VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
ADMINISTRATIVE DIVISION
LEGAL PRACTICE LIST	
vcat reference No. j67/2020	
CATCHWORDS	
Legal practice list – misconduct at common law – disciplinary complaint and investigation – professional misconduct – unsatisfactory professional conduct – Legal Profession Uniform Law – misappropriation of trust monies – unlawful dealing with trust money – persistent failure to pay counsels’ fees – failing to provide costs disclosure – failing to record receipt of trust monies – misconduct occurred before disqualification for other misconduct – misconduct not discovered until after disqualification – restricted practising certificate granted – protection of the public – pleas of guilty – findings of guilt and conviction   –  reprimanded  – fined – conditions on practising certificate.   	

APPLICANT	Victorian Legal Services Commissioner  	
RESPONDENT	Saad Merhi 	
WHERE HELD	Melbourne	
BEFORE	Judge Hampel, Vice President 	
HEARING TYPE	Hearing	
DATE OF HEARING	3 June 2021 	
DATE OF ORDER
DATE OF CORRECTION	29 October 2021
10 November 2021	
CITATION	Victorian Legal Services Commissioner v Merhi (Legal Practice) (Corrected) [2021] VCAT 1246	

FINDINGS
Saad Merhi is guilty of: 
- seven charges of professional misconduct by misappropriating trust monies (Charges 1, 3, 4, 6, 8,  9 and 11);
- six charges of professional misconduct by unlawfully dealing with trust money (Charges 2, 5, 7, 10, 12  and 14);
- one charge of professional misconduct by persistently failing to pay or delaying in the payment of barristers fees (charge 16);
- one charge of the unsatisfactory professional conduct by failing to provide costs disclosure as soon as practicable after instructions were given (charge 13); and
- one charge of the unsatisfactory professional conduct by failing to record the receipt of trust monies when received (Charge 15);
as detailed in the Application dated 2 September 2020.
OrderS
1	Findings of guilt and convictions in respect of all charges be recorded.
2	Saad Merhi be reprimanded.  
3	In addition to the conditions which already apply to Saad Merhi’s practising certificate until 30 June 2022, the period for which Saad Merhi must engage in supervised legal practice by a person approved by the Board is extended to 30 June 2022, and he must provide quarterly reports from his supervisor on his performance and progress on 1 December 2021, 1 March 2022 and 1 June 2022.
4	Saad Merhi be fined $10,000. 
5	Saad Merhi pay the applicant’s costs fixed in the amount of $14,000.
6	In the event Saad Merhi does not pay the fine and costs in full within 30 days of the making of this order, the fine and costs are to be paid in monthly instalments of no less than $1,000, or such lesser monthly instalment amounts as the parties agree. Instalment payments are to be paid on the first business day of each month from December 2021.
7	If all or part of the fine and costs are paid in instalments, the instalments are to be applied first to payment of the fine. 
8	In the event Saad Merhi fails to pay a monthly instalment in accordance with order 7, within 7 days of the first business day of any month, and fails, within that time to propose a reasonable alternative arrangement for payment of that unpaid instalment, and all future instalments, the whole of the outstanding balance of fine and costs is payable within 30 days of the first business day of the month in which the failure to pay the instalment occurred. 

Judge Hampel 
Vice President 			

APPEARANCES:		
For the Applicant	Mr S Ginsbourg, of Counsel 	
For the Respondent	In person	

Reasons
Background
1	Mr Merhi is a legal practitioner, who was admitted to practice in Victoria in 2005. From 2005 until mid 2017 he operated as a sole practitioner in Sydney Road, Coburg.  Following the receipt of information Mr Merhi’s practice appeared to owe significant outstanding fees to barristers clerks, the Victorian Legal Services Commissioner (VLSC), in April 2017, appointed an external investigator to investigate the affairs of his practice.  
2	It took nearly two years, until March 2019 for the investigator to conclude her investigation and report to the VLSC.  
3	Three months later, in June 2019, the VLSC notified Mr Merhi she intended to investigate his conduct as a disciplinary matter, under sections 282 and 266 of the Legal Profession Uniform Law (Vic) (‘the Uniform Law’). 
4	Following that investigation, in September 2020, the VLSC filed an application for orders, containing fourteen charges of professional misconduct and two charges of unsatisfactory professional conduct. 
5	The professional misconduct charges involve misappropriation of or unlawful dealing with trust money, and persistent failure to pay, or delay in paying counsel’s fees. The unsatisfactory professional conduct charges concern multiple instances of failure to account for trust monies received on the day of receipt, and to provide costs disclosure as soon as practicable after receipt of instructions. 
6	All but one of the charges fall within the period between 1 July 2015 and 31 May 2017. The misconduct charge of persistent failure to pay counsel’s fees relates to fees incurred between 2013 and 2017, and frames the period over which the persistent failure to pay occurred as between 2016 and 2018.

