PC v FM [2019] NZLCRO 105 (10 September 2019)

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	LCRO 207/2018
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	PC Applicant
AND	FM _Respondent

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

[1] Ms PC has applied for a review of a decision by the [Area] Standards Committee (the Committee) to take no further action on her complaint about the conduct of Mr FM, a legal executive with [law firm A] (law firm A). Ms PC’s husband Mr ZL assisted with her application.

[2] The complaint arose from events that led to a civil claim against [law firm A] for breach of fiduciary duty. The claim concerned whether Ms PC had been sufficiently advised about renewals of a café premises lease. The District Court held she had not been. An award of damages followed.

[3] Ms PC was competent at café work but a novice in business affairs and English was her second language. Mr ZL does not appear to have had any significant degree of business awareness.

[4] Mr FM acted for Ms PC in May 2012 or thereabouts when she purchased a café business operated in leasehold premises. The purchase price was $90,000. Neither she nor her husband had ever entered into a commercial lease before.

[5] Ms PC accompanied by Mr ZL, met Mr FM twice. Under his guidance she signed the requisite transaction documents, but the reality was that she could not read English and was very much reliant on Mr ZL.

[6] As the District Court later recognised, one of her main aims was to secure a tenancy that could be maintained through to 2021. That was to be expected, and would have been self-evident, given the purchase price of the business was $90,000. Mr FM was well aware of his client’s expectation that benefit of the lease would be maintained until 2021.1

[7] When the purchase was made the building in which the café was operated was owned by the [incorporated society] (the society).

[8] At the time of purchase the lease was about 6 weeks into a three-year term that had commenced on 1 April 2012 and thus was to expire at the end of March 2015.

[9] A deed of variation of lease dated 16 April 2012 (the variation deed) had created that term and conferred two rights of renewal of three years each, with a final expiry date of 31 March 2021. The renewal dates were also the rent review dates.

[10] The variation deed was referred to in the 25 May 2012 deed of assignment of lease to Ms PC, but the two rights of renewal (each exercisable on three calendar months’ notice) that were provided for by the variation deed were not recorded there. There was simply a reference to the “expiry date of current term: 1 April 2015” (the date should have been 31 March 2015).

[12] XYZ then tried to increase Ms PC’s rent but Mr FM pointed out that the variation deed provided that the next rent review was not due until the end of March

[13] On 21 March 2015, [law firm B] (law firm B), acting for XYZ, wrote to Ms PC to advise that the lease was due to expire on 31 March 2015 and that their letter was notice of its termination 20 working days after that on 1 May 2015.

1 See, for example, his draft email to XYZ prepared following a meeting with Mr ZL on 19 May

[XYZ] will be in touch with you directly. I understand the landlord is open to your ongoing occupation of the premises on a month to month basis.

[15] Mr ZL (Ms PC’s husband) provided Mr FM with a draft response to XYZ’s letter. As with his other written communications to Mr FM to be found amongst the papers before me, this displayed his limited awareness of lease realities and legalities.

We wrote to you on 23 July 2013 providing a copy of lease and contesting your statement the lease had expired earlier and received your reply that it is in fact correct that the lease is to expire on March 31, 2021.

[Our client] is agreeable to terminating the lease subject to conditions. They (our client and her husband) have health issues they need to deal with and contemplate transferring the lease to a mutually agreed purchaser for the remaining term of the lease. On the basis of your legal representative’s latest letter they believe the business would be unsaleable.

[18] On 27 May 2015, Mr FM then wrote to XYZ along the lines of Mr ZL’s draft, including to say:

It would be helpful to [our clients] if the lease could remain at the expiry date of

[19] XYZ not having replied, on 14 July 2015, Mr FM wrote to [law firm B] enclosing a copy of his letter to XYZ and asking them to discuss it with their client and respond.

... we would be willing to discuss a new longer term lease arrangement with you[r] client to a new lease term of your liking, however it would need to include a redevelopment clause providing approximately four months’ notice to terminate the lease.

[21] In October 2015, Ms PC (now on month to month terms or simply holding over) entered into an agreement to sell the café business for $120,000 subject to the negotiation of an acceptable lease with the purchasers and XYZ by 20 November

[22] The negotiations were unsuccessful. Ms PC continued to operate the business until 1 June 2016 when XYZ gave what appears to have been a final notice to depart by 30 September 2016.

