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Female attorney-at-law struck off the roll – Part II

Dr. Francis Alexis, KC – was involved in the court battle

For the first time in over 40 years, a Grenadian attorney-at-law has been disbarred from practicing in the profession for professional misconduct.

High court judges, Justices Raulston L.A. Glasgow and Victoria Charles-Clarke ordered that 71-year old female attorney, Brenda Wardally-Beaumont’s name be struck off the court’s roll after finding her guilty of professional misconduct in the discharge of her duties.

The attorney was hauled before the court after she failed to return the sum of EC$304,419.99 which she held in trust for her client, Joel Ganpot arising from a divorce proceeding.

The case against Wardally-Beaumont was brought to court by attorney-at-law, Alban John who was up against Dr. Francis Alexis, KC and Winnifred Duncan-Phillip who were representing their colleague defendant.

“The Registrar of the High Court shall effect the appropriate changes to the court’s roll of attorneys-at-law and shall cause the requisite notices to be published in the Official Gazette,” the ruling stated.

The Wardally-Beaumont episode started in April 1999, when the female attorney was retained by Ganpot to represent him in matrimonial proceedings involving his wife.

In April 2005, Wardally-Beaumont received the sum of $304,419.99 on Ganpot’s behalf, which represented monies he was entitled to as part of the settlement of the ancillary relief proceedings and never handed it over to him.

As a public service, THE NEW TODAY has decided to reproduce an edited version of the decision handed down by Justice Glasgow and Charles-Clarke that resulted in the female attorney being disbarred from practicing law in the country:-

As we have noted above, these proceedings are being conducted further to the referral by our colleague Wallbank J on 26th January, 2015.

We observe that the legislature of Grenada has empowered the General Legal Council (GLC), a body established under the Legal Profession Act, to also discipline attorneys at law who are registered to practice in Grenada. See section 37 of the Act. Where, however, the GLC has heard an allegation made against an attorney at law and finds that the allegation is not only made out but warrants a sanction which is beyond the jurisdiction of the GLC, such as removal from the roll of lawyers, the GLC is required to refer the matter to the Supreme Court to be dealt with in accordance with the procedure set out in section 82 of the Supreme Court Act.

The tribunal is of the view that notwithstanding the provenance of the referral, and in this case, it emanated from our esteemed colleague Wallbank J, we are required to consider whether reasonable cause has been shown to warrant either the suspension or removal of Ms. Beaumont from the practice of law in Grenada. We also agree with counsel Mr. John that the standard of proof to be applied is the criminal standard of proof in that the allegations must be proven beyond a reasonable doubt.

It is by now clear that the court will exercise the aforestated common law and/or statutory supervisory and disciplinary jurisdiction over attorneys at law to ensure that they maintain the highest fidelity to the codes of ethics, mores and values of the profession.

Clearly, the more serious the departure from the standards expected of counsel, the more severe the sanctions that must be imposed to express the court’s disapproval of the inappropriate, unprofessional and/or unethical practice exhibited by the legal practitioner. We will consider this latter aspect in our discourse on sanctions, if necessary.

Discourse on the law as applied to the facts in this case
As a starting point, we remind ourselves that this entire affair centres on the failure of an attorney-at-law to hand over funds received on behalf of a client to that client. For the reasons to follow, we do not find that the attorney-at-law has provided any plausible, adequate, credible or satisfactory evidence or reasons to overcome Mr. Ganpot’s contention that she misappropriated those funds for her own use. Attorneys-at-law are to be held to the highest standards of rectitude in the exercise of their duties both to the court and to their clients. The Act and its attendant Code of Ethics mandate no lesser standard. Indeed, one of its dictates stipulates that counsel holds all moneys received for a client on trust for that client.

See section 54 of the Act. Further, section 54(2) of the Act enjoins the GLC to –

“…make rules generally, as to the keeping and operating of bank accounts for clients’ money by an attorney-at-law, and without prejudice to the generality of the foregoing, such rules may provide— (a) for an attorney-at-law to open and keep accounts at banks;

(b) for an attorney-at-law to keep accounts containing particulars and information as to money received, held, or paid by them for, or on accounts of their clients; and

(c) for the Council to take such action as may be necessary, to enable it to ascertain, whether or not the rules are complied with”

The tribunal has not been pointed to any rules made by the GLC pursuant to its section 54(2) powers. If this is indeed the case, we believe that the facts of this case graphically and in some sense tragically, highlight the need for such rules to be put in place and enforced by the GLC.

