A Canberra lawyer has been ordered to pay almost $100,000 and have his practice supervised after he was found guilty of professional misconduct in his dealings to start a Gungahlin child care centre.
The council of the ACT Law Society took disciplinary action against Darren Carden, principal of firm Eastwoods Legal, in the ACT Civil and Administrative Tribunal.
After agreement between the parties, the tribunal ordered Mr Carden pay a $15,000 fine and $80,000 in the law society's costs.
He will also bear the costs of having a supervisor watch over his practice for 18 months.
The tribunal's presidential member Geoff McCarthy said Mr Carden had put himself in a position of "irreconcilable conflict" between his duties as a lawyer and his commercial interests in the deal for the child care centre.
Mr McCarthy was critical of Mr Carden, who had described the events as merely a "business deal gone wrong".
"For the respondent to view the matter in that way displays a worrying failure to recognise his error," Mr McCarthy said.
He said it was concerning that even after the proceedings before the tribunal Mr Carden failed to appreciate the significance of the conflict he'd placed himself in.
He hoped the 18 months' supervision would teach Mr Carden the importance of avoiding professional conflicts.
The lawyer was involved in a joint venture with three other people related to the purchase and development of land in Amaroo for a child care centre.
The lawyer entered negotiations in which he acted for and on behalf of the joint venture partners, and on his own behalf as one of the partners, for the lease agreement.
One of the partners, who said she had little idea of what she was signing, was the only personal guarantor under the lease agreement.
It meant she alone out of the four partners was liable for the fit out demands and operational costs under the lease, that she estimated at nearly $800,000.
The deal eventually fell over.
Subsequent litigation in the ACT Supreme Court saw the woman's company put into voluntary administration, resulting in the termination of the lease agreement.
The partner complained to the law society about Mr Carden.
A solicitor has a professional obligation to avoid conflicts between their personal interests and their duty to their clients.
Mr McCarthy said if the solicitor does enter into a transaction with a client who relies on them for advice where there is an apparent conflict, the solicitor bears a "heavy burden" to establish that the client has given their fully informed consent, such as to insist on independent advice.
Mr Carden was also charged with discourteous communication, after an email in which he said the partner "is going to be living on the street when I bankrupt her, I'll be standing at the front of her house cheering on the removalists when they collect her crap."
In mitigation, Mr Carden said that at the time of the breaches in 2014 he was a relatively inexperienced lawyer and had limited supervision.
He said the parties of the joint venture agreed to contribute professional services to the running of the joint venture, and he believed he was acting in good faith to provide legal services.
It was not until later, after reviewing the professional conduct rules for lawyers, that he realised the conflict of interest.
He said his business partners encouraged him to continue providing legal services to the venture when he opened his own practice, rather than his previous firm continuing to provide those services.