Law Society of New South Wales v Glenorcy Pty Ltd

The Law Society of New South Wales brought proceedings against Glenorcy Pty Ltd concerning a solicitor admitted to practice in both New South Wales and Queensland. The solicitor, who resided in New South Wales but maintained an office in Queensland, was alleged to have failed to account for and misappropriated funds entrusted to him by a New South Wales client. These entrustments were deposited into a Queensland bank account. The central dispute revolved around whether the New South Wales Fidelity Fund was liable to compensate the client for the solicitor's defalcations, given that the alleged misconduct occurred in Queensland.

The court was required to determine whether the solicitor's conduct had a sufficient connection with his practice as a New South Wales solicitor to engage the jurisdiction of the New South Wales Fidelity Fund under the *Legal Profession Act 1987* (NSW). Specifically, the court had to consider whether the provisions of the Act, particularly those relating to claims against the Fidelity Fund, had extra-territorial application in these circumstances. A further issue concerned the measure of damages, and whether any compensation awarded should be reduced by purported interest payments the client had received from the solicitor, to avoid double compensation.

The court reasoned that while the solicitor was admitted in New South Wales, his professional activities giving rise to the claim, including the handling of client funds and the alleged misappropriation, occurred in Queensland. The court applied principles of statutory interpretation concerning extra-territoriality, finding that the *Legal Profession Act 1987* (NSW) did not extend to regulate conduct occurring entirely outside New South Wales, even if the solicitor was admitted in that state and the client was from there. The court also considered the rule against double compensation, noting that payments received by the client from the solicitor, even if from misappropriated funds or the solicitor's own pocket, could potentially reduce the amount recoverable from the Fidelity Fund.

The appeal was allowed in part.