LAW EXTENSION COMMITTEE
17 LEGAL ETHICS
SUMMER 2014-15
ASSIGNMENT
INSTRUCTIONS
In Legal Ethics, there is only ONE ASSIGNMENT. This assignment is compulsory and must be
submitted by all students. The assignment will constitute 20% of the final mark in this subject.
Assignments must be submitted by the due date unless an extension has been granted.
Extensions need to be requested by email prior to the assignment due date and specific
supporting evidence provided. Late assignments attract a penalty of one mark out of 20, or 5%
of the total marks available, per day. A pass mark is 50%. Assignments that are received more
than ten days after the published due date will not be accepted. Please note that students
granted an extension must still submit their assignment within ten days of the original
assignment due date.
Assignments are assessed according to the “Assignment Grading and Assessment Criteria”
outlined in the Guide to the Presentation and Submission of Assignments. Prior to the
examination, assignments will be returned to students and results posted on students’
individual Results screen of the LEC Webcampus. Students are responsible for checking their
Results screen and ascertaining their eligibility to sit for the examination.
The rules regarding the presentation of assignments and instructions on how to submit an
assignment are set out in the Guide to the Presentation and Submission of Assignments
available on the LEC Webcampus. Please read this guide carefully before completing and
submitting this assignment.
The maximum word length for this assignment is 1200 words (inclusive of all footnotes but not
bibliography).
Completed assignments should be lodged through the LEC Webcampus by 11:59pm on
Thursday 22 January 2015.
Please download the Assignment Coversheet. The coversheet will be the first page of your assignment.
Save it with the name you intend to use for the assignment, and begin your answer on the second page. Make
sure you complete the Assignment Coversheet by entering in your Full Name and Address Details and the Date
you lodged your assignment on the Webcampus. Next to “Signed”, type your name to acknowledge that the
assignment is your own work.
COMPULSORY ASSIGNMENT
Jane had not long been admitted as a lawyer and was happily working for Bob in a quiet suburban
practice. Bob did a bit of everything. Jane thought that she too could, like Bob, have a good career in
the suburbs. She was looking for something with little stress and a decent income.
As the years passed, Jane was increasingly content with her employment with Bob. Unlike her friends,
she had a good job and a good income. She couldn’t understand the stress her friends were
complaining about. Bob had a happy family life; he had a number of investment properties, a nice
house and always went overseas on holiday.
One day Bob walked into Jane’s office and sat himself down. He wanted a chat. Bob said that he
thought highly of Jane, they had hit it off and the practice was working very well; everyone was happy.
“How would you like to join me in partnership?”
Jane was delighted. A dream come true. What else could she ask for? “Yes, of course.”
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Things couldn’t have been better; Bob treated Jane very well. Bob had begun doing some
developments in the local area – he had bought some vacant land and built a few small units. Bob
seemed rejuvenated by his extra-curricular activities.
Neither Jane nor Bob could have foreseen the downturn of 2014. Suddenly things were not so rosy.
“Never mind,” said Bob, “I’ve been through this before; we’ll get over it.”
By the end of 2014, Bob’s units were not selling and work on another development had ground to a
halt. Bob didn’t complain; he seemed to take things in his stride.
One day an old client of the firm, Cheryl, came to see Jane.
Cheryl hadn’t been able to see Bob and wanted to enquire about the distribution of her late husband’s
estate. Harold had passed away some months earlier leaving Cheryl everything – which included
$1,000,000 in bank accounts. Cheryl wanted to give some money to one of her granddaughters who
was getting married but couldn’t get Bob to take her calls and send her the money she needed.
Jane grabbed Cheryl’s file from Bob’s office – he was overseas and due back at the end of the week.
Probate had been granted and the funds were said to have been forwarded to the firm – Bob was to
have held the estate funds in a controlled money account.
A quick look at the trust records revealed that the funds had indeed come in but a few days later had
been advanced to XYZ company.
Cheryl was adamant that she hadn’t lent any money to XYZ and all she knew was what Bob had told
her.
Jane told Cheryl to go home, not to worry and that she would speak to Bob and sort things out.
Jane was clearly worried. What should she do? She would speak to Bob first.
Jane telephoned Bob, who was just on his way to the airport to catch his flight home. She explained
what had happened with Cheryl. Bob didn’t seem too fussed – “I’ll explain everything when I get home
on Friday. Everything’s ok.”
Jane was clearly worried but told Cheryl what Bob had said to her and that she would call her again
after speaking to Bob on his return.
On Friday Bob came to the office straight from the airport. He asked Jane to come to see some land
he was developing. They hopped into a taxi – nothing was said until the taxi pulled up alongside an
empty block of land in south Bellevue Hill.
“This is it Jane,” said Bob. “A whole new concept in building. It’s going to make me so much money I’ll
be able to retire – the practice will be yours. Trust me. Cheryl will get all her money.”
Bob admitted to Jane that he had lent Cheryl’s money to XYZ – XYZ was his company. He had had
Cheryl sign some loan documents which she didn’t understand so, regardless of what she said, it was
all properly documented. He had even had another solicitor give a certificate saying that he had
independently explained everything to Cheryl – “No worries Jane; I’ll keep Cheryl calm. Are you with
me Jane? We can both do very well from this.”
Jane thought long and hard as to what she would do – report the matter to the Law Society? Call in
the Police? No, she had too much to lose – against her better judgment she would go along with Bob’s
plan. “Yes, I’m in.”
Bob did sort out things with Cheryl; her granddaughter got her wedding present and, not long after,
Harold’s estate was distributed. Jane thought that all was again well – no one would ever be the wiser.
Bob’s development was proceeding well, albeit that the market remained flat. When all the units
eventually did sell, Bob would walk away from the firm with a sizeable profit.
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A few months passed and the firm was the subject of a random trust account inspection after which
the inspector, Bob being out, spoke to Jane.
The inspector had been looking at Harold’s estate file and queried a loan advance of some $1,000,000
to XYZ. The Inspector wanted to know what Jane knew about this loan. The inspector had telephoned
Cheryl but she could shed no light on the loan – all she could say to the inspector was that Bob had
informed her that the moneys had been held in a controlled money account and, in any event, there
had been a final distribution. As far as Cheryl was concerned, aside from the initial hiccup, all was
well.
As the inspector pointed out to Jane, the estate funds hadn’t been retained in a controlled money
account but, rather, lent to XYZ. Eventually the funds had been repaid and the estate distributed. The
inspector was not satisfied with what he had seen.
Jane’s heart sank.
In tears, Jane told the inspector everything – about Cheryl, about the development, about everything.
The inspector telephoned Bob, but Bob said that he had nothing to say to him and just hung up.
The inspector immediately reported the matter to the Council of the Law Society, which determined to
have an urgent meeting to consider what action it should take.
You are a member of the Council and have been asked to report on the matter – assume that
the report of the inspector contains all the above information as well as the documentary
evidence to support it.
What immediate action, if any, would you recommend be taken by the Council in respect of
Jane and/or Bob and/or the law practice, and why?
At a subsequent meeting, the Council is asked to consider whether any disciplinary action
should be taken against Bob and/or Jane. What is your recommendation, and why?
If you are of the opinion that disciplinary action should be taken against Bob and/or Jane, what
orders would you recommend be sought, and why?
In your answer refer to the relevant authorities and legislative provisions which support your
position.
[max 1200 words]
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