EPR T3 A1 Email and events NAVQSW 2023_06_26 (3)

Ethics and Professional Responsibility Task 3, Activity 1 Email and events INDEX Email from Min Nguyen ...................................................................................................................... 2 Events occurring during Min Nguyen’s absence ................................................................................ 4 Appendix 1 ....................................................................................................................................... 10 Appendix 2 ....................................................................................................................................... 11 Appendix 3 ....................................................................................................................................... 12 Appendix 4 ....................................................................................................................................... 13 9d789fd59d2681921e00fc37df1c06c584b60274.docx Page 1 of 14 © The College of Law Limited

Email from Min Nguyen EMAIL From: Min Nguyen (Principal) To: (Student Lawyer) CC: Alex Green (Law practice bookkeeper) Subject : Arrangements during my week leave Date: Today I’ll be on leave in Indonesia next week. I’ll get a sim card when I arrive at the airport and let you and Alex know what the number is. Telephone and internet access will be problematic for most of the week as I’ll be in some remote parts of Lombok. Do what you can to help Alex and attend to any queries that might arise . Asher Zheng the manager of our local College Bank branch where our trust and office accounts are kept is very helpful if there is any problem. Alex has his phone number. I’ve appointed you signatory on the office and trust accounts. Just in case you are ill or for any other reason can’t operate the accounts I’ve also appointed my brother Lawrence as signatory to operate both accounts. Some of the things that you will need to attend to while I’m away (there may be others) are listed below. Tina Hudson sale to Li This matter is scheduled to settle on Friday of next week. Tina has authorised Nguyen Solicitors to do anything necessary to complete the electronic conveyancing transaction. Tina’s property at Seabreeze is unencumbered so when settlement takes place the whole of the proceeds of sale will be paid into Tina’s personal bank account rather than into our trust account. Our costs agreement with Tina provides that Tina will pay a fixed fee of $1,800 for our costs and disbursements of completing the settlement. I have sent a bill in advance to Tina for $1,800 on account of our costs for this matter but note the matter isn’t concluded until settlement has taken place. Dino Demarco ats Police (ledger/matter ref 13099) Demarco’s sentencing following his guilty plea to the charge for supply of methamphetamine is about two months away. I‘ve given him an indication as to the likely sentence which includes a term of imprisonment and a substantial fine. He might want to discuss his situation with you but all legal work has been completed. He still owes Karen Assi, the barrister who we briefed to appear for him at his trial, $1,200. See if you can extract that from him if he comes in. Sprowle v Davis Peaches Pty Limited This is a claim by our clients Lou and Jill Sprowle for damages for false and misleading conduct under the Australian Consumer Law. We agreed to act and to obtain an advice as to prospects of success. Our clients agreed to pay $2000 for our costs and an estimated $3,500 for a barrister, Mark Richards, to provide his advice. The advice has been received and a copy sent to our clients a few days ago. We also sent our bill of costs as agreed. We have not yet received Mark Richards’ account. Our clients may well want to discuss the advice with you next week. If they do, please check the trust and office ledgers and the file to establish if Mark Richards’ account has been received. Lou and Jill are good clients and usually pay our bills immediately. If any amount is outstanding please ask them to settle the account. If Mark Richards’ account has been received, arrange for that to be paid. 9d789fd59d2681921e00fc37df1c06c584b60274.docx Page 2 of 14 © The College of Law Limited

Events occurring during Min Nguyen’s absence Events Monday Tina Hudson attends the office. She advises she has moved out of her house and the keys have been left with the agent on sale. All is ready for Friday’s settlement. She will electronically transfer the amount of $1,800 drawn from her personal account with Westpac in the next day or so, on account of our agreed costs and disbursements to complete the settlement. Q1 (a) Should Tina’s EFT of $1,800 be deposited into the firm’s trust account or office account? (b) In accordance with your answer to question 1(a), identify all the accounting steps to be completed assuming a bookkeeping system is used. 1. A) According to section 129 of the LPUL, trust money is money entrusted to a law practice in the course of or in connection with the provision of legal services by the law practice. As the money will be received from the client/Tina in connection with the legal services provided in relation to the sale of her property, it is categorised as general trust money. Therefore, it must be deposited in the firm’s trust account as soon as possible. B) The below accounting steps are required for transactions regarding trust money; - As the money will be transferred by EFT, I must verify receipt of the payment with the bank. Notice of confirmation must be received in writing or electronic form (General Rules 2015 r 36(1)(b). - Once the transaction has been confirmed with the bank, I must record the transaction in Tina’s client ledger. - Create a trust receipt and issue to Tina - Update the trust ledger Tuesday 9d789fd59d2681921e00fc37df1c06c584b60274.docx Page 4 of 14 © The College of Law Limited

