COURT OF APPEAL

Dominion, Volume 11, Issue 20, 18 October 1917, Page 9

COURT OF APPEAL

APPLICATION TO STRIKE OFF ROLLS

HEARING NOT CONCLUDED

Ihe Court of Appeal yesterday resumed the hearing; of an application by the Aeu- Zealand Law Society tor a lule absolute to strike oil' the rolls of barristers and solicitors John. Raphael Lundon, of Auckland. The Chief Justico, Sir Robert Stout, presided, and with him on the bench were. Mr. Justice Denniston, Mr. Justico Cooper, Mr. Justice Chapman, and Mr. Justice Hoskiiur. The- Law Society alleged that Lundon had been guilty of professional misconduct, 1 in that ho made a gross • overcharge of illOO against a client, Joseph l'letcher, of Auckland, labourer, for his services in obtaining prepayment from tho National Bank of New Zealand at Newton a sum of £m, lodged by Fletcher on fixed deposit; and in that ho persistently failed to account to Fletcher and his solicitors for monevs held by hiin in trust on behalf of l'letcher, from November, 1915, to March 28, 1916, thoii"-U repeatedly requested in writing to do so. •Mr. H. F. Von Itaast appeared for tho Law Socioty, and Dr. Fitchclt and Mr. A. W. Blair for Lundon. The Chief Justico.said that he desired to havo a statement made by Lundon on the previous day .cleared up. Ho understood Lundon to havo said that ho paid the money ho had Teceived from tho bank into a trust account. Waff that so? Xundon gave evidenco'that ho had simply 1 a. general trust. account.. He. did not keep a. separate account for each client. His private account was in tho National Bank, and the trust account in the Bank of Now Zealand. Ho agreed to pay interest to Fletcher on, tho money at the. rato of Si-per cent., because ho was not going to havo itsaid that Fletcher suffered by. his taking charge i»f the 'money. 'Witness simply wanted to protect Fletcher against himself, because Fletcher's habits made it inadvisable'to trust.him with'the 1 money. Tho trust account was subject, to audit, and witness had- a clearanco up (o May, tho month iii which he was suspended.. The account was continuously kept in credit up to an amount equal "to-that held for Fletcher. ■ , Mr. -yon Haast: Why cont'd you,, not havo deposited this money in your own name, bearing interest?— Witness: "And what would I have been open to then ?— to the very ; attack'that l is :being made upon' mo now." Why should '.you. pay .5J per cent', in-, terest : when the bank-was .only •allowing 3J?—"I wished to .prevent anyone from casting, aspersions on me. ' In the settlement, I .paid the interest two months before it was due. When the 'money was finally paid oyer, to Fletcher, it wa3 very soon gone, and now. f|io ■wi'fo. is starving., I. have a latter' 1 .in. Jriy pocket-now: from her, 1 begging for a. pair of boots". ... .': ■'■ . : Dr. Fitchett asked the.witness whether Fletcher ever gave him any instructions as to how the interest 1 on the i! 350 was to bo applied, l and Lundon's reply-was • that Fletcher- instructed him in writing that it was to be applied to the maintenance of tho wife. It had' been :so applied. •.....' .'..■

Mr. Von Haast said that-, it. was clear that Lundon knewA|hat Fletcher ■ was oinreliable, and that ft was very likely* it the' bank- -manager said = that the .nroney was- on fixed deposit, and Fletcher' that it was on current account, that tho manager was in the right. Lundon, however, made a bargain with Fletcher for dEIOO, when the proper course, was to seo whether the' inonoy was on , fixed deposit or not. If it was on deposit for a fixed term/ then no action could lie by i?letolier against the bank, and the only.tlunfj Lundon cguld do was to ask the bank to break tho deposit, or ni.ako an advance. That was i matter, .for the charging of a small-fee. If the rtoney was eiinply. on. current account, it was, of course, easily obtainable. Mr; Yon Haast traversed fully the explanations given, by Lundon of the' bargain for tho •EIOO, and submitted, that they were' an attempt, to build lip an ■explanation af [ex Luiidon'realised tho way.in which tho transaction was regarded by other - members "of the .profession. Tho Court' had to consider in this case whether Lundon had not taken advantago of tho necessities of Fletcher's position in order to make an unconsuionublo- bargain. ' The Court had also to consider Lundon's persistent failure to account for the moneys till Fletcher brought an action. Lundon had taken up -'tho attitude that the money wa?.a loan, and, not.' a trust, though ho'eaid in his explanation to the Law Society that it was a trust, ■ and that it was held for the purpose of keopiug it out of.reach of:Fletcher's father-in-law, ."•■.- ■; •■ •■

Dr. Fitchett submitted that the affair was not a charge or an agreemont, but a sort of bet. Up to:the timo it was ipaid, no" question of' charge'could possibly rise, and if any such question rose, it rose ; at. the moment, of .payment.; At the time the nioney w.as paid, Lundon recognised that thu services performed would be over-paid.by MQO, and 60 he said that 'ho would cancel a '.£SO cheque of Fletcher's to' him, and in addition would do any .professional work that Fletcher required to be done while he (Lundon) held any part of the money. Counsel hoped that the Court vould not take so. narrow a view as to eay forthwith that with the payment of the cash into Lundou's hands an over-charge was ma.de. Lundon's failure to furnish accounts was due to the fact that' he treated the ,£3so.as a loan placed with him for. eighteen months at the rate of Si'iper cent. Everything that had been done, had unquestionably been to Fletcher's benefit. Mr. Blair also addressed the Court, and his argument was not concluded when the case was adjourned till to-day.