Conveyancing For Both Parties – A High Risk Practice

OPINION
by Tim O’Dwyer M.A., LL.B
Solicitor
Consumer Advocate
watchdog@argonautlegal.com.au

Acting for both parties is an unwise, high-risk practice for solicitors and their trusting clients. It should be prohibited absolutely by law.

Brisbane solicitor Richard Ebbott is mentioned twice in real estate rebel Neil Jenman’s book, DON’T SIGN ANYTHING! Jenman describes how Ebbott handled the conveyancing for two Sydney clients who lost more than $50,000 each after buying two overpriced Brisbane townhouses. Then four years later Ebbott acted for Victorians Murray and Helen Casey who had been pushed into signing for a Gold Coast unit overpriced by $70,000.

After discovering the distressing truth Helen Casey called Ebbott to cancel. He said, “You have signed and you cannot pull out and if you do you will be sued by the property owner.” Funnily enough, three years after that Ebbott told Sydney clients John and Barbara Hamilton, who wanted out of their overpriced contracts, almost the same: “You both signed the contracts for the purchase of the two properties, you did sign freely and voluntarily and without any pressure from anyone.”

Ebbott finally faced a little justice when he pleaded guilty to professional misconduct charges laid by the Queensland Law Society in the Solicitors Complaints Tribunal (SCT).

The charges arose from a number of conveyancing matters from 2001 where he acted for the sellers and their buyers. The SCT fined Ebbott $25,000.00 with costs. It took into account, among other things, his plea of guilty, his professed remorse and his since-altered practice methods. Ebbott undertook not act again for both parties in conveyancing matters.

In the lucrative transactions in question, he had received two lots of professional costs while a marketing agent, who had referred the buyers to him, collected substantial commissions from the settlement proceeds. There was evidence, the SCT found, of purchase prices inflated to cover the middleman’s marketing commissions. These commissions were disclosed to the sellers but not to the buyers. In most transactions the payments were made on top of regular commissions paid to the selling agents. The marketing commissions ranged from $10,450.00 to more than $30,000.00. On one sale the marketeer’s commission was one third of the purchase price.

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