Council of the Law Society of NSW v Barford

Case •

[2011] NSWADT 303

•

05 December 2011

Administrative Decisions Tribunal


New South Wales

Medium Neutral Citation: Council of the Law Society of NSW v Barford [2011] NSWADT 303
Hearing dates:5 December 2011
Decision date: 05 December 2011
Jurisdiction:Legal Services Division
Before: J Pheils, Judicial Member
N Isenberg, Judicial Member
C Bennett, Non -Judicial Member
Decision:

1. Pursuant to s18(2) Legal Profession Act 2004 any law practice is prohibited (without approval under section 17) from employing or paying the Respondent, in connection with the legal practise engaged in by the law practice.

2. The Respondent pay the Society's costs of these proceedings in the sum of $2000 by 4 December 2013.

Legislation Cited: Legal Profession Act 2004
Category:Principal judgment
Parties: Council of the Law Society of New South Wales (Applicant)
Hanora Jacqueline Barford (aka Jackie Barford) (Respondent)
Representation: Council of the Law Society of New South Wales (Applicant)
Hanora Jacqueline Barford (aka Jackie Barford) (Respondent in person)
File Number(s):112020

REasons for decision

  1. On 3 August 2011 the Council of the Law Society of New South Wales filed an application seeking:

a.An order under Section 18(2) Legal Profession Act 2004 ("The Act") prohibiting (without approval under section 17) any law practice from employing or paying the Respondent in connection with the legal practise engaged by the law practice.
b.That the Respondent pays the costs of the Law Society of these proceedings.

  1. The Respondent appeared in person in the proceedings. By an amended reply dated 18 September 2011, she consented to orders being made pursuant to section 18 (2) of the Act and confirmed that she was guilty of conduct which, "if I were an Australian legal practitioner, would have constituted professional misconduct".

  1. The applicant relied on the following material:

i.Affidavit of Anne Marie Foord sworn 26 July 2011
ii.Affidavit of Garry Napper sworn 2 March 2011.
iii.Affidavit of Stanislaus Anthony Carroll sworn 26 July 2011
iv.Affidavit of Robert Patrick Higgins sworn 26 July 2011
v.Affidavit of Michael O'Dea sworn 29 July 2011

  1. The Respondent was a lay associate with the firm of solicitors for 40 years. She was considered to be a valued and trusted employee. She was given the day to day management of number of estate matters. Her long term trusted relationship with the practice allowed her to engage in fraudulent transactions, amounting to $163,684.20 without discovery by members of the practice.

  1. During a routine trust account inspection it was noticed that a number of cheques were drawn with payees as the Commonwealth Bank of Australia and Westpac Banking Corporation and that associated and other documentation were not located on the estate file matters. Paid cheques were requested from the banks for two of the payments. These cheques were found to have notations on the back of the cheques indicating that the monies had been paid into accounts in the name of the Respondent. The handwriting on the cheques was identified as being that of the Respondent.

  1. The ensuing investigation by the trust account inspector found 12 instances of misappropriation from the general trust account and 4 instances in regard to controlled money accounts. In order to perpetuate and conceal the misappropriation the Respondent falsified correspondence, bank withdrawal slips, client authorities and in one case forged a client's signature. Statements of account to the clients and the practice were also falsified.

  1. The particulars of the conduct of the Respondent are set out below:

1. Matter 60190 - Misappropriation of general trust account monies $13,010.00 on or about 19 July 2006.

  1. $13,010.00 was held in the trust account as balance due to the estate. On 18 July a trust cheque transaction request was completed by the Respondent for this amount. On the same day a cheque for this amount was drawn. The cheque had a hand written notation on its back with the details of the banking account of the Respondent with the Commonwealth Bank St James Branch. A bank statement for Trust Account discloses payment of cheque 100241 on 19 July 2006 for $13,010.80. The bank statement for Commonwealth Bank Streamline account in the name of the Respondent discloses a deposit on 19 Jul 2006 for $13,010.80.

