N2361

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS. NO. 25 Of 2003

TOBY BONGGERE
Applicant

AND:

PAPUA NEW GUINEA LAW SOCIETY
Defendant

GOROKA:	 	KANDAKASI, J.
2003:	14th & 21st March

LAWYERS – Application for Practicing Certificate - Requirements that must be met - Provision of trust account audit report - Conflicting audit reports – Lawyer seeking to justify deficiencies in audit reports after having relied on it and the Law Society rejecting it – No independent and credible evidence provided to support purport justification for deficiencies in audit reports –No case made out for grant of orders sought – ss.35 to 47 Lawyers Act 1996 & ss.1, 3 to 10, 12 & 14 Lawyer’s (Trust Account) Regulations 1990.

LAWYERS – Lawyers duty bound to have readily available the Lawyers Act 1996, The Professional Conduct Rules and the Lawyers (Trust Account) Regulations as the necessary tools of their trade – A failure to have is inexcusable and could amount to a breach of the Professional Conduct Rules and could provide the foundation for a conclusion that the lawyer may have acted contrary to requirements of the law.

PRACTICE & PROCEDURE – A plaintiff under an obligation to demonstrate his statutory or other basis for his claim or action – Court’s under no obligation to identify basis for a plaintiff’s action – Where a lawyer is a party there is a higher duty for him to demonstrate the legal basis for his action and that the relief he seeks is one that can be granted - A failure to do so may lead to the conclusion that there is no legal basis for the action. 

LAWYERS - PRACTICE & PROCEDURE - Lawyers (Trust Account) Regulations 1990 - Application for waiver of the requirements under the Regulations – Application must be supported by evidence showing that the intent of the regulations has not and will not be defeated and that the applicant is a trustworthy and therefore a fit and proper person to practice law.

STATUTORY INTERPRETATION - Lawyers (Trust Account) Regulations 1990 – Regulations are intended to protect clients from unscrupulous lawyers and to make lawyers accountable – The requirements of the regulations are important and can not be readily dispensed with, except in cases where the intent of the legislation has and will not be defeated – An applicant seeking a waiver of the requirements must show a case for waiver by appropriate evidence that the intent of the legislation has not and will not be defeated by a waiver – ss. 1, 3 to 10, 12, & 14 Lawyers (Trust Account) Regulations 1990.

Papua New Guinea Cases Cited:
The State v Cosmos Kutau Kitawal (No 1) (unreported judgement delivered 15/05/02) N2266.
Bank of Hawaii (PNG) Ltd v. Papua New Guinea Banking Corporation & Ors (unreported judgement delivered 08/06/01) N2095.
Danley Tindiwi & Ors v. John Nilkare & The State [1984] PNGLR 191.
Re Moresby North East Parliamentary Election (No.1): Goasa Damena v. Patterson Lowa [1977] PNGLR 424.
SCR No. 1 of 1982: Re Philip Bouraga [1982] PNGLR 178.
Peter Aigilo v Sir Mekere Morauta Prime Minister and Minister for Treasury Chairman of National Executive Council & Ors (No 1) (unreported judgement delivered 03/08/01) N2103.
Karingu v. Papua New Guinea Law Society (unreported and unnumbered judgement) SCA 69 of 1996.
Curtain Brothers (Queensland) Pty Ltd and Kinhill Kramer Pty Ltd v The State [1993] PNGLR 285.
Emily Paneyu Dirua v. Papua New Guinea Law Society (unreported judgement delivered 19/07/96) N1467.
Canisius Karingu v. Papua New Guinea Law Society (unreported judgement delivered 23/04/99) N1842.
Pwesei Benson Lomai v. Papua New Guinea Law Society (unreported judgement delivered on 04/12/98) N1854.

Overseas Cases:
Blackburn v. Flavelle (1881) 6 App.Cas. 628.

Texts Cited:
Craies on Statute Law, 7th ed., pp. 259-260.

Counsel:
Mr. T. Bonggere in Person.
Mr. M. Mukwesipu for the Defendant.

21st March 2003

KANDAKASI, J:	The Plaintiff, Mr. Toby Bonggere was refused both an Unrestricted and a Restricted Practicing Certificate despite three repeated applications to the Papua New Guinea Law Society (Law Society). He is now applying by origination summons for orders that:

1.	The requirements for him to file his trust account audit report for the period ending 28th February, 1998 be waived; and 
2.	The Defendant issues either a Restricted or an Unrestricted Practicing Certificate to him.

He claims that his trust account records, books and client files (records) for the period ending 28th February 1998 were lost to criminals after the police in Mt. Hagen had locked him and other tenants out of the premises he was operating out off. As a result of that he says, he is not able to meet the requirements for him to produce and submit to the Law Society, his trust accounts’ audit report (audit report). But this fact was not made known to the Law Society, either before or at the time of making his application. He is not arguing specifically in any way that the Law Society was wrong in refusing to grant him an Unrestricted or a Restricted Practicing Certificate. His main argument without pointing to any specific provision of the Lawyers (Trust Account) Regulations 1990, (LTAR) or any other law, is that this Court has a discretion to grant the orders he seeks and asks this Court to grant him those orders. 

The Law Society is opposing the application saying there is no truth in what Mr. Bonggere is claiming. It also argues that the requirements for the production of an audit report is an important requirement as a matter of law, which has an important public policy consideration. As such, it can not be readily dispensed with except in exceptional circumstances. It also argues that Mr. Bonggere has not made out a case for a waiver of the requirements for the provision of an audit report.

