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New Zealand Legal Complaints Review Officer |
Last Updated: 17 May 2018
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LCRO 176/2016 LCRO 193/2016
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CONCERNING
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applications for review pursuant to section 193 of the Lawyers and
Conveyancers Act 2006
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AND
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CONCERNING
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a determination of [City] Standards Committee [X]
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BETWEEN
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RQ and TS
Applicants
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AND
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VU
Respondent
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AND
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BETWEEN
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VU
Applicant
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AND
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RQ and TS
Respondents
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DECISION
The names and identifying details of the parties in this decision have been
changed.
Introduction
[1] Mrs RQ and Mrs TS are sisters and complained about Mr VU’s conduct when administering Mrs XW’s estate in 2015, but in doing so, also raised complaints about Mr VU’s conduct prior to the commencement of the Lawyers and Conveyancers Act 2006 (LCA).1
1 The LCA came into force on 1 August 2008.
[2] The [City] Standards Committee [X] (the Committee) made a finding of unsatisfactory conduct against Mr VU and imposed penalties.
[3] All parties (the complainants and Mr VU) applied for review of the Committee’s determination.
Background
[4] In 1992, Mr VU was instructed by Mr XW and his wife, Mrs XW, to act for them on various matters. Mr XW was the complainants’ father. Mrs XW was the complainants’ stepmother.
[5] In 1993, Mr VU acted for Mr and Mrs XW when they purchased [House AB].
[6] In 1996, Mr VU prepared Deeds to create the [Trust 1] Family Trust (the settlor being Mrs XW) and the [Trust 2] Family Trust (the settlor being Mr XW). The trustees of each Trust were Mr and Mrs XW and Mr VU.
[7] The two Trusts then each acquired an undivided one half share of the [House AB] property.
[8] In 2001, the Trusts sold the [House AB] property and the following year, purchased [House, ABC]. The title to that property was held by the two Trusts as tenants in common in equal shares. In the timeline provided by Mr VU to the Committee, Mr VU refers to this property as “XW’s home”.
[9] Mr XW died in February 2008. A transmission of the title to the property to the surviving trustees of each Trust (Mrs XW and Mr VU) was registered on 1 April 2008.
[10] In March 2008, the [Trust 2] Family Trust (Mr XW’s Trust) was wound up. In the timeline provided by Mr VU, he says this was pursuant to a resolution of “the surviving trustee”.2 Mr VU advises that the winding up resolution provided that the Trust’s half share in the property was to vest in Mrs XW.
[11] The title to the property records registration of a transfer on 30 April 2008 to XW (½ share) and VU (½ share). Mrs XW and Mr VU then owned the property as tenants in common in equal shares.3
2 This is presumably an error as there were two surviving trustees, Mrs XW and Mr VU.
3 In submissions to the Committee for the complainants (15 April 2016) Ms DC notes this and says (at [29]):
[12] The title records a further transfer on 21 May 2008 by Mr VU of his ½ share in the property to himself and Mrs XW.
[13] These various transactions resulted in Mrs XW owning an undivided half share in the property and the other half share of the property being owned by Mrs XW and Mr VU jointly, presumably as trustees of the [Trust 1] Family Trust (Mrs XW’s Trust).
[14] In his timeline, Mr VU advises that the following event occurred on 16 May 2008:4
XW and CJW met with DR to discuss an arrangement they proposed whereby 3 of the [Trust 1] Family Trust discretionary beneficiaries (the RQs and CJW’s son ZY (“TLS”) – being a daughter of AXW and her spouse and a grandson of AXW would be selected as beneficiaries (to the exclusion of all other discretionary beneficiaries) under clause 1.2 of the Trust Deed and the Trust’s remaining asset (the Trust’s ½ share of XW’s home) would be vested in those 3 jointly if they gifted that half share to XW for the 19 May 2008 QV desktop estimate of $160,000.
[15] In the timeline, Mr VU goes on to record events on 23 June 2008:
Agreement signed by the RQs and TLS to transfer their ½ share of [XW’s] home to XW for $160,000 and loan and gift documents writing off the $160,000 in tranches of $81,000 and $79,000. They declined DR’s offer for them to take the documents away for independent advice.
[16] The title to the property records registration of a transfer on 1 September 2008 to Mrs XW. Mrs XW thereby became the sole owner of the property.
[17] Mr VU’s timeline further records, that on 4 August 2009 the following occurred: “The RQs and TLS documents for the remaining $79,000 gift to XW were dated and lodged with IRD”.
[18] Mrs XW and the RQ family subsequently fell out and on 12 December 2011, Mrs XW made a new will in which Mr VU was appointed sole executor and trustee.5 In her will, Mrs XW left all of her estate to charities.
without any further explanation, it is presumed this was a mistake and, at least for the 1/2 share owned by the OFP, the ownership was intended to remain with the surviving trustees. It is presumed this was a mistake when Mrs XW transferred her 1/2 share out of the EFT and into her name personally.
No clarification of this from Mr VU has been noted.
4 CJW is Mrs RQ.
5 Neither the making of the will or a codicil dated 23 April 2014 are recorded in the timeline provided by Mr VU. Copies of the documents were provided by the complainants when lodging their complaints. In the letter of complaint (issue one) the complainants state:
[19] The effect of these events and documents was that the complainants and their sisters were disinherited from their father’s share in the property. Their brother had previously disavowed his potential interest in the property.
[20] Mrs XW died on 13 July 2015. Probate of Mrs XW’s will was granted to Mr VU on 10 August 2015.
[21] The complainants were living overseas at the time and learned of Mrs XW’s death when Mrs RQ’s son sent her an email from Mr VU, dated 28 July 2015, to which was attached Mrs XW’s death certificate.
[22] On 30 July 2015, Mrs RQ sent an email to Mr VU which read:
Hello VU
My sister TS and I have only today received notification of the passing of our stepmother XW who was married to our father AXW
To my knowledge, not having been notified otherwise, I was named as an executor on both wills of my parents. Could you please forward a copy of both wills to me at this email address and advise me of what I may be required to do with regards to the estates of my parents.
[23] On 12 August 2015, Mr VU responded:
We extend to you our condolences on the death of your stepmother. She was the sole trustee and beneficiary under your late father’s will.
We have no record of acting in respect of your late mother’s estate. We have no details of her will.
Please credit the Northlaw Trust account 12-3093-0176219-02 at the Kamo branch of ASB with $400 on account of the costs of us assembling for you any further information you request regarding the wills of your parents.
[24] On 31 August 2015, Mr VU emailed Mrs RQ:
Since our 12 August 2015 email below, we have been assembling the information required to report to the beneficiaries of XW’s’ estate.
Attached is the 13 February 2004 Acknowledgement of your debt. It would assist in completing our report if you could provide details of any payments you have made to date in respect of the principal and interest accrued under the Deed.
The will had been changed in December 2012 “excluding all family which was contrary to all we had been given to understand by both parents at different times”.
The date is incorrect. The will is dated 12 December 2011 and that date is confirmed by the subsequent codicil.
[25] On 1 September 2015, Mrs RQ responded:
I am confused as to whom is dealing with the estate/will of my stepmother. I perhaps incorrectly understood from your previous letter that you/your firm were not involved.
Can you please advise who the executor and solicitor is so that I can request a copy of the will and deal with them directly over any matters pertaining to the same.
Thank you
[26] Mr VU responded on the same day:
We are acting in the administration of the Estate of your late stepmother.
We confirm our 12 August advice that she was the sole trustee and beneficiary under your father’s will.
The beneficiaries under her will are Hospice and St Johns Ambulance.
We look forward to receiving details of the balance owing to the Estate under the Deed you signed in 2004.
[27] Mrs RQ emailed Mr VU on 2 September 2015 asking for further information and a copy of Mrs XW’s will. She advises that Mr VU did not respond.
[28] Mrs RQ and Mrs TS complained to the Lawyers Complaints Service on 6 November 2015.
The complaints
[29] The complainants’ letter of complaint noted two issues:
- (a) They say:
Our belief is that this timeline of events shows clearly along with the documents to support that VU has acted without integrity and without transparency. VU’s conduct in denying knowledge of the will etc is deceptive. We incurred costs to have BA source information on our behalf, unnecessary stress and bewilderment at our time of grief.
(b) The complainants also referred to the events in 2008 when Mr and Mrs RQ and their son were requested to accompany Mrs XW to Mr VU’s office. They say:
Our understanding was that we were signing papers to terminate the Trusts as they were no longer required and this would enable XW to sell the
house. We were not given any copies of paperwork we signed, nor was it suggested we should have independent legal advice.