The transfer of $13,010.80 to the Respondent bank account was not authorised or consented to by the executors or beneficiaries of the estate. The amount of $13,010.80 was misappropriated by the Respondent.

2. Matters 41369 & 61934 - Misappropriation of general trust account monies $86,988.99 on or about 14 December 2006.

  1. The law practice was engaged in early 2004 by the remaining sole beneficiary and nephew of the deceased. The named executor under the will predeceased the testator. As a consequence Letters of Administration, with the will annexed dated 21 September 2004 were obtained by the law practice, naming the client as the Administrator. The client resided in Victoria.

  1. The Australian assets of the estate consisted of one banking account and three term deposit accounts with Challenge Bank, one account with Commonwealth Bank, one term deposit with ANZ Bank and one term deposit with National Australia Bank. The trust account ledger 41369 discloses that the banking accounts for Westpac/Challenge Bank, Commonwealth Bank and National Australia Bank were realised in October/November 2004.

  1. No amount was received to trust account ledger 41369 in respect of the ANZ account disclosed in the Letters of Administration for the amount of $76,549.64.

  1. General trust account ledger 061934, discloses the receipt of funds to the account of $87,318.99 on 16 November 2006. The cheque was received by the law practice on 14 August 2006, some 3 months prior to banking to the trust account.

  1. There is a payment dated 7 December 2006 to the Commonwealth Bank of Australia for "Balance due from Estate", reference 100780 for $86,988.99. Balance on the account of $330.00 was withdrawn from the trust account on account of costs.

  1. On 7 December 2006, the Respondent made a Trust Cheque Transaction Request for matter to the Commonwealth Bank of Australia for Balance due from Estate $86,988.99. Cheque no.100780, drawn on the law practice's Trust Account is dated 7 December 2006, and is in the amount of $86,988.99. A bank statement for the law practice's Trust Account discloses the payment of cheque 100780 in the amount of $86,988.99 on 14 December 2006.

  1. The cheque has a notation on its back in the Respondent's handwriting with the details of her bank account and her signature. There is an email confirmation dated 14 April 2010 from the Commonwealth Bank; confirming that the funds were credited to the bank account of the Respondent. The bank statement for the Commonwealth Bank Streamline Account in the name of 'Hanora J Barford' discloses a deposit on 14 December, 2006 of $86,988.99.

  1. The Respondent misappropriated trust monies in this matter in the amount of $86,988.99. To disguise this, she falsely produced a letter addressed to the client dated 30 November 2006.

3 Matter 72513 - Misappropriation of general account trust monies $878.25 on or about 30 October 2007.

  1. The trust account ledger shows payment of $878.25 by cheque no. 7122 on 24/10/2007 to 'Commonwealth Bank of Australia for Monies due to Estate - unclaimed monies', leaving a nil balance in the account.

  1. The Respondent made a Trust Cheque Transaction Request for matter 072513 to Commonwealth Bank of Australia for Monies due to Estate - unclaimed monies for $878.25. The Commonwealth Bank paid cheque no.7122, drawn on Trust Account, in the amount of $878.25 and dated 24 October 2007 is made payable to the Commonwealth Bank of Australia. The cheque has the a notation referring to the visa account of the Respondent on its back. The bank statement for the law practice's Trust Account discloses a payment of cheque 7122 on 30 October 2007 in the amount of $878.25. The bank statement for the Respondent's Commonwealth Bank Visa account discloses a deposit of $878.25 on 30 October 2007.

Matter file 72513 contained a letter to The Officer in Charge, Unclaimed Monies Section, Office of State Revenue (OSR) dated 29 October 2007 included the following:

  1. "The Nursing Home where he was a resident for some time prior to his death forwarded to us a cheque for the balance of monies held in his trust account with the Home. As the deceased had no known relatives we are now enclosing a cheque for $878.25 for you to place with Unclaimed Monies. Will you kindly acknowledge receipt of the enclosed cheque for our records."

