One of our readers with expert credentials in property conveyancing and the conduct of para-legal matters has reviewed the file released to Ralph Blewitt by Slater and Gordon about the firm's actions in the conveyancing and financing of the purchase of 1/85 Kerr Street Fitzroy in 1993.

The following comments are based on the complete file as sent by Slater and Gordon, most of which has been published here on the blog.

Comments from viewing Blewitt Conveyance / Mortgage files

Power of Attorney

No evidence exists on the Conveyance / Mortgage files documenting the creation of the Power of Attorney.  Thus I would expect there would be a separate Blewitt:  Power of Attorney to Wilson file at Slater and Gordon. 

 That file will document the making of the Power of Attorney – including instructions taken for its preparation and the date those instructions were taken.   It should also include a file note documenting Gillard’s attendance when she personally witnessed the document.  That note would
normally detail that the lawyer has fully explained the document and its effects to the Donor before it was signed by them.  The note should also document the date the Power of Attorney was witnessed. 

Because Blewitt asserts the Power of Attorney was signed in Perth, I would expect the file will be able to corroborate Blewitt’s version of events.  Alternatively (and because we have 2 people with 2 different assertions here), Gillard’s version that “I have done nothing wrong” will be corroborated and the file will document her witnessing it in Perth in front of Blewitt. 

 Due to the effect of a Power of Attorney, lawyers take their witnessing seriously – especially with Powers of Attorney that grant the Attorney the right to deal with real property on behalf of the Donor.  There is an ethical question that arises from Gillard deciding it was appropriate for her to witness Blewitt’s signature.  Normally lawyers decline witnessing documents like this where there is a close relationship with the person receiving the power.  This is to protect themselves
from allegations of undue influence/improper behaviour.  I wonder what Gillard’s explanation is in
deeming it ethically acceptable for her to witness this Power of Attorney when the person receiving the power was her boyfriend. 

 If there is not a file, or documents held by Slater and Gordon, then the usual situation is for the Law Society to take the client’s (Blewitt’s) version of events as the truth. This goes to explaining why lawyers document everything – to prove conversations/meetings occurred and to document what was said in them.

 I’d like to clear up one matter of misunderstanding on the Power of Attorney.  This type of Power of Attorney (a general power, not enduring) was not required to be witnessed.  The only time two witnesses were required was if the Donor was unable to sign the form personally.  In that event the Donor could direct another person to sign the form on his behalf, and that other person would sign on behalf of the Donor in the presence of two witnesses who then sign the form as witnesses.  That’s the strict reading of the Power of Attorney legislation.  Lawyers in Victoria may be able to point to a specific section in the Property Law Act that deals with witness requirements for Powers that deal with real property, so this strict reading based on the Power of Attorney Act may not be correct for Powers of Attorney that deal with real property. I could not see any specific
requirements in the Property Law Act http://www.austlii.edu.au/au/legis/vic/consol_act/pla1958179/s159.html that deals with what constitutes a valid appointment of a Power of Attorney for real estate. (EDITOR'S NOTE, THERE IS A REASONABLE CASE TO BE MADE THAT THE POWER OF ATTORNEY WAS DONATED IN WESTERN AUSTRALIA AND THUS SUBJECT TO WESTERN AUSTRALIAN LAW IN ORDER TO BE A GOOD AND VALID POA.   WA LAW IS SPECIFIC, 2 WITNESSES AND ENDORSEMENT OF ACCEPTANCE BY DONEE.) 

There is also a question of conflict of interest between the Attorney and the Donor – Gillard was aware the property was being bought as an investment where Wilson would be the tenant. 
Wilson had authority to do anything to purchase a property in Victoria – this arguably includes renting it to a suitable tenant on appropriate terms.  The Power of Attorney file should document an appropriate acknowledgement of this conflict of interest along the lines of Page 82 which deals with a similar conflict of interest between the Mortgagor and Mortgagee.

The Real Estate Agent, G A Thomson, may still hold their records from this transaction.  It would
be interesting to see the date they first sighted the Power of Attorney.  Is it normal practice for Real Estate Agents (acting on behalf of a Vendor) to allow a purchaser to sign a Contract without
providing evidence of a properly executed Power of Attorney?  It would be interesting to hear from any readers in this industry of their own requirements in this area.  Blewitt would need to authorise the release of this information from the Real Estate Agent.

 Conveyance

 This appears to be a pretty stock-standard conveyance and mortgage file.  However, with new
information from Blewitt regarding the execution of the Power of Attorney, the question of double-stamp duty arises. 

The appropriate stamp duty authority in Victoria should be notified of the assertion that the Power of Attorney was not in place at the time of execution of the Contract of Sale. Because Gillard prepared the Power of Attorney and was present at the Auction, I expect Blewitt would have a claim against Gillard and Slater and Gordon to recoup the double-duty payable (with penalty interest).  Further reading to help understand what this is about:  http://residentialsettlements.com.au/could-that-contract-variation-land-you-with-double-stamp-duty/.

 Page 59 is the Declaration for stamp duty purposes by the Vendor noting the date of the Contract. 
Note the wording in paragraph 3 “Contract OR CONTRACTS”.  This declaration is used by the Stamp Duties Office to confirm that no double-duty is payable.  If the Vendor was aware that the Power of Attorney did not exist at the time of signing the Contract, I expect this Declaration would need to have been amended to record that the Power of Attorney did not come into effect until after the Contract had been signed.

