Law Society of New South Wales v Meredith
[2004] NSWADT 212
•09/28/2004
CITATION: Law Society of New South Wales -v- Meredith [2004] NSWADT 212 DIVISION: Legal Services Division PARTIES: APPLICANT
The Council of the Law Society of New South Wales
RESPONDENT
Warner Maxwell MeredithFILE NUMBER: 042020 HEARING DATES: 12/08/2004 SUBMISSIONS CLOSED: 08/12/2004 DATE OF DECISION:
09/28/2004BEFORE: Nader J QC - ADCJ (Deputy President); Clisdell RJ - Judicial Member; Bubniuk L - Non Judicial Member APPLICATION: Professional Misconduct - breach of s. 61 of the Legal Profession Act - Professional Misconduct - breach of s. 62 of the Legal Profession Act - Professional Misconduct - misappropriate trust moneys/moneys - Professional Misconduct - overcharge MATTER FOR DECISION: Principal matter LEGISLATION CITED: Legal Profession Act 1987 CASES CITED: REPRESENTATION: APPLICANT
P Boyd, solicitor
RESPONDENT
G Walsh, solicitorORDERS: Orders made 12 August 2004: 1. That the name of Warner Maxwell Meredith be removed from the roll of Legal Practitioners; 2. That Warner Maxwell Meredith pay the Council's costs of and incidental to these proceedings to be agreed or, in default of agreement, assessed.
1 On 12 August 2004 after a brief hearing, the Tribunal was satisfied that Warner Maxell Meredith (the Respondent) was guilty of professional misconduct of such seriousness that he is not now a fit and proper person to remain on the Roll of Legal Practitioners. Accordingly the Tribunal ordered that his name be removed from the Roll and that he pay the costs of the Council of the Law Society of NSW (the Informant) of and incidental to these proceedings.
2 In substance, if not in their precise terms, those orders were made by consent.
3 The Respondent admitted every allegation made by the Informant although at first there was disagreement about the amount of money misappropriated. We have concluded that the disagreement was bona fide. At the hearing on 12 August 2004, the Respondent admitted that the Informant’s misappropriation figures were correct. The result was that as at that date there was no issue of fact between the parties.
4 On 12 August 2004, because the orders that were made were inevitable, a matter readily conceded by the Respondent, we made the orders referred to in paragraph 1, above, and informed the parties that we would publish reasons in due course.
5 All supporting evidence having been admitted as well as the findings sought by the Council, it is necessary only to summarise the admitted facts as set forth in the Information.
6 At all material times the Respondent was a legal practitioner within the meaning of section 128 of Legal Profession Act 1987 (the Act).
FINDINGS SOUGHT BY THE COUNCIL
7 By its Information filed 4 May 2004, the Informant asks for findings that the Respondent is guilty of:
- Wilfully breaching sections 61 and 62 of the Act;
of misappropriating trust funds; and
of gross overcharging.
8 The Council relies on the following facts as supporting the findings sought:
1. The estate of the late Lawrence Craig Withers.
The Respondent wilfully breached sections 61 of the Act.
The Respondent misappropriated $17,827.07.
The Respondent overcharged.
9 On 16 May 1997 the respondent entered into a costs agreement with Lee Withers. The agreement, inter alia, provided as follows:
- THE WORK
1. The Work you require us to do is as follows:
Costs of applying for probate of the Will and testamentary documents plus administration of estate, application for testamentary document to be included in application and advice and application in relation to interpretation of the testamentary document regarding whether general or specific bequest.
CHARGES AND EXPENSES (COSTS)
2. We will charge you:
(a) at the rate of $180.00 per hour for each hour engaged on your Work; or
(b) Probate; first schedule Supreme Court copy annexed
We will incur expenses on your behalf which we will ask you to pay. They will include:
PRESENT ESTIMATE OF CHARGES AND EXPENSES IN TOTAL
3. We estimate that our charges for completing the Work, up to and including (eg settlement) will be about $18,000.00
We expect to complete that work by 30 June 1998
To that point we estimate the expenses that we will incur on your behalf will total about $2,000.00
Total $20,000.00
We will advise you of any additional work required beyond the point indicated, and of its costs.
10 Probate of the Will and Codicil of Laurence Craig Withers pursuant to Order made 7 May 1998 was granted to Lee Withers ("Mrs Withers").
11 On 6 June 1997 Mrs Withers paid to the solicitor the sum of $500.00 which he credited to General Ledger Account no 6973.
12 On 22 July 1997 Mrs Withers paid to the solicitor the sum of $5,000.00 which he credited to General Ledger Account no 7032.
