YQ v VG [2018] NZLCRO 24 (14 March 2018)

Last Updated: 30 March 2018

	LCRO 264/2016
CONCERNING	an application for review pursuant to section 193 of the Lawyers and Conveyancers Act 2006
AND
CONCERNING	a determination of the [Area] Standards Committee
BETWEEN	YQ Applicant
AND	VG Respondent

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

DECISION

Introduction

[1] Ms YQ was employed as principal of [Area] School (the school). She has applied for a review of a decision by the [Area] Standards Committee (the Committee) which decided to take no further action in respect of her complaint about Mr VG’s involvement as lawyer for Ms YQ’s employer.

Background

[2] Mr VG’s part in Ms YQ’s affairs was to advise and represent the school’s Board and a Limited Statutory Manager appointed for the Board (the employer) on employment-related matters, and to investigate the history of Ms YQ and others’ employment at the school.

[3] Ms YQ had been principal of the school between [Date Period]. Her employment was suspended, and then terminated, because the employer concluded

that her “management and behaviour towards current and former staff members had been responsible for an unhealthy and harmful working environment at the school”.1

[4] Ms YQ raised a personal grievance challenging her suspension and dismissal. Mediation was unsuccessful and Ms YQ was not satisfied with the decision reached by the Employment Relations Authority. Her appeal to the Employment Court concluded that the she had established her disadvantage grievance, because the employer’s decision to suspend her was not a conclusion a fair and reasonable employer could have reached in all the circumstances.

[5] Ms YQ then made a complaint to the New Zealand Law Society Complaints Service (NZLS) about Mr VG’s involvement as her former employer’s lawyer.

Complaint

[6] Ms YQ says Mr VG contravened:

• (a) rule 2.3 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (the Rules), which requires a lawyer to use legal processes only for proper purposes;
  
• (a) rule 2.7 of the Rules, which prohibits a lawyer from threatening, expressly or by implication, to make an accusation against a person or to disclose something about any person for any improper purpose;
  
• (b) rule 13.5 of the Rules, which obliges a lawyer engaged in litigation for a client to maintain his or her independence at all times;
  
• (c) his obligation of independence by having a “dual role” as “the school’s legal counsel and investigator”; and
  
• (d) his obligation to maintain proper professional standards.
  

Decision

[7] The Committee determined, pursuant to s 152(2)(c) of the Lawyers and Conveyancers Act 2006 (the Act), that no further action on the complaint was necessary or appropriate.

[8] In reaching that decision the Committee determined that:

1 [Case citation removed].

(a) Mr VG was not providing regulated services while acting as an investigator, and so any consideration of his conduct in relation to that aspect was outside the Committee’s jurisdiction (the Committee noted this aspect had already been considered by the Employment Court).

(b) The issue of procedural compliance with the Education Act 1989 was the responsibility of the employer. To the extent that Mr VG may be or was responsible for any non-compliance (given his role as legal adviser to the employer), these matters were canvassed by the Employment Court, who found that “the defects were minor and did not lead to the employee being treated unfairly”.

(c) In any event, non-compliance consisting of a minor defect in process with no material consequence could not amount to unsatisfactory conduct.

(d) No aspect of Mr VG’s correspondence that Ms YQ raised could constitute a “threat” pursuant to the Rules.

(e) There is no evidence that the employer acted with bad faith in steps taken relating to Ms YQ’s suspension or other matters raised by her within her complaint.

(f) Ms YQ’s employment situation was successfully litigated by her in the Employment Court, however this does not mean Mr VG did anything inappropriate from a professional conduct perspective as a lawyer.

(g) The Employment Court noted that Mr VG’s “dual role” created a perception of bias, but no actual bias.

(h) In some respects, Ms YQ was seeking to re-litigate employment matters already decided by the Employment Court.

Application for review

[9] Ms YQ applied for a review and wants Mr VG to pay her money, and this Office to issue a media statement that she can disseminate publicly. As to the latter, it is noted that s 206(1) of the Act requires this Office to conduct reviews in private, and that there is no public interest in ordering publication of Mr VG’s name in the context of this decision. There is also no basis on which to order Mr VG to pay Ms YQ compensation, as will be seen from what follows.

[10] Ms YQ says:

• (a) the Committee has ignored the considerable evidence provided that proves Mr VG has acted in a manner that breaches the standards required of a lawyer;
  
• (b) Mr VG’s investigation was fundamentally flawed and had a pre-determined outcome; and
  
• (c) Mr VG was clearly the investigator and also the legal advisor.
  