Issues 

These arguments present a number of issues for determination. These are:

1.	Is the claim by Mr.Bonggere that police locked him out of his office and his records were eventually lost to vandals credible, and if so, is it of any consequence to his application?

2.	Whether there is any discretion in this Court to waive the requirements for the provision of an audit report under the LTAR, and if so, in what circumstances can the Court exercise that dissection in favour of an application for a waiver?

3.	Subject to the answers to the above questions, has Mr. Bonggere made out a case for a waiver of the requirements for an audit report and the orders he seeks?

I will deal with these questions in the order in which they appear. But before getting into that, I will first deal with the relevant facts. 

The relevant facts

The relevant facts from which the arguments and the issues arise are straightforward and not much in issue. They emerge from the following affidavits:

1.	Affidavit of Toby Bonggere sworn 7th and file 8th January 2003;
2.	Affidavit of Toby Bonggere sworn and filed 28th February 2003;
3.	Affidavit of Ere Kariko sworn 3rd and filed on 6th March 2003;
4.	Affidavit of Toby Bonggere sworn 11th and file 13th March 2003;
5.	Affidavit of Koim Kip sworn 11th and file 13th March 2003;
6.	Affidavit of John Coonmer sworn 11th and file 13th March 2003;

Through his affidavits, Mr. Bonggere says he has been practicing as a sole practicing lawyer since 1984 under the name Bonggere & Co. Lawyers. In 1994, he moved his practice from Kundiawa in the Simbu Province to Mt. Hagen in the Western Highlands Province and established his practice at a building called the YMCA building. 

In the beginning of 1997, he was attending to a matter in the National Court in Lae, when the police in Mt. Hagen, acting on an order of the National Court in Mt. Hagen, locked up the YMCA building, resulting in a lockout of all of its tenants. The tenants were not given any opportunity to take their belongings at any stage. The building is still locked up even to this day but in a deteriorated condition due to vandalism. 

He claims to have spoken to the police, without specifying the date, time, place and the name of the policeman he has spoken to about his desire to get his records. He goes on to claim that the police did not allow him to do so. That has resulted in a complete lost of all his records and other things. He has neither made any formal requests to the police, nor has he lodged any complaints with the police on the vandalism. He has not even made any application to the Court for appropriate orders.

Sometime in 1997, Mr. Bonggere applied for a renewal of his Unrestricted Practicing Certificate. For the purpose of his application, he was requested to provide an audit report for the period ending February 1998. He therefore, sought and secured the services of three different accountants, Bob Tepra, Gigmai Towa and Thomas Serowa to do the report. The fourth one, Tengdui & Associates refused because Mr. Bonggere was not able to provide his relevant accounts records. 

Mr. Bonggere says the Law Society rejected the audit reports by Bob Tepra and Gigmai Towa because they were not registered with the Accountants Registration Board. The report by Thomas Serowa was prepared without examining his records and the report did indicate that position. The Law Society refused to grant a renewal of his Unrestricted Practicing Certificate or even issue him with a Restricted Practicing Certificate because the Law Society was of the view that, the audit report disclosed gross mismanagement, as he was not able to provide his records to the auditor. 

Following the refusal to renew his Unrestricted Practicing Certificate, Mr. Bonggere joined the firm of Simon Norum Lawyers and later Joe Wal & Company Lawyers and made two separate applications for an Unrestricted Practicing Certificate or failing that, a Restricted Practicing Certificate. Both of those applications were refused by the Law Society, insisting upon a provision of his audit report and advised him to apply to the Court for a waiver of the requirement for him to furnish a proper trust account audit report. Hence the application now before me.

The affidavits of Koim Kip and John Coonmer support Mr. Bonggere’s own evidence. This is only in relation to Mr. Bonggere setting up his practice in Mt. Hagen out of the YMCA building, as well as the lock out by police on orders of the Court and his records and other properties being lost to vandals. This is without any additional evidence or verification of what Mr. Bonggere claims as well as those by them. 

The affidavit of Mr. Ere Kariko is the only affidavit filed for the Law Society. That affidavit sets out the chronology of events and the reasons for the decision or position the Law Society took in relation to Mr. Bonggere’s three different applications for a Practicing Certificate. 

According to Mr. Kariko, the Law Society received on 16th August 1999, an audit report dated 13th August 1999 for Mr. Bonggere. The report had an attachment in the form of a letter of the same date. 

The audit report was in the required Form 1 under the LTAR, without any change except for the insertion of the relevant period covered by the report, the date of the report and a reference to an attachment in item 2 of the report. The attachment stated in effect that the author was not able to examine the basic trust account records, such as cash books, cash receipt book, cash receipt vouchers, cash payments vouchers, bank statements, trust ledgers, trial balances, deposit and cheque books and client files. This was attributed to an inadvertent misplacement or lost of the same when Mr. Bonggere shifted office location twice during the period under report or when the accountants responsible for maintaining the trust records have changed engagement. It also stated that, Mr. Bonggere provided only a summary of these records to which the author was not able to apply audit procedure and tests underlying basic trust records based on the information provided. The author was not able to certify that the trust account records were kept in the form required by the LTAR. 