13 On 12 September 1997 Mrs Withers paid to the solicitor the sum of $8,000.00 which he credited to General Ledger Account no 6973.
14 On 22 December 1997 the solicitor opened a Controlled Money Account ("the account") with Macquarie Bank Limited and deposited to it the proceeds of a Life Assurance Policy in the sum of $176,787.63.
15 On 23 December 1997 three cheques totalling $50,000.00 were drawn from the account.
16 Between 25 February 1998 and 18 November 1998 the solicitor withdrew from the account the sum of $17,000.00.
17 The total sum drawn as costs by the solicitor (including the sum of $278.38 withdrawn from the trust account on 2 July 1998) was $81,278.38.
18 The amounts received were credited by the solicitor to the General Ledger Accounts as relating to the following:-
- File No.
6973 Application for a Grant of Probate 35,278.38
7032 Application under Section 18A 36,200.00
7062 Re.Defence of Claim by Rebello 7,700.00
7241 Administration of Estate from 1/9/98 2,100.00
$81,278.38
19 Bills of Costs totalling $63,451.32 were sighted by the Receiver as follows:
- Date
7.12.97 Re. Application under Section 18A which appears to cover the period from 8.5.97 to 2.12. $27,538.50
1.9.98 Application for Probate $20,552.27
1.9.98 Re. Application under Section 18A which appears to cover the period from 9.12.97 to 6.7.98 $8,460,54
3.7.98 Re. Rebello $6,900.00
$63,451.31
The amounts drawn by the solicitor exceed the Bills in the sum of $17,827.07
20 The first two Bills of Costs included an amount for care and skill although not provided for in the costs agreement referred to in paragraph 1. The amount paid in each Bill for care and skill was as follows:
- Date
7.12.97 9,860.00
1.9.98 4,550.00
14,410.00
21 Each of the 4 general ledger accounts referred to in paragraph 10 above had a substantial credit balance thus indicating to the solicitor that he had drawn amounts and deposited money in excess of costs billed to the client.
22 As at 7 August 1998 there was a balance in the account of $66,351.23. As at that date $50,000.00 is shown in a Statement of Account prepared by the solicitor as having been paid to Mrs Withers. Records held by the solicitor relating to the account fail to record details of the payment to Mrs Withers.
23 The foregoing facts are to be found in the first report of Jean Sayer, the Chartered Accountant appointed receiver to the property of the Respondent on 22 December 1998 by the Supreme Court of New South Wales pursuant to the section 92 of the Act, at pages 1-23 and in her second report at pages 26 – 29.
2. The estate of the late Clorene Sophie Parish.
The Respondent wilfully breached Section 61 of the Act
24 On 27 November 1997 Probate of the Will of Clorene Sophie Parish was granted to her husband Gordon Clarence Parish ("Mr Parish") for whom the Respondent acted.
25 Between 24 December 1997 and 11 August 1998 on seven occasions costs totalling $26,136.00 were drawn by the respondent by transfer from the Trust Account of the Estate to the General account. Such transfers were without the authority of Mr Parish.
26 On 28 August 1998 a detailed the Bill of Costs dated 1 September 1998 was forwarded to Mr Parish. The Bill was made up of profit costs of $24,741.00 and disbursements of $1,315.00. The amount shown in the Bill for costs up to 24 December 1997 was $12,500.00.
27 The disbursements shown in the Bill included amounts previously drawn from the trust account and which should not have been reimbursed to the Respondent namely advertising in the sum of $60.00 and Registration fees of $110.00.
28 On 24 December 1997 the Respondent drew the sum of $17,500.00 by transfer from the Trust Account of the Estate to the General Account. Thus the amount drawn exceeded the proper costs shown in the Bill dated 1 September 1998 in the sum of $5,000.00.
- See Jean Sayer’s first report at pages 11 – 14.
The Respondent wilfully breached Section 61 of the Act
The Respondent misappropriated the sum of $123,652.25
29 On 24 December 1986 Ms Samson who resides in the United States of America gave a power of attorney to the Respondent.
30 On or about 18 March 1987 the Respondent acted on behalf of Ms Samson with respect to the purchase of an investment property at Newport which was subsequently rented. In addition to the rent money the solicitor received other money from Mrs Samson.
31 From time to time the funds of Ms Samson were invested in mortgage advances, mainly contributory loans, or kept in Controlled Accounts with St George and Macquarie bank.
32 On 11 July 1977 the sum of $56,276.84 was transferred to St George Bank account No. 107 526 854 ("the first account").
