Experienced lawyer reprimanded for failing to read Court Orders and breaching Undertaking - Victorian Legal Services Board + Commissioner

Experienced lawyer reprimanded for failing to read Court Orders and breaching Undertaking

October 24, 2018

A Benalla solicitor who paid trust account money to his client in breach of Court orders has been reprimanded by the Victorian Civil and Administrative Tribunal.

The Victorian Legal Services Commissioner told VCAT that in 2015 Mr David Joseph represented a client in a family law matter in the Federal Circuit Court. During the proceedings the Court ordered the proceeds from the client’s earlier redundancy payout be placed in an interest bearing trust account for both parties. The Court ordered the money was to only be paid out under an order of the Court or with the other party’s consent.

VCAT heard that in correspondence with the other party’s solicitors, Mr Joseph acknowledged the claim to the money in the trust account. Later in the year Mr Joseph advised his client that withdrawal of the money may be a breach of the Court Orders but that his client could instruct him to withdraw the money. Mr Joseph did not mention the Court’s conditions on withdrawal.

The Commissioner also told VCAT that Mr Joseph had prepared a letter for his client indemnifying Mr Joseph against ‘any losses that may be sustained by us due to having acceded to your present instructions’ to withdraw the money. Mr Joseph did not advise his client to get independent legal advice about signing the letter. After the client signed the letter, Mr Joseph withdrew the money without a Court order or the consent of the other party.

Several weeks later the Court ordered that the sum of $47,000 be paid from the trust account to the other party within four weeks. Mr Joseph gave the Court an Undertaking that either the client and/or he would make the payment, however no payment was made.

Mr Joseph maintained that he had made an error and was unaware that the money could only be released with a Court Order or with the permission of the other party. He also submitted that he had not breached the Undertaking as the other party received the money after making an insurance claim against him with the Legal Practitioner’s Liability Committee.

VCAT found that Mr Joseph had breached the Undertaking, and that he had negligently failed to provide adequate advice to his client.

VCAT found Mr Joseph guilty on two charges of professional misconduct, one charge of misconduct at common law and one charge of unsatisfactory professional conduct.

Mr Joseph was reprimanded, fined $7,000 and ordered to the Commissioner’s costs of $10,000

For further information, download the VCAT decision.