Wellington lawyer Quentin Stobart Haines handed in his practising certificate when charged with offences under the Prostitution Reform Act. Any chance of later returning to law practice hinges on the outcome of Law Society disciplinary charges with the High Court now ruling Haines improperly entered into loan transactions with clients and failed to properly account for client money.
The High Court was told Haines failed to properly account for $140,000 received from a client identified as C. This was supposedly an advance for legal work yet to be done and prepayment for a report required from an accounting firm needed as evidence in potential litigation. Contrary to Law Society rules, this money was paid into Haines personal bank account. He used this money for his own benefit. Haines then employer reimbursed C, claiming on insurance for Haines’ misappropriation.
Haines claimed some of this money was a private loan from C to him. The court was told that even if it was a loan it has not been repaid. Haines said the insurance payout excuses any repayment.
The High Court was also told of convoluted financing arrangements involving a client identified as M. Client M and his family trust agreed to guarantee Haines borrowings totalling $575,000 from two finance companies. A side deal saw Haines agreeing to advance monies to M and in turn M agreeing to meet scheduled interest payment on Haines loans should Haines be unable to make payment.
These unusual loan arrangements ran parallel with Haines on a retainer agreeing to undertake legal work for M, with again another side deal; invoices were supposed to be delivered to M monthly, but any demand for payment would be deferred to a later date mutually agreed.
This date arrived two years later when M faced bankruptcy and Haines produced a one million dollar invoice for deferred fees, what the High Court was to later rule was a sham arrangement intended to boost creditor votes in Haines favour and designed to vote through an Insolvency Act proposal to avert M’s bankruptcy.
This ploy failed. The High Court ruled Haines behaviour was an attempt to pervert or defeat the course of justice. Haines was later ruled entitled to a lesser sum for arrears of fees: $525,000. Invoicing a higher fee was professional misconduct, the High Court ruled.
The court also ruled Haines breached professional standards of independence once the lawyer/client relationship between Haines and M expanded to their subsequent convoluted financial arrangement without M then receiving independent advice.
Haines faces potential penalties: censure, a period of suspension (backdated or not), or prohibition on future practise as a lawyer (striking off).
Haines v. National Standards Cttee No.1 – High Court (30.10.23)
23.185