Faleauto v DE [2016] NZLCRO 64 (29 November 2016)

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	LCRO 99/2015
CONCERNING	an application for review pursuant to section 193 of the Lawyers and Conveyancers Act 2006
AND
CONCERNING	a determination of the [X] Standards Committee [X]
BETWEEN	TED FALEAUTO (EDWARD GEORGE TANU (TED) FALEAUTO JOHNSTON) Applicant
AND	DE _Respondent

The names and identifying details of some parties in this decision have been changed.

[1] Mr Faleauto has applied for a review of a direction to publish his name, in the context of a summary of facts, outcome, and orders following Mr DE’s complaints about his conduct and service. The direction was made by the X Standards Committee X, pursuant to s 142(2) of the Lawyers and Conveyancers Act 2006 (the Act), with the prior approval of the Board of the New Zealand Law Society (NZLS) given on [Date]

2015, pursuant to reg 30 of the Lawyers and Conveyancers Act (Lawyers: Complaints

[2] In June 2013 Mr Faleauto was in practise as a barrister sole. Mr Faleauto has not applied to review the Committee’s decision, in which it concluded there had been unsatisfactory conduct on his part. He acknowledges he received money directly from

Mr DE, who was a private client, in advance of rendering an invoice, which the Committee concluded contravened ss 110(2) and 112(1) of the Act, regs 9 and 10 of the Lawyers and Conveyancers Act (Trust Account) Regulations 2008 (the Trust Account Regulations), and rr 9.3 and 14.2 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (the Rules).

[3] The Committee also determined that there had been unsatisfactory conduct on the part of Mr Faleauto because he failed to complete the retainer with Mr DE, failed to keep Mr DE informed of progress of the retainer and had fallen “woefully short of the obligation of courtesy owed to Mr DE”. That conduct was found to have contravened rr

4.2, 7.1 and 10 of the Rules. The Committee noted, as part of the context, that Mr Faleauto was in the process of relocating overseas and setting up in practise outside New Zealand.

[4] Having concluded in its decision dated [Date] 2014, that there had been unsatisfactory conduct on his part pursuant to s 12(c) of the Act for contraventions of the Act, Trust Account Regulations and Rules, the Committee censured Mr Faleauto pursuant to s 156(1)(b) of the Act and imposed other orders. The Committee recorded its findings of fact, the outcome of its enquiries, and the orders it had made pursuant to s 156(1). On that basis, the Committee invited both parties to provide written submissions in relation to publication of the facts of the matter and Mr Faleauto’s name, and allowed 14 days in which to do so.

[5] The direction to publish Mr Faleauto’s name followed in a separate decision dated [Date] 2015, the NZLS Board having approved publication in February. That decision records that no submissions were received from Mr DE.

[6] Mr Faleauto contends that his name should not be published, and applied for a review on 19 May 2015.

[8] In his application for review, Mr Faleauto referred to five matters to be taken into account in considering publication of lawyers’ names in the public interest. Those matters relate back to the consumer protection and public confidence purposes of the Act, which include some of the factors that must be taken into account pursuant to reg

30 of the Committee Regulations, the seriousness of the conduct dealt with by the

[9] Mr Faleauto repeated matters he had put before the Committee by way of background and mitigation. He said he had mended his ways, and was now better informed about the obligations that rest on him under the provisions he breached. He said his professional history is not a bad record, and that he has been practising law for over 20 years, having only recently begun to accept privately paying clients.

[10] Mr Faleauto said the circumstances were unique, and publication will not benefit the public or a lawyer. He says he does not seek to excuse his conduct, but that publication “will do no more than unfairly and excessively punish” him, and “to a slight degree make the public believe that justice is done”. He submitted that, in the circumstances, publication would be unjust.

[11] Mr Faleauto referred to and distinguished two previous adverse professional conduct findings, the first relating to deficiencies in his time recording to support legal aid bills, and the second for not having been sufficiently responsive to an enquiry from his client. He seeks to distinguish both.

[12] Mr Faleauto says that his name would be tarnished by publication, his errors were not dishonest, and that public confidence would not be enhanced by him being excessively punished. He contended that:1

Publication should be reserved for dishonesty, and intentional, or negligent series of offending. Also for serious records of offending. Publication of name will not assist here as it was due to mistake and unfortunate loss of the file and shifting of office. They were one off errors under unique unrepeatable circumstances and not ones I will ever repeat.

[14] The nature and scope of a review have been discussed by the High Court, which said of the process of review under the Act:2

[39] ... the power of review conferred upon Review Officers is not appropriately equated with a general appeal. The obligations and powers of the Review Officer as described in the Act create a very particular statutory process.

[40] The Review Officer has broad powers to conduct his or her own investigations including the power to exercise for that purpose all the powers of a Standards Committee or an investigator and seek and receive evidence. These powers extend to “any review” ...

[41] ... the power of review is much broader than an appeal. It gives the Review Officer discretion as to the approach to be taken on any particular review as to the extent of the investigations necessary to conduct that review, and therefore clearly contemplates the Review Officer reaching his or her own view on the evidence before her. Nevertheless, as the Guidelines properly recognise, where the review is of the exercise of a discretion, it is appropriate for the Review Officer to exercise some particular caution before substituting his or her own judgment without good reason.

[15] More recently, the High Court has described a review by this Office in the following way:3

[2] ... A review by the LCRO is neither a judicial review nor an appeal. Those seeking a review of a Committee determination are entitled to a review based on the LCRO’s own opinion rather than on deference to the view of the Committee. A review by the LCRO is informal, inquisitorial and robust. It involves the LCRO coming to his or her own view of the fairness of the substance and process of a Committee’s determination.

[16] Given those directions, the approach on this review, based on my own view of the fairness of the substance and process of the Committee’s determination, has been to:

[17] Although information has been copied to Mr DE throughout the course of this review, he has not participated to any great extent, and has given no indication as to whether he consents to the review being determined in his absence or not. Notices of hearing were sent to both parties, and this Office requested responses from Mr DE that have not been forthcoming. In the circumstances, his consent has been assumed and this review is determined in his absence.

[18] Mr Faleauto attended a review hearing in Auckland on 22 November 2016, and was heard on his application for review.

[19] At its heart, the review issue is whether it is necessary or desirable in the public interest for Mr Faleauto’s name to be published in the context of a decision

recording several contraventions of the Act, Regulations and Rules, and findings of unsatisfactory conduct, the facts surrounding which are essentially not in dispute.

[20] Consideration of whether or not publication is necessary or desirable in the public interest is guided by the purposes of the Act, which are:4

[21] Directing publication under s 142(2) is a procedural step that a Committee should only take if it has obtained the prior approval of the NZLS Board. Both the Committee and the Board must take into account the relevant factors listed in reg 30(2)(a) to (e), which relate to the impact of publication on the interests and privacy of those named, when deciding whether to publish the identity of a lawyer who is the subject of a censure order.

[22] This Office has the power to confirm, modify, or reverse any direction given by a Standards Committee.5 It is also noted that the Legal Complaints Review Officer (LCRO) has the discretion, independently, to direct publication of decisions as each LCRO considers necessary or desirable in the public interest, pursuant to s 206(4) of the Act.

[23] The exercise to be undertaken by a Committee, and on review, calls for interests to be weighed and balanced.

[24] Mr Faleauto says it is not in his interests for his name to be published. He is, understandably, concerned about his reputation and the likely impacts on his practise. He is also concerned about proportionality between the seriousness of his conduct and the possible consequences of publication. He contends that publication of his name would be of little or no benefit to the public, and is not necessary to prevent a repeat of the conduct that the Committee found to have been unsatisfactory.

[25] There is always a risk that publication of a lawyer’s name will affect that lawyer’s reputation and practice. That alone is not sufficient to render publication not

necessary or desirable in the public interest. Mr Faleauto argues, however, that those impacts would be disproportionate to his unsatisfactory conduct, particularly given the other orders the Committee imposed, including a fine of $5,000. At the review hearing Mr Faleauto said he was still paying off the fine but had complied with the other orders made.

[26] Publication of a lawyer’s name in the context of a Committee’s decision informs the public about who did what, and when. The Committee directed publication of a summary of facts, together with the outcome, and orders it had made in relation to Mr Faleauto’s conduct in 2013. Events have since moved on.

[27] Mr Faleauto says he has abandoned his attempts at setting up in legal practise overseas. He says he is focussing all his professional energies on his practise in New Zealand. He describes that as 99 per cent legal aid, with virtually no private client work. He says he now knows, and is attentive to, his professional obligations in relation to what little private client work he does. In particular Mr Faleauto says he is acutely aware of the limitation of receiving payments directly for his fees.

[28] Very shortly before the review hearing Mr Faleauto attended two NZLS professional education events. On 10 September 2016 he successfully completed the NZLS “Stepping Up – foundation for practising on own account”.6 On 16 November

2016 he attended a Trust Account Supervisors Assessment Day run by the NZLS Trust Account Inspectorate team.7 At the review hearing on 22 November 2016 Mr Faleauto described that course as a “refresher” because he says he has previously completed a similar course.

[29] Broadly speaking Mr Faleauto accepts he is not well placed to contest the facts. He accepts that his conduct in respect of Mr DE contravened the Act, Regulations and Rules made thereunder. There is no real argument about what happened, or that the conduct was unsatisfactory. In any event, any such argument would be beyond the jurisdiction of this Office on review.

[30] Mr Faleauto describes his own failures as negligent. However, he owes a duty to his professional colleagues to care enough about the relevant statutory and regulatory provisions, and the professional rules, to find out about, and comply with them. As with all lawyers, he is under a professional obligation in that regard. Knowledge of, and adherence to, the Act, Regulations and Rules made under it are

_{professional obligations through which the status of the legal
profession is recognised.}

6 _{Certificate “Stepping Up –
Foundation for Practising On Own Account” (10 September 2016).}

[31] Invoices and proper accounting are essential to the orderly operation of any business or professional practice. In addition, for barristers like Mr Faleauto, there are professional rules that make it difficult for money to change hands without the proper paperwork being provided.

[32] Mr Faleauto contends that publication of his name would be of little or no benefit to the public. It can be seen from the discussion above that is not the case. There is a real benefit to the public, particularly to consumers of legal services, in knowing that lawyers are familiar with the rules around taking money.

[33] Publication in circumstances where Mr Faleauto did not comply with a range of professional obligations, and contravened duties to his client and the court, is necessary to give effect to, and consistent with all three purposes of the Act. Publication is likely to assist in maintaining public confidence in the provision of legal services, protecting the consumers of legal services, and recognising the status of the legal profession.

[34] Mr Faleauto does not say that publication of his name will have any impact on the interests or privacy of the complainant, Mr DE (who was his client) or on Mr Faleauto’s relatives, partners, employers, or associates. However, it is not necessary or desirable, nor would it be customary, in the public interest for anyone but the lawyer, in this case Mr Faleauto, to be identified in the summary of facts, outcome, and orders that the committee publishes.

[35] Mr Faleauto has provided no good reason to reverse the Committee’s direction. This decision records the steps Mr Faleauto has taken to educate himself on the Act, Regulations and Rules. That will be properly reassuring if he has absorbed, and abides by, those.

[36] In all the circumstances, the Committee’s direction to publish Mr Faleauto’s

[37] Publication of this decision is also directed identifying only Mr Faleauto. The names of the complainant and any other identifying features are to be removed. For completeness, the materials the Committee publishes should be linked to this decision. A direction to that effect is made pursuant to s 206(4) of the Act.

[38] Pursuant to s 210 of the Act, and the LCRO’s Costs Orders Guidelines, the LCRO has a broad discretion to make orders for costs on review. The costs of the complaints and disciplinary processes under the Act are defrayed across all lawyers in New Zealand, unless an order to contribute to those costs is made by a Committee or this Office on review.

[39] Mr Faleauto’s application for review has been unsuccessful. The Guideline amount is $1,200 for a simple review hearing. There is good reason to order Mr Faleauto to contribute to the costs of this review. The guideline amount is reduced by half to recognise the brevity of the review hearing in respect of this matter.

[42] Pursuant to s 206(4) a direction is made to publish this decision including Mr Faleauto’s name but not identifying the complainant or any other identifying feature, with a link between the materials the Committee publishes and the decision.

[43] Pursuant to s 210 Mr Faleauto is ordered to pay costs of $600.00 to NZLS by

In accordance with s213 of the Lawyers and Conveyancers Act 2006 copies of this decision are to be provided to:

[X] Standards Committee [X] The New Zealand Law Society The Secretary for Justice

New Zealand Legal Complaints Review Officer

Faleauto v DE [2016] NZLCRO 64 (29 November 2016)