Lawyer's past censure hushed

Despite claiming to be medically unfit to work, Jonathan Mathias competed in the Motatapu Miners Trail Event. Photo / Supplied

A lawyer struck off for "egregious" breaches in his duty to Blue Chip investors had been censured before for similar offences.

The news of Jonathan Mathias' previous offending had been kept so well under wraps that not even those involved in a High Court case against him last year knew.

Mathias, a preferred provider of legal services to Blue Chip investors who earned most of his income from the work, has been struck off the roll of barristers and solicitors after admitting 13 misconduct charges.

In the Lawyers and Conveyancers Disciplinary Tribunal's June 21 decision it emerges that nine years earlier Mathias was prevented from practising as a solicitor on his own account.

There was also an order that even as an employee he was not to play a part in the administration of any firm's trust account.

"What is particularly relevant is that a number of the defaults which feature in the present charges also featured when he was charged in 2001," the latest tribunal decision says.

The restrictions on Mathias were removed in 2005 when the Auckland District Law Society did not oppose the move. However the full written reasons for the original censure were never put before the 2005 tribunal.

"We make the comment that in future such applications will undoubtedly need to be carefully scrutinised by the [Law] Society before there is agreement ... to a practitioner applying to recommence practice," the 2010 decision says.

The 2001 tribunal recommended Mathias' name be published, but this didn't happen. Then, because of an error, the 2005 tribunal recommended against publishing the name.

Paul Dale, the barrister who successfully brought a High Court case against Mathias on behalf of Blue Chip investors Bruce and Judy Bartle, said the June 21 decision was the first he had heard of his past.

"I have a client whose lawyer was Mathias during the relevant period. She was staggered when I told her."

Dale said about 150 Blue Chip investors had had Mathias recommended to them who may have claims against him.

Mathias was adjudged bankrupt in October last year and told the tribunal he lived on a modest medical disability insurance. He is said to be medically unfit to work. However earlier this year he was photographed competing in the Motatapu Miners Trail Event near Arrowtown.

The disciplinary tribunal said Mathias' clients had suffered significant financial hardship as a result of his conduct.

He was "utterly unsuited to practising as a lawyer" and self-interest and greed were motivating factors behind his actions. "The breaches of his obligations to his clients and his colleagues became more egregious as time went on."

The charges admitted by Mathias included:

* Acting when he had a conflict of interest;

* Not acting as an independent legal adviser;

* Charging for work that was not done;

* Deducting money from funds held in trust without authority;

* Using clients' funds;

* Allowing his trust account to be overdrawn five times;

* Misleading clients about a transaction, and

* Using his trust account for personal transactions.

He has been ordered to pay $22,000 in costs.

A New Zealand Law Society spokesman said current legislation provided a wider range of options for managing the complaints process. Mathias had no comment to make when contacted at his Wanaka home.

Couple misled

Whangarei Blue Chip investor Judy Bartle is shocked to hear of lawyer Jonathan Mathias' past.

In 2006, Blue Chip recommended Mathias to Judy and husband Bruce instead of their regular lawyer, because he had done numerous Blue Chip agreements and "knew exactly the ropes".

So the Bartles, whose only income is the pension, entered a joint venture agreement which involved them borrowing $630,000 - more than their Amber Dr home was worth.

They were led to believe they were only borrowing $137,000 and the rest would be taken care of by Blue Chip, Judy says.

The Appeal Court has ruled that the mortgages the Bartles were left with were "oppressive". Earlier the High Court upheld their claim against Mathias. It said Mathias conveyed a "very misleading impression".