[11] Mr VG says he has little to add to his earlier response to NZLS beyond:

• (a) he is confident all of his actions were carried out professionally, for proper purposes and with independence as required by the Rules;
  
• (b) while his advice to his client is privileged, at no time did he have reason to believe that his client was acting in bad faith or with improper purpose;
  
• (c) all the correspondence he sent to Ms YQ was sent on as the employer’s legal counsel, acting on instructions from the employer; and
  
• (d) Ms YQ has not identified any specific express or implied threat and he did not make any such threat.
  

Review hearing

[12] Both parties attended a review hearing convened from Auckland on 28 February 2018 by audio-visual link, with Ms YQ joining from Invercargill, and Mr VG and his lawyer joining from Christchurch.

Nature and scope of review

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

... 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” ...

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

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

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

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.

Review Issues

[15] The issues for consideration on review are:

• (a) does the investigation Mr VG carried out for the employer fall within the definition of legal work under the Act;
  
• (b) did Mr VG conduct his professional dealings with Ms YQ with integrity, respect and courtesy;
  
• (c) did Mr VG threaten to use, or use legal processes for any improper purpose; and
  
• (d) was Mr VG engaged in litigation between Ms YQ and the employer for the purposes of r 2.5.
  

Discussion

Does the investigation that Mr VG carried out for the Employer fall within the definition of legal work under the Act

[16] The Act does not regulate everything that a lawyer does. It does, however, regulate the legal work that lawyers do. Legal work is defined in the Act as including:4

(b) advice in relation to any legal or equitable rights or obligations:

...

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

4 Lawyers and Conveyancers Act 2006, s 6.

(e) any work that is incidental to any of the work described in paragraph [(b)].

[17] Mr VG is a lawyer. He was instructed by the employer to represent and advise it on the legal and equitable rights (if any) arising from the employment relationship with Ms YQ. The representation and advice Mr VG provided to the employer was legal work pursuant to (b).

[18] The Committee considered whether or not the investigative work Mr VG did for the employer also fell within the definition of regulated services under the Act. The Committee concluded that the investigative work was not regulated, because it was not advice in relation to any legal or equitable rights or obligations. The Committee also noted the broad terms of reference the employer had specified for the investigation, and considered there was a distinction between an investigation into facts with a single term of reference, and the provision of legal advice on legal rights and obligations.

[19] Given the broad definition of legal work set out in (e), and the fact that the definition of legal work is not exclusive, that distinction seems artificial. It also seems inconsistent with the High Court’s comments in Orlov that tend to narrow the exclusions.5

[20] The employer instructed Mr VG to represent it and to provide advice on its employment obligations. While those included the employer’s relationship with Ms YQ, she was not the employer’s only employee at the school. The purpose of the employer’s investigation was to ascertain the facts. Evidence was provided by a range of people, not just employees.

[21] Mr VG could not give the employer employment advice in a vacuum. He could only give advice based on all of the facts he could access. Mr VG was not alone in his investigation, although the other investigator was not a lawyer. The facts Mr VG and the other investigator identified necessarily informed the legal advice Mr VG would provide and any representations he made on the employer’s behalf. The investigative work Mr VG did was intimately connected to the advice he was to provide to the employer.

[22] Mr VG could not provide reliable legal advice without the investigative work having been done by someone. Where it was done by a non-lawyer, the question of whether it was regulated under the Act simply does not arise. However, as Mr VG is a lawyer, and he did some of that investigative work as an incident to preparing a report and providing legal advice, the investigative aspect of Mr VG’s was legal work falls

5 Orlov v The New Zealand Lawyers and Conveyancers Disciplinary Tribunal [2014] NZHC 1987, [2015] 2 NZLR 606.

within the definition set out in (e). Mr VG’s investigative work was legal work and is regulated under the Act.

[23] As my view is that the investigative work was legal work, it is appropriate to note that there is no evidence of any conduct on Mr VG’s part in carrying out that investigation or preparing his report that falls below a proper professional standard. Objectively read, his report is balanced. Mr VG reports the evidence he was given by witnesses and his views on that. He was instructed to give a view. He does not have to be right, he is only required to exercise his professional judgement. The report demonstrates that he did and that he took time to form the views he expressed.

[24] While there is correspondence from Ms YQ’s lawyers expressing a clear preference for Mr VG to complete his investigation and report with some haste, the time he took suggests Mr VG carried out his allotted tasks with the level of competence and diligence a member of the public can properly expect of a reasonably competent lawyer.

[25] As Mr VG was not instructed by Ms YQ, the most she and her lawyers could do was put pressure on him and then say bias could be perceived in his conduct as the employer’s lawyer. The Employment Court said there was no evidence of actual bias on Mr VG’s part. I can see none.

[26] If Ms YQ or her lawyers had wanted to challenge the substance of the report, any of the witnesses Mr VG interviewed could have been called to give evidence. It is assumed that as well as prolonging the Court process, that would have attracted an indeterminate and unmanageable level of risk for Ms YQ. Thus, the safer strategy was to undermine Mr VG’s work rather than to confront the witnesses and any issues they may have wanted to raise.

[27] The evidence available on review provides no basis for any finding that is adverse to Mr VG arising from his investigation, report, advice or representation of the employer. It is noted that complaints of that nature can be difficult for a non-client to sustain because of the privilege and confidence that apply to Mr VG’s professional relationship with his client, Ms YQ’s former employer.

Mr VG’s obligations to Ms YQ

[28] For the purposes of the Rules, Ms YQ was a third party to Mr YQ’s relationship with his client, the employer. Broadly speaking, Mr VG’s obligations to Ms YQ are encapsulated in r 12 which records that “a lawyer must, when acting in a professional capacity, conduct dealings with others ... with integrity, respect and

courtesy”. Those obligations are necessarily limited by the far wider and more onerous obligations Mr VG owed to his client, whose interests he was obliged to advance.

[29] Ms YQ, who was represented by her own lawyer at all material times, acknowledges that Mr VG’s conduct towards her was respectful and courteous. However, she contends that he displayed a lack of integrity towards her.

[30] Ms YQ suggested at the review hearing that being paid from public money for the work he did for her former employer somehow taints Mr VG’s integrity. There is no proper basis for that proposition.

[31] Ms YQ’s complaint reflects her disappointment in the employer’s substantive decision to suspend her from her employment, and to terminate her employment. Any shortcomings in that respect cannot be attributed to Mr VG. The employer did not have to act in accordance with Mr VG’s advice and there is a suggestion in Mr VG’s evidence that there may have been times when the employer did not. While there may be times when it is proper to do so, this process of review of a decision on Ms YQ’s complaint is not the place to explore issues that might have arisen in the relationship between Mr VG as a lawyer and his client. To do so would betray the employer’s right to have the confidence of its relationship with Mr VG respected and would impinge on any privilege the employer may not have waived.

[32] Understandably, Ms YQ's perceptions of Mr VG’s conduct are coloured by her experiences. However, it cannot safely be assumed that the employer’s or the school’s interests were entirely consistent with Ms YQ’s. As mentioned earlier, the employer was responsible to all of its employees, including Ms YQ, and to the school’s students and their parents. Those multilateral obligations required careful management based on sound advice, which in turn relied on a comprehensive grasp of the relevant facts.

[33] The materials available on review, including the parties’ presentations at the review hearing, disclose no basis for the contention that when acting in a professional capacity Mr VG did not conduct his dealings with Ms YQ with integrity.

Did Mr VG threaten to use, or use any legal process for an improper purpose

[34] I understand this aspect of Ms YQ’s complaint to be twofold. First, it is a contention that Mr VG’s investigation was a legal process and that he used that process for the improper purpose of ending her employment. Second, that the suspension process was wrong. There are a number of difficulties with both those propositions.

[35] It is accepted that the employer’s enquiry and suspension processes were legal processes. Both processes had to be conducted in accordance with the legal obligations imposed on an employer under the legislative framework of the Employment Relations Act 2000. The overarching statutory obligation of good faith touches on all aspects of the employment relationship, including disciplinary investigations and suspensions. Disciplinary investigations and suspensions are permeated by principles of natural justice and fairness, which are key procedural requirements required by law.

[36] According to the terms of reference for the disciplinary investigation, it was wide-ranging. It did not occur in a vacuum. Concerns had been raised in other inquiries into what was going on at the school, but it was not their purpose to sheet those problems home to any particular employee or employees. The employer’s investigation had to be wide-ranging, because of the scope of concerns that had previously been raised, the fact the employer also owed obligations to the broader community and because Ms YQ was not the employer’s only employee.

[37] There are many kinds of employment related investigations. Some are simple and straightforward, with the focus on a single employee and a single incident. That was not the case with the employer’s investigation. As I understand the way the enquiry was conducted, Mr VG and the Board member were to cast a wide net, and then to analyse and assess the information they gathered from witnesses to evaluate whether there was evidence of conduct that was inconsistent with an employee’s obligations in the employment relationship. There were allegations and counter- allegations floating around that included bullying and overbearing conduct, factions forming, preferential treatment and inappropriate use of language. It was a minefield that had to be dealt with somehow because of the employer’s multilateral obligations.

[38] Mr VG’s evidence is that he wanted to find out what the facts were. That was why he interviewed potential witnesses, and produced a report that recorded the evidence he had collected and set out his assessment of that evidence. The witness interviews were constrained by time, presumably to contain costs and so witnesses could focus their minds on what was relevant. The witness interviews were conducted with the purpose of ascertaining fact. There is no impropriety in that purpose.