Given the report, the Law Society decided on 13th September 1999, not to grant Mr. Bonggere an Unrestricted Practicing Certificate. He was informed of that decision by letter dated 21st September 1999. It reads in relevant parts:

"Council was of the opinion that the documents constituting the trust audit report for the year ended 28th February 1998 disclosed gross mismanagement of the trust account in that no proper records were provided to the auditor, and accordingly your 1999 Unrestricted Practicing Certificate application was refused." 

Mr. Bonggere then applied to the National Court in Mt. Hagen for a review of the Law Society’s decision. That application was dismissed on 13th December 1999, finding that the Law Society made no error in arriving at its decision. 

About 10 months later on 4th October 2000, the Council of the Law Society (Council) received a trust account audit report for Mr. Bonggere for the same period, ending 28th February 1998, from Gigmai Towa. At about the same time, the Council received a fresh application for an Unrestricted Practicing Certificate from Mr. Bonggere. The audit report contained no qualification under item to of the report. But in a letter dated 12th September 2000, the author stated that he had examined the trust account books and related documents kept by Bonggere & Company and concluded, "the Trust Account books were properly kept in accordance with generally accepted accounting principles". However, on the Council’s own inquiries, it found that Mr. Gigami Towa was not registered to practice as an account in any category. So by letter dated 10th October 2000, the Law Society wrote to Mr. Bonggere and informed him of that position and requested him to provide an audit report from a registered auditor. 

Following no response, the Law Society wrote to Mr. Bonggere on 27th October 2000 seeking a reply. The Law Society has no record of having received a response from Mr. Bonggere to either of those letters. 

Then on 27th March 2001, Mr. Bonggere applied for a Restricted Practicing Certificate from the Law Society. By letter dated 14th May 2001, the Law Society wrote to Mr. Bonggere informing him that his application could not be granted until the trust account audit report for the year ending 28th February 1998 was clarified. In response, Mr. Bonggere undertook by letter dated 16th May 2001 to the Law Society, to provide an audit report and asked that he be issued with a Restricted Practicing Certificate in the meantime. On 5th June 2001, the Council refused Mr. Bonggere’s application noting that the Council’s request for him to properly explain his audit report was still outstanding. He was informed of that decision by letter dated 14th June 2001.

On 4th July 2001, the Law Society received a trust account audit report for Mr. Bonggere for the period ending 28th February 1998 prepared by a Mr. Bob Tepra. This report was similar to the one done by Mr. Gigmai Towa. Also the report did not have any qualifications under item 2. The effect of this was that the author had examined the relevant records and he concluded that all was in order. The Council considered the report and resolved to find out if he was a registered auditor or an accountant and more importantly, what was his qualifications if any, under item 2 of the prescribed form. 

Subsequently, the Law Society ascertained from the Registrar of Accountants Board that Mr. Tepra was not registered as an accountant in any category. It notified Mr. Bonggere of this and the fact that there was no qualification of the report by its author. It also asked Mr. Bonggere to have that rectified using a registered auditor. This was by letter dated 10th July 2001. Mr. Bonggere responded by letter dated 24th July 2001, questioning why the Law Society was taking issue with Mr. Tepra doing his report, when he had been doing his reports in the past. At the same time, he asked that he be issued with a Restricted Practicing Certificate. 

The Council considered Mr. Bonggere’s letter and resolved that he must comply with the audit requirement and provide him with a list of the registered auditors. By letter dated 17th August 2001, the Secretary of the Law Society communicated that decision to Mr. Bonggere and provided him with a list of the registered auditors. 

On 15th May 2002, Mr. Bonggere wrote to Mr. Kerenga Kua, a member of the Council asking him to assist him (Bonggere). In that letter, he also stated for the first time that, he had lost his trust account records amongst other things to vandals following a lockout of the YMCA building by the police on a National Court Order. The Council met on 10th July 2002, considered the letter to Mr. Kua and Mr. Bonggere’s application for a Restricted Practicing Certificate and decided not to grant the application. That was on the basis that Mr. Bonggere had not complied with the requirement to provide an audit report in accordance with the LTAR. This was communicated to Mr. Bonggere by letter dated 26th July 2002. 

In the latter part of the year 2002, Mr. Bonggere applied yet again for an Unrestricted Practicing Certificate. The Secretary of the Law Society wrote to him on 4th September 2002, noting that he was already refused the application for reasons already given. He was then asked to explain if there was any reason behind the new application. Mr. Bonggere responded by letter dated 2nd November 2002, saying his records were lost to vandals after the YMCA building was locked up by police.

At a meeting held on 22nd November 2002, the Council considered Mr. Bonggere’s letter and decided against granting him a practicing certificate and advised him to apply to the National Court for a waiver of the requirements for him to provide his trust account audit report. Mr. Bonggere was notified of that decision by letter dated 10th December 2002.

Mr. Kariko also deposes that Mr. Bonggere provided a Statutory Declaration, declared on 26th November 2002, under cover of a letter dated 25th November 2002. The Council considered both of these. Mr. Kariko further deposes to Mr. Bonggere not notifying the alleged lost of his records to the Law Society immediately after it had occurred. Furthermore, Mr. Kariko deposes that no evidence from the police or from the YMCA of the loss of Mr. Bonggere’s records was provided. Still further, Mr. Kariko deposes that there is no evidence of any steps that might have taken (if any), by Mr. Bonggere to re-construct his records from for example, his bank statements. Even further, he deposes to the Law Society, having difficulty understanding how Messrs Gigmai Towa and Bob Tepra were able to provided a "clean account" in terms of not providing any qualification to their respective reports in terms of item 2 of the report form. He then queries, if indeed Mr. Bonggere’s records were lost to the vandals following a police lockout, what records, and or books did Messrs Tepra and Mr. Towa examine to arrive at the clean audit reports? 