[23] By then, Ms PC and Mr ZL had gone elsewhere for legal advice. Despite further negotiations, and relying for leverage on possible rights to relief under the Property Law Act 2007, they were unable to salvage by agreement a right to occupy the premises through to 2021. The requirement of a redevelopment clause presumably thwarted efforts to reach any such accommodation.

8 June 2018 in favour of Ms PC for an amount of $60,000 and costs, the trial judge having found that there had been a fiduciary duty breach by [law firm A].

[30] ... incumbent on any competent lawyer to point out, in the reporting letter that the first renewal date for the lease was 31 March 2015 and that the provisions contained in paragraph 34.1 required the plaintiff, as tenant, to give the landlord written notice to renew three calendar months before the end of the term. A competent lawyer could not reasonably expect two novices, entering into their first business enterprise, to locate and understand the renewal of lease provisions buried in paragraph 34.1 on page 13 of a closely type-written document.

[31] Had Mr FM taken that simple step and made the plaintiff aware of the need for renewal, the disastrous consequences to her business may not have eventuated, or, if they had, following the provisions of the lease being properly pointed out, she would have been the author of her own misfortune.

[32] ... put matters right when the plaintiff again consulted Mr FM in 2013 over the premature attempt by the new owner of the premises to secure a rent review ... he could have, and should have, also pointed out that the rent review would only follow after giving notice of an intention to renew a lease.

[33] Although the instructions received from Mr ZL, following a termination, may have been equivocal, particularly in relation to the carrying on of operating the café on a month-to-month basis [it] is clear, and should have been clear to Mr FM, that the plaintiff was still seeking the lease to continue until 2021.

[34] A competent lawyer, in my view, would have been aware of the provisions of the Property Law Act and would have advised Ms PC that if she wanted to retain the viability of her business,2 to take immediate steps in the High Court to secure relief against forfeiture. At that early stage, there would have been a high likelihood of success.

[29] Ms PC (through Mr ZL) lodged a complaint with the New Zealand Law Society’s Lawyers Complaints Service (NZLS) on 21 June 2018. The substance of her complaint was that Mr FM:

(b) following the landlord’s advice that the lease was to be terminated, acted without authority to confirm Ms PC accepted a month to month tenancy; and

(a) they found it surprising that, when reporting to a client, in addition to providing a copy of the lease (following a meeting where the terms had been explained to the clients) they would be required to point out in writing all the key terms of the lease;

(b) the correspondence clearly showed that Mr FM advised Ms PC that the lease terminated in 2015;

(c) they received no instruction to fight the termination and did not therefore raise with Ms PC her right to seek relief against forfeiture; and that

(d) the assertion that Mr FM acted without instruction in agreeing that the tenancy was on a month to month basis was met by the identification of Mr ZL's draft letter as being an instruction to their firm.

[31] [law firm A] considered that the judge had erred in fact and in law but, so they said, had concluded that the costs and distraction of an appeal would have been such as made it sensible to avoid any such ongoing contest.

[32] The Committee determined, pursuant to s 138(2) of the Lawyers and Conveyancers Act 2006 (the Act) that no further action on the complaint was necessary or appropriate.

19) ... Mr FM’s performance in this matter was not in accordance with best practice and the Committee is concerned to read that apparently under cross-examination he admitted he was not aware of the standard requirement that a tenant provide at least 3 months’ written notice of a desire to renew a lease.

20) In the circumstances where the client is inexperienced in commercial transactions and is not an English speaker (although assisted by an English speaker) it would of course be highly recommended that the key terms, including specific dates by which action needs to be taken, be drawn to the attention of the client in writing.

21) The lease had been terminated when Mr ZL delivered his letter to Mr FM in which he instructed a certain course of action be taken. The practitioner accepts that with the benefit of hindsight those instructions ought to have been tested. Instructions should generally be taken after a client is informed by the lawyer of the nature of the decisions to be made and the consequences of them. With the benefit of alternative options being explained the instructions given may have been different.