Details of charges 
A. Professional misconduct: misappropriation of trust money  
7	There are six misappropriation of trust money charges instancing six separate occasions of withdrawal of trust funds, entered in the accounts as for payment of counsel’s fees, but not in fact applied to payment of those fees. The total amount misappropriated was $6,674.90. (Charges 1, 3, 6, 8, 9 and 11).
8	One further misappropriation of trust money charge related to withdrawing an amount in excess of any entitlement to do so. The amount misappropriated was $161. (Charge 4).
9	On one occasion, over 12 months after Mr Merhi had misappropriated the amount withdrawn from trust and booked it as payment of counsel’s fees, he paid the outstanding amount to counsel using funds from another source. In all other instances, the fees remained unpaid up to the time of investigation or charge.    
 
B. Professional misconduct: unlawful dealing with trust money  
10	There are two charges of unlawful dealing with trust money instancing two separate occasions of failing to deposit monies received for payment of costs into the trust account. The total amount involved was $5,500. (Charges 2 and 5).
11	There are two charges of unlawful dealing with trust money causing a trust account deficiency instancing two separate occasions of withdrawing trust money for payment of costs and disbursements, without first issuing an account. On each occasion, an account was issued some days later. The total amount involved was $2,138. (Charges 7 and 12).
12	There is a further charge, particularised in the original application for orders filed with the Tribunal as misappropriation, but which was treated at the hearing as a further instance of unlawful dealing with trust money causing a trust account deficiency by withdrawing trust money for payment of costs and disbursements, without first issuing an account. Again, the account was issued shortly after. The amount in this case was $924. (Charge 10).
13	Finally, under the general descriptor of unlawful dealing with trust money is a rolled up charge instancing twenty-six separate occasions where Mr Merhi withdrew money from trust for his own costs, without waiting the 7 days required after rendering an account, or having written permission to make the withdrawal earlier. (Charge 14).

C. Professional misconduct: other 
14	The final professional misconduct charge is the charge of persistent failure to pay or delay in the payment of barristers fees. As noted above, the fees were incurred between March 2013 and July 2017. The charge defines the period of persistent failure to pay those fees as the two years between 19 May 2016 and 16 May 2018.  The total amount of unpaid counsel’s fees as at 16 May 2018 was $37,347, owed to seven different members of counsel. (Charge 16).
15	Since then, according to a schedule of outstanding fees provided by Mr Merhi at my request at the conclusion of the hearing, $27,639 is still outstanding, spread amongst six barristers,  Mr Merhi is apparently making monthly payments of $1,000 to the barristers’ clerk who then apportions it amongst the barristers.  

D. Unsatisfactory professional conduct  
16	There is one rolled up charge instancing five separate occasions over fourteen months, between 15 December 2015 and 15 February 2017 of failure to provide costs disclosure as soon as practicable after instructions were given. (Charge 13).
17	And, there is one rolled up charge instancing five separate occasions over a different, but overlapping 14 month period, between 1 September 2015 and 19 October 2016 of failure to record the receipt of trust monies when received. On each occasion, receipt of the monies was not recorded until the following day. (Charge 15).

Mr Merhi’s acknowledgement of wrongdoing
18	After the application setting out the sixteen charges was filed, Mr Merhi wrote to the Victorian Legal Services Board + Commissioner, saying, amongst other things: 
“I plead guilty to all the charges and hope that some of the charges can be downgraded from professional misconduct to the lesser charge of unsatisfactory professional conduct.”
19	At the commencement of the hearing, Mr Ginsbourg who appeared on behalf of the VLSC advised he was instructed to proceed with the charges as framed. Mr Merhi, who represented himself, then confirmed he admitted the conduct alleged. Although invited, he made no submissions directed to persuading me the admitted conduct in respect of any of the fourteen professional misconduct charges did not constitute professional misconduct, or were properly capable of supporting a finding only of the lesser charge of unsatisfactory professional conduct, and pleaded guilty to the charges as framed. That is, his request to the VLSC to downgrade some charges from professional misconduct to unsatisfactory professional conduct having been rejected, he did not contest the charges before the Tribunal. He acknowledged the admitted conduct constituted, in respect of each of charges 1 – 12, 14 and 16 professional misconduct. He acknowledged the admitted conduct constituted, in respect of charges 13 and 15, unsatisfactory professional conduct.  
20	Notwithstanding the guilty pleas, and the express concession made by Mr Merhi that the fourteen professional misconduct charges were admitted, I have made my own assessment of the evidence, and my own findings as to whether the conduct, expressly admitted by Mr Merhi, constituted, professional misconduct in respect of the fourteen charges alleging professional misconduct, and unsatisfactory professional conduct in respect of the remaining two charges.  Having reviewed the evidence, and considered the submissions made by the parties, I am satisfied the admitted conduct relied on for each of charges 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 14 and 16 constitutes professional misconduct.  I am also satisfied the admitted conduct relied on for each of charges 13 and 15 constitutes unsatisfactory professional conduct.