(c) The complainants go on to refer to the change by Mrs XW of her will in December 2011, by virtue of which they were disinherited. This occurred shortly after discussions between Mrs RQ’s son and Mrs XW relating to removal of a guarantee of borrowing by Mrs RQ’s son provided by Mrs XW which was secured over the property.
(d) With regard to the change of Mrs XW’s will, the complainants say:
Our opinion is that this is an over reaction to the guarantee and waiting for 12 months [sic]. We question either the legal advice she received and/or her mental constancy at this time.
[30] The complainants made the following requests:
Can you please facilitate with VU to send all documents that relate to whatever the transaction was in 2008 that involved Mr & Mrs RQ, and ZY. We also request a copy of the will and/or Trust of AXW. A schedule outlining the assets and liabilities of the estate.
A request of VU for family photographs and title to the remaining family plot at the [Town]Cemetery.
VU be required to make a contribution to legal costs that we have incurred with BA of [Law Firm 2].
Address our issues with VU to misinformation in Issue 1 as per timeline.
The Standards Committee determination
[31] The Committee identified four issues to be addressed:6
- Whether Mr VU provided misleading information to the extent that he advised the complainants by way of email dated 12 August 2015 that he had no record of acting in the estate of their late step-mother Mrs XW and that he had no details of her will despite the fact that he had himself applied for probate of Mrs XW’s will on 16 July 2015 and, if so, whether Mr VU breached his professional obligations under the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 [the Rules] or any other enactment;
- Whether Mr VU failed to respond to the complainants’ email of 2 September 2015 requesting clarification as to the nature and extent of his involvement with Mrs XW’s estate and, if so, whether Mr VU breached his professional obligations under the [Rules] or any other enactment;
6 Standards Committee determination (18 July 2016) at [5].
Did Mr VU provide misleading information?
[32] The Committee canvassed the email correspondence between Mrs RQ and Mr VU. It concluded:7
.... that, against that background, any claim by Mr VU that he assumed that Mrs RQ was referring to her biological mother, as opposed to her step-mother, when she used the word “parents” is untenable. It was clear in the context that Mrs RQ was referring to her father and step-mother. If Mr VU had been uncertain whether the enquiry related to Mrs RQ’s biological mother or her step-mother, it was open to him to clarify this with her. Alternatively, Mr VU could simply have advised Mrs RQ that he did not hold a will for her biological mother but that he did hold a will for her step-mother. ...
... The Standards Committee considered that Mr VU’s actions in sending the 12 August 2015 email amounted to unsatisfactory conduct in terms of section 12(b) of the [LCA] being conduct that would be regarded by lawyers of good standing as being unacceptable. It also considered that Mr VU’s conduct amounted to a breach of Rules 10 and 12 of the [Rules], being unsatisfactory conduct in terms of section 12(c) of the LCA.
Did Mr VU fail to respond to the complainants’ email of 2 September 2015
[33] The Committee determined there was no evidence to suggest Mrs RQ remained a client of Mr VU’s firm at the time of the email correspondence and consequently rr 3,
3.2 and 7.2 of the Rules did not apply. Although the Committee accepted that “a delay in responding to a third party enquiry, in some circumstances, could amount to a breach of Rule 12”, it accepted “Mr VU’s submission that it would be unduly onerous to impose an obligation on him to respond to third parties within such a time frame” and “[i]n the circumstances, the Standards Committee did not consider that Mr VU had breached his professional obligations whether under the RCC or any other enactment”.8
[34] The Committee determined to take no further action on this issue.
7 At [9]–[11].
8 At [14].
The events of 2008
[35] The Committee determined that none of the conduct which occurred in 2008 satisfied the requirements of s 351(1) of the LCA to enable the Committee to assume jurisdiction to address the complaints. It determined to take no further action on those issues.
Did Mr VU breach his professional obligations when drafting Mrs XW’s new will?
