The Legal Services Tribunal of New South Wales CITATION : Tracey Luker [1997] NSWLST 19 PARTIES : Tracey Luker FILE NUMBER(S) : of 1996 CORAM: Mr G Molloy (Chairperson) - Mr C. Staff - Mr J. O'Neill Clerk misappropriated funds from employer's trust account :- Guilty of conduct which if she had been a barrister or solicitor would have constituted professional misconduct. CATCHWORDS: LEGISLATION CITED: Legal Profession Act 1987 CASES CITED: DATES OF HEARING: 30 June, 1997 DATE OF JUDGMENT: 07/08/1997 LEGAL REPRESENTATIVES: Mr L Pierotti No appearance by the Clerk. JUDGMENT: The Law Society sought an order under s.48I of the Legal Profession Act alleging that Luker, a clerk employed by a firm of Newcastle solicitors had been guilty of conduct which, if she had been a barrister or solicitor, would have constituted professional misconduct. The clerk on 10 occasions stole money from the accounts of her employer by falsely requisitioning cheques and converting them to her own use. The Tribunal made an order prohibiting the employment of the clerk by a barrister or solicitor in terms of section 48I and ordered her to pay the costs of the Law Society. T his Tribunal has before it Application by the Law Society of NSW seeking an order prohibiting any barrister or solicitor from employing or paying Tracey Luker in connection with the practice of such barrister or solicitor. The proceedings are brought pursuant to the provisions of Part 3A, Section 48I, Legal Profession Act, the ground being that Ms Luker is alleged to have been guilty of conduct which, if she was a barrister or solicitor, would have constituted professional misconduct. At all relevant times Ms Luker was a Clerk employed by a well known and respected firm of Newcastle solicitors. She has ceased that employ, is now married and is a mother. Ms Luker was employed by the solicitors before and after the Newcastle earthquake 29 December, 1989. She was employed at a branch office and in 1990 she became a permanent secretary at the head office of the firm in Newcastle. The firm treated her kindly. She was sponsored to attend a conveyancing course at the College of Law and attended several advanced conveyancing courses at the expense of the firm. She acquired a working knowledge of the firm's accounting procedures. The evidence discloses, however, that Ms Luker apparently suffered from an addiction to gambling and took it upon herself to re-pay the kindness of the firm by stealing moneys from the firm. In internal legal parlance it is called misappropriation but in reality it is commonly called plain stealing. The Law Society has alleged that in 10 separate instances Ms Luker took moneys belonging to the firm and placed those moneys in her own accounts. The total moneys alleged to have been so stolen amount to some $7,490.93, being moneys taken in relation to 10 separate conveyancing transactions. There is evidence before us, however, that Ms Luker has taken from and re-paid to the solicitors something in the order of $30,000.00 - this evidence comes from an admission made to a Law Society Trust Account inspector at an interview which took place with Ms Luker 29 September, 1995. At that interview Ms Luker was asked: "... have you remitted any funds to the solicitor as a result of what we have been discussed today". And she replied: "Yes, we remitted to them $30,000.00 in lieu of any other moneys that is owing ...". And there is corroborating evidence from the solicitors' office manager to similar effect. Later in the same interview Ms Luker said: "The money (referring to various amounts of money taken by her in various conveyancing transactions) has been paid into my account and I am trying to be as helpful as possible and I am trying to get this matter fixed up as quick as we can ... I am attending Gamblers Anonymous to try and help me with my problem." The facts as pleaded and proved disclose that from about April 1994 and on 10 separate occasions Ms Luker embarked upon a course of conduct designed to deceive these solicitors and designed to appropriate for her own use moneys that were properly owing to or owned by the solicitors. In a typical example she would requisition a trust account cheque from the accounts department in the firm, indicating in the requisition form that the money was required on account of "settlement moneys", she would take the trust account cheque and purchase a bank cheque and then place that bank cheque in an account operated by her. She would then cause an account for professional charges to be sent out to the client in the full amount but would create a separate account for the reduced amount (being the money that she took) and forward that created account to the accounts department. By this method she hoped that the accounts as kept by the firm would be balanced and the additional amount that she took would not be reflected in the internal accounts and therefore would not be picked up by audit or otherwise. Her ultimate undoing was by her hand altering a direction to pay in a conveyancing transaction thereby directing the solicitors for the purchaser to draw a cheque payable to a Bank. This cheque would otherwise have been payable to her employer. That meant, of course, that the solicitors were not paid the amount on account of their fees. Ms Luker took the amount and appropriated it to her own use. The fact that no moneys were received by her employers on account of costs came to the notice of one of the partners. As a result of that investigation a review took place of all of the client matters in which Ms Luker was an active participant. There is no requirement for us to set out in detail all the unfortunate facts of this matter. There are adequately set out in the various statutory declarations and adequately summarised in the particulars to the Application. The plain facts are that Ms Luker took moneys to which she was not entitled and paid those moneys into her own accounts. She cannot avoid the obvious result. The Tribunal is satisfied on the evidence admitted and to the requisite standard of proof that Ms Luker was a Clerk within the meaning of Section 48I and is further satisfied that she has been guilty of conduct in the Particulars annexed to the Application to this Tribunal filed 23 May, 1997 in relation to each of the matters particularised and in relation to the totality of the matters particularised and which conduct would have constituted professional misconduct within the meaning of Part 10. The Tribunal is therefore satisfied that an Order should be made pursuant to the provisions of Section 48I. Consequently, the Tribunal makes the following Orders: 1. Barristers and solicitors are prohibited from employing or paying in connection with his, her or their practice or practices Tracey Luker. 2. Tracey Luker pay the reasonable costs of the Law Society in a sum as the parties may agree 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.