  1. There was no receipt from the OSR on file. This letter was fabricated to cover the misappropriation of trust monies, as the monies in question were not forwarded as unclaimed monies.

4. Matter 50177 - Misappropriation of general trust account monies $1,465.00 on or about 25 March 2009.

  1. Trust Account Ledger 50177 discloses:

i. An entry on 11 March 2009, being $1,465.00 received from Australian Taxation Office for Refund re Liabilities; and
ii. An entry dated 24 March 2009, being a payment by cheque no.9174 for $1,465.00 paid to Commonwealth Bank of Australia for 'Refund Commonwealth Gov't Liabilities'. This brought the account back to a nil balance.
iii. The trust account ledger discloses, prior to the above two entries, a residual distribution to bring the account balance to nil on 21 December 2007, save for a costs withdrawal of $14.19 which was transferred to the office account on 11 January 2008. This was the last transaction before the receipt and disbursement of $1,465.00, and was some 14 months prior.

  1. On 23 March 2009, the Respondent made a Trust Cheque Transaction Request for matter 050177 to Commonwealth Bank of Australia, for 'Refund C/wth Gov Liabilities' in the amount of $1,465.00. The Commonwealth Bank paid cheque no.9174, drawn on the Trust Account, and dated 24 March 2009; is in the amount of $1,465.00 had a notation of the Respondent's Commonwealth Bank Account on its back. The bank statement for the Law Practice's Commonwealth Bank Trust Account discloses a payment of cheque 9174 on 25 March 2009 in the amount of $1,465.00.

  1. The Respondent's Commonwealth Bank Streamline Account bank statement discloses a deposit on 25 March 2009 of $1,465.00. An email, dated 14 April 2010, from the Commonwealth Bank, confirms that $1,465.00 was credited to the account of 'Hanora J Barford'.

5. Matter 80138 - Misappropriation $560.00 controlled monies on or about 21 May 2009.

  1. The executors and clients in this matter are, a partner of the law practice and a former partner and former associate of the practice. The matter had both general trust account transactions and controlled money transactions. The amount in question related to the controlled money account.

  1. An amount of $550.00 was withdrawn and purportedly sent to a beneficiary (L.O.) for which a signed receipt from her is present in the matter file. The $550.00 was in fact banked to an account in the name of the Respondent. The transfer of $550.00 to the Respondent's bank account was not authorised or consented to by the executors or beneficiaries of the estate.

  1. The controlled money account 60673/4 ledger discloses a transaction on 25 May 2009 with reference 5953100 paid to L.O. being, on account of monies due $550.00, plus $10.00 bank cheque fee. The Respondent had the conduct and day to day carriage of this matter.

  1. The St George paid bank cheque no. 943784, drawn on 20 May 2009 for $550.00 payable to Commonwealth Bank of Australia has no handwritten notation on the reverse side. The Commonwealth bank statement for Visa card a/c in the name of 'Hanora J Barford' discloses a credit (deposit) entry on 21 May 2009 in the amount of $550.00.

  1. In order to hide the misappropriation, the Respondent falsified the controlled money withdrawal direction and added false details to the withdrawal slip presented to the St George Bank, after it was signed by the signatories. She also added 'L. O. $550.00' to the practice copy of the St George Bank withdrawal slip after the original was signed by the signatories.

6. Matter 90049 - Misappropriations $37,051.20 controlled monies on or about 16 June 2009, $984.30 controlled monies on or about 27 January 2010 and $420.00 general trust account monies on or about 05 February 2010.

  1. The executor of this estate is a partner in the law practice, and a nephew of the deceased.

6A.Misappropriation $37,051.20 controlled monies on or about 16/06/2009

  1. The controlled monies ledger 15173/2 discloses a transaction dated 09 June 2009 for $37,041.20 with detail paid to Australian Taxation Office for Tax payable plus $10.00 bank cheque fee.