Characterisation of nature and seriousness of the conduct
A. Professional misconduct: misappropriation of trust monies
21	The VLSC submitted the misconduct revealed by the misappropriation charges was very serious. 
22	It was the VLSC’s position I should not only find in respect of the charges involving the misappropriation of trust monies, that it was dishonest, according to the standards of reasonable and honest people but also that I should reject Mr Merhi’s assertion he honestly believed he could withdraw trust monies intended for counsel’s fees and apply them to his own use. 
23	Mr Merhi billed clients for counsel’s fees, and clients paid Mr Merhi for counsel’s fees, as billed. Mr Merhi paid the monies paid to him for payment of counsel’s fees into trust, as he was obliged to, then transferred them out. When withdrawing the funds he had received for payment of counsel’s fees from trust, he created false book entries, which purported to show a cheque for the amount withdrawn had been issued in favour of counsel, and acquitted against an invoice from counsel for that amount, when in fact, no such cheque was issued, and the monies were not applied to payment of counsel’s fees. Mr Merhi treated the monies purportedly withdrawn from trust for payment of counsels fees as his own. He used the funds paid to him, and ostensibly withdrawn by him to pay counsel, for his own purposes.   
24	In the course of the investigation, Mr Merhi had asserted he honestly believed he was entitled to deal with trust money in the way he did. That is to withdraw from trust monies paid by clients to pay counsel’s fees and apply them, not to payment of counsel’s fees but for his own benefit. He maintained that position before me. He characterised his conduct as a silly act of desperation and not as dishonest. In other words, that he could use the monies received from clients for counsel’s fees for other purposes, because of the solicitor’s contractual liability to pay counsel’s fees, regardless, or independently of the contractual liability of the client to pay the disbursements incurred by the solicitor on his behalf. 
25	He maintained that position, even when taken to the investigator’s report, which showed that on each of the six misappropriation charges relating to counsel’s fees, he had generated entries in his trust account records falsely recording cheques had been issued in favour of counsel for the fees.
26	He explained the trust account software was designed to record both the withdrawal of funds from trust and the details entered on the cheque to be paid to the recipient of the withdrawal trust funds, by reference to the invoice rendered by counsel for those fees. That is, he was aware the software was programmed to reconcile the invoice with the trust withdrawal and the cheque issued for payment of the fees detailed in the invoice. Mr Merhi explained the only way he could withdraw monies from trust ostensibly for counsel’s fees, but in reality to appropriate them to his own purposes, was to generate an entry which he knew falsely recorded that a cheque had been issued to counsel for the nominated amount, when in fact, he diverted the money to his own use.
27	That may explain the mechanics of the workaround, in an accounting package designed to prevent trust funds being used for non-trust purposes. That in itself should have, at the very least, served as a warning he could not treat trust funds in that way. It provides no support, in my view, for Mr Merhi’s assertion he honestly believed he could act as he did. The subterfuge involved in creating the false accounting records in order to allow him to use the trust funds received for payment of counsel’s fees for his own purposes makes his assertion he honestly believed he could do so implausible.
28	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. 
29	That Mr Merhi had a contractual obligation to pay counsel’s fees, and was personally liable to pay them, whether the client had paid him or not, does not absolve him of his obligations in respect of the use to which monies received on trust could be put. 
30	The evidence before me reveals that one member of counsel eventually obtained judgment against Mr Merhi for his outstanding fees. The fees owing to him included, but were not limited to, the amounts which are the subject of the misappropriation charges. Even then, Mr Merhi did not honour his judgment debt liability, his contractual obligation, or his promise, apparently made personally to counsel, to pay him what he was owed. It was only when, faced with the real threat of bankruptcy, following non-payment of the judgment debt, that he entered into an instalment agreement with that member of counsel to pay the judgement debt. 
31	In other words, Mr Merhi’s reliance on his legal obligation to pay did not translate into evidence of a preparedness to pay, until faced with the threat of bankruptcy, and the inevitable consequences that would have had for his right to practice.  
32	Whatever Mr Merhi says of his understanding of his legal or contractual responsibility to pay counsel these fees, and of the significance of his assurances to counsel he would honour his obligation to pay for services counsel had rendered his client, at his request, his conduct demonstrates at best, a cavalier approach to honouring his contractual responsibility or making good on his promises.
33	These circumstances too make Mr Merhi’s assertion he honestly believed he could act as he did in misappropriating the trust monies because of his personal liability to pay, inherently implausible.
34	The creation of the false book entries was a scheme, or stratagem designed to conceal the diversion of monies paid by clients and required to be held in trust until used to pay counsel’s fees, to Mr Merhi’s own benefit. The very dishonesty of the stratagem renders the assertion of honest belief implausible.
35	Mr Merhi falsely represented in trust and other accounting records monies paid into trust had been applied to payment of counsel’s fees, when they had not. The false entries concealed the fact he had not done so, and instead  had diverted the funds to his own use. He acknowledged a contractual obligation to pay. He did not meet that contractual obligation. Or, put more bluntly, he breached it. He made a personal promise to pay counsel, but he did not make good his promise. His conduct belied his words. 
36	I am satisfied that creating a book-entry falsely asserting a cheque has been issued to counsel to pay the fees they had invoiced for services they had provided to a client, drawing down on the monies paid by the client to pay those fees, and diverting the money to his own use, even if Mr Merhi is taken at his word that he intended to pay counsel, at some indeterminate future time, from some indeterminate future source of income, is dishonest by the ordinary standards of reasonable and honest people. 
37	Taking all this into account, I am comfortably satisfied this conduct was dishonest, according to the standards of reasonable and honest people. I am not satisfied, on the material before me, that Mr Merhi honestly believed he was entitled to act as he did. 
38	I am also satisfied that, although the total amount of money misappropriated was relatively small, these charges in combination represent a pattern of behaviour, which renders the conduct a more serious example of misappropriation of trust monies than the crude dollar value might suggest.  
39	I take into account in so finding, the nature of the dishonesty involved, the creation of the false accounting entries to enable the misappropriations to occur, my rejection of Mr Merhi’s assertion he believed he was entitled to treat trust monies in this way and the persistence of the conduct, namely six separate instances over an extended period of 11 months. 