In his latest affidavit headed "affidavit in reply", Mr. Bonggere speaks of the expenses that he has been put through to secure the services of the different auditors. He also speaks of the audit report prepared by Mr. Serowa was based on information he provided to him from memory and based on Mr. Serowa’s advice, he came up with a summary prepared by a friend. That summary formed the basis for his report but is not in evidence before me. He also says, had he known that Mr.Serowa was going to do such a damaging report, he would not have engaged him and paid for his fees. 

Mr. Bonggere takes issue with the Council that mismanagement can only be concluded from the records. As such, the absence of the records does not mean mismanagement. In his case, he says it was a lockout of his office and eventually losing his records. He also takes issue on the Council’s view as to the lack of qualification as required in item 2 of the report. He does so without addressing that point but proceeding on the basis that they did not contain any damaging statement as those in Serowa’s report. 

The remaining part of that affidavit enters into arguments on the lack of any other evidence confirming the lockout and the lost of his records to vandals. 

From these, it is clear to me that most of the facts are not in issue. What is in issue is, whether there is merit in Mr. Bonggere’s claim of the police lockout and thereafter losing his records to vandals? But before that, is the question of whether he was a legal tenant of the building described as YMCA in Mt. Hagen and whether there was in fact a National Court order for the alleged lockout? There is also the question of what is the correct interpretation to be given to the three separate audit reports provided for Mr. Bonggere in support of his application for his practicing certificate? These all come under the first issue for determination in my view, so I will consider these questions in that context.

Credibility of Mr. Bonggere’s claims

This issue requires a careful consideration of the facts before me. That in turn requires an assessment of what Mr. Bonggere claims as against what he was required to do from a common sense and logical viewpoint and given his position as a lawyer, having mandatory statutory obligations under the LTAR. In this consideration, what Mr. Bonggere in fact did will be considered.

It is trite law that, common sense and logic plays a major role in determining whether a witness and therefore his evidence are credible. I noted that in these terms in The State v Cosmos Kutau Kitawal (No 1) (unreported judgement delivered 15/05/02) N2266:

"Logic and common sense does play an important part in either the rejection or otherwise of evidence before a court of law and whether or not an accused person should be found guilty. In The State v. Gari Bonu Garitau and Rossana Bonu [1996] PNGLR 48, applying a logical and common sense approach, the National Court found the defendants guilty of murder even when there was no evidence directly showing that the defendants had killed the deceased. The Court proceeded to convict them, when the defendant’s failed to provide a reasonable explanation for the appearance of the badly wounded deceased body in their house. On appeal, the Supreme Court affirmed the National Court’s approach and dismissed the appeal: see Garitau Bonu & Rosanna Bonu v. The State (24/07/97) SC528 and Paulus Pawa v. The State [1981] PNGLR 498 for an earlier authority on point."

In this case, the question to ask is, what was Mr. Bonggere reasonably required to do if indeed, he was locked out of his office and he eventually lost his records? I am of the view that, he was required to take serious and meaningful steps to remove his records from the YMCA building before the alleged vandalism took place. He could have started that process by asking the police to allow him access to the premises to do just that, if there was room in the alleged National Court Orders on which the police acted. As this involved a Court Order and since it impinged on his duties under the LTAR, it was incumbent on him to put on record formerly what was happening to his practice as a result of the lockout and the eventual lost to vandals. If he was not getting or it was not possible to get any cooperation from the police, it was incumbent on him to apply to the National Court for appropriate orders to allow him access to the building to get his records. But he neither made any such application nor has he made any formal requests to the police. There is simply no documentary or other direct and credible evidence of what exactly he did, except for his claims in his affidavit.

It was also incumbent upon him to immediately notify the Law Society of the lockout and the eventual lost of his records. But he did not do that. Further it was incumbent upon him to take some steps toward re-constructing his records with the assistance of his bank account statements. This was not difficult to do. It only required a request to his bank for the provision of a statement of his accounts for the relevant period. Then based on that, he would have reconstructed his accounts. There is no evidence of any step being taken in this regard. Then when he first applied for a renewal of his Unrestricted Practicing Certificate, he was obliged to notify the Law Society of the status of his trust account records and the steps he was taking to reconstruct them and or flag any problems he might be facing. He did not do that.

Instead, from the attachment or the qualifications accompanying the first audit report, it was indicated that the records were lost or misplaced in the process of shifting of office by Mr. Bonggere twice in the period covered in the report. What Mr. Bonggere now claims after the Law Society refused his application, is contrary to what he had put to the Law Society and in any case, is not supported by any independent and credible evidence.

As it may be obvious from the above, there are inconsistencies given in the reason for the unavailability of Mr. Bonggere’s trust account records. Neither Mr. Bonggere nor any of his witnesses provide any explanation for this. All that Mr. Bonggere says is that, he told Mr. Serowa that he had lost his records. He is not taking any direct issue on what the report stated as the reason for the missing of his records. 

