APPEAL COURT

Hokitika Guardian, 27 June 1933, Page 2

APPEAL COURT

SOLIC ITOR’S F I DEL] TY (Per Press Association —Copyright). WELLINGTON, June 2G. Arising out of the defalcations of George Grey, who formerly practised as a solicitor at Now - Plymouth, and who, some time ago, was struck tiff the rolls as a solicitor of the Dominion, is a claim which is being made against the New Zealand Law Society, under the Law Practitioners’ (Fidelity Guarantee Fund) Act, by Fred Allies Hooker of New Plymouth, the present trustee of the deceased estate of William George Grey brother of George Grey.

The material facts set out in the statement of claim filed by the plaintiff are that George Grey, after the death <>f the testator, became registered as the proprietor, by transmission as executor and trustee of the will of the testator, of two properties under the Land Transfer Act; that he also received £656, the proceeds 0 f life policies on the testator’s life, as well as the rents of a trust property, amounting to a further £192. The total amount expended by him for the purpose of the trust came to £312, and it i s alleged that the balance of £535 was fraudulently stolen and misappropriated by him for his own purposes. In addition to this, it is alleged that he fraudulently mortgaged two properties belonging to the estate, and misappropriated the Amounts received thereon, approximately £Bl2, to his own itso.

To facilitate the. disposal of this claim, certain questions of law were stated by the parties, for the opinion of the Court, and these questions, having be removed by order of Mr Jusice MacGregor, are being argued in the Court of Appeal, to-day.

' An important question for the decision of the Court is, assuming the person s beneficently entitled to the estate ,>f William George Grey, have suffered precuniary loss by reason of the theft, under the circumstances set pvt in the statement of claim, and have given all necessary notice, are they entitled to reimbursement from the Solicitors’ Fidelity Guarantee Fund under Section 84 of the Act? A further question to be decided is whether or not in fact plaintiff had the consent of the council of the New Zealand Law Society to commence action.

Mr o’l.eary/, for plaintiff, said the point was whether ‘solicitor trustee” (whose defalcations are covered by Section 84) means any solicitor who happens to be a trustee, or only a solicitor trustee who acts as solicitor to an estate. For plaintiff ,it was submitted that the theft by a solicitor trustee need not be of moneys received in the course of practice as a solicitor. On his reading of the section, it appeared that any solicitor who happened to he a trustee, whether or not he rendered legal services to an. estate, came within the working of the section. He admitted this interpretation resulted in a very wide liability on the part of the Law Society, and must of necessity extend to solicitors who received trust moneys in their private capacity, and not as legal practitioners.

Mr von Haast, for the Society, contended that this was not a case of a solicitor trustee receiving trust moneys in the course of his practice as a solicitor. Here the moneys in question had been collected by Messrs Grey and Grey, solicitors, New Plymouth, and then handed to George Grey as trustee of the estate, who hanked them in his own account. He submitted that the Fidelity Guarantee Act was intended to cover a person who was practising as a solicitor who was also acting as a trustee and who received trust moneys entrusted to him as a solicitor. The court reserved its decision.