The Legal Services Tribunal of New South Wales CITATION : William John Barclay [1997] NSWLST 8 PARTIES : William John Barclay FILE NUMBER(S) : of 1996 CORAM: Mr G Molloy (Chairperson) - Mr M. Barnes - Ms K. Elliott CATCHWORDS: Professional Misconduct - fail to act honestly - Professional Misconduct - misappropriate trust moneys/moneys :- misappropriated clients' money. LEGISLATION CITED: Legal Profession Act 1987 CASES CITED: DATES OF HEARING: 12 August, 1997 DATE OF JUDGMENT: 08/12/1997 LEGAL REPRESENTATIVES: Mr G. J. Still Mr E. Bramble JUDGMENT: The solicitor aged 78 at the time of the proceedings before the Tribunal was found to have dishonestly misappropriated or wrongfully applied clients' money over a period from about 1969 to 1994. The Tribunal found the solicitor guilty of professional misconduct and ordered that his name be removed from the Roll of Legal Practitioners. He was also ordered to pay the costs of the Law Society. Chairman : This is probably one of the saddest cases to come before this Tribunal in recent years. The solicitor is aged 78 and has served some time in gaol as a result of his mis-doings. As is often the case in a matter of this nature, the actions of the solicitor could have been avoided by proper application of common sense and adherence to the principles that underpin the proper practice of law. The solicitor embarked upon a trail of misappropriation and unarguable misconduct since about 1969 and has spent most of the balance of his life living a lie trying to paper over the problems created about 28 years ago. He was admitted to practice on 20 March 1953. He was the sole proprietor of W. J. Barclay & Co. and by 1989 was sufficiently experienced to recognise that his conduct was improper and he should have realised at that stage that if he continued that improper conduct ultimately the day would come where disciplinary proceedings would be commenced against him. He must also have realised with the application of common logic that there was a very fair chance that criminal proceedings would also be preferred against him. But notwithstanding this he persisted in his conduct. The problems encountered by him arose in about 1969 where he was persuaded to become a director of two companies, Capital Constructions Pty. Limited and Ulmurra Investments Pty. Limited. Into those companies, which bought and sold property, the solicitor invested clients' money. It appears that fairly early in the piece there was some litigation and perhaps at that stage the solicitor should have heard the alarm bells ringing. Unfortunately for him and for many clients he did not. The first two or three projects of this company were successful and the funds of clients were reasonably secured. Apparently clients entrusted the solicitor and left money with him "to deal with as appropriate". The solicitor would then use those funds for the various company projects. Ultimately, in circumstances that are not entirely clear, certain lands, which were security for these client loans, were sold, the proceeds received by one or both companies and the moneys lost. The clients were not then repaid their investment moneys, so there was an initial shortage of trust funds created in about 1969. The solicitor in a handwritten statement on 6 April, 1994 admits that he had misappropriated client funds. He admitted that he "appropriated funds for payment of interest on outstanding debts without any consent or knowledge of clients (that he conducted an Investment Account and that) the moneys paid into the investment account were partly clients' money and partly from (his) office account ... (and) were used by (the solicitor) without the clients' knowledge, consent or authority to repay interest owing to clients whose funds had been previously used." It would be not unfair to say, having regard to the volume of material before the Tribunal and the number of incidents of misappropriation, that the solicitor embarked upon a series of transactions designed to protect himself and with an intent to mislead and deceive clients, most of whom were elderly and whose money he held, into thinking that their money was secured, into thinking that their money was earning appropriate interest and into thinking that payments of interest or repayments of money to those clients were properly derived from their investments. In fact, however, the payments of interest and repayments of principal were more often than not obtained from the investments of other clients. It goes without saying that ultimately the day of reckoning must come when the lie cannot be continued, repeated or sustained. There is no need in this Judgment to set out in detail the various individual complaints which are adequately particularised in the Information. We must say at the outset, however, that in his Reply the solicitor admits all the material and facts and does not oppose the making of an order that his name