23) The Committee notes that the Court has on its calculation restored Ms PC to the position she would have been in had the breach not occurred. Mr ZL is of the view that had the practitioner’s omission not occurred and had Ms PC agreed a new rental and had the lease renewed and had a willing buyer for the business found their losses would have been far less.

24) Mr ZL’s desired outcome is that Mr FM is censured and that the Committee examine the culpability of his supervising partner. The Committee in its discretion having carefully considered the complaint, the practitioner’s response and the further detailed submissions prepared by Mr ZL on Ms PC’s behalf, concluded that any further action is unnecessary or inappropriate in the circumstances.

25) Ms PC has been successful in Court where there has been a finding of a breach of fiduciary duty on the part of the defendants. The Court found that the defendant’s omission was the cause of Ms PC’s loss.

The outcome sought is some limitation on Mr FM’s field of legal work, re-education in fiduciary duty, or a fine.

[35] Mr ZL’s submissions are not always particularly easy to follow but appear to come down to contentions including that:

(a) Mr FM had not drawn attention to the right of renewal terms of the lease and the need to duly exercise them to secure tenure until March 2021; rather

(b) Mr FM’s handing of the whole matter had left him and Ms PC with the belief that tenure was secure until March 2021; and

(a) the Court’s finding that, in addition to providing a copy of a lease already explained in a client meeting, lawyers should have to point out in writing all the key terms such as term end and renewal dates was surprising;

(b) the judge had been mindful of the language barrier and that Ms PC could neither read nor write but made no moment of the fact that this was a relationship couple who were clearly entering into the joint enterprise;

(d) Alternatively, of course, it leaves one wondering as to the benefit of writing a report letter in English, re-explaining the key points, to someone who cannot read or write in English;

(e) The finding of the judge was extraordinary. The correspondence clearly shows (highlighted) that Mr FM recorded the termination date and that was copied to the clients;4

(f) [law firm A] were first engaged in relation to termination of the lease after the clients had received notice of that;

(g) As to their 27 May 2015 letter to XYZ,5 Mr FM says he was responding to instructions, albeit instructions which may, in hindsight, be thought to have invited alternative commentary. Mr FM relies on the premise that the instructions told [law firm A] what the clients wanted. The clients did not wish to commit, personally, to a renewal of the lease. They wished to sell the business, with a new lease in place, to which they were not a party. The clients “wanted their cake and to eat it also”. It is accepted that Mr FM may have failed to push back on those instructions and failed to offer comments on consequences and alternative strategies. His failing, perhaps, was that he received instructions, and acted upon them, without rigorously testing them.

[38] The parties have agreed to the review being dealt with on the papers. This review has been undertaken on the papers pursuant to s 206(2) of the Act, which allows a Legal Complaints Review Officer (LCRO) to conduct the review on the basis of all information available if the LCRO considers that the review can be adequately determined in the absence of the parties.

[39] I record that having carefully read the complaint, the response to the complaint, the Committee’s decision and the submissions filed on the application for review, there are no additional issues or questions in my mind that necessitate any further submission from either party. On the basis of the information available I have concluded that the review can be adequately determined in the absence of the parties.

4 Correspondence relevantly annexed to the response comprises: (a) [law firm A]’ letter to XYZ (15 July 2013) which points to the rent review and lease expiry date coinciding on 31 March

2015 – no CC to Ms PC or Mr ZL appears on the face of the letter; (b) [law firm A]’ letter to XYZ (23 July 2013) soliciting a response to the 15 July letter – no CC to Ms PC or Mr ZL appears on the face of the letter; (c) XYZ’s letter to [law firm A] (2 August 2013) acknowledging both letters and acknowledging error as to rent review date – no CC to Ms PC or Mr ZL appears on the face of the letter; (d) [law firm A] letter to Ms PC (5 August 2013) that did attach a copy of XYZ’s 2

August 2013 letter. The 8 August acknowledgement from Mr ZL makes no reference to renewal issues.

[40] The nature and scope of a review have been discussed by the High Court, which said of the process of review under the Act:6

... 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.

[41] More recently, the High Court has described a review by this Office in the following way:7

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.

