17 July 2015 · LawTalk 869
into the trust account at the firm where he worked. Provisions in s 110(1) of the Lawyers and Conveyancers Act 2006, regulation 10 of the Lawyers and Conveyancers Act (Trust Account) Regulations 2008 and rule 9.3 of the Lawyers and Conveyancers Act (Conduct and Client Care) Rules 2008 meant that Mr Chen had an obligation to ensure that the money was promptly paid into the trust account.
Admitted Mr Chen admitted the charge of misconduct. Following that, his counsel and the lawyers standards committee that laid the charges agreed a level of penalty which they put to the Tribunal. The Tribunal said it was prepared to endorse the agreed level of penalty, but it wanted Mr Chen to “listen carefully” to its reasons for the endorsement. “The actions taken by Mr Chen in accepting money which was expressed to be a gift and then in not paying into the trust account for some months were most unwise,” the Tribunal said. “In particular we refer to the reckless breach of the Trust Account Rules and s 110 of the Lawyers and Conveyancers Act 2006, which provide for the proper management of funds received from clients. “We commend Mr Chen for his openness to the standards committee. He swore an affidavit in which he immediately accepted his misjudgement and took responsibility for his actions and it is clear that from the outset of receiving this money, having attempted to refuse it on a number of occasions from the client, that he was uncomfortable and aware that receiving the payment directly caused him professional ethical difficulties and that level of awareness is important.” The Tribunal noted it was “somewhat concerned” that he had given a similar assurance some six years ago. However it accepted the submission made by Mr Chen’s counsel that the lesson was now well learnt and he would be extremely cautious in future. Mr Chen had acted “unprofessionally and recklessly in breaching the Act and the Rules which govern the management of client funds. “These rules are at the very heart of professional practice because the public are entitled to confidence that a professional adviser will treat their affairs and
their property with the utmost care and good faith.” As well as the censure and fine, the Tribunal ordered Mr Chen to pay the Law Society its costs of $14,750 and $1,587 Tribunal costs.
Strike off for submitting false documents Rohineet Sharma of Auckland has been struck off by the New Zealand Lawyers and Conveyancers Disciplinary Tribunal after he submitted a false solicitor’s certificate and filed a false discharge of mortgage certificate with Landonline. In [2015] NZLCDT 12, Mr Sharma admitted one charge of misconduct and the facts giving rise to that charge. However, the lawyers standards committee that brought the charge to the Tribunal and Mr Sharma differed as to whether the misconduct was intentional or inadvertent. The charge arose from Mr Sharma’s purchase of a commercial property in Auckland. To finance the purchase, a bank (bank A) required a first mortgage to be registered in its favour. To facilitate this, and without authority, Mr Sharma discharged the mortgage
to another bank (bank B) over his own residential property, submitted a false solicitor’s certificate to bank A and filed a false discharge of mortgage certificate with Landonline to effect the discharge of the mortgage to bank B. Mr Sharma’s residential property was mortgaged to bank B for $2.5 million. Yet when Mr Sharma completed the relevant form for bank A, he disclosed borrowings from bank B as $400,000 only.
Explanation Mr Sharma’s explanation for this discrepancy, the Tribunal said, was that he did not have all the necessary detail when he started filling out the form and that a bank employee had instructed him to bring in all his bank statements and other documents and that the form could be completed later. “But he signed the form with the $400,000 figure in it,” the Tribunal noted. Mr Sharma said he concluded from his discussions with bank A that he would be able to access a confirmed stand-alone lending arrangement with the bank. On that basis he entered into an unconditional agreement to purchase the commercial property for $490,000 after an auction. He then requested borrowings of $490,000 to meet the settlement date. Bank A said it required a first mortgage to be registered against Mr Sharma’s residential property before granting a loan for
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