DO v Law Firm ABC [2019] NZLCRO 109 (30 August 2019)

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	LCRO 10/2018
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 [X]
BETWEEN	DO Applicant
AND	LAW FIRM ABC & BODY CORPORATE _Respondents

[1] Mr DO has applied to review a decision by the [Area] Standards Committee [X] (the Committee) by which he was ordered to pay $1,000 costs to the New Zealand Law Society as a penalty for unsatisfactory conduct.

[2] The conduct identified by the Committee as unsatisfactory was that when acting for parties to a dispute and in contravention of r 10.2 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (the Rules), he communicated directly with the other party knowing it was represented by lawyers.

[3] The events to which this application for review relate, occurred on 30 March

[4] Mr DO was at the relevant time a lawyer employed by the law firm [Law firm X] (Law firm X).

[5] Mr DO held a valid proxy from one of three [Law firm X] clients who were the owners of two units (two of the [Law firm X] clients were the owners of one unit).

[6] The three [Law firm X] clients were members of Body Corporate established under the Unit Titles Act 2010 (the UTA) or its statutory predecessor. The proxy was given by one of two client unit owners who lived in Australia.

[7] The three [Law firm X] client unit owners were involved in litigation with the body corporate about the extent of their liability to contribute to repairs to the unit title property in question.

[9] In proceedings in the Tenancy Tribunal the body corporate had set out to recover a quarter per unit of its repair costs expenditure from the three [Law firm X] client unit owners on the basis that the four units should bear that equally.1

[10] The body corporate failed before the Tenancy Tribunal, recovering instead smaller sums because of, in broad terms, the tribunal’s conclusion that such a recovery (rather than an apportionment taking into account units beyond the four) was inconsistent with the scheme of the UTA and unfair.

[11] The body corporate appealed the tribunal’s decision to the District Court.

[12] That appeal was dismissed, and the body corporate took the matter to the High Court. On [Date] 2018 the High Court found for the body corporate on part of a point of law, but in overall effect the three [Law firm X] client unit owners succeeded on the substantive merits in terms that preserved the original monetary outcome. Thus, the

1 The owners of the other two of the affected units had paid the body corporate’s demands.

[13] In the course of his judgment the High Court judge noted that on the face of it the litigation had not justified the legal resource expended. He did, however, recognise that the body corporate had seen it as in its longer-term interest to obtain a definitive ruling on the point of law raised.

[15] The agenda for the AGM included a notice of motion that it be resolved that the District Court appeal be withdrawn. This notice had been given by the [Law firm X] client owner resident in New Zealand who was at the meeting.

[16] In light of its addition to the agenda as an item potentially affecting the future of the litigation, Mr DO had fully expected that a lawyer from [ABC] would be present at the meeting, but he had not been in touch with them to confirm that.

(b) expressed the view that what his clients had been asked to pay was not a fair sum.

[18] The chairperson then intervened to the effect that he had received an objection to Mr DO speaking when no-one from [ABC] was present following which:

(d) the chairperson noted that Mr DO was a lawyer involved in the litigation with a particular axe to grind; after which

(e) one of Mr DO’s clients who was present intervened to ask why it was alright for the body corporate’s lawyer to address a general meeting when no other legal representative was present (as, she said, had happened previously when representatives of [ABC] were present) but not for Mr DO to speak;

(f) after some further back and forth the motion was moved and seconded at which point Mr DO took a further opportunity to speak;

(g) in doing so his objective was to have those present vote to end the litigation on the basis, at least, that it was uneconomic; and

(h) when he spoke, he said that Mr [ER], a lawyer from [ABC] who was acting in the matter, was just after a legal precedent.3

[19] [ABC] and the body corporate lodged a complaint with the New Zealand Law Society Complaints Service (NZLS) on 24 May 2017. The substance of their complaint was that:

(a) Mr DO, while he may have been entitled to attend the meeting as a proxy holder, had overstepped the mark by addressing the meeting on matters on which, as he knew, the body corporate was legally represented; and

A lawyer acting in a matter must not communicate directly with a person whom the lawyer knows is represented by another lawyer in that matter except as authorised in this rule.4

[21] In a 24 July 2017 letter to the NZLS, Mr DO’s employers (the partners of [Law firm X]) submitted that:

(a) one of their clients (the proposer of the motion) was concerned at the cost benefit of the appeal and had been joined in that concern by other clients resident in Australia;

(b) Mr DO had addressed the meeting in terms matching his instructions from the clients and in doing so had not addressed the legal merits of the

3 Mr DO’s remarks to that last effect were originally of concern to [ABC] but that was assuaged by an apology from Mr DO.

