Siphoning a miserable $12,000 from a property settlement sees a solicitor prised off the jam roll … Implausible explanation for misappropriation … Emilie Lentz at the Hellfire Club
AT the Bureau de Spank, solicitor Vijay Kumar went down in his appeal against a decision of the NSW Administrative Decisions Tribunal to remove him from the jam roll. John Basten, Mark Leeming and Ronnie Sackville did the job.
The professional misconduct concerned Kumar’s directions for settlement of property sold by his client, Mr Malik. The cheque directions sent to the purchaser’s solicitors directed that a payment of $12,000 be made to “Permanent Custodians”. The letter directing this payment was signed on behalf of Kumar.
A legal secretary from the purchaser’s solicitor enquired about the $12,000 payment and she later spoke to Kumar who said his client authorised him to draw it.
“I asked was it a personal loan. He said something like that.”
The cheque was delivered later that day and credited to Kumar’s loan account three days later.
Kumar’s relationship with Permanent Custodians was one of ongoing and significant indebtedness.
By the end of 2003, Kumar had borrowed $293,370 from Permanent Custodians and had frequently fallen into arrears, being threatened with eviction on numerous occasions. Interest was accruing at a high rate and penalty fees for arrears were had been imposed. For the three months prior to the misappropriation of the $12,000 from Malik, Kumar had been unable to make monthly repayments.
The fearsome NSW Legal Services Commissioner applied to the Administrative Decisions Tribunal to determine Kumar’s conduct.
The tribunal found Kumar guilty of professional misconduct on three grounds:
- For misappropriating $12,000 from Malik’s proceeds of settlement;
- For obstructing an audit of his practice between 2010 and 2011; and
- For misleading the commissioner about where he was on February 1, 2011.
After a further hearing the tribunal ordered that Kumar’s name be struck from the roll and that he pay $3,000 compensation to Malik, given that $9,000 had already been repaid in instalments.
Kumar’s case on appeal was that he had been “mistaken” in believing that Malik had directed a cheque for $12,000 to be paid to Permanent Custodians.
He claimed that he believed the money was intended to repay Malik’s own indebtedness to Permanent Custodians, an argument the court of appeal said was “wholly implausible”.
Kumar maintained he had $12,000 of his own money to pay down his indebtedness. Justice Leeming said:
“Only if he believed that there were such funds could Mr Kumar have been under the mistaken belief that he had used his own funds, rather than Mr Malik’s money, to repay his own indebtedness.”
However, there was no evidence that such funds were available. Kumar would have known his indebtedness to Permanent Custodians had been growing for years, that the lender had taken steps to take possession of his mortgaged property and that the electricity was about to be cut off at his Liverpool office.
Furthermore, when Malik discovered the misappropriation, Kumar proceeded to repay the money in instalments.
Repayment in instalments rather than in full suggested that the entirety of the $12,000 was not available to him. Additionally, sequestration proceedings had been commenced against Kumar in 2010.
The CA found that for the misappropriation to be a mistake “depends on a most unlikely coincidence”. The “mistake” entailed a belief that Malik wished to repay the exact same amount to the exact same lender, Permanent Custodians, at the exact time that Kumar had to make an essential repayment.
In any event Malik did not owe any money to Permanent Custodians and there was no reason for Kumar to believe that he did, let alone in the exact sum he owed.
The court found that Kumar intentionally misappropriated the money for his own benefit, to make a payment to his lender, preventing his own eviction and bankruptcy.
Taking into account the severe impact of this finding on Kumar professionally, the court nonetheless found that it met the Briginshaw standard of proof.
The court rejected the submission that a reprimand or restrictions on Kumar’s ticket were appropriate. Misappropriation of $12,000 was sufficient to justify the orders made to remove him from the roll, as it concerned, “the very basic obligations of honesty and trustworthiness discussed in major cases [and] fundamental principles of honesty and fair dealing”.
Kumar is also up for the commissioner’s costs.