Week 4 Flashcards

Question

Money - Borrowing and Business

Answer 1

Adami sought to borrow money ($30,000) from his client for two months. The client, Mr Barrato, was a long-term client who had given express consent to the arrangment (and supported him at the tribunal). The money was taken out of the trust account, and returned within the timeline. VCAT: This is a violation of the rule against borrowing (2 months suspension + costs main outcome, "The reason for such a rule as this is that borrowing from a client raises the spectre of conflict of interest especially in the circumstances such as these where no security was given for the loan"

Answer 2

lawyers were banks nominee mortgagee for their clients who owned a failing poultry farm > best deal as lenders incompatible with client interest

Answer 3

client was both a longstanding client and friend of Needham. Needham and his business partner Harle found a project for development. Needham advised the client of the opportunity. The client trasnferred money that Harle stole. The development fell through and the bank (first mortgage) sold the land at a loss. VCAT: citing Law Society of NSW v Harvey [1976] 2 NSWLR 154 in which that court 'acknowledged there are exceptional cases where a transaction may be in the special interest of a particular client … but such cases will be isolated, and will require conscientious disclosure of all material circumstances and everything known relating to the proposed transaction which might influence the client, or anybody from whom the client might seek advice' (Reprimanded and payment of costs)

Answer 4

even if the lawyer acted in the best interests of the client by obtaining a valuation, by not consulting an independent advisor still not "acting in best interests"

Answer 5

solicitor had drawn up wills for very close friend under which she was a beneficiary NCAT: professional misconduct; breach of the rules (reprimand, fine and costs) → Lawyers must take immediate action at the sign of potentially becoming a beneficiary - even if you comply with the rules per se, you place yourself in a dangerous position of being accused of conflict - mingling of roles and funds

Answer 6

solicitor urged client, M, to sign will under which he was a beneficiary (and some other very problematic actions)

Answer 7

the client had instructed her lawyer to draft a will under which he was the executor. As the will was challenged, the solicitor charged both as lawyer and executor, but without transparency. Victorian Supreme Court, "it is not a position which the solicitor should seek … given the very real potential for conflict arising between the interests of the client and the interests of the solicitor on such an occasion, it would be preferable that solicitors declined to act as executors"

Answer 8

→ Solicitors can make referrals, even for a fee (to them or third party) but they must clearly and truthfully inform clients, so clients can take their own decisions (consent) ○ Benefits to thoughtful referrals: trusting relationships between professionals, or time/frustration saving because you know how each works Homes & Barlett (2023): receiving secret profits from referrals may constitute if 'Corrupt Commissions or Rewards' (s 249B Crimes Act 1900 (NSW))

Answer 9

Medical negligence lawyer (Sullivan) billed clients for work done via his wife's bank account (speech pathology and summaries of medical records), and her company 'Medical Chronology'. Some reported work had not been done, and other work was significantly overcharged (total over .5M). Sullivan had not informed clients of the connections. QCAT: there was a 'fundamental failure to observe the appropriate and necessary standards of integrity and professional independence. Indeed, one struggles to find a more stark example of what could, in shorthand, be described as a patent conflict of interest"

Answer 10

→ If you can expect to be a witness, you cannot (continue to) act as a lawyer → The underlying principle is conflict of interest: ○ With your client's interest: your evidence may be detrimental to your client ○ With the administration of justice: it is difficult for the court to weigh evidence from someone with a vested interest in winning their case --> negates the premise of objectivity

Answer 11

Mr Kallinicos and his wife, and Mr Hunt and his partner had set up a complex web of companies, and shareholding structures essentially operate a property/strata business. Mr Moloney had acted as the vendor of properties through his firm. When the partnership broke down, Hunt & Co instructed Maloney. NSW Supreme Court: Orders for Maloney to cease to act as solicitor (and pay costs since he opposed) … "fair minded members of the public would perceive Mr Moloney as not being able, however well intentioned, to advise his client conduct the proceeding free and unaffected by the impact of personal interest … [they] would conclude that the proper administration of justice requires that Mr Moloney not act for the defendants in these proceedings"

Answer 12

→ Note: this is different from being a self-represented litigant → The starting point: it is always a bad idea to act for yourself → If the lawyer essentially is the client (e.g company's alter ego), the lawyer likely cannot act for themselves - Likely to be(come) a material witness Other conflicts of interest arising

Week 4 Flashcards

(41 cards)