The Lawyers and Conveyancers Disciplinary Tribunal (the Tribunal) has suspended Auckland lawyer Aaron Rodney Nicholls from practice on an interim basis from 17 April 2024. The Standards Committee sought an interim suspension order in respect of Mr Nicholls after laying charges which alleged misappropriation of client funds and deceitful conduct.
The matter originated from a complaint by Mrs V. In May 2023, Mrs V and her husband had the proceeds from the sale of the family home deposited into Mr Nicholl’s trust account. The bulk of those funds ($498,897.25) was to be placed on interest bearing deposit (IBD) and from time to time, the clients intended to authorise Mr Nicholls to make payments to a building contractor on their behalf.
As early as June 2023, there was a discrepancy between what Mr Nicholls advised his clients was the balance ($497,339.12) and the actual amount ($413,714.12). In October 2023, Mr Nicholls’ clients authorised payment of $170,820 to be paid to their contractor. The amount was paid by Mr Nicholls, however; it appears the source of payment was not the IBD account but rather from other client funds held in Mr Nicholls’ trust account.
Between December and late January, Mr Nicholls’ clients made several requests for further payments. Having regard to the authorised payments, the balance of funds held as of 26 January 2024 should have been $328,077.50 before any interest, taxes or fees were accounted for. As of 31 January 2024, the bank records showed that the IBD account had a balance of $4,831.88. The Standards Committee allege that between May 2023 and 17 February 2024, Mr Nicholls made nine unauthorised withdrawals from the client’s account.
Having ignored several approaches by his clients, Mr Nicholls on 14 February 2024, sent their new solicitor a client trust statement that conflicted in significant and material ways to the statement provided to Standards Committee investigators by the bank. In particular, instead of the expected balance in the region of $328,000, the bank records showed a remaining balance of $4,812.62. The Standards Committee allege that the client trust statement was false and was created by Mr Nicholls.
In March, the Law Society intervened in the firm’s trust account and transferred the balance to a trust account in the name of the Law Society. The total balance was $121,940.75.When approached by Standards Committee investigators, Mr Nicholls was unable to answer questions about the movement of funds satisfactorily, nor was he able to locate the paper file for his former clients. In his response to the application for interim suspension, Mr Nicholls stated that he was too unwell to answer the allegations fully and had insufficient time. No explanation was put before the Tribunal concerning the client funds. The Tribunal noted that the Committee’s investigation is ongoing.
The Tribunal therefore found the high standard required for the granting of an order of interim suspension had been reached and it was necessary and desirable to make the order suspending Mr Nicholls from practice on an interim basis pending further order or determination and disposition of the charges. Mr Nicholls can apply for discharge of the interim order. The Tribunal noted that it would anticipate any application to revoke the interim suspension might 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.”
If you are a client of Mr Nicholls and would like to speak to someone about funds held in his trust account, please contact: