Commissioner for Fair Trading v Walker [2004] NSWADT 139

CITATION: Commissioner for Fair Trading v Walker [2004] NSWADT 139 DIVISION: Legal Services Division APPLICANT PARTIES: Commissioner for Fair Trading RESPONDENT Elizabeth Carmen Walker FILE NUMBER: 042015 HEARING DATES: 23/06/2004 SUBMISSIONS CLOSED: 06/23/2004 DATE OF DECISION: 07/12/2004

BEFORE: Vass CB -Judicial Member; Hedison J - Non Judicial Member; Fitzgerald R - Non Judicial Member APPLICATION: Professional Misconduct - misappropriate trust moneys/moneys MATTER FOR DECISION: Principal matter LEGISLATION CITED : CASES CITED: Law Society of NSW v Bannister NSW Supreme Court of Appeal BC9301831 – 27-8-93 APPLICANT REPRESENTATION: K Grant, solicitor RESPONDENT G Jemmeson, solicitor ORDERS: 1.The Conveyancer is guilty of Professional Misconduct.; 2. The Conveyancer is privately reprimanded.; 3. The Conveyancer pay the costs of the Office of Fair Trading

REASONS FOR DECISION 1 The information is brought by the Commissioner for Fair Trading (the Commissioner) against Elizabeth Carmen Walker (the Conveyancer) who is a licensed Conveyancer under the provisions of the Conveyancer's Licensing Act 1995. The information alleges that the Conveyancer is guilty of professional misconduct, in that she failed to disburse monies in accordance with the directions of her clients L.F. Bedada and F.B. Eddto, being persons on whose behalf those monies were held in contravention of section 25(2) of the Conveyancers Licensing Act 1995. THE LEGISLATION 2 Division 2 of Part 3 of the Conveyancers Licensing Act 1995 (CLA) deals with trust money and section 25 sets out how conveyancers are to deal with monies received on behalf of another person. That section provides: (1) A Licensee who, in the course of conducting a conveyancing business, receives money on behalf of another person: (a) must pay the money, within the time prescribed by the regulations, into a general trust account at a bank, building society or credit union in New South Wales, and must hold the money in accordance with the regulations relating to trust money, or, (b)…. (2) In either case the licensee must hold the money exclusively for, and must disburse the money in accordance with the directions of, the person on whose behalf it is held. Section 25(7) provides that: "(7) It is professional misconduct for a licensee to contravene this section." THE FACTS 3 The Conveyancer acted for the clients in relation to the purchase of a property and after issuing a Notice to Complete, and because the Vendor was not able to complete, the Contract for Sale was terminated and the Conveyancer on behalf of the clients applied to the Office of State Revenue for a refund of stamp duty amounting to the sum of $4,049.50. 4 A refund of stamp duty cheque for the sum of $4,049.50 was received by the Conveyancer from the Office of State Revenue on 12 June 2002. The cheque was made out in the name of clients and marked "Not Negotiable". 5 Earlier, and in fact on 17 May 2002, the Conveyancer had written to the clients advising them that the Contract had been terminated and enclosing her memorandum of fees totalling the sum of $1,596.00. 6 On 21 June 2002, the Conveyancer went to the Commonwealth Bank at Doonside and because she was known to the Teller at the Bank, she was able to cash the cheque that she had received from the Office of State Revenue by receiving $1,596.00 in cash and a cheque made out to the clients for the sum of $2,453.50. The cash that the Conveyancer received was credited to the Walker Conveyancing general account which was held at that bank. 7 A complaint was made by the clients of the Conveyancer to the Office of Fair Trading and subsequently, the matter was resolved between the Conveyancer and the clients with the Conveyancer refunding to the Clients all but $226.00 of the total stamp duty cheque to the clients. The $226.00 related to monies that the Conveyancer had disbursed on behalf of the clients. 8 It is perhaps of interest to note that the obligations imposed on conveyancers by section 25 of CLA largely mirror the obligations imposed on solicitors by section 61 of the Legal Profession Act 1987. There is one significant difference between the two Acts. Section 61(8) of the Legal Profession Act 1987 provides that contravention of the section will amount to professional misconduct of a solicitor if done "wilfully". The provisions of section 25 of the CLA provides that any breach of that section is professional misconduct. 