DV v LS [2018] NZLCRO 137 (19 December 2018)

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	LCRO 91/2017
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 No [X]
BETWEEN	DV Applicant
AND	LS and HS _Respondents

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

[1] Mr DV has applied to review a decision of the [City] Standards Committee 3 (the Committee), in which the Committee made findings of unsatisfactory conduct against him in relation to his representation of Mr LS and Mrs HS in litigation involving their respective homes.

(a) Mr DV was ordered to pay Mr LS compensation in the sum of $18,293.38. (b) Mr DV was ordered to pay Mrs HS compensation in the sum of $8,531.95. (c) Mr DV was ordered to pay a fine of $7,000, together with costs of $2,500.

[3] The events giving rise to the findings of unsatisfactory conduct all occurred whilst

Mr DV was a partner in the law firm [Firm]. Mr DV left that partnership on 31 July 2012 and

after that date, the client files to which this application for review relate were managed by other lawyers in [Firm].

[4] [Firm] is and at the material time was a law firm specialising in building and construction litigation, including what has come to be known as leaky building litigation. This includes acting for individual homeowners or members of body corporates whose homes have weathertightness problems.

[5] In an email to Mr LS and Mrs HS dated 4 June 2012, a solicitor employed by [Firm]

[6] Whilst he was a partner at [Firm], Mr DV worked in a team of lawyers, all of whom were junior to him and had varying levels of post-admission legal experience.

[7] At the relevant time Mr and Mrs LS and Mrs HS were near-neighbours in a block of three, two-storey, detached townhouses.1

[8] The townhouses had been built in or around 2001. Mr and Mrs LS purchased their townhouse in 2004 and Mrs HS purchased her townhouse in 2009.

[9] During 2011 the LSs and Mrs HS discovered that their townhouses had significant weathertightness issues.

[10] Mr LS initiated the statutory claims process through the Weathertight Homes Resolution Service (WHRS) during September 2011. Mrs HS took the same step during October 2011.

[11] By that process, the WHRS considers a claim lodged with it and decides whether to accept the claim for adjudication by the Weathertight Homes Tribunal (WHT). If the WHRS accepts a claim for adjudication, the claimant may then lodge proceedings in the WHT. In other words, the WHRS is the gateway to the WHT.

1 Mr and Mrs LS's complaint was lodged with the New Zealand Law Society Complaints Service in Mr LS's name only. Although the couple owned their townhouse, for ease of reference throughout this decision I will refer to Mr LS as including Mr and Mrs LS.

[12] In early October 2011, Mr LS approached [Firm] with a view to instructing that firm to act in relation to a potential claim for compensation against the [City] Council, which was the authority which issued the final Code Compliance Certificates (CCC) for the townhouses.

[14] Both parties spoke separately to Mr DV by telephone about their potential claims. At that time Mr DV was a partner in [Firm].

[15] Soon after those discussions with Mr DV, a solicitor employed by [Firm], Ms H, drafted negligence proceedings to be filed in the District Court separately on behalf of Mr LS and Mrs HS (the negligence proceedings). The defendant was the [City] Council.

[16] At that time, Ms H had been employed by [Firm] for approximately three–four months. She had been admitted to the bar three years earlier, in August 2008.

[17] Ms H advised Mr LS and Mrs HS that it was important to file the negligence proceedings promptly and within the limitation period which applied to proceedings in the District Court. That period expired on 20 November 2011, which was ten years after the [City] Council had issued its CCC.

[18] The reason for taking this step was to protect Mr LS’s and Mrs HS’s overall litigation position. This was because although Mr LS had lodged, and Mrs HS was about to lodge, a claim for adjudication with the WHRS, there was no certainty that those claims would be accepted by the WHRS. Acceptance would depend upon what date the WHRS identified as the “built-date” for the properties.

[19] Ms H further advised Mr LS and Mrs HS that even if the WHRS accepted a claim for adjudication, its determination about the applicable limitation period was open to judicial review proceedings in the High Court. Ms H advised Mr LS and Mrs HS that the [City] Council tended routinely to challenge, by judicial review in the High Court, the WHRS’s determination of the built-date of a property in question.

[20] Ms H’s advice was that if the WHRS rejected their claims for adjudication, or the [City] Council successfully judicially reviewed a claim that the WHRS had accepted, then Mr LS and Mrs HS would still have the negligence proceedings in the District Court to fall back on and proceed with.

[21] The two sets of negligence proceedings were filed in the [City] District Court on 25

October 2011. Mr DV’s name did not appear as the lawyer on the record in the negligence

[22] The negligence proceedings were not, however, served on the [City] Council until early 2013.

[23] The WHRS advised Mr LS in late November 2011 that it had accepted his claim for adjudication. Mrs HS was similarly advised in early 2012.

[24] In February 2012 Ms H wrote to both Mr LS and Mrs HS to enquire whether they had received advice from the WHRS about their claims for adjudication. Between then and June 2012, Mr LS and Mrs HS spoke to Ms H about the WHRS reports they had received and the next steps with their claims for compensation.

[25] Another lawyer in [Firm], Mrs R, had been assisting Ms H with Mr LS’s and Mrs HS’s files, and took the files over from Ms H in approximately mid-June 2012. Mrs R had been admitted to the bar in September 2011; some nine months earlier.

[26] On 24 June and 6 July 2012 [Firm] filed separate proceedings in the WHT on behalf Mr LS and Mrs HS, against the [City] Council (the WHT proceedings). The WHT proceedings were served shortly after they had been filed.

[27] Mr DV’s name appeared on both sets of the WHT proceedings as the partner at

[29] The WHT case management processes for the WHT proceedings were initiated by that Tribunal in early July 2012.

[30] On 31 July 2012, Mr DV left the partnership of [Firm]. There was no formal handover by him of any files in which he had been involved.

[31] A partner, Mr J, and a senior lawyer employed by [Firm] (Mr E), assumed responsibility for Mr LS’s and Mrs HS’s files after 31 July 2012. Mrs R continued to correspond directly with them and with the [City] Council’s lawyers.

[32] Either Mr J or Mr E discovered after 25 October 2012 that the negligence proceedings had not been served. The District Court Rules in force at that time required proceedings filed in that court to be served within 12 months of filing (the time-out period).

[33] Those Rules also provided that if the proceedings had not been served within the time-out period, a judge or a Registrar had the discretion to extend the time for serving them for a further six months.

[34] On 6 November 2012, Mr J wrote to the Registrar at the District Court and requested an enlargement of the time within which to serve the negligence proceedings on the [City] Council.

[36] It was established at about this time by either Mr J or Mr E, that the WHT proceedings had been lodged in June 2012. This was despite Mrs R’s ongoing work on the WHT proceedings in the weeks and months immediately following Mr DV’s departure from [Firm] on 31 July 2012.

[37] The significance of this discovery was that s 60 of the Weathertight Homes Resolution Services Act 2006 (the WHRSA) prevents a claimant from having proceedings about the same subject matter filed in two different courts or tribunals.

[38] In other words, if there were no limitation issues with either the District Court or the WHT, a claimant had to make a choice of forum within which to have their claim heard. However, proceedings commenced initially in the District Court could be transferred to the WHT in certain circumstances.

[39] In a letter dated 19 December 2012, Mr J wrote to both Mr LS and Mrs HS, separately, and informed them that the WHT had no jurisdiction to consider the proceedings before it, given the existing (but unserved) negligence proceedings. Mr J also advised them that the District Court had extended until April 2013, the date by which the negligence proceedings must be served on the [City] Council.

[40] Mr J’s letter recommended that Mr LS and Mrs HS should “obtain independent legal advice regarding this matter”, noting that [Firm] was “unable to progress [the negligence proceedings] until [their clients obtained] independent advice”.

[41] Mr LS and Mrs HS received Mr J’s letter on or about 21 December 2012 (a Friday). They were unable to speak to anyone about their cases until the new year.

[42] In about the middle of January 2013 Mr LS and Mrs HS sought advice from another lawyer who specialised in leaky building litigation. That lawyer, Mr R, recommended:

(c) consideration should then be given to applying to the District Court to transfer the negligence proceedings to the WHT.

[43] On 22 January 2013, Mr R sent [Firm] uplift authorities for Mr LS’s and Mrs HS’s

[44] In apparent recognition of errors made, on 23 January 2013 [Firm] refunded the fees that had been paid by Mr LS and Mrs HS in connection with all work undertaken by that firm relating to the WHT proceedings.

[45] Mr LS and Mrs HS instructed Mr R to withdraw the WHT proceedings and serve the negligence proceedings on the [City] Council. He did so.

[46] The [City] Council applied to review the Registrar’s decision to enlarge the time for serving the negligence proceedings and to have those proceedings struck out as an abuse of process.

[47] Mr R opposed those moves by the [City] Council and also applied to the District

[48] The District Court dismissed the [City] Council’s application and transferred the negligence proceedings to the WHT. Eventually the parties settled the weathertightness claim without the need for a hearing before the WHT.

[49] Mr and Mrs LS and Mrs HS requested [Firm] to pay the legal fees they had incurred in instructing Mr R to regularise the state of the negligence proceedings and the WHT proceedings. The parties were unable to reach agreement about this.

[50] Mr LS and Mrs HS lodged a joint complaint with the New Zealand Law Society Lawyers Complaints Service (Complaints Service) on 7 September 2015. They identified “[Firm] and Co” as the “incorporated law firm” about which they were complaining.

(a) they had approached [Firm] in September 2011 for their leaky home litigation; (b) they were advised to lodge claims in the WHRS (a claim for adjudication) and

(d) in December 2012, they received a letter from [Firm] advising that the negligence proceedings had not been discontinued, that they had a claim “running on two foots” and the [City] Council argued that their claim was no longer valid;

(e) [Firm] blamed the error on a partner who had left the firm. [Firm] had forgotten to look at their files after that partner had left. They were advised to get independent legal advice;

(f) that advice came on the eve of [Firm]’s Christmas break. Little information about the error and its impact was provided;

(g) Mr LS and Mrs HS were unable to receive independent advice for several weeks; this, from Mr R; and

(h) Mr R was able to rectify matters but at additional cost to Mr LS and Mrs HS.

[52] The outcome sought by Mr LS and Mrs HS was for [Firm] “to pay for cost and

[53] The Complaints Service correctly identified that [Firm] was not an incorporated law firm and that complaints could not be made against an unincorporated partnership of lawyers such as [Firm]. After further consultation with Mr LS and Mrs HS, the Complaints Service treated their complaint as potentially engaging conduct by Mr DV and Mr J and so the Complaints Service corresponded with them both, accordingly.

[54] In the course of responding to the complaint, Mr DV identified Ms H and Mrs R as having been involved in acting for Mr LS and Mrs HS. As a result of being informed about their involvement, the Committee resolved to commence own motion inquiries in relation to Ms H’s and Mrs R’s conduct, pursuant to s 130(c) of the Lawyers and Conveyancers Act

[55] Ultimately the Committee determined to take no further action in relation to Mr J, Ms H and Mrs R. Conduct findings were only made against Mr DV. Accordingly, I propose to set out only Mr DV’s response to the complaint.

[56] The Complaints Service wrote to Mr DV on 28 September 2015 and summarised the complaint against him as being:

that you failed to act competently when conducting leaky building litigation, namely that:

[57] In responding, in a letter to the Complaints Service dated 2 November 2015, Mr DV

(a) He left [Firm] on 31 July 2012 and knew nothing about Mr LS’s and Mrs HS’s

(b) He does not accept the assumption made by Mr LS and Mrs HS that he “was somehow responsible for their claims”.

(c) Having perused [Firm]'s files, Mr DV submitted that he “was not responsible for these claims and action in relation to them". His name did not appear on the negligence proceedings; Ms H’s name did. Although his name was on the WHT proceedings, he did not sign those proceedings and he appeared on them “as a partner of the firm”.

(d) The suggestion that the negligence proceedings ought to have been discontinued once the WHRS accepted the claims for adjudication, was "not sustainable ... it would have been negligent to end the [negligence proceedings] in the face of a judicial review application in relation to the [WHT proceedings]".

[58] By way of comment on Mr DV’s response, Mr LS provided the Complaints Service with a copy of a letter dated 10 November 2015 that he had received from his lawyer, Mr R.2

(a) Because of concerns about whether Mr LS’s and Mrs HS’s claims would be accepted for adjudication by the WHRS, [Firm] recommended that they file the negligence proceedings.3

(b) “In breach of the clear requirements in the District Court Rules applicable at the time, [[Firm]] took no steps to serve [the negligence proceedings]. Instead they held the proceedings unserved while steps were taken by the firm to progress [Mr LS’s and Mrs HS’s] claim [in the WHRS and WHT]”.

(d) The problem with that advice was that the WHRSA did not allow proceedings about the same subject matter to be filed in two different jurisdictions. Mr R noted that:

2 Mr R also wrote a letter dated 1 December 2015 on behalf of Mrs HS, which she provided to the Complaints Service. To all intents and purposes, the two letters written by Mr R, are the same. For convenience, later in this decision I will refer only to Mr R’s letter dated 10 November, written to Mr LS.

3 Mr R incorrectly said that the negligence proceedings were filed in September 2011, with Mr DV as the solicitor on the record. In fact, the negligence proceedings were filed with Ms H on the record, on

as a specialist firm litigating in this area [he] would have expected [[Firm]] to be fully aware of those clear statutory provisions and to have provided appropriate advice ... regarding the need to either (1) discontinue the [negligence proceedings] or (2) elect to serve the [negligence proceedings] and to pursue [the] claim against the [[City] Council] in that forum.

(e) “Despite the clear requirements in the District Court Rules that implore solicitors to serve proceedings promptly [[Firm]] had taken no steps to serve the [negligence proceedings] on the [[City] Council] ... There is simply no proper basis for a solicitor to do that”.

(f) Mr R noted that he did “not criticise [[Firm]] for having advised [Mr LS and Mrs HS] to commence [the negligence proceedings] to protect the limitation position pending determination of the eligibility of the [WHRSA] claim”.

(g) Mr R considers that [Firm] were in error for failing to serve the negligence proceedings on the [City] Council “as required by the District Court Rules” and that this error was compounded by the advice to commence proceedings in the WHT whilst the negligence proceedings remained on foot (albeit unserved).

(h) Mr R suggests that [Firm] should have served the negligence proceedings and then had them transferred to the WHT. This is what Mr R accomplished on behalf of Mr LS and Mrs HS.

[60] The Committee resolved to set Mr LS’s and Mrs HS’s complaint against Mr DV down for a hearing on the papers. To that end the Committee prepared a Notice of Hearing dated 18 February 2016 and forwarded it to the parties with an invitation to them to provide written submissions.

[61] The Committee identified the issue to be determined as being the same as it had set out in its letter to Mr DV dated 28 September 2015.4

[62] In written submissions (undated but forwarded to the Complaints Service by Mr DV by email dated 4 March 2016), Mr DV referred to his previous responses to the complaint, and said:

(a) “[A]s is apparent from the [Firm] files, I was not responsible for these claims”.

(b) “There can be no sustainable complaint about [issuing the negligence proceedings given the limitation issues, as the WHRS had not then accepted Mr LS’s and Mrs HS’s claim for adjudication]. It would have been negligent not to issue the [negligence proceedings]”.

(c) Once the claim for adjudication was accepted, proceedings were issued in the WHT. The [City] Council judicially reviewed the WHRS determination, in which event “it would have been negligent to discontinue the [negligence proceedings]”.

[63] The Committee met on 1 April 2016 and resolved to adjourn the hearing. Further issues arose as follows:

(a) The Committee requested Mr DV to provide time records for his attendances in relation to Mr LS and Mrs HS.

(b) The Committee resolved to set a further issue down for a hearing on the papers, as follows:

Whether Mr DV failed to ensure that the conduct of [Ms H] was at all times competently supervised and managed in accordance with rule

[64] The Committee provided the parties with an amended Notice of Hearing to reflect the above, dated 27 April 2016.

[65] At its meeting on 20 September 2016, the Committee conducted its hearing on the papers in relation to the Notice of Hearing dated 27 April 2016. The Committee also considered the complaint that had been made against Mr J, together with the own motion investigations that it had commenced in relation to the conduct of Ms H and Mrs R.

[66] Specifically, in relation to the complaint against Mr DV as to his competence, and the own motion investigation into his supervision of Ms H, the Committee made findings of unsatisfactory conduct on both accounts and deferred the issue of penalty.

[67] In addition, the Committee resolved to inquire further into Mr DV’s conduct in relation to whether he had competently supervised and managed Mrs R “in filing proceedings in the [WHT] at a time when [the negligence proceedings] were on foot”.

[68] A Notice of Hearing dated 21 October 2015 was forwarded to Mr DV setting out the additional supervision issue in relation to Mrs R. It does not appear that the Committee’s findings of unsatisfactory conduct were at that time conveyed to Mr DV.

[69] On behalf of Mr DV, Mr CW wrote to the Complaints Service on 21 November 2016 in connection with the Committee’s widened inquiry concerning the supervision of Mrs R.

[70] In simple terms Mr CW submitted that Mrs R appeared to have drafted and filed the

[71] Mr CW also made the point that Mr DV had “no opportunity post 31 July 2012 to

[72] At its meeting on 3 March 2017, the Committee considered its own motion inquiry into Mr DV’s supervision of Mrs R. It noted that:5

the relevant time period is short [being] from 18 June 2012 (when Mrs R started working on the files) until 31 July 2012 (when Mr DV ceased to be a partner of [[Firm]]).

[73] The Committee noted that this was “a time period of some consequence” because

the WHT proceedings were filed whilst the negligence proceedings remained on-foot.

[74] The Committee made a finding of unsatisfactory conduct against Mr DV in relation to his supervision of Mrs R.

