Bankrupt lawyer's island bolthole

20:25, Feb 17 2014
Grey Lynn house
One of the Grey Lynn houses owned by Mary Castles, the wife of bankrupt and struck-off lawyer Eion Castles.
Grey Lynn house
One of the Grey Lynn houses owned by Mary Castles, the wife of bankrupt and struck-off lawyer Eion Castles.

A lawyer struck off for over-charging a client by almost $500,000 filed for bankruptcy on Friday, despite his wife owning three properties worth over $3 million.

Auckland lawyer Eion Castles was yesterday struck off by the Lawyers and Conveyancers Disciplinary Tribunal for overcharging a couple and causing them to lose their home so they could pay his bill.

Castles advised the tribunal that he had filed for bankruptcy on Friday, before the tribunal could order him to pay back the $482,000 he had over-charged the couple and pay $127,000 in Law Society costs, penalties and compensation.

The couple who lost their house - one of Castles' former golf buddies, who has since developed cancer, and his wife - told the tribunal the bankruptcy was  ''cowardly''.

''Castles will still live in an up-market suburb, in a house owned by his wife. He will still receive rent from a house owned by his wife. He will still holiday on the beach at Waiheke in a house owned by his wife,'' the man said.

Castles' wife Mary Castles is listed as owning three properties - two in exclusive Grey Lynn with rateable values of $850,000 and $860,000 and one on Waiheke Island with a rateable value of $1.47 million.

People appeared to be home at both Grey Lynn properties yesterday but did not answer the door.

Castles' victims, whose names are suppressed, told the tribunal he was a ''sociopath''  who had no ''guilt, remorse or sympathy''.

''Castles has no conscience. He suffers no guilt nor will he endure any hardship while we continue to live in penury,'' the husband said.

Castles was found guilty last year of negligence, incompetence, misconduct and gross over-charging. He did not show up for his penalty hearing yesterday.

After submissions from Law Society lawyer John Katz, QC, the tribunal panel took 30 minutes to conclude that Castles should be struck off.

Katz said Castles had shown ''no contrition, no regret, no remorse'' and had responded to the tribunal's guilty verdict with a ''sustained attack'' on his former clients.

He filed no submissions and was not represented at the tribunal yesterday.

Castles charged the complainants more than $1m between 2005 and 2008 for acting for them in three cases.

Expert assessors told the tribunal the work undertaken should not have cost more than $462,000. The ''grossly excessive overcharging'' left the couple ''virtually destitute'', the tribunal said.

They were forced to sell their Remuera house to pay the bill and spent 28 months in 27 different house-sits.

The couple lived out of suitcases and supermarket shopping bags with no certainty of future accommodation and paid $600 a month in storage costs for their possessions.

Katz said the husband now had cancer and when he died he would leave his wife and two children with ''minimal assets'' due to Castles' actions.

''This practitioner single-handedly ruined these people's lives,'' Katz said.

Castles was  a ''serial overcharger'' who had faced 18 complaints over 25 years - nine of which were upheld, he said.

Striking off was the only possible outcome, he said.

Katz asked for repayment of the overcharged fees, and compensation for both the victims and the Law Society.

Castles declared bankruptcy on Friday and Katz said the ''harsh reality'' was that the couple would probably not see a cent of the money.

The case stemmed from High Court proceedings involving a leaky home the couple had bought.

After errors by the couple's previous lawyers, Castles, who was a golf buddy of the husband, offered to take on their case.

The couple said Castles did not tell them his hourly rate - between $350 and $390 - at their first meeting.

The tribunal said Castles' fees were ''outrageous'' considering the work carried out did not appear to be of a sufficient complexity or ''unusual nature'' to warrant retaining independent counsel of Castles' seniority.

Castles did not tell the complainants that continuing with the proceedings would be uneconomic for them, the tribunal said.

While the complainants did receive $655,000 in settlement from one of the proceedings it did not cover their costs, the tribunal said.

Castles also disclosed confidential information about the couple's financial and mental states to the wife's brother-in-law.


Eion Castles
EION CASTLES: Gross overcharging.

Fairfax Media