Black marks

Repetition of the same error does not amount to "consistent" conduct ... Property finance scam ... Law Society's case goes nowhere on appeal ... However, distressing findings in bank loans contract case ... And forgetting to tell the bar association all the bad things that happened in life ... Reporter Alix Piatek 

THE Law Society of NSW has come a cropper in its attempt to put solicitor Peter Webb off the track. 

Poor Pete fell foul of a property scammer and mortgage broker called Graham Lee and before he knew it he was before the stipes with the society pressing charges of professional misconduct or unsatisfactory professional conduct. 

Lee's property racket involved a syndicate of property purchasers. He negotiated prices for the properties lower than those advised to the purchasers. Finance was obtained for 100 percent at the higher price and then Lee trousered the difference, after forging the borrowers and purchasers signatures on loan documents. 

In all he skimmed nearly $630,000 with the funds transferred to his company from Webb's trust account. 

The Court of Appeal said that Webb had no knowledge he was being suckered or that his clients were being ripped off. This contradicted an earlier finding by the Supreme Court in a case brought against him by the lender, the Commonwealth Bank. 

Webb had clearance from the Law Society to act for people had not met, but the bad thing he did was transferring the excess funds that he received on settlement to Lee, without obtaining instructions from the purchasers. 

Also, in most cases he acted for both the purchasers and the vendors. 

The ADT had said that Webb's negligence was not "mere negligence" - it was sufficiently serious to warrant a "black mark". 

Originally seven grounds were relied on, but only one was found to constitute unsatisfactory professional conduct. 

The Bureau de Spank rejected the Law Society's argument that, considered separately, the conduct described in the other grounds constituted unsatisfactory professional conduct. 

The tribunal spanked him with a lettuce leaf, ordered he be reprimanded, fined $1,500 and pay 50 percent of the Law 'n' Order Society's costs. 

The society was infuriated and went to the Court of Appeal saying that Webb should have been found guilty of professional misconduct and removed from the jam roll. 

Later, in oral argument, the society changed gears and said that if its appeal was successful it no longer wanted the wretch struck off. Instead, he should be fined $5,000 and ordered to attend re-education camp. 

However, the application to amend was declined because it was made too late. 

Meagher JA described what happened as "a single overarching mistake made in the context of related transactions". 

The failure to confirm instructions from clients in 10 transactions was explained by the fact that he trusted the swindler Lee and that the Law Society said it was all right to act on Lee's instructions. 

The tribunal was justified in concluding: 

"The repetition of the same error by the solicitor should not be treated as a 'consistent' course of unsatisfactory professional conduct." 

So there's a challenging distinction between a single overarching mistake made in the context of related transactions and a failure to maintain a reasonable standard of competence and diligence on separate occasions. 

Webb was found to be in the former category. 

Leeming and Simmo agreed. 

See Council of the Law Society of New South Wales v Webb

In the non-spanking jurisdiction there were findings in March last year by Price J in Commonwealth Bank v Hamilton that at least with some of the purchase prices Webb knew that the contracts were a sham and that he acted dishonestly. 

Pricey ordered the solicitor to pay the bank nearly $500,000.  

He found Webb's responses to be "nonsensical" and some of his testimony reflected poorly on his honesty and reliability. 

"Unfortunately he permitted his desire to retain [Lee as a client] to overwhelm his integrity and professional responsibility to the purchasers." 

Seems there's a tiny inconsistency, or something. 

*   *   *

AND what of NSW brief John Costigan? 

His affairs became a frightful mess, leading inexorable to him being turfed-off the jam roll. 

Sheltered appeal judges declared his behaviour to be "disgraceful and dishonourable". 

Fabian Gleeson gave the leading judgment, with Robert Macfarlan and Ronnie Sackville in nodding agreement. 

There really wasn't much to resolve because Costigan didn't defend the proceedings brought by the Bar 'n' Grill Association. 

Admitted in 1989 the latter part of Costigan's career got tangled-up with traffic and driving convictions, forgetting to lodge his tax return and using trust monies to pay off credit card debt. 

Most of which sounds entirely understandable. 

Costigan indicated his disenchantment with the legal caper in 2012 when he emailed the bar association to say he was thinking about throwing in the wig and gown. 

Ten days later, on March 26, 2012, he sent another email to the association with the news that he had been declared bankrupt. 

He had failed to tell the bar that in 2008 and 2010 he had been served with creditors' petitions. 

The association suspended Costigan and two months later cancelled his ticket.

The court then weighed-in and declared the brief no longer met the Olympian standards required to be re-admitted: he mislead the court, the bar association and his own clients. 

It gets better. Between 2002 and 2007 Costigan accumulated several traffic and driving convictions, including drink driving. 

He failed to tell the association. 

He also forgot to lodge a tax return and was convicted of an offence (later annulled) under the Tax Administration Act 1953. 

He neglected to let the association know about this strife when he applied to renew his ticket. 

A letter provided to the bar by Dr John Roberts explained that Costigan's memory lapses arose from anxiety, agoraphobia and post-traumatic stress disorder. 

He also had trouble with money. 

Funds deposited into trust accounts by two of Costigan's direct access clients were withdrawn with a week - $55,000 paid by the father of one client was gradually withdrawn and transferred to Costigan's credit card. 

One client had the temerity to demand a refund. Costigan agreed, but according to the Court of Appeal, he did not have enough money to follow through on the promise. 

There was one further juicy flourish. 

After the bar association cancelled his practising certificate, Costigan appeared before a magistrate in Waverly Local Court to represent a respondent in AVO proceedings. 

Several days later he attempted to obtain the court file from the court staff by explaining that he was a barrister in the matter. 

The Court of Appeal said Cossie had a "reckless disregard" for his obligations of disclosure and could not be regarded of a person with good fame (and fortune). 

He was ordered off the roll. 

See Council of the Bar Association of New South Wales v Costigan