[75] In relation to penalty, the Committee ordered Mr DV to pay compensation to Mr LS and to Mrs HS, to pay a fine and to pay costs. However, it deferred setting the quantum of each of these, pending further analysis of Mr R’s invoices to Mr LS and Mrs HS.

[76] The Committee produced a comprehensive determination in which it set out its findings in relation to Mr J, Ms H, Mrs R and Mr DV.

[77] In relation to Mr DV, the determination provided reasons for the findings that it had made at its meetings on 20 September 2016 and 3 March 2017. Those findings were:

(b) Supervision of Ms H: unsatisfactory conduct. (c) Supervision of Mrs R: unsatisfactory conduct.

[78] I will now set out the Committee’s reasons for each of those conclusions.

[79] The Committee accepted that it was appropriate to have filed the negligence proceedings at the outset. However, the Committee said that “what occurred (or did not occur) after the filing of the [negligence proceedings] was what concerned [it]”.6

[80] The areas of concern included that that the negligence proceedings were never served. In that regard, the Committee noted that it “agreed with Mr R” and “considered the failure to serve the [negligence proceedings] to be a negligent oversight". Further, that “the

clients should have been advised that the proceedings must be served without undue delay

– there are clear requirements for prompt service under the District Court Rules".7

[81] Secondly, the Committee was concerned about “the issue of the claims being filed in two forums". It noted that Mr DV “denied that it was wrong to bring the claims in two forums". The Committee disagreed with him and said that s 60(5) of the WHRSA “is clear in prohibiting a claim from being adjudicated in the [WHT] where the complainant has initiated proceedings in a court”. The Committee further said that "it was clear that Mr LS and Mrs HS should have been, but were not, given advice that they should pursue proceedings in either the District Court or the [WHT], but not both at the same time".8

[82] The Committee held that this amounted to a “failure to act competently in a manner consistent with the duty to take reasonable care”.9

[83] The Committee noted that Mr DV’s response to the supervision issues was “to point to [Ms H] and [Mrs R]”. It said that “this appeared to be a complete abdication of the usual responsibility of a partner supervising more junior lawyers” and held that this was “unprofessional and inappropriate”. It further concluded that “the failures regarding service and issuing proceedings into forums with failures of the responsible partner, Mr DV”.10

[84] The Committee held that “Mr DV was responsible for what his junior lawyers were doing (or not doing). That is the position of a partner in a law firm”.11

concluded that Mr DV had failed to ensure that the conduct of [Ms H] and [Mrs R], while they were respectively working on the matters and he was at [[Firm]], was at all times competently supervised and managed by him in relation to [Mr LS’s and Mrs HS’s matters] in breach of r 11.3.

[86] In “[taking] into account Mr DV’s disciplinary history” the Committee concluded that a fine of $7000 was appropriate, together with costs of $2500.13

should be compensated for the legal costs (including disbursements) incurred in correcting the failings the Committee has found – namely, for the steps taken by [Mr R] to terminate the [WHT] proceedings, to deal with issues around the service of the [negligence proceedings] and for transferring the [negligence proceedings] to the [WHT].

[88] After reviewing Mr R’s invoices to Mr LS and Mrs HS, the committee ordered Mr DV to pay compensation of $18,293.38 to Mr LS, and $8,531.95 to Mrs HS. It described this as “compensation for [Mr DV’s] failings both in terms of competence and supervision”.15

[89] Mr DV filed his application for review on 9 May 2017. He submitted that the

(a) he was responsible for the failures regarding service of the negligence proceedings and filing proceedings in two different fora; and

[90] In addition, Mr DV submitted that the Committee failed to adhere to the rules of natural justice by not providing him with an adequate opportunity to make submissions on penalty, and that there was no principled basis to the penalty orders made by the Committee.

[91] The nature and scope of a review have been discussed by the High Court, which said of the process of review under the Act:16

... 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.

[92] More recently, the High Court has described a review by this Office in the following way:17

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.

[93] 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:

(a) consider all the available material afresh, including the Committee’s decision;

[94] As the Officer with responsibility for deciding this application for review, I appointed Mr Robert Hesketh as my statutory delegate to assist me in that task.18 As part of that delegation, on 16 April 2018 at [City], Mr Hesketh conducted a hearing at which Mr DV appeared together with his counsel Mr CW. Mr LS and Mrs HS appeared separately by

[95] The process by which a Review Officer may delegate functions and powers to a duly appointed delegate was explained to the parties by Mr Hesketh. All parties indicated that they understood that process and took no issue with it.

[96] Mr Hesketh has reported to me about that hearing and we have conferred about the complaint, the application for review, the submissions filed by all parties and my decision. There are no additional issues or questions in my mind that necessitate any further submissions from either party.

[97] Prior to the hearing, Mr CW filed extensive written submissions on behalf of Mr DV. Neither Mr LS nor Mrs HS had time within which to respond to those submissions before the hearing on 16 April 2018. At the conclusion of that hearing Mr Hesketh invited Mr LS and Mrs HS to provide written submissions responding both to Mr CW’s written submissions, and to his oral submissions on Mr DV’s behalf at the hearing.

[99] Mr LS and Mrs HS’s complaint, as drafted and lodged by them, was against “[Firm]”. The Committee correctly noted that complaints may only be made against individual lawyers or an incorporated law firm (which [Firm] was not).

[100] The Committee’s approach to Mr LS’s and Mrs HS’s complaint was to identify individual lawyers who had worked on their files and to inquire into the conduct of those lawyers. Administratively the Complaints Service allocated separate file or complaint numbers to each of the four lawyers and corresponded separately with each.

[101] The Committee then produced one decision document which noted the four file numbers and set out separate determinations for each of the four lawyers.

[102] The only lawyer against whom findings of unsatisfactory conduct were made, was

[103] In all other cases, the Committee determined to take no further action. Neither Mr LS nor Mrs HS has applied to review the Committee’s determinations in relation to the other three lawyers.

[104] Amongst its determinations was the Committee’s inquiry into the conduct of Mr J, the partner in [Firm] who inherited Mr LS’s and Mrs HS’s files after Mr DV departed on 31

[105] The Committee determined that there were no conduct issues on the part of Mr J

[106] I have given thought as to whether there is scope for this Office to review the determination to take no further action on the complaint against Mr J. That determination was included in a single decision document which also contained separate determinations about Mr DV, Mrs R and Ms H.

[107] However, Mr LS and Mrs HS did not apply to review any of the determinations made by the Committee. Mr DV has applied to review the determinations made against him.

[108] Section 203 of the Act sets out the scope of this Office’s review powers, as follows

The Legal Complaints Review Officer may, in reviewing a final determination of a

(c) of any enquiry carried out by or on behalf of a Standards Committee in relation to the complaint or matter to which the final determination relates; and

[109] My view is that s 203 empowers this Office on review to consider the whole of the final determination that is the subject of an application for review. It does not empower this Office to consider other determinations about other lawyers, contained in the same decision document and which are not the subject of an application for review.

[110] The only final determination about which an application for review has been filed, amongst the four made by the Committee, is that relating to Mr DV. This Office’s review powers are limited to a consideration of any or all the aspects of that determination, and that determination alone.

[111] In submissions filed with this Office after the hearing before Mr Hesketh, Mr LS and

There seems to be a lot of time deciding who was responsible for our file and the subsequent errors. Mr DV was the Solicitor on record pre-31 July 2012 and Mr J from August 2012. Somewhere in this someone has to take responsibility.

[112] It seems to be the case that acts or omissions by a lawyer or lawyers having responsibility for Mr LS’s and Mrs HS’s files, have resulted in those clients suffering at least some monetary loss. This much appears to have been recognised by [Firm] when they agreed to refund fees paid by those clients in relation to the work done in drafting, filing and serving the WHT proceedings.

[113] There is also argument to say that the remedial legal work carried out by Mr R on behalf of Mr LS and Mrs HS, for which fees were quite properly charged by him, represents a further loss by those clients at the hands of [Firm]. The Committee plainly recognised this when it ordered Mr DV to compensate Mr LS and Mrs HS in the amount of Mr R’s fees.

[114] I acknowledge that for Mr LS and Mrs HS the process of their leaky building litigation would have been distressing and stressful. It involved their homes: a place where a homeowner not unreasonably expects to feel safe and comfortable.

[115] Added to this was the news received by Mr LS and Mrs HS a day or two before Christmas 2012 in the form of Mr J’s letter pointing out procedural difficulties with their cases and inviting them to obtain independent legal advice. It is not difficult to imagine that this would have been devastating news to them both.

[116] By the time that Mr LS and Mrs HS received Mr J’s letter, neither could obtain independent legal advice because of the impending Christmas break. They had to wait until the new year before being able to discuss the troubling news they had received on the eve of Christmas.

[117] Mr R was engaged by Mr LS and Mrs HS in the second half of January 2013. [Firm] rendered the firm’s final invoice and statement on 23 January 2013, which involved refunds for fees charged and paid for attendances associated with the WHT proceedings.