B. Professional misconduct: unlawful dealing with trust account charges
40	The VLSC submitted the misconduct involved in these charges, too was serious. Again, although relatively small amounts of money were involved, and it would appear Mr Merhi was entitled to claim the professional fees involved, and did render accounts for his fees, this again is properly characterised as a persistent course of conduct. That is, there were repeated instances of ignoring trust account rules designed to ensure practitioners properly account for trust monies and do not treat them as their own. He variously did not place funds in trust as he was obliged, did not render an account before helping himself to monies paid on account of his costs, or did not allow the required time to elapse before he helped himself to trust funds held or his costs. 

C. Professional misconduct: persistent failure to pay counsel’s fees
41	The amount involved (in excess of $37,000, of which approximately $7,000 is referable to the trust misappropriation charges), the time over which this conduct occurred (the fees were incurred from 2013 until Mr Merhi ceased practice in mid 2017, although the charge as framed covers only the two year period from 2016 to 2018), and the number of barristers involved (7 in total), combine to make this, too a serious instance of misconduct of this type. 
42	Mr Merhi relied on what he characterised as the barristers’ acceptance of his promises to pay them, their agreement to extend the time for payment,  and his entry into an agreement with their clerk to repay all outstanding amounts by instalments as evidence of his understanding and acceptance of his legal and contractual obligation to pay counsel’s fees. 
43	Yet, when asked at the hearing how much of the total amount the subject of this charge had been repaid, Mr Merhi was unable to provide any detail, apart from advising the monthly instalment amount was $1,000. He did not know how much he had repaid, how much was still outstanding, or when, on his current rate of repayment all outstanding fees would be repaid. 
44	The earliest of these fees have been outstanding since 2013, that is 8 years ago, and at the latest, since 2017, 4 years ago. If the $10,000 by which the total indebtedness has been reduced was repaid by monthly instalments, only ten instalment payments have been made. The desultory rate of repayment since Mr Merhi first told the VLSC commission he intended to repay all outstanding amounts, again demonstrates the gulf between the seriousness with which Mr Merhi said he regarded his obligation to pay counsel, and his actions.
45	Again, this charge reveals a persistent pattern of conduct, a recurrent disregard by Mr Merhi for his professional and contractual obligations to fellow members of the profession, over an extended period of time. Barristers are entitled to expect, when retained by a solicitor, that they can trust they will be paid for the services they are retained to provide, and paid in accordance with the terms of the retainer, not at the whim of the solicitor. They should be able to trust that a solicitor will use the moneys received from the client for their fees to pay them, not to pay other expenses, for their own benefit. 

