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Chief Registrar v Titoko - Sanction [2022] FJILSC 2 (21 January 2022)

IN THE INDEPENDENT LEGAL SERVICE COMMISSION
AT SUVA

ILSC CASE NO. 001 OF 2019

BETWEEN : CHIEF REGISTRAR

APPLICANT

AND : SEMI TITOKO

RESPONDENT

Counsel : Ms V Prasad for the Applicant

Mr D Toganivalu for the Respondent

Date of Sanction: 21 January 2022

SANCTION

[1] Following a trial, the legal practitioner was found guilty of seven counts of professional misconduct.

[2] The facts of the case are outlined in detail in my judgment. Briefly, the legal practitioner was the Principal of Qarcia Barristers & Solicitors and the sole signatory of Qarcia Barristers & Solicitors Trust Account.

[3] During the course of his practice, the legal practitioner received a sum of $232,000.00 to be held in trust for his client, Ms Tara Devi, being proceeds of sale of her property. The conveyancing was carried out by the legal practitioner in 2017. Shortly after the money was deposited in the trust account by the purchaser, Ms Devi was paid $102,000.00 and the remaining balance of $130,000.00 was withdrawn from the trust account without the instruction of the client and not paid to Ms Devi. As of to date Ms Devi had not received that money.

[4] The legal practitioner is facing fraudulent conversion charges in the criminal court as a trustee of the funds. His former clerk is facing aiding and abetting charges. The truth of these charges is a matter for the criminal court.

[5] However, on the evidence presented at the trial, it is the legal practitioner who is liable for the mismanagement of his trust account, resulting in a client to lose a significant amount of money. He cannot shift blame on his staff for his effectiveness to maintain a trust account.

[6] In South Australian Supreme Court v Bayes [2001] SNSC 319 the court said:

All practitioners must take very seriously the obligations imposed on them with respect to trust accounts. Maintaining a trust account is a basic professional obligation in relation to the charging of clients and accounting to them.

[7] The misconduct in the case of the practitioner is serious and the purpose of sanction is deterrence, both special and general. The complainant was an elderly woman and a widow. She was educated only up to Form 4. She has a daughter with special needs under her care. She was vulnerable and the legal practitioner’s conduct of depriving her the proceeds of sale of her property held in trust by him is appalling. It is the Commission’s duty to protect the public and the reputation of the legal professional by imposing sanction that serves that purpose.

[8] In Chief Registrar v Waqabitu [2014] FJILSC 4; 001.2014 (28 July 2014), Commissioner Madigan said at [12]:

Trust account defalcations have been dealt with by the Commission in the cases of Haroon Ali Shah (No 007 of 2011), Kini Marawai (No 006 of 2012), Jolame Uludole (No 025 of 2013) and Luseyane Ligabalavu (No 002 of 2013 and No 003 of 2013). The principles established by these cases are that offending with regard to trust accounts matters by a practitioner is very serious professional misconduct and it is offending which would attract the severest of penalties available to the Commission.

[9] There is little remorse expressed by the practitioner for his conduct. He is now 48 years old and unemployed. Currently, he is suspended from practising law after findings of professional misconduct or unsatisfactory conduct were made against him in two other cases. He submits that he earns a living by farming. He has a daughter in school who is dependent on him.

[10] He is facing criminal prosecution, and if convicted, a prison sentence is evitable. The likelihood of him complying with any monetary sanctions is slim.

[11] After taking all these matters into account, I order that the name of the legal practitioner be struck from the roll of practitioners held by the Chief Registrar.

[12] I now consider whether the victim, Tara Devi should be reimbursed for her loss from the Fidelity Fund pursuant to section 23 of the Trust Accounts Act (Trust Accounts (Amendment) Act 2009).

[13] Section 23 of the Trust Accounts Act (Trust Accounts (Amendment) Act 2009) provides:

(1) The Fidelity Fund constituted by section 22 shall be applied at the direction of the Commission for the purpose of reimbursing person who suffer loss through the stealing or fraudulent misappropriation by a legal practitioner in private practice on his or her own account or in partnership with others, or by any clerk or servant of such legal practitioner, of any money or other property entrusted to such legal practitioner, clerk or servant in the course of such practice. No reimbursement shall be made under this section however in respect of the loss of any money or other property entrusted to a legal practitioner, clerk or servant for the sole purpose of investment. The word “investment” in this subsection shall have the same meaning as it has in section 6 (2).

(2) The total amount which may be applied from the Fidelity Fund in the reimbursement of all persons who suffer loss through stealing or fraudulent misappropriation by the same legal practitioner or servant or clerk of such practitioner shall not exceed the sum of $50,000.00 in any 12 months period.

(3) The Commission may direct, notwithstanding the preceding subsection, after taking into account all liabilities of the fund whether ascertained or contingent, that such amount in excess of the total amount limited by the previous subsection be paid as it thinks fit towards reimbursement of such persons.

(4) In considering any claim pursuant to this section, the Commission may in its absolute discretion direct that there be paid to the Applicant out of the Fidelity Fund in addition to the amount to which the Applicant would otherwise be entitled pursuant to this section, interest on such part of the claim for such period and at such rate as the Commission may determine, and such costs and expenses as the Commission may consider have been reasonably incurred by the Applicant in making and proving the Applicant’s claim pursuant to this section.

(5) The Funds Trustee shall pay from the Fidelity Fund such amount and to such person as the Commission may direct in accordance with its obligations under this section.

[14] It is clear that Tara Devi had lost money entrusted to a legal practitioner in private practice through theft or fraudulent misappropriation. It does not matter whether the offence was committed by the legal practitioner or his employee or both. The money was entrusted to the legal practitioner for the benefit of Tara Devi. The money was proceeds of sale of Tara Devi’s property. The money was not entrusted to the legal practitioner for the purpose of investment.

[15] Although there is a statutory ceiling amount of $50,000.00 with or without interest and costs that the Commission can award as reimbursement, the Commission has discretion to order reimbursement of an amount in excess of $50,000.00 payable to all persons who suffer loss through theft by the same legal practitioner in any 12 months period, after taking into account all liabilities of the fund whether ascertained or contingent. No payments are currently due from the Fidelity Fund. There is no evidence to suggest that reimbursement of the actual loss of trust moneys from the Fidelity Fund is not financially feasible.

[16] I make an order that the victim, Tara Devi to be reimbursed $130,000.00 from the Fidelity Fund. There will be no orders for interest or costs. The Chief Registrar is to facilitate the payment of $130,000.00 from the Fidelity Fund to Ms Devi.

Final Orders

[17] The name of the legal practitioner is struck from the roll of practitioners held by the Chief Registrar.

[18] Ms Tara Devi is reimbursed $130,000.00 from the Fidelity Fund.

. ...........................................
Hon. Mr Justice Daniel Goundar

COMMISSIONER
Solicitors:
Legal Practitioners Unit for the Applicant.
Toganivalu Legal for the Respondent.