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House of Assembly - Fifty-First Parliament, Third Session (51-3)
2009-10-15 Daily Xml
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MAGAREY FARLAM

Mr BIGNELL (Mawson) (14:35): My question is to the Attorney-General. Can he inform the house about developments in the Magarey Farlam matter and matters of the Law Society's culpability for the misconduct of its members?

The Hon. M.J. ATKINSON (Croydon—Attorney-General, Minister for Justice, Minister for Multicultural Affairs, Minister for Veterans' Affairs) (14:35): Members would be aware that a supervisor and manager has been appointed to wind up the law firm Magarey Farlam after its bookkeeper's alleged defalcation, and to pay out what was left in the firm's trust account. I understand that there has been a mediation, and the auditors, the banks and the insurers have finally been called upon to pay their part in compensating the victims of this defalcation. Of course, if the Leader of the Opposition had got her way it would have been all cast on the guarantee fund, but that is another matter.

As Attorney-General, I must authorise all payments made from the guarantee fund. Many of the costs claims have now been finalised, and these include those of Mellor Olsson, one of whose partners, members may recall, tried to take quite a large sum of money out of the guarantee fund, and certainly his overcharging was endorsed in this house by the Leader of the Opposition. One will recall the turn she put on towards the end of question time a few months back before she was Leader of the Opposition.

A large saving has been made because we did not just write a cheque for Mr Goode's bill, as the Leader of the Opposition was advocating.

Mrs Redmond interjecting:

The Hon. K.O. FOLEY: I rise on a point of order. The Leader of the Opposition just accused the Attorney-General of misleading the house. I ask that she withdraw and apologise, or move a substantive motion.

The SPEAKER: I did not hear any such thing.

Members interjecting:

The SPEAKER: Order! The house will come to order. I did not hear any such thing. I heard the Leader of the Opposition say, 'You shouldn't misrepresent people,' but I do not think that is an accusation of misleading the house. In any case, it would be far preferable for there not to be these constant exchanges from one side of the chamber to the other while a minister is on his feet.

The Hon. M.J. ATKINSON: I do know the truth of the matter, and it is that Mr Goode of Mellor Olsson sent a bill to the guarantee fund for—wait for it—$365,205.16. With the concurrence of the Crown Solicitor's Office I have authorised payment in response to that bill of—wait for it—$131,856.24. This reduced amount was offered to Mellor Olsson after the supervisor found that the former Law Society president, Mr Andrew Goode, was claiming outrageous costs to be paid from the fund.

The Leader of the Opposition, or the member for Heysen, as she then was, told the house that this is just routine, this is what lawyers do, you put in a bill and then you see what comes back. I can tell you what came back, $233,000 less than initially claimed. It was no thanks to the Law Society though. Despite my giving the Law Society president, John Goldberg, the opportunity to respond to my concerns, he said that he was satisfied that there was no impropriety in the manner in which Mr Goode submitted his claim for costs.

So, Mr Goode submitted almost three times as much as he was entitled to, and the Leader of the Opposition says that that is routine in the profession: that is what we do. The Leader of the Opposition has lost any moral compass about how the practise of the law ought to occur in this state.

Members interjecting:

The SPEAKER: Order!

The Hon. M.J. ATKINSON: Who investigates lawyers in this state? The answer to that is: lawyers do.

Members interjecting:

The SPEAKER: Order!

The Hon. M.J. ATKINSON: I think there is a need for a more independent means of investigation. Earlier this year I stumbled upon a disappointing example of the problems created by self-governance within the legal profession when I noticed in the daily cause list—and I try to read the cause list every day—the name of yet another former Law Society luminary and Criminal Law Committee guru in a spot of bother over his professional integrity.

Mr Nicholas Niarchos was listed to appear before the Supreme Court in what I eventually discovered was an application pursuant to section 49 of the Legal Practitioners Act to continue to practise the law despite entering into an insolvency arrangement. He had not paid income tax for years. It was only upon requesting that a staff member of mine attend the matter in court that I learned the nature of Mr Niarchos's appearance. As a matter of principle—

Mrs Redmond interjecting:

The Hon. M.J. ATKINSON: The Leader of the Opposition can shake her head; apparently she considers it all right that lawyers practise when bankrupt or subject to insolvency agreements. Again, she has completely lost her moral compass about the practice of the law. As a matter of principle, bankrupt lawyers or lawyers subject to an insolvency agreement ought not to be allowed to practise unless it can be shown that they are fit and proper persons to practise the law because otherwise they pose a risk to the public.

Lawyers are in a trusted position, often managing funds held in trust accounts for clients. Where a lawyer has a poor financial history, it is necessary as a matter of prudent public protection that the profession is as open as possible and willing to provide the public with information needed to allow people to arm themselves against being victims of professional misconduct perpetrated against them by a trusted legal representative. The risk to the public became only too evident in the Magarey Farlam matter.

Ms Chapman interjecting:

The Hon. M.J. ATKINSON: The member for Bragg interjects that it was the bookkeeper's fault; it was the accountant's fault. It is never the lawyer's fault, is it, according to the Liberal Party? Funnily enough though, the lawyers have been persuaded to make a contribution to the defalcation. At no point did the Law Society appear to have any intention to inform me as Attorney-General of Mr Niarchos's hearing. He was a Law Society mate; that is 'mate' spelt with three As. This is disappointing, as one would reasonably think that it would be prudent to ensure maximum transparency about such matters rather than to allow a situation where the Attorney-General finds out only by my assiduously reading the cause list that a lawyer is applying to continue to practise, despite entering into a personal insolvency arrangement.

Although Mr Niarchos had not yet become bankrupt, an application under section 49 of the Legal Practitioners Act became necessary owing to his need to enter into an insolvency arrangement with his creditors. The court granted Mr Niarchos authority to practise the profession of the law subject to his complying with strict conditions upon his licence. Draft orders were presented to the court by Mr Niarchos and supported by the Law Society. These orders were thankfully amended as proposed by the Solicitor-General, who attended on my behalf, to include me as Attorney-General as a recipient of notifications of continued compliance.

The court orders now require that a quarterly report be provided, not only to the Law Society but to me as Attorney-General. Should Mr Niarchos fail to comply with any of his licence conditions, not only the Law Society but also I, as Attorney-General, have the ability to apply for an order revoking the court order authorising Mr Niarchos to continue to practise. But for my reading the cause list, none of this would have happened. The Law Society—

The Hon. I.F. Evans interjecting:

The Hon. M.J. ATKINSON: And I will. The Law Society would have covered up for one of its nomenklatura nicely. Mr Goldberg was as quiet as a mouse. Although the Law Society is not required by statute to notify me of applications, pursuant to section 49 of the Legal Practitioners Act, its calculated silence about this application raises concerns about a profession being self-serving. Once again we see the Law Society holding itself to a different standard from the rest of society.

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