LOSSES BY CLIENT.

New Zealand Herald, Volume LXIX, Issue 21165, 23 April 1932, Page 12

LOSSES BY CLIENT.

•DEALINGS WITH SOLICITOR.

INDEMNITY CLAIM FAILS.

THEFT NOT ESTABLISHED. LAW SOCIETY SUCCEEDS. £BY TELEGRAPH. —OWN CORRESPONDENT. ] NEW PLYMOUTH, Friday. Reserved judgment was delivered today by Mr. Justice Blair in the case in ■which Nelson Ben Bishop sought to recover from the New Zealand Law Society under the Law Practitioners (Solicitors Fidelity Guarantee Fund) Act sums amounting to £1052 10s as reimbursement on account of misappropriations by Harold J. M. Thomson while practising a§ a solicitor at Inglewpod. The sums related to advances of £IOOO and £.500. The former sum was represented by certain deeds, the actual money having been misappropriated before the date of the coming into force of the Act under which the claim was brought. It was submitted that Thomson had stolen what was valuable property, but the judgment of the Court was that Thomson had got possession of these deeds by means of false pretences. Set Off Not Permitted. The amount of £3OO had been admitted by the Law Society, but as sums amounting to £52 10s had been paid by Thomson to the plaintiff, the society claimed the right to set (hat amount off as against the £3OO. This His Honor held could not bo sustained and tho judgment of the Court was in favour of plaintiff in respect of £52 10s, but against him on a claim for £IOOO. The Court ordered the parties each to pay their own costs. In his judgment, Mr. Justice Blair said the elements necessary to found a successful claim on the fund for a reimbursement of loss appeared to be: —(a) Theft by a solicitor or solicitor-trustee; (b) tho thing stolen must be money or other valuable property; (c) the theft must have been committed subsequent to Jannary 1, 1930; (d) the thing stolen must have been entrusted to a solicitor or a solicitor-trustee. His Honor proceeded by saying that element (b) had been satisfied and no question arose whether Thomson, when he got the deeds in question, was acting as a solicitor. The question whether a solicitor who by false pretences obtained possession of a valuable thing could bo said to be entrusted with it might arise for decision. The quastion in this case was whether Thomson's conduct was theftIndemnification Against Theft. So far as plaintiff was concerned, the [Act, suid His Honor, advisedly made use of the word theft. It was theft by a solicitor which was indemnified against.

His Honor then referred to the wide application of the word theft in accordance with section 240 of the Crimes Act. There was, /however, marked distinction between theft and false pretences. In this case Bishop intended Thomson to havei the deeds for exchanging them for s, second mortgage for £450 and the sum of £IOOO. Thomson, after he got the £IOOO, was to invest it. When he obtained Bishop's signature to the documents, Thomson had no intention of getting the £IOOO or of reinvesting it, jind there was no £IOOO to get, because it had been spent. lie thus got deeds from Bishop by false pretences and with intent to defraud Bishop. That was not theft and the statute only gavo indemnity in the case of theft by a solicitor of moneys or other valuable property entrusted to him. Thomson, so far as disposing of the deeds was concerned, did with them precisely what Bishop had instructed him to do.

"To my' mind," said His Honor, "Thomson could not have been convicted of the theft of these documents, although it is clear that he could have been con victed for false pretences in relation to them. As plaintiff has not, in relation to the documents, established a case of theft against Thomson, I do not consider that plaintiff is entitled to succeed in respect of tho £IOOO "

His Honor said the indemnity provided by the fund was by section 15 limited to losses by thefts committed after January 1, 1930, the date of the coming -into operation of the Act. This limitation was necessary, because until the fund was created, there was no means of meeting claims.

Thomson's defalcations extended over Bome years prior to the coming into operation of, the Act, but these older defalcations, having been made good by him by funds coming into his hands after the coming into force of tho Act, thus had the eSect of giving the benefit of the Act in respect of misappropriation committed long prior to tho commencement of the indemnity fund. The Law Society, nevertheless, did not dispute that the indemnity provided by the fund applied to recent thefts which were substitutionary of old ones outside the Act.