[118] Unfortunately also, despite complaint having been made to the Complaints Service by Mr LS and Mrs HS in September 2015, the final determination in respect of Mr DV was not released by the Committee until March 2017. The process of review in this Office has meant that the lawyer conduct aspect of Mr LS’s and Mrs HS’s leaky building litigation, the procedure for which began with their approaches to the WHRS in late 2011, has not been able to be resolved until now.

[119] All parties to this unfortunate passage of events cannot help but have very great sympathy for Mr and Mrs LS, and Mrs HS. They are truly the innocent parties in it all. Yet they have maintained a dignified patience throughout.

[120] That being said, the focus of the disciplinary enquiry which arises out of the complaint made against Mr DV and the review of that complaint by this Office, is limited to the time during which he had some responsibility for and input into Mr LS’s and Mrs HS’s leaky home litigation files.

[121] The question to be asked is whether, during that period of approximately 10 months between October 2011 and 31 July 2012, Mr DV committed (whether by act or omission) any breach of the professional obligations that he owed to his clients, Mr LS and Mrs HS.

[122] It seems clear that all are agreed that the critical conduct issues to be considered are:

(a) Was Mr DV obliged to supervise the work of Ms H and Mrs R? (b) If so, did he do so to the required standard?

(c) The failure to serve the negligence proceedings promptly after they were filed on 25 October 2011, and any advice given to Mr LS and Mrs HS about service of those proceedings.

(d) Filing proceedings in the WHT in early June 2012 and at a time when there were co-existing negligence proceedings; this being an apparent contravention of s 60 of the WHRSA.

[124] Before doing so, I observe that initial contact was made to [Firm] by Mr LS. He then encouraged Mrs HS to do likewise, and thereafter [Firm] appeared to treat the two of them as being clients with identical interests, and to regard Mr LS as, in effect, speaking on behalf of them both.

[125] Therefore, where there is a reference in correspondence to Mr LS’s instructions, I

[126] Neither Mr LS nor Mrs HS have said otherwise. Both have presented as united as to their complaints and their responses to Mr DV’s application for review.

[127] Of itself [Firm]’s approach to acting for and taking instructions from Mr LS and Mrs HS, is unremarkable. That being said, it appears that neither was provided with a letter and/or terms of engagement, when the retainers began in September/October 2011.

[128] Mr DV could not recall whether he provided that information to Mr LS and Mrs HS, and could not recall seeing documents of that nature on [Firm]’ files. Neither Mr LS nor Mrs HS could recall receiving this information at the beginning of the retainers. The only documents in that category were dated July and September 2012 and these were amongst Mrs HS’s papers.

[129] The lack of a letter and/or terms of engagement was not before the Committee as a conduct issue and I do not propose to refer to it in those terms in this decision.

[130] However, I observe that if this information had been provided to Mr LS and Mrs HS, it would have described the scope of that firm’s retainer including, perhaps, reference to proceedings in the District Court or the WHT. Doubtless, terms of engagement would also have included the names of the lawyers at [Firm] who would be providing the legal services as well as the partner with overall responsibility for the more junior lawyers and the files.

[131] I mention that because some of those issues are before this Office in circumstances where the parties, because of the passage of time, have dimmed recollections. Terms of engagement provided at the time might have assisted to resolve some of the issues.

[132] This issue engages r 11.1 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (the Rules), which provides:

A lawyer in practice on his or her own account must ensure that ... the conduct of employees is at all times competently supervised and managed by a lawyer who is qualified to practise on his or her own account.

[133] Mr DV was a partner (thus qualified to practise on his own account) at [Firm]

between the time the retainers began (September/October 2011) and his departure on 31

[134] Mr DV spoke initially to Mrs HS by telephone about her potential claim. Mrs HS said that this was a lengthy discussion during which Mr DV described other leaking building cases in which he had been involved.

[135] Mrs HS’s impression after that discussion was that [Firm] would be her and Mr LS’s lawyers, and Mr DV would be the partner dealing with their files, with assistance from Mr J. That being said, Mrs HS never met Mr DV face to face.

[136] Mrs HS met both Ms H and Mrs R, separately and together, on a number of occasions (up to Mr DV’s departure). She said that Ms H and Mrs R referred to Mr DV as their boss.

[137] Mr LS initially met Ms H and spoke to her about the negligence proceedings. Like Mrs HS, Mr LS had a lengthy telephone discussion with Mr DV — he believes that this occurred during October 2011. The discussion was about Mr LS’s case and Mr DV’s experience.

[139] Mr LS regarded Ms H as having the carriage of their files, with Mr DV as the team leader.

[140] For his part, Mr DV has no particular memory of Mr LS’s or Mrs HS’s files. I make no criticism of him in that regard — the events about which these matters are concerned occurred between six and seven years ago.

[141] Time records, although not always a complete account of time spent, certainly reveal small amounts of time recorded against Mr DV’s name for attendances on the files until his departure from [Firm] on 31 July 2012. Nevertheless, Mr CW conceded on Mr DV’s behalf that his client did not “efficiently” use time records. Implicit in this concession is an acknowledgement that Mr DV spent unrecorded time working on Mr LS’s and Mrs HS’s files.

[142] I think it beyond doubt that Mr DV not only personally assumed partner responsibility for Mr LS’s and Mrs HS’s files within [Firm], but also held himself out to Mr LS and Mrs HS that he carried that responsibility.

[143] Mr DV had lengthy discussions with each of Mr LS and Mrs HS, virtually at the beginning of the retainers. Mr DV reassured them of his experience and expertise.

[144] Both Ms H and Mrs R spoke to Mr LS and Mrs HS in terms that indicated that they deferred to Mr DV — they referred to him as their “boss”.

[145] It is entirely reasonable for Mr LS and Mrs HS to have concluded that the overall management of their litigation files would rest with Mr DV, with much of the day to day work being done predominantly Ms H and/or Mrs R.

[146] I note that Mr DV’s name did not appear on the negligence proceedings. I attach little relevance to that. He directed Ms H to file them, in an email to her dated 25 October

I reckon you file 3 notices of claim on the [address withheld] properties today.

[147] The negligence proceedings were discussed and filed in consultation with Mr DV. He told Ms H to arrange for service of the proceedings. This is entirely consistent with the actions of a partner who had assumed responsibility for those proceedings and was supervising their management.

[148] The fact that Ms H queried his direction to serve those proceedings and told Mr DV that the clients had instructed otherwise, does not undermine the clear position that Mr DV was the partner in [Firm] with responsibility for the negligence proceedings, including adequately supervising any lawyers who worked on those files.

[149] Mr DV was however named on the WHT proceedings lodged in that Tribunal on 24

[150] “Acting” in a matter means just that: representing a client in that matter; being their lawyer.

[151] Mr DV submitted that his name on court proceedings did not carry any particular significance. When asked by Mr Hesketh whether he was saying that a partner’s name on court proceedings was simply form and carried no substance, he replied that this was his position.

[153] A lawyer’s name on documents filed in court proceedings is notice to the court, and other litigants in the proceedings, that the lawyer is acting for a party in those proceedings.

19 At that time [Firm] considered that they might also be instructed to act for the third detached townhouse owner.

[154] It is also notice of the lawyer’s address for service on behalf of their client. It is to that lawyer at the address they have provided, that the court and other litigants will send any correspondence or documents relating to the proceedings.

[155] The named lawyer remains on the record of the proceedings in the court until that lawyer formally notifies the court and the other litigants otherwise. In some circumstances, a lawyer requires the court’s leave to be removed from the record.

[157] A diligent and prudent lawyer will only allow their name to be added to proceedings as “acting”, if that lawyer has some involvement in or responsibility for the proceedings. This is consistent with and reflects that lawyer’s duty as an officer of the court, including the obligation facilitate the administration of justice.20

[159] Mr DV’s submission otherwise was part of his broader submission that he had no real responsibility for the carriage of Mr LS’s and Mrs HS’s files whilst he was at [Firm], and that for the most part Ms H was the lawyer with the overall responsibility.

[161] Ms H and Mrs R both worked on Mr LS’s and Mrs HS’s files. Neither could practise on their own account. They were employees of [Firm]. Someone in that firm with the ability to practise on their own account was required to competently supervise and manage them.

[162] I find that Mr DV had the responsibility, in terms of r 11.3, to “competently supervise and manage” the conduct of Ms H and Mrs R, being employees who were working (together and subsequently, Mrs R separately) on Mr LS’s and Mrs HS’s files. I also find that by his conduct he assumed that responsibility of his own volition.

[163] The next question is whether Mr DV competently supervised and managed the work of Ms H and Mrs R.

20 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, r 2.

[164] Rule 11.1 obliged Mr DV to competently supervise and manage employees. For the purposes of the retainer with Mr LS and Mrs HS, this involved his employees Ms H and Mrs R.

[165] Mr DV’s approach to his supervision of Ms H was deliberately laissez faire. He concluded that because Ms H had three years post admission experience in dealing with leaky building litigation, he could leave her to get on with it. He said that she knew that she could approach him if she had any problems.

