Kenneth Yee has been struck off for misuse of client funds by the New Zealand Lawyers and Conveyancers Disciplinary Tribunal.
In  NZLCDT 22, the Tribunal noted that Mr Yee had misused the client funds in two ways.
“First he diverted funds to companies associated with him, accounting to the clients as if charging fees,” the Tribunal said.
“However the fees were never actually paid to the firm. This behaviour occurred over a period of approximately five years from late 2008 or early 2009 until 2014.” Mr Yee took a total of $95,706.41 in this manner, thus depriving the firm of fees.
“The second method by which funds were misused, was by his taking funds from the trust account into one of his companies as a ‘loan’. The funds were then repaid either to the trust account or directly to the client.
“Funds used in this manner amounted to $505,155.17 and have been fully repaid to the clients. When discovered, Mr Yee provided post facto authorities for some of the ‘loans’.
“However clearly there was a breach of his duty of fidelity to the client, a conflict of interest that would appear to be irremediable, and a breach of Rule 5.2 of the [Lawyers and Conveyancers Act] (Lawyers: Conduct and Client Care) Rules 2008, and of Regulation 7 of the Lawyers and Conveyancers Act (Trust Account) Regulations 2008,” the Tribunal said.
In the course of the hearing the Tribunal was provided two letters from Mr Yee containing his clear admissions, and also setting out some of the background to the offending.
“The practitioner had experienced extreme financial stress after he was sued for very large sums of money as a trustee of a family trust for whom the firm acted,” the Tribunal said.
“He was sued in his personal capacity and over a period of years despite the firm attempting to put loans in place to repay the claimants and petitioners in his bankruptcy, by 2012 an adjudication of bankruptcy against the practitioner occurred.
“In his letter Mr Yee describes how he became seriously depressed and unwell, but accepts that his behaviour was unacceptable and wrong.
“All of the funds taken as loans were repaid to clients and Mr Yee expresses his wish, when he is discharged from bankruptcy to attempt to repay his former partners the diverted fees.”
Mr Yee did not take part in the Tribunal proceedings and chose not to appear. He did, however, take responsibility for his actions at a very early stage.
The Tribunal noted that Mr Yee practised for some 40 years without ever having incurred any prior disciplinary record. “He deserves considerable credit for this,” the Tribunal said.
“It is a sad task to strike off a practitioner with a lengthy and previously unblemished career in the legal profession.
“However, strike off is the only proportionate response to dishonesty and subterfuge on the part of a lawyer, particularly when this involves the misuse of funds held on behalf of clients.
“The solicitors trust account has long been regarded as ‘sacrosanct’. Dealing with its funds, as if using a personal bank, as did Mr Yee, is considered to be at the highest level of professional misconduct and culpability,” the Tribunal said.
The Tribunal ordered Mr Yee to pay 75% of the standards committee costs, being $5,978.57, and $1,504 Tribunal costs.