Lou Sprowle arranges to meet with you later that day. You recall that Lou was sent a bill for $2,000 two days ago via email. You obtain a printout of the trust and general account ledgers in the matter of Sprowle v Davis Peaches Pty Limited as set out at Appendix 1 . Q2 In relation to the $2,000 bill: (a) What action should you take to pay the bill from trust? (b ) Identify the bookkeeping steps you will take to pay the bill, assuming a manual bookkeeping system is used. 2. A) Once a client has been issued with a bill, 7 business days must pass before trust money can be withdrawn from the general trust account. This gives the client some time to make any potential objections in relation to the bill. Therefore, I should wait until 7 business days has passed and if Lou doesn’t make any objections, the trust money may be withdrawn to pay the firm's bill. (s 144) B) The below bookkeeping steps are required; - Enter the bill of costs into the costs journal - Enter the transaction into the trust ledger You also check the Sprowle v Davis Peaches Pty Limited file and find that the barrister, Mark Richards, has sent his memo of fees in the sum of $3,500. It came in this morning and you recall that Min asked you to arrange for it to be paid. Q3 Assuming that Lou has paid the $2,000 bill of costs from the money held on trust, what will you say to Lou in relation to the $3,500 payment now due for barrister’s fees? First, we need to send the bill to the client advising him that he has an outstanding fee owed to the barrister and include his trust account ledger with the remaining balance amount owing. If the trust money is not enough to pay for the barrister fee, request the client to pay additional money into the trust account, otherwise have the client confirm on the payment to the barrister. As shown in appendix 2, there is a balance of $2,500. Assuming that Lou has paid the $2,000 bill of costs, there should be $500 remaining in the trust account that is held on behalf of the client. This means that Lou owes another $3000 in barrister fees. To collect this outstanding amount, the first step would be to send a bill to the client advising him of the amount owing to the barrister. His trust account ledger should be included to make it clear that we are proposing to withdraw $500 from the trust account. We will also need to ask the client to deposit a sum of $3000 into the trust account. If paid, this $3000 sum would be transit money in accordance with s 140 of the LPUL. Wednesday 9d789fd59d2681921e00fc37df1c06c584b60274.docx Page 5 of 14 © The College of Law Limited

C) When a firm receives more than $10,000 in cash, this transaction must be reported to the Financial Transaction Reports Act 1988 (Cth) and the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth). As Dino has handed over more than this amount, we must report the transaction appropriately. Thursday Sonal Singh attends her appointment. Ivana Measure’s survey report has been received with her invoice for $800. After discussion, Sonal instructs us to send a letter of demand to Taylor Merdec requiring part of a fence between the two properties to be removed. Sonal hands you a cheque drawn on her personal bank account in favour of Ivana Measure for the $800 due. Q5 (a) What should you do with the cheque received from Sonal? (b) What accounting steps, if any, are required to be completed? a) As the $800 cheque was received subject to a direction to deliver it to a third party, it is technically transit money. Therefore, it needs to be delivered to Ivana as soon as practicable. b) The only record keeping requirement is that the firm records and retains any particulars that would be needed to identify the transaction and the reason it was received. This information must be kept for 7 years (s 140). Alex Green tells you that Arun Patel and Mala Sandhu have called and asked for the balance in their account to be transferred to them this afternoon. There is a nil balance in the office account. A copy of the trust ledger in respect of the matter of their proposed purchase of the Seabreeze newsagency and the electronic funds transfer awaiting your signature is at Appendix 4 . Q6 (a) Assuming you are authorised to approve the payment of trust money, should you sign the electronic funds transfer in its present form? (b) If the electronic funds transfer is signed and the transfer is completed, identify any consequences. 6. A) The electronic funds transfer in Appendix 4 is incorrect. It states that $2,455 is remaining, when the remaining balance is actually $2,000. Therefore, I should not sign the electronic funds transfer in its present form. B) The penalty for mishandling trust money is 500 penalty units and/or 5 years imprisonment. Assume your first practising certificate was issued to you three months ago. You therefore have a restricted practising certificate as you are required to be supervised. Assume also that Min’s brother, Lawrence, has been admitted but has never engaged in legal practice and Lawrence is not employed 9d789fd59d2681921e00fc37df1c06c584b60274.docx Page 7 of 14 © The College of Law Limited

