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Prominent Maori lawyer Donna Hall has denied a conflict of interest over a central North Island land deal in which she allegedly acted for three of the trusts involved in the sale.
The Law Society's standards committee alleges Ms Hall acted for the vendor, purchaser and lender during the 2007 deal, without the consent of each party to represent the others.
The committee opened its case against Ms Hall before the Lawyers and Conveyancers Disciplinary Tribunal in Wellington today.
The tribunal is able to impose much harsher sanctions than the committee can, including being struck off the roll, suspension, or fines of up to $30,000.
The hearing follows a complaint from a shareholder of the Tauhara Middle 15 Trust, which in 2007 bought the Tauhara North block near Taupo from Landcorp for $5 million jointly with another trust.
The complainant alleged a conflict because Ms Hall acted for both Tauhara and the Hikuwai Hapu Lands Trust, which facilitated the transaction.
She also acted for Tauhara Middle 4A2A Trust, which provided an unsecured loan to Tauhara Middle 15 to help fund its $1m contribution to the deal.
Law Society standards committee lawyer Gary Turkington told the tribunal today that Ms Hall failed to advise each party of the areas of conflict or potential conflict, and to advise the purchaser and lender that each should take independent advice.
Ms Hall was in a conflicted position during the on-selling of the land because she was also acting for the purchasing trust, he said.
In authorising the sale, the Maori Land Court gave its approval for the execution of a mortgage, but signalled it was not approving the purchase until five questions had been answered.
Mr Turkington said Ms Hall by-passed the questions and had put Hikuwai's trustees first.
Ms Hall's lawyer, Helen Cull, said there was no conflict because her client was not acting on the land deal itself.
Rather, she was acting on behalf of the Tauhara Middle 15 in its Maori Land Court proceedings, and to help remove a trustee who was opposed to the bank loan to secure the deal.
Ms Cull said the trust had approached Ms Hall to act on its behalf in the land deal, but she declined and instructed a barrister to act for the trust.
It was the barrister's duty to inform the trustees of a potential conflict, and any conflict arose from the trusts sharing trustees, she said.
Three people involved in the deal were trustees on all three trusts, while a further three were trustees on the two Tauhara trusts.
Ms Cull said there was evidence the trusts had shared mutual interests in purchasing the land, which had significant development potential for Maori, and the trusts shared beneficiaries.
"It is only a professional conflict if there are two distinctive interests that are conflicting and we don't accept that,'' she said.
Tribunal member Susan Hughes QC questioned whether the trustees were aware that Ms Hall stood to lose $300,000 in legal fees from the Hikuwai trust if the deal did not got through.
Ms Cull said she would need to take instructions from her client on that matter, and would get back to the tribunal tomorrow.
The hearing is expected to last three days.
- APNZ
By Hana Garrett-Walker and Matthew Backhouse | Email Hana
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