  1. There is a handwritten direction concerning Controlled Monies dated 1 June, 2009, signed by the Executor, which includes $37,041.20 to the Australian Taxation Office. This amount has been squeezed in between two items which were originally equally spaced, as were other items on the document.

  1. St George paid bank cheque no. 944007 drawn 01 June 2009 for $37,041.20 payable to Westpac Banking Corporation has a notation on it's reverse side to split the cheque between two accounts $30,000.00 and $7,041.20'. A letter from Westpac dated 16 June 2009 to Hanora J Barford confirms the opening of a term deposit account for $30,000.00. A letter from Westpac dated 16 June, 2009 to Hanora J Barford confirms the opening of another account. Copied to that document was Westpac deposit slip dated 16 June 2009 with a cheque deposit of $7,041.20. The Westpac bank statement in the name H J Barford account discloses a deposit on 16 June 2009 for $7,041.20.

  1. The Respondent falsified the controlled money withdrawal direction by adding the detail $37,041.20 to Australian Taxation Office, to the document after it was signed, in order to hide the misappropriation. The Respondent also added the detail to the withdrawal slip presented to the St George Bank after it was signed by the signatories, such detail being Westpac Banking Corporation $37,041.20.

  1. In addition, the Respondent added the wording to the practice copy of the St George Bank withdrawal slip after the original was signed by the signatories, being Australian Taxation Office $37,041.20, in order to hide the misappropriation. The Respondent falsified the statement of account for St George bank covering the period from 7 May 2009 to 1 June 2009.

6B. Misappropriation $974.30 controlled monies on or about 27 January 2010

  1. The controlled monies ledger 15173/2 discloses a withdrawal transaction dated 31 January 2010 Ref 7463300 for $974.30 with detail 'paid to Australian Taxation Office for further amount due 25/1/10, plus $10.00 fee'. The direction regarding the Controlled Monies dated 25 January 2010, signed by the Executor includes one item $974.30 to Australian Taxation Office. This amount has been added in handwriting, as distinct from the other entries, which are printed. The withdrawal slip from the St George Bank dated 25 January 2010 for controlled money account shows a cheque detail of Australian Taxation Office $974.30, has been squeezed in between two other entries. There is no space is provided for the middle entry.

  1. St George paid bank cheque no. 367278 dated 21 January 2010 payable to Commonwealth Bank of Australia for $974.30 has a notation on its reverse of Respondent's Visa account number. Commonwealth bank statement for Visa card in the name of Hanora J Barford reveals a deposit on 27 January 2010 in the amount of $974.30.

  1. In order to hide the misappropriation the Respondent falsified the controlled money withdrawal direction by adding the detail $974.30 to Australian Taxation Office, added the same detail to the withdrawal slip presented to the St George Bank and added the same details to the practice copy of the St George Bank withdrawal slip after the originals were signed.

6C.Misappropriation $420.00 - general trust account monies on or about 5 February 2010.

  1. General trust account ledger 90049 discloses an entry on 02 February 2010 for cheque no.10563 paid to Commonwealth Bank of Australia for '- O/s Card Balance due $420.00'. On 1 February 2010, the Respondent made a Trust Cheque Transaction Request for matter 090049 to Commonwealth Bank of Australia, for 'O/s Card Balance Due $420.00'.

  1. Commonwealth Bank paid cheque no.010563, drawn on the Trust Account, dated 02/02/2010 for $420.00 payable to Commonwealth Bank of Australia contains the handwritten notation of the Respondent's Visa account. Bank statements for the Trust Account disclose a payment of cheque 010563 on 05 February 2010 for $420.00.