[42] 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:

[43] Given that resolution of the complaint and review in this case follows on from civil proceedings in the District Court where the applicant/complainant was successful,

it is important to distinguish between such proceedings and the complaint and review process. In civil proceedings, the courts are concerned with determining the respective parties’ obligations and liabilities, whereas disciplinary proceedings entail a much wider consideration of a lawyer’s conduct, focusing on maintaining professional standards and the protection of consumers.8

[44] Thus, that a set of circumstances involving a lawyer or legal executive may have led to court proceedings that have gone to judgment, does not mean that the individual concerned may not have to confront professional conduct issues too.

[45] Legal executives as well as lawyers are open to findings of unsatisfactory conduct.9 In what follows I refer to authority concerning lawyers’ duties and responsibilities to their clients. In the particular circumstances of the present case, the duties and responsibilities so identified as owed by lawyers are of a kind equally applicable to the conduct of legal executives. It is merely for simplicity’s sake that in what follows I just refer to lawyers.

[46] As to the breadth and depth of such duties and responsibilities, the District Court judgment rightly recognised that much may depend on the particular circumstances such as whether the client was well-versed in business affairs or a tyro embarking on their first self-managed business undertaking.

[47] There can be cases too where a client with a reasonably sophisticated knowledge and understanding of the subject matter in question deliberately chooses to engage a lawyer on a limited retainer to do certain things that, perhaps, only a lawyer can do. And that may serve to circumscribe the scope of the lawyer’s responsibilities by giving rise to a limited retainer.

[48] It must never, however, be thought that the scope of even a limited retainer will necessarily and inevitably mark out immutable boundaries of responsibility.

Canterbury/Westland Standards Committee 3.10 In that case, Van Bohemen J noted at

_{[33] the decision of the Court of Appeal in Gilbert v
Shanahan}11 _{in which the Court
said}

8 Lawyers and Conveyancers Act 2006, s 3(1)(a) and (b): two purposes of the Act are to maintain public confidence in, and protect consumers of, the provision of legal services.

9 Lawyers and Conveyancers Act 2006, s 14: the definition of unsatisfactory conduct is extended to employees of practitioners or incorporated firms.

that lawyers’ duties are governed by the scope of their retainer but that it would be unreasonable and artificial to define that scope solely by reference to the client’s express instructions. That is because matters that reasonably arose in the course of carrying out those instructions had to be regarded as coming within the scope of the retainer.

[50] Australian authority is to the same effect. In Yates Property Corp Pty Ltd (in liq) v Boland, in the Federal Court of Australia Full Court, the reaction to a submission that a lawyer retained to conduct litigation and to brief counsel to advise and appear in that litigation was under no obligation to provide any advice on any substantive aspects of the litigation except as might be specifically requested by the client, was expressed in these terms:12

[56] This extraordinary submission should be rejected. First, it is inconsistent with authority. In Hawkins v Clayton, Deane J, with whom Mason CJ and Wilson J agreed, said that the relationship of solicitor and client is a relationship of proximity which ordinarily gives rise to a duty of care requiring the solicitor to take steps to avoid the client suffering foreseeable economic loss. That duty cannot come to an end merely because counsel has been retained. Secondly, the submission completely loses sight of the fact that a solicitor is retained by a client because the solicitor is a professional person who by his training and qualifications is able to provide advice to his client on matters of law. When a solicitor is retained to conduct litigation his function is to further his client’s interests in that litigation. That is what he is qualified to do and that is why he is paid a fee.

[51] That passage was cited at [56] by Muir JA in the Queensland Court of Appeal in Robert Bax & Associates v Cavenham Pty Ltd (a business transaction case) who then continued:13

[57] This reasoning of the Court in Yates was applied by this Court in Littler v Price, in relation to the duty of a solicitor retained to act in the purchase of an apartment.

[58] In both Yates and Littler, there was an express retainer to advise. But the duty to advise may exist even if the client does not request it or advice is not proffered by the solicitor. In Henderson v Amadio Pty Ltd (No 1), Heerey J, dealing with a case in which advice was not specifically requested or offered, said:

“I find that Nevett Ford’s retainer imposed an obligation on them to advise their clients as to the nature of the rights and obligations they were undertaking by becoming parties to the contract of sale, transfer and mortgage or guarantee. The retainer was not limited to the task of ensuring that the purchasers obtained a good marketable title to the property”.