33 On 1 July 1997 the Respondent signed a document styled "Acknowledgement of Debt" which stated:-
- I, Warner Maxwell Meredith of 8 Belmore Street, Surry Hills do hereby acknowledge that I owe Lorna Elizabeth Samson of 2518 Plum Hollow, San Antonia Texas USA the sum of Forty Thousand Dollars ($40,000.00) together with 7% interest per annum to be paid upon demand.
34 The rent received from the Newport property was credited to St George Bank account number 017 818706 ("the third account").
35 Between 22 November 1993 and 10 December 1998 the Respondent withdrew from the third account the sum of $27,460.00 which he applied for his own benefit.
36 The Respondent misappropriated the following amounts:-
- From first account $56,276.84
From the second account $40,000.00
From the third account $27,460.00
Hope mortgage $915.41
Less Advance to O'Rourke $1000.00
- $123,652.25
The Respondent wilfully breached section the 61 of the Act
The Respondent wilfully breached section the 62 of the Act
The Respondent misappropriated the sum of $16,576.84
37 The Respondent acted for Mr and Mrs McIntyre ("the McIntyres") on the sale of their Sylvania property and the purchase of a property at Sans Souci.
38 After completion of these matters the Respondent wrote to the McIntyres and advised them that the sum of $94,137.05 was held on their behalf in two accounts kept with the St George Bank.
39 On 20 August 1996 the Respondent wrote to the McIntyres advising them that if they provided the sum of $5,762.95 the amount of $100,000.00 would be held to be invested. On 12 September 1996 the sum of $5,762.92 was received from the McIntyres.
40 On 12 September 1996 the Respondent withdrew from one of the accounts kept with St George Bank the sum of $16,576.84 in the form of a bank cheque payable to Westpac Banking Corporation.
41 The payment made to Westpac Banking Corporation was in respect of a personal indebtedness by the Respondent to that bank. Such payment in the sum of $16,576.84 was a misappropriation of the funds held by the Respondent in trust for the McIntyres.
42 On 30 September 1996 the shortfall of $16,576.84 was made good by a withdrawal of that amount from the account of Ms L. E. Samson by way of a bank cheque payable to the McIntyres.
- See Jean Sayer’s second report at pages 21 – 23.
The Respondent wilfully breached section the 61 of the Act
The Respondent wilfully breached section the 62 of the Act
The Respondent misappropriated the sum of $25,000.00
43 On 28 June 1996 the sum of $25,000.00 was received by the Respondent on behalf of Ms Davis and deposited to a St George Bank account opened on her behalf.
44 On 12 September 1996 the amount of $25,000.00 was withdrawn on the St George Bank. The Respondent's records disclose it as paid to L. M. Davis.
45 In fact the $25,000.00 withdrawn on 12 September 1996 was in the form of a bank cheque payable to Westpac Banking Corporation.
46 The payment made to Westpac Banking Corporation was in respect of the repayment made on that day of the various accounts kept by the Respondent as well as by the Respondent and his wife with that bank.
- See Jean Sayer’s second report at pages 23 - 24.
The Respondent wilfully breached section 61 of the Act
The Respondent wilfully breached section 62 of the Act
The Respondent misappropriated the sum of $30,000.
47 On 28 June 1996 the sum of $35,000.00 was received by the Respondent on behalf of Mr Langley and deposited to a St George Bank account held on his behalf.
48 On 9 July 1996 $5,000.00 was repaid to Mr Langley. The Respondent's Controlled Money records indicate that on 12 September 1996 the sum of $30,000.00 was withdrawn and paid to "J. A. Langley - principal".
49 In fact of the $30,000 withdrawn on 12 September 1996 was in the form of a bank cheque payable to Westpac Banking Corporation.
50 The payment made to Westpac Banking Corporation was received in respect of part payment of the indebtedness by the Respondent of his business and personal accounts with that bank.
- See Jean Sayer’s second report at pages 25 - 26
The Respondent wilfully breached section 61 of the Act
51 On 17 September 1998 the Respondent received the sum of $418,500.00 on behalf of Mr Francis following the settlement of a personal injuries claim. Such sum was deposited to the Respondent's trust account.
52 On 18 September 1998 the Respondent prepared a Bill of Costs for Mr Francis which included the following amounts due to Counsel:-
- A. Patterson $12,000.00
J. Coombs QC $1000.00
M. Finnane QC $7,525.00
53 Between 18 September 1998 and 30 October 1998 various amounts were transferred by the Respondent from the Trust Account to the General Account on account of costs and disbursements.
54 The fees due to Mr Finnane were paid on 27 November 1998 and those due to Mr Patterson on 1 December 1998.
55 On 6 October 1998 Mr J. Coombs QC sent to the Respondent an account rendered with respect to his fees said to be outstanding since 28 July 1998. Such fees and the sum of $1000.00 had not been paid as at the date of the laying of the Information.