9 The complainant submitted that the honest and reliable handling of trust funds by a conveyancer is a fundamental pre-requisite of fitness and in support of that submission relied upon a decision of the Court of Appeal in New South Wales in the matter of the Law Society of New South Wales -v- Banister, which decision is unreported but delivered on 27 August 1993. In that matter, the Legal Professional Disciplinary Tribunal had imposed a monitory fine on a solicitor found to have wrongly appropriated to his own account a sum of $3,000.00 taken from a $43,000.00 redemption award made to his client under the provisions of the Workers Compensation Act. The Court of Appeal in fact removed the name of the solicitor from the roll and in giving its decision, pointed out that the failure to hand the cheque to the client for the full sum of $43,000.00 was only one matter to take into account. There were in fact other matters namely, that he failed to explain to the client: (a) that the lump sum of $43,000.00 awarded by the Court to the client was exclusive of costs; (b) that the Courts award provided for the payment of the client's costs by the employer as "agreed or taxed"; (c) that the cost of the client had to be either agreed or taxed pursuant to the award. (d) the solicitor eventually settled the claim for costs and did not advise the client that a further sum had been received. (e) the $3,000.00 that the solicitor received he used for his own purpose and did not pay those monies into the office account or more particularly, he did not share it with his Partners. 10 The Conveyancer, in her Reply, admitted the contraventions on section 25(1) and section 25(2) of the CLA. The Tribunal was informed by the solicitor appearing for the Conveyancer that the Conveyancer does not have a trust account and that she had rendered a memorandum of fees on 17 May 2002 and in her mind, she thought that she was taking funds to pay her own account. The Conveyancer appeared very contrite and is well aware of the breaches that she has committed. 11 By way of background information, the Tribunal was informed that the Conveyancer is 48 years of age and lives at Quakers Hill with her husband and now two adult children. She has been involved around legal practices for approximately 30 years and in that time, primarily involved in conveyancing. In February 1996, she became licensed under the CLA. No other formal complaints have been made against her. She has a small practice involving four people including herself and her husband. She is a member of the Australian Institute of Conveyancers and is a Council member elected by her peers. She has been a member of the Council for approximately 8 years and is a fellow of the Institute. 12 A reference from Mr Alan West was tendered to the Tribunal. He is the Chief Executive Officer of the Australian Institute of Conveyancers. He speaks very highly of the Conveyancer in his reference and in particular, states her to be an honest and straight forward, cooperative and concise and very capable conveyancer. 13 Section 82 in part 6 of the CLA provides that part 10 of the Legal Profession Act 1987 applies to licensees and professional misconduct and unsatisfactory misconduct of licensees in the same way as it applies to solicitors. Section 171C of the Legal Profession Act, provides the orders that this Tribunal may make subsequent to the Tribunal making a finding that the Practitioner has been guilty of professional misconduct. 14 Taking into account the facts set out above, the Tribunal finds that the Conveyancer has breached the provisions of section 25(1) and section 25(2) of the CLA and in those circumstances finds that the Conveyancer is guilty of professional misconduct. PENALTY 15 The Tribunal has taken into account the fact that the Conveyancer did not dispute the particulars in the Information; has resolved the dispute with her clients and refunded the monies; had rendered an account to the clients prior to cashing the cheque at the Commonwealth Bank; accepting her explanation that she thought that she was deducting the monies to pay her own costs and that she is otherwise a person of excellent character. In the circumstances, the Tribunal orders: 1. The Conveyancer is privately reprimanded. 2. That the Conveyancer pay the costs of the Office of Fair Trading within one calendar month of the date of this order. Liberty to apply if payment is not made.