Once it is accepted that a solicitor is acting for a lay client in relation to a transaction involving, after the retainer commences, the execution of

technical legal documents, it must follow in my opinion that the solicitor is obliged to explain and advise the client as to the effect of those documents. (I am speaking of lay clients in the sense of people whose ordinary business does not include transactions of the kind in question ... Much modern legal documentation, such as mortgages and commercial leases, is virtually unintelligible even to well-educated lay people. Yet generally speaking the law binds people to documents they sign, whether read or not. It is f or this ver y r e as on t hat a s o lic i tor ’s ex pla nat ion and advice is so essential. And often it is important for a client to know what a document does not contain.”

“Accordingly, there is no lack of authority for the proposition that the retainer of a solicitor for the purchaser on the purchase of a business ordinarily extends beyond mere documentation and includes the duty to warn the purchaser of anything that is unusual and anything that may affect the purchaser obtaining the benefit of the contract which he or she discloses to the solicitor is sought to be obtained. It will be observed that the authorities quoted come mainly from obscure reports. The reason for this is fairly obvious, the question is one of fact which has to be determined in the light of all the circumstances of the case and the way in which the case is presented at the trial. When a case of this nature does get reported in an authorised set of law reports, it is usually only because some other aspect of the case is reportable.”

[66] The fact that Mr Bax was probably unaware of his c l ient ’s lac k of lega l and commercial knowledge and acumen does not assist him . In the absence of a careful written explanation of the salient features of the proposed transactions, the way in which they should be implemented and an explanation of the risks involved, Mr Bax had a duty to inform himself relevantly in relation to his client with a view to determining what advice needed to be given to sufficiently explain the tr an s ac tions a nd pr otec t h is c li ent’s int eres ts .

(c) to say that her husband was her alter ego would be to ignore the need to ascertain whether or not he had a sufficiency of business acumen;

(d) there was more than one lease document here (and they needed to read together) and even just one can, as Heerey J observed, be virtually unintelligible even to a well-educated lay person;

(e) the life of the lease was clearly of vital importance to Ms PC and her husband and understandably so given their outlay of $90,000 to buy the business;

(g) that he should adequately deal with the matter of the renewal dates was undoubtedly a top priority;

(h) circumstances will alter cases but this is one where a careful written explanation was called for in May 2012 and, it could be said, a rehearsal of that in 2013 when the lease was again in the spotlight.

(a) “ t he Court ’s f inding t hat , in addition to providing a copy of a lease already explained in a client meeting, lawyers should have to point out in writing all the key terms such as term end and renewal dates was surprising”.

Why the finding should be seen as “surprising” is not elucidated. Mr FM’s “will say” statement for the Court (a) does not include any claim by him that he explained the lease to Ms PC and/or her husband; (b) variously indicates that he found Mr ZL (whom he described as the point of contact) to be less than a clear thinker; (c) asserts that he was unaware of Ms PC’s difficulties with written English (indicating that despite the obvious he failed to make due inquiry); and (d) that despite (c) just above he relied on Mr ZL as message carrier to Ms PC.

(b) “the judge had been mindful of the language barrier and that Ms PC could neither read nor write but made no moment of the fact that this was a relationship couple who were clearly entering into the joint enterprise”.

Given what I have just written about submission (a), why the judge should have made such “moment” is quite unclear. In any event, and to state the obvious, this jurisdiction has no place in the courts’ hierarchy. It makes its own findings of fact although, when a

_{court has already made such findings, this jurisdiction may well adopt
some number of}

them as relevant to the issues at hand16 – that in the absence of any contrary and persuasive evidence that the court did not have. Court findings on contested evidence can be invaluable as it will generally have been tested by cross-examination and other means.

Insofar as the café undertaking may have been a joint enterprise, the points recorded in (a) above are rehearsed.

(d) “Alternatively, of course, it leaves one wondering as to the benefit of writing a report letter, re-explaining the key points, to someone who cannot read or write”.

It is unclear whether this is a submission or a speculative observation. Either way its flaw is self-evident in that such a letter would have been read by Mr ZL.

(e) The finding of the judge was extraordinary. The correspondence clearly shows (highlighted) that Mr FM recorded the termination date and that was copied to the clients;

This is a reference to the 2013 correspondence.17 That, as proffered to the Committee by [law firm A], does not include any letter sent or obviously copied to Ms PC or Mr ZL (in written form as could be revisited) where reference is made to the termination date. Such reference is only found in a letter to XYZ.

