Orewa lawyer Patrick James Kennelly has been censured and fined $20,000 by the New Zealand Lawyers and Conveyancers Disciplinary Tribunal after admitting that he breached an undertaking given to the Tribunal and also breached the Trust Account Regulations.

Mr Kennelly’s undertaking was that he would commit to moving to approved trust account software by 31 March 2018 and that he would undertake appropriate training. However, he resolved problems with the software he was using and decided it was not necessary to change. In spite of advice from the Law Society, Mr Kennelly did not apply to the Tribunal to be released from his undertaking.

The Tribunal found that the breach of the undertaking reached the threshold of misconduct. It said as an experienced practitioner he was fully aware of the obligation but chose to do nothing about it.

However, the Tribunal noted that Mr Kennelly had made a good effort in cleaning up his trust account under the supervision of an independent trust account consultant. It did not oppose him being released from his undertaking despite the fact that he should have sought release, and accordingly released him from it.

The Trust Account Regulation breaches occurred when Mr Kennelly deducted fees on two occasions without sending an invoice, failed to report to clients about funds held on trust and/or on IBD, and failed to reconcile the IBD account. He also breached the Conduct and Client Care Rules by failing to pay to his clients money held dormant for over 12 months in his trust account.

The Tribunal made a finding of unsatisfactory conduct in relation to these. In doing so it took into account the underlying background regarding Mr Kennelly’s trust accounting software, the acknowledged progress he had made in clearing outstanding matters, the improved operation of his trust account, and the fact that Mr Kennelly had taken full responsibility for the trust account.

In its censure the Tribunal said Mr Kennelly had escaped suspension, because of the progress he had made in respect of his trust account.

As well as a censure, it imposed a fine of $20,000, saying the substantial size was to reflect the seriousness with which it regarded Mr Kennelly’s actions in failing to adhere to his undertaking and failing to seek a release when his circumstances changed. Mr Kennelly was also required to pay total costs of $15,061.50. He must continue to employ the independent trust account consultant until 31 January 2021 and to pay all dormant balances.