accordance with the law. Form 1 in the Schedule reflects this. Lawyers who enter into such partnerships must accept joint responsibility to account for client’s moneys. This position is confirmed by the provisions of the Partnership Act Ch 148.

2.	The fact that one trust account was operated by the other partner does not remove the responsibility or obligation of the other partner to report on the trust account for the purpose of an application for a practicing certificate.

3.	That the Council was correct in reaching the decision that it was not satisfied with the report of the trust account.

Papua New Guinea cases cited

SCA 69 of 1996; Canisius Karingu v Papua New Guinea Law Society (2001) SC674.

Counsel

C Karingu, in person.
T Elemi, for the defendant. 

23 April 1999

Kapi dcj. This is a review pursuant to s 45 (1) of the Lawyers Act 1986 (as amended) (Act).

Mr Canisius Karingu (plaintiff), a lawyer, was practising law in partnership with Mr Sitapai in Port Moresby under the firm name Karingu Sitapai Lawyers. The plaintiff was suspended from practice for a period until January 1995. In early 1996, he applied for an unrestricted practising certificate pursuant to Part IV of the Lawyers Act. The Council of the Law Society (Council) first considered the application at its meeting of 14 March 1996 and declined to issue a certificate on the grounds that the plaintiff provided a report on one trust account only and not on all of the firm’s trust accounts. Subsequent to this, the plaintiff wrote to the Council giving an explanation that he and his partner had opened two trust accounts in the name of the firm. That he operated one trust account and Mr Sitapai operated the other. The report forwarded to the Council by the accountant was only in respect of the account which he operated. The Council subsequently reconsidered its decision and maintained its position. The Council confirmed its position in its letter dated 1st April 1996 to the plaintiff in the following terms:

"Be advised that at the meeting of the Council on 22nd March 1996, the Council confirmed its earlier decision that the trust account audit report submitted on your behalf did not satisfy the Council as to the requirements of the Regulations.

In particular, the Council was not satisfied that this report correctly reflected the partnership between you and Mr Sawi Sitapai. The Council is somewhat concerned with your advice that two separate trust accounts were operated by each partner separately.

In the circumstances therefore, the Council was not satisfied that the proper requirements of the Regulations had been met.

Accordingly, the Council declined to issue you the practising certificate."

The plaintiff filed originating summons seeking to review the decision of the Council. The matter came before the National Court and in a ruling dated 18th September 1996; the Court ruled that the review under the Act should be pursued by way of a prerogative writ of certiorari under Order 16 of the National Court Rules. The Court dismissed the originating summons.

The plaintiff appealed to the Supreme Court (SCA 69 of 1996) and in a decision dated 30 October 1997; the Supreme Court quashed the decision of the National Court and reinstated the originating summons to be dealt with by the National Court. The originating summons has now come before me for determination on the merits.

The Supreme Court in SCA 69 of 1996 indicated the nature of the review now before me. The Court said:

"We are satisfied that pursuant to s 45 (2) the Court ‘shall review the application to the Society….’ which in our view amounts to a reconsideration of the application. The orders that the Court may make are also supportive of our view that the review envisaged is in fact a reconsideration of the application. The orders that the Court may make are to:

(a)	uphold the decision of the Society to refuse the application; or

(b)	order that the application be granted"

Both Counsels were agreed that the review should be conducted on the basis of the materials that went before the Council. For the relevant matters that went before the Council, the plaintiff relies upon three of his own affidavits sworn 10 April, 26 April 1996 and 8 April 1999 respectively. Counsel for the Council relies on affidavit of Loani Henao sworn the 3 September 1996. The relevant facts for the purposes of the review are not disputed.

The plaintiff submits that there is requirement under the Act for a lawyer to provide a report on a trust account but there is no provision for a partnership to provide the same. He submits that the report provided to the Council in respect of the trust account which he operated was sufficient and he had no responsibility for the trust account operated by his partner. He submits that he has satisfied the requirement for provision of a report of the trust account he operated and the Council fell into error in not granting the certificate.

Counsel for the Council submits that under s 13 of the Lawyers (Trust Account) Regulations 1990 (Regulation), an applicant for an unrestricted practising certificate must provide a report of all the partnership trust accounts. He submits that the plaintiff has only submitted the report on one trust account and not the other. He submits that the plaintiff as a partner is responsible for the trust account operated by Mr Sitapai under the name of the firm. He submits, therefore, that I should uphold the decision of the Council.

The issue in this case is; whether the plaintiff is required to provide a report in respect of the trust account operated by Mr Sitapai in the name of the firm? 

A lawyer who wishes to obtain a practising certificate may apply in accordance with the provisions of Part IV of the Act. Section 13 (3) of the Regulations requires that an applicant who applies for a certificate shall forward to the Council a report of an accountant setting out the various matters in terms set out in form 1 of the Schedule to the Act that the trust account is in order. 

In the present case, the firm opened two trust accounts under the name of the firm. The firm may operate more than one trust account (see s 3 (2) of the Regulations). Where a lawyer is practising alone, there is no question that he must provide a report on all the trust accounts. In the present case, the firm opened two trust accounts, which were operated separately by the two partners. The question is; whether, a partner is obliged to forward a report to the Council in respect of both accounts for the purpose of an application for a practising certificate?

The plaintiff submits that he is not obliged to forward a report on the trust account operated by Mr Sitapai. He submits that he is only obliged to report on the trust account operated by him and as he has done this, he is entitled to a practising certificate.

Counsel for the Council submits that the plaintiff is obliged to provide a report in respect of all the trust accounts of the firm.

This question may be resolved by reference to the provisions of the Regulations. The Regulations deal with two situations; where a lawyer is practising on his own and where lawyers are practising in a partnership (see s 13 (4) of the Regulations). Clearly, where the partnership is receiving money from clients in the name of the firm, all partners must be responsible for keeping the records of the account in accordance with the law. Form 1 in the Schedule reflects this. Lawyers who enter into such partnerships must accept joint responsibility to account for client’s moneys. The fact that one trust account was operated by the other partner does not remove the responsibility or the obligation of the other partner to report on the trust account for the purposes of an application for a practising certificate. 

This position is confirmed by the provisions of the Partnership Act Ch 148. I find that the Council was correct in reaching the decision that it was not satisfied with the report of the trust account.

I would uphold the decision of the Council in refusing to grant the practising certificate. I dismiss the review with costs to the defendant.

Mr Canisius Karingu in person.
Lawyers for the defendant: Fiocco Posman & Kua.