There is no sign anywhere of a spelling out to Ms PC or Mr ZL of the fact that if the lease was to be preserved until the end of March 2021, then notice pursuant to the right of renewal would be essential, which had to be given three calendar months prior to term’s expiry, first in 2015 and again in 2018.

(f) [law firm A] were first engaged in relation to termination of the lease after the clients had received notice of that.

16 Lawyers and Conveyancers Act 2006, s 207: the LCRO may seek and receive evidence as he or she thinks fit, and may take into account any relevant information, whether or not that information would normally be inadmissible in a court of law.

This observation was presumably intended to be taken as pregnant with a submission that Ms PC and Mr ZL left matters too late. If that was the intention then it leaves begging the question of whose fault that was.

[54] As to their 27 May 2015 letter to XYZ (relevant to relief against forfeiture), [law firm A] say:18

Mr FM was responding to instructions, albeit instructions which may, in hindsight be thought to have invited alternative commentary. But the instruction is telling as to what the clients wanted. The clients did not wish to commit, personally, to a renewal of the lease. They wished to sell the business, with a new lease in place, to which they were not a party. The clients ‘wanted their cake and to eat it also’. it is accepted that Mr FM may have failed to push back on those instructions and failed to offer comments on consequences and alternative strategies. His failing, perhaps, was that he received instructions and acted upon them, without rigorously testing them.

[55] The Committee said that it made its decision to take no further action in reliance on s 138(2) of the Act. To the extent relevant here, s 138 reads:

(1) A Standards Committee may, in its discretion, decide to take no action or, as the case may require, no further action, on any complaint if, in the opinion of the Standards Committee,—

(f) there is in all the circumstances an adequate remedy or right of appeal, other than the right to petition the House of Representatives or to make a complaint to an Ombudsman, that it would be reasonable for the person aggrieved to exercise.

(2) Despite anything in subsection (1), a Standards Committee may, in its discretion, decide not to take any further action on a complaint if, in the course of the investigation of the complaint, it appears to the Standards Committee that, having regard to all the circumstances of the case, any further action is unnecessary or inappropriate.

[56] It appears that the Committee, despite having come to the conclusion that Mr FM’s conduct had been flawed, then turned to and focused on the points that (a) what he did in May 2015 accorded with the client’s instructions (albeit those were left unquestioned) and that (b) the court had given a damages remedy, and on those accounts declined to go so far as to record an unsatisfactory conduct finding.

[57] As noted at [40] above, the High Court has said that where the review is of the exercise of a discretion, it is appropriate for this Office to exercise some particular caution before substituting its own judgment without good reason.

[58] In Kacem v Bashir,19 a relocation case, the Supreme Court said of an appeal against the exercise of a discretion that:

[32] the criteria for a successful appeal are stricter: (1) error of law or principle; (2) taking account of irrelevant considerations; (3) failing to take account of a relevant consideration; or (4) the decision is plainly wrong. The distinction between a general appeal and an appeal from a discretion is not altogether easy to describe in the abstract. But the fact that the case involves factual evaluation and a value judgment does not of itself mean the decision is discretionary. In any event, as the Court of Appeal correctly said, the assessment of what was in the best interests of the children in the present case did not involve an appeal from a discretionary decision. The decision of the High Court was a matter of assessment and judgment not discretion, and so was that of the Family Court.

[59] I have taken all of the matters of fact and principle discussed above into account in reaching my own conclusions. Those conclusions are that:

(a) With respect, the District Court Judge was right when he wrote that “the time for real focus is the receiving of instructions by the defendants from the plaintiff in respect of the purchase of the business and the transfer of the lease”;

(b) in the given circumstances, clear advice on the subject of renewals of the lease and the pre-conditions for that reasonably arose in the course of Mr FM carrying out his instructions and thus had to be regarded as coming within the scope of the retainer;

(d) as the Judge said at [26] of his judgment, “It would have been clear to Mr FM that ... (Ms PC’s) clear intention in making the purchase was to secure through to the year 2021. Why else would she pay $90,000 as a purchase price ...?”;

