The saga of Sydney solicitor Leon Nikolaidis continues to entrance us.Leon is in the relatively rare position of being in the nick for client fraud, yet he still holds a practising certificate, remains on the jam roll and his services are advertised to the world on the Law Society web site.
There’s nothing to stop him knocking up some billable hours at Silverwater … and, if he sticks to his form, they’ll be expensive hours.
The NSW CCA dismissed his appeal against conviction and sentence for fraud on December 17.
He was charged in 2002 with making a false instrument – a fudged costs agreement, backdated by over a decade – and was convicted five years and four juries later.
Nikolaidis staved off an immediate sojourn in the slammer pending determination of the appeal and was granted a stay of the suspension or cancellation of his ticket.
The stay on his ticket being torn up was only supposed to last three months, which has stretched to a year because of the length of time to hear and determine the appeal.
The stay is still in place and is scheduled for further hearing on February 3.
In a long anticipated judgment, delivered in the last gasps of the law term past, the court (McClellan, Simpson and Hoeben) dismissed his appeal against conviction and upheld the two-year sentence with 12-month non-parole period imposed by Brian Knox DCJ in November 2007.
The facts giving rise to the conviction concerned a dispute between Nikolaidis and a former client, John Preston, as to the correct hourly rate to be used in the calculation of unpaid fees.
Preston had retained Nikolaidis from 1984 until the professional relationship went pear-shaped eight years later.
Preston volunteered helpfully when examined-in-chief:
“We hated each other’s guts.”A skirmish over the return of the client’s files ensued; Nikolaidis claimed $95,000 in fees based on a $200 charge-out rate and subsequently filed an application for assessment of his costs under the Legal Profession Act1987 (NSW) (repealed).
The costs assessor sought copies of documents substantiating the claimed charge-out rate, whereupon the crown alleged Leon exhibited a flair for creativity.
The jury accepted evidence from Nikolaidis’ secretary that he had instructed her to prepare such a document between 1996 and 1998 – backdated to 1984 and bearing the initials of her predecessor – using an electric typewriter and superseded firm letterhead.
The CCA observed acceptance of that evidence was the clincher at the trial.
Section 300 of the Crimes Act spells out the false instrument offences.
And section 299(2) tells us when an instrument is false.
Once the jury accepted that Nikolaidis had directed his secretary to prepare a falsely dated document the requisite intention (namely, to induce the costs assessor to accept it as genuine and consequently to make an assessment to Preston’s financial prejudice) was “obvious” and his conviction “inevitable.”
Asserted shortcomings in Brian Knox directions to the jury didn’t curry any judicial favour, nor did claims of miscarriages of justice occasioned by (inter alia) the failure of the crown to seek leave to adduce, and the subsequent admission of, evidence of a complaint by Nikolaidis’ secretary to a salaried partner.
Nikolaidis has sought special leave to appeal to the High Court – no doubt the basis for breathing further life into the stay on his ticket.
The ease with which intention was made out in this case contrasts markedly with the outcome of disciplinary proceedings against Nikolaidis that culminated in a 2007 Court of Appeal decision.
An earlier spot of bother over costs had landed Leon before the NSW Administrative Decisions Tribunal.
This time the blame was sheeted home to an employed solicitor and Leon emerged (almost) lily-white.
In 2001 a costs assessor found that Nikolaidis charged a client $28,365.60 when the fair and reasonable sum was $3,305.70, increased on appeal to $5,820.60.
The Legal Services Commissioner, Steve Mark, referred the matter to the tribunal in 2003 on the basis that there was a reasonable likelihood that Nikolaidis would be found guilty of professional misconduct for the deliberate charging of grossly excessive costs.
And in 2005 that’s what the tribunal found.
However, a majority of the Court of Appeal (Hodgson and McColl, with Beazley dissenting) thought otherwise.
The court wrestled with the adjectival function of “deliberate” in s.208Q of the Legal Profession Act 1987, which declared “the deliberate charging of grossly excessive amounts of costs” to be professional misconduct.
The critical question was “whether the intention must accompany the act of charging, or the act of excessive charging.”
Lucky for Leon, Justice McColl (in an analysis with which Hodgson agreed) inclined to the latter construction in light of the authorities.
He’d delegated the task of preparing the bill to an employee, so there “was no evidence that [he] knew … the bill contained excessive amounts of costs”.
The questions that were not argued included: how does an employee single-handedly conjure inflated bills? Is it absolutely nothing to do with the “charging culture” of the office?
The fraud conviction managed to stick because Nikolaidis’ instructions in respect of the dodgy agreement were “clear and express”, presumably.
Recklessness might have been his undoing in the disciplinary proceedings, but as he wasn’t charged with a failure to exercise adequate supervision, he was off the hook.
An unfortunate result that is remedied (in part) by the Legal Profession Act2004.
Section 498(1) removes the offensive adjective, declaring instead that “charging of excessive legal costs in connection with the practice of law” is capable of being unsatisfactory professional conduct or professional misconduct.
However, complaints that are not brought pursuant to s.498(1)(b) remain subject to the common law requirement of “deliberateness”.
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