Lawyer banned after unauthorised trust fund transfer

An Auckland lawyer has ended a 41-year career having been found guilty of professional misconduct after transferring $174,000 from a couple's trust fund without the wife's permission then attempting to cover up his actions.

John Hardwick Sanders was prohibited from practising as a solicitor by himself but retired before his case was heard last month.

Sanders moved the money from Auckland couple Richard and Suman Prasad's account to that of Mr Prasad's mother, to help her buy a new house in November 2006.

But he did not obtain Suman Prasad's permission first, breaching the Law Practitioners Act and the Solicitors Trust Account Rules.

In what the NZ Lawyers and Conveyancers Disciplinary Tribunal called a "muddled and unprofessional attempt to mislead others", Sanders was also found guilty of trying to cover up his actions by retrospectively changing the dates of documents outlining Mr Prasad's consent for the transaction.

Through a lawyer, Mr Sanders argued that he was entitled to rely on the implied authority of Mr Prasad to give instructions on behalf of himself and his wife.

He argued that a joint account of two clients could be treated as a single client and the permission of one joint owner was sufficient.

In regards to the dates on the documents he provided, Mr Sanders claimed he had made an "innocent mistake".

But the tribunal did not accept this.

"A simple telephone call by Mr Sanders to Mrs Prasad could have resolved the issue and avoided the situation in which he now finds himself," the tribunal's decision states.

"The act and the rules are intended to protect money held on trust, and for that reason require the money to be held and dealt with only as directed by those on behalf the money is held.

"There was no authority from Mrs Prasad, and Mr Prasad appears either to be mistaken about that or to have deliberately misled Mr Sanders about Mrs Prasad's agreement to the funds being transferred."

The tribunal censured Sanders' failure to comply with regulatory requirements. It also ordered Sanders to pay $11,847 in costs towards the tribunal hearing's costs to the Law Society.

Mrs Prasad, who is still in the process of divorcing her husband of 22 years, said she was still struggling with the deceit.

"I don't trust my ex-husband. I don't trust the lawyer any more. To be honest I don't trust people any more," she said. "We worked so hard, we built so many properties together and in the end this has happened. It's so sad. Never trust husbands. Never ever."