The Law Society is concerned the deficit on a suspended Co Roscommon solicitor's client account may exceed €600,000, the High Court has heard.
Declan O’Callaghan, who had practiced at Kilraine O’Callaghan, Pound Street, Ballaghaderreen, has undertaken to discharge whatever sum the deficit amounts to, the court has heard.
Nessa Bird BL, for the Law Society, said on Monday the solicitor, in line with undertakings provided to the court, lodged €395,000 to address the deficit but a cheque for €144,000 of that sum has bounced. The issue with the €144,000 was due to a problem with the lender, not Mr O’Callaghan, and the problem had been rectified, the court was told.
Ms Bird said Brendan Steen, a solicitor appointed as a joint manager of the practice, has identified it would be necessary to repay €212,000 to the client account on top of the funds already paid. That made a deficit of €600,000, she said.
The Society had some concerns regarding the source of some of the monies lodged to the client account in that they appear to be loans from persons who appear to be clients, she said. The Society needed to ensure any such loans are properly vouched with built in waivers.
The Society is concerned further payments may be necessary and considers a further meeting of the Society's Regulation of Practice Committee is necessary, counsel said. It may be necessary to call Mr O' Callaghan and the current joint managers of the Pound Street practice, Mr Steen and Aoife O'Callaghan, a daughter of Mr O'Callaghan, before the committee to address matters in the report, she said.
Mr O'Callaghan's case was back before the president of the High Court, Mr Justice Peter Kelly, on Monday, for an update.
Ms Bird said, arising from the need to address a range of matters outlined, she wanted an adjournment of three weeks.
Noting the judge previously asked whether various statutory agencies should be informed of the matter, counsel said the relevant agencies had been notified.
Bounce
Gabriel Gavigan SC, for Mr O’Callaghan said it was not any action of his client that caused the €144,000 cheque to bounce but rather arose due to an issue with the lender who had said the matter would be rectified.
Mr O’Callaghan has met every request made of him by the Society and intends to honour the proposals made, counsel added.
Mr O’Callaghan also accepted what Mr Steen said about an additional €212,000 deficit and that the matter, as the Society proposed, go before the RPC, he added . Mr Steen had said it would take some time to work through issues in the practice as some were complex, counsel noted.
In his ruling, the judge noted he had directed that €350,000 be paid into the client account from personal funds by Mr O’Callaghan by September 12th last and the solicitor also undertook to make good any additional deficit that may occur after all files have been finalised.
The court was told that undertaking continues and any additional deficit will be met.
Mr O'Callaghan had said he will dispose of various assets including a premises in Dublin and investment property in Portugal and there were also outstanding fees and a VAT refund due to him.
The judge noted he was told the shortfall of €144,000 was not due to any default by Mr O’Callaghan but arose because of a lender, will be put right and will be paid into the account forthwith and the court so ordered.
The judge said he was happy matters are moving at a reasonable pace and that any authorities who should be notified had been notified.
He adjourned the matter for three weeks for an updated report and so the €144,000 sum can be paid.
Ward of court
Mr O’Callaghan agreed last July to several orders, including not to practice as a solicitor, pending the outcome of an inquiry by the Solicitors Disciplinary Tribunal (SDT) into his conduct.
He was also to pay €350,000 from his personal funds to the client account of Kilraine O’Callaghan Solicitors; to cease his involvement with that firm and to make good any additional deficit that may occur after various identified client files are finalised.
Earlier the judge granted a separate application to have a former client of Mr O’Callaghan’s, a bereaved child, made a ward of court with a view to protecting the child’s assets.
The Society earlier this year initiated its application for suspension of Mr O’Callaghan arising from concerns raised in an independent solicitor’s report, including his having withdrawn substantial fees from the estate of that child.
The court was previously told Mr O’Callaghan has reimbursed some €344,000 fees, including VAT, withdrawn by him from the child’s estate, which he has accepted were excessive. They remain lodged in a controlled account pending further court order. The child’s estate has assets of more than €736,000.