The subsequent audit reports proceeded on the basis that the relevant records existed and they were examined to arrive at the view the respective authors arrived at. They did not qualify their reports in any way. The claim by Mr. Bonggere in the form of the affidavits and the various letters to the Law Society that the records were lost ought to have been stated but was not done. This introduces a new inconsistency, especially as between the first audit report and the subsequent ones. The first stated there were no records while the last two suggest that the records were there and that they were examined. Again Mr. Bonggere provides no explanation for this and deposes to the records being lost, thereby contradicting the last two audit reports. 

Further, until the Law Society rejected the audit reports, Mr. Bonggere chose to accept them as true and correct in every respect. This is evidenced by the fact that Mr. Bonggere relied on them and applied on the strength of these audit reports for an Unrestricted and later a Restricted Practicing Certificate. He presented them as correct when he submitted them to the Law Society. In so doing, he has in my view, misled the Law Society.

Furthermore, it was incumbent upon Mr. Bonggere to show that the lost or misplacement of the records did not defeat the purpose of the LTAR. He could have done that by providing a list of his clients at the time of the loss and state whether he received any monies from any of them. If he did receive any monies from them, he would have then stated whether that was for a payment of a debt owed to him or a deposit on account of his fees or for a particular purpose. Where there were deposits, he would have then provided an explanation as to the date of their deposit in the trust account, whether there were any withdrawals of such funds, how much and for what purpose. He would have then had this verified by a number of his clients. This would not have been a difficult thing to do, as he would have still recalled who his clients were in the last 12 months. Then with the assistance of his bank account statements, he would have accounted for the monies he may have received into the trust account, any paid out from the trust account and the balance as at the time of the lockout and the eventual alleged loss of his records. There is no evidence on this aspect.
 
In these circumstances, I find what Mr. Bonggere claims incredible. It defies any sense of logic and common sense response to a situation as a reasonable and prudent lawyer should have. So the answer to the first part of the first question is no. Given that answer, it is not necessary to answer the second part of that question.

There are at least two further factors casting some doubt to the credibility of Mr. Bonggere’s claims and lend support to the above finding. The first is in relation to the alleged National Court Order on which the police allegedly locked out the tenants to the YMCA building. If indeed there was such a Court Order, Mr. Bonggere could have easily obtained a copy of the Order and annex it to his affidavit to support his claim but he has not done that. This was again not a difficult thing to do. The police could have provided him with a copy of the Order, if he asked for one. Even if the police did not, he could have easily obtained a copy from the National Court Registry in Mt. Hagen. There is no explanation for the lack of such evidence when such evidence should have been produced.

The second factor is the question of his tenancy and its status out of the YMCA building. He has not provided any evidence confirming his claim of being a tenant of that building, except for the affidavit of Mr. Koim Kip. But this person appears to be someone lacking any ability to read and write in English. This is evidenced in the way in which the deponent has signed his affidavit. In any case, it is clear from his affidavit, that Mr. Kip or whoever he was representing did not have the legal title over the property. 

This clearly demonstrates that, Mr. Bonggere being a lawyer was prepared to take the risk of losing his tenancy and more importantly a serious question of security over his records and generally his practice and other activities he claims he was conducting out of the YMCA building. This was clearly placing himself in a position of compromising his duties under the LTAR, for the keeping of proper records of his practice.

This in turn leads to what is clearly a display of carelessness on his part, both in terms of failing to ensure security over his records and practice generally as well as doing something meaningfully in response to the alleged lockout and later the alleged lost of his records. This has been carried into a failure to have at his disposal a copy each of the Lawyers Act 1986, the LTAR and the Professional Conduct Rules 1989. These are the basic tools of his trade as a lawyer. All practicing lawyers should have at their ready reach a copy of each of these legislations because they govern their conduct as lawyers. A failure in this regard would in my view, inevitably lead to the conclusion that the lawyer concerned has been operating in ignorance and therefore a possible breach of the requirements of these legislations. 

More of Mr. Bonggere’s failure came to light in his performance at the hearing of his action. It is thus, appropriate now to consider the next question whether Mr. Bonggere has made out a case for a grant of the orders he seeks. But before that, it is necessary to consider whether this Court has any discretion to waive the requirement for an audit report under the LTAR and if so, in what circumstances can it be exercised in favour of a waiver?

Discretion to Waive Audit Reports

At the hearing of this matter, Mr. Bonggere clearly displayed a total ignorance of the relevant and applying legislation and the relevant provisions thereunder. This was evidenced by his lack of any reference to any legislation and the relevant and applicable provisions thereunder. He also failed to draw to my attention any case authority on point. He is a lawyer plaintiff pursuing a case that affects his livelihood as he claims in his affidavits. It was therefore, incumbent upon him to properly research and present his case. 

It is settled law that he who claims must prove it: Bank of Hawaii (PNG) Ltd v. Papua New Guinea Banking Corporation & Ors (unreported judgement delivered 08/06/01) N2095. This includes a specification of the basis on which the action is brought, whether it is based on a provision of an Act, or the Constitution or any other law. Where a lawyer is involved, Rule 15 of the Profession Conduct Rules 1989 obliges him or her to assist the Court in drawing to the Court’s attention to any relevant law including any case law, whether or not they support his or his client’s case. Mr. Bonggere did not adhere to that obligation even though this is a case which affects him personally.

