Council of the Law Society of NSW v Farah [2013] NSWADT 110

Administrative Decisions Tribunal New South Wales Medium Neutral Citation: Council of the Law Society of NSW v Farah [2013] NSWADT 110 Hearing dates: 20 February 2013 Decision date: 21 May 2013 Jurisdiction: Legal Services Division Before: S. Hale, Judicial Member D Fairlie, Judicial Member E Hayes, Judicial Member Decision: 1.Order pursuant to S. 18(2) of the Legal Profession Act, 2004 prohibiting (without approval under section 17) any law practice from employing or paying the Respondent in connection with the legal practice engaged in by the law practice 2.Order that pursuant to S 20(3) of the Legal Profession Act, 2004 the Respondent to pay the Applicant's costs of the proceedings as agreed or assessed Catchwords: Lay Person carrying on conveyancing business - not qualified - misappropriation of moneys - forgery - Legislation Cited: Legal Profession Act, 2004 Financial Transaction Reports Act, 1988 (Cth) Cases Cited: Allinson v General Counsel of Medical Education and Registration [1894] 1QB 750 Stanoevski v Council of the Law Society of New South Wales [2008] NSWCA 93 Briginshaw v Briginshaw (1938) 60 CLR 368 Rejfek v McElroy (1965) 112 CLR 517 Category: Principal judgment Parties: Council of the Law Society of New South Wales (Applicant) Nagib Farah (Respondent) File Number(s): 122024

REASONS FOR DECISION

THE CONDUCT COMPLAINED OF: 1The Respondent, despite being neither a solicitor nor a licensed conveyancer, conducted a conveyancing business for reward in breach of S 6 of the Conveyancers Licensing Act, 2003 NSW. 2The Respondent's conveyancing business was styled J J Service Providers ('JJSP') and operated from a space within the offices of Farah Lawyers, Level 6, Suite 4, 410 Chapel Road, Bankstown NSW ('the Practice') The Principal of the Practice was the Respondent's brother, Elias Farah. 3Since about 2002, under the auspices of the Practice and JJSP, the Respondent had carriage of conveyancing matters from start to finish, including legal searches, lodgement and stamping of documents, settlement and registration. 4The Respondent was not an employee of the Practice. JJSP acted as an agent for the Practice. In this capacity it: a) Had no authority to deal with Trust monies of the clients of the Practice other than by way of deposit into the Trust Account. Trust monies expected and required to be deposited into the Trust Account included monies forwarded by clients for deposits paid before exchange of contracts, deposits paid in cash, stamp duty, settlement monies and balance of mortgage monies received from incoming mortgagees. b) Received a fee per file on settlement. This fee was separately charged to and collected from the clients by the Respondent on behalf of JJSP. 5The Applicant ('the Law Society') became involved in late 2011 following a complaint by a former client of the Practice, Ahli Ahmed, who was experiencing problems in obtaining his files from the Respondent having been told that the Respondent had 'disappeared'. 6The Law Society's investigation established that the Respondent had misappropriated client funds in a number of conveyancing matters over a three year period. There was a small deficiency of $4,562.50 in general trust account monies relating to a forged trust account cheque, which had been corrected by the Respondent's brother. As far as deficiencies in other trust monies were concerned, there were three matters with unusual circumstances, in which monies were being claimed by former clients of the practice. It was found there had been significant manipulation of trust monies through bank accounts of the Respondent and other bank accounts, however, the Respondent had borrowed monies from money lenders to make good the deficiencies during the tenure of the fraud. The Respondent's brother informed the Law Society that he and his family had given in the vicinity of two million dollars to the Respondent, supposedly to repay the money lenders. 7Following the discovery of the fraud, the Respondent disappeared. At the date of hearing the proceedings, his whereabouts were unknown.