Part 2 - Slater and Gordon's confidential legal advice from Geoff Masel of Philips Fox on $67,000 cheque from slush fund
This is a Slater and Gordon file note written by the late Geoff Shaw
Shaw reveals Masel's legal advice in this paragraph:
The requirements of a Solicitor's Trust Account Receipt at the time were clear - Slater and Gordon was required to report "from whom the money was received" (which it could using the Masel/Shaw protocol have said was the Commonwealth Bank) - and it was required to report the drawer of any cheque.
No one can now argue that Ralph Blewitt was the source of the money.
The money came from this cheque.
Slater and Gordon might not have known at the instant the cheque's proceeds hit their account who the drawer of the cheque was.
But by the time this all became controversial - they certainly did.
There are three choices - either Ralph Blewitt was committing some type of fraud in putting himself forward as the source of the funds when the money really came from the AWU Workplace Reform Association - and that prospect should have demanded diligent and swift action from the solicitors for the AWU.
Or else Blewitt was a Trustee in name only for the purchase in which the lawyers Slater and Gordon acted.
The 3rd possibility is they were all crooks in it together.
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Just for completeness, the 1990 rules were in force from August, 1990 until repealed and replaced by these rules on 1st April 1998 by The Victorian RPA Ltd Trust Account Practice Rules made under the Legal Practice Act 1996.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 +0000Dear 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.
Slater and Gordon and the Trust Account Receipt for the money from the AWU Workplace Reform Association
The AWU Workplace Reform Association cheque for $67,722.30 was deposited at a WA branch of the CBA on 18 March, 1993. The cheque wasn't made out to the CBA for conversion into a bank cheque, it's a cheque from the account of the AWU-WRA to the Trust Account of Slater and Gordon.
By April, 1996 it was clear that the cheque and the statements of account that showed the cheque being deposited into Slater and Gordon's Trust Account were important pieces of evidence in the Industrial Relations Court of Australia and its investigations into The AWU Scandal. Ian Cambridge expressed incredulity at Slater and Gordon permitting the use of funds from the AWU-WRA in the purchase of real estate by an individual. So what Slater and Gordon's bank told the firm, and what the firm recorded in its Trust Account to describe the deposit in its bank account are important matters.
The Slater and Gordon conveyance and mortgage files were subpoenaed by the Industrial Relations Court (and on the basis that Ian Cambridge's affidavit exhibited all relevant material returned with the subpoena) it can be inferred that no copies of the Trust Account Receipts were sent by Slater and Gordon with the conveyance file to the court.
Here is Slater and Gordon's letter in response to Ralph Blewitt's recent written request for a copy of the Trust Account Receipt:
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.
You will note that Mr Higgins doesn't state that the firm has no copies of the relevant Trust Account Receipts, rather that "it appears the firm largely no longer holds trust account receipts for the early 1990's". It appears - the firm - largely - no longer holds.....
Maybe the firm might like to have a closer and better look.
Spin Baby, Spin goes on to make these observations
An interesting response from James Higgins of Slater and Gordon. I’d like to ask Mr Higgins where they filed their original Receipt Requisition and duplicate trust account receipt, and where the original trust account receipt was kept as it wasn’t sent to the client. In my experience the duplicate and original trust account receipt should be on the conveyancing file. A search in the Matter Accounts Group would of course fail to turn up the receipt. DOH! Do these guys think we’re idiots or something? Have they looked on the conveyance file? Perhaps Slater and Gordon operates in a different manner than all the firms I’ve worked at and doesn’t file Cheque and Receipt requisitions and the corresponding cheque remittance advice and duplicate receipts on the relevant files? Somehow I doubt it. My bulldust detector is going beep, beep, beep.
It doesn’t surprise me that their Matter Accounts Group search results showed nothing. They’d need to access archive file boxes of their accounts department to access the correct records. He doesn’t say Slater and Gordon have searched for those file boxes and they have been destroyed. He doesn’t say they’ve looked on the conveyance file as well. He just implies they’ve looked in their “system” (that’d be the current one) and there’s nothing to be found, which is exactly what I’d expect if that’s the only place they looked.
