New Zealand Law Society - Wellington lawyer struck off for misusing client funds

Wellington lawyer struck off for misusing client funds

Taking control of a vulnerable client’s bank account and using the money as if it was his own has led to a finding of misconduct and a strike off for Wellington lawyer Alwyn O’Connor. Mr O’Connor was also found guilty of negligence with regard to his work on an employment matter. The New Zealand Lawyers and Conveyancers Disciplinary Tribunal noted that Mr O’Connor had a criminal history and had only been given a certificate of character after “lengthy and careful consideration”. This background, combined with the serious nature of the conduct, meant that strike off was the only penalty which the Tribunal considered would adequately protect the public and maintain the standards of the profession. Mr O’Connor was also ordered to pay compensation and costs.

The misconduct charge involved Mr O’Connor acting for a vulnerable client, Mr C, on a pro bono basis.  Mr O’Connor accepted that he erred in blurring his professional role with his alleged friendship with Mr C. While Mr C was in prison, Mr O’Connor asked him for a loan for an undefined amount. Mr C did not receive any independent advice on the loan. Mr O’Connor then used Mr C’s’ bank account as if it was his own. Mr O’Connor transferred $156,375.41 to his own account and repaid $155,950.00. He spent a further $22,251.39 of Mr C’s funds using an Eftpos card, which was never repaid. Mr O’Connor failed to provide any form of accounting to Mr C and commented in evidence that Mr C could work it out by looking at the bank statements. When the matter was being investigated by the Standards Committee, Mr O’Connor refused to provide complete bank records to the Investigator appointed by the Committee. Overall, the Tribunal found that Mr O’Connor was not a credible witness and that he was “evasive, selective in recall, obstructive and obfuscating”.

The negligence charge involved Mr O’Connor acting for Mr A whom he had previously represented and had struck up a friendship with. Mr A’s employer offered voluntary severance to all employees subject to a strict timeframe. Mr A was interested in the offer and spoke to Mr O’Connor about the matter. Mr O’Connor agreed to act for Mr A, but “left his role loosely situated within a casual, friendly atmosphere”. Mr O’Connor took the view that the employer was seeking a cheaper form of redundancy and engaged in a risky strategy which led him to treat deadlines as unimportant. Mr A ultimately decided to accept the voluntary severance, but this was declined by his employer as he had missed the deadline (which Mr O’Connor had told him not to worry about). The Tribunal found that Mr O’Connor failed to understand Mr A’s dilemma, arm him with clear advice and encourage him to make a decision within the required timeframe. The Tribunal described him as “both negligent and incompetent in the laxity of his attention to Mr [A’s] needs”. 

After the Tribunal made its findings on liability, it suspended Mr O’Connor on an interim basis, having regard to the interests of the public as it considered that he was not a fit and proper person to practise.

In determining the appropriate penalty, the Tribunal explained that Mr O’Connor had only been given a certificate of character in 2014 after “lengthy and careful consideration” by the Practice Approval Committee (PAC) of the New Zealand Law Society due to his previous convictions for dishonest offending and assaults on a child. The Tribunal referred to the decision as “a compassionate one”, which gave Mr O’Connor “a second chance at his life, the opportunity to prove that he had reformed, and to redeem himself by service to others”. The Tribunal noted that PAC was very heavily influenced by the support Mr O’Connor had from “very senior and respected members of the profession”, the fact Mr O’Connor would be supervised by an employer who had “complete confidence” that Mr O’Connor was rehabilitated and Mr O’Connor’s own assurances that he would be “the cleanest most professional lawyer”.

The Tribunal noted that strike off will be the starting point in any case where there is serious misconduct involving the misuse of client funds and lack of accounting. In terms of aggravating factors, the Tribunal noted that Mr O’Connor’s previous convictions were relevant as they demonstrated an unprincipled use of other people’s money and a breach of trust, which were features also present in the misconduct charge. The Tribunal also noted that Mr O’Connor had failed to disclose two bankruptcies when applying for a certificate of character and that these had only been revealed in 2018 when Mr O’Connor applied to practise on his own account (as a confidential objection was made when his name was advertised). The Tribunal considered that his failure to disclose these was “inconsistent with the essential attributes of honesty, trustworthiness and integrity that are expected of practitioners”.

The Tribunal also referred to Mr O’Connor’s non-compliance with the disciplinary process, including his repeated breaches of directions for filing evidence, and noted that his “disregard for the disciplinary processes of his professional body gives little hope of rehabilitation”. The Tribunal considered that Mr O’Connor’s decision to lie under oath to the Tribunal was an aggravating factor.   Other aggravating features included Mr O’Connor’s failure to comprehend the seriousness of his actions, Mr O’Connor’s previous disciplinary history (he had one previous finding of unsatisfactory conduct) and the length of time over which the conduct occurred (being almost two years). The Tribunal considered that Mr O’Connor’s commitment to pro bono attendances for people who might not otherwise receive legal assistance was a mitigating feature, along with his other community service.

In reaching its conclusion on penalty, the Tribunal held that it would not be fulfilling its statutory obligations to protect the public and maintain the standards of the profession if it were to impose any sanction that allowed Mr O’Connor to remain in practice. The Tribunal noted this was a sanction of last resort, but the nature of the conduct and the track record of the practitioner suggested this point had been reached. The Tribunal held it could not take the risk of further exposing this practitioner to the public and that he was not capable, at this stage, of the level of rehabilitation necessary for him to be trustworthy in the role of a lawyer. Accordingly, Mr O’Connor was struck off, ordered to pay $25,000 in compensation to Mr C and ordered to pay costs.

Mr O’Connor has filed a notice of appeal against the Tribunal’s decision on liability and penalty.