Using the IRAC model and the Legal Profession Uniform Law NSW 2015

Problem scenario

You are a solicitor who works for the Office of the Legal Services Commissioner (OLSC). You have been forwarded the following matter for consideration.

Desean is a solicitor who runs his own small practice in Eden, on the far south coast of New South Wales. Desean has a couple of solicitors working for his firm. Desean was retained by Jeffrey in October 2019 to advise about obtaining a loan for $1,500,000 in order to start a new business in the area. Jeffrey wanted to buy a luxury cruising yacht to run seal and dolphin tours out of Eden for tourists. Jeffrey had little personal savings or assets (less than $50,000) as he had spent most of his income on travelling the world and motor vehicles. Desean advised Jeffrey that while his business plan seemed sound he needed more equity before a bank would consider giving him the loan that he was after.

In November 2019 Jeffrey brought his mother, Florence, into Desean's office and asked him to assist Florence put her home, valued at $1,000,000, into Jeffrey's name. Knowing what he did about Jeffrey's desire to obtain a loan for his business venture, Desean was concerned that Florence was being coerced into giving the property to Jeffrey. Accordingly, outside the presence of Jeffery, Desean asked Florence to explain why she wanted to transfer the land to Jeffrey. Florence explained that she was 72 years of age, recently widowed, and that Jeffrey was her only child. Florence told Desean that she was concerned that someone would be able to care for her as she aged and that she and Jeffrey were very close. Florence wanted to give Jeffrey an inter-vivos gift and in return she would be securing her family home to live in and a commensurate level of comfort until she died. When Desean noted that once Jeffrey received the title, he may wish to mortgage the property. Florence responded that she was sure Jeffrey would look after her interests before any business and that she wanted to make the gift happen as soon as possible. During this meeting, Florence also asked Desean to draft a new will for her, given that her husband had recently passed away, as she had some jewellery and some art works, she wanted to gift to friends and distant family. Desean agreed to do so and, at Florence's request, to be the executor of her will.

Immediately, after having met with Florence in private, Desean then asked Florence and Jeffrey to acknowledge that they were happy for Desean to act for both of them. Florence and Jeffrey agreed. In late November 2019 Desean drew up the transfer documents and the parties transferred Florence's property into Jeffrey's name. In December 2019 Desean assisted Jeffrey to obtain the loan he sought in October 2019 and Jeffrey purchased a new cruising yacht worth $1,200,000 and began advertising his new business.

In January 2020 the Covid19 epidemic came to Australia and in February 2020 all overseas tourism began to stop. In March 2020 domestic tourism stopped as a result of lockdowns, and with-it Jeffrey's business. In September 2020, Jeffrey tried to sell his cruising yacht, but the market had dropped, and he could only sell the vessel for $650,000. In response to Jeffrey not paying his loan repayments, the bank sued to recover the remaining $550,000 from the loan in December 2020 and in so doing forced Jeffrey to sell his home (formerly Florence's). Florence rang Desean in March 2021 when she discovered that she was being forced to move out. Desean told her that he could not assist her with this particular issue as Jeffrey had recently approached him for advice about his forced sale of the home.

Florence contacted another local solicitor, Anneke Elliot, in mid-June 2021. Several days later Florence travelled to Anneke's office to provide the details of her matter. Anneke was Desean's personal (domestic) partner but was employed by a firm in Narooma. Anneke advised Florence that Florence may wish to sue Jeffrey for the loss of her residence. Although reluctant to do so Florence, who did not want to live with Jeffrey in a small townhouse, begrudgingly agreed to sue Jeffrey. In November 2021 Florence's matter first came before the District Court in Bega for a directions hearing. Florence was surprised to see that Jeffrey was being represented by Desean. Florence was also concerned when the judge, who knew both Desean and Anneke, expressed surprise that they were combatants. When Florence asked Anneke what the judge meant, Anneke explained that they were in a domestic relationship but not to worry about it. In January 2022 Florence was advised by a friend that she should make a complaint - and Florence did. Florence complained about Desean to the OLSC but decided not to complain about Anneke because she was her solicitor and Florence still hoped to win her civil case against Jeffrey.

Question

You are the solicitor within the OLSC who has been asked to investigate the complaints against Desean.The Assistant Commissioner expects you to examine all the facts thoroughly and determine what the specifics of Florence's complaints should be, whether the complaints have merit, and whether the complaints should be forwarded to the Law Society of New South Wales for a full investigation. The Assistant Commissionerwants you to present your 'case theory'^[2]and analysis of the issues to him at the litigation team meeting next week.You should understand that your 'case theory' should be based on the law, as you understand it. You are not obliged to make strictly partisan submissions. You are also entitled to be completely candid with the Assistant Commissioner about what you know and understand.