D. Unprofessional conduct 
46	The two charges are both rolled up charges, each instancing 5 separate failures to provide a costs disclosure and record receipt of trust moneys at the time required. Compared to the misconduct charges these are relatively minor. But, they demonstrate a persistent disregard for practice rules designed to protect the rights and interests of clients.   
47	Seen in the context of the other charges, they are further instances of a pattern of persistent and widespread disregard by Mr Merhi of his professional obligations. In that sense, I accept the VLSC submission that these charges should not be treated as trivial.

Conclusion: nature and seriousness of conduct
48	Although the amounts are relatively small, this is not minor offending. In respect of each category of charges, the conduct occurred over a considerable period. There are sixteen separate charges in total, a number of them involving multiple instances of the same type of wrongful conduct. They are not mere book keeping irregularities. Looked at as a whole, they demonstrate persistent, deliberate disregard for the obligations of a legal practitioner in respect of trust monies. And, so far as the misappropriation and persistent failure to pay counsel’s fees charges are concerned, there was not only financial benefit to Mr Merhi, there was financial detriment to the affected counsel. 
49	Mr Ginsbourg drew my attention to what I had said in VLSC v Hyatt. It is equally apposite here:
“The terms trust account, trust money, money on trust are not meaningless. The use of the word trust in these terms is fundamental. The lawyer is trusted to hold other people’s money, and to deal with it only as they direct, and to fully and properly account to those who entrust them with their money for where it is and where it has gone. To abuse that trust diminishes not just the reputation of the individual wrongdoer, but unfairly diminishes public trust and confidence in the integrity of the legal profession more generally.”
50	To hold a practising certificate is to accept the trust reposed in practitioners to act honourably, and with integrity, in their dealings with their clients, the counsel they retain, and all those whose services they engage, whether on their own behalf, or on behalf of clients. A practising certificate is a privilege, which carries with it the means to earn a good income by providing services only those who have met the stringent ethical, academic, and practical training standards for a legal practitioner are permitted to provide. That privilege comes with a responsibility to uphold those standards in the conduct of legal practice. A failure to honour that trust, to accept the responsibility to uphold those standards, is an abuse of that privilege. 

Prior professional misconduct charges
51	This is not the first time Mr Merhi has been dealt with by the Tribunal for misconduct relating to his practice as a solicitor.  In July 2017 his practising certificate was cancelled. A 12 month immediate disqualification, followed by a further 12 months disqualification, and suspension for 18 months was imposed on him for five charges of common law misconduct. 
52	Four charges concerned falsely attesting he had witnessed the execution of loan documents or the provision of independent financial advice in relation to four loans, between June and November 2011. This facilitated a fraud by another solicitor, his former principal. An amount in excess of $900,000 was paid out by the Fidelity Fund and the Legal Profession Liability Committee as a result. 
53	The fifth misconduct charge related to a breach of his duty of candour to the regulator in the course of its investigation of the fraudulent loans. He initially told the regulator (on two separate occasions in late 2014 and early 2015) he had only falsely attested the signing of documents on one occasion. Following that disclosure, disciplinary proceedings were instituted against him. The investigation continued, and he was subsequently confronted with further loan documents alleged to have been falsely attested to by him. On four separate occasions, he made further false representations to the regulator about his conduct. He admitted to one further instance of false attestation, suggested his signature on some other attestations could have been forged, and said he could not remember, and so, could not say how many times he had falsely attested loan documents.
54	The conduct giving rise to the professional misconduct and unsatisfactory professional conduct charges before me occurred after the false attestations, but during the period of investigation, that is, at the same time as Mr Merhi was engaging in the persistent breaches of his duty of candour to the regulator.
55	In other words, at the time he was engaging in this course of conduct, there was an active investigation under way in respect of the false attestations, and he was lying to the regulator about the extent of his involvement in it. 