I do not consider it as the duty of the Court to conduct the necessary research for a party and then establish the basis of that party’s claim, especially where lawyers represent them or the parties are lawyers. Because to do so would be bringing the Court down into the field of play and thereby compromise its position as neutral determiner of the issues between the parties. The onus is instead on the parties to a proceeding to assist the Court with the authorities or legal basis they stand upon for the position they take in a matter. A party which fails to discharge that responsibility, stands the risk of failing in his/her argument or claim. There is no reason why this consequence should not follow here because the failure, in my view amounts to taking an action without having any legal basis. 

Mr. Bonggere’s only submission was that, this Court has a discretion to waive the requirements for the provision of audit reports under the LTAR without specifying the source of that discretion. This begs the obvious conclusion that Mr. Bonggere is pursuing this claim without any statutory or other legal basis. As such, the matter should be dismissed.

However, to be seen to be fair, it is necessary to consider whether there is any provision in the LTAR or else where that allows an application such as this in the context of the regulation. This requires a closer examination of the provisions of the LTAR and any other applying legislation. 

The LTAR makes specific provisions as to how a "lawyer who, in the course of his practice as a lawyer either alone or in partnership, has received, held or disbursed any monies for or on behalf of any person" should deal with monies received from his client. Section 3 obliges a lawyer to deposit all monies received from his client within 3 banking days into a trust account, unless the funds he receives is in satisfaction of a debt due from the client (s.5). Section 4 then provides as to the manner and circumstances in which a lawyer can withdraw out of the trust account. In any case, all withdrawals are to be by cheque. The next five sections, 6, 7,8, 9 and 10 make specific provisions as to the kind of records a lawyer should keep. These include, a receipt book, a bank deposit book, a receipts cash book and payments cash book, a trust ledger, a trust cheque book, 	trust ledger trial balance statements, a trust journal, and bank statements of a trust account.

Section 12 then, requires a lawyer to furnish within four months after the 28th of February each year, to the Council of the Law Society, a report of an accountant in relation to his trust accounts for that year. For that purpose s.14 makes it mandatory for a lawyer to:

"(a) produce to the accountant all books, papers, accounts, documents and securities in any way relating to monies received by the lawyer for or on behalf of any person; and (b) furnish the auditor with all the information that he reasonably requires."

A failure to do so attracts a criminal penalty of a fine not exceeding K1, 000.00.

I am of the view that, these are strict and mandatory requirements that must be met by all lawyers who, in the course of his practice as a "lawyer either alone or in partnership" if he or the partnership "has received, held or disbursed any monies for or on behalf of any person." A failure to do so may result in serious and adverse consequence, which includes a refusal by the Law Society to issue or renew his practicing certificate. This is signified by the use of the word "shall" in nearly all of the provisions of the LTAR. See Danley Tindiwi & Ors v. John Nilkare & The State [1984] PNGLR 191, for an example of a case interpreting the term "shall" in these terms. This is for the protection of the clients of such lawyers’ and to ensure proper accountability and transparency in their dealing with their clients’ money. This in itself is an important public policy consideration.

There is no provision in the LTAR, allowing a dispensation of the requirements of the regulation. The only expressed exemption is in s. 1 of the LTAR. This provision reads:

"(1)	This Regulation shall not apply to a lawyer—
(a)	who does not receive or hold monies for or on behalf of another person and who complies with Subsection (2); or
(b)	is employed by the State, a provincial government, a body established by statue or a corporation, who in the course of his employment holds or receives money for or on behalf of his employer only and who complies with Subsection (2).
(2)	A lawyer who does not receive or hold monies for or on behalf of another person in any calendar year shall furnish to the Council a Statutory Declaration made by him to that effect."

It is a well-accepted principle of statutory construction that "the express mention of one thing causes the exclusion of another". The old Latin maxim for that is "expressio unius est exclusio alterius." There is always however a need for caution before applying this rule of interpretation. 

Another relevant rule of statutory interpretation is in the context of enabling legislation is in the maxim, "expressio unius est exclusio alterius", which means the express enactment shuts the door to further implication. If there is a clearer rule of statutory interpretation is this that:

"… where the legislature have expressly prescribed one or more particular modes … such expression always excludes any other mode, except as specifically authorised":

Blackburn v. Flavelle (1881) 6 App.Cas. 628, 634, Craies on Statute Law, 7th ed., pp. 259-260 in Re Moresby North East Parliamentary Election (No.1): Goasa Damena v. Patterson Lowa [1977] PNGLR 424.

Following this principle in effect, the Supreme Court in SCR No. 1 of 1982: Re Philip Bouraga [1982] PNGLR 178, held that the NEC did not have the power to direct the Police Commissioner in relation to the day to day administration of the Force. This was because it was not expressly provided for in the range of powers of the Minister for Police or the NEC prescribed in the relevant legislation. I followed that in the case of Peter Aigilo v Sir Mekere Morauta Prime Minister and Minister for Treasury Chairman of National Executive Council & Ors (No 1) (unreported judgement delivered 03/08/01) N2103. In so doing, I held that the Attorney General has no power to direct the Solicitor General in the performance of his duties except on policy matters. This was because such a power was not included in the number of powers that were vested in the Attorney General.

Arguably, it would follow that, in using the words Parliament choose to use in s.1 of the LTAR, it deliberately choose to make sure that the requirements of the regulation applies without any other exception. The argument would continue that, in so providing, Parliament intended that there should be no waiver of the requirements of the regulations.