[39] Ms YQ contends that the suspension notice Mr VG sent to her in early November is evidence of him using misusing the suspension process that applied to Ms YQ’s employment relationship.

[40] The Employment Court has dealt fully with those concerns. Mr VG was not a party to the employment relationship, so there is no contractual privity. Unlike

employer and employee, Mr VG had no enforceable legal rights or obligations under the employment agreement. His job was to provide advice based on the facts, which the employer was not obliged to follow. Suggesting that he suspended Ms YQ conflates his legal capacity with that of his client, and completely misconceives his role as a lawyer.

[41] There is no evidence of any purpose on the part of Mr VG that could be described as improper. There is therefore no evidential basis for a finding that Mr VG used or threatened to use a legal process for an improper purpose.

Was Mr VG engaged in litigation between Ms YQ and the school

[42] Ms YQ contends that Mr VG did not maintain his independence while he was engaged in litigation for his client. Litigation is the process of taking a case to a court of law so that a judgment can be made.6 On that basis, Ms YQ raising a claim to a personal grievance probably marks the start of the litigation process.

[43] This aspect of Ms YQ’s complaint again relates to Mr VG’s roles in investigating, advising and representing the employer. Her complaint extends to Mr VG giving evidence about the investigative process, the opinions and conclusions expressed in his report, his attendance representing the employer at mediation and what she knows of the advice he provided to the employer. She objects to the evidence Mr VG gave to the Employment Court, and is no less concerned about the evidence he did not give because of the employer’s claims to privilege.

[44] The employer acknowledged at the outset that the investigation was not going to be carried out by someone independent of the school. It was carried out by a member of the Board that had employed Ms YQ as well as Mr VG. It could be that Mr VG assisted the Board member by bringing adding a level of independence and objectivity. In any event, the investigation process has been dealt with above. From a professional perspective, there is no problem with that.

[45] Mr VG was also obliged to be objective in providing advice to his client. That has also been discussed above. There is no problem with that.

[46] Ms YQ’s contention is that Mr VG’s investigation was skewed. That has been addressed by the Employment Court’s comment that there was no actual bias, only a perception on Ms YQ’s part.

6 Cambridge Dictionary “litigation” <www.dictionary.cambridge.org>.

[47] The letter Ms YQ’s lawyer wrote to Mr VG’s firm on 22 January 2014, while typical of letters lawyers sometimes write to protect their client’s position when litigation is or may be looming, is not evidence that Mr VG lacked independence.

[48] It is accepted that the employer had asked Ms YQ not to speak to the witnesses while the investigation was underway. That does not mean Mr VG did not investigate in a balanced way. The employer’s direction cannot be taken to extend to prohibiting Ms YQ from calling individuals as witnesses before the ERA or Employment Court, because there is no property in a witness. Ms YQ certainly could have called any direct evidence in her case to the ERA or Employment Court if it served her interests to do so.

[49] While the Employment Court described Mr VG’s role as a “dual role”, it seems to have been broader than that. Alongside the investigation and advice Mr VG provided, was his representation of the employer. There is nothing that suggests Mr VG’s advice and representation were not based on the information witnesses had provided to him. If Ms YQ wanted to challenge the evidence provided by those witnesses, she could have called the witnesses rather than directing criticism at Mr VG.

[50] At the review hearing Ms YQ conveyed the sense that Mr VG’s “dual roles” created a conflict of interest for him. She was unable to articulate the interests that came into conflict.

[51] Mr VG was acting on instructions from the employer. Given the information gathered in previous inquiries, there was a more than negligible risk that the interests of the employer might come into conflict with those of its employee, Ms YQ. Ms YQ recognised the potential for conflict very early on because she chose to be independently represented as soon as the employer raised possible concern over her performance as principal. Whatever Ms YQ’s view, her interests were not indivisible from the school’s. There is no conflict of interest for Mr VG. He did not act for Ms YQ.

[52] Mr VG was a witness in the Employment Court. He was not engaged in that litigation as a lawyer representing a party. There is no evidence that Mr VG gave any evidence that calls into question his conduct as an officer of the court.

[53] There is no evidential basis on which to find that Mr VG lacked independence. The fact that he was obliged to advance his client’s interests in preference to Ms YQ’s is not evidence of a lack of independence.

[54] In short, there is no evidential basis on which to conclude that Mr VG was not independent in the litigation in which he was engaged as the employer’s lawyer.

Summary

[55] Mr VG was doing legal work, and providing regulated services in his investigative role. Aside from that difference of opinion, there is no basis on which to modify or reverse the Committee’s determination that further action on Ms YQ’s complaint is not necessary or appropriate. In the circumstances, the decision is confirmed.

Decision

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

DATED this 14th day of March 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 YQ as the Applicant Mr VG as the Respondent

[Area] Standards Committee The New Zealand Law Society