(e) Mr ZL and thus Ms PC obviously believed until a point in time when the lease had expired that tenure was secure until 2021;

(f) that appears to have been the case because Mr FM failed to adequately ensure that two individuals who were unsophisticated in business

matters were left in no doubt as to what was required to ensure tenure until 2021;

(g) Mr FM needed but, by all the appearing to be reliable evidential signs, failed to take positive steps to avoid his client suffering a real and foreseeable economic loss;20 and

(h) those shortcomings add up to a significant and serious breach of rule 3 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008.21

[60] As best I can judge from what it has recorded, the reason why the Committee did not reach that conclusion was that it saw Mr FM’s May 2015 follow through in simple obedience to Mr ZL’s “month to month” instructions as in some way exculpatory, presumably because client instructions were adhered to.

[61] That is an illogical conclusion. At that point (save for any relief against forfeiture possibilities) the lease had been lost. As identified at [59](a) above, whether Mr FM’s conduct was or was not unsatisfactory fell primarily to be judged by reference to the events back in May 2012 or thereabouts.22

[62] As to relief against forfeiture, it is contended for Mr FM that no blame can attach to him for the non-exploration of that as a possible remedy because Ms PC (through Mr ZL) preferred to try and achieve a sale of the business with the purchaser negotiating a fresh and direct lease with XYZ.23

[63] The contention here appears to be that Ms PC, given the circumstances she found herself by then, had no wish to see the lease revived in terms reinstating her lessee obligations personally. But that is not the primary point.

[64] The point is that recognised by the Judge in awarding damages as he did – that due to a lack of timely notices for lease renewal (which they were ignorant of the need for), Ms PC had nothing of commercial utility to sell.

20 Note in this respect the more extensive judicial observations at [29] of the District Court judgment.

21 Rule 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.

22 I do not count it necessary particularly to dwell on whether, in 2013, Mr FM let by a further opportunity to ensure that his client well understood what was required to keep the lease alive.

23 That looks to have been an unlikely outcome because by then XYZ was apparently much

[65] What also seems to have influenced the Committee’s decision is that in the

[66] I recognise that there can be cases where the ability to obtain an adequate remedy elsewhere justifies a decision to take no further action on a complaint and that the Act specifically so provides – see [55] above.

[67] But sight must not be lost of the principle I noted earlier that in civil proceedings the courts are concerned with determining the respective parties’ obligations and liabilities, whereas disciplinary proceedings entail a much wider consideration of a lawyer’s conduct, focusing on maintaining professional standards and the protection of consumers.

[68] I find that Mr FM breached r 3 in a fundamental way, amounting to unsatisfactory conduct, when in or about May 2012, the advice and assistance he provided to Ms PC fell well short of what the authorities cited above spell out as being required in circumstances like those in this case.24

[69] That advice and assistance also 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 was thus unsatisfactory conduct on that account too.25

[70] I leave out of particular consideration shortcomings on Mr FM’s part in 2013

[71] I leave out of consideration the relief against forfeiture issue because the materials presented do not convey a clear and satisfactorily complete factual picture as would make it fair to opine on that issue.

[72] I consider the conduct breach identified to be of sufficient seriousness to warrant the imposition of a monetary penalty.

_{[73] Mr FM is to pay a fine in the sum of $1,500 to the New
Zealand Law Society.}

[74] 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.

[75] Taking into account the Costs Guidelines of this Office, Mr FM 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.

[77] Pursuant to s 206(4) of the Act, I direct that this decision be published so as to be accessible to the wider profession in a form anonymising the parties and bereft of anything as might lead to their identification.

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

(b) By reason of a breach of rule 3 of the Conduct and Client Care Rules and pursuant to section 12 (a) of the Lawyers and Conveyancers Act

(d) Pursuant to section 210 (1) of the Lawyers and Conveyancers Act 2006 and the LCRO costs orders guidelines, Mr FM is ordered to pay the sum of $1,200 to the New Zealand Law Society by way of costs, such sum to be paid within one month of the date of this decision.

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

Mr FM as the Respondent Mr XB as a Related Person [Area] Standards Committee New Zealand Law Society

New Zealand Legal Complaints Review Officer

PC v FM [2019] NZLCRO 105 (10 September 2019)