A senior lawyer who was fined $275,000 after helping foreigners buy land in breach of overseas investment rules has now been found to have been shockingly negligent by a disciplinary body.
“His failure to inform himself in a new area of practice, and his failure to recognise warning signs, amount to a level of negligence that would shock members of the public,” the New Zealand Lawyers and Conveyancers Disciplinary Tribunal has said.
However, the tribunal found Auckland lawyer Andrew Jarvis’ actions in facilitating the deals did not amount to professional misconduct.
Jarvis says that his troubles arose from “unintentional errors of law” made years ago, and he has been chastened by the consequences.
The disciplinary proceedings against Jarvis related to his role in facilitating the sale of 271ha of sensitive forestry land in Gisborne and Auckland to foreign buyers in 2011 and 2014.
Under the Overseas Investment Act 2005, foreign entities or people who are not citizens or residents must have permission from the Overseas Investment Office to acquire certain types of land in New Zealand.
Jarvis acted for a wealthy British citizen, William Mitchell, and a German businessman, Marzio Keiling, who were both living in Singapore.
In 2011, Mitchell wanted to buy forestry land in New Zealand.
Jarvis incorporated a New Zealand company whose shares were nominally owned by a New Zealand citizen but were held in trust for Mitchell. Mitchell then advanced the money to buy several East Coast forestry blocks.
In facilitating the deals, Jarvis overlooked provisions of the Overseas Investment Act that prevent an “associate” of a foreign buyer from acting this way.
In 2014, Keiling approached Jarvis to set up a similar arrangement to buy forestry property north of Auckland.
Jarvis acted as he had done with Mitchell, even when a real estate agent raised the problem of an “associate” acting in the case of a foreign investment.
Mitchell, Keiling and the companies were later charged under the Overseas Investment Act for making transactions without consent.
They were forced to sell the properties and pay penalties and costs totalling more than $1.7 million.
The Overseas Investment Office also brought proceedings against Jarvis – an experienced commercial lawyer and director at Ponsonby law firm Chambers Craig Jarvis – for his role in the schemes.
The High Court later imposed civil penalties on Jarvis totalling $275,000.
His conduct was also referred to the Lawyers and Conveyancers Disciplinary Tribunal by a standards committee of the Law Society.
Jarvis admitted unsatisfactory conduct in his dealings, but the tribunal considered whether they could also be described as negligence or misconduct.
Jarvis had pleaded that he had not breached the Overseas Investment Act consciously, and the tribunal found his actions did not meet the threshold for misconduct.
However, it did find he was negligent, and that “Mr Jarvis’ negligence in these transactions was gross”.
Jarvis had a previously unblemished 40-year law career, but the tribunal said that the fact the negligence did not reflect the majority of his practice made no difference.
“That a competent lawyer could have failed so dismally in matters of such importance to his clients satisfies the statutory test [of negligence].
“We find that his negligence is of such a degree as to bring the profession into disrepute.”
Despite this, the tribunal said it had taken into account the outcome of the proceedings in the High Court and the “chastening effect” of the disciplinary case, and suspending Jarvis from practice did not appear to be required.
It called for submissions from counsel for the standards committee and Jarvis while considering a penalty, which is likely to be a censure and a fine.
Jarvis was approached for comment and his counsel, Jonathan Lewis, responded on his behalf.
“As the decision makes clear, Mr Jarvis made unintentional errors of law 12 and 15 years ago respectively,” Lewis said in an email.
“He did not consciously breach the Overseas Investment Act, and he took responsibility for those errors once he was made aware of them.
“The consequences of those mistakes have been very severe, and he has been chastened by this process.”
– This story originally appeared in the New Zealand Herald.
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