Solicitor receives heavy fine for unlawful withdrawal of caveats
November 25, 2016
A Horsham solicitor who unlawfully executed withdrawals of caveat against a client’s property has been found guilty of professional misconduct.
Mr Denis J O’Brien, of the law practice O’Brien Lawyers, had acted for the vendor in a complex property sale involving multiple purchasers. The property was covered by a number of caveats, with the caveators being separately represented.
The caveators and the property vendor had previously agreed that the caveats against the property would be removed at settlement in exchange for payment of an agreed proportion of the proceeds.
Leading up to the date of settlement, Mr O’Brien requested the withdrawals of caveat be provided early to enable the settlements to take place progressively across the day. The solicitor for one of the caveators refused to provide the withdrawals until certain information and a bank cheque had been provided.
Having not received all the withdrawals of caveat as requested, Mr O’Brien prepared and executed withdrawals for each remaining caveat on the day of settlement. These were provided to the purchasers and ultimately lodged with the Registrar of Titles.
After investigating a complaint from the caveator’s solicitors, the Victorian Legal Services Commissioner charged Mr O’Brien with professional misconduct for executing withdrawals of caveat when he knew (or was reckless as to the fact) that he was not authorised to do so, and causing a document which he knew to be false and/or misleading to be produced to the Registrar of Titles.
Appearing before the Victorian Civil and Administrative Tribunal, Mr O’Brien accepted that his signing of the withdrawals of caveat was an error of judgement. He contended, however, that he had honestly (if mistakenly) believed that he was entitled to sign them. He also argued that, given the circumstances of the settlement, he found himself in an impossible position and signing the withdrawals of caveat appeared to be the only course available.
VCAT found that Mr O’Brien had acted deliberately with a reckless disregard or indifference to whether or not he had the authority of the caveator to sign the withdrawals of caveat.
VCAT reprimanded Mr O’Brien and ordered his practising certificate be suspended for six months, with a stay against the suspension for a two-year period. During the stay Mr O’Brien was ordered not to engage in or commit any other disciplinary offence.
Mr O’Brien was ordered to complete 10 hours of professional development in the area of ethics and professional responsibility, and to participate in six one-hour professional counselling sessions.
VCAT also fined Mr O’Brien $45,000 and ordered him to pay the Commissioner’s costs of $29,749.