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Solicitor’s reprimand challenge backfires with tougher penalty for acting in conflict

The founder of an NSW boutique firm was hit with a harsher penalty after appealing the reprimand she received for acting in conflict by representing both a longstanding client and her family members.

user iconNaomi Neilson 31 May 2024 Big Law
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Maria Di Giovanni, a founder of Iron Cove Law in Drummoyne, was ordered to complete an ethics course and issue an apology to a client she had known for a decade and had formed a relationship with that was “closer to friendship” than solicitor-client.

In May 2023, the Council of the Law Society of NSW found Di Giovanni engaged in unsatisfactory professional conduct by advising both the client and her family members in a commercial property conveyance of a multimillion-dollar property in Sydney.

The council originally imposed a reprimand and ordered that she undertake an ethics course, which, “to her credit”, Di Giovanni completed despite challenging the findings simultaneously.


This month, NSW Civil and Administrative Tribunal (NCAT) principal member Aaron Suthers and senior member Michelle Sindler said Di Giovanni’s conduct in the appeal “indicates that she has not learnt from the course in respect of having gained an understanding of the fundamental complications of acting for both parties.

Given Di Giovanni’s evidence that conveyancing forms “a considerable part of her practice”, she was ordered to complete a further course on informed consent and how conflicts arise.

“The solicitor should also provide an appropriate apology … which was not addressed by the parties but is so clearly warranted that we see no practical injustice to the solicitor in not being given an opportunity to address the issue,” the members said.

The tribunal was told that by the time of the conveyancing, the client was struggling with regulatory compliance issues from owning a commercial property in a superannuation fund – which Di Giovanni also acted for – and this was “exacerbated” by his wife’s death.

Di Giovanni said the client had “lost his compass” and had “called on her firm with higher frequency” after his wife died.

The client had asked Di Giovanni to assist with selling the property but, when he changed his mind, Di Giovanni discussed the potential advantages of a private sale and advised him “certain members of her family … may have an interest in purchasing it”.

Di Giovanni drove the client out to the property to meet her family members and, on a later date, witnessed his signature on a contract.

After the contract was executed, Di Giovanni wrote to her family members about the potential dangers of acting for both parties and advised them the firm would cease acting if this became an issue.

She did not issue this same advice to the client at that time.

When the client said he wanted to resile from the contract, Di Giovanni did not cease acting. Instead, she attempted to negotiate mutual rescission, with the client’s company to pay the family member’s reasonably incurred costs. NCAT said this did not work.

It was then that Di Giovanni told the client it “may be prudent for you to obtain independent legal advice”.

Despite the client showing up at the Drummoyne offices and accusing Di Giovanni of “not looking after him”, she continued to act for both parties. About 18 months later, the complaint was made.

The client alleged in a letter to the Law Society that he “felt like the property had been stolen from under my nose by my solicitor and sold to her relatives for the same price I paid for it two years earlier”.

In response, Di Giovanni said she “did not pressure” him.

Her case was that consent was informed to the client because he was an “astute businessman” who had signed a contract knowing she was acting for both parties during the matter.

“However, even if we can be satisfied that the vendor knew it was to occur and consented, expressly or implicitly, to the solicitor acting for both parties, there is no probative evidence that such consent was in any way ‘informed’,” Suthers and Sindler said.

“As a minimum standard, he should have been advised, at least orally but preferably in writing, that in the event of an actual conflict of interest arising the solicitor was bound to cease to act for both parties in the absence of informed consent from them both.”

On review of the original findings, Suthers and Sindler did find it difficult to understand why the council placed relevance to the solicitor being related to one side of the transaction.

They said, at the highest, this could only be treated as a reason to draw the inference that Di Giovanni may have been “motivated to benefit one client over another” during the matter.

Suthers and Sindler also recognised that Di Giovanni had satisfied them there was “no basis” to find she did not tell the client she was acting for both parties, or for the council to have found that her actions led to the family members obtaining an advantage.

However, the seriousness of the proven conduct “and the need to deter similar conduct by other lawyers” was still “highly relevant”.

“The fact that the solicitor is still apparently unable to recognise relevant aspects of her transgression also places importance on the need to ensure the protective orders have a deterrent effect on her,” Suthers and Sindler said.

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