Conduct since the earlier disciplinary proceedings
56	In July 2017 in addition to disqualifying Mr Merhi from holding a practising certificate the Tribunal  directed he pay the VLSC’s costs of the proceedings. It noted that Mr Merhi was also liable to reimburse the Legal Profession Liability Committee (LPLC) for a substantial portion of the $243,876.51 it had paid out. That was to be paid by instalments over a 7 year period.  
57	It is unclear to me how much of the costs and LPLC reimbursement has been paid. In November 2018, after the 12 month period of disqualification required to be immediately served had expired, Mr Merhi applied to the Victorian Legal Services Board (VLSB) for an unrestricted principal’s practising certificate. 
58	In submissions made by Mr Merhi to the VLSB in support of his application, he acknowledged he had entered into an agreement in 2017 to pay the amounts ordered to be paid by the Tribunal in July 2017 by an initial lump sum of $12,000 and monthly instalments of $1,000, but had not honoured the agreement. He had not paid the lump sum, or made any further instalment payments after the initial $1,000. He did not contact the VLSC, acknowledge his default, offer any explanation or apology for failing to honour the agreement, or seek to renegotiate the terms of repayment. 
59	His submissions in support of the application for a practising certificate asserted he believed the VLSC had not pursued him for payment because she was aware he had been experiencing mental health, marital and financial difficulties. He appeared to draw support for that belief from the absence of reminders or follow up demands. He promised to pay the lump sum by the end of November 2018, by borrowing from his family, and to resume instalment payments thereafter. In other words, he demonstrated he had the capacity to immediately source the funds to honour his obligations, and was prepared to again promise to pay the VLSC what the Tribunal had directed him to pay, in order to secure the issue of a practising certificate. 
60	Mr Merhi was also aware, by the time he made the November 2018 submission to the VLSC in relation to his practising certificate application it was investigating him in respect of non-payment of counsel’s fees, in the period leading up to his suspension in 2017. 
61	It would appear the practising certificate application was held in abeyance as the VLSC continued its investigation into the non-payment of counsel’s fees. Mr Merhi continued to press for a full, unrestricted principal’s practising certificate to be issued to him, asserting he was a person of outstanding character and morals, fully aware of his professional obligations, and a fit and proper person to hold a practising certificate.
62	In response to the VLSC’s inquiries in relation to non-payment of counsel’s fees, Mr Merhi initially blamed poor business practices, that is not always being able to recoup the fees from clients, or poor office management. He initially denied in emphatic terms misappropriation of trust monies intended for counsel’s fees. He appeared to consider his desire to pay other practice expenses as a sufficient justification for the use of monies paid for counsel’s fees. He relied on what he said was counsel’s acceptance of his promise to pay them, and his contractual responsibility to do so, regardless of the receipt of monies from the client for that purpose, as an adequate discharge of his professional obligations to pay counsel’s fees. 
63	When first confronted by allegations of trust account deficiencies, he denied them. He maintained his books always balanced. He suggested that if there were deficiencies, it would be due to error or incompetence on the part of his bookkeeper. Ultimately, in a meeting with the VLSC investigators in late 2019,  he acknowledged he had on occasions  transferred monies from trust to office and used them for office expenses instead of paying the counsel’s fees for which they had been provided. He sought to justify his conduct on the basis the practice was struggling financially, he needed the funds to pay other expenses and he was in any event still personally liable for payment. 
64	Mr Merhi was still, at the same time, pressing for a full practising certificate to be issued to him. The disclosure of misappropriation led the VLSC to advise him in December 2019 it held serious concerns about his fitness to hold a principal practising certificate, by reason of his conduct in relation to non-payment of fees, and misuse of trust funds.
65	Mr Merhi, whilst maintaining he met the standards required of a holder of a principal practising certificate, applied, in the alternative, for an employee practising certificate.
66	Eventually the VLSB issued him with an employee practising certificate, from 31 January 2020, with conditions preventing him from receiving trust money, or signing or witnessing mortgage documents. He was also required to engage in additional continuing professional development in relation to the management of trust accounts, to be supervised by a person approved by the VLSB, and to provide quarterly reports from his supervisor. 
67	Mr Merhi obtained employment in accordance with the limitation and conditions on his certificate with Apsiis lawyers in February 2020. He has been supervised by its principal director Mr Sam Zeitoune, in accordance with the conditions imposed on his practising certificate. Mr Zeitoune provided a strong testimonial in support of Mr Merhi. He wrote he holds Mr Merhi in high regard, describing him as a man of integrity and honesty, and an asset to his firm. He said his standard of work was excellent. He expressed his opinion Mr Merhi had taken significant steps to rebuild what had previously been a highly regarded reputation in the Muslim community.    
68	In Mr Zeitoune’s opinion, Mr Merhi was open honest and transparent in relation to the current investigation and charges. He considered Mr Merhi understood the serious nature of the charges, accepted his actions were improper, was deeply remorseful, embarrassed by his actions, and ashamed. 
69	He considered the conduct was out of character with the man he had known since employing him in February 2020. In his opinion, Mr Merhi would not jeopardise his ability to practice law again. 
70	He provided support for Mr Merhi’s account of the impact on his mental health, marriage and financial circumstances of the original disciplinary proceedings, and commended him for acknowledging the mental health impact and for seeking professional help. He noted the difficulties not only  men generally, but men from a Muslim background have traditionally had in acknowledging and seeking treatment for poor mental health. In his view, Mr Merhi’s engagement with a psychologist, and return to practice as a solicitor have had a major positive impact on his mental health and wellbeing.
71	This indicates that despite Mr Merhi’s repeated references to his honour and integrity, he acknowledges his reputation has suffered. It also reveals he has been prepared to accept professional help, and to accept he must work under supervision if he is to enjoy the right to practise. It also reveals that, when supervised, required to undergo further training and assessment, and restricted in his ability to witness documents and access trust accounts, he is capable of competently exercising his professional skills as a solicitor. This provides a level of confidence that a balance can be struck between protecting the public, denouncing the behaviour, imposing a penalty that reflects the seriousness of the misconduct, and permitting Mr Merhi to pursue his chosen profession. 
72	In the original disciplinary proceedings, in respect of the lack of candour charge, the tribunal described Mr Merhi’s conduct as revealing a tendency to put his head in the sand. Denial, minimisation or rationalisation, are, although not admirable, common responses when a person who has held themselves out as someone of honesty and integrity are forced to confront their own wrongdoing. 
73	A tendency to put his head in the sand may be an explanation for Mr Merhi’s failure to pay counsels fees, misappropriations and related conduct in the first place, and the various excuses and explanations advanced by him during the investigation. It may also explain his failure to make significant inroads into what he owes counsel, and to take responsibility for honouring the agreement to pay the fine and costs ordered to be paid in the earlier proceedings. 
74	I accept Mr Merhi’s evidence he was under considerable pressure over the period covered by these charges. He was under investigation for the false attestation charges. He was facing a significant professional and financial toll.  His practice was struggling financially.  His marriage was under strain, adding to his financial woes. His physical and mental health were suffering. 
75	His assertions at that time he was an honourable person, rightly held in high regard in the legal profession, the Muslim community and the broader community, however did not sit comfortably with his conduct, in falsely attesting to mortgage documents, which had enabled a fraud running into more than a million dollars to be committed. 
76	Mr Merhi’s assertions of his high professional standards, remorse and a desire to make amends did not result, after the last hearing, in a sustained ability to make the repayments ordered by the Tribunal, or to pay any but token amounts in discharge of outstanding counsel’s fees. Nor did it result in a frank acknowledgement of further serious professional shortcomings, in relation to the misappropriations or failure to pay counsels fees in a timely manner during the investigation into these matters.
77	Mr Merhi’s financial difficulties continued after his disqualification from practice. His marriage came to an end, and his mental health continued to suffer. That provides some context for the continued failure to pay counsel’s fees, the maintaining of the position his contractual responsibility, and personal promises to pay counsel when he could, was a sufficient discharge of his professional responsibilities in that regard, and the vehement denials until late 2019 of misappropriation.
78	In his November 2018 communications with the VLSC, Mr Merhi  undertook to repay fully the amounts outstanding to it and the barristers. The position in relation to the discharge of his obligations flowing from the 2017 VCAT determination was unclear. However, even by the time of the hearing before me, when Mr Merhi had been back in practice as a solicitor for 18 months, only $10,000, the equivalent of ten instalments had been paid.  
79	Again, in this hearing, Mr Merhi spoke strongly to his belief he was an honourable person, who understood and lived up to his professional obligations and the standards expected of a practitioner. He again asserted he would repay all outstanding amounts. 
80	Despite the vehemence of his assertions as to his professional integrity, and the apparent sincerity of his promise to repay all outstanding counsels’ fees, Mr Merhi has failed to demonstrate a capacity for sustained discharge of his promises to pay. 
81	In my view, the pattern of behaviour I have detailed, between 2013 and 2017, when the misappropriations and persistent non-payment of fees occurred, and later, from 2017 to 2021, from the start of the investigation, and continuing up to the time of hearing demonstrate that, when under pressure, by reason of financial or personal difficulties, Mr Merhi is at risk of falling short of the professional obligations and standards expected of a practitioner. He is at risk of committing and rationalising further acts of misconduct, and of putting his head in the sand, or seeking to avoid responsibility or accountability for his conduct.
82	In my view, this pattern of conduct demonstrates that if Mr Merhi is to be permitted to practice, a further period of supervised practice, and a further period of prohibition from dealing with trust monies is warranted to mark the seriousness of the conduct, and to protect the public.

