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A lawyer is accused of misconduct for making more than half a million dollars in unauthorised transfers from a family trust and his late parents’ bank accounts. However, the lawyer, who has interim name suppression, denied that the payments had been “self-serving”. In a Lawyers and Conveyancers Disciplinary Tribunal hearing this week, he said they were primarily made to retain a “family property”, for which he is the sole director and shareholder. They were also to reimburse expenses he incurred in the upkeep of that property, and his ongoing care of his elderly parents. He faces an allegation of misconduct, brought by the Standards Committee, on behalf of the New Zealand Law Society. Committee prosecutor Sam McMullan said the transactions from the family trust and from his mother and parents’ accounts, were for the lawyer’s own benefit and in breach of his obligations as a fiduciary. He was a trustee and beneficiary of the family trust, with his sister the other beneficiary. To prove the charge, the committee needed to show that the lawyer’s conduct reached a level where, at the time that he engaged in it, he was not a fit and proper person to be a lawyer. It is not alleged that he was not entitled to access the money from the trust, as the trust deed did allow for such transactions. However, he needed to have sought proper authority from the other trustee. He also accepted that with the settlement of the estate, there hadn’t been any actual loss to the other beneficiaries. Lawyer says he was a ‘man on a mission’ The lawyer’s explanations for his actions focused on his stress, mental health and emotional turmoil as he tried to manage his parents’ care in the context of a breakdown in a relationship with his sister. He said he had a “very close” and loving relationship with his parents, spoke of give and take, and money moving around as he tried to do his best to meet their needs. It’s alleged he made three payments from the family trust account some months after his mother’s death – one of $97,280, and two of $100,000. A further payment was made about a month later, of $34,736. The standards committee’s case includes that the first two payments involved the man breaking a term deposit, contrary to the financial strategy outlined in minutes of an earlier trust meeting. The lawyer said at that stage he was acting without consulting the strategy, as there was a “significant asset at risk” that the family had invested in. He said he was a “man on a mission” operating in a day-to-day “pragmatic way”, trying to do his best. McMullan questioned this assertion, clarifying with the lawyer that the property he was referring to was the lawyer’s property, not owned by a family trust, and protecting it did not protect the financial interests of the other beneficiary, his sister. The lawyer said there were still sufficient assets for his sister, which she could take in “due course” but accepted he hadn’t been “thinking straight”. The lawyer claimed that because he didn’t practise in the area of estate law, he had no more knowledge of his obligations as a trustee than a lay person. He said his emotional state and grief at the time meant he hadn’t been able to carry out his duties properly. At one point, he said he had not read the trust deed when he was appointed as a trustee. He later clarified he “must have” read it, but didn’t specifically recall reading it. McMullan pushed back on his claim that he was lacking in the skills to carry out his trustee obligations. “You’re a lawyer,” McMullan said, before suggesting the lawyer held himself out as being involved in large-scale “criminal and civil litigation cases”. The lawyer said his practice involved complex matters, but his role was more in the “co-ordination and strategy” – enlisting other experts and practitioners to carry o...
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