in the law practice and has no other connection with it. Min has directed you and Lawrence to sign any trust account cheques in Min’s absence. Q7 (a) Does the legislation entitle Min to direct you or Lawrence to sign any trust account cheques in Min’s absence? (b) Is this appropriate? a) Section 43(2) states that a cheque must be signed by under the direction or authority of an authorised principal of the law practice, or if such a principal is not available, an authorised legal practitioner associate. Therefore, Min is not entitled to direct myself or Lawrence to sign any trust account cheque’s in his absence. b) This is not appropriate because if we were to sign the trust account cheques, we would be breaching the Legal Profession Uniform General Rules and run the risk of not being able to practice. Friday Tina Hudson’s sale settled this morning. The balance sale proceeds that were paid into the PEXA environment by the purchaser of Tina’s house was disbursed directly into Tina’s personal bank account by PEXA in accordance with our direction. Previously, Tina provided written instructions authorising the payment of our costs and disbursements from the money held in trust on her behalf Q8 Even though Tina has authorised payment and indicated that she has transferred the funds, before Tina’s trust money can be withdrawn from trust and transferred to the office account to pay the bill of costs, what must you check in relation to the funds deposited? I must first check with the bank and verify that the transaction has been successful before attempting to withdraw Tina’s trust money. This confirmation cannot be verbal and must be in written or electronic form (s 36). If confirmed, I need to issue a receipt which states the date the funds were credited to the account. This must also be entered into the cash and into Tina’s ledger account. Q 9 (a) Identify the type of trust money that represented the balance sale proceeds as a result of Tina’s authority to Nguyen Solicitors to do anything necessary to complete the e-conveyance on her behalf. (b Identify the accounting steps required to be completed and maintained regarding the 9d789fd59d2681921e00fc37df1c06c584b60274.docx Page 8 of 14 © The College of Law Limited

Appendix 1 Appendix 1 Trust Account Ledger ACCOUNT NAME: Sprowle, Lou and Jill v Davis Peaches Pty Limited ADDRESS: 6/6 Conclave Avenue, Seaside MATTER: Damages claim in Federal Court DATE 20XX RECEIVED FROM OR PAID TO PURPOSE REC/CH Q/ JNL NO. DR CR DR/C R BAL (Four months ago) Fr L. Sprowle On a/c c/d – initial advice R231 2,500 00 CR 2,500 00 Office Account Ledger ACCOUNT NAME: Sprowle, Lou and Jill v Davis Peaches Pty Limited ADDRESS: 6/6 Conclave Avenue, Seaside MATTER: Damages claim in Federal Court DATE 20XX RECEIVED FROM OR PAID TO PURPOSE REC/CH Q/ JNL NO. DR CR DR/C R BAL (Two days ago) Costs rendered – advice re prospects of success CJ213 2,000 00 DR 2,000 00 9d789fd59d2681921e00fc37df1c06c584b60274.docx Page 10 of 14 © The College of Law Limited

Appendix 2 Appendix 2 NGUYEN SOLICITORS 118201 PO Box 2 Your capital City 20 xx ABN 62 751 281 333 Received from Dino Demarco the sum of One thousand and two hundred dollars and zero cent s Cash For and on behalf of Dino Demarco : Barrister Karen Assi’s fee (client name) (matter description) For: Deposit ($1,200.00) and on account of barrister Karen Assi’s fee Ledger Account / Matter Reference # 2 Received by: Student lawyer on behalf of: Nguyen Solicitors Nguyen Solicitors Law Practice Trust Account NGUYEN SOLICITORS 118202 PO Box 2 Your capital City 20 xx ABN 62 751 281 333 Received from the sum of dollars and cents $ Cheque/Cash For and on behalf of : (client name) (matter description) For: Ledger Account / Matter Reference # Received by: on behalf of: Nguyen Solicitors Law Practice Trust Account 9d789fd59d2681921e00fc37df1c06c584b60274.docx Page 11 of 14 © The College of Law Limited

Appendix 4 Appendix 4 Trust Account Ledger ACCOUNT NAME: A Patel and M Sandhu purchase of Seabreeze newsagency ADDRESS: 10 Amy Street Seabreeze ACCOUNT NUMBER/ MATTER REFERENCE: 2022/XX DATE 20XX RECEIVED FROM OR PAID TO PURPOSE REC/CHQ / JNL NO. DR CR DR/CR BAL (Three months ago) Fr Patel & Sandhu On a/c c/d R231 5,000 00 CR 5,000 00 (Two months ago) To ASIC Incorporation fees C231 545 00 CR 4,455 00 Two months ago) to Nguyen Office account For costs C233 2,455 00 CR 2,000 00 NGUYEN SOLICITORS Law Practice Electronic Funds Transfer Request Date: (today) Client Name: A Patel and M Sandhu Matter Number: 2022/XX Matter Name: A Patel and M Sandhu purchase of Seabreeze newsagency Bank details of the payee have been verbally validated and confirmed: Confirmed Amount to be transferred: $2,455.00 Payee/Account Name: A Patel and M Sandhu BSB: 312 -876 Account Number: 3456787 Reason for Transfer refund of balance of moneys held in trust on completion of matter TRANSFER AUTHORISED BY: ……………………………… PRINT NAME: ………………………………………………… 9d789fd59d2681921e00fc37df1c06c584b60274.docx Page 13 of 14 © The College of Law Limited

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