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NSW solicitor reprimanded for misappropriating trust accounts

A NSW solicitor specialising in migration law has been reprimanded after being found guilty of unsatisfactory professional conduct for misappropriating trust account money. 

user iconNaomi Neilson 28 January 2021 Big Law
NSW solicitor reprimanded for misappropriating trust accounts
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The NSW Civil and Administrative Tribunal (NCAT) has handed down a reprimand and ordered that Jesus Gutierrez Diaz of Blacktown’s Diaz & Diaz Lawyers undergo further education based on findings that he “dishonestly” misappropriated trust accounts. The Tribunal stopped short of also labelling the conduct professional misconduct. 

The misconduct related to two clients – whose identities have been protected by NCAT – whom Mr Diaz was involved with in April 2017. For the first, Mr Diaz drew a cheque of $268 from the firm’s trust accounts, which resulted in the client’s trust ledger becoming and remaining overdrawn by $110 for a period of 137 days until corrected. 

In the same month, Mr Diaz drew a cheque from the trust account for his second client, but during that time that settlement monies had not yet been paid into the account – and would not be paid until five weeks after the cheque was drawn. Following the cheque’s withdrawal, Mr Diaz caused a deficiency in the client’s trust account by $4,550. 

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The council of the Law Society of NSW alleged that Mr Diaz was “unable to provide a reasonable excuse for these shortfalls” and that, by way of response, he said that both shortfalls “had been rectified, and that they were the result of honest mistakes”. 

Between October 2016 and June 2017, the second client provided Mr Diaz with letters, each authorising him to generally use money held on trust for the payments of the fees and disbursements relating to legal work. On six occasions Mr Diaz issued tax invoices to the second client, none of which referred to the proposed withdrawal of $4,550. 

NCAT noted that even if the client’s letters gave instruction to withdraw trust money in order to pay Mr Diaz’s invoices, Mr Diaz failed to give the client “a request for payment, referring to the proposed withdrawal or a written notice of withdrawal” for the money. 

“The respondent’s failure promptly to rectify the deficiencies in his trust accounts once he became aware of them is conduct in pursuit of his professional activities that would reasonably be regarded as disgraceful or dishonourable by professional colleagues of good repute and competency,” the Law Society council submitted. 

NCAT refuses to redact Mr Diaz’s identity, cites ‘maintenance of high standards’

Mr Diaz attempted to have the Tribunal suppress the publication of his penalty decision “in view of his prominence in the community” and his “unblemished” record. However, NCAT refused to do so on the grounds that its role is to protect clients and community from harm that could be caused by “dishonest [and] incompetent” practitioners. 

“It does so to a significant degree by promoting the maintenance of high professional standards within the profession. For this tribunal to agree to the respondent’s request would undermine this objective, since the public availability of the tribunal’s orders and reasons is inherently a significant part of the process,” NCAT explained. 

The entire judgement can be read on AustLII: Council of the Law Society of New South Wales v Diaz [2021] NSWCATOD 9 (22 January 2021)

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