Auckland lawyer slapped with suspension for deceitful conduct

The lawyer was also charged with misappropriating client funds

Auckland lawyer slapped with suspension for deceitful conduct

The Lawyers and Conveyancers Disciplinary Tribunal has slapped Auckland lawyer Aaron Rodney Nicholls with an interim suspension from practice, reported the New Zealand Law Society.

The suspension follows the Standards Committee's filing of charges against Nicholls, which claimed that the lawyer misappropriated client funds and displayed deceitful conduct.

Nicholls’ case was brought to the committee after a complaint from his client, Mrs V. In May 2023, Mrs V and her husband transferred the proceeds from the sale of their family home into Nicholls’ trust account. Most of the funds ($498,897.25) would be placed in an interest-bearing deposit (IBD), and on occasion, Nicholls would be authorised to make payments to a building contractor on the couple’s behalf.

By June 2023, discrepancies between the account balance Nicholls reported to his clients ($497,339.12) and the actual funds available ($413,714.12) surfaced. In October 2023, Mrs V and her husband authorised Nicholls to pay $170,820 to the contractor, and while the lawyer completed the transaction, it was found that the funds did not come from the IBD but from other client funds in his trust account.

From December 2023 to this January, Nicholls' clients requested additional payments. With all authorised payments taken into account, by 26 January the expected balance should have been $328,077.50 prior to interest, taxes or fees. However, as of 31 January, the IBD account held only $4,831.88.

The Standards Committee claimed that Nicholls made nine unauthorised withdrawals from the account of Mrs V and her husband between May 2023 and 17 February this year.

Nicholls’ clients tried to approach the lawyer, but their attempts were ignored, On 14 February, Nicholls provided a client trust statement to the new solicitor for Mrs V and her husband; the statement differed significantly from the statement provided to Standards Committee investigators by the bank. The expected balance was approximately $328,000, but bank records revealed a balance of just $4,812.62.

Thus, the committee claimed that the client trust statement was fabricated by Nicholls.

The Law Society stepped in in March, transferring $121,940.75 from the firm’s trust account to a trust account held by the Law Society. When questioned by Standards Committee investigators, Nicholls was unable to provide a satisfactory explanation for the discrepancies in fund movements; moreover, he could not locate the paper file for Mrs V and her husband. Responding to the application for interim suspension, Nicholls stated he was too unwell and lacked sufficient time to fully address the allegations. He did not offer an explanation concerning the client funds issue to the tribunal.

The tribunal determined that the criteria for issuing an interim suspension order had been met and suspended Nicholls accordingly from practice pending “further order or determination and disposition of the charges”, as per a statement published by the Law Society. Nicholls was permitted to apply for the lifting of the interim order.

The tribunal said that it expected applications for the suspension’s revocation to potentially follow “a satisfactory explanation for the movement of funds in the unorthodox manner as has been described, and the alleged difference between the client trust statement provided by Mr Nicholls to the clients and the bank statement obtained from the bank”.

Nicholls’ suspension took effect on 17 April.

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