 The Mortgage executed by Wilson as Attorney requires “The witness must be an independent person.”  There was an independent person witnessing the mortgage, yet the instrument used to execute the mortgage did not have an independent witness.  Yet another reason why Gillard
should have refused to witness the Power of Attorney as she was not independent of Wilson.

Page 87 – regarding concerns about Prof Negligence Insurance – certification of witness.  This whole memo seems to be asking questions about the signing of the mortgage documents
that is to occur the following day – hence the “urgent” mark.  Olly may be worried about “independent” witnessing for the Borrower (the firm is also acting for the lender).  Nick’s “no” indicates that’s no concern – the firm is independent - and it’s OK for her to witness and complete the Certification of Witness document as an employee of Slater and Gordon.  A possible explanation.

Page 89 also talks about signing the mortgage forms in the presence of an independent adult witness – given Slater and Gordon are acting for both sides, this would be a concern for Olly to run past her boss.  I would have had similar concerns as you are acting for both parties and aren’t independent of either.  I didn’t see a Certification of witness document on the file.  Normally if one
was required to be signed by the witness, it would be enclosed with the mortgage letter on page 89.  Because it was not listed as an enclosure, I can only assume it was not a requirement of this particular lender.

The Valuation Report (in particular pages 126 and 127) were possibly the most interesting to me as they talk about the condition of the property being purchased.  Bear in mind Wilson allegedly renovated the property. 

The Valuation talks about the property being “internally upgraded”.  Were renovations carried out by Wilson?  If so, what renovations were required to a property that was already “internally upgraded”?  The sale brochure also refers to a renovated property.  Can Mr Blewitt shed any light
on whether renovations were actually carried out by Wilson and what they were?

Mr Blewitt has stated he didn’t know about the mortgage until a couple of months ago.  It would
be good to get some more information from Mr Blewitt about the arrangements as he knew them to be. Page 199 is a letter to Ralph Blewitt asking for the balance settlement monies, which he says he telegraphically transferred to Slater and Gordon Trust Account.  The letter is addressed to him in Perth and the settlement calculations are enclosed.  The Statement mentions “less mortgage advance of $137,797.00” on page 200.  Did MrBlewitt receive this letter?  If he did, how
does he explain not being aware of the mortgage?  Or was he aware there was a mortgage, just
not one in his name? 

Page 235 contains what we always called “Initial letter to client”.  This letter is a pro-forma
letter that would have been altered to reflect the individual conveyance.  Hence the “you” terminology would have formed part of the original “pro forma” letter, and the conveyancer wouldn’t have spent too much time amending the “you” terminology to reflect the Power of
Attorney.  This letter can’t be relied upon as to the lawyers understanding of the conveyance due to its pro-forma style.

Mortgage

 Page 52 details that Blewitt was expected to pay Slater and Gordon interest cheques of $3,656.25 every quarter.  It would be interesting to see if any of these payments can be traced in the Wilson accounts.

 Mr Blewitt paid a valuation fee (page 154, 155).  I query what Mr Blewitt thought this fee was
for, if not a part of the mortgage process for a mortgage in his name.

 Gillard thought that Mr Blewitt was an appropriate candidate for an interest only loan for 3 years, with the balance $150,000 (principal) payable at the expiration of the 3 years. 

Ms Gillard’s comments in her exit interview about the finances of Mr Blewitt don’t seem to gel with the type of mortgage granted.  I would be interested to hear from readers in the lending industry on their thoughts on this.

Page 160 talks about obtaining a copy of Blewitt’s Tax Returns – standard practice for lenders. 
No copy was obtained for the file.  Blewitt’s Accountant did provide a letter detailing salary but
considering Gillard talked about flats Blewitt owned I’m surprised the letter was sufficient.  I’m also surprised Slater and Gordon didn’t require a Guarantee from his wife or a second mortgage
over their matrimonial home.  Again, comments from lenders might shed some light on this mortgage transaction.

Gillard as a Lawyer unable to defend her actions due to client privilege

 As we really only have one side of the story, I would put it to you that Blewitt should release Ms Gillard from her legal obligation to client confidentiality regarding these matters, and also at the same time Blewitt should challenge the AWU to also release Gillard and Slater and Gordon
from client confidentiality regarding these matters.  Until the lawyers are released from client
privilege, they cannot speak and properly defend / explain their actions.  I have felt at times for Ms Gillard as she struggles with this issue and to enable her to be able to operate on a level
playing field.  This is not a political matter, it is to enable AWU members to work out what has happened and get their money back.  At the moment Ms Gillard is unable to answer all but the most basic of questions, and certainly not questions related to client privileged information.

Slater and Gordon are similarly constrained and should also upon receiving a release from confidentiality agree to release any internal Slater and Gordon material relating to these matters.

Nick Styant-Browne and Ms Olive Brosnahan are also similarly constrained and unable to speak publically about specific client matters.

A broad release would also release and open up the Blewitt Defamation file at Slater and Gordon – both the Melbourne and Perth Offices.

It really is in everyone’s interests for these releases if we are wanting to seek the truth without political manipulation.  These releases will allow us to get to the truth of the matters rather than the smokescreens that I currently see deployed by all parties.  If Mr Blewitt is prepared to put his neck on the chopping block and provide a release, the AWU has no excuse not to provide the same release in relation to matters pertaining to Wilson’s swindle.  No-one wants to know the inner workings of the AWU, but we do want to ensure justice is carried out for AWU members – indeed all members of unions (that would be me!).

I think that we all a vote of thanks to reader P who wants to remain anonymous in this analysis.   It must have taken a tremendous amount of time and clearly many years of professional real world experience.