Accountant who billed clients after being fired found guilty of … – New Zealand Herald

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An accountant who continued to invoice multiple clients after she was fired, taking them to court and calling in debt collectors when they didn’t pay, has been found guilty of professional misconduct.
Sandy Dai also allegedly defamed a former client’s new accountant by claiming he had inappropriate relationships with other clients and saying he wasn’t allowed to practise.
The charges against Dai have been released in full for the first time after her name suppression lapsed in the High Court last week.
Shortly after the lapse, the New Zealand Institute of Chartered Accountants’ (NZICA) disciplinary tribunal released its findings from a hearing into Dai’s conduct held late last year during which five complainants testified.
“The member’s conduct towards her former clients, and to their choice of new accountants, was not only unprofessional but at times disgraceful,” the tribunal said in its decision.
“It displays an attitude variously of vindictiveness and a lack of self-control, evidently brought on when a client chooses not to continue with the member’s services.”
Dai told the Herald she intended to appeal the NZICA tribunal decision and the lapsing of her name suppression in the High Court, and that she could still continue to operate as an accountant.
She said the investigation into her conduct had been “subjective not objective”.
One of the most serious charges against Dai was about her conduct towards another accountant who replaced her after her clients terminated her services.
Dai ignored requests to hand over the couple’s files to the new accountant, Kevin Chiv, and continued to send invoices despite no longer representing them.
She also referred an unpaid invoice to a debt collection agency. The couple didn’t think it was due but paid to avoid an adverse credit rating because they were trying to buy a house.
The husband then sent Dai a letter asking why she had not released their files to Chiv, and asking why she continued to send invoices despite her services being terminated three months earlier.
In a response Dai said the man’s wife “may suffer ‘post-birth’ depression that she is imagining me as an ‘enemy’”, according to evidence submitted to the tribunal.
Dai then sent an invoice claiming two years’ worth of Xero accounting software fees and filed a claim to the Disputes Tribunal for invoices she claimed the couple hadn’t paid, totalling $1231.
“The volume of documentation she submitted to the Disputes Tribunal, and the lengths to which the couple were made to go to defend her claim, were unnecessary and out of all proportion to the amount involved, even if it had been justified,” the NZICA’s disciplinary tribunal found.
After a hearing in October 2021, the Disputes Tribunal dismissed the claim, finding Dai was not entitled to any further fees after the termination of her services in April.
But Dai applied for a rehearing alleging the couple had filed a frivolous counterclaim and demonstrated a lack of integrity.
It was her dealings with the couple and their new accountant that gave rise to Chiv laying a defamation complaint against her in the High Court.
In a letter to the couple, Dai claimed Chiv was banned from trading as an accountant, which the tribunal said was incorrect, and that he was found to have been having inappropriate relationships with clients, which the tribunal said was a complete distortion of the facts.
Chiv was suspended by the NZICA in 2020 but was not prevented from working as an accountant.
He took exception to the allegations and said they were largely false and defamatory. He then notified Dai of his intent to take the matter to the High Court and seek damages exceeding $200,000.
Within half an hour of receiving the letter Dai sent another email to her former clients saying, “I find Mr Chiv may have a delusional state of mind … I think Mr Chiv should seek psychiatric treatment”.
Chiv filed his defamation claim and complained to the NZICA about Dai’s conduct. The Herald understands the case is ongoing.
The tribunal said Dai made outrageous and unjustified attacks on Chiv’s personal and professional character and reputation and did so for improper reasons.
Another client, known as Ms S, employed Dai as her accountant in 2018 before noticing an increase in her monthly fee, something she said they had not discussed.
The following year the fee went up again and Ms S terminated the contract with Dai, who was instructed to finish the year’s accounts and tax returns before handing over to a new accountant.
Instead Dai emailed three invoices to Ms S totalling $4450.
The following evening Dai left at least five messages on Ms S’ phone and sent several WeChat messages. She made disparaging remarks about the new accountant’s competency, the tribunal decision said.
Dai then filed a claim in the Disputes Tribunal for the unpaid monthly invoices despite it being before their due date.
In her claim, Dai called Ms S dishonest and said she had resigned as her accountant because of this.
The Disputes Tribunal partially awarded in Dai’s favour though the NZICA tribunal noted the Disputes Tribunal didn’t have access to the WeChat messages showing Dai’s services were terminated.
A professional conduct committee (PCC) of the NZICA investigated Dai’s behaviour and billing practices, but Dai raised a proceeding against the PCC in the High Court, naming Ms S as a second respondent.
In the claim she accused Ms S of verbally abusing her and being highly offensive and providing false and misleading information to the Disputes Tribunal.
“Although that matter is before the High Court and has yet to be determined, the tribunal saw no evidence to support these allegations in any of the material provided to it.
“Making such serious allegations in court proceedings without reasonable cause is improper, and when done by a chartered accountant is unprofessional,” the tribunal said in its decision.
A woman known only as Ms C engaged Dai to do tax returns for herself and the business she owned with her husband Mr X in 2018.
In 2021 Dai messaged the woman and said there was an outstanding amount, which surprised the couple as she’d never previously mentioned it despite being in weekly communication with the woman.
They queried the outstanding amount and rather than answer the question Dai mentioned involving a debt collector, the tribunal noted.
Dai then emailed the couple saying she had suspended all services and unlinked them from the IRD website.
In their email junk folder they found an email from a debt collector stating they had an overdue account of $1286.
On analysis of the invoices, the tribunal concluded Dai had raised her monthly fee without telling the couple, causing the outstanding debt.
A few days later, Ms C and Mr X paid $1315.87 into Dai’s bank account. The payment was reversed so they paid it again, and again it was reversed, with no explanation.
Dai told the tribunal the couple should have paid her debt collector instead of her, but the tribunal disagreed and said they were fully entitled to pay Dai directly.
When the couple said they would probably make a complaint to the NZICA Dai said she would lodge a “credit default” on them, which would stay on their file for four years.
She then emailed the NZICA and said she’d been harassed and threatened by a former client. She also stated the clients were forcing her to produce false accounts.
The tribunal said it was unprofessional to refer the outstanding balance to a debt collector and “bizarre” when Dai reversed the couple’s payments.
The tribunal was unable to issue its findings in January after Dai lodged her claim in the High Court against the PCC, and she was granted interim name suppression.
On Friday Justice Peter Churchman issued a judgment declining ongoing suppression making it possible for the NZICA to publish its findings.
The tribunal said Dai’s inability to manage her client relationships by not responding to reasonable requests for clarification, returning fees paid without any explanation, and suspending her services fell well below the standards expected of a chartered accountant.
“What is particularly concerning is that the member persisted in this conduct, by repeating her allegations when challenged, and in her responses to the complaints.
“The member displayed a disturbing lack of insight into the wrongfulness and seriousness of her actions both in her responses to the complaints and her evidence and submissions to the tribunal hearing.”
The tribunal has not decided Dai’s penalty yet, however, the PCC wants her struck off.
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