[36] The Committee noted that its chief preoccupation is the maintenance of professional standards in the legal profession. It does not have any jurisdiction to consider a challenge to the validity of a will on the grounds that the testator may have lacked testamentary capacity. Such claims are properly brought before the High Court. The Standards Committee was satisfied in all the circumstances that there is a sustainable alternative forum available to the complainants should they wish to air their concerns regarding the preparation and execution of Mrs XW’s last will.9
Orders
[37] Having made the single finding of unsatisfactory conduct against Mr VU the Committee:
- (a) ordered Mr VU to pay a fine of $1,000;
- (b) ordered Mr VU to pay the sum of $500 on account of costs; and
- (c) ordered Mr VU to pay the sum of $500 to the complainants for the “inevitable emotional distress they would have experienced in connection with Mr VU’s email of 12 August 2012”.10
The applications for review
[38] The complainants applied first for a review of the determination of the Committee. They noted that “the Standards Committee found that DR had been
9 At [27].
10 At [31].
intentionally misleading and selective with the truth to conceal the true state of affairs that we were enquiring after”.
[39] They sought the following outcomes:
- For intentionally misleading and emotional stress $2000
- Payment of all legal costs incurred from [Law Firm 2] to source information initially requested of DR and to write a submission. Invoices attached.
- Written apology.
Mr VU
[40] Mr VU himself then applied for a review. Set out below is Mr VU’s executive summary.
By relying on the general duties set out in [rr 10 and 12 of the Rules] [City SC X] may have not only ignored my obligations to Mrs XW under Chapter 8 [of the Rules] but also might have discounted my fundamental (and, I submit, overriding) obligations under the LCA.
...
This section has particular application in addressing how [City SC X] has dealt with this complaint because the committee seems to have ignored my obligation to protect Mrs XW’s interests and to discharge my obligations to her – not only as her lawyer but also as the executor of her will.
Rule 8 ... deals with one of these obligations that are fundamental in the practice of law. It is set out in the introduction paragraph 8.1 to the text of Duncan Webb, Kathryn Dalziel, Kerry Cook Ethics, Professional Responsibility and the Lawyer (Lexis Nexis Wellington, 3rd Edition 2016) (“the WDC Treatise”) at page 238 where the learned authors say:
“The knowledge lawyers gain of clients and their affairs through the professional relationship is secret...
The duty is a strict one and extends to all information regarding the client, and even the fact the client has retained the lawyer.”
That suggests I may have gone as far as I could go in disclosing what I did in my 28.7.2015 letter to [Law Firm 2]11 and in my 12.8.2015 email to the complainants. The committee has not shown how any of the “justifications for breach of confidence” mentioned in Chapter 8.7 of the WDC Treatise (pages 249-258) might have applied here.
[41] The detail of Mr VU’s application for review is referred to where appropriate in the relevant parts of this decision.
11 [Law Firm 2] is the law firm retained by the complainants to assist them in their dealings with Mr VU.
Objections by Mr VU during review process
[42] Mr VU submitted that the complainants’ application for review could not be accepted as it was only signed by Mrs RQ.
[43] Mrs RQ alone could have applied for a review of the determination.12 The application form recorded herself and Mrs TS as the applicants.
[44] Section 200 of the LCA requires this Office to conduct reviews with as little formality and technicality as possible. Mr VU’s objection is technical in nature and is rejected. In any event, once Mr VU himself applied for a review, any objections fall away because the review must address any and all issues arising and is not restricted to those matters raised by the applicant.
[45] A review hearing took place in Whangarei on 12 March 2018. Mrs RQ and Mrs TS attended by telephone. Mr VU attended in person and was represented by Mr FE.
[46] The hearing was conducted by Mr Vaughan acting as a delegate duly appointed by the Legal Complaints Review Officer (LCRO) pursuant to cl 6 of sch 3 of the LCA. The LCRO has delegated Mr Vaughan to report to me and the final determination of this review as set out in this decision is made following a full consideration of all matters by me after receipt of Mr Vaughan’s report and discussion.
[47] Mr VU objected to Mr Vaughan conducting the review for the reason that Mr Vaughan had convened an Auckland District Law Society Property Disputes Committee meeting some years previously which considered a matter involving himself. Mr VU did not provide a date when this took place or any further details. Mr Vaughan has not been a member of that Committee for many years.
[48] In any event, there is authority which establishes that a judicial officer is not required to recuse him or her-self merely because he or she has presided over an earlier matter involving that person which has gone against that person.13 Mr Vaughan was not required to recuse himself.
Review
12 Lawyers and Conveyancers Act 2006, s 294(2)(a).
13 See for example Taylor v R [2010] NZCA 628.
[49] In his email of 12 August 2015, Mr VU advised Mrs RQ that he had no record of acting in respect of her late mother’s estate and no details of her will. This was in response to an email from Mrs RQ in which she requested copies of “both wills of [her] parents” and for advice as to what was required of her as executor.
[50] The Committee described Mr VU’s explanation (that he assumed Mrs RQ was referring to her biological mother and not Mrs XW, her stepmother) as “untenable”.14 It also concluded that Mr VU’s response was “intentionally misleading”.15
[51] Having made these comments the Committee determined that Mr VU’s conduct constituted unsatisfactory conduct pursuant to s 12(b) of the LCA “being conduct that would be regarded by lawyers of good standing as being unacceptable”.16 It also found that Mr VU had breached rr 10 and 12 of the Rules and therefore his conduct also constituted unsatisfactory conduct pursuant to s 12(c) of the LCA.
[52] Mr VU’s application for review was accompanied by a copy of his response to the application for review by the complainants. He says:
Neither the facts nor the law support the finding against me by [City SC X] of unsatisfactory conduct under s 12(b) LCA in general or of any breach of Rules 10 and 12 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (“RCCC”) in particular.
[53] The facts of Mr VU’s conduct are indisputable. The content of the email is what is relied on by the Committee to reach its conclusion.
[54] Mr VU submits that his obligations to Mrs XW and his duties pursuant to s 4 of the LCA, reinforced by rr 5.1(6) and (8) of the Rules, meant that he had “gone as far as he could in disclosing what [he] did in his 28.7.2015 letter to WRMK and [his] 12.8.15 email to the complainants”.
[55] Mr VU’s letter to WRMK of 28 July 2015 enclosed a copy of Mrs XW’s death certificate. It “discloses” nothing more. The fact of a person’s death is not a matter to be kept private and confidential — it is a matter of public knowledge.
[56] Mrs RQ thought she was an executor of Mrs XW’s will. She asked Mr VU for copies of both her father’s will and Mrs XW’s will. Once a will has been admitted to Probate it is a matter of public record. Mr VU’s affidavit to lead Grant of Probate to himself was sworn on 15 July 2015, some 27 days prior to his email response to Mrs
14 Standards Committee determination, above n 6, at [9].
15 At [10].
16 At [10].
RQ. Probate was granted on 10 August 2015. Mr VU replied to Mrs RQ’s email on 12 August 2015.
[57] Mr VU would not have breached any confidences or obligations to Mrs XW by advising Mrs RQ that she was not an executor of Mrs XW’s estate and once Probate had issued, he was able to provide a copy of it to her as requested. Instead, he chose to respond to Mrs RQ’s enquiry and request, by denying he was acting for Mrs RQ’s “mother”. He did not, as noted by the Committee, endeavour to clarify who Mrs RQ was referring to if he was in any way confused.
[58] In any event, it is not accepted that Mr VU could have been confused. It was absolutely clear who Mrs RQ was referring to and Mr VU’s denial that he had misled Mrs RQ is, as noted by the Committee, untenable.
[59] The determination by the Committee that Mr VU’s conduct constituted unsatisfactory conduct is confirmed.
The 2008 conduct
[60] Section 351(1) of the LCA provides that the Lawyers Complaints Service has jurisdiction to consider complaints about conduct that occurred prior to 1 August 2008 if “proceedings of a disciplinary nature could have been commenced under the Law Practitioners Act 1982”.
[61] The relevant standards are set out in ss 106 and 112 of the Law Practitioners Act 1982 (LPA). Those sections provide that disciplinary sanctions may be imposed where a practitioner is found guilty of misconduct in his or her professional capacity, or conduct unbecoming a barrister or a solicitor (the provisions relating to negligence and to criminal convictions are not relevant here). Further guidance can be obtained from the Rules of Professional Conduct for Barristers and Solicitors which were the applicable rules at the time.
[62] The threshold for disciplinary intervention under the LPA was therefore relatively high. Misconduct is generally considered to be conduct:17
of sufficient gravity to be termed ‘reprehensible’ (or ‘inexcusable’, ‘disgraceful’ or ‘deplorable’ or ‘dishonourable’) or if the default is said to arise from negligence such negligence must be either reprehensible or be of such a degree or so frequent as to reflect on his fitness to practice.
17 Atkinson v Auckland District Law Society NZLPDT, 15 August 1990 as cited in Complaints Committee No 1 of the Auckland District Law Society v C [2008] NZHC 2284; [2008] 3 NZLR 105 (HC) at [27].
[63] Conduct unbecoming is perhaps a slightly lower threshold. The test will be whether the conduct is acceptable according to the standards of “competent, ethical, and responsible practitioners”.18
[64] The Committee determined that Mr VU’s conduct did not cross this threshold and declined jurisdiction.
[65] Mr VU says that in May 2008, Mrs XW and Mrs RQ met with him:
... to discuss an arrangement they proposed whereby 3 of the [Trust 1] Family Trust discretionary beneficiaries (the RQs and CJW’s son ZY (“TLS”) – being a daughter of AXW and her spouse and a grandson of AXW) would be selected as beneficiaries (to the exclusion of all other discretionary beneficiaries) under clause 1.2 of the Trust Deed and the Trust’s remaining asset (the Trust’s ½ share of XW’s’ home) would be vested in those 3 jointly if they gifted that half share to XW for 19 May 2008 QV desktop estimate of $160,000.
[66] This suggests that Mrs XW and Mrs RQ themselves proposed the arrangement whereby the interest of the [Trust 1] Family Trust in the property would be transferred to Mrs XW. It is inconceivable that lay persons would develop a proposal of this complexity.
[67] Mr VU says that he subsequently wrote to Mrs XW with a letter for Mr and Mrs RQ and their son “setting out his understanding of the proposals she [Mrs XW] and [Mrs RQ] had agreed on”.
[68] The letter was not sent directly to Mr and Mrs RQ and their son. There is no indication they received it, or, if they did, that they understood the detailed proposals.
[69] Mr VU says that Mr and Mrs RQ and their son all agreed to the proposals at a meeting with Mrs XW and Mr VU on 5 June 2008 and declined to have another lawyer represent them.
[70] The documents were then executed on 23 June 2008 and Mr VU records that the RQ family again declined to take the documents away for independent advice.
[71] Mrs RQ says that she and the other beneficiaries understood that they were signing documents to enable Mrs XW to sell the property. She denies they were asked by Mr VU whether they wanted to take independent advice.
18 B v Medical Council [2005] 3 NZLR 810 (HC) at 811.
[72] The Rule relating to conflicts of interest at the time was r 1.04 of the Rules of Professional Conduct which provided: “A practitioner shall not act for more than one party in the same transaction or matter without the prior informed consent of both or all parties”.
[73] The steps to be taken to obtain informed consent were set out in some detail by Hammond J in Taylor v Schofield Peterson:19
... a solicitor must always: (1) recognise a conflict of interest, or a real possibility of one; (2) explain to the client what the conflict is; (3) further explain to the client the ramifications of that conflict (for instance, it may be said that she could not give advice which ordinarily she would have given); ensure that the client has a proper appreciation of the conflict, and its implications; and (5) obtain the informed consent of that client. Then, and only then, can the solicitor act.
[74] That required something more than a simple inquiry of Mrs RQ, her husband and son, as to whether they wanted to take independent advice.
[75] The effect of the documents prepared by Mr VU were such that Mrs XW’s interest in the property through the [Trust 1] Family Trust was transferred to Mrs XW personally. That raised the possibility that Mrs RQ and her siblings could be disinherited by Mrs XW, and, as Mrs XW’s step daughter, Mrs RQ had no standing to pursue a claim against Mrs XW’s estate.
[76] Mr VU was required to have made that clear to Mrs RQ to be able to assert he had her informed consent to him acting for all parties.
[77] Mr VU does not assert he advised Mrs RQ to the extent outlined by Hammond
J. He says he asked Mrs RQ, her husband and son, “whether they wanted to take the documents away for their lawyer to look at them and to witness their signatures”. This perfunctory offer gave no indication of the serious effect of the documents.
[78] Mrs RQ denies she had any understanding of the documents other than that they enabled Mrs XW to sell the property.
[79] Mr VU has breached r 1.07 of the Rules of Professional Conduct in force at the time. Proceedings of a disciplinary nature could have been commenced. The requirements of s 351(1) are met.
[80] In addition to the matter referred to above, the Committee did not address Mr VU’s conduct in having the beneficiaries sign the gift statements 12 months ahead of the
19 Taylor v Schofield Peterson [1999] 3 NZLR 434 (HC) at 440 per Hammond J, referring to Clark Boyce v Mouat [1993] 3 NZLR 641 (PC).
time when they were to be used. At the time Mr VU obtained signatures from the beneficiaries, an individual was only able to gift a maximum of $27,000 in any 12 month period without incurring gift duties.
[81] Mr VU had all documents necessary to complete the gifting executed in 2008. Once 12 months had elapsed he dated the documents 2009 and filed the gift statements to complete the gifting program. Mrs RQ advises that Mr VU did not make contact with her or the other beneficiaries in 2009 to either execute the relevant documents at that time or to confirm it was in order to proceed with the documents executed in 2008.
[82] The gift statements signed by the beneficiaries would have included a declaration by the donor that no other gifts had been made by him or her in the previous 12 months. Mrs RQ and her family were in Australia at the time. The declaration purportedly made by the complainants and purportedly taken by Mr VU, were not made in accordance with the requirements of the Oaths and Declarations Act 1957 (the ODA).
[83] Mr VU has acted in breach of the ODA, and caused the signatories to also be in breach of the ODA. That must be a matter which meets the requirements of s 351(1) of the LCA. Consequently, the Committee and this Office has jurisdiction to consider and determine the consequences of Mr VU’s conduct.
[84] Unsatisfactory conduct is defined in s 12 of the LCA.
- (a) ... 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; or
- (b) .... conduct that would be regarded by lawyers of good standing as being unacceptable, including –
- (i) conduct unbecoming a lawyer...or
- (ii) unprofessional conduct.
[85] By failing to follow the requirements to obtain informed consent as set out by Hammond J and the shortcomings with regard to having documents, including a statutory declaration, signed in advance, meets the definition of unsatisfactory conduct provided in s 12 of the LCA. Mr VU’s conduct constituted unsatisfactory conduct pursuant to ss 12(a) and (b) of the LCA.
[86] Section 352(1) of the LCA provides that any penalties imposed in respect of conduct prior to 1 August 2008 must be a penalty that could have been “imposed in respect of that conduct at the time when that conduct occurred”.
[87] The only relevant penalties that could have been imposed were a censure and a fine not exceeding $2,000.20 The Act provided for compensation where the conduct of the lawyer was directly related to losses suffered by the complainant. That is not the case in respect of the 2008 conduct.21 The complainants have suffered losses because Mrs XW changed her will and that was not a direct result of the 2008 events.
[88] The LPA did not provide for the remedies sought by the complainants.22 In the circumstances little would be achieved by imposing anything further by way of penalty.
Mrs XW’s will
[89] Mrs RQ and her sister complained that Mr VU had drafted a new will for Mrs XW in circumstances where she may have lacked testamentary capacity and by that will, the complainants were disinherited. The Committee determined that it did not have jurisdiction to address this complaint and such issues should be referred to the High Court. That view is confirmed on review.
[90] In addition, Mr VU did not have any duty to the beneficiaries of Mrs XW’s will who were disinherited by her new instructions. That would be an impossible duty to impose on a lawyer.
[91] The determination of the Committee in this regard is confirmed.
Failing to respond to correspondence
[92] The remaining issue addressed by the Committee was the alleged failure by Mr VU to respond to the complainants’ email of 2 September 2015 in which they asked Mr VU to clarify his involvement with Mrs XW’s estate. The Committee determined that a delay of five working days was not excessive.23
[93] Nothing further is required other than to confirm the Committee’s view of this matter.
Decision
20 Law Practitioners Act 1982, ss 106(4)(a)–(b), 112(2)(e).
21 The Committee awarded the complainants the sum of $500 compensation for emotional distress arising out of Mr VU’s misleading conduct and that is confirmed on review.
22 See paragraph [30].
23 Mr VU became aware five working days later that the complainants were represented by another law firm and consequently could not correspond directly with them after that time.
[94] Pursuant to s 211(1)(a) of the Lawyers and Conveyancers Act 2006 the determination of the Standards Committee is confirmed, but modified by the further finding of unsatisfactory conduct as discussed in [59–83] above.
Costs
[95] Mr VU’s application for review has been unsuccessful. In accordance with Costs Orders Guidelines issued by this Office and pursuant to s 210 of the Lawyers and Conveyancers Act 2006, Mr VU is ordered to pay the sum of $1,600 by way of costs to the New Zealand Law Society by no later than 21 May 2018].
DATED this 19TH day of April 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:
Mrs RQ and Mrs TS as the Applicants Mr VU as the Respondent
[City] Standards Committee [X] The New Zealand Law Society
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