Neil Sands
A solicitor has been struck off for misappropriating around $200,000 of her clients’ funds to help escape a violent ex-husband whom she feared was hatching plans to murder her two young children.
The Lawyers & Conveyancers Disciplinary Tribunal said it imposed the penalty “with some mixed feelings” and took the unusual step of granting name suppression to the women, referred to only as “Ms M”.
In a decision handed down on June 18 but published only this week, the tribunal provided extensive background on Ms M’s circumstances, saying she wanted her story told “so that others do not find themselves in a similar situation”.
“The [strike-off] order was inevitable, as was readily recognised by Ms M herself, for she had misappropriated client funds and all lawyers know those to be sacrosanct. However, the story is not as simple as that,” it said.
Ms M was a lawyer of 25 years’ standing with her own law firm, who carried out property transactions involving advance payments to a trust account.
She made a series of unauthorised transactions from the trust account to her business accounts between March 2023 and November 2023, which she said began as an administrative error but “snowballed” into deliberate misappropriation.
Fearful, overwhelmed
The tribunal said Ms M used the funds, which totalled somewhere between $173,000 and $203,000, to relocate with her two children from one New Zealand city to another, putting it towards expenses such as accommodation, a car and school fees.
It said a statement from Ms M described how she was fleeing a violent relationship with an ex-husband, placing her under “extreme psychological pressure”.
“I lived through court hearings, police interventions, breached protection orders and constant sleepless nights,” she said.
“There were many nights when I barricaded my children (then only five and seven years old) and myself inside a bedroom, pushing furniture against the door, hearing him outside, praying we would be safe.”
It said Ms M felt “a constant and credible fear of danger” from her ex-husband, which the Family Court acknowledged when it approved her application to relocate.
“Ms M described one situation where there was a strong suggestion of her husband having intended to carry out a murder-suicide with the two children whom he had uplifted, and that incident led to a short period of his being committed under the Mental Health Act.”
A psychologist, Dr X, told the tribunal that, in his opinion, Ms M was suffering from post-traumatic stress disorder, moderate depression, severe anxiety and stress. He said this was caused by her abusive marriage and likely led to impaired cognitive functioning.
In her statement, Ms M said this did not excuse her conduct, but she did not recognise at the time that she was overwhelmed by her personal circumstances.
“In hindsight, I should have shut my law firm down when I couldn’t cope. But I loved being a lawyer. In all the darkness, it was the one thing I was holding on to that made me still feel like me. And now that’s gone.”
Support available
The tribunal said: “Ms M was concerned that other practitioners not repeat her mistake, particularly given the number of resources now available to practitioners to support them during such difficult times.”
It said suppressing Ms M’s identity was justified because her Family Court proceedings were ongoing and the danger to her and her children was “absolutely realistic”.
It also said Ms M was “still not functioning at her best”, concluding: “the private interests in this case outweigh the public interest in knowing who this practitioner is.”
The tribunal said the New Zealand Law Society Fidelity Fund had paid $255,762.10 so far to cover claims arising from the case. It said Ms M had obtained a court order for the sale of her former matrimonial house and intended to repay the Fidelity Fund when it eventually went through.
The tribunal said Ms M accepted she had abused her position of trust by using client funds for personal purposes and did not oppose being struck off.
“At this level and given the eight-month period over which funds were misused, Ms M and her counsel were realistic to accept that strike-off was the only proportionate outcome” it said.
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