‘Breath-taking lack of candour’ by solicitor leads to suspension of practice
September 14, 2016
A Mornington Peninsula solicitor has been suspended from legal practice for five months after charging an elderly client almost $100,000 in commissions without entitlement or the client’s consent.
The Victorian Civil and Administrative Tribunal found sole practitioner, Mr Peter Ng of HMK Legal, had charged his client commissions for managing her financial assets, but had failed to inform her that he was charging commissions.
In 2007 Mr Ng prepared an Enduring Power of Attorney (Financial) for his elderly client, which appointed him as her Attorney. Following this, the client signed a costs agreement with Mr Ng. Costs associated with the administration of her affairs were estimated ‘in the vicinity of $5,000 to $6,000 per year’.
In 2008 the client informed Mr Ng that she had been diagnosed with dementia. Four years later in July 2012 Mr Ng sought further information on his client’s health from her medical practitioner.
In September or October of that year, Mr Ng decided to change the way he charged his client by charging commissions in addition to his professional costs. He prepared a revised costs disclosure letter and placed it on the client’s file; however, he did not send the letter to his client.
By 2013 the client’s assets had grown to over $3 million in value and required considerable work to manage. That year Mr Ng charged his client $66,000 in commission, and in 2014 he charged his client $33,848 in commission.
When the Victorian Legal Services Commissioner indicated he was investigating Mr Ng’s failure to provide his client with an updates disclosure, Mr Ng advised that he intended to apply to the Guardianship List of VCAT to be released from the Power of Attorney and to seek a determination that his commissions be allowed retrospectively.
When he appeared before the Guardianship List in October 2014, Mr Ng failed to disclose that his updated costs disclosure letter had not been sent to his client, nor did he disclose that the Commissioner was investigating his conduct.
The Commissioner brought Mr Ng before VCAT’s Legal Practice List to answer:
- one charge of professional misconduct for breaching his fiduciary duties to his client and charging commission when not entitled;
- one charge of professional misconduct for failing to provide full and frank information to VCAT’s Guardianship List; and
- one charge of unsatisfactory professional conduct for failing to disclose the substantial changes to the fee arrangements to his client.
Senior Member Butcher, of VCAT’s Legal Practice List, found the commissions Mr Ng charged were wholly invalid as there was never any basis for the charging of a commission.
VCAT also found Mr Ng had ‘displayed a breath-taking lack of candour’ by using the revised costs agreement letter in his application to the Guardianship List to support his application for retrospective approval of his fees and commissions, but failing to disclose that the letter had never been sent to the client.
VCAT found Mr Ng guilty of all charges and ordered Mr Ng’s practising certificate be suspended for five months, commencing 1 September 2016. Mr Ng was also ordered to pay the Commissioner’s costs of $8,500.
Mr Ng told VCAT that he had refunded the commissions in full to his client’s estate. He also gave VCAT an undertaking stipulating that he would henceforth not agree to accept an appointment as Power of Attorney and would renounce any existing appointments save for family members.
Mr Ng appealed the penalty and VCAT stayed the suspension. Mr Ng later abandoned the appeal, and the suspension was to subsequently take effect from 1 October 2017 to 28 February 2018. Mr Ng was also ordered to pay the Commissioner’s costs of the appeal, fixed at $20,000.
For more information download the VCAT decision.