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Appeal allowed for solicitor accused of misleading new legal representation
A solicitor who in January was found guilty of misappropriating trust account funds and misleading another solicitor has had the findings overturned.
Naomi Neilson
The Court of Appeal under the NSW Supreme Court has allowed an appeal by solicitor Malcolm Douglas Carr after finding the Civil and Administrative Tribunal had erred with its findings of professional misconduct and unsatisfactory professional conduct behind allegations that Mr Carr had misappropriated trust monies and misled another lawyer.
In November 2014, Mr Carr followed instructions to discharge his client’s trust account by transferring the remaining balance to the client. The client then deposited a $7,900 sum into his office account in respect of counsel fees which, two days later, would then be used by Mr Carr to deposit $5,000 into the counsel’s account, leaving $2,900.
The client deposited a further $3,127 into the office account in December 2014 in filing fees. The Tribunal found Mr Carr was aware of each of the deposits and utilised money from the accounts between December 2014 and January 2015. The Tribunal also found that his “known lack of entitlement rendered his knowledge, belief or intent dishonest”.
However, the Court of Appeal set out that the $2,900, upon being received by Mr Carr’s bankers, was no longer the client’s property. In the circumstances, “whatever breaches or transgressions of which the solicitor might have been guilty, it could not be said that he misappropriated any property of or any money of the client”.
“The client, for whatever reason, paid cash into the office account. The Law Society of NSW and Tribunal did not explore the circumstances in which the payments occurred, and no complaint is made in the application in relation to those circumstances,” added the Court of Appeal, setting aside the Tribunal’s finding in this count.
As for the $3,127, the Court of Appeal set out the Tribunal’s finding that Mr Carr should have been diligent to “ensure that the client was appropriately advised in writing before November 2014 that monetary deposits ought to be made to the trust account”. In new findings, the Court of Appeal said the allegation was not made by the Law Society and was not a basis upon which the Tribunal could find misappropriation of that sum.
In March 2015, the client engaged Norris Maait as his solicitor, leading to discussions between Mr Carr and Mr Maait about the client’s files and trust money. The NSW Law Society alleged that Mr Carr attempted to mislead Mr Maait when he stated he did not hold any of the funds for the client in his trust account. The Tribunal concluded that he ought to have appreciated and checked his accounts for the $2,900.
A few days later, Mr Maait then sent Mr Carr two deposit receipts indicating the client’s deposits into the office account. The next day, they had a telephone conversation and Mr Carr said he would transfer the $2,900 but the $3,127 was a filing fee.
The Court of Appeal found it was necessary for the Tribunal to find that Mr Carr would have actually intended to mislead Mr Maait. However, no allegation was ever made by the council in its application and, more significantly, the Tribunal was not asked by the Law Society to make a finding that Mr Carr intended to mislead Mr Maait.
In those circumstances, the Tribunal erred with the allegation of attempt to mislead. In the absence of any allegation of intention to mislead and in the absence of finding any intention to mislead, “it was not open to the Tribunal to find,” the Court of Appeal noted.
The appeal was allowed, and orders made in January 2020 were set aside. The Court of Appeal also ordered that the Law Society council pay Mr Carr’s costs of proceedings before the Tribunal and pay his costs of the appeal.
Naomi Neilson
Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
You can email Naomi at:
