Solicitor ordered to pay $131k for misappropriating trust fund

By Naomi Neilson|12 January 2021
Canberra

A Canberra-based director has been ordered to pay $131,205 for misappropriating his practice’s trust account. It is the fourth time he has been involved in similar disciplinary hearings and is the second penalty related to trust account defalcation.

Charles Giles, who acted for clients “whose business was in severe financial difficulty”, has been ordered to pay $131,205.38 for misappropriating trust funds while at the time holding an unrestricted practising certificate. In March 2019, his conduct was branded as professional misconduct and, in April 2020, his name was removed from the roll.

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The applications to have his name removed related to two matters. In the first – named the Bankwest matter – Mr Giles received a large sum from a third party and paid it into the trust account. At that stage, the clients were not liable to pay his costs. In the next, relating to a Rural Bank matter, costs were payable. In total, he received $371,603.04.

In September 2015, Mr Giles transferred $295,664 from the Bankwest trust ledger and deposited it into the Rural Bank trust ledger. He then transferred the funds to his office’s general account, from which he took the costs payable in the Rural Bank matter.

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The trust account irregularity was brought up by accounting staff and external auditors, prompting Mr Giles to disclose the situation in a 2015 letter to the ACT Law Society.  

In making the decision to remove his name from the roll, Supreme Court’s Chief Justice Helen Murrell wrote that Mr Giles “suffers from a seemingly permanent character flaw, such that it will never be possible to be confident about the practitioner dealing properly with trust funds” and that she is satisfied he is “permanently unfit to practice”.

In submissions during the costs trial, Mr Giles said he “acknowledges and understands he made a serious error of judgement in transferring the trust funds without authority”, particularly as he “had already been the subject of disciplinary action for past conduct” in 1985 and 2014 relating to trust accounts. He also acknowledged that systems were put in place in his practice to prevent the trust account problems from occurring.

The costs order can be found here.

Other background information can be found here (finding of professional misconduct), here (recommendation to be removed from roll) and here (removal decision).

Solicitor ordered to pay $131k for misappropriating trust fund
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