[166] It could be said that three years post-admission experience is modest, and that a partner with considerable experience in a specialist area of law ought not to presume that a lawyer with such a modest level of experience will recognise that there might be a problem with a file.

[167] It must be acknowledged however, that as a lawyer with three years post-admission experience (as she then had), Ms H was entitled to apply to the New Zealand Law Society (or the High Court) practise on her own account.21 Whether any lawyer who so applies is approved to practise on their own account, will depend upon whether they meet the other requirements of the Act and the Lawyers and Conveyancers Act (Lawyers: Practice Rules) Regulations 2008.

[168] Implicit in this is an acknowledgment in the legislation that a lawyer with the experience that Ms H had at the time, was eligible to apply to practise on their own account. This must reflect a view that such a lawyer is potentially capable of running their own legal practice and does not otherwise require to be supervised and managed.

[169] In Ethics, Professional Responsibility and the Lawyer, the learned authors said of r

The rule recognises the importance of the profession supervising its newest members. In practice, the rule is particularly important for junior practitioners, who may face a complaint to the Law Society as a result of their inexperience and lack of supervision. In that situation, while the junior practitioner may be held to account, so too may that practitioner’s supervising lawyer.

22 Duncan Webb, Kathryn Dalziel and Kerry Cook Ethics, Professional Responsibility and the Lawyer

[107] The rule requires “competent supervision and management” by a lawyer of their employees. It does not demand constant supervision, for to expect that would render the point of employing competent and experienced staff, pointless.

[108] This approach does mean that mistakes may not be identified by the managing lawyer, if they are made. Whether the failure to identify an employee’s error should attract a disciplinary response, will depend upon the facts of each case.

[171] To the above observations I would add that the degree of competent supervision and management will also depend upon the nature of the work being undertaken by the employee.

[172] Leaky building litigation is regarded as a specialist area of law. A relatively small number of lawyers in New Zealand specialise in it. It is procedurally technical and involves complex areas of the common law. For the affected home or building owners, the process can be heart-breaking, and this adds to the importance and seriousness of any litigation conducted in this area.

[173] The proceedings being undertaken on behalf of Mr LS and Mrs HS were not straightforward. This arises because of the nature of leaky building litigation and also in the following particular respects:

(a) There was a question-mark, at the outset, as to whether either would have claims accepted by the WHRS because of limitation issues.

(b) The potential defendant was known by Mr DV to take procedural objections to leaky building litigation, including to the acceptance of claims by the WHRS.

(d) Proceedings in the District Court are governed by strict and extensive rules.

(e) At the very least there was a question-mark about whether proceedings about the same subject matter could co-exist in the District Court and the WHT.24

(f) Mr LS and Mrs HS preferred to have their cases resolved in the WHT for reasons of efficiency and cost.

[174] It seems clear that Ms H presented to Mr LS and Mrs HS as a confident practitioner, familiar with the issues their instructions raised. Doubtless also she presented as confident and competent to Mr DV.

[175] In responding to the Committee’s own motion investigation into her conduct, Ms H

[176] I now illustrate where in Ms H’s case there was a distinct lack of any supervision by

The next step would be to issue proceedings in the [WHT]. We recommend that you issue now and once [Mrs HS] receives her report she can be tagged onto your proceedings.

[178] There was no reference in that email to the negligence proceedings and the effect of those proceedings on the proposed WHT proceedings.

[179] In an email from Mr LS and Mrs HS to Ms H dated 1 June 2012, they asked several questions including “with the filing in the District Court what is our cost so far?” and “worst case scenario if we do go all the way to adjudication what cost ... would we be looking at

...?”. The email also referred to mediation in the WHT, the negligence proceedings and to the proceedings (then not filed) in the WHT.

[180] Ms H’s response to that email on 4 June 2018 does not address the costs question asked about the negligence proceedings. Amongst other comments, Ms H said “[t]o file your claim in the WHT we would charge ...” and then refers to steps in that Tribunal.

[181] The significance of Ms H’s two emails, almost three weeks apart, is as follows: Ms H was clearly still involved with both files in early June 2012. She had been asked about the negligence proceedings (albeit about costs) and did not respond to that query.

[183] At no time did Ms H refer to the fact that the negligence proceedings had still not been served, or that those proceedings would need to be discontinued before proceedings could be filed in the WHT.

[184] Both of those issues should have been addressed with Mr LS and Mrs HS at that time.

[185] Competent supervision and management of Ms H by Mr DV in the almost-three weeks between the emails (16 May 2012 – 4 June 2012), should readily have identified the issues. Competent supervision and management between 4 June and when the proceedings were filed in the WHT (24 June and 6 July) would also have identified the issues.

[186] Although Mr DV was entitled to take into account the fact that Ms H had three years’ relevant post-admission experience when assessing the extent of his supervision of her, as is made clear by r 11.1 supervision was nevertheless required.

[187] I do not consider that Mr DV’s supervision of Ms H was to the standard expected by r 11.1.

[188] It is not competent supervision and management to say that a lawyer with three- years post admission experience, involved in proceedings such as these, would be sufficiently experienced to recognise some of the problems that may arise in the conduct of those proceedings. That is re-active rather than pro-active and is the opposite of competent supervision and management.

[189] A pro-active approach to competent supervision and management is required by a supervising lawyer. This includes, at the very least, regular meetings to discuss progress to satisfy the supervising lawyer that there are indeed no issues; or, if there are, to recognise them and address them.

[190] I am satisfied that Mr DV breached r 11.1 in that he failed to competently supervise and manage Ms H in relation to the client files of Mr LS and Mrs HS, and that this is unsatisfactory conduct pursuant to s 12(c) of the Act.

[191] Mrs R presents in a different category. She was admitted to the bar in September

[192] Mrs R worked with Ms H on the two files until approximately the middle of June

2012, when Ms H’s involvement either ceased or was significantly reduced. In an email to

Mrs HS dated 18 June 2012, Mrs R said that she was “assisting [Ms H] on this file”.

[193] Mrs R attended to filing the two sets of WHT proceedings — these with Mr DV’s

[194] The fact that Mr DV’s name appears on those proceedings suggests that he was consulted about that in advance by Mrs R. It presents as unlikely that a lawyer with (then) nine months’ post-admission experience would take the step of filing and serving proceedings, naming a partner on the record, without first consulting that partner.

[195] This, in my view, is a clear indication that Mr DV assumed responsibility for Mrs R’s work. This is consistent with the obligation to competently supervise and manage an employee.

[196] However, an illustration of where Mr DV fell down in his supervision and management of Mrs R is that he allowed the WHT proceedings to be issued whilst there were extant negligence proceedings.

[197] This involves discussion about s 60 of the WHRSA. It is helpful to set out the relevant extracts of s 60 as it applied at the time:

(1) The owner of a dwelling house has the right to apply to the tribunal to have the claim adjudicated if it is an eligible claim.

(5) An owner of the dwellinghouse may not, however, apply to have an eligible claim adjudicated, or continue adjudication proceedings, if, and to the extent that, the subject matter of the claim is the subject of –

(6) Subsection (5) does not limit the power of any party to apply for proceedings to be transferred for adjudication under section 120 or agree that they be transferred under section 121.

[198] To the suggestion that s 60(5) of the WHRSA provides an absolute bar to there being co-existing leaky building proceedings about the same subject matter in more than one forum, through Mr CW Mr DV endeavoured to argue that the words “may not” in subs (5) are not the same as “shall not”. The submission was that using the words “may not apply”, Parliament has given a claimant a discretion about whether to file proceedings about the same subject matter in two different fora.

[199] Mr CW did not produce any authority to support this proposition. It is a proposition which presents as novel and bold.

[200] If it was Mr DV’s view at the time that the WHT proceedings were lodged, that there was a contestable interpretation to s 60(5) which meant that proceedings could co-exist in different fora, I would have expected there to be some notes, memoranda or correspondence on the file dealing with that. At the very least, informed client instructions ought to have been obtained about whether they wanted to proceed with filing proceedings in the WHT in the face of compelling argument to say that they were prevented from being able to do so.

[201] Quite simply, why would a client want to spend money on legal fees, including drafting, filing and service, for a proceeding that was compellingly statute-barred?

[202] I do not accept that Mr DV turned his mind to the s 60(5) issue at the time that Mrs

[203] I do not doubt that Mr DV was aware of the provision as part of his then extensive practice in the WHT. I conclude that he overlooked or had forgotten about the negligence proceedings. By his own acknowledgement he effectively left Ms H to deal with those proceedings and consequently took little part in their management.

[204] Competent supervision and management of Ms H by Mr DV, such as regular updating meetings to discuss all files on which Ms H was working, would have avoided the problem that arose with there being co-existing proceedings. Mr DV could be expected to have had an ongoing awareness of the negligence proceedings.

[205] This, in turn, would have led to competent supervision of Mrs R, and, at the very least a discussion with her about the effect of s 60(5) of the WHRSA — in turn leading to advice to Mr LS and Mrs HS, and receiving their instructions.

[206] I am satisfied that in breach of r 11.1, Mr DV failed to competently supervise and manage Mrs R in relation to the preparation, filing and service of the WHT proceedings.

[207] I further find that that this is unsatisfactory conduct by Mr DV, pursuant to s 12(c) of the Act.

[208] I now deal in turn with the two remaining issues: whether Mr DV breached professional standards in relation to the unserved negligence proceedings and filing concurrent WHT proceedings.

[26] However, what occurred (or did not occur) after the filing of the [District Court] proceedings was what concerned the Committee. Firstly, there was the fact that the [District Court] proceedings were never served. [Ms H] asserted that this was on the instructions of the client and there was an email on file between [Ms H] and Mr DV on 1 November 2011 to that effect. However, the Committee agreed with Mr R in this regard and considered the failure to serve the [District Court] proceedings to be a negligent oversight. It considered the clients should have been advised that the proceedings must be served without undue delay – there are clear requirements for prompt service under the District Court Rules. Even if the clients’ instructions remained that the proceedings should not be served, the issue should have been explained and followed up. Instead, the files appear to show no further correspondence until February 2012 when the assessment reports were received. The [District Court] proceedings remained unserved at the time when [the] retainers were terminated.

[29] The Committee concluded that the failure to serve (or at least give robust advice regarding service) of the [District Court] proceedings ... amounted to [a failure] to act competently in a manner consistent with the duty to take reasonable care.

[210] The Committee identified two conduct issues arising out of the failure to serve the negligence proceedings as being a failure by Mr DV to obtain informed instructions about the issue, as well as his failure to serve the proceedings as soon as was practicable. It concluded that both were breaches of r 3.

In providing regulated services to a client, a lawyer must always act competently and in a timely manner consistent with the terms of the retainer and the duty to take reasonable care.

[212] I do not agree with the Committee’s characterisation of Mr DV’s failure to give advice and receive informed instructions about deferring service, as fitting within r 3. In my view, this conduct is more properly measured against r 13.3. It provides:

Subject to the lawyer’s overriding duty to the court, a lawyer must obtain and follow a client’s instructions on significant decisions in respect of the conduct of litigation. Those instructions should be taken after the client is informed by the lawyer of the nature of the decisions to be made and the consequences of them.

[213] Additionally, I consider that the failure to serve the proceedings as soon as was practicable potentially raises issues of competence and diligence under s 12(a) of the Act. It provides:

[Unsatisfactory conduct] means conduct of the lawyer ... that occurs at a time when he ... is providing regulated services and is conduct that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer.

a) What, if any, advice did Mr DV give Mrs HS before the latter gave instructions to defer service of the proceedings? This engages a consideration of r 13.3.

b) Was the failure to serve the proceedings as soon as was practicable after they had been filed, conduct of a lawyer that fell short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer?25

[215] The starting point is the District Court rule in force at the time. It relevantly said:26

2.10.3 The plaintiff must, as soon as practicable after filing the notice of claim, serve a copy of the notice of claim on each defendant.

2.10.4 The proceeding comes to an end if the plaintiff does not serve the notice of claim within 12 months after the date on which the notice of claim is filed or within the further time allowed by the court under rule 2.10.6.

2.10.5 The plaintiff may, before or after the expiration of the period referred to in rule 2.10.4, apply to the court or a Registrar for an order extending that period in respect of any person who has not been served.

2.10.6 On application under rule 2.10.5, the court or Registrar ... may extend the period of service by six months starting on the date on which the order is made and so on from time to time while the proceeding is pending.

2.10.7 A proceeding that comes to an end under this rule is treated as having been discontinued by the plaintiff.

[216] The important sub-rules are rr 2.10.3, and 2.10.4. On the one hand, a lawyer is obliged to serve proceedings as soon as practicable after filing them; on the other hand, filed proceedings do not time-out for lack of service, for 12 months. Even then, the court or a Registrar may extend the time further.

_{[217] The equivalent High Court rule in force then and now is r
5.72.}27 _{It provides:}

(b) when directions as to service are sought, as soon as practicable after the directions have been given.

(2) Unless service is effected within 12 months after the day on which the statement of claim and notice of proceeding are filed or within such further time as the court may allow, the proceeding must be treated as having been discontinued by the plaintiff against any defendant or other person directed to be served who has not been served.

[218] I note that the High Court rule in force between 1986 and 2009, r 127, was expressed in identical terms to r 5.72.

[219] The requirement to serve proceedings “as soon as practicable after they have been filed” is common to the rules in both the High and District Courts and has been the position in the High Court since at least 1986. Each High Court rule has been headed “Prompt Service Required”.

[220] The consequences of not serving proceedings as soon as practicable after they have been filed can include a defendant applying to them strike out, on grounds that the delay has caused the defendant to suffer some prejudice.

[221] In Watson v Watson the High Court held that there must be “reasonable efforts” to serve proceedings within 12 months, or “good reasons” for delaying service.28

[222] The word “practicable” means “able to be done or put into practice successfully”, “when something can be done or performed” or “[a thing] reasonably capable of being accomplished; feasible”.29

[223] The ordinary and natural meaning of “as soon as practicable (after proceedings have been filed)”, consistent with the heading to the High Court rule, is “promptly”.

[224] In other words, unless there are difficulties with effecting service of proceedings, attempts to do so must be made promptly after they have been filed. In Mr LS’s and Mrs HS’s case, there were no attempts at service whilst Mr DV remained a partner at [Firm], nor any after his departure until Mr R attended to it in January or February 2013.

[225] Service of proceedings is a critical and triggering event in the conduct of litigation. The place and mode of service are important. Service must be formally proved as part of

the litigation process. The date of service triggers the timing of the next steps in the litigation, and the plaintiff’s lawyer will need to be vigilant about timetables that flow from that.

[226] Instructions to a lawyer not to serve proceedings as soon as practicable after they have been filed would be a “significant decision” about the conduct of the litigation in terms of r 13.3, about which advice must be provided before informed instructions are given.

[227] Advice to Mr LS about the claims procedure generally was set out in Ms H’s email

We would recommend that you instruct us to lodge a claim in the District Court while you wait for [the outcome of your application to the WHRS for adjudication]. If you are not eligible, you will still be in time in the District Court. If you are eligible, we can discontinue your claim in the District Court, and you can continue a claim in the [WHT]....

[228] The only written reference to serving the negligence proceedings is contained in an email exchange between Ms H and Mr DV on 1 November 2011. In summary, Mr DV told Ms H to “serve [the negligence proceedings]”. Ms H questioned that saying:

[Mr LS’s] instructions were pretty specific – file the claim to stop the clock, then we will check your references and decide whether we want to proceed with [Firm] – I can serve if you think, otherwise I was thinking of arranging a meeting with both [Mr LS and Mrs HS] at a time when she is in [City]. Thoughts?

[229] Although Mr LS seems to have indicated to Ms H that there was uncertainty about whether [Firm] would continue to be instructed, it is clear that [Firm] had at least been instructed to prepare and file the negligence proceedings and by implication give advice about that. In other words, Mr LS and Mrs HS were clients of [Firm].

[230] Mr DV’s response was “OK. If he does not want to serve yet, that is fine”.

[231] When a client instructs their lawyer to defer service of filed proceedings, that lawyer should give their client clear and unambiguous advice about the requirement to serve the proceedings as soon as is practicable after they have been filed, noting that a failure to do so risks the defendant applying to strike the proceedings out because some prejudice to that defendant caused by the delay in service.

(a) He “was involved in the decision to issue [the negligence proceedings] and

(b) However, beyond that he had neither carriage of nor responsibility for the negligence proceedings. They were being managed by Ms H, whose name was on the record. Ms H had over three years post admission experience, almost all of which was in the area of leaky building litigation. In other words, she did not require supervision to the degree that might be expected of someone who was only recently admitted.

(b) In any event, Mr LS instructed Ms H not to serve the proceedings on his behalf. His instructions were based upon his wish to preserve his position as to limitation issues that might arise in the District Court, whilst at the same time allowing him to await the outcome of the WHRS’s assessment of his claim for adjudication (which came in late November 2011). The further inference Mr DV invites is that although those instructions came from Mr LS, in a sense both he and Mrs HS were unanimous in the approaches that they wished to take to achieving resolution of their claims, in whatever forum.

[233] Mr DV’s email to Ms H on 1 November 2011 directing her to serve the negligence proceedings suggests that he was aware, as might be expected, of the requirement to promptly serve the negligence proceedings.

[234] Nevertheless, Mr DV chose to accept at face value, Ms H’s indication that Mr LS

[235] Those instructions were plainly at odds with the requirement for prompt service and should have led to further enquiry by and advice from Mr DV.

[236] Missing is any record of advice given to Mr LS and Mrs HS about filing and service of the negligence proceedings. In one of her emails to Mr DV on 1 November 2011, Ms H refers to “arranging a meeting” with Mr LS and Mrs HS. This was in the context of the discussion about service and Mr LS’s instructions about that.

