Thanks to reader Ken for so many tips on this blog including this very important post. Ken, the community owes you.
This is a link to the Victorian Government Gazette that promulgated the Solicitors (Audit and Practicing Certificates) Rules, 1990. The Rules were proclaimed on 15 August, 1990 and have the effect of provisions of the Legal Profession Practice Act, 1958.
Here is the requirement on Solicitors Trust Accounts for recording the receipt of money.
Just for completeness, the 1990 rules were in force from August, 1990 until repealed and replaced by these rules on 1st April 1998 by The Victorian RPA Ltd Trust Account Practice Rules made under the Legal Practice Act 1996.
These Trust Account Rules 1998 commenced on 1 April 1998 and address the receipt of moneys received to a Trust Account by “Direct Deposit.”
See the State Library of Victoria –
Available State Library of Victoria Request from onsite storage SLTF 346.945059 P88V (1998) (updating...)
Here is an extract –
Victorian Lawyers RPA Ltd
TRUST ACCOUNT PRACTICE RULES
These practice rules are made by Victorian Lawyers RPA Ltd. under section 72 of the Legal
Practice Act 1996.
Part I - Preliminary and Definitions
l. Commencement Date
These practice rules, except for rule 24, come into operation on 1 April 1998 and Rule 24
comes into operation on I April 1999.
2. Repeal of Previous Rules
The Solicitors' (Audit and Practising Certificates) Rules 1990 and the Mortgage Register and
Nominee Company Rules 1977 are repealed.
Part 4 Accounting Records
5. Receipting of Trust Money ....
(5) Receipts are to be made out as soon as practicable following receipt of the trust
money or in the case of a direct deposit, as soon as practicable after the legal practitioner
becomes aware of the deposit.
The key requirement of solicitors is to record “from whom the money is received” not who deposited the funds, since this latter person may just have been an employee, agent, friend or relative doing a postal or banking errand. In the case of a cheque or draft, the name of the drawer must be recorded on the receipt.
So, we have now the reference to the Rules (forming part of the Act, the law) that applied to Slater and Gordon's Trust Account in 1993 when the AWU-WRA money came in.
The Rules had been in operation for some years when the 1993 deposit was made. There was a duty on both the Commonwealth Bank to furnish the drawer information where deposits to a Solicitors Trust Account were made by cheque, and a positive obligation on Slater and Gordon to find out and record the drawer of the cheque on the Trust Account Receipt. Section 32 (d) - in the case of a cheque, a solicitor shall specify the drawer. No if known, no if but or maybe, shall.
You may recall that on 4 September, 2012, James Higgins wrote to Galbally Rolfe, the solicitors acting for Ralph Blewitt. Mr Higgins described both the Trust Account Receipt and the Trust Ledger which he says recorded Mr Blewitt himself as paying in the $67,772.30 payment (paragraph 4). Mr Higgins quotes details from and refers to the Trust Account Receipt itself from which I infer that Slater and Gordon had a copy of the Receipt as late as September, 2012. With fresh investigations afoot, one hopes that the Receipt has not been destroyed.
This email from James Higgins dated 8 April 2013 goes further in stating that the money paid to Slater and Gordon was money that was presented to Slater and Gordon and recorded by it as money belonging to Mr Blewitt, ie "there is no reference concerning where you sourced these funds".
From: James Higgins
To: Ralph Blewitt
CC: Sharon Judd, Slater and Gordon
Subject: Your recent request.
Date: Mon, 8 Apr 2013 02:52:43 +0000
Dear Mr Blewitt.I write in response to the request for Trust Account receipts associated with your conveyancing file for your purchase of a property in 1993. I am assuming for this purpose that you are no longer represented by Galbally Rolfe and I can communicate directly with you in this regard. For the avoidance of doubt, and as we have previously advised you should continue to seek independent legal advice concerning these matters.Your request was to our Managing Director Mr Andrew Grech. Mr Grech is on leave and has asked me to respond on his behalf.Under the rules and laws applying to Trust Account receipts they must be kept for 7 years. Nevertheless we requested our Matter Accounts group search for receipts from 1993 related to this matter. Unfortunately it appears the firm largely no longer holds trust account receipts for the early 1990's given the expiration of time. We do enclose a copy of our Trust Account ledgers which we have previously provided to your lawyers. You will note that the ledger reflects that the transactions you have inquired about involved a Direct Deposit in your name. You are aware you deposited those funds at a Commonwealth Bank Branch in Western Australia. As previously advised to your lawyers there is no reference in your conveyance or mortgage file concerning where you sourced those funds. The other transaction you inquire about concerned a personal cheque in the name of R E & J A Blewitt.You will note that these ledgers are in fact copies of the actual ledger that was printed off for the file on 13 July 1994 prior to any controversy concerning this conveyance. I am informed that this was likely to be for the purposes of archiving the file.Yours faithfullyJames HigginsGeneral Manager - Commercial and Project LitigationSLATER & GORDON LAWYERS485 La Trobe St, Melbourne VIC 3000T: (03) 9602 6888 | F: (03) 9600 0290
On 8 May 2013 I wrote to Slater and Gordon and you can read a copy of my email here. I have spoken to the addressee twice, the email has been received, but Slater and Gordon has not replied.
Slater and Gordon's record of the source of the money is wrong. The money came from a sham entity, the AWU Workplace Reform Association, which was set up by one of Slater and Gordon's partners. The financial accounting for this transaction covers up facts which could give rise to a report to police or money laundering authorities.
There being no response from Slater and Gordon, I will escalate the reporting of this irregularity in a Solicitor's Trust Account.