VLSC’s submissions on penalty
83	The Applicant submitted that a formal finding of guilt, a reprimand, a significant fine ($10,000), and an order Mr Merhi pay its costs of this proceeding, coupled with a mandatory period of supervised practice and trust account training, was a sanction necessary, and sufficiently severe, to serve the paramount purpose of protecting the public. These sanctions, the applicant submitted would also serve to mark the seriousness of the conduct, and meet the needs of punishment and deterrence. It submitted, notwithstanding the seriousness of the charged conduct, the time that has elapsed since this misconduct occurred, the context in which the conduct occurred, that is when Mr Merhi was under the strain of the investigation for the false attestation charges, the time at which the conduct came to light, namely after Mr Merhi had been dealt with for the earlier charges, and the fact Mr Merhi has already served a period of disqualification and been permitted to return to supervised practice, that no further period of disqualification was warranted. 

Mr Merhi’s submission on penalty 
84	Mr Merhi submitted he was remorseful, was making reparation, and had been sufficiently punished. He submitted the Tribunal should be confident he understood his professional obligations, and was competent to hold a full practising certificate. He submitted he should no longer be financially disadvantaged by the limitations and restrictions on his practising certificate, and there should be no extension to the period of restricted practice to which he is currently subjected. Finally, because of his continuing financial hardship, including the outstanding amounts owed to counsel, and his restricted right to practice, he argued for a much smaller fine, nominating $2,000, not $10,000 as a figure better reflective of his circumstances.

Conclusions on penalty
85	I have already outlined my concerns about the gulf between Mr Merhi’s assertions as to his professional integrity and competence generally, and his persistence in asserting he believed he was entitled to act as he did in relation to trust funds and payment of counsels fees. I have also noted what appears to be a persistent pattern, when under pressure, of failure to adhere to his professional obligations, and failure to take responsibility for his misconduct, by a combination of ignoring his obligations or rationalising his behaviour by reference to his personal circumstances. I have expressed my reasons why, if Mr Merhi is permitted to practice, a further period of supervised and restricted practice is warranted.
86	Were it not for the time which has elapsed since this misconduct occurred, and the fact Mr Merhi had already served a period of disqualification when this misconduct came to light, and had been permitted to return to restricted practice, I would have considered a period of disqualification appropriate. And, without usurping the responsibility of the Board to consider what conditions needed to be met before a practising certificate should again be issued, or the conditions attaching to a practising certificate, I would have recommended the Board impose conditions of supervised practice, and a requirement to undertake further ethics and trust account training and assessment. I would have also recommended psychological assessments be regularly conducted so as to monitor Mr Merhi’s capacity to discharge his duties as a practitioner having regard to the impact on him of his personal and financial circumstances. Finally, I would have recommended the Board consider the imposition of conditions in respect of payment of outstanding counsel’s fees, reparations, fines, and costs, having regard to the commitment (or lack of it) Mr Merhi had shown to repaying those outstanding amounts. 
87	Having regard to the circumstances in which Mr Merhi has been permitted to return to restricted practice, and the evidence of Mr Zeitoune as to the manner in which Mr Merhi had conducted himself as a solicitor since then, I do not consider a further period of disqualification is necessary. It can properly be said that the disqualification and subsequent restricted right to practice, whilst these charges were pending,  have served to fulfil part of the need to protect the public, punish and deter. Protection of the public is still necessary in my view, but that need, as well as the needs of punishment and deterrence can be served by a further period of supervised and restricted practice, a reprimand, a fine and a costs order. 
88	The period of supervision I am ordering is not to be taken as an indicator of what I would have considered to be the appropriate length of supervised practice for misconduct of this nature and duration, had Mr Merhi not already been subject to disqualification, and supervised return to practice. I have taken it into account the penalties previously imposed, and already served.   
89	As the Board has seen fit to issue an employee certificate to Mr Merhi and impose conditions and restrictions on it, I propose to extend the period of supervision to which he is already subject to until 30 June 2022. The other conditions and restrictions on his practising certificate apply until at least the expiry of the certificate on 30 June 2022. I note the restriction on witnessing mortgage documents (a condition referable to the past disciplinary proceeding, not this one) applies until 30 June 2025. In my view, a further period of restriction on receiving and handling trust money is also warranted, having regard to the risk Mr Merhi could again see misappropriation as a means of relieving financial pressure.  
90	Having expressed my views as to what conditions I would have imposed on Mr Merhi’s practising certificate, were he currently not the holder of a certificate, I leave it to the Board to consider what conditions, or restrictions it imposes on Mr Merhi’s practising certificate after 30 June 2022. 

Judge Hampel
Vice President