Notwithstanding the absence of the procedural rules stated in section 54(2) of the Act, the Code of Ethics in the Third Schedule sets out the applicable imperatives with respect to client’s funds. In this regard sections 64, 81 and 82(1) read as follows:

“64. An attorney-at-law shall not retain money he receives for his client, longer than is absolutely necessary”

81. In pecuniary matters, an attorney-at-law shall be most punctual and diligent; and shall never mingle funds of others with his own, and he shall at all times be able to refund money he holds for others.

82.(1) An attorney-at-law shall keep such accounts as clearly and accurately distinguished, the financial position between himself and his client, as and when required.”

Misappropriation or mishandling of a client’s funds is a self-evidently egregious violation of the ethics and high moral standards of the profession. It is a breach of the considerable faith placed by clients in the lawyers and in our system of justice.

The mandate of our system of justice to aid in the maintenance of the rule of law in our societies is thrown into question when the public loses faith in the way judges and other constituent members of the legal profession conduct the business that the public places into our hands. In addition, there is no discounting the incalculable hurt, pain and possible financial displacements that a client may encounter when they are out of their funds to conduct their affairs.

In this regard we borrow from the words of our distinguished colleague Wallbank J where he observed in his referral to us that –

“Misappropriation of client funds can take many forms. All such forms are seriously egregious. They cause scandal, incalculable distress and anxiety to the immediate victims, and great harm to the administration of justice system, including to public confidence in the Courts and the legal profession.

Misappropriation of client funds is not the preserve of the thoroughly devious, which is why instances undermine the reputation of the legal profession so profoundly. They breach the tenet around which the entire civil administration of justice revolves, that client funds are sacrosanct.

Why misappropriation of client funds is so serious bears reflection. The first reason of course is the immediate harm it causes. Then there is the indirect damage that it does to the fabric of society as a whole. It constitutes a breach of contract, but is more than that. It is a breach of trust, but is also more than that. Breaches of contract and trust can be, and unfortunately are, committed by tradesmen, businessmen and ordinary members of the public, but a solicitor is none of these. He or she practices pursuant to an oath that he or she professes upon admission. That is why a solicitor is referred to as a professional, in the original and etymologically correct sense of the word. Misappropriation of client funds is a betrayal of the obligations freely assumed, for all time, when the solicitor takes the oath.” [34] With regard to the facts in this case, there are some stark matters arising immediately. Firstly, apart from Ms. Beaumont’s evidence that she made enquiries into her clients’ account and conducted searches, to date, there is no evidence as to the nature of those searches, what they entailed and the evidence as what to the searches purportedly unearthed. We have cited the Code of Ethics that enjoined counsel to maintain separate accounts for the funds that she received on Mr. Ganpot’s behalf. Besides her viva voce evidence we have not had sight of any evidence that she maintained any such account and as to whether her funds were or were not comingled with the client’s funds. Significantly, as we have stated above, the missing funds amounted to quite a lot of money.

Therefore, if counsel’s assertions about the theft of the funds are true then one would have anticipated that counsel would have engaged the police, the Financial Intelligence Unit or even auditor to trace the allegedly missing monies belonging to her client. Ms. Beaumont’s suspicion that someone from her bank stole monies from her client’s account or that Ms. Charles was collecting monies on the firm’s behalf, but not depositing them into the client’s account are serious allegations. Any reasonable and diligent attorney -at -law would have conducted an audit or involve the relevant authorities to investigate and account for the missing monies. As we have said before, this evidence besides being unsupported is also palpably incredible.

Further, Ms. Beaumont by her own evidence at paragraph 6 of her affidavit avers that a similar incident had previously occurred at her firm. In view of her sections 81 and 84 obligations set out in the Code of Ethics and in light of this previous incident, it was incumbent on Ms. Beaumont to put proper measures in place to mitigate against these losses or theft of client’s funds.

