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Lawyers Complaints Service: Murray Withers loses strike off appeal

28 April 2014

Murray Ian Withers’s appeal against strike off has been dismissed by Justices Panckhurst and Mander in the High Court [2014] NZHC 611.

Mr Withers was struck off by the New Zealand Lawyers and Conveyancers Disciplinary Tribunal in July 2013 [2013] NZLCDT 39 (see LawTalk 835, 14 February 2014). In summary, the tribunal found that Mr Withers:

  • had deliberately failed to perform an undertaking he had given, and had not taken any timely steps to remedy his failure when pressed on the matter by the recipient of the undertaking;
  • had acted for more than one party in the same transaction without the prior informed consent of all parties, and without disclosing an interest he had in the transaction concerned and how that affected his ability to give independent advice; and
  • had remained engaged and advised on some further matters arising from the transaction referred to in b (above), notwithstanding his inability to provide independent advice on such further matters.

There were three aspects to the appellant’s appeal against penalty, Justices Panckhurst and Mander noted.

“The first was that a suspension from practice, coupled with requirements that Mr Withers undertake rehabilitative steps, was the appropriate sanction. Counsel also submitted that the tribunal gave undue weight to Mr Withers’ disciplinary history, and insufficient weight to some positive personal factors.”

Mr Withers’ conduct comprised an “egregious breach” of the fiduciary obligations owed to his clients, the judgment said.

“A solicitor is subject to fiduciary duties to act in the best interests of his clients; and to act with fairness and openness. Fundamental obligations of the relationship are that the solicitor must not have a personal interest in the transaction, act for two parties in the same transaction without informed consent or fail to disclose information which materially relates to the client’s affairs.

“Here, Mr Withers breached each of these obligations.”

His personal interest was not disclosed in a fair and open manner. Email replies sent to one party, in which he referred to suing a person involved with the other party, “put the existence of a deliberate deception beyond doubt. This was the antithesis of what was required on the part of a solicitor,” the judgment said.

The finding of a deliberate deception led naturally to acceptance of the first party’s evidence that she was not advised to obtain independent legal advice. The fact that Mr Withers had successfully concealed his interest meant an explanation of the need to obtain independent advice would have made no sense.

“In any event, as the tribunal found, the transactional situation quickly became such that even with informed consent Mr Withers could not justify acting for both parties. Mr Withers’ position became and remained untenable.

“Yet, for over two years Mr Withers continued to act for both parties in a deteriorating situation. It was not until early 2010 that vendor clients learned of the true position, and received independent advice. Even then there was significant delay before liability to pay the outstanding portion of the purchase price was admitted and payment made.

“This is a particular aggravating feature of the misconduct. It persisted over a long period. There were twists and turns, time for reflection and time to seek advice – had there been an inclination to do so. We see this as highly relevant to the penalty decision.”

The breach of the undertaking was also serious misconduct. However the judgment said the court differed from the assessment reached by the tribunal in that it doubted that the failure to honour the undertaking given to the Christchurch City Council was deliberate.

“The probability is that the financial circumstances in which [a company of which Mr Withers was a director and shareholder] found itself a short time later gave rise to the breach.

“Here, the breach was aggravated by Mr Withers’ failure to contact the [Christchurch City] Council when payment fell due, and also by the subsequent prevarication and delay. In commerce it is essential that people can have total confidence in the worth of solicitors’ undertakings. Any failure erodes that confidence, and is detrimental to the legal profession as a whole.

“Viewed in the round, the seriousness of the misconduct is decisive,” the judgment said.

“The tribunal considered that the likely success of the rehabilitative proposals hinged on Mr Withers’ willingness to seek and accept the advice of others. It was not satisfied he would do this and concluded that protection of the public interest required that an order for striking off be made.

“We are driven to a similar conclusion. Mr Withers’ disciplinary history and this further misconduct reflect a lack of integrity and judg[e]ment. These are essential qualities of any practitioner. The point has been reached where protection must prevail at the expense of the possibility of rehabilitation.

“We do not accept that Mr Withers’ disciplinary history was accorded undue weight. He is a mature practitioner and has been in practice for 38 years. His disciplinary record is of significant concern, particularly the previous breaches of an undertaking and an instruction in favour of a familial interest. This history, when added to the serious misconduct, rendered the outcome inevitable.

“Nor do we accept that the tribunal’s passing reference to the professional and community support received by Mr Withers means that these aspects were given insufficient weight.

“Regrettably, in some cases misconduct will trump positive personal considerations, particularly where the misconduct is of a nature to indicate a flaw of character. Sadly, that was the situation in this instance,” Justices Panckhurst and Mander said.

Last updated on the 17th March 2016