OM v BL [2018] NZLCRO 61 (20 July 2018)

Last Updated: 15 August 2018

	LCRO 226/2017
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	OM AND RA Applicants
AND	BL AND DG Respondents

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

_DECISION

Introduction

[1] OM and RA the [applicants] have applied for a review of a decision by the [Area] Standards Committee (the Committee) to take no further action in respect of their complaint concerning conduct on the part of Mr BL and Mr DG (the lawyers).

Background

[2] The [applicants] agreed to purchase a property on terms that allowed them to live in the property while they paid the purchase price off by instalments over 30 years. The vendor was responsible for making associated payments including rates and insurance. When the [applicants] defaulted, the vendor commenced proceedings. The High Court ordered the [applicants] to vacate the property.

[3] The lawyers acted for the [applicants] in the High Court process. The

[applicants] were dissatisfied with the outcome of the High Court proceeding. The

lawyers issued their final bill in 2011. The [applicants] did not pay. When the lawyers sought to recover their fees, the [applicants] made a complaint to the New Zealand Law Society (NZLS).

The complaint and the Standards Committee decision

[4] The [applicants] complained that the lawyers:

(a) had been professionally negligent by not pursuing the [applicants’] rights under the Property Law Act 2007 (PLA) and had not achieved recognition of those rights;

(b) had not provided “costings in respect of services”, an estimate or a

breakdown of hours worked;

(c) had not supplied copies of all their documents;

(d) had not proceeded on the basis that the agreement for sale and purchase of the property was a fraudulent document; and

(e) had not provided the High Court with a “pre-approved mortgage document” to demonstrate the [applicants] could pay the full purchase price.

[5] The lawyers denied having been professionally negligent, noting that the Court’s focus was on the [applicants’] defaults under the agreement rather than on what their rights might otherwise have been under the PLA. Although they did not specifically address the allegations relating to a lack of costing, estimates and time records, the lawyers say they provided services in accordance with their terms of engagement which was on the file handed over to the [applicants] and which contained all of the [applicants’] documents. The suggestion that the agreement was fraudulent, which was made in subsequent correspondence from the [applicants], was not addressed. The lawyers say the [applicants’] affidavit evidence that was filed in the High Court referred to the pre-approved finance the [applicant] said he had secured. The lawyers say the outcome of the High Court proceeding preserved the [applicants’] position on the basis that they could retain their home if they paid the arrears.

[6] The Committee examined the information that was available to it and found no evidence of conduct on the part of the lawyers that suggested the lawyers had breached their professional obligations to the [applicants] or otherwise acted inappropriately. The Committee did not conclude that the lawyers had not followed the

[applicants’] instructions. It was unable to consider the fees because all of the invoices had been rendered more than two years before the complaint was made and there were no special circumstances for the purposes of reg 29 of the Lawyers and Conveyancers Act (Lawyers: Complaints Service and Standards Committees) Regulations 2008. The Committee determined, pursuant to s 138(2) of the Lawyers and Conveyancers Act 2006 (the Act) that further action on the complaint was not necessary or appropriate.

Application for review

[7] The [applicants] applied for a review of the Committee’s decision and want it reversed. The [applicants] provided a copy of a “Conditional Approval for loan number [number] dated [date], which confirms it is not a formal Letter of Offer, but advice on the status of the [applicants’] application for finance. The [applicants] say they gave this document to Mr DG, but he did not attach it to the affidavit the [applicant] filed in the High Court proceeding.

[8] The lawyers said they had no further information to add.

Review Hearing

[9] The [applicants’] did not consent to the review being determined in their absence, so a review hearing was scheduled to take place in Wellington on 6 July

2018. Shortly before the hearing, Mr RA indicated he would be unable to attend due to ill health. The hearing was adjourned.

[10] The review hearing was rescheduled to 18 July 2018 and the Registry sent a notice of hearing to the [applicants’] last known address on 6 July 2018, advising them that the review hearing would proceed over the telephone and providing instructions on how to connect.

[11] On 16 July 2018, the [applicant] produced a medical certificate dated 13 July

2018 which recorded that he had been to the doctor and told the doctor he had been unwell since 2 July 2018.

[12] On 17 July 2018, the Registry attempted to contact the [applicants] on the phone number they had provided to remind them that the review hearing was scheduled to proceed the following day. The call was diverted to voicemail.

[13] The [applicants] did not attend the review hearing on 18 July 2018 and the

Registry again attempted without success to contact them by phone.

[14] The lawyers consented to the review being determined in their absence, were not required to attend the review hearing and did not exercise their right to do so.

[15] In the circumstances, this review has been determined in the parties’ absence

but without the [applicants’] consent.

Nature and scope of review

[16] The nature and scope of a review have been discussed by the High Court, which said of the process of review under the Act:1

... 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.

[17] More recently, the High Court has described a review by this Office in the following way:2

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

Discussion

[18] The [applicants’] foremost concern on review is their view that they could have persuaded the High Court to allow them to buy the property if Mr DG had included evidence that they had approval for a loan. The [applicants] consider the High Court would have made a different decision if it had that information.

_{[19] There are a number of difficulties with that argument.}

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

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

[20] The [applicants] provided the lawyers with a copy of a conditional loan offer dated 8 June 2010. The conditional loan offer was to expire on 8 July 2010.

[21] The [applicants]’ affidavit to the High Court is dated 12 December 2011. That means that the conditional loan offer had well and truly expired by the time the [applicants]’ evidence was sworn.

[22] From the perspective of professional standards, assuming Mr DG had a copy of the expired conditional loan approval, the question is whether omitting it from the affidavit is conduct that falls below a proper professional standard. That argument is difficult to sustain in the face of the conditional loan offer having expired around 18 months earlier.

[23] The expired conditional loan offer would not have been sufficient to support the contention that the [applicants’] had finance of $120,000 available to them in December 2011. The [applicants] have provided no evidence on review that confirms they did, in fact, have finance of $120,000 available to them in December 2011.

[24] Although there are a number of other responses that could deal equally well with the [applicants’] concerns, that is the principal objection to Mr DG’s conduct expressed on review. Without any evidence to support it, that concern does not provide a basis for a determination that Mr DG’s conduct was unsatisfactory in any way. There is no other evidence that would support a determination of unsatisfactory conduct either.

[25] There is no evidence of conduct on the part of Mr BL that could be unsatisfactory for the purposes of the Act.

[26] Although the [applicants’] have not pursued the other aspects of their original complaint in their review, all of the issues they raised have been considered. On the available materials, there is no basis on which to reverse or vary the Committee’s decision. That 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 20th day of July 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:

OM and RA as the Applicants BL and DG as the Respondents [Area] Standards Committee The New Zealand Law Society The Secretary for Justice