1. The application to strike out made by the Solicitor the 25 May 2011 seeks firstly
   • an order that the whole of the Application be struck out pursuant to section 32 and/or section 56 of the ACAT Act: or
   • alternatively, an order that clause 1, clause 2 and the parts of clause 3 dealing with the payment of money into the trust account be struck out. This would leave only the allegation that the settlement of the Supreme Court claim without instructions and in breach of an assurance given constituted a breach of standards of frankness, fair dealing, competence and diligence to be expected of a solicitor: or
   • an order that clause 1 and the parts of clauses 2 and 3 dealing with the withdrawal of the money from trust account be struck out. This would leave allegations in the same terms as the preceding clause of the application that by settling the claim in the proceedings without instructions and contrary to an assurance that he would not do so, the Solicitor had failed to treat his client fairly and in good faith

1. It will be seen from the way in which the application to strike out has been drafted that the issue of the withdrawing of money from the trust account, and whether the Supreme Court proceedings were settled without instructions, need to be considered as two separate issues - as does the Application itself.

1. I do not consider it necessary at this stage to have to consider the differences between the allegation of the breach of standards alleged between paragraphs 2 and 3 of the Application. This is a matter upon which counsel may wish to address, and there may be authorities to which I have not been referred which draw distinctions between these two categories. As both paragraphs 2 and 3 of the Application cover the same ground (although alleging that they may constitute different obligations), if I am satisfied that either one of those paragraphs could on the evidence at this stage be sustained, I do not propose to strike out the other paragraph but leave the matter for argument at a hearing.

1. In relation to clause 1 of the Application, the evidence of the Daughter indicates, in paragraphs 15 and 16 of her affidavit, that the Father wished to transfer his money into her control as owner as a gift, for her own benefit. There is no indication that this gift was subject to the Daughter paying any outstanding accounts of his, nor any evidence that he told her of any outstanding accounts that he may have had. Indeed, the account rendered by the Firm and which was paid from the funds that she deposited was not prepared until after the date of the discussion between father and daughter and the transfer of funds.

1. Paragraph 16 of the Daughter's affidavit indicates that the transfer from the account of the Father to the account of the Daughter had been facilitated by the Firm. It was following this transfer to her that on the 23 August 2007, when the money must have become her property, that she was asked to deposit money into the trust account of the Firm. It becomes a serious question to be tried as to what the responsibilities of the partners of the Firm and specifically those of the Solicitor were in relation to the money that they received from her.

1. Annexure "F" to the affidavit of the Law Society solicitor shows that $4,405.95 of this money deposited by the Daughter on 23 August 2007 was withdrawn on 29 August 2007 in payment of the costs of the Father, as set out on the account of that date. Paragraph 16 of the affidavit of the Daughter's affidavit indicates that the reason given to her for the request for money was (in part) to pay her father's costs, but this was before the bill had been drawn. There is no indication that the amount was disclosed, or her consent sought to payment being made on 29 August.

1. The Daughter attended at the office of the Firm on 4 September 2007, at which the Solicitor was present. (Paragraph 25 of her affidavit). There is nothing in her affidavit to support the proposition that authority had been given for the withdrawal of funds from the Firm's trust account. There is no written document that has been produced to date.

1. Counsel for the Solicitor argued that as the Daughter had a power of attorney from her father, the payment that was made into the Firm's trust account on

23 August was a payment on his behalf from his resources, as a necessary step to completing his affairs before his death. She was only acting as his agent and attorney to settle his debts before death. The difficulty with this proposition is that the evidence of the Daughter indicates that prior to her making the payment, the Father's funds had been given to her as her own. She had made the payment from own resources.

1. While the chain of events alleged by the Society may be disputed at a full hearing, I am satisfied that there is evidence upon which the Tribunal could find that clause 1 of the Application is upheld, subject to whatever is filed on behalf of the Solicitor and the testing of evidence. I therefore dismiss the application to strike out to the extent that it seeks the striking out of clause 1 of the Application on this ground, and also clause 2 (iii) and (iv) and clause 3 (iii) and (iv).

1. It remains to be considered whether the Application should be struck out on the other ground that there is no evidence that the Solicitor settled the court case in breach of his undertaking to consult and obtain instructions from the Daughter before doing so.

1. Counsel for the Solicitor pressed upon the Tribunal the proposition that the Solicitor could not act as executor and the solicitor for the Daughter at the same time. He pointed to the potential conflict of interest that may arise between a solicitor's obligation to his client, and his obligations to the Supreme Court in acting as executor and obtaining probate. Reference was made to the difficulty facing an executor if one of a number of beneficiaries sought to direct him as to the way in which probate should be sought, or the administration of the estate should be conducted.

1. It is clear that for an executor to accept instructions or direction from one beneficiary where there are a number of beneficiaries to be considered could amount to a breach of the executor's obligation. In the present case, there was only one beneficiary, with whom the Solicitor had had discussions about the issues that would arise. While it may be undesirable for the executor of an estate to also act as the solicitor for the sole beneficiary (a question on which I express no opinion), it cannot be said that for an executor to also act as solicitor must invalidate either the obligations as a solicitor or the obligations as executor.

1. Counsel pressed that in such a situation, the obligations of the executor would be to the Court as the ultimate body to which all legal practitioners owe their obligations. While in general terms this proposition appears correct, there is nothing to which the Tribunal has been referred on this application which indicates that if a legal practitioner who is the executor also acts as solicitor for the sole beneficiary, then the latter relationship with its attendant obligations is invalidated. It is a question of the evidence that can be brought to show that the professional reputation of solicitor and client has been established.

1. In paragraph 25 of her affidavit, the Daughter refers to the conversation in which she specifically raised the question of the need for her to obtain independent legal advice. The evidence is that the Solicitor assured her that he would look after her interests and there was no need for her to obtain independent legal advice. While the words of the Solicitor quoted in the paragraph do not specifically state that the Solicitor is "her solicitor in the matter", to a lay client it could be reasonably inferred that such a relationship existed. Clearly, this is what the Daughter thought.

1. Annexure D to the affidavit of the Daughter exhibits an e-mail from the Solicitor which advises her that "the matter WILL NOT be settled unless and until I have your instructions." (His emphasis). It is this document that is the basis upon which the Daughter says in paragraph 40 of her affidavit that the breach of obligation occurred because the matter had been settled without her instructions. On the face of it, this evidence could make out the ground that the Society relies upon in grounds 2 and 3 in relation to the settlement of the court action.

1. I am satisfied that the application to strike out clause 1 and clauses 2 (i) and (ii) and 3(i) and (ii) of the Application has not been made out. Coupled with my findings in relation to clauses 2 (iii) and (iv) and 3 (iii) and (iv) of the application to strike out, this means that the whole of application to strike out fails and is dismissed.

1. It is not appropriate for any order for costs to be made at this stage, and

I decline to do so. The question of costs should be considered in the course of the full hearing of the Application.

FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )