This article is from the Australian Property Journal archive
Solicitor Anthony Butler, 37, has been found guilty of unsatisfactory professional conduct by Queensland’s Legal Practice Committee, fined $1,500 and ordered to pay costs of $2,000.
Mr Butler, at present a consultant with Surfers Paradise solicitors Freestone & Kummick, was charged by the Legal Services Commission after contravening Section 368B of the Property Agents and Motor Dealers Act 2000.
While a partner in the now defunct Cavill Avenue firm of Butler & Clements, Mr Butler failed to provide Certificates of Independence to clients in 178 conveyancing matters between January 2003 and January 2004.
In each transaction the selling agent NoLimit Realty Pty Ltd referred unwitting buyers to Butler’s firm.
Conveyancing solicitors are required by Section 365B to certify whether or not they are independent and to disclose to buyer clients business, family or other relationships they may have with anyone involved in the particular sale. This Section was included in amendments brought in by the Beattie Government in 2001 to try to stamp out Queensland’s then notorious two-tier marketeering scams. Despite these laws, overpriced property racketeering continues unabated – particularly on the Gold Coast – with panels of less-than-independent solicitors happily accepting referrals of novice investor clients.
The action against Mr Butler resulted from complaints made to the Queensland Law Society and to the Office of Fair Trading in October 2003 by Victorians, Rod Dinan and Gabby Tadesco. These out-of-towners were referred to Butler & Clements for their purchase of an off-the-plan townhouse marketed as a NoLimit lifestyle investment. When the couple suspected a scam, they contacted consumer advocate Neil Jenman who recommended they urgently obtain independent legal advice. Their contract was soon successfully cancelled.
Although the agent disclosed a business relationship with Butler & Clements to these buyers, and no doubt did the same in the other 177 referrals, the Legal Practice Committee and the Legal Services Commission accepted “there was no business relationship … in relation to the contracts.” The Committee in fact ordered particulars of the charge against Anthony Butler to be amended by deleting that he “failed to disclose to purchaser clients a relationship with the selling agent.”
Both the Committee and the Commission seem unaware that the Law Society has long warned solicitors that “a consistent referral source” of new clients might not only constitute a disclosable relationship under Section 365B, but also prevent solicitors certifying “genuine independence”.
While the Law Society and the Legal Service Commission took almost two years to complete their investigations and lay this single misconduct charge, Fair Trading within three months (in January 2004) secured an Enforceable Undertaking from Butler & Clements agreeing Section 365B had been contravened and promising to comply in future.
Meanwhile Anthony Butler’s former partner Lisa Clements, now practising as Clements Lawyers, was investigated by the Legal Services Commission and Fair Trading in 2005 following a similar complaint. The complainants, Robert and Cecilia Headrick of Werrington NSW, were referred to Clements Lawyers by NoLimit Realty for the conveyancing of an off-the-plan apartment. Like Dinan and Tadesco this couple also later felt nervous and again approached Neil Jenman, independent advice was sought and they were soon out of their contract. Although the agent declared a business relationship with Ms Clements, she certified to the Headricks clients that she had no business or other relationship with this agent.
The Legal Services Commission determined it was not in the public interest to take disciplinary action over this, but would call for a future report to ensure Ms Clements complied with her legal obligations. Fair Trading also took no action. Neil Jenman has commented: “We may expect real estate agents to be deceptive, but lawyers are supposed to protect us from them. When lawyers collaborate with crooks the very essence of what we expect of lawyers is betrayed. The lawyers’ sin of betrayal is far worse than any crooked agents’.”
Veteran Gold Coast solicitor John Macdonald said yesterday he was extremely disappointed with the decision of the Legal Practice Committee. “Less than 10 bucks per offence is cheaper than a parking meter fine,” he said. “Such a miserable penalty imposed on a serial offender should be appealed, otherwise why would any solicitors bother doing the right thing?”
By Tim O’Dwyer, lawyer.*
HOW I WAS STITCHED UP http://www.cyclingnews.com/photos/2005/tech/features/conti_factory/l1000322.jpg
(Part of an edited statement supplied by Gabby Tadesco to Fair Trading and the Queensland Law Society Services Commission)
By 1:00 p.m. the No Limit saleslady asked if we wanted a coffee. I said, “Well actually, some lunch would be nice.” We were starving after only a cuppa and a breakfast bar on the plane. She said how much time we would have would depend on what time the solicitor waiting in their Brisbane office had to fit us in. If we wanted to go ahead, we had to sign the contracts that day. On the way to the coffee shop, we passed a real estate agent’s window. I tried to look at properties and prices but the saleslady hurried us on. I realize now why she didn’t want us to stop there. When we got to the coffee shop she asked if we wanted to proceed, and my husband agreed. So she called her office and waited for a call back on when the solicitor would be available. While our food and drinks order was coming she got a phone call and was told that if we wanted to see the solicitor we should get there as soon as possible. He was free but didn’t want to hang around. With a 25 minute drive to the office we ate and drank very hurriedly while the saleslady went over our figures and worked out the tax we would be entitled to claim. We would have a very small amount to contribute each week from our own pocket. As we rushed off to the solicitor she almost drove through a red light. She was panicking and said that the solicitor was a bit moody and might not wait if we were late. All the time I was asking questions to try and settle my continued doubts about the whole thing.
When we finally arrived at No Limit’s Brisbane office the very young looking solicitor was there flicking impatiently through a magazine. I needed to use the toilet urgently and had to ask if I could go first. I felt so rushed. The saleslady then introduced us and filled in our names on the documents and left the solicitor to go over them with us. He told us “No Limit” did not employ him or pay him in any way, and that he was there for our benefit. He went over the contract with us fairly flippantly and explained our obligations and their obligations, and said we had 5 days cooling off. We signed where necessary. I was happy the cooling off period would enable us to take the contract to our solicitor in Melbourne. There was a warning (I think it is law) on the front of the contract to seek independent advice and valuation.
When we got back to Victoria I made an appointment to see a local solicitor and began to look up the internet about getting a valuation of the property. But to tell the truth, I was unsure how to actually find someone in Queensland and wondered if they would be honest or not.
There was a knock on the door of our home a short time later from a local estate agent looking for listings. I said that we didn’t want to sell as we had just signed for an investment property in Queensland. He warned me to be careful, and gave me Neil Jenman’s book. I looked at its title, “DON’T SIGN ANYTHING”, and thought this was the sign I had been asking for all morning. I quickly contacted Neil Jenman by email and got a reply that he was investigating the NoLimit organization at that very moment.
