Divorce: Partner did not consider partnership interest a matrimonial asset
A partner who deliberately failed to disclose during his divorce that he held over £23,000 in his capital account has been struck off.
The Solicitors Disciplinary Tribunal (SDT) heard that the money – a mixture of partner drawings and his share of a new partner buying into the firm – was held in a dormant client account that had been used for a relative’s conveyancing transaction.
Matthew Stephen Becker, who qualified in 2000, was a partner and the compliance officer for legal practice at Plymouth-based firm Curtis Law, which trades as CWC Solicitors.
He denied the allegations against him, although the SDT found the fact he withdrew the money just a few days after his ‘clean break’ divorce was finalised in June 2016 was “telling and informative”.
When Mr Becker completed the Form E financial statement in the divorce proceedings, in September 2015, he held £15,400 in partnership payments in the account, a figure that had risen to £23,600 in June 2016 when he filled in form D81, the statement of information for a consent order. He did not include his capital account in either.
In his defence, Mr Becker said the realisation his marriage was over was a shock that caused him to consider his next steps, including leaving the law. But were he to leave the partnership, he would have to pay his share of the firm’s debt, which at the time was around £500,000. He had given a personal guarantee of £125,000.
As a result, Mr Becker said, he did not see the firm as “an asset of value, it was simply one which paid him a modest income that he believed he could not get out of without repaying a lot of money”.
But the SDT decided that, if this were the case, “Mr Becker would have detailed both the sums in his capital account and his share of the firm’s debt”.
Even if Mr Becker did consider the Form E to be informal and voluntary, as he claimed, “that did not entitle him, as a solicitor, to complete it inaccurately”, the SDT went on.
“He knew that the Form E was to be used in the financial settlement and was going to relied on by Person B [his ex-wife]. Form E contained numerous warnings regarding the accuracy with which it needed to be completed. The fact that it was ‘informal and voluntary’ did not negate those warnings.”
The money should have been declared in both forms, the tribunal concluded. His failure to do so was “a conscious and deliberate act in circumstances where he considered that the offer made to Person B was reasonable and fair, and where he did not consider his interest in the firm to be a matrimonial asset, Person B, in his view, having made no contribution to that or to his position as a partner”.
As a result, he had misled both Person B and the court; the SDT also found that Mr Becker had taken unfair advantage of Person B. He acted dishonestly and with a lack of integrity, it decided.
Mr Becker said he did not know his money was being held in client account, in breach of the accounts rules, and was “horrified” when he found out. While the evidence did not establish that he had caused the money to be paid into the client account, he did allow them to be paid out to his personal bank account, also in breach of the accounts rules.
He should have reported these breaches to the Solicitors Regulation Authority (SRA) and his failure to notify either his regulator or his partners of this showed a lack of integrity, the SDT said.
The tribunal concluded that Mr Becker was “motivated by his desire to conceal assets from Person B”.
It acknowledged his previous good character and the level on insight he had shown as regards errors he had made, and also took account of positive references that had been submitted and his co-operation with the SRA.
But given that the misconduct involved dishonesty, “the only appropriate and proportionate sanction” was to strike him off.
The SRA sought costs of nearly £52,000 but the SDT agreed with Mr Becker’s analysis of it that only £23,655 was justified.