EN v FO [2018] NZLCRO 118 (19 November 2018)

Last Updated: 2 December 2018

	LCRO 178/2015
CONCERNING	an application for review pursuant to section 193 of the Lawyers and Conveyancers Act 2006
AND
CONCERNING	a determination of the [City] Standards Committee [X]
BETWEEN	EN Applicant
AND	FO Respondent

DECISION

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

Introduction

[1] Ms EN has applied for a review of a decision by the [City] Standards Committee [X] (the Committee) to take no further action in respect of her complaint concerning Ms FO’s fees and her conduct.

Background

[2] Ms EN says that she and her husband instructed Ms FO in relation to three or four separate matters on the basis that Ms FO’s hourly rate was $350.

[3] On 5, 12 and 18 June 2015 Ms FO issued invoices for fees based on the time recorded in relation to the:

• (a) Purchase of [Address 1], [Town] $1,225.00

• (b) Deed of Lease — [Business Address] $1,225.00
  
  • (c) Sale of [Business 1] at [Business Address] $385.00
    

[4] On 23 June 2015, believing Ms FO had overcharged her, Ms EN made a complaint to the New Zealand Law Society (NZLS).

Standards Committee Process

[5] The Committee confirmed receipt of Ms EN’s complaint and on 29 June 2015, her husband Mr EN added to it saying that Ms FO:

• (a) said she would “charge $750 plus GST for each case when completed”, except for the discharge of a charging order which in each case would cost no more than $450;
  
• (b) gave quotes on 28 May 2015 for:
  

(i)	purchasing a property without no finance	$750
(ii)	purchasing a business	$750
(iii)	lease	$750

(c) fabricated her time records in relation to the purchase of [Address 1];

(d) charged for non-existent attendances;

(e) double charged;

(f) charged fees in excess of her quotes; and

(g) billed more than the amounts she had quoted.

[6] Mr EN says he understood Ms FO had agreed to reduce her fee by half if a case was not successful, and would take no other fee above each of the caps.

[7] Ms EN’s complaint was accepted as suitable for resolution through the NZLS Early Intervention Process. NZLS contacted Ms FO and the principal of her firm, Mr CY, neither of whom wished to respond.

[8] On 20 July 2015 the Committee determined, pursuant to s 138(2) of the Lawyers and Conveyancers Act 2006 (the Act), that no further action on the complaint was necessary or appropriate because:

• (a) the fees were fair and reasonable according to the standards set out in r 9.1 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008; and
  
  • (b) Ms FO’s time records showed she had recorded her attendances correctly and separated her attendances in respect of each file.
    

[9] The EN’s objected to the way the Committee had dealt with the complaint and the result, and applied for a review.

Application for review

[10] Ms EN applied for a review on 31 August 2015 providing documents that she had not put to the Committee for consideration and saying Ms FO:1

• (a) quoted fees capped at $450 and $750 for each case;
  
• (b) fabricated her time records and overcharged; and
  
• (c) overcharged for the sale of [Business 1] which was not completed.
  

[11] Ms EN says Ms FO’s attendances cannot have been correctly recorded because Ms EN was engaged elsewhere at times Ms FO recorded as having spent time on the files.

[12] Ms FO provided a significant amount of material in support of her reply, very little of which had been before the Committee. Ms FO says she provided quotes for three other matters2 that had not been the subject of Ms EN’s complaint. She says she did not provide a quote for the three matters that were identified in Ms EN’s complaint. Those three matters were billed primarily on a time and attendance basis in accordance with her terms of engagement and timesheets which she stands by as accurate. Ms FO says the fees are lower than those customarily charged in the market and reflect the reasonable costs of running a practice. Ms FO says $750 would not represent a fee that had regard to the interests of her or her firm.

1 The documents include invoices that were rendered after the Committee determined the complaint on 20 July 2015, so cannot have been part of the complaint and emails that do not relate to the invoices that were the subject of the complaint. Documents that are irrelevant to the invoices that were the subject of complaint or came into existence after the Committee process had concluded, have been disregarded on review because they have not been the subject of a complaint determined by a Committee.

2 Refinance of [Residential Address] and the discharge of two charging orders.

Review Hearing

[13] The parties attended a review hearing in Auckland on 7 November 2018 at which Ms EN was assisted by Mr EN and their son.

Nature and scope of review

[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:3

... 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.

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” ...

... 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:4

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.

