CW v QA [2018] NZLCRO 72 (13 August 2018)

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	LCRO 254/2015
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 [X]
BETWEEN	CW Applicant
AND	QA _Respondent

[1] Mrs CW has applied for a review of a decision by the [Area] Standards Committee [X] (the Committee) to take no further action in respect of her complaint concerning conduct on the part of Mr QA.

[2] Mrs CW had an employment problem. She instructed Mr QA to assist her. He provided services to Mrs CW, including taking Mrs CW’s instructions, attending a lengthy meeting with the employer and advising Mrs CW, after which he drafted and raised a personal grievance (PG) on her behalf. The employer denied the allegations and Mrs CW instructed Mr QA to bring her matter before the Employment Relations Authority (ERA), which involved him filing an originating document.

[3] Mr QA issued an invoice dated 30 June 2014 for $6,311.20, which represented part of the time he had spent on her matter. Mr QA’s terms anticipate payment within 7

days, but he made a concession to Mrs CW. Recognising that she had lost her job and the family was on one income, he told her he was prepared to accept smaller sums in reduction of his fee. Mrs CW decided that she wanted to save and make lump sum payments. She made a payment in August 2014 and another in October 2014, each of

[5] Mr QA did not do any more work, nor did he take any formal steps to recover his unpaid fees from Mrs CW. Mr QA says he spoke to Mrs CW’s husband several times, and that [her husband] came to his office and told him that Mr QA’s fees would be paid. Mr QA says he made it very clear to [Mrs CW’s husband] that he would be more than happy to press on with Mrs CW’s case if he could see regular payments coming in.

[7] Mrs CW says she contacted Mr QA and instructed him to carry on with her work. She says he told her he was too busy to do her work. She says Mr QA did not require payment or a firm commitment to make payment from her.

[8] Time went by. Mrs CW did not pay Mr QA any more money. He did not do any more work. She asked him for her file. He gave it to her. She instructed other representatives.

outstanding fees and whether he would be prepared to accept less. Mr QA declined.

[11] Mrs CW says she last heard from Mr QA on 30 June 2014, when he advised her that he had completed a draft of her PG and would send it to her for her approval but he did not. Mrs CW attached correspondence, including a letter from Mr QA to her employer dated 10 June 2014 raising her personal grievance, his bill to her of the same date, Mr QA’s timesheets to 29 June 2014, and a reply from the employer’s representative dated 16 June 2014. The employer denied Mrs CW’s claims and put her on notice that it would defend her claims and seek costs if she pursued them.

[12] Mrs CW alleges delay of over a year on the part of Mr QA, with no outcome. Mrs CW says she did not agree to make regular payments to Mr QA, has had to pay her

2014 that he was too busy to commit time to her matter and would come back to it in the new year but did not.

[13] Mr QA denies any wrongdoing. He says he raised the PG, as evidenced by the letter attached to Mrs CW’s complaint. He did not file a statement of problem originating a claim to the ERA, but says that having raised the PG in time, there is no deadline for filing the statement of problem. Mr QA says Mrs CW was aware that him continuing to do work for her was contingent on him receiving regular payments, which did not happen. Mr QA refers to his discussions with Mrs CW’s husband and says he uplifted the file so Mrs CW’s claim could proceed. Mr QA attached correspondence that suggests Mrs CW would have been open to paying his fee if he reduced it to $2,000, depending on the settlement she was able to negotiate with the employer, but nothing came of that proposal.

[14] The Committee considered the materials provided by the parties and determined Mrs CW’s complaint on the basis that, while Mr QA could have communicated his expectations around payment more clearly to Mrs CW, he was not obliged to progress her instructions without her having paid his fees. The Committee considered that further action was not necessary or appropriate.

[16] Mrs CW repeated the key points of her complaint and says that she would like Mr QA to waive his fee because he did not complete the work they agreed he would do. She says he did not respond to her email of 27 March 2015 (after which her file was uplifted) and did not tell her he was only going to continue acting if he saw her making some progress towards paying his fees, he just did nothing.

[17] Mr QA says he was not retained on a contingency basis and essentially stands by his stated position to NZLS that he has done nothing wrong.

[18] Both parties attended a review hearing in Auckland on 9 August 2018. Mrs CW

[19] 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.

[20] 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.

(a) should waive his fee because he did not complete the work they agreed he would do;

[22] The first and second arguments rely on the existence of a conditional fee agreement, that is, Mr QA would only be entitled to be paid if he got a final result. Conditional fee agreements are regulated under the Act and practice rules.3 Rule 9.10 of the Lawyers and Conveyancers (Lawyers: Conduct and Client Care) Rules 2008 says that such an agreement must be in writing.

[23] Mrs CW has not produced any evidence in support of her assertion that Mr QA

[24] Mr QA says he does not act on the basis of conditional fee agreements and he did not enter into any such agreement with Mrs CW.

[25] As there is no evidential basis on which Mrs CW can claim the existence of a conditional fee agreement, the first and second arguments must fail.

[26] The third contention Mrs CW advances is that Mr QA did not tell her he was only going to continue acting if he saw her making some progress towards paying his fees.

June 2014, with her complaint. The invoice is for a total of $6,311.20, says: “Terms: Strictly [seven] days. No statement will be issued. Your prompt payment would be appreciated” and sets out options for making payment.

[28] Mr QA says the invoice echoes his standard terms of engagement which require fees to be paid within seven days of the date of the invoice. Mr QA says he understood Mrs CW had lost her job, the family was on one income, it would be difficult for her to pay his bill and he was willing to accept regular payments, implicitly of more or less any amount, in reduction of his fees.

[29] It is assumed Mr QA had a conversation along those lines with Mrs CW not long after he sent her his bill, because she decided she wanted to save up to pay off lump sums and had done so by August 2014 to the tune of $500. She did the same again and paid another $500 in October 2014. Mrs CW has paid nothing more to Mr QA since

[30] Mr QA says he and [Mrs CW’s husband] spoke several times about the outstanding fees and Mrs CW’s intention to progress her matter. Mr QA says [Mrs CW’s

husband] assured him that he would be paid and he assured [Mrs CW’s husband] he would do the work if he saw that happening. Mrs CW says [her husband] told her nothing of these conversations. She says she had no idea they were going on, or of what was being said, in particular, she knew nothing of Mr QA’s adherence to the notion that he should be paid for at least some of the work he had done before doing more work.

[31] Mrs CW says she spoke to Mr QA about her matter herself in late 2014 and early 2015. She says she was becoming increasingly concerned about delays on Mr QA’s part. Her position is that even though she was concerned about delays, Mr QA gave her no hint that he might be waiting to see some money, any money, come in from her on a regular basis.

[32] Mrs CW’s evidence is that none of the conversations she had with Mr QA gave her reason to believe that he was only going to advance her matter if he saw her making some progress towards paying his fees. Her expectation, then, was that he would continue to act having been paid $1,000 for the $6,311.20 worth of work represented by his June invoice.

[33] The general presumption is that people who issue bills want them paid. Mr QA allowed Mrs CW a concession. Mrs CW took immediate advantage of that and has continued to do so ever since. She made the two payments, and although there is no evidence to back her statement up, says she carried on saving towards paying the rest of Mr QA’s bill. She gives no explanation for why she did not just make regular weekly payments of even a small amount, beyond the fact that she has a mortgage to pay.

[34] Mr QA did nothing to press Mrs CW for money and assisted her in furthering her matter by providing her with her file so she could instruct someone else. Mrs CW has made no attempt since October 2014 to reduce or eliminate her indebtedness to Mr QA. She says she was very happy with the work he did. Her complaint was not that he had charged an unfair or unreasonable fee, but that he did not tell her he was only going to do more work for her if she made demonstrable progress towards paying his fees. She did not.

[35] Mr QA says he believed Mrs CW knew and understood what he required of her. He believed she had a strong case against her employer. He wanted to do the work. He also wanted to know, reasonably enough, that he was being paid for it.

[36] There is no logic to the proposition that Mr QA should keep on working indefinitely without his fee being paid down at all. There is no rational basis for such an expectation. There is no basis on which it could reasonably be argued that a concession

to allow a struggling client time to pay by instalments should be treated as a complete waiver of all outstanding fees, which is how Mrs CW has been treating it.

[37] It is not accepted that Mr QA did not communicate his requirements to Mrs CW. It is more likely that he told her early on that he wanted her to make some inroads into paying her bill so he could carry on with her work. What Mr QA did not do is bind Mrs CW to an agreed payment plan in writing as a condition of doing more work. While he might have been better served by doing that, he cannot be criticised for not having done so.

[38] It is not the case that Mr QA should suffer an adverse conduct finding because Mrs CW’s misplaced expectations were not met, or that he should be penalised for allow her time to pay his bill.

[39] I have carefully considered all of the materials available on review including the parties’ comments at the review hearing. I am unable to identify any reason to modify or reverse the Committee’s decision. That is confirmed.

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

CW v QA [2018] NZLCRO 72 (13 August 2018)