Two More Lawyers Face Deregistration Over US$250K Scandal

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By Mary Taruvinga

A HARARE lawyer, Lawman Chimuriwo is facing deregistration after he allegedly misappropriated trust funds amounting over US$100 000.

Chimuriwo was found guilty of unethical conduct by a tribunal chaired by High court judge Justice Felistus Chatukuta.

He has been in practice since 2012 when he opened Lawman Chimuriwo Attorneys soon after he registered as a lawyer.

The Law Society had applied that he be found guilty of unlawful conduct following a complaint brought forward by Kenias and Farai Mafukidze.

It was alleged Chimuriwo contravened the Legal Practitioners Act after withholding payment of trust money to client without lawful cause.

He also failed to promptly pay the trust money due to the sellers upon demand and within a reasonable time.

Chimuriwo failed to properly keep the books of accounts and did not issue a receipt for $250 000 that was received in the trust account.

He irregularly paid out more money to a client than was in the client’s trust account.

The Mafukidzes were the registered owners of a certain stand 820 Mount Pleasant Township of subdivision A Lot 58 (the property).

CBZ had a running mortgage balance on the property.

The Mafukidzes failed to service the debt.

They agreed with CBZ that the property be sold, and the proceeds be channelled to CBZ to settle the debt.

They entered into an agreement of sale with Anthony Machakaire, the buyer who purchased the house for US$250 000.

The money was to be paid into Chimuriwo’s trust account.

It was a term of agreement that the purchase price would be released to the Mafukidzes upon transfer of the property or be paid to CBZ to liquidate the debt owed by them.

Deed of transfer was done on October 16, 2017, thereafter Machakaire paid the full purchase price to the trust account.

“The respondent did not advise the Mafukidzes who were his clients, nor CBZ which had released Deed of Transfer and given consent for the cancellation of its mortgage bond number 3839/2013 on the strength of his undertaking that an amount of US$241 would be paid to CBZ Bank upon registration of the property from the Mafukidzes to Machakaire,” reads the court papers.

In January 2018, CBZ Bank made a follow-up regarding the transfer of the property.

Chimuriwo responded giving the impression that the transfer was yet to be completed.

Around the same period, CBZ was advised by the Mafukidzes that the transfer of the property had been registered in the Deeds Office and that the buyer had already taken possession of the house.

CBZ then wrote a letter demanding payment from Chimuriwo who then paid US$145 000. He undertook to pay the balance of US$96 000 by March 31, 2018.

CBZ on April 19, 2018, wrote to Chimuriwo through its lawyers complaining that he had misappropriated trust funds.

Court processes began.

Chimuriwo later gave explanations that he had overpaid another client and denied abusing funds stating that it was not wilful.

“He explained that he had overpaid Timothy Manyuchi, another client of his as a result of an accounting error,” the tribunal heard.

He had engaged Manyuchi over the payment on January 26, 2018, and he undertook to pay back but failed to honour the promise.

He further explained that he was withholding payment of the purchase price to the Mafukidzes because he had a dispute with them over an unpaid fee of US$3 380 and therefore, he had a lien over the funds.

He said he did not mean to mislead the bank and wrote a letter stating that the only outstanding issues regarding the property was the conflict of City of Harare bills which the sellers were aware of.

The tribunal however concluded that it is common cause that he did not disclose and withheld the payment of trust money to a client.

“Upon completion of transfer the respondent became duty bound to remit the sum of US$241 000 to CBZ bank and to release the balance of the proceeds of the purchase price to the Mafukidzes or liquidate the monies due to CBZ to facilitate the removal of the mortgage bond registered against the title deeds for the property.”

The balance of US$105 000 remained unpaid on the capital amount leading to the Mafukidzes and CBZ issuing summons against Chimuriwo.

The tribunal said that the parties had issues over an outstanding fee of US$3 380 did not make sense. The respondent should only have withheld the money in dispute for his fees and forwarded the remainder as per instructions.

The issue of a lien was an afterthought by the respondent to try and excuse his glaring failure to pay when payment was due.

It was also established that the argument that he had overpaid another client was a separate charge to be handled on its own. He failed to pay in 2017 and overpaid his other client in 2018.

It was concluded that the embattled lawyer delayed paying the money because he had misappropriated the funds.

It was directed that he files his submissions on the appropriate punishment on or before June 22, 2021, while LSZ files its submissions on or before June 25, 2021, while Chimuriwo is expected to file his response if he wishes by June 28, 2021.

Another lawyer, Kudzai Mukanhairi also faces deregistration after she by-passed a colleague Linda Chipato communicating bad about her to her client offending the ethics of the profession.

She had previously worked for Chipato and knew the client belonged to her.

The tribunal concluded that what she did was unethical, and she was aware because she went on to tell the representative of the client not to disclose their communication to Chipato.