  1. Commonwealth bank statement for Visa card in the name of Hanora J Barford has a credit (deposit) entry on 05 February 2010 in the amount of $420.00. In a statement made by the executor of the estate he noted the following:

"(a) A statement of 1 June 2009 understated the amount received from Ord Minnett by the amount of $37,041.20.
(b) A sum of $37,041.20 was then incorrectly shown as paid to the Australian Taxation Office. The tax payable at that stage was $5,583.60 which was in fact, correctly paid by way of a separate cheque.
(c) The statement of 1 February 2010 showed tax paid to the Australian Taxation Office of $31,698.40 whereas the amount actually payable to the Australian Taxation Office was $30.304.10. A separate cheque for the balances of:
(i) $974.30 was shown as payable to the Australian Taxation Office but was not in fact, paid to the Australian Taxation Office; and
(ii) a sum of $420 was shown as paid on Commonwealth Bank Mastercard but was in fact, not payable to that entity and not in the beneficiary statement;

  1. The amounts of

a) $37,041.20
b) $420.00
c)$974.30

are now payable to the beneficiaries. I am the sole executor of the Estate ...I did not authorise any of the transactions set in the (b) and (c) above. I did not authorise payment...to Jackie Barford"

7.Matter 62660 - Misappropriation of controlled monies $3,448.00 on or about 17 August 2009 ($4,030.00 less redeposit of $582.00)

  1. Controlled monies ledger 56214/1 discloses a withdrawal transaction dated 31 August 2009 for $3,448.00 with detail 'paid to St George bank for a Tax Payable 17/8/09, plus $10.00 fee'. A direction dated 13 August 2009, and signed by the Executor, has the provision for two payment amounts and the second has been struck out and is initialled. The $3,448.00 entry to Australian Taxation Office has been added to the document between the struck out portion and the first entry.

  1. There is a withdrawal slip St George Bank dated 17 August 2009 and cheques in names of 'S M P' ($30,000.00) and 'Australian Taxation Office' ($3,448.00). The matter file did not disclose any documentation regarding the payment to the Australian Taxation Office.

  1. There is a St George bank customer receipt dated 17 August 2009 for the deposit of $582.00 in cash. The St George Bank statement for the Estate account discloses entries dated 17 August 2009 described as "cash withdrawal" ($34,050.00) and "cash deposit" ($582.00).

  1. The controlled money ledger and the practice record of the withdrawal slip both disclose the total withdrawal amount as $33,448.00, being the net of the transactions shown on the bank statement for the account; being the withdrawal of $34,050.00 less the deposit of $582.00.

  1. A St George paid bank cheque no. 081631, dated 17 August 2009 and made payable to Westpac Banking Corporation for $4,030.00, has a handwritten notation with the Respondents bank account. A bank statement in the name Hanora J Barford account records a deposit on 17 August 2009 in the amount of $4,030.00.

  1. A letter addressed to the client dated 21 July 2009 advises that the balance held on the St George account at 20 June 2009 was $32,632.29. The balance of the account as disclosed on the bank statements and the statement of account (addressed to J Barford) as at 20 June 2009 was $36,090.60. The difference between the amounts is $3,458.31.

  1. The amount of $4,030.00 was withdrawn by the Respondent, and was in excess of what was required to be deducted to arrive at the figure which was advised to the client. As a consequence, the amount of $582.00 was redeposited to the account.

  1. In order to hide the misappropriation the Respondent falsified the controlled money withdrawal direction by adding the details $3448.00 to Australian Taxation Office, to the document, "Westpac Banking Corporation $4,030.00", to the withdrawal slip presented to the St George Bank and the words 'Australian Taxation Office $3,448.00' to the practice copy of the St George Bank withdrawal slip after they were signed.

8. Matter 91011 - Misappropriation of general account trust monies $1,131.49 on or about 1 September 2009

  1. The trust account ledger discloses an entry dated 25 August 2009 with detail 'paid to Westpac Banking Corporation for balance due to the beneficiaries, cheque no. 9788 for $1,131.49'. The Respondent made a Trust Cheque Transaction Request dated 24 August 2009 for matter 091011 to Westpac Banking Corporation, for 'balance due to beneficiaries $1,131.49'.