be removed from the Roll and that he pay the costs of the Law Society. It is convenient, however, purely by way of example, to refer to a number of the transactions that brought the solicitor's name before this Tribunal. In the Estate of W.R. Griffin, where there were bank accounts in total $134,554.93, the solicitor withdrew from those accounts $ 51,260.00 and paid that sum to a Mr & Mrs Shepherd who themselves had invested $60,000.00 with or via the solicitor. From the bank accounts he also withdrew $10,400.00 and paid that amount to a Mr & Mrs Carter, $9,257.00 for professional charges and expenses in respect of the Estate, $2,769.93 in cash, $31,621.00 to Mr & Mrs Braddock (who had themselves invested $40,000.00 with or via the solicitor) and $53,000.00 he paid to a Mr Kleeson in respect of an investment of $43,358.02 by Mr Kleeson with the solicitor. The deceased also had invested with the solicitor $26,000.00 and this investment was not included as an asset in his Estate and there is no evidence that those moneys were repaid to the deceased prior to his death. Furthermore, out of a deposit of $7,000.00 held in a building society by the solicitor in trust for the deceased the solicitor withdrew $4,149.97, apparently indicating in the building society passbook in his handwriting that the money was paid to his wife, and in another account in the same building society held by the solicitor in trust for the deceased in $3,000.00 the solicitor withdrew and paid to himself $3,295.59 representing the principal and accrued interest. On all of the above the payments were not authorised by the deceased during his lifetime nor by the terms of any Estate trust. By way of further example Mr & Mrs Simpson had invested with the solicitor $34,000.00. The solicitor purported to pay to them quarterly interest thereon at 14% per annum, but most of the actual payments were paid from money owned by others, namely from P & E Saad in $6,000 and from a building society account in the name of Bull in $10,000.00. Furthermore, $16,000.00 (being part of the $34,000.00 advanced by the Simpsons) the solicitor paid to a company in which he and his wife were directors, Belanglo Holdings Pty. Limited, and without instructions the solicitor on-lent that money, and the money has never been refunded to the Simpsons nor has there been any accounting. A further example: Ms Sing advanced a total of $30,000.00 to the solicitor, all of which money was paid to Belanglo Holdings Pty. Limited, interest on $15,000.00 was paid to 21 March, 1994 and interest on $15,000.00 to February, 1994 and the solicitor has not accounted to Ms Sing for the whole $30,000.00. By way of final example, Ms Staples advanced the sum of $4,000.00 to the solicitor. The solicitor created an Epitome of Mortgage indicating that the advance was to a company styled Trendcraft Pty. Limited, a company in which the solicitor and his wife were directors. There is evidence that there was created an unregistered mortgage over property owned by Trendcraft Pty. Limited but the advance was not "secured" by a registered mortgage or by a caveat, the property was sold and the money has not been repaid to Ms Staples. There are numerous other examples. Their significance, however, is that the solicitor's conduct extended over many many years. In the Estate of Griffin the misconduct took place between 1988 and 1993, on many separate different occasions. In the matter of Simpson the misconduct took place during the period 1982-1994, in the matter of Sing from 1974 to 1994 and in the matter of Staples from 1974 to 1993. Numerous other generally similar incidents of misappropriation and misconduct were also before us. It is plain that the solicitor had engaged in a pattern of conduct from about 1969 to 1994 in which he used the savings of other persons for his own benefit or simply misappropriated moneys. There are numerous incidents of failure to account and failure to repay clients. We are satisfied, on the evidence before us, on the admissions of the solicitor and to the requisite standard of proof that in each case the individual particularised complaints have been proved to our satisfaction, that the solicitor has wilfully breached Section 61 of the Legal Profession Act 1987 , wilfully breached Section 62 of that Act, has failed to account to his clients for money received and has misappropriated moneys in the terms of the matters pleaded. We have absolutely no hesitation in ordering that the name of the solicitor be removed from the Roll of legal practitioners and that he pay the costs of the Council of the Law Society. The orders of the Tribunal are: The name of William John Barclay be and is hereby removed from the Roll of legal practitioners. 2. The solicitor pay the costs of the Law Society in such sum as may be agreed and in default of agreement as determined by the Tribunal. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.