LICARDY v THE LAW SOCIETY OF NEW SOUTH WALES [1998] NSWCA 130

LICARDY v THE LAW SOCIETY OF NEW SOUTH WALES

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

GLEESON CJ, MASON P and SHEPPARD AJA 18 March 1998, 6 May 1998

[1998] NSWCA 130

LEGAL PRACTITIONERS — Legal Profession Act 1987 s61 — Whether, in the circumstances of the case, disbursement of moneys in bust account at direction of client breach by solicitor of s61 of Legal Profession Act.

The Law Society of New South Wales instituted proceedings before the Legal Services Tribunal alleging that the appellant, who practises as a solicitor, was in breach of s61 of the Legal Profession Act. Essentially the section provides that, if a solicitor, in the course of practising as a solicitor, receives money on behalf of another person, the solicitor shall hold the money exclusively for the other person and disburse the money as directed by the person upon whose behalf it is held. The question in this case was whether on the facts found by the Tribunal, the appellant was in breach of the section.

The facts of the matter were that the appellant acted for Mr and Mrs Lindsay-Field. Mr Lindsay-Field was an undischarged bankrupt. He was the owner of a property at Tarcutta which was the subject of a mortgage to a bank. The bank had agrees to discharge the mortgage on payment of a sum of $210,000 to it and on certain other conditions. Mr Lindsay-Field's bankruptcy made it difficult for the parties to deal with the matter on this basis. It was thought that a part of $15,000 to the petitioning creditor, the Australian Taxation Office, which had obtained the sequestration order, would enable the bankruptcy to be annulled or Mr Lindsay-Field to obtain an early discharge. He borrowed money from his sister and her husband Mrs and Mr McArthur. The money was lent by them on condition that the amount lent be applies to procure the annulment of the bankruptcy or Mr Lindsay-Field's discharge from bankruptcy thus putting him in a position to deal with the bank in order to have the mortgage discharged. The appellant was well aware of the conditions on which the money had been lent although the McArthurs were not his client.