Lawyer accused of mishandling trust fund to leave man penniless
A lawyer has been accused of misusing a client’s trust fund and leaving him penniless after he loaned more than $400,000 to another client without securities.
Geoffrey Willcocks has argued that Joseph Wakefield, as executor of his father’s estate, loaned the contents of the fund to Harold Darrell in 2010 against the deeds of a property in Hamilton.
However, the deeds for the property were actually held by the former Bank of Bermuda, which refused to transfer the deeds to Mr Darrell, and Mr Darrell defaulted on the loan and stopped making payments in 2012, a court heard.
While Mr Wakefield called for the case to be struck out because of the passage of time, Chief Justice Narinder Hargun ruled on Tuesday that the case should be allowed to move forward.
“In the circumstances, it is plainly arguable that the conduct of Mr Wakefield in transferring the trust funds to Mr Darrell was reckless and accordingly Section 23(1) of the Act applies to the facts of this case, with the result that no period of limitation prescribed by the Act applies to this action,” he wrote in a judgment.
“Accordingly, it cannot be said, as contended by Mr Wakefield, that it is ‘very clear’ that the plaintiff’s claim is barred by reason of limitation under the Act.
“These matters can only properly be determined after full discovery at the trial of this action.”
The court heard that Mr Willcocks’s father, Peter Willcocks, died in July 2005.
According to his will, drafted by law firm Wakefield Quin Ltd, the sum of $480,000 would be used to create a trust fund for the benefit of Mr Willcocks in the form of an annual payment of $30,000 for the duration of his lifetime.
Mr Wakefield, as senior partner of Wakefield Quin Ltd at the time, was appointed as executor and trustee of the estate.
The court heard that in October 2010 Mr Wakefield contacted an accountant at Wakefield Quin indicating that he intended to loan the $427,259 still in the fund to Mr Darrell against the deeds of his property.
Mr Darrell subsequently signed a memorandum of deposit in which he promised to deposit the deeds with Mr Wakefield once he received them from the Bank of Bermuda.
The bank refused to give the deeds to Mr Darrell and was subsequently given permission by the courts to sell the property to satisfy debts and legal costs related to a longstanding legal dispute with Mr Darrell.
Mr Willcocks received his payments until 2014. Then the payments stopped.
He argued that Mr Darrell was a friend and client of Mr Wakefield, and that the loan was made with no securities in place, in breach of Mr Wakefield’s duty to him.
Mr Willcocks, now a senior citizen, said the actions of Mr Wakefield had left him penniless and completely reliant of financial assistance for rent, groceries and health insurance.
At a hearing in August, Mr Wakefield argued that the case should be thrown out on several bases, including that it was time-barred.
He argued that Mr Willcocks was informed in July 2015 that there was no money left in the trust, and that he had six years from that time to launch the legal action.
Mr Wakefield said that the legal action was not filed until December last year, six months outside that window.
Mr Willcocks responded that during the 2015 meeting he had not been told the money was “permanently gone” and that he had been urged to “call in the fall”.
He said he had been left with the impression that the funds could be recovered from Mr Darrell and that the annual payments would be able to resume in the future.
The court was also shown a 2013 letter in which Mr Willcocks was told that Mr Darrell would remain personally liable irrespective of the status of the security and may be able to repay the loan.
Mr Justice Hargun said he was not satisfied in the circumstances that the case was time-barred.
He also dismissed a submission that the case should be struck out on the basis that the allegations were “scandalous and vexatious and constitute an abuse of process”.
The judge also refused to strike out allegations against Wakefield Quin Ltd, which is listed as the second defendant in the case.
The firm argued in court that the case against it was overly vague and incoherent and should not be allowed to proceed.
Mr Justice Hargun said the firm’s arguments had some merit, but that Mr Willcocks should have the opportunity to replead his case against the firm to rectify the deficiencies.
The judge ordered Mr Willcocks to file an amended statement of claim within six weeks and said the action against Wakefield Quin Ltd would be struck out if that is not done.
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