56 A number of affidavits were admitted into evidence on behalf of the Respondent. They disclose that, in general, the Respondent has enjoyed a good reputation both as a person and as a legal practitioner. It is clear that the Respondent’s referees regarded the appalling contact the conduct recited above as a very much out of character. Of course, the Respondent himself concedes the inevitable, namely, that, whatever his reputation, he must suffer removal from the role of legal practitioners particularly as a consequence of his misappropriation of trust funds. Frequently, breaches of section 61 and 62 of the Act can be the result of carelessness, albeit serious, and do not always result in a finding that the legal practitioner is not a fit and proper person to remain on the Roll of Legal Practitioners. However, when such breaches are integrated with conduct amounting to deliberate misappropriation, only one consequence is possible. We have already observed that the respondent recognises that fact.
57 It is appropriate to mention some matters favourable to the Respondent. He may one day apply for readmission to the Roll of Legal Practitioners. We have already referred to the prompt and full confession of his misdeeds. We also mention matters which he has asked us to note on his behalf. It is our opinion that the Respondent's conduct in these proceedings strongly indicates genuine remorse and contrition.
58 The Respondent was born at Rozelle in New South Wales in 1947. After an unfortunately difficult childhood and adolescence he was accepted into the faculty of Law at Sydney University in January 1967. He informed us that he attended the University for five years and that during the first three of those years he supported himself by working as a bus conductor with the then Public Transport Commission.
59 The Respondent described how, by reason of involvement in property speculation, he found himself in financial difficulty. He also had difficulty with tax payments to the Australian Taxation Office. The difficulty with the Tax office continued from 1990 until he was made bankrupt on 28 June 2001. He said that during those 11 years had a continuing battle with the Tax office, involving litigation. He said that interest rates began to increase and that what had been a debt of some $50,000 to $70,000 accumulated to a debt of almost $240,000.
60 These difficulties caused his position with his bankers to deteriorate. In 1992 he entered into an arrangement with Westpac which required him to pay $5,000 per month for 12 to 18 months. In return for agreeing to make those payments the bank agreed to consider refinancing his loans.
61 The Respondent related in some detail the many misfortunes which beset him. Some of them were both financial and more personal.
62 As a result of an inspection by the Law Society of New South Wales his defalcations were discovered. He believed that Ms Jean Sayer was appointed receiver of his property on the 22nd of December 1998. He says that he co-operated with Ms Sayer.
63 In about 1999 he sold his practice. His practising certificate had been cancelled. He found it very difficult to survive for the first 12 months thereafter. In the year 2000, he obtained work as a manager with a company called Australian Sandstone Products Pty Limited at Penrith where he was employed for about 12 months.
64 In the year 2001, the Respondent’s wife purchased a hotel at St Peter's and employed the respondent as a bar employee in May 2001. He worked in that capacity until the date of his affidavits. He was paid $300 net per week.
65 In July, 2000, the Respondent and his wife refinanced their home and borrowed $420,000 from which an amount of $130,000 was paid to the Law Society and a further amount of $13,000 was paid by his former legal practice in relation to outstanding costs. The Respondent said that the amount ($143,000) was calculated on the basis of outstanding funds being approximately $118,000 owed to Lorna Samson and $25,000 owed to Mr and Mrs Davis.
66 The Respondent refers in some detail to a substantial amount of pro bono legal work which he has done in his years as a legal practitioner. He points out that it is now about 5 1/2 years since his practising certificate was cancelled by the Law Society. He says that probably not a day passes without his thinking of what he has done. He said, "I enjoyed very much the privilege of being a member of an honourable profession and I have felt and continued to (feel) utterly ashamed of my conduct."
67 The Respondent said, "I have obviously not only let my clients down in such a demonstrable and dishonest way, but also the community and the Profession that I hold in such esteem. I can only apologise to my former clients and this Honourable Tribunal for my conduct."
68 The subjective matters to which we have referred, including the circumstances of the Respondent's life and his apparently genuine contrition, cannot have any effect on the outcome of these proceedings. However, they may be of some use to a court or tribunal that may be required, some time in the future, to determine whether the Respondent is then a fit and proper person to practise law. Nothing we say can, or is intended to, influence such court or tribunal in any way.
69 For the foregoing reasons the Tribunal ordered:
- 1. That the name of Warner Maxwell Meredith be removed from the roll of Legal Practitioners.
2. That Warner Maxwell Meredith play the Council's costs of and incidental to these proceedings to be agreed or, in default of agreement, assessed.
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