Rohineet Sharma of Auckland has been struck off by the New Zealand Lawyers and Conveyancers Disciplinary Tribunal after he submitted a false solicitor’s certificate and filed a false discharge of mortgage certificate with Landonline.
In  NZLCDT 12, Mr Sharma admitted one charge of misconduct and the facts giving rise to that charge.
However, the lawyers standards committee that brought the charge to the Tribunal and Mr Sharma differed as to whether the misconduct was intentional or inadvertent.
The charge arose from Mr Sharma’s purchase of a commercial property in Auckland. To finance the purchase, a bank (bank A) required a first mortgage to be registered in its favour.
To facilitate this, and without authority, Mr Sharma discharged the mortgage to another bank (bank B) over his own residential property, submitted a false solicitor’s certificate to bank A and filed a false discharge of mortgage certificate with Landonline to effect the discharge of the mortgage to bank B.
Mr Sharma’s residential property was mortgaged to bank B for $2.5 million. Yet when Mr Sharma completed the relevant form for bank A, he disclosed borrowings from bank B as $400,000 only.
Mr Sharma’s explanation for this discrepancy, the Tribunal said, was that he did not have all the necessary detail when he started filling out the form and that a bank employee had instructed him to bring in all his bank statements and other documents and that the form could be completed later.
“But he signed the form with the $400,000 figure in it,” the Tribunal noted.
Mr Sharma said he concluded from his discussions with bank A that he would be able to access a confirmed stand-alone lending arrangement with the bank. On that basis he entered into an unconditional agreement to purchase the commercial property for $490,000 after an auction.
He then requested borrowings of $490,000 to meet the settlement date. Bank A said it required a first mortgage to be registered against Mr Sharma’s residential property before granting a loan for the commercial property.
Mr Sharma advised bank A that he would proceed, that he would pay off bank B from his own funds and that the only funds required from bank A would be $490,000 to buy the building.
Bank A instructed Sharma Legal, requiring a new first mortgage over his residential property, with a priority limit of $1,090,000 plus interest. To effect these conditions, Mr Sharma discharged his own mortgage to bank B without authority from the bank.
He achieved this by submitting a false solicitor’s certificate to bank A, filing a false discharge of mortgage with Landonline and registering the bank A mortgage with Landonline.
Mr Sharma told the Tribunal that “whilst he discharged the mortgage to [bank B] over the property without authority from [bank B] he did such inadvertently without intention to mislead or deceive”.
Mr Sharma also said that “whilst accepting that a solicitor’s certificate that was false was provided to [bank A] he did not believe that certificate to be false at the time that the certificate was given, and that whilst accepting that a false discharge of mortgage certificate was filed with Landonline he did not believe that such to be a false certificate at the time that it was given”.
When bank B discovered that the mortgage had been discharged without authority and that the borrowers had granted the Sharmas a new mortgage, it lodged a caveat over the title to the property. It subsequently cancelled the loan contracts and demanded full repayment of indebtedness to it.
Mr Sharma has repaid all amounts owing to bank B.
How did it happen?
“As a result of the practitioner’s actions, the Registrar-General of land suspended Mr Sharma’s ability to certify land title transactions until after the matter had been dealt with by the Tribunal,” the Tribunal said.
In oral evidence, Mr Sharma was asked a number of times to explain how this “error” could possibly have arisen. “He was simply unable to provide a rational explanation.
“In the end we were in agreement with the Registrar of Land who said the following when removing Mr Sharma’s e-dealing authority: ‘Mr Sharma maintains he made an error in discharging the mortgage. In the absence of a clear explanation as to how this came about it is difficult to understand how this could have occurred’.
“The Registrar, Mr Muir, went on to discuss the integrity of the land title system and its reliance upon lawyers diligently performing their obligations when certifying land title transactions.
“These comments confirm the seriousness of the misconduct insofar as it affects the reputation of the profession as a whole and the integrity of the land transfer system in this country.”
The Tribunal said it reached the view that the discharge of the mortgage was “deliberate and not an inadvertent error as described by the practitioner”.
That finding “elevates the misconduct to conduct involving dishonesty and is very serious misconduct indeed”.
“We accept the submission that the practitioner has failed on both counts in relation to this discharge of mortgage and that that behaviour is aggravated by reason of the fact that it was dealing for his personal benefit.”
Further aggravating features were three adverse disciplinary findings against Mr Sharma since 2008 – two findings of unsatisfactory conduct and one of conduct unbecoming.
As well as the strike off, the Tribunal ordered Mr Sharma to pay $15,097.89 standards committee costs and $5,384 Tribunal costs.