EY v PS [2019] NZLCRO 107 (30 August 2019)

Last Updated: 5 October 2019

	LCRO 165/2017
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 [X]
BETWEEN	EY Applicant
AND	PS Respondent

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

_{been changed.}

Decision striking out application for review

[1] Mr EY has lodged an Application for Review of the determination by [Area] Standards Committee [X] to take no further action on his complaints about Mr PS.

[2] Mr EY’s complaints relate to events occurring “from the late 1990s to 2011”.1

[3] Part of his complaint is to seek copies of authorities for 48 payments from the trust account of the firm [law firm], where Mr PS was a partner. The payments were made between 1998 and 2011.

[4] Mr EY lawyer (Mr AQ) had requested this information from Mr PS in a letter

20 September 2016. Prior to this Mr PS had responded to a number of inquiries from Mr EY’s accountant (Mr TV), and provided him with a substantial quantity of records, including copies of trust account ledgers, copies of statements and correspondence.

1 Standards Committee determination (4 August 2017) at [6].

[5] Regulation 11(5) of the Trust Account Regulations2 requires a lawyer to retain trust account records for a period of at least 6 years from the date of the last transaction. Much of the information provided by Mr PS was well outside this requirement.

[6] Mr PS acted for a number of companies of which Mr EY was a director and shareholder, and the EY Trust, the trustees of which were Mr EY, Mr HZ (a barrister) and Mr PS’s brother, Mr JS. Mr JS was Mr EY’s accountant, who Mr PS says, had a “very long and close association with the EY group.”3

Mr PS continues:

EY relied heavily on [JS] in respect of all financial and business matters.

[7] With his letter, Mr PS included a lengthy letter from Mr JS4 commenting on the matters raised by Mr EY in his complaint. Mr JS concludes his letter:

In relation to the formal complaint made by [EY] to the Law Society, all I can say is that I was fully aware of each and every transaction on behalf of [EY], his Trust or any of the companies he controlled where [law firm] were retained on specific transactions and that I would have followed through each and every settlement transaction made through their Trust Account to have ensured that the proceeds or payments were properly applied in accordance with the requirements of the directors of the company concerned or of the trustees in respect of any transaction relating to the [X] Family Trust.

[8] The nature of Mr EY’s complaints to the Lawyers Complaints Service is

reflected in the final paragraph of the Standards Committee determination:

Mr EY seeks to use the disciplinary process to answer his questions and suspicions. However, it is not the role of the Lawyers Complaints Service or the Committee to embark on an investigation on such a basis. And, if he came up with any conclusive evidence of wrongdoing, there is an adequate alternative remedy that it would be (or would have been) reasonable for him to exercise (and in fact such adequate remedy existed for the earlier alleged conduct) – via the civil courts. Indeed, many of Mr EY’s grievances appear in actuality with former director/trustee, [JS], and the civil courts are the appropriate forum for pursuing such grievances.

[9] It could also be added here, that it was Mr EY’s role as a director and trustee,

to ensure, at the time, that the companies and trusts were being properly administered.

[10] The reasons provided by Mr EY in support of his application for review are:

I feel the committee did not consider all the relevant information, as I have advised them I have significant material that was best explained through a meeting. No meeting was held with the Committee.

2 Lawyers and Conveyancers Act (Trust Account) Regulations 2008.

3 Letter, PS to Lawyers Complaints Service (8 May 2017).

4 Letter, JS to Lawyers Complaints Service (3 May 2017).

[11] The outcome of the review sought by Mr EY is a “directive to the committee that they seek all relevant information in order to properly consider the issue.” In this regard, I endorse the first sentence of the last paragraph of the Standards Committee determination (see above at [8]), namely, that Mr EY is seeking to use the disciplinary process to answer his questions and suspicions.

[12] There is nothing in the two Eastlight folders of material provided by Mr EY that justifies continuing with this review. The material consists of a substantial number of pages of the firm’s trust account ledgers, and Mr PS has also provided a significant amount of material (e.g copies of emails, statements, letters) over the years, in response to Mr EY’s continuing requests for further information.

[13] The letter from Mr AQ is nothing more than a continuation of Mr EY’s requests

– it contains nothing in the way that would indicate concern about the transactions

effected through the firm’s trust account.

[14] To satisfy myself (and Mr EY) that there was nothing amiss with the operation

of the firm’s trust account, I wrote to the New Zealand Law Society Inspectorate on

29 July 2019, and enquired how many inspections of the firm’s trust account took place during the relevant years, and whether the Inspectorate itself had any cause for concern.

[15] The Inspectorate responded to my inquiry by letter 29 July 2019, advising that it had conducted six inspections between 1998 and 2011, and had no concerns arising out of these inspections.

[16] Copies of both letters have been provided to the parties, and when forwarding a copy of my letter to the Inspectorate to Mr EY, I noted that Law Society inspections are extremely thorough, and include requests to sight authorities for payments to persons other than the person for whom the funds were held.

[17] The Inspectorate reply was sent to Mr EY under cover of a further letter from myself (mistakenly dated 39 July 2019), in which I said:

If you wish the review to continue, I request you to specifically identify the matters that still concern you and refer to the material which supports your concerns.5

[18] Mr EY’s responses has been to provide two brief emails, with (in one case)

numerous pages of unexplained documents

_{Section 205(1) Lawyers and Conveyancers Act 2006}

[19] Section 205(1) of the Lawyers and Conveyancers Act 2006 provides:

The Legal Complaints Review Officer may strike out, in whole or in part, an application for review if satisfied that it

(a) discloses no reasonable cause of action; or

(b) is likely to cause prejudice or delay; or

(c) is frivolous or vexatious; or

(d) is otherwise an abuse of process.

[20] I can discern no reasonable cause of action in the material provided by Mr EY. Neither do I consider a meeting with Mr EY would advance matters as to date, he has been provided with every opportunity to be precise in his allegations, but has not done so.

[21] I consider Mr PS has been prejudiced by the continuing demands for information and records, now many years beyond the obligatory period.

[22] Mr EY’s continuing allegations, unsupported by any of the vast amount of

material provided, borders on the vexatious.

[23] Finally, I endorse the comment of the Committee that Mr EY’s actions are an

_{abuse of process.}

5 The majority of Mr EY’s communications to this Office (and to the Standards Committee) have consisted of sending vast numbers of pages of ledgers, letters, statements, etc with no explanation of what the material is intended to provide evidence of. It is impossible to review that material without being advised what it is intended to be providing evidence of.

Decision

Pursuant to s 205(1) of the Lawyers and Conveyancers Act 2006, the whole of Mr EY’s

application for review is struck out.

_{DATED this 30}TH _{day of August 2019}

O Vaughan

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:

Mr EY as the Applicant

Mr PS as the Respondent

Ms PW as a Related Person [Area] Standards Committee [X] New Zealand Law Society