However, when the regulation is read together with the Lawyers Act 1996, under which the regulation was enacted in particular ss.35 to 47, the position appears to change. The pertinent provision there is s. 45. That provision reads:

"45.	Review of Council's decision.

(1)	An applicant, who is refused an application for a practicing certificate, may apply to the Court for—
(a)	a review of the decision by the Council to refuse his application; and
(b)	an order directing the Society to issue to him a practicing certificate on such terms as the Court thinks fit pending the review by the Court.
(2)	The Court, on an application under Subsection (1), shall review the application to the Society for a practicing certificate and may—
(a)	uphold the decision of the Society to refuse the application; or
(b)	order that the application be granted.
(3)	The National Court may, pending a review under Subsection (1)(a), grant an order under Subsection (1)(b).
(4)	The Society shall comply with and give effect to an Order under—
(a)	Subsection (2)(b); or
(b)	Subsection (3)."

This section clearly creates a right for a lawyer who has been refused a practicing certificate to apply to this Court (s.1 of the Act) for a review of the decision refusing the grant of a practicing certificate. At the same time, it is clear that this section does not provide for a waiver of the requirements of the LTAR. Nevertheless, as will be seen, the case authorities read into this provision, a discretionary power to waive the requirements for a trust account audit report that is required by the LTAR. I will return to this a little later, for now, let me go into what as been said about s. 45 of the Lawyers Act 1986. 

The Supreme Court in Karingu v. Papua New Guinea Law Society (unreported and unnumbered judgement) SCA 69 of 1996, 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"

These words appear to indicate that a hearing under s. 45 (2) of the Lawyers Act 1986, is akin to a hearing of an appeal. It is settled law that, the hearing of an appeal is a rehearing of the matter appealed against but on the evidence presented in the Court or tribunal below. See Curtain Brothers (Queensland) Pty Ltd and Kinhill Kramer Pty Ltd v The State [1993] PNGLR 285, for an example of a case on point. 

The cases that have come to this Court under s. 45 of the Lawyers Act 1986, appear to have proceeded on the basis of the material put before the Law Society. In any case, no issue was taken on the correct procedure in any of those cases. The cases I have been able to find in my quick and limited research include the cases of Emily Paneyu Dirua v. Papua New Guinea Law Society (unreported judgement delivered 19/07/96) N1467, which was drawn to my attention by the learned counsel for the Law Society. The others are Canisius Karingu v. Papua New Guinea Law Society (23/04/99) N1842 and Pwesei Benson Lomai v. Papua New Guinea Law Society (04/12/98) N1854.

But Hinchliffe J., took a different view in his judgement delivered on 13th December 1999 (annexure "E" to Kariko’s affidavit). That is the decision in relation to the Law Society’s decision to refuse Mr. Bonggere’s first of the three applications for a practicing certificate. His Honour was of the view that an application for a review is not an appeal but a review as in judicial review. Mr. Bonggere did not appeal against that decision. Instead, he made two repeated but unsuccessful applications to the Law Society. There is no issue on this aspect before me so I need not concern myself with that issue. If however, there was an issue on this, what the Supreme Court said in the Karingu v. Papua New Guinea Law Society (supra) as to what is meant by the use of the word "review" in s. 45 would be determinative. But that would not be in the way of determining whether it was open to Mr. Bonggere to make further applications to the Law Society or appeal against the National Court judgement. 

Without, labouring on the procedure, I will now turn to the circumstances or the principles on which the power of the Court under s. 45 of the Lawyers Act 1986 can be exercised. In the Dirua (supra) case, the Law Society refused to grant the plaintiff an Unrestricted Practicing Certificate because she was not able to furnish her audit report. The plaintiff was in a partnership with another lawyer. Her partner had control over the trust account records. The partnership eventually broke up and the relevant records were left with an accountant who was not registered as an accountant. 

The plaintiff’s numerous attempts to retrieve the records, which included overseas telephone calls, were unsuccessful due to that person having left the country. The partner who had control of the relevant records was of no help to the plaintiff as he had also left the jurisdiction. The Court found in those circumstances, reasonable to waive the requirements for the provision of plaintiff’s trust account audit report and ordered that she be issued with an Unrestricted Practicing Certificate. 

In Karingu v. Papua New Guinea Law Society (National Court judgement), the Law Society refused to grant the plaintiff an Unrestricted Practicing Certificate because he failed to submit his firm’s trust account audit report covering all of the trust accounts the firm had operated. The firm had two partners each maintaining two separate trust accounts. The plaintiff provided an audit report for the one he had control of. The National Court found nothing wrong with the Law Society’s decision to refuse the application. The Court took the view, correctly in my view, that the true nature of a partnership is that all the partners are equally and jointly liable for the liabilities and or responsibilities of the partnership. A failure by one means a failure by the other partners. That judgement was on remission from the Supreme Court.

In the Lomai (supra) case, the plaintiff was also refused an Unrestricted Practicing Certificate. But that was on the basis of the plaintiff not having met the requirements for a minimum of two years restricted practice. That was in turn based in a difference in the date of his commencement of his restricted practice. The Court found that the plaintiff did provide a reasonable explanation for the difference or confusion on the date of his commencement of his restricted practice.

