Ministry of Justice

Complaint / Committee found unsatisfactory conduct / censure and $10,000 fine / civil litigation / complaint lawyer failed to draft and file proceedings within appropriate time frame, allowing other party to advance Limitation Act defence / HELD / lawyer did not seriously challenge unsatisfactory conduct finding / contended penalties were unduly harsh / lawyer displayed casual indifference to obligation to advance and protect client’s interests / conduct at the high end of unsatisfactory but did not reach threshold for referral to Disciplinary Tribunal / censure was not unreasonable or disproportionate / lawyer failed to act on client’s instructions for a long time and was oblivious to requests for updates and explanations for delay / delay approached unconscionability / length of delay, lawyer’s indifference to advancing client’s case, and unconvincing explanations for conduct support argument for significant fine / Committee’s decision confirmed / section 211(1)(a)

Review / Committee declined to take further action / employment proceedings / complaint fees were excessive / lawyer provided final invoice late / lost data relating to client file / did not keep client properly informed about costs / allowed personal issues to dominate certain client communications / Privacy Act 2020, section 22, Information Privacy Principle 5 / Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, rule 9.1 / rule 9.6 / HELD / LCRO could not determine whether lawyer managed document and email management systems efficiently / unreasonable delay in providing final invoice / personal issues did not excuse obligations to clients / Committee overlooked delay before COVID-19 lockdown / additional aggravating delay after Alert Level 2 restrictions began / fees fair and reasonable for work undertaken / Committee’s decision modified to find breach of rule 9.6 / Committee’s decision otherwise confirmed / section 211(1)(a)

Review / Committee found unsatisfactory conduct / residential property transfer / complaint lawyer acted for both parties in transaction, that complainant was unwell, that complainant had not signed transfer documents, that lawyer did not advise complainant of potential steps following discovery of forged signature, and that complainant incurred significant loss attempting to rectify matters / complainant unsatisfied with Standards Committee compensation order / Lawyers and Conveyancers Act 2006, section 156(1)(d) / HELD / despite lawyer’s actions and omissions, it cannot be established that complainant would not have proceeded with the transaction had those actions or omissions not taken place / inadequate evidence on complainant’s lack of capacity / appropriate to award compensation for impact of the transaction / Committee’s decision modified to impose $3,000 fine in addition to fine imposed by Standards Committee / Committee’s decision otherwise confirmed / section 211(1)(a)

Complaint / Committee declined to take further action / enduring powers of attorney (EPOA) / complaint lawyer witnessed person’s signature on EPOA and provided certificates without ascertaining whether person had appropriate mental capacity to understand the EPOA / Protection of Property and Personal Rights Act 1988, section 93B / Sandman v McKay [2019] 1 NZLR 519 (SC) / Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, rule 2.5 / rule 2.6 / HELD / presumption under PPPRA means lawyer did not need to seek medical assessment of person prior to signing of the EPOA / no evidence supporting a view that lawyer’s certificates were not a true record of advice provided to person / no direct evidence that person’s statements were enough to put lawyer on notice that person lacked capacity to understand the effects and implication of the EPOA / Committee’s decision confirmed / section 211(1)(a)

Complaint / Committee found unsatisfactory conduct / property transaction / complaint lawyer continued to be involved in client’s family’s affairs, decision should be published, client should be compensated, and lawyer should be prohibited from involvement in matters / review application by lawyer challenging penalties and in response to complainant’s application / Lawyers and Conveyancers Act 2006, section 156(1)(i) / Wislang v Medical Council of New Zealand [2002] NZCA 39 / Daniels v Complaints Committee 2 of the Wellington District Law Society [2011] 3 NZLR 850 / Workington v Sheffield LCRO 55/2009 (26 August 2009) / J v NZ Psychologist Board HC Wellington AP 34/01 (11 July 2001) / HELD / LCRO cannot stop lawyer representing client or being involved with trusts / no evidence requiring further compensation / Committee fine modest for conduct breaches, but no reasons to interfere / anonymised publication serves public interest / Committee’s decision confirmed / section 211(1)(a)

Complaint / Committee declined to take further action / estate administration / complaint lawyers, as executors of the estate, failed to promptly invest proceeds from sale of property at appropriate interest rate, lawyers’ fees were excessive, lawyers failed to communicate with trustees over placement of sale funds and sale of property, and lawyers contributed to delay in settling sale of property / Lawyers and Conveyancers Act 2006, section 132 / section 111(1) / section 114 / Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, rule 3 / HELD / lawyers’ decision not to invest sale proceeds in higher-interest account reasonably made and within their discretion / Committee’s decision confirmed / section 211(1)(a)

Review / Committee declined to take further action / conveyancing transaction / complaint lawyer failed to advise vendor that Body Corporate was required to certify disclosure statement and provided poor service / Unit Titles Act 2010 / Lawyer and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, rule 3 / New Zealand Law Society Property Law Section Guidelines / HELD / Committee took no further action on the basis lawyers had discounted fees, but inquiry must consider whether disciplinary response required / financial loss appropriately addressed in other forums / reasonable to expect lawyer would carefully explain disclosure regime / failure to provide appropriate advice constitutes unsatisfactory conduct in terms of s 12(a) and breach of rule 3 / $2,000 fine ordered / Committee’s decision modified to reflect findings, otherwise confirmed / section 211(1)(a)

Complaint / Committee declined to take further action / residential property sale and purchase / complaint lawyer failed to ensure assignment of earthquake claim from vendor to purchaser completed / HELD / Complaints Service did not correctly identify subject of complaint / Standards Committee should have considered the role of other lawyer initially contacted by complainant / insufficient evidence to establish either respondent or other lawyer breached duties to complainant / time between subject matter of complaint arising and date of complaint makes it difficult to investigate complaint / Committee’s decision confirmed / section 211(1)(a)

Review / Committee found unsatisfactory conduct / trust account / own-motion complaint lawyer permitted another lawyer to use their trust account to facilitate transactions, receiving referral fee payment / Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, rule 5.9 / HELD / review of penalty / Committee ordered $5,000 fine / no set formula to calculate appropriate fine / receiving collateral reward a serious matter / lawyer should only profit from reasonable fee, not from collateral matters / lawyer motivated by genuine desire to assist young colleague / fine reduced to $2,000 / Committee’s decision modified / section 211(1)(a) and (b)

Complaint / Committee declined to take further action / commercial transaction / complaint lawyer had close relationship with other party to transaction and disclosed confidential information in attempting to establish a business relationship / also, improperly served a statutory demand for lawyers’ fees / fee complaint / Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, rule 2.3 / rule 5 / rule 8 / HELD / hearsay evidence submitted to support conflict of interest and disclosure of confidential information complaints / hearsay insufficient to substantiate complaint / complainant’s concern law firm victimised lawyer unsubstantiated and speculative, not a basis to avoid contractual fees / statutory demand issued for proper purpose and complainant accepted, then defaulted on debt and payment plan / no evidence fee complaint demonstrates lawyers duplicated invoiced work / fees fair and reasonable / Committee’s decision confirmed / section 211(1)(a)

Review / Committee declined to take further action / subdivision consent and easement / complaint lawyer not competent in advising complainant to take judicial review proceedings, did not raise relevant matters in the proceedings, and did not advise on litigation risk / fee complaint / Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, rule 3 / rule 7.1 / VM v XZ [2020] NZLCRO 216 / HELD / lawyer advised complainant of litigation risk and discretionary nature of judicial review / indication law was “well-settled” by judge / no evidence lawyer’s arguments lacked merit / representation was meticulous / adverse costs order cannot be considered part of lawyer’s fee in fee complaint / comparison between fees and High Court Rules scale a useful starting point, but not a determinative factor / applicable test for fees is in rule 9 and 9.1 / Committee’s superficial fee analysis must be returned to the Committee for first instance determination / section 209 / Committee…

Complaint / Committee declined to take further action / in-house counsel in insolvency firms and insolvency proceedings / complaint in-house lawyer provided regulated services to the public, and the lawyer failed to inform the court of available defences and material facts / Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, rule 13 / rule 13.1 / HELD / in-house counsel complaint being pursued as an own-motion inquiry by Committee as complainant lacks sufficient personal interest / complainant’s wish to receive Committee’s ruling for business purposes insufficient to establish personal interest, amounts to legal advice / LCRO does not have jurisdiction to determine correctness of contested litigation issue / concerns in complaint addressed in High Court decision / complaints process not an alternative form to relitigate matters / presiding judicial officer should raise issue about potential lapse / Committee’s decision confirmed / section 211(1)(a)

Date of decision: 9 August 2021