go astray

Law

When trust funds go astray

Western Samoa’s attorney-general finds out no one is above the law

By Alan Ah Mu

When Leaupepe Sanerivi Muliaumasealii was appointed West ern Samoa’s attorney-general in early 1991, his academic record inspired confidence. An LLB (Hons) and a Masters of Jurisprudence from Auck land University, an LIM from McGill University, Canada, and a Bachelor of Civil Law from Oxford were impress ive achievements, especially as no Samoan holds the latter degree.

In a low key manner, Leaupepe

bolstered that confidence by building a

reputation for hard work shown, for nstance, his discovery of some long standing legal anomalies, the passing of in amendment giving prosecutors the 'ight of appeal for the first time and guiding Polynesian Airlines in legal natters during the transfer of manage nent from Ansett.

During that time, few in Samoa were

iware that Leaupepe was being inves

igated by the New Zealand Law society’s disciplinary tribunal for ac ivities in the Auckland practice he ran fom 1982 to late 1990. Thus, when the >3-year-old was found guilty on four Targes of professional misconduct and vas struck off the NZ law register in

■arly May, there was wide-felt surprise.

“It came as a shock,” said a former

Auckland employee of Leaupepe’s.

He always emphasised ethics.”

“Oh, I was surprised,” said one awyer. “He’s a quiet, hardworking ;uy” who was “well respected in NZ”.

In a letter faxed to the tribunal, the ttorney-general admitted making un uthorised payments of SNZ 113,630 r om 13 clients’ money, failing to ccount for the withdrawal of

SNZ23OO from a client’s account, allowing his trust account to be overdrawn by 5NZ25,000 and failing to complete monthly audit returns of his business.

The offences occured from 1988 to late 1990, when he ceased to practise in Auckland, and left a shortfall of 5NZ91,302 in clients’ money.

Leaupepe heard of the tribunal’s decision from a NZ reporter and informed Prime Minister Tofilau Eti Alesana and the Western Samoa Law

Society the next morning.

Worried about the country’s repu tation, the Cabinet accepted the Attorney-General’s resignation, the Prime Minister told reporters, and within days, a replacement was found in Tupai Se Apa, then president of the

law society.

The matter however, doesn’t end there. NZ’s fraud squad may yet lay

criminal charges against Leaupepe

who might be required to answer them in NZ since there is an extradition treaty between that country and West ern Samoa. (He didn’t attend the tribunal hearing, saying his medical condition after a heart attack in 1991

prevented it).

And there is a real possibility the Western Samoa Law Society will strike him off it’s law register also. The society is awaiting official copies of the charges and decision from the NZ Law Society before considering such an action, but there is a school of thought that not striking off Leaupepe will set a dangerous precedent for others disbarred elsewhere turning up to practise in Samoa.

In an interview with the Samoa Observer newspaper, Leaupepe blamed

himself for his demise and said he had been too busy with other matters and had failed to “tidy everything up” in Auckland before leaving.

Sympathisers say office and money management was not one of Leaupepe’s strengths; that he had probably carelessly used clients’ money to pay for other clients’ fees and through bad management, failed to complete audit returns.

But even then, the episode raises questions about the protection of clients. A total of 5NZ65,111 in claims by Leaupepe’s former clients have been met by the NZ Law Society’s fidelity fund, set up for those whose funds had been mishandled by lawyers. (In this case some clients did not apply for compensation from the fund). Samoan lawyers in Samoa do not have a fidelity fund. Several said this was an indi cation of the level of honesty amongst them.

Trust funds hold clients’ money handed over for such purposes as

deposits in land purchases or paying

for lawyers’ initial court appearances and the interviewing of witnesses in a case.

Lawyers may only withdraw money from trust accounts after a client has agreed to the fees listed in the bill of costs. Thus the “trust account can never be overdrawn by even one sene because it’s not your money,” one

lawyer explained.

“And you can’t use the trust account to pay for another client’s fee.”

“It’s a plus for us that to date no client has accused a lawyer of misuse of trust funds.”

The hope is that one well-qualified

lawyer’s lapses will help ensure that

this continues.