  1. The paid cheque, Commonwealth Bank no. 9788 for $1,131.49 dated 25 August 2009 has the handwritten notation directing it to the account Hanora J Barford. Bank statements for the Trust Account disclose payment of cheque 9788 on 1 September 2009 for $1,131.49. Westpac Bank statement for account 'Miss H J Barford', discloses a deposit of $1,131.49 on 1 September 2009.

  1. The misappropriation of $1,131.49 was disguised by including a lower amount in the statements of account for the net realisation from the sale of the property.

9.Matter 090908 - Misappropriation of general account trust monies $3,495.32 on or about 6 October 2009 and $393.65 on or about 22 September 2009.

  1. Misappropriation of $3,495.32

  1. The trust account ledger discloses an entry dated 31 August 2009 with detail 'paid to Commonwealth Bank of Australia for repayment expenses paid for Estate, cheque no. 9828 for $3,495.32'. The Respondent made a Trust Cheque Transaction Request dated 27 August 2009 for matter 090908 to Commonwealth Bank of Australia for 'Repayment exps paid for Estate $3,495.32'. There is a Commonwealth Bank cheque dated 31 August 2009 (no. 9828) in the amount of $3,495.32 with the payee being the Commonwealth Bank of Australia. The back of the cheque has no notations.

  1. Bank statements for the Trust Account discloses payment of cheque 9828 on 6 October 2009 in the amount of $3,495.32. The Commonwealth Bank statement for Visa card account in the name of 'Hanora J Barford' shows a deposit on 6 October 2009 in the amount of $3,495.32. An email dated 14 April 2010 from the Commonwealth Bank confirms that the amount of $3,495.32 was paid into the account of the Respondent.

  1. A manually prepared statement of account describes the payment as "31/8/09 John Walter - Repayment of expenses paid on behalf of Estate". There was no documentation on file in regard to the payment of $3,495.32.

  1. Misappropriation of $393.65

  1. The trust account ledger discloses a nil balance as at 4 September 2009. On 14 September 2009, $393.65 was receipted to the account from Australian Health Management Group for 'Refund contributions'. There is also an entry dated 21 September 2009 for $393.65, which discloses payment to the Commonwealth Bank of Australia described as 'Balance due'.

  1. On 21 September 2009, the Respondent made a Trust Cheque Transaction Request for matter 090908 to the Commonwealth Bank of Australia for 'Balance due beneficiaries $393.65'. A paid cheque obtained from the Commonwealth Bank (no. 9984) for $393.65 and dated 21 September 2009 notes the payee as Commonwealth Bank of Australia. The back of the cheque has the notation to the account of "Hanora J Barford" and the Respondent's signature.

  1. Bank statements for Trust Account disclose payment of cheque 9984 on 22 September 2009 for $393.65. The Commonwealth Bank statement for account in the name of 'H J Barford' discloses a deposit on 22 September 2009 in the amount of $393.65. A remittance advice from Australian Health Management regarding the amount for $393.65 is dated 25 August 2009, and has a date received stamping of 14 September 2009 (being the same date that it was receipted to the account).

  1. There was no copy of final accounting in the matter file in regard to the receipt and payment of the $393.65.

10.Matter 72516 - Misappropriation of general account trust monies $3,914.99 on or about 16 October 2009.

  1. Correspondence dated 15 June 2009 from Military Super refers to a payment of $98,586.39. A receipt from ComSuper dated 12 June 2009 discloses an overpayment (of superannuation to deceased) in the amount of $6,982.05. No separate payment item for this amount is shown in the trust account; the documentation would indicate that the $6,982.05 was deducted from and prior to the net superannuation payout of $98,586.39 received into the trust account.

  1. The statement of account concerning the file is not accurate, in that it excludes four transactions prior to 12 June 2009 which result in a balance of $65.55. Further inaccuracies are as follows,

Expenditure item 17/6/09 Com Super -
Overpayment (not paid from trust account)3,879.44
Expenditure item 7/10/09 Carroll and O'Dea
final costs and fees, shown as $855.01,
actual$885.01 (30.00)
Unrecorded balance
as detailed above 65.55
The amount misappropriated is accordingly $3,914.99.