[237] It is not clear from the material whether and when that meeting took place and, if it did, what advice was given about service of the negligence proceedings.

[238] At the very least I would have expected to see a record of advice given to Mr LS and Mrs HS about the need for prompt service of the negligence proceedings. I would expect that advice to have included a reference to the rule requiring service as soon as

[239] practicable. As well it should have included advice about the potential dangers of delaying service including the risk that the [City] Council might apply to strike out the claim on the grounds of prejudice because of delayed service.

[240] I consider that Mr DV breached r 13.3 by failing to give Mr LS and Mrs HS advice about the need to serve proceedings as soon as is practicable after they had been filed and the potential consequences of failing to do so. This failure meant that their instructions about the significant decision to defer service were not given from the perspective of being fully informed.

[241] I find that this is unsatisfactory conduct by Mr DV, pursuant to s 12(c) of the Act.

[242] Because Mr DV did not give advice about the requirement to serve the negligence proceedings as soon as was practicable after they had been filed, the issue which next arises is whether he fell below the required standard of competence and diligence by not filing those proceedings as required by District Court Rule 2.10.3.

[243] As has been noted, a failure to serve proceedings as soon as is practicable after they have been filed can lead to a defendant applying to strike them out the claim, arguing prejudice.

[244] Whether there is prejudice to a defendant because of delayed service will depend upon the facts of each case. The length of the delay is not necessarily a relevant factor; the question will be, whatever the delay, whether the defendant has been prejudiced by it.

[245] A delay of one month could result in prejudice to a defendant if, say, an important witness dies during that period and the defendant has been denied opportunity to take at least a written statement from them for possible use in any proceedings.

[246] In the present matter, although the negligence proceedings were not served for close to 15 months after they had been filed, the District Court dismissed the [City] Council’s application to strike them out.

[247] That dismissal does not mitigate Mr DV’s conduct in not serving the negligence proceedings as soon as was practicable after they had been filed. The District Court Rules obliged him to do so, absent informed instructions to the contrary. He did not have instructions of that nature.

[248] It appears to have been well known by lawyers practising in the area of leaky building litigation, including Mr DV, that the [City] Council when a defendant will take procedural and technical points as part of any defence. It should have occurred to Mr DV that the Council might pursue the delayed service issue whether or not he had informed instructions from Mr LS to delay service.

[249] The proceedings remained unserved for approximately nine months before Mr DV

[250] I agree with the Committees conclusion that Mr DV’s conduct in failing to ensure prompt service of the proceedings, requires a disciplinary response. However, as indicated by me above at [213] I consider that the failure more properly reflects the language of s

12(a) of the Act: conduct of a lawyer providing that fell short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer, and as such is unsatisfactory conduct.

[252] I do not accept Mr DV’s argument that there is a contestable interpretation of s 60(5) of the WHRSA, with one such interpretation being that a claimant may have coexisting proceedings about the same subject matter in the WHT and some other court or tribunal.

[253] Ms H did not think so either, when she sent Mr LS an email on 12 October 2011 and said:

If the claim is discontinued in the District Court because you are found to be eligible by the WHRS then we won’t be able to make a claim for lawyers’ fees however claims in the WHT generally are quicker.

[254] I think it clear that Parliament intended leaky building litigants to make a choice of one jurisdiction (subject to the ability to transfer proceedings between jurisdictions). One battle on one battlefield is consistent with the conduct of all litigation.

[255] It follows that it was wrong for the WHT proceedings to have been filed in June and July 2012 and served on the [City] Council. The WHT lacked the jurisdiction to deal with those proceedings.

[256] However, a claimant who lodges proceedings in the WHT is not required to certify that they have not lodged similar proceedings in another court or tribunal.

[257] Accordingly, the WHT manages proceedings lodged with it as though it has jurisdiction to deal with them.

[258] This triggers the WHT’s case management processes. The first of these, generally, involves a Case Manager in that jurisdiction contacting the parties to notify them of the date of a preliminary conference before an Adjudicator in the WHT.

[259] On 10 July 2012, a Case Manager in the WHT emailed Mrs HS and Mr DV about the proceedings that had been earlier lodged by Mrs R. The Case Manager informed them of the preliminary conference date (17 July 2012) and provided information about the procedure at that preliminary conference. She further noted that the preliminary conference would deal with Mr LS’s claim as well.

[260] Mr DV does not recall reading that email but does not doubt that it was received by him.

[261] In my view receipt of the email ought, at the very least, have triggered enquiry of Mrs R as to whether she required assistance in preparing for the preliminary conference. Such a discussion — consistent with a duty to competently supervise and manage — would undoubtedly have revealed that there were co-existing and unserved negligence proceedings in the District Court.

[262] If the significance of that was not apparent to Mrs R, then in my view it ought to have been readily apparent to Mr DV.

[263] Moreover, had Mr DV competently supervised and managed Ms H, receipt of that email by him ought immediately to have triggered enquiry as to how those proceedings could have been filed whilst there were co-existing negligence proceedings.

[264] Even if the 10 July 2012 email from the WHT to Mr DV did not prompt him to discuss Mr LS’s and Mrs HS’s cases with Mrs R, the WHT’s reporting letter addressed to him and to Mrs R, dated 17 July 2012 and attaching a procedural order that the adjudicator had made, ought clearly to have triggered such an enquiry.

[265] A lawyer who commits such a basic procedural error has been, at the very least, careless.

[266] Not all procedural errors will have major consequences. In my view, the procedural error made by Mr DV in allowing proceedings to be filed in the WHT whilst there were co- existing (though unserved) negligence proceedings in the District Court, was not one which had immediate or major consequences.

[267] Such a duplication can be cured by simply asking the WHT to terminate the proceedings, pursuant to s 109 of the WHRSA. That section (relevantly) reads:

The tribunal must terminate adjudication proceedings if it considers, on reasonable

grounds, that they should not have been commenced ... in terms of section 60(5) ...

[269] There is no suggestion that this was a difficult procedure, or that when Mr R undertook it, it was met with opposition by the [City] Council. It appears to have been a straightforward administrative process.

[270] Mr DV could equally have taken that step. His clients’ positions would not have been compromised.

[271] I regard Mr DV’s conduct in allowing the WHT proceedings to be filed and served whilst there were co-existing negligence proceedings, as careless rather than demonstrating a lack of competence which calls for a disciplinary response.

[272] I have not come to this conclusion lightly. To a lawyer with expertise in this technical area of building and construction law, matters of jurisdiction should be meat and drink to that lawyer. Mr DV had such expertise — it was his description of that expertise to Mr LS and Mrs HS which persuaded them to continue to instruct [Firm].

[273] His submission that s 60(5) might allow a claimant to double-dip, is disingenuous.

[274] But it does not appear to have been carelessness to a degree which compromised Mr LS’s and Mrs HS’s litigation positions. Section 109 of the WHRSA makes that clear: the WHT must terminate proceedings that have been filed contrary to the restriction in s 60(5). There appears to be no room to argue otherwise.

[275] By a fine margin, I disagree with the Committee’s characterisation of Mr DV’s conduct in this regard, as being a failure to act competently and thus unsatisfactory conduct and I reverse that finding.

(a) failed to competently supervise and manage both Ms H and Mrs R in breach of r 11.3 and that this was unsatisfactory conduct by him pursuant to s 12(c) of the Act;

(b) failed to advise Mr LS and Mrs HS of the nature of decisions to be made about service of the negligence proceedings and the consequences of those decisions, in breach of r 13.3 and that this was unsatisfactory conduct by him pursuant to s 12(c) of the Act; and

(c) fell below the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer by failing to serve the negligence proceedings as soon as reasonably practicable after those proceedings had been filed, and that this was unsatisfactory conduct contrary to s 12(a) of the Act.

[278] The Committee found unsatisfactory conduct in connection with “the failures regarding service [of the negligence proceedings] and issuing proceedings in two forums”.30

It also held that Mr DV breached r 11.3 in relation to his supervision of both Ms H and Mrs R. It further held that this amounted to unsatisfactory conduct on Mr DV’s part, under s 12(c) of the Act.

[279] When imposing penalty, the Committee did not differentiate between the two findings of unsatisfactory conduct that it made against Mr DV. It simply imposed a fine of

[280] By the level of the fine, the Committee clearly regarded the totality of Mr DV’s

[281] As a result of the findings I have made, Mr DV is left with findings of unsatisfactory conduct in relation breaches of rr 11.3 and 13.3 of the Rules, and s 12(a) of the Act.

[283] In the case of Ms H, Mr DV’s approach to supervision and management was that she could speak to him if she encountered difficulties on Mr LS’s and Mrs HS’s files. As indicated, that approach mistakenly presumes that Ms H would be aware of the types of problems that might or do arise.

[284] This approach meant that proper advice to Mr LS and Mrs HS about service requirements and non-service pitfalls, was not provided.

