New Zealand Law Society - Misapplication of funds

Misapplication of funds

Published on 19 March 2021

The Lawyers and Conveyancers Disciplinary Tribunal, administered by the Ministry of Justice, has made an interim order to suspend Jesse Seang Ty Nguy from practice effective immediately until the disciplinary action being taken against him has concluded.

The Auckland Standards Committee No 2 made the application for suspension to the Tribunal due to Mr Nguy’s apparent misapplication of funds (more than $1.3m), failure to honour an undertaking in respect of those funds and a pattern of dishonest statements.

The funds in question related to a property purchase for one of Mr Nguy’s clients. Instead of settling the purchase, Mr Nguy applied the funds towards other purposes (including payment of debts to barristers and payments for renovation work on a property). No credible evidence was provided to show that any of these payments related to the client.

The vendor of the property made numerous attempts to settle the purchase with Mr Nguy. When this did not eventuate the vendor took legal action against Mr Nguy’s client for failure to settle.

The Tribunal found that Mr Nguy made multiple unauthorised payments from his trust account. These involved “deliberate actions which he covered by materially misleading the vendor’s solicitor for many months”.

In commenting on the nature of dealing with client funds, the Tribunal stated “It is a fundamental obligation on solicitors to be scrupulous in dealing with client funds. Mr Nguy’s conduct in this case has shown repeated breaches covered by associated dishonest representations. We are readily satisfied that it is in the interests of the public to suspend Mr Nguy from practice until the charges against him have been disposed of”.