  1. On 2 October 2009, the Respondent made a Trust Cheque Transaction Request for matter 072516 to Commonwealth Bank of Australia for payment due, in the amount of $3,914.99. A paid cheque obtained from Commonwealth Bank no. 10062 for $3,914.99, and dated 7 October 2009 has the hand written notation to the account of Hanora J Barford" on its reverse.

  1. A bank statement for Trust Account discloses payment of cheque 10062 on 16 October 2009 in the amount of $3,914.99. A Commonwealth Bank statement for account in the name of 'H J Barford' discloses a deposit on 16 October 2009 in the amount of $3,950.99, the cheque in question forms part of this amount.

  1. During a routine trust account investigation on 9 March 2010, the fact that there was no correspondence on the file to support the debit entry concerning the $3914.99 cheque was raised with the Respondent. She indicated to the inspector that she may have correspondence on a separate file that she used when the main file has gone into storage. About 15 minutes later she presented to the account inspector what purported to be a copy of a letter dated 9 October 2009 addressed to the client. The letter indicated that the client had recently found out about a Mastercard account held by the deceased that required payment of $3914.99. A "word document history" was later obtained for this letter, that showed the letter was created on 9 March 2010 at the approximate time that the question was raised by the inspector. The document was fabricated by the Respondent to deceive the trust account inspector.

11. Matter 90597 - Misappropriation of general account trust monies $475.00 on or about 2/12/09

  1. On 30 November 2009, the Respondent made a Trust Cheque Transaction Request for matter 090597 to Commonwealth Bank of Australia for 'Balance fees due' in the amount of $475.00. Paid cheque no. 010264 for $475.00 and dated 30 November 2009 has the hand written notation on its reverse, with the details of the Respondent's Commonwealth Bank Visa account.

  1. A bank statement for Trust Account discloses payment of cheque 010264 on 2 December 2009 for $475.00. An email dated 14 April 2010 from an officer of Commonwealth Bank confirms that these funds were credited to the account of Hanora J Barford.

  1. A Commonwealth Bank statement for Visa card in the name of 'Hanora J Barford' discloses a deposit on 2 December 2009 for $475.00.

  1. Statements of account on the file covering the period 22 September 2009 to 9 April 2010 includes expenditure item "30/11/09 CBA - amount found to be repayable to Bank $475.00." The matter file did not contain any documentation to support that there were any monies repayable or any fees due to the Commonwealth Bank.

12.Matter 90019- Misappropriation of general account trust monies $493.00 on or about 23 December 2009.

  1. On 17 December 2009, the Respondent made a Trust Cheque Transaction Request for matter 090019 to the Commonwealth Bank of Australia for 'Balance share fees' in the amount of $493.00. A paid cheque obtained from Commonwealth Bank (no. 010345) for $493.00 and dated 18 December 2009 has the hand written notation with account details on its reverse.

  1. Bank statements for the Trust Account discloses payment of cheque 010345 on 23 December 2009 in the amount of $493.00. An email from an officer of the Commonwealth Bank dated 14 April 2010 confirms that the monies in question were credited to the account of 'Hanora Barford'. The Commonwealth Bank statement for the Respondent's Streamline account discloses a deposit entry on 23 December 2009 in the amount of $513.00. This includes the amount of $493.00.

  1. Matter File 90019 contains letters to client executors dated 8 January 2010 which refers to Statement of all monies received and paid out and statements of account covering the period 17 June 2009 to 31 December 2009. A comparison between the items and amounts shown in the trust account ledger and those shown in the statement of account discloses that an expenditure item shown in the statement of account as has been falsified.

  1. The item which is shown with detail, "8/12/09 North Coast Health & Pest Authority - outstanding account $605.29", was in fact $112.29 and has been overstated by $493.00, being the amount misappropriated by the Respondent. The item shown in the trust account ledger payable to Commonwealth Bank of Australia for $493.00 is not shown at all in the statement of account. The record has been falsified.

