New Zealand Law Society - Former lawyer censured and fined

Former lawyer censured and fined

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Former lawyer Murray Withers has been censured and fined $3,000 for a series of breaches relating to the administration of an estate.

The lawyers standards committee dealing with the matter also ordered Mr Withers to reduce the account for estate administration by $3,000 plus GST and to make two refunds ‒ one of $3,000 plus GST and one of $1,500 plus GST ‒ to the estate administrator.

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).

Mr Withers acted in the estate of a man who died intestate in the spring of September 2010.

The complaint against him related to three issues:

  • Fees charged in relation to the estate;
  • Failure to pay an outstanding account in the course of the estate administration; and
  • Mr Withers’ engagement of a non-commercial organisation to clean the deceased’s house, contrary to the family’s instructions.

Fees charged

The standards committee found there did not appear to be any basis for charging fees beyond the time spent on the matter.

The committee noted that in a letter to the estate administrator, Mr Withers stated that “our fees were just on $13,000.”

That, the committee said, was “palpably incorrect”. The total fees were $18,298. “Even if one excluded the contemporaneous sale fee, the estate administration fee was still $16,100 excluding disbursements. Mr Withers, in quoting $13,000, clearly also omits to refer to the GST on the charges.

Having regard to the time records, the time costing up to the date of the bill was $11,884, the committee noted.

A further reduction of $1,000, to $1,200 plus GST, must be made to provide a “fairer allowance for drafting time” (for drafting Letters of Administration, which had proved difficult).

“The committee is satisfied that the overcharging of the main account constitutes unsatisfactory conduct.

“In all the circumstances it is appropriate to reduce the bill of costs … from $14,000 to $11,000.”

Outstanding account

Mr Withers’ firm was aware of a debt owed to another law firm “from an early stage,” the committee noted.

A letter from that firm “is illuminating,” the committee said. It referred to significant correspondence to Mr Withers’ firm but a “dearth of responses” in reply.

It was clear that the debt was not paid and residuary estate funds were distributed to beneficiaries without the firm making provision for payment of the debt “in circumstances where Mr Withers and his firm had responsibility to address payment,” the committee said.

“The committee is of the view that the omission to pay the … account constitutes unsatisfactory conduct.”

House cleaning

Mr Withers had been expressly instructed to employ commercial cleaners to clean the deceased’s house.

Mr Withers had advised that commercial cleaners had estimated an amount between $1,500 and $2,000.

Instead, Mr Withers paid an organisation with which he was associated with to clean the house as a fund-raiser $2,500. Twice in correspondence, Mr Withers’ firm expressly referred to an agreement to pay the organisation $1,000.

That “clearly constitutes unsatisfactory conduct,” the committee said. It directed Mr Withers to pay $1,500 compensation to the estate administrator ‒ being the difference between the stated payment of $1,000 and the $2,500 actually paid.

As well as the censure, fine and compensation, the committee ordered Mr Withers to pay $1,000 costs, and ordered publication of both the facts and Mr Withers’ name.

LCRO review

Mr Withers sought a review from the Legal Complaints Review Officer (LCRO). The LCRO noted that because of the time of filing the review, the only matter it had jurisdiction to consider was whether the committee’s direction to order name publication should be confirmed.

The LCRO confirmed name publication, stating that it was “necessary and desirable in the public interest”. The LCRO also directed that the organisation that conducted the cleaning should not be identified.

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