New Zealand Law Society - Lawyer struck off for tax evasion and misusing trust account funds

Lawyer struck off for tax evasion and misusing trust account funds

A conviction for tax evasion and a finding of misconduct for misusing client funds has led to a strike off for former Hamilton lawyer Wayne Revell. The Lawyers and Conveyancers Disciplinary Tribunal (the Tribunal) held that both charges were grave, implied a gross lack of ethical behaviour and that Mr Revell had not confronted the character defects which underpinned the charges. The Tribunal considered that public confidence required a strong response and thus made an order for strike off.

Mr Revell faced two charges. The first charge was in relation to his conviction for an offence punishable by imprisonment which reflected on his fitness to practice and/or tended to bring the profession into disrepute. Mr Revell had pleaded guilty to tax evasion over a ten-year period from 2007/8 to 2017. Mr Revell failed to pay tax in relation to money earned both through his partnership and outside of the partnership. Mr Revell received multiple warnings from Inland Revenue from 2010 onwards but failed to respond and took the view that his former partner was responsible for paying his personal tax.

The second charge concerned thirteen irregular transfers from his trust account to his practice account between 19 June and 19 August 2019. Some of these were reversed but the ledger notations were misleading. Mr Revell was required to keep $12,000 in his trust account pending completion of certain work, but he allowed the account balance to drop below that on several occasions. Mr Revell gave evidence that these transfers amounted to a series of inadvertent errors and denied he deliberately used the money to prop up his practice account.

Mr Revell accepted his actions amounted to reckless misconduct, but the Tribunal found that his actions amounted to willful misconduct. The Tribunal noted that an action is willful where a lawyer knows something is a contravention of a relevant Act or regulation but nevertheless intentionally does that thing. Mr Revell was aware that trust account money must be held for clients but nevertheless intentionally transferred trust monies into his practice account and spent it on personal items. The Tribunal did not accept Mr Revell’s evidence that he did not know he was using trust account money at the time and found that he breached a number of provisions in the Lawyers and Conveyancers Act 2006 and the Lawyers and Conveyancers Act (Trust Account) Regulations 2008.

In considering the appropriate penalty, the Tribunal noted that the duration of the tax offending was shocking and that Mr Revell’s response demonstrated a high degree of self-deception. A strong response was required as a deterrent to others and as a step towards restoring public confidence in the probity of lawyers. The misuse of trust funds occurred partly in stressed circumstances, with Mr Revell’s former law partner being sentenced in August 2019. This charge involved dishonesty and a failure to protect the property of clients to whom he owed a fiduciary duty. The nature and gravity of the charges meant that strike off was the primary option in terms of penalty unless Mr Revell could show he could be a fit and proper person to practise in the foreseeable future.

The Tribunal noted that Mr Revell had shown a lack of insight into his conduct and that there were still signs that he remained self-deceiving, minimised his culpability and lacked ethical rigour. Mr Revell’s submissions for the penalty hearing showed he still did not fully accept responsibility for misusing his trust account. The Tribunal considered these defects were ingrained and that there was a real risk Mr Revell could err again. Mr Revell’s suggestions in terms of protective measures that could allow him to practise again safely further demonstrated that he did not accept that he had engaged in deliberate wrongdoing. The Tribunal noted its approval that Mr Revell had begun counselling. However, overall, the Tribunal found that Mr Revell had not persuaded it that he had sufficient insight to fuel a rehabilitative response and that strike off was the appropriate outcome. In addition to being struck off, Mr Revell was ordered to pay the Standards Committee's and Tribunal’s costs.