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Solicitor escapes disciplinary action for alleged misappropriation of trust funds
A solicitor accused of misappropriating trust funds has had an application to strike her name from the roll of practitioners dismissed.
Naomi Neilson
NSW sole practitioner Erica Taylor successfully appealed against the decision to allow the Law Society of NSW to submit an application to have her name struck from the roll of practitioners. The Supreme Court dismissed orders made alongside the applications and ordered the Law Society’s Council to pay Ms Taylor’s costs for the appeal.
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In May 2020, the Law Society filed the application following an investigation of the trust account that alleged Ms Taylor was withdrawing money to fund deficits in her practice’s cash flow. When the funds were required to be paid out or prior to the inspections, the Law Society claimed she would rectify the account details.
The tribunal allowed the Law Society to commence proceedings under its jurisdictions, but Ms Taylor shortly appealed on the grounds that the council’s resolution made in June 2015 did not constitute a complaint, the professional conduct committee did not have appropriate delegation and that the proceedings were not brought in time.
While the Supreme Court did not agree that the professional conduct committee was unequipped to perform the function of the council and submitted that the proceedings were brought in time, it did agree that the resolution did not constitute a complaint.
The council argued that the appellant’s contentions “conflate” the making of complaints and the requirement that the complaint be in writing. It argued that the complaints may be made without the necessity for writing and at different times to it being put in writing.
“The language of the resolution is against the construction the council seeks to give it. It is not the language of a complaint – rather, the resolution is framed in the languages of intention that a complaint be made,” the Supreme Court’s tribunal said, adding that there were many appropriate ways that a complaint could have been made instead.
“Accordingly, the tribunal accepts, as submitted by Ms Taylor, there was no complaint made prior to July 2015. The tribunal did not have the jurisdiction to handle the council’s disciplinary action, which depended upon there being a complaint… duly made’.”
The court also accepted that the resolution did not meet its requirements. Although an assertion of “misappropriation of trust funds” comes close to sufficiently describing the conduct of the council’s allegations, it is more of a legal conclusion to be drawn.
The court noted the council set “considerable store of evidence” that Ms Taylor should be aware of the allegations against her and while that may be accepted, it still “doesn’t address the question of what is required, at minimum, for allegations of misconduct to constitute a ‘complaint… duly made’.”
“The appellant’s prior knowledge of the nature of the allegations is irrelevant to whether the resolution satisfied the requirements of a complaint,” the Supreme Court’s tribunal said.
