NSW Lawyer Steals Over $300,000 From Clients

Another NSW lawyer has been struck off the roll of legal practitioners. Although, it’s not a common occurrence, there are lawyers who breach their professional obligations and commit serious offences against their very own clients. And when it does happen, the consequences can be dire.

Ms Tereze Dzitars recently found this out when her case went before the NSW Civil and Administrative Tribunal (NCAT) in January this year.

The case against her

The Council of the Law Society of NSW filed the case against the lawyer on 16 September 2016, on two allegations of professional misconduct.

The first ground was that she breached section 255 of the Legal Profession Act 2004 (LP Act), which provides that:

“(1) A law practice must:

(a) hold trust money deposited in a general trust account of the practice exclusively for the person on whose behalf it is received, and

(b) disburse the trust money only in accordance with a direction given by the person.

(2) Subsection (1) applies subject to an order of a court of competent jurisdiction or as authorised by law.

(3) The law practice must account for the trust money as required by the regulations.

The maximum penalty for any breach is a fine of up to $5,500.

NCAT found that although the case against Ms Dzitars was filed after the LP Act was repealed and replaced by the Legal Profession Uniform Law (the Uniform Law Act) on 1 July 2015, the former Act still applied.

This was because the Uniform Law Act provides that a complaint or investigation begun before the commencement of the Act should be dealt with in accordance with the earlier legislation. The investigation into Ms Dzitars began back in 2014.

The second ground was that the lawyer misappropriated trust funds.

An executor for hire

Prior to 14 September 2009, Mr Ozols retained the services of Ms Dzitars to prepare his will and act as his power of attorney. Some of the man’s inheritance was to be passed onto various individuals, but the majority was left to a relative in Latvia.

On 26 June 2013, after Mr Ozols’ death, Ms Dzitars deposited $964,764 into the trust account of the law practice where she worked. She credited this sum to the deceased.

Another client by the name of Ms Bukavs similarly organised for the lawyer to look after her will prior to 17 December 2010. After her death, Ms Dzitars deposited two amounts into the trust account, which were credited to Ms Bukavs.

A deposit for the purchase of land owned by the deceased for the sum of $45,000 was put into the trust account on 17 December 2013. Another in the amount of $450,000 for the settlement of the sale was deposited on 18 February 2014.

But then it seems all this money got a little too tempting.

Other people’s money

The Council of the Law Society of NSW found that Ms Dzitars breached section 255 of the LP Act and stole trust funds, when she drew a series of cheques and made several withdrawals from the law practice’s trust account, over the period 29 June 2013 and 24 April 2014.

A total of $202,279 was stolen from the Ozols’ estate, while $73,010 was taken from the Bukavs’ estate. The Council found that Ms Dzitars managed to swindle $275,289.

It was found that the money of the deceased, Ms Dzitars, was used to buy a new car, a vacuum cleaner and a brand new kitchen. The lawyer also managed to pay off a few of her old debts. An amount was paid to Telstra, her St George Bank Visa card was paid off, some went to David Jones, and also to Toyota Finance.

She also paid for her son’s dental expenses.

A confession, but no appearance

On 3 October last year, Ms Dzitars filed a reply to the Council stating that, “all grounds are admitted and particulars are admitted.” She also agreed to have her name struck off the roll of lawyers.

However, she claimed to have no money left and that she was suffering from mild dementia.

Ms Dzitars did not appear during the hearing, where she was represented by her son, Robert Dzitars.

Although he is not a legal practitioner, he was allowed to make submissions in respect of his mother’s health problems.

The evidence against her

During the hearing, an affidavit from Richard Savage, the manager of the law practice, was produced as evidence, along with a second statement provided by Terrance Copas, a manager in the trust account department.

A schedule was also produced that listed the withdrawals made by Ms Dzitars, along with the trust account cheques she drew, including the payee, the amount and purpose of the payment.

In his affidavit, Mr Savage recalled a conversation with Ms Dzitars where she claimed money paid to Toyota Finance was for a car that the deceased Mr Ozols owned. Mr Savage said she later changed her story and confessed that she’d used the estate funds to purchase a car for herself.

Ms Dzitars also admitted using the funds to pay off her son’s dental costs, which amounted to $5,000.

The NCAT decision

On 28 March this year, NCAT found that Ms Dzitars had misappropriated more funds than originally found by the Council. She was found to have made four unauthorised withdrawals from the Bukavs’ estate totalling $86,010, along with 27 unauthorised withdrawals from the Ozols’ estate totalling $229,041.

“In order to establish an allegation of misappropriation it is necessary to demonstrate that there was some deliberate act which is objectively dishonest applying the ‘ordinary standards of reasonable and honest people,’” the Tribunal outlined.

One of the examples that displayed this was the evidence provided by Mr Savage about the car.

The Tribunal said it was evident that when Ms Dzitars bought the car, she “knew she had acted dishonestly and that she was aware that what she did was wrong,” because she attempted to conceal that she had purchased the car for herself by initially telling Mr Savage the car actually belonged to Mr Ozols.

The orders

The Tribunal found that Ms Dzitars was indeed guilty of professional misconduct and ordered that her name be “removed from the roll of legal practitioners”, and that she pay the costs of the Council of the Law Society of NSW.

NCAT acknowledged that under the Civil and Administrative Tribunal Act 2013, there is a provision where, under exceptional circumstances, such costs don’t have to be paid. However, they found no exceptional circumstances in this case.

It is expected that Ms Dzitar’s will now face criminal prosecution for fraud.