Again, no evidence was led with respect to what mechanisms were in place to safeguard her client’s monies. Indeed, Ms. Beaumont astonishingly admits that “I now know that a due diligence search and comparative accounting if conducted over the years could or would have disclosed discrepancy [sic] .”

We also find it extra ordinary that counsel testified that she only discovered what happened to Mr. Ganpot’s moneys after Ms. Charles left her office in 2010. Counsel was paid this money on her client’s behalf in 2005. This would mean that the client was “knocking” on counsel’s door for 5 years for his money before counsel “discovered” where the money had allegedly gone. What exactly did counsel tell him in that period about the location of his money? Incredibly, if one is to believe counsel’s story then the discovery of what happened to the money occurred after Mr. Ganpot was constrained to file a claim for his money (June 2007), after he had obtained judgment (July 2007) and after the consent order was obtained further to enforcement proceedings (February 2009). If we are to believe counsel’s version of what happened to the money, we find this indisputable evidence of a beyond grossly negligent disposition to client’s funds. We however find counsel’s account of the missing funds incredible and rather indicative of the evidence that the funds were misappropriated by counsel.

We could find no greater evidence that counsel not only wantonly and callously mishandled client’s funds but also misappropriated same than when we examine the evidence with respect to the purchase of land in 2016. There was, in our view, a deliberate and dishonest effort to conceal this transaction. We can only surmise, and we believe rightly so, that counsel sought to hide this transaction from the client to whom she owed moneys.

We already above in this ruling recited the facts about the purchase of this land.

But suffice it to say, that the land was bought in April 2016 in counsel’s name, then transferred into the names of 2 individuals bearing relations to counsel in May 2016 with counsel holding a life interest in the property. One of the individual’s names was eventually removed. Counsel raised sums and built a house on the land in which she now resides.

Even if this was not a rather sloppy attempt to conceal this transaction then we are solidly convinced that the transaction itself shows Ms. Beaumont’s disregard for her obligations to her client. This is since these facts make nonsense of counsel’s assertion of impecuniosity and difficulties over the years to pay Mr. Ganpot his money. We do express great sympathy for counsel for the period in 2009 in which she ailed and had to seek medical assistance overseas. But it is clear to us that by 2016 counsel, by her own evidence, was in a more than adequate financial state to purchase or to raise moneys to purchase property for her own purposes.

Interestingly and instructively, we observe that counsel was engaged in obtaining property and attempting to conceal her efforts to do so in the year 2016. This year is significant since counsel would have been aware that Justice Wallbank had only one year earlier in 2015 referred her conduct to a disciplinary tribunal for possible sanctions of suspension or removal from the roll of attorneys.

Yet she proceeded in 2016 with no regard to the looming threat of severe sanctions to purchase property for own benefit with funds that could or ought to have been paid to her client to liquidate the long outstanding debt owed to him. Meanwhile her client was left to   make several applications to the court to receive his moneys and implore counsel over the period of 17 years for his money.

As we have stated above, we are tasked with looking not merely at the quantum of the sums in question but at the conduct of the lawyer. All in all, we do not believe that counsel maintained the highest values of the profession with respect to Mr. Ganpot’s money. We do not accept that a credible or an accurate or satisfactory account has been given to us as to what transpired with those funds.

We are inclined to the view and indeed so find that the confluence of evidentiary matters suggests that the funds were misappropriated by counsel. We find that, as found by Wallbank J, this was not the first instance of counsel’s wanton disregard for the interest of her client’s money. This clearly indicates a pattern of inappropriate, incompetent and/or dishonest behaviour by counsel with respect to client’s funds. The finding of egregious professional misconduct is therefore made out in this case.

What is the appropriate sanction?

We are now to consider the sanction warranted in the circumstances.

Counsel for Mr. Ganpot submits that the approach the tribunal should take in determining an appropriate sanction has long been settled by the court in Bolton v Law Society , where the court explained the reasoning behind imposing a sanction. Binhgam MR elucidated that a sanction has a punitive element which serves to punish the attorney for his wrongdoing. Equally a sanction is also imposed to maintain the reputation of the profession.