13. Matter 92903 - Misappropriation of general account trust monies $8,974.21 on or about 5 March 2010.

  1. On 1 March 2010, the Respondent made a Trust Cheque Transaction Request for matter 092903 to the Commonwealth Bank of Australia for 'Outstanding monies due to Bank' in the amount of $8,974.21. There is a paid cheque from the Commonwealth Bank (no. 010652) in the amount of $8,974.21 and dated 2 March 2010 with payee Commonwealth Bank of Australia. The back of the cheque does not have any hand written notation.

  1. A bank statement for the Trust Account discloses a payment of cheque 010652 on 5 March 2010 in the amount of $8,974.21. An email from the Commonwealth Bank confirms that the cheque was deposited to the account of the Respondent. The Commonwealth Bank statement for the AwardSaver account in the name of 'H J Barford' discloses a deposit on 5 March 2010 in the amount of $8,994.21, this includes the amount of $8,974.21;

  1. An Affidavit of executors dated 12 December 2009 discloses a list of liabilities of the deceased. According to that Affidavit, there is no liability owing to the Commonwealth Bank. Similarly, a handwritten list of liabilities does not list any liability owing to Commonwealth Bank. The matter file did not reveal any documentary evidence for the existence of a personal loan owing by the deceased to the Commonwealth Bank.

The Respondent's Position

  1. Respondent admits misappropriating the monies.

  1. An affidavit made by the Managing Partner of the law firm, relied on by the Respondent, states that the Respondent was employed in a clerical capacity from 24 October 1968 until 1 September 2010. He became aware of the irregularities referred to above in late March or early April 2010.

  1. The issues were raised with the Respondent and she was stood down from employment, she then took independent legal advice and her employment was terminated. The matter was reported to the Police. A full audit of all matters handled by the Respondent over the previous 10 years was undertaken by the law practice. The Respondent fully cooperated with the practice and all the money and interest was reimbursed to the clients. He has no doubt that over a long time the Respondent served their clients

"..diligently, competently and honestly and in many instances well beyond the normal call of duty.

  1. I have a limited understanding as to the personal and psychological issues which resulted in the commission of serious misconduct over an apparently limited period of time.

  1. This has been a tragic and complex matter in which Ms Barford's proactive cooperation has been of considerable assistance in ensuring the efficient and comprehensive rectification of the client losses sustained."

Tribunal's View of the actions of the Respondent

  1. The evidence brought by the Law Society clearly establishes a course of conduct by the Respondent involving misappropriation and attempts to defraud.

  1. In relation to ground (a) of the application in order to make the substantive order sought the Tribunal finds that the Respondent is not a fit and proper person to be employed or paid in connection with any legal practice.

  1. In relation to ground (a) a lay associate of legal practice who wilfully misappropriates money's received from clients, deceives the trust, built up over many years of partners in the practice and attempts to deceive the Trust Account Inspector is clearly not a fit or proper person to engage in legal practice. Accordingly the Tribunal finds that the Respondent is not a fit and proper person to be employed or paid in connection with any legal practice, subject to the rights of the Respondent to make and application under section 17 of the Act.

  1. In relation to ground (b) of the Application in order to make substantive order sought the Tribunal finds that the Respondent has been guilty of conduct which, if the Respondent were an Australian legal practitioner, would have constituted professional misconduct.

  1. In relation to ground (b) the law is clear that fraudulent misappropriation of money received on behalf of another person is professional misconduct. If the Respondent had been a legal practitioner the Tribunal would have found this conduct was professional misconduct.

Orders

  1. No law practice may employ or pay the Respondent in connection with the legal practice engaged in by the law practice, without approval under section 17 of the Legal Profession Act.

  1. The Respondent pay the costs of the Law Society in the sum of $2000 by 4 December 2013.

Decision last updated: 20 December 2011

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