Conveyancer Fined Over Conflict of Interest

Posted on September 13, 2010 by | 8 Comments


Consumer AlertThe Office of Consumer and Business Affairs (OCBA) is warning conveyancers of their legal duty to declare any relevant interests on properties they deal with, following successful disciplinary action in the District Court.


Today Judge Wayne Chivell officially reprimanded Bernard Ignatius Flood and fined him $2000 as a result of Mr Flood acting unlawfully and negligently in his practice as a conveyancer.


Mr. Flood has operated a conveyancing business in Mount Gambier but the court was told that as well as carrying on business as a conveyancer, he bought and sold residential and commercial properties for investment purposes. He did so as director and shareholder of a number of companies.


The matter came to OCBA’s attention during investigations into another issue, and the court heard that on three occasions, when acting as conveyancer for both the purchaser and vendor in a transaction, Mr. Flood also had a pecuniary interest in the properties being sold.


This arose because a company of which he was director and shareholder was the purchaser of the property on each occasion.


The court was told that despite the conflicts of interest, Mr. Flood continued to act for both parties to the transaction, which, as is clear from the Regulations, he could not do.


 It heard the defendant also acted negligently in the course of conducting his business as a conveyancer.


This arose from his breach of fiduciary obligations to a vendor in failing to disclose that he had a pecuniary interest in the property that was being sold.


In imposing penalty today, Judge Chivell said a registered conveyancer should not have “divided loyalties”:




“It is vital that conveyancers meet high ethical standards, that they be aware of their professional responsibilities, that their office systems and methods be such that conflicts of interest such as the ones involved here be avoided and that necessary disclosures to clients be full and frank.”


The Commissioner for Consumer and Business Affairs, David Green said the case highlights the clear need for transparency in such business dealings and the consequences of failing to do so.


To read the full court report CLICK HERE


See also Goodman Group Conveyancing Bribe Payments

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8 Comments

  • http:// says:

    This Blog has previously reported on the folly of both conveyancers and conveyancing solicitors acting for both parties in the same transaction:

    When Can Lawyers Or Conveyancers Act For Both Parties?

    Conveyancing For Both Parties – A High Risk Practice

    Should conveyancing solicitors act for both parties?

  • http:// says:

    Interesting case Tim – here in NSW,any real estate agent who recommends that a principal or prospect engage the services of a solicitor or licensed conveyancer, when that agent knows that the solicitor or licensed conveyancer will be acting for the other party to the agreement concerned – can face fines as high as $5,500. I believe for a corporation it can be as high as $11,000.

    I also believe there is an exception to the rule book on this, in the case where an agent recommends that a principal or prospect engage the services of a solicitor or licensed conveyancer if no other solicitor or licensed conveyancer is available (for example, in a remote location or a town) but the agent still must disclose that the solicitor or licensed conveyancer will be acting for the other party.

  • http:// says:

    Scout’s honour, only this morning after this post appeared on the Blog I witnessed as a Notary Public some documents for a young couple involved in a property transaction in New Zealand.

    See below one of the documents supplied to the couple by their Kiwi solicitors.

    Frankly, I can’t make any

    sense of this part of the fifth para: “we have informed you of all material information in respect of the transaction, if any, that relates to the other party.”

    1. We have asked you to act for us as our lawyer in relation to this transaction in respect of all attendances for completion and settlement of the above matter.

    2. We are aware you also act for the other party in relation to the transaction.

    3. You have advised us that you have a conflict of interest as your firm also acts for other party in the transaction but that you are not aware of any matter or information in respect of the other party that prevents you from acting for us.

    4. You have explained to us that if a conflict of interest arise, you will stop acting for us and the other party and refer both parties to other lawyers.

    5. We consent to you acting for us notwithstanding you act for the other party as we are satisfied you have taken and will take all proper steps to protect our position and we have informed you of all material information in respect of the transaction, if any, that relates to the other party.

    6. We acknowledge that we are satisfied and do not need to be independently advised.

  • http:// says:

    Wow, and very strange indeed !

    If the professional has received consent from the client about obtaining a benefical interest,but also acts fairly and reasonably in relation to the obtaining of the interest, then it is fine.

    However, if a professional is required to act for both parties,it would be clearly impossible to act fairly and reasonably in relation to the obtaining of the interest -it would be like an agent acting for a vendor on the sale of their home – then acting for the purchaser and then charging a commission for their services. (or where the agent is the purchaser who then charges a commission for the services provided).

    I don’t think any professional could ever act fairly and reasonably in those circumstances,especially due to the law being written specifically for a professional to act in the best interest of one party.

  • http:// says:

    Here is a link to the full case report where you can find out why Bernie Flood got off so lightly, about the illegal role of his real estate salesman mate and how Bernie’s business is thriving because of the on-going “support” of a couple of local Land Agents:

    •  COMMISSIONER FOR CONSUMER AFFAIRS v FLOOD [2010] SADC 118 (3 September 2010)

  • Rob says:

    I agree, agents, brokers and solicitors should only ever act on behalf of one party.

  • Rob says:

    I do not believe that selling agents should recommend any professional services to a buyer. I often hear of them promoting building and pest inspectors.

  • chris hasson says:

    I think the law can’t act fairly if you’re acting for two parties but the law is only written to benifit from one.

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