Discussion

Further information

[16] With her review application Ms EN sent:

• (a) A copy of the Agreement for Sale and Purchase for [Address 1] which was signed on 29 May 2010. That is not inconsistent with Ms FO’s timesheet for that date which records that Ms FO had a meeting on that
  

3 Deliu v Hong [2012] NZHC 158, [2012] NZAR 209 at [39]–[41].

4 Deliu v Connell [2016] NZHC 361, [2016] NZAR 475 at [2].

date with her client and prepared and sent an email relating to the agreement. She recorded 30 minutes. There is nothing remarkable about that.

(b) A copy of an ASB Bank statement which appears to show that Mr EN’s EFTPOS or credit card was used in [Town B] on 2 June 2015. Ms EN says she and her husband were in [Town B], not with Ms FO. Ms FO’s timesheet records attendances on the files on 2 June 2015 none of which suggest the presence of either of the EN’s. As well as being unconvincing as evidence of a person’s location at a given time, it is difficult to see the bank statement as having any relevance.

[17] Ms EN also sent an email that suggests she harbours mistrust and is confused about the bills she has received, what needed to be done and what was done on her instructions to Ms FO. Mistrust, confusion and a lack of communication with the lawyer instructed are not good grounds for a review application.

Special circumstances — Regulation 29

[18] The Committee made no reference in its decision to reg 29 of the Lawyers and Conveyancers Act (Lawyers: Complaints Service and Standard Committees) Regulations 2008. That is the regulation that constrains the bills of costs over which Committees exercise jurisdiction. Regulation 29 says:

If a complaint relates to a bill of costs rendered by a lawyer or an incorporated law firm, unless the Standards Committee to which the complaint is referred determines that there are special circumstances that would justify otherwise, the Committee must not deal with the complaint if the bill of costs–

...

(b) relates to a fee that does not exceed $2,000, exclusive of goods and services tax.

[19] Regulation 29 was discussed at the review hearing and the EN’s were given an opportunity to set out any circumstances they considered might be special for the purposes of reg 29 that might open the door to consideration of the amounts of the three invoices about which they complained.

[20] The fees are not related to one another. As Ms EN confirmed at the review hearing that each fee relates to an entirely discrete matter, the fees cannot be aggregated so they collectively exceed $2,000.

[21] The EN’s said Ms FO had capped her fee and exceeded the cap by almost double. Ms FO denies capping her fee for [Address1], [Town], the deed of lease for [Business Address] or the sale of the [Business 1] at [Business Address]. Logically, without a cap there is nothing to exceed. The EN’s provided no evidence in support of their assertion of capping or allegedly exceeding the cap.

[22] The EN’s’ allege Ms FO falsified her time records and double charged. Ms FO denies both allegations. The EN’s have provided no evidence that supports either allegation. Ms FO’s timesheets record attendances that are unremarkable for the type of work she undertook for the EN’s in each of the three unrelated matters.

[23] The Committee did not invite any discussion on special circumstances, and none were put to the Committee. The evidence on review does not demonstrate circumstances that could be considered special, such that jurisdiction to consider the amount of Ms FO’s fees might be opened up. There is no evidence of any conduct on the part of Ms FO in relation to the three invoices or her charging practices that could be unsatisfactory for the purposes of the definitions in the Act. In the circumstances, the concerns advanced in Ms EN’s complaint cannot be advanced on review, nor could they have been advanced by the Committee.

[24] This review is determined on the basis that no other standards issues arise,

and the Committee and this Office lack jurisdiction to consider about the amount of the fees they were charged for the:	the EN’’s complaints
(a) Purchase of [Address 1], [Town]	$1,225.00
(b) Deed of Lease – [Business Address]	$1,225.00
(c) Sale of [Business 1] at [Business Address]	$385.00

[25] The Committee’s decision is therefore reversed and replaced with this decision.

Decision

Pursuant to s 211(1)(a) of the Lawyers and Conveyancers Act 2006 the decision of the Standards Committee is reversed.

Pursuant to s 211(1)(b) of the Lawyers and Conveyancers Act 2006 and reg 29(b) of the Lawyers and Conveyancers Act (Lawyers: Complaints Service and Standard Committees) Regulations 2008, in the absence of special circumstances, there is no statutory jurisdiction to deal with Ms EN’s complaint about the amount of Ms FO’s bills

of costs dated 5, 12 and 18 June each of which relates to a fee that does not exceed

$2,000.

DATED this 19th day of November 2018

D Thresher

Legal Complaints Review Officer

In accordance with s 213 of the Lawyers and Conveyancers Act 2006 copies of this decision are to be provided to:

Ms EN as the Applicant Ms FO as the Respondent

Mr RI as the Applicant’s Representative Mr CY as a Related Person

[City] Standards Committee 3 New Zealand Law Society