NSW Law Society swaps sides to support the solicitor it had wanted struck off … NCAT out of line in trust account case … NSW Court of Appeal … Law Society’s original complaint lacked clarity … Max Shanahan reports
Trust account irregularities at Terepo’s one-person law shop first caught the attention of the Law Society in 2015. The previous year, Terepo gave her husband “authority to manage all accounts, including [the Trust Account].”
Unbeknownst to Terepo, and without authorisation, her husband proceeded to make 37 transfers totalling $12,070.50 from the trust account into the office account and Terpeo’s personal account. In December, Terepo herself transferred $850 from the trust into her own account.
An audit brought the irregularity to light, and the Law Society promptly requested information from Terepo and served her with a notice under s.371 of the Legal Profession Uniform Law requiring production of documents and information.
According to the Law Society, Terepo’s responses to these requests were vague, failed to answer all the questions and did not provide full information and disclosure as required under the legislation.
The Society duly applied to the NSW Civil and Administrative Tribunal for orders to strike Terepo from the Jam Roll.
In addition to s.371 of the LPUL, alleged breaches of ss.255, 255A, 263, and 264 of the Legal Profession Act were relied upon to support the application.
The only reference made by the Law Society to any recklessness on the part of Terepo was in relation to the alleged breach of s.255.
Despite this, in finding Terepo guilty of professional misconduct and unsatisfactory professional conduct, the Tribunal relied on a finding that Terepo had been “recklessly indifferent” to the possibility that trust monies might be misappropriated by giving other people access to the account.
The Law Society duly applied to the court for enforcement of the orders.
On appeal, however, Terepo submitted that the Tribunal “erred in taking into account irrelevant considerations that were not the subject of any relevant allegation in writing by the [Law Society]” – specifically, the finding that Terepo had been recklessly indifferent with regards to the trust money.
Cue a Damascene conversion from the Law Society. Having previously applied for Terepo to be banished from lawyerly society, it now joined in Terepo’s appeal, making submissions to the Court about “the need for disciplinary tribunals to keep within the boundaries of the cases put to them”.
Perhaps, as the Court of Appeal noted, the Law Society’s original complaints “could and should have been stated much more clearly than they were”‘
A good outcome for Terepo, given she hasn’t practiced in NSW since 2014. The findings of professional misconduct and unsatisfactory professional conduct are to stand.
Terepo – absent from the hearing before the Tribunal – was given the chance to explain her personal circumstances at the time of the transgressions.
She was experiencing difficulties with her marriage and mental health and was “not thinking straight”. She only found out about her husband’s fund fiddling after the audit.
“I felt really bad. I had no malice … I was and still am very sorry for what had happened. I made sure that my husband paid all the trust money back, which he did.”
As for the $850 Terepo personally withdrew:
“I needed to pay something urgently … I did not have enough money with me. However, I was expecting some money to come into [the] office and as soon as I received them, I would pay back the money to the trust account. This has already been paid back.”
The court, comprised of Chief Justice Bell and Justices Macfarlan and Mitchelmore, accepted the proposed orders:
“Whilst the findings of professional misconduct against Ms Terepo are serious, they are not, in light of the circumstances in which Ms Terepo’s conduct occurred, so serious as to warrant an order for the removal of her name from the roll …”
All’s well that ends well.
Terepo v Council of the Law Society of New South Wales