[285] It also meant that Ms H, by omitting to advise Mr LS and Mrs HS about s 60(5) of the WHRSA, encouraged them to the belief that they could have co-existing proceedings. This in turn meant that Mr LS and Mrs HS paid for unnecessary legal services, in the drafting, filing and serving of the WHT proceedings.

[286] In the case of Mrs R, Mr DV agreed to have his name recorded as the lawyer acting on the WHT proceedings that she drafted, in circumstances where those proceedings were void from the outset.

[288] Mr DV’s failure to competently supervise and manage Ms H and Mrs R resulted in two fundamental procedural errors being made: first, the negligence proceedings were not served as soon as was practicable after they had been filed; secondly, proceedings were filed in the WHT whilst there were co-existing negligence proceedings. I do not accept Mr DV’s argument that, procedurally, that is a contestable issue.

[289] Mr DV’s failure to competently supervise and manage Ms H and Mrs R began when Mr LS (and subsequently Mrs HS) approached [Firm], which was in approximately September 2011. His minimalist approach to supervision and management continued until his departure from [Firm] on 31 July 2012; a period of some ten months.

[291] The strategic and procedural importance of serving proceedings is underscored by

the requirement to serve them “as soon as practicable” after they have been filed. A

deviation from that statutory requirement is a significant decision in the conduct of any litigation.

[292] I regard the failure by Mr DV to advise his clients about service of the negligence proceedings, in the face of their uninformed instructions not to do so, as a serious conduct lapse. With his self-described experience and expertise in leaky building litigation, including the issues that arise with limitation periods in both the District Court and the WHT, I would have expected him to provide comprehensive advice at the outset of any retainer, about strategic decisions and how procedural requirements can impact those decisions. There was a singular lack of any such advice.

[294] Mr DV was obviously aware of the need to serve the negligence proceedings: he initially directed Ms H to do so. Her response that the clients wanted to defer service was met by Mr DV with no critical assessment, nor any regard whatsoever for the requirement to serve proceedings as soon as practicable after they have been filed.

[295] Coupled with his knowledge of the [City] Council’s litigation response to leaky building litigation, he should have known that the failure promptly to serve the proceedings potentially invited challenge.

[296] I regard this too as a serious lapse of competence and diligence. For that, I impose a fine of $3,000.

[297] The Committee’s basis for ordering compensation was for the legal costs incurred by Mr LS and Mrs HS in engaging Mr R to terminate the WHT proceedings, deal with service of the negligence proceedings and transfer those proceedings to the WHT.

[298] In Ms HS’s case, the Committee ordered Mr DV to pay compensation of $8,531.95;

[299] Mr R began acting for Mr LS and Mrs HS, in approximately January 2013. The steps he took were to:

(b) serve the negligence proceedings on the [City] Council. [300] This prompted the [City] Council to:

(a) apply to set aside the Registrar’s decision to extend the time for serving the

(b) apply to strike out the negligence proceedings as an abuse of process. [301] Mr R:

(b) cross-applied to transfer the negligence proceedings to the WHT. [302] The District Court:

[303] I consider that none of this would have occurred if Mr DV had served the negligence proceedings as soon as practicable after they had been filed. The procedural and jurisdictional future of Mr LS’s and Mrs HS’s claim for compensation for owning a leaky home would have been triggered by service of the negligence proceedings. The [City] Council would have been engaged from the outset and the proceedings managed by the District Court’s rules-controlled and event-based case management processes.

[304] As I have already noted, Mr DV took no steps in relation to service of the negligence proceedings before his departure from [Firm] on 31 July 2012. Nor did anyone else in [Firm] after he left, until the lack of service was noted and time enlarged by the Registrar of the District Court, at Mr J’s request.

[305] Given the approach of the [City] Council to raising procedural points in leaky building litigation, acknowledged by Mr DV, it is hardly surprising that the Council took the procedural steps that it did once Mr R became involved. After all, the negligence proceedings had been filed as far back as on 25 October 2011.

[306] I agree with the Committee’s conclusion that Mr DV must pay compensation to Mr LS and Mrs HS for his lack of competence and diligence in failing to serve the negligence proceedings promptly.

[307] I do not agree with the Committee’s conclusion that Mr DV should compensate Mr LS and Mrs HS for the full amounts of Mr R’s fees for the remedial work that he did in relation to the unserved negligence proceedings and the co-existing WHT proceedings. Mr DV left [Firm] for good on 31 July 2012; after that date, responsibility for the further carriage of Mr LS’s and Mrs HS’s files fell principally to Mr J.

[308] Relevant to the assessment of how much compensation Mr DV should pay, is that his failure to serve the proceedings for nine months was compounded by [Firm] not identifying that issue for several months after his departure. The fact that the Registrar enlarged service time for a further six months meant that by the time Mr R served the proceedings, almost 15 months had elapsed since the negligence proceedings had been filed.

[309] A delay of 15 months as opposed to one of nine months would have required a more detailed explanation by Mr R as part of his opposition to the Council’s attempt to strike out the negligence proceedings.

[310] I remind myself of the High Court’s observations, set out by me at [92] above, that the process of review “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”.

[311] To some extent fixing Mr DV’s contribution to the costs incurred by Mr LS and Mrs

HS is arbitrary because of the break in the chain that occurred when Mr DV left [Firm].

[312] Nevertheless, Mr DV failed to advise his clients about the obligation to promptly serve the negligence proceedings after they had been filed, and for nine months he did nothing to mitigate a compounding problem. This, in circumstances where he knew that the [City] Council’s approach to defending leaky building litigation was to pursue technical arguments, one of which was plainly the failure to serve the negligence proceedings as soon as was practicable, in breach of District Court Rule 2.10.3.

[313] In the circumstances, I order Mr DV to pay compensation to Mrs HS in the sum of

[314] In his submissions on behalf of Mr DV, Mr CW raised several procedural challenges to the Committee’s inquiry processes. This included the fact that the Committee made initial findings of unsatisfactory conduct against Mr DV at its 20 September 2016 meeting (competence and failure to supervise Ms H), but did not inform Mr DV of those findings until it delivered its full determination on 3 March 2017. Further, Mr CW was critical of the Committee’s failure to invite Mr DV to make penalty submissions. Finally, Mr CW submitted that the Committee ought to have conducted a hearing in person.

[315] I agree that it is disappointing that 18 months elapsed between the complaint being made and the Committee’s final determination. However, I acknowledge that the Committee’s inquiry was made complicated by the fact that the complaint when initially made did not identify particular lawyers; that Mr DV had left [Firm] on 31 July 2012 and there were delays in him being able to review that firm’s relevant files, and that his responses to the complaint identified that other lawyers were involved in acting for Mr LS and Mrs HS (Ms H and Mrs R).

[316] I do not agree that, overall, the Committee’s inquiry process was unfair or unreasonable, or otherwise did not comply with the principles of natural justice. In particular, I note that on each of its Notices of Hearing, the Committee explicitly invited submissions on “the appropriate orders the Standards Committee may make under s 156 of [the Act], if there is a finding of unsatisfactory conduct”.

[317] Pursuant to section 211(1)(a) of the Lawyers and Conveyancers Act 2006 the decision of the Standards Committee is confirmed, modified and reversed as follows:

(b) Confirmed as to the finding that contrary to r 11.3 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, Mr DV failed to ensure that the conduct of Ms H and Mrs R was at all time competently supervised and managed by him and that this was unsatisfactory conduct. For that breach, I impose a fine of $2,500.

(d) Modified by a finding of unsatisfactory conduct by Mr DV for a breach of r 13.3 in that he failed to inform Mr LS and Mrs HS of the nature and consequences of significant decisions to be made in the negligence proceedings about the service of those proceedings on the [City] Council. For that breach, I impose a fine of $3,000.

12(a) in that he fell below the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer by failing to serve the negligence proceedings on the [City] Council as soon as was practicable after those proceedings had been filed. For that breach, I impose a fine of $3,000.

(f) Reversed as to the finding that the filing of proceedings in two fora without proper advice to the clients amounted to a failure to act competently in a manner consistent with the duty to take reasonable care and was unsatisfactory conduct.

(g) Modified as to the payment of compensation to Mr LS and Mrs HS as follows: (i) Mr DV is to pay the sum of $12,000 to Mr LS.

(ii) Mr DV is to pay the sum of $5,000 to Mrs HS. [318] The total of the fines now payable by Mr DV is $8,500.

[319] Where a finding of unsatisfactory conduct is made or upheld against a practitioner on review it is usual that a costs order will be imposed. I see no reason to depart from that principle in this case.

[320] Taking into account the Costs Guidelines of this Office, Mr DV is ordered to contribute the sum of $1,200 to the costs of the review, that sum to be paid to the New Zealand Law Society within 30 days of the date of this decision.

[321] The order for costs is made pursuant to s 210(1) of the Lawyers and Conveyancers

[322] Pursuant to s 215 of the Lawyers and Conveyancers Act 2006 I confirm that the order for costs made by me may be enforced in the civil jurisdiction of the District Court.

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

New Zealand Legal Complaints Review Officer

DV v LS [2018] NZLCRO 137 (19 December 2018)