By Angus Thompson
A Sydney lawyer who has been involved in multiple high-profile anti-mosque campaigns has been accused of misappropriating money he held in trust for one group of campaigners in order to prop up his own firm.
But solicitor Robert Balzola has been allowed to keep practising after a bid by the Council of the NSW Law Society to have him suspended collapsed due to a legal technicality.
The Law Society, the peak body for solicitors, resolved on July 20, 2017, to suspend Mr Balzola immediately, alleging the results of a probe into his finances showed “a deliberate practice of using trust money … to ensure sufficient funds were available in the general account to pay Mr Balzola’s salary and meet the liabilities of the practice”.
In issuing the claims against Mr Balzola, the body gave him an opportunity to explain why it shouldn’t suspend him until June 30 this year.
Mr Balzola launched NSW Supreme Court proceedings to appeal against the decision, initially achieving a stay of the immediate suspension that would allow him to practise while he fought the claims.
The Law Society audit was sparked by a complaint from Julie Hoskin, a Bendigo community member who had engaged Mr Balzola, a prominent Christian, to help her and others oppose the construction of a mosque in the Victorian regional city.
Mr Balzola has also helped similar campaigns in Sydney and Canberra.
Ms Hoskin, who was also being represented by Mr Balzola in another matter, claimed in early 2016 that the trust money deposited by her and other community campaigners was being held in the firm’s general account without her permission, and that there were many discrepancies in the “confusing” account statements he issued.
“Some are major and show that many thousands of dollars are missing,” Ms Hoskin allegedly said.
According to investigator Simon Ward, Ms Hoskin said Mr Balzola had offered to keep the money in trust after several banks refused to hold accounts for the campaigners’ legal fight.
Mr Ward alleged Mr Balzola manipulated trust accounting records to avoid detection by “erroneously issuing receipts from his trust account for funds that were never received”.
“Trust money deposited to the general account was regularly used in meeting the general liabilities of the practice,” Mr Ward claimed.
The accusations were published in a June 19, 2017, Law Society report on the investigation.
Mr Balzola’s solicitor, Jennifer Shaw, attached the report, together with his response to the claims -dated July 18, 2017 – to an affidavit tendered to the court.
Ms Shaw claimed on behalf of Mr Balzola that the breaches were neither deliberate nor dishonest.
She said the allegations largely concerned “administrative errors or oversights” that occurred around 2013 and 2014 and “at a time when the practice didn’t have sufficient systems as he has implemented today”.
Ms Shaw said cases in which Mr Balzola used trust money to pay for office expenses were “typically only the unintended consequence of the practitioner failing to appreciate the presence of trust funds in the office account”.
“All the transactions identified in the report as ‘misappropriations’ or otherwise being dishonest have an understandable, innocent explanation,” she said in Mr Balzola’s response.
Ms Shaw said Mr Balzola’s trust account had been fully reconciled and his accounting systems had been updated, and that the matter didn’t warrant suspension or a manager being appointed to the practice.
In relation to Ms Hoskin’s complaint, Ms Shaw said it had been difficult for her client to deal with the large number of small contributions from members of the public.
On August 4 last year, the case went before Justice Des Fagan, who ordered Mr Balzola to serve evidence on which he relied to overturn the suspension before the next hearing date, urging both parties to move forward quickly.
The proceedings were then repeatedly adjourned at the Law Society’s request.
On June 4 this year, Mr Balzola’s lawyers argued before Justice David Davies that the 56-day period the Law Society had to vary the immediate suspension from the time it notified him had expired.
The Law Society claimed that that 56-day period didn’t run while the immediate suspension was placed on hold by the stay.
The court heard that, because of the stay, the body did nothing to vary the temporary ban.
“This was because the Law Society is a model litigant and did not want to do anything which might lead to Mr Balzola claiming an abuse of process whilst the stay was in place,” Justice Davies said.
In finding for Mr Balzola, Justice Davies said it was “unfortunate that so much time has elapsed since the stay was put in place and the 56-day period expired”.
“No explanation has been offered, as I have said, about why steps were not taken more promptly to have the proceedings brought on for hearing,” he said in his June 8 judgment.
Justice Davies awarded costs for part of the proceedings to Mr Balzola.