Canterbury
barrister and solicitor Murray Ian Withers was disbarred from practice after
being found guilty of professional misconduct when he acted for both buyer and
seller in the subdivision of a property on Taylors Mistake Road,
Scarborough. His failure to disclose a
personal interest in the purchasing company amounted to a serious conflict of
interest.
Withers appealed
unsuccessfully to the High Court, arguing suspension from practice followed by
work under supervision was a more appropriate penalty.
The Scarborough sale
concerned over 8200 square metres of land which could be subdivided into
between three to eight lots. The court
was told a sale agreement was completed in late March 2007 at a price of $1.4
million between the SCK Family Trust as vendor with the potential purchaser
left open. Withers signed on behalf of a
named purchaser “or nominee”. The
required deposit of $200,000 was not paid.
Within days, Withers was attempting to renegotiate the contract,
supposedly on behalf of the named purchaser. After some discussions, the SCK Family Trust
agreed to receiving a reduced sum in cash by taking one of the proposed
sections valued at $400,000 in part payment with a further sum of $375,000 left
in on mortgage. They then learnt that
the nominated purchaser was now a development company called Clifden Holdings
Ltd. Unbeknown to them, Wither’s family
trust was part owner of Clifden. Withers
did not get their consent to his acting for both vendor and purchaser.
Evidence was given
that Withers failed to act in a professional manner: he did not disclose the
conflict of interest when the original contract was signed, he did not disclose
the conflict of interest when the contract was renegotiated and he did not
protect the SCK Family Trust in respect of the $375,000 left in - no loan
agreement was prepared, no mortgage was registered and no personal guarantees
were obtained from the directors/shareholders of Clifden as the borrower.
In addition to SCK
Family Trust’s complaint to the Law Society, Christchurch City Council also
laid a complaint. Council had agreed
that a $117,900 development contribution payable following the subdivision
could be delayed, after Withers promised that payment would be made from the
sale proceeds of lot six in the subdivision.
That personal undertaking was not honoured after lot six was sold.
Confirming that
Withers should be disbarred, the High Court said he had failed to act with
fairness and openness towards the SCK Family Trust. He deliberately deceived his client by
pretending to act as a go-between with the purchaser. He discouraged the Family Trust from getting
independent legal advice.
The High Court did not
consider a period of suspension and supervision would be an appropriate penalty
given Wither’s disciplinary record.
Evidence was given that Withers had been subject to Law Society
complaints in the past for sloppy conveyancing practice and for charging
excessive fees. In one instance he had
been ordered to reimburse a deceased estate $1500 after he contracted his son’s
touch rugby team to clean up a house prior to sale rather than engaging
professional house cleaners. The amount
paid to the rugby team was more than cleaners had quoted for the work
Withers
v. NZ Law Society – High Court (28.03.14)
14.013