Counsel urges the tribunal to find that despite Ms. Beaumont’s attempts to explain the missing funds, she has not shown any contrition or has made an honest attempt to remedy her default. Counsel states that the funds have been unaccounted for since 2005, some 17 years ago. The appropriate sanction, in counsel’s view, is to have Ms. Beaumont’s name struck-off the court’s roll as an attorney-at-law or suspension for five years at the very least.

[35]   In answer, counsel for Ms. Beaumont is of the view that this case is more in line with Re Clarke , where the court found that there was no dishonest intention to deprive the client of his money. In that case, the attorney was suspended for 9 months. Counsel submits that there are no aggravating factors in this case. Therefore, she argues that the ultimate sanction of being struck-off the court’s roll is not appropriate. Counsel asks the tribunal to allow Ms. Beaumont reasonable time to repay the balance due failing which she can be suspended for a period of time as the tribunal deems fit.

At paragraph 6 of Ms. Beaumont’s affidavit, she admits that this was not the first time that monies went missing or went unaccounted for in her client’s account. Indeed, Ms. Beaumont stated in that same paragraph that “[t]his was not the first occasion for $30,000.00 to cover a deficit when a similar situation occurred. At that time I believed that I must have made a mistake.”

The tribunal takes note that there is a previous judgment of the high court, where Ms. Beaumont was ordered to return monies in excess of the sum of $100,000.00 to a former client. We have concluded that there is a pattern of mismanagement of client’s funds involving Ms. Beaumont’s practice. Indeed, this previous judgment against Ms. Beaumont was highlighted by Wallbank J at paragraph 15(i) of his judgment, where his Lordship stated that:-

“The Defendant has previously consented to, and subsequently satisfied, a judgment against her in Claim No. GDAHCV2002/0101, Cecilia Yvonne James vs Brenda Wardally-Beaumont, wherein it was claimed that the Defendant misappropriated a sum in excess of $100,000 whilst acting for the Claimant in the sale of a property. I pause here to remark that the Defendant’s alleged mitigation argument in the present case, that the misappropriation of Mr. Ganpot’s money was the doing of a former employee, is called into question by this earlier event, in that one may well ask why it is that the Defendant appears not to have taken appropriate care to prevent a repetition of a similar incident, particularly as she was for all intents and purposes a sole practitioner and thus must have had an appreciation of her firm’s fee income before signing off on spending.

The apparent repetition suggests, rather, a longer running and more endemic problem in the financial management of the Defendant’s practice than she is currently portraying. Disclosure of the Defendant’s dealings with the client account should demonstrate the whole picture. Appropriate measures can be put in place to preserve her clients’ confidentiality. If the Defendant has nothing to hide, and if the primary responsibility for the shortfall in the present case lies with another, as the Defendant contends, the Defendant should be keen to give full disclosure.”

Again, we allude to Ms. Beaumont’s own evidence of gross negligence in managing the serious business of client’s funds. We again repeat the charge that counsel ought to have at the very least put proper mechanisms in place to prevent a reoccurrence of missing monies in her client’s account. Indeed, we have been directed to no evidence of any steps made by counsel to put systems in place in her office to prevent the occurrence of another incident of this sort. In fact, besides counsel’s viva voce evidence that she does have a client’s account, no evidence has been led before us to show that counsel even has a client’s account or that there is an adequate or indeed any system to secure money belonging to her clients.

Section 2(2) of the Code of Ethics states that “[a]n attorney-at-law shall maintain his integrity and the honour and dignity of the legal profession and of his own standing as a member of it, and shall encourage other attorneys-at-law to act similarly, both in the practice of the profession and in their private lives, and shall refrain from conduct which is detrimental to the profession, or which may tend to discredit it:..”

The entire course of this matter has brought dishonour to the profession. Additionally and more importantly, Mr. Ganpot and indeed the entire public that relies on the integrity of the judicial system have had their trust betrayed by the conduct of counsel in this case. There is no evidence before us to satisfy us that sufficient or anything significant has been done by Ms. Beaumont to repair these breaches, to compensate the hurt inflicted on Mr. Ganpot after 17 years and/or to advert any further occurrence of gross mishandling or misappropriation of client’s funds.

