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Sole practitioner owing $27k in barrister fees reprimanded
The Victorian Civil and Administrative Tribunal has reprimanded and made a number of other orders against a sole practitioner who misappropriated and unlawfully dealt with trust monies, failed to provide costs disclosures and failed to pay barrister fees.
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Solicitor Saad Merhi has been found guilty on 16 separate charges relating to trust account misappropriation, unlawfully dealing with trust money, persistently failing to pay barrister fees, and more. In addition to a reprimand, Mr Merhi has had conditions applied to his certificate and must pay a $10,000 fine and $14,000 in costs.
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Between July 2015 and May 2017, Mr Merhi misappropriated a total of $6,835.90, which he entered in the accounts as payment for barristers fees but was in fact used for personal reasons. Mr Merhi was charged with two counts of failing to deposit $5,500 and two other charges of causing a trust account deficiency totalling $2,138.
Under the general descriptor of unlawfully dealing with trust money, the tribunal found that there were 26 separate instances where Mr Merhi withdrew money from trust for his own costs, “without waiting the seven days required after rendering an account, or having obtained written permission to make the withdrawal earlier”.
Other professional misconduct charges related to his “persistent failure to pay or delay in the payment of barrister fees”. As of May 2018, Mr Merhi owed $37,347 to seven different members of counsel. However, based on a schedule of outstanding fees provided to the tribunal, that number has decreased to $27,639 because he was making $1,000 monthly payments that was distributed among the barristers.
The evidence before the tribunal revealed that one member of counsel eventually obtained judgment against Mr Merhi for his outstanding fees. Even then, Mr Merhi did not honour his judgment debt liability, his contractual agreement to pay barrister fees or his promise – made directly to the counsel – to pay him what he was owed.
“It was only when, faced with the real threat of bankruptcy, following non-payment of the judgement debt, that he entered into an instalment agreement with that member of counsel to pay the judgement debt,” the tribunal noted in judgment.
When withdrawing the funds he received from clients for payment of counsel fees, Mr Merhi created false book entries that purported to show a cheque for the amount withdrawn “had been issued in favour of the counsel”. He treated the money meant for barristers as “his own” and used the withdrawn funds “for his own purposes”.
In the course of the investigation, Mr Merhi said he honestly believed he was entitled to deal with the trust money in the way that he did and characterised his conduct as a “silly act of desperation and not as dishonest”. However, the tribunal found it was “inherently implausible” for Mr Merhi to honestly believe he could act as he did.
“It is in my view unlikely that a lawyer, admitted to practice in 2005, and practising as a sole practitioner since then, who is required to demonstrate an understanding of his obligations in respect of trust funds in order to hold a sole practitioner practising certificate, could genuinely conflate a duty of fidelity in respect of trust money with a contractual obligation to pay counsel’s fees,” the tribunal found.
The entire judgment – which includes additional charges against Mr Merhi – can be read in full on AustLII or JADE: Victorian Legal Services Commissioner v Merhi (Legal Practice) [2021] VCAT 1246 (29 October 2021)