Would they be willing to access their old Accounts Boxes from the relevant period to see what their Trust Account Bank Statements from that time show the entry from their bank to be? It’s that entry that should be on the trust account receipt, not what was written by the conveyancing clerk who “takes a stab in the dark on who the recipient might be” for a direct deposit. If I were the Police I’d be subpoenaing that bank statement from Slater and Gordon from that archived accounts department box. I know it’ll be there if they haven’t destroyed the relevant box and that destruction or otherwise can be confirmed by the company that’s been hired by Slater and Gordon to hold their archived files (someone like Recall or Brambles). Every touch leaves its trace and every story can be background checked if it doesn’t sound right. If Slater and Gordon want to pretend that their bank records no longer exist in their archive boxes, what would there be to stop the Police going down to the archive company and accessing the relevant boxes to get it? Nothing. This is a fraud case and the Police are quite capable of going and getting that statement if they think it relevant. I reckon I could find it myself within ½ a day with the right access to the archival storage system.
Personally I think that response from Higgins is a complete fob-off and I’d be going back to them asking them to clarify exactly where they searched, and where they expect the original and duplicate copy of their receipts would have ended up prior to their “destruction”. Perhaps they don’t file them on their files like the firms I’ve worked for. If they don’t want to answer in a timely manner, maybe Mr Styant-Browne would be willing to comment on normal practice at Slater and Gordon at that time on where the trust account receipts issued by the Accounts Department would have been filed if they weren’t sent to the client/depositor? Every touch leaves its trace and I bet Mr Styant-Browne or indeed anyone who worked at Slater and Gordon at that time can confirm in a statutory declaration exactly where receipts issued by the Accounts Department in relation to client matters were filed at Slater and Gordon. I bet the answer will be: on the relevant file.
If the current partners want to play games in relation to a simple request for a trust account receipt that should have been filed on the conveyance file and is easily accessed because they’ve already handed most of the client-portion of the file over to Blewitt – we know they’ve got that file, then I’m willing to play games too and give some good leads for a story. Any journalist worth their salt out there prepared to start approaching partners who were at Slater and Gordon at the time for comment on where the Blewitt receipt should be? Personally I hope Ralph is not prepared to lie down on this and writes back to Slater and Gordon seeking clarification of exactly where they have searched – and where they haven’t searched…
And this from a learned fellow who's written in the past couple of days.
Mr Higgins of Slater and Gordon writes:
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.
Learned fellow goes on to observe:
The Ledger is incorrect.
Trust Account receipts (and subsequently Trust Ledgers) must show the drawerof cheques received.
It is misleading to say the S & G trust ledger reflects a “direct deposit” in Blewitt’s name and he deposited those funds.
Blewitt deposited an AWU-WRA cheque with the Commonwealth Bank in Perth to be transferred by telegraphic transfer by the bank to the credit of Slater & Gordon’s trust account for the benefit of Ralph Blewitt.
The bank was required and would have shown in their statement of the Slater & Gordon Trust account a receipt of a cheque from AWU-WRA to be credited to the Trust Account of Slater & Gordon for the benefit of Ralph Blewitt.
Slater & Gordon incorrectly recorded in their Trust Account ledger that the cheque was drawn by Ralph Blewitt. It was not.
Trust ledgers are required to accurately reflect the issued Trust Account receipt for funds received.
Assuming the Trust ledger reflected the issued Trust Account Receipt then the receipt is also incorrect if it did not show the funds were received from the AWU-WRA, being the drawer of the cheque..
Trust Account receipts and subsequently, Trust Account Ledgers are required to detail the drawer of the cheque, as well as the details of the beneficiary and the matter/file it relates to.
The correct wording of the receipt and then the Trust Account ledger should have been something along the lines –
“Received on the ___day ____of 1993 the sum of $67,000 from the AWU-WRA on account of Ralph Blewitt re the purchase of 1/85 Kerr Street, Fitzroy, (File number _____)”
In relation to Slater and Gordon's statement: 'As previously advised to your lawyers there is no reference in your conveyance or mortgage file concerning where you sourced those funds", Learned Fellow says:
Sophistry! What is in or not in the client files is not entirely relevant.
However, the Slater & Gordon Trust Account copy Receipt Book , their CBA Trust Account Statements and the Client Trust Ledger are relevant.
The CBA Trust Account for Slater & Gordon issued statements should have and I expect would have shown the drawer of the cheque deposited to the account was the AWU-WRA for the benefit of Ralph Blewitt.
The Trust Account Receipt and Trust Account ledger issued by Slater & Gordon should have reflected this. If not ,then Salter & Gordon breached their legal obligations.