For these reasons, we are satisfied that an order for suspension would be an inadequate sanction. We rule that that Ms. Brenda Wardally-Beaumont is hereby struck-off the court’s roll of attorneys-at-law registered to practice law in Grenada. The Registrar of the High Court is to make the necessary adjustments to the roll of attorneys-at-law in Grenada to remove counsel’s name therefrom and to make the necessary publications in the Official Gazette.

Interest on the judgment debt
At trial and under cross examination, a preliminary issue was raised by counsel for the defendant as to whether post-judgment interest accrued from the default judgment dated 13th July 2007 (default judgement) or the consent order dated 13 July 2009. The tribunal notes that these proceedings concern the discipline of an attorney-at-law and do not concern private law rights of a client to claim for monies due and owing. However, for completeness, the tribunal will consider the arguments raised by Ms. Beaumont.

Counsel for Ms. Beaumont submits that the default judgment dated 13th July 2007 did not include post-judgment interest. The default judgment does not disclose that post-judgment interest was not awarded by the Registrar of the high court upon entry of the default judgment. Indeed, judgment was entered for the sum of $308,248.69 in default of the defence against Ms. Beaumont without any order for post-judgment interest thereafter.

It is now well established that post-judgment interest does not automatically attach to every judgment debt, save and except where statute expressly makes provision for post judgment interest to accrue or where it is ordered by the court.

The entry of the default judgment was made on 13th July, 2007 which was prior to the section 27A amendment in 2009 and as such that amendment is not applicable in the circumstances since that section did not have retroactive effect. Section 27A of the Supreme Court Act section prescribes that-

“Interest of judgement debts

(1)  For the purposes of this section –

“judgement debt” means a debt under a relevant judgement;

“relevant judgement” means a judgement of the High Court for the payment of a sum of money and, in relation to a judgement debt, means the judgement or order which gives rise to the judgement debt.

(2)  This section shall not apply where a relevant judgement was given before the date of commencement of the Act.

(3)  Until it is satisfied, every judgement debt shall bear interest at such rates as the High Court may determine and in the absence of such determination, the rate of interest shall be six per cent per annum.

(4)  Unless it is otherwise ordered by the Court, the rate of interest under subsection (3) shall be calculated from the time of the giving of the relevant judgement, as the case may be, notwithstanding that the giving of the relevant judgement has been suspended by any other proceedings either in the High Court or on appeal.” (My emphasis)

The evidence discloses that the consent order made provision for entry of the judgment sum of $300,971.11 together with interest of 6% per annum. There is no evidence that this consent order has been set aside. As such Ms. Beaumont and Ms. Ganpot are bound by terms of the consent order.

The tribunal is satisfied that post-judgment interest on the judgment debt only began to accrue and continues to accrue from the consent order dated 13th July 2009 to the date of satisfaction. In passing the tribunal notes that the judgment debt remains largely unsatisfied. Further, the tribunal notes that by consent the debt owed to Mr. Ganpot was crystallised into a consent order of the court. Mr. Ganpot remains at liberty to pursue civil remedies to enforce the judgment debt, if such a need arises.

Conclusion
[51] For all these reasons, it is hereby declared and ordered that-

(1) Brenda Wardally-Beaumont (Ms. Beaumont) is found guilty of professional misconduct in the discharge of her duties as an attorney-at-law when she failed to return the sum of $304,419.99 which she held on trust for her client, Mr. Joel Ganpot.

(2) Ms. Beaumont is hereby struck-off the court’s roll of attorneys-at-law in Grenada.

(3) Ms. Beaumont shall pay all outstanding monies together with accrued interest due and owing to Mr. Joel Ganpot, in accordance with the consent order dated 13th July 2009 within 6 months of today’s date.

(4) The Registrar of the High Court shall effect the appropriate changes to the court’s roll of attorneys-at-law and shall cause the requisite notices to be published in the Official Gazette.

(5) There shall be no order as to costs.

Raulston L.A. Glasgow
High Court Judge

Victoria Charles-Clarke
High Court Judge

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