By Paul Gregoire and Ugur Nedim
Former sole principal at Lane Cove legal practice Leslie Hargrave Lawyers, James Leslie recently had his name struck off the roll of solicitors kept by the NSW Supreme Court, as it was found he’d mishandled trust money in numerous ways, which constituted professional misconduct.
In late 2016, Leslie was acting on behalf of Peter Lambie in relation to his becoming sole executor and beneficiary of his late mother’s estate. It was on 4 October that Lambie entered into a cost agreement with Leslie Hargrave Lawyers.
On 5 December, Leslie received a cheque for $209,856 on behalf of the Lambie estate that was to be held in his firms’ trust account. This is a type of bank account that allows a law practice to hold clients’ money for the provision of legal services, which must be distributed under their direction.
However, on 17 January 2017, all the Lambie money was withdrawn and distributed in relation to unrelated matters. Some formed part of a cheque, a life insurance payment was made, about $90,000 was deposited into the office account, with more was placed in another client’s account.
Lambie subsequently instructed Leslie to pay him $20,000 from the trust account in May 2017. The solicitor then withdrew that amount and had a bank cheque made out for his client, even though at that point, none of the money in the trust account came from the Lambie estate.
A matter for the tribunal
After an investigation, the Law Society of NSW applied to the NSW Civil and Administrative Tribunal (NCAT) for disciplinary findings to be made under the Legal Profession Uniform Law (NSW) (the Uniform Law) claiming that Leslie had engaged in activities that qualified as professional misconduct.
In November 2017, the Society suspended Leslie’s practising certificate, barring him from operating as a solicitor. And in March the following year, it further appointed trust account inspector Simon Ward to investigate the trust fund dealings of Leslie Ward Lawyers.
The Law Society raised six grounds of which it maintained revealed that Leslie was “not a fit and proper person to engage in legal practice”. And these were based on his actions in relation to not only the Lambie Estate, but also in regard to his representation of a Ms Camilleri.
In his response to the Society’s application, Leslie filed a reply to the NCAT, stating that he did not oppose the orders sought by the legal profession governing body. And the former solicitor was unrepresented at the 3 May hearing this year, while he also failed to appear in court as well.
Grounds made out
In its full findings, the NCAT set out that each of the grounds submitted by the Law Society had been proven to the Briginshaw standard, which requires a higher degree of satisfaction in relation to the proof of evidence in civil cases dealing with serious matters.
The first ground was that Leslie caused a deficiency in the trust account, which is outlawed under section 148 of the Uniform Law. This offence carries a $5,500 fine and/or up to 5 years imprisonment. And the NCAT found Leslie had done this in relation to the Lambie Estate funds.
The Society also claimed Leslie had misappropriated trust funds. This was apparent in the way the ex-solicitor had withdrawn the Lambie trust funds without approval and then used the money to cover a number of transactions that had nothing to do with the client who owned it.
“We would expect any solicitor, particularly an experienced solicitor, to know that trust money held on account of an estate was not to be disbursed for purposes unrelated to the estate,” the NCAT members said, adding that “ordinary, decent people” would consider these actions dishonest.
The affidavit of inspector Simon Ward set out a detailed account of how Leslie had attempted to conceal his dodgy trust money dealings by detailing false transactions. The Society based its third ground on this evidence, which was uncontested by Leslie. And the NCAT found it established.
The remaining grounds
The fourth ground outlined failure to comply with trust money obligations in three ways, all of which were found to hold. The NCAT outlined that Leslie had mixed trust money with other funds, contrary to section 146 of the Uniform Law. This breach carries a fine of $5,500.
Leslie also failed to keep trust fund records, in breach of section 147, which carries a fine of either $5,500 or $11,000. And the final failed trust money obligation was using these funds to pay for legal costs contrary to rule 42 of the Legal Profession Uniform General Rules 2015 (NSW).
The ex-lawyer was also found to have breached the stipulations around dealing with controlled money, under section 139 of the Uniform Law. This carries a penalty of $5,500.
Controlled money is that which a client provides to a firm with a written direction to hold in a separate client-specific account. Leslie breached the law in this case, by depositing some of the Lambie funds into a controlled account opened in 2010 to hold funds from another client’s estate.
And the final ground that Leslie contravened was in relation to failing to comply with a request to produce records in relation to his firm’s trust account. Section 370 of the Uniform Law, requires compliance to this request, and carries a fine of $5,500 for failure to do so.
Unfit to practice
In finding all six grounds were made out, NCAT Deputy President Judge Susanne Cole, Senior Member James Lonsdale and General Member Emeritus Professor Philip Foreman then went on to consider whether Leslie’s actions constituted professional misconduct.
“Reliability and integrity in the handling of trust funds are fundamental prerequisites to determining whether a person is a fit and proper person to be entrusted with a right to practice,” the members said, as they were confirming Leslie’s behaviour was in fact professional misconduct.
On 23 July this year, the NCAT panel determined that Leslie is “probably permanently unfit to practice as a solicitor”. The members ordered his name be removed from the NSW Supreme Court roll of lawyers, and the ex-legal professional was directed to pay the costs of the NSW Law Society.