All of these cases are distinguishable from the present case because in the present case, Mr. Bonggere wrote no letters, gives no specific dates and names of people he may have spoken to in an effort to get to his records as did the plaintiff in the Dirua (supra) case. He could have even applied to the Court for appropriate orders but he did not. He was in sole practice and was the one responsible for the keeping of the records unlike in the Karingu (supra) and Dirua (supra) cases. It was therefore, reasonably within his ability, with the assistance of his bank account records to reconstruct his records but he did not do that. It was also incumbent upon him to notify either immediately or at the time of submitting his first report, the Law Society of the lockout and the eventual lost of his records and for any advise as to what he should do, but he did not do that. Instead, at the time of his first report, he gave a different reason for not providing a report in accordance with the requirements of the LTAR. If that information was incorrect, he had the onus to correct it before it was submitted or soon thereafter but he did not. 

None of the three cases cited, provide any specific guidelines as to the factors the Court should take into account when it is asked to exercise its powers under s. 45 of the Lawyers Act 1986. Nevertheless, a number of principles do appear. In the Dirua (supra) case, the Court at p. 5 expressed the view that "each case must be decided on its own merits and factual situation by the Court." It also appears clearly from both the Dirua (supra) and Karingu (supra) cases and that a plaintiff in an action under s. 45 of the Lawyers Act 1986 must provide a reasonable explanation for his/her failure to provide an audit report. Further it appears clear to me that a plaintiff must demonstrate by appropriate evidence some error or omission on the part of the Law Society in arriving at its decision. 

I agree with what is already emerging from these cases but I feel compelled to add that a plaintiff must build his/her case around the legislative intend behind the requirements for the audit reports. This is important because it appears to me that the legislature did not intend that the requirements under the LTAR should be waived for the reasons already given. Nevertheless, there might be cases in which those requirements could not be met even with the exercise of all reasonable care and attention due to any circumstances beyond the control of a lawyer. Surely the legislature could not have intended that such a person should be victimized due to no fault of his or hers. 

In order to make out a case for a waiver, the applicant must in my view, amongst others, provide evidence of taking all the steps he should reasonably have been taken, in the circumstances to comply with the requirements under the LTAR. Examples of the kind of steps that should be taken are such as those mentioned in the context of this case. The applicant must then show again by appropriate evidence that, despite his or her best efforts, he or she could not produce an audit report in the terms required by the LTAR because of a circumstance beyond his or her control. A total destruction by say fire on his or her office premises coupled with his or her bank not being able to produce his or her bank account statements for the relevant period is an example of a circumstance beyond an applicant’s control. 

An applicant must also show by appropriate evidence that the intent of the legislation has not and will not be defeated by a waiver order by providing evidence of the steps he or she has taken to comply with the requirement. To this end, the applicant must provide evidence of the kind mentioned in the context of this case. This evidence should display the kind of care, skill and attention put toward compliance which will in turn form the basis to determine whether the applicant is a trustworthy and a fit and proper person to be allowed to practice law. What this means is that, there should be no ready grant of an application for a waiver of the requirements for a trust account audit report for this is a very important requirement that must be met. However a waiver could only be granted in cases where the Court is satisfied with a number of things. First, it must be satisfied that the applicant has seriously and meaningfully taken all the steps that should have been taken to comply with the requirement. Secondly, it must be satisfied that a circumstance beyond the applicant’s control has in fact prevented compliance. Thirdly, it must be satisfied that a waiver will not defeat the legislative intent behind the requirements of the regulations. Finally, the Court must be satisfied that the applicant is a trustworthy and a fit and proper person to be allowed to practice law, having regard to the steps he or she has taken toward compliance.

I consider this important for the purposes of upholding the legislative intent for the protection of both the lawyers concerned and their clients. A lawyer will keep his or her integrity and credibility as a lawyer, while a client will be assured of protection from unscrupulous lawyers. At the same time, this would protect the Court from any accusation of it covering lawyers’ breaches of the requirements of the LTAR. 

This now leads me to the last and remaining issue of whether Mr. Bonggere has made out a case for an exercise of this Court’s discretion under s.45 of the Lawyers Act 1986, in his favour.

Has Mr. Bonggere made a case for a waiver?

As noted earlier, an answer to this question is dependent on the answers to the questions already covered and the facts as outlined above.

I have already found that the reasons provided by Mr. Bonggere for a failure to provide an audit report in accordance with the requirements of the LTAR are incredible. I therefore, decided to reject his claims. I also found that Mr. Bonggere had failed to take reasonable steps to protect his interest and more so, to ensure that the intent of Parliament behind the provisions of the LTAR was not defeated. Overall, he has failed to make out a case that he took all the steps that were reasonably required of him in the particular circumstances of his case to secure his records for the purposes of providing an audit report in accordance with the LTAR. He has also provided inconsistent information to the Law Society without any reasonable explanation for that either to the Law Society or to this Court. Further, he has provided no evidence of the steps he took to ensure compliance of the requirements of the LTAR during the relevant period. Furthermore, he has neither argued nor has he made out a case that the intent of the legislation under consideration has not and will not be defeated if the orders he seeks are granted.

Given the above, I am led to the conclusion that, Mr. Bonggere has failed to make out a case for the exercise of the Court’s discretion under s. 45 of the Lawyers Act 1986, as applied by this court to date, in his favour. I therefore order a dismissal of these proceedings with costs against Mr. Bonggere.
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Lawyers for the Applicant:			Applicant in Person.
Lawyers for the Defendants:			Pryke & Bray Lawyers.