4 There are several exceptions provided for in rule 10.2. None apply to the issues to be determined on review.Breiff

(c) in later correspondence with [ABC], [Law firm X] had assured them that if on any future occasion a member of its firm had instructions to attend a meeting of the body corporate, notice of that would be given to [ABC];

(d) [Law firm X] were troubled that this written assurance from fellow professionals had not been accepted by [ABC] as one meeting their concerns.

(a) his instructions from his New Zealand client (the motion’s proposer who was present at the meeting) had included that when she had tried to speak at a previous meeting she had been “shouted down” by the lawyers for the body corporate and not allowed to express her views;

(b) he had been admitted to the meeting on the strength of a proxy from one of the Australia resident clients and, given the agenda item in question, had expected that the body corporate’s lawyers would be present;

(c) when objection was taken to him speaking at the meeting he had “immediately raised the fact that (he) was there by proxy and that (he) was not purporting to provide advice to the body corporate.”5

[23] Mr DO further submitted that s 102(2) of the UTA is a significant provision:

(1) An eligible voter may exercise the right to vote either by being present in person or by proxy.

[24] When he addressed the members he was, he said, doing just that. The complainants had not suggested, nor could they, that had the Australian owner attended personally “he would not have been able to address the members even had he been a lawyer himself.”

[25] Mr DO particularly submitted that he was not addressing the body corporate as such; rather, he was addressing its members who were at the meeting. Thus, he argued, that he was not addressing [ABC]’s client – it was the body corporate’s members with

5 The excerpt from the meeting transcript provided to the LCRO does not include a record of Mr DO asserting that he was not giving advice. It may in any event be noted that r 10.2 speaks in unqualified terms of communication rather than just the giving of advice.

[26] He added the submission that in circumstances like these, r 10.2 is “impractical”.

... a strict application of the rule would see the lawyers engaged by the body corporate unable to address the meeting if a member who was present was represented by another lawyer. Body corporate members are entitled to attend their meetings as of right and cannot be required to leave in order to allow the body corporate’s lawyer to speak to the balance of the owners where the matter related to the affairs of the body corporate as a whole. Members are of course able to seek independent advice at any stage of the process ...

(a) the assurance offered had not extended to one that, having given advance notice of the intention to attend a body corporate meeting, [Law firm X] would also refrain from any direct communication with the body corporate at that meeting;

(b) Mr DO’s attendance as a proxy did not exempt him from his obligations under r 10.2 and any rights to speak did not extend to doing that on matters within the compass of that rule;

[28] As to the scenario advanced by Mr DO that I set out at [25] above, [ABC] submitted that such a meeting was one of the body corporate and that if another practitioner’s client was present it was in their capacity as part of that body corporate.

(a) [Law firm X] undertaking not to attend a body corporate general meeting and knowingly communicate directly with the body corporate on a matter where [ABC] is engaged by that body corporate; and

(b) an apology from Mr DO for his attendance and direct communication at the 30 March 2017 AGM.

[30] The Committee gave the parties notice of its intention to deal with the matter on the papers and invited responses to issues it had identified as potentially calling for determination. Those issues included:

(a) did Mr DO’s conduct extend beyond “the limited capacity of proxy” or extend to him acting as the proxy giver’s lawyer, by going beyond the expression of their views/concerns?

(e) if r 10.2 did not apply, did Mr DO’s failure to give advance notice to [ABC]

[31] By email of 28 September 2017 [ABC] advised that it was content with what had already been conveyed by its correspondence.

[32] On 3 October 2017 [Law firm X] and Mr DO responded to the issues identified by the Committee, including proffering an opinion from a Mr [SI] of (Law firm Y]. Mr [SI] is a lawyer who, on the basis of what he sets out as his background, qualifies as an expert in the field of unit titles and body corporate law.

(a) section 102 of the UTA sets out broadly that a proxy (who may be a lawyer) is entitled to attend and be heard at a general meeting as if the unit owner;

(b) as a matter of practice, instructions to body corporate lawyers are generally delivered by the chairperson or committee of the body corporate. Therefore, [ABC]’s client was the body corporate acting through its chairperson or committee;

(c) the client is not the unit owners as a group as they may have differing views which must be resolved when necessary by a vote;

(d) as to [ABC]’s submission that in terms of s 88 the meeting was of the body corporate, it was equally correct to say that it was a meeting of unit owners as members of the body corporate and until there was a vote the body corporate did not have a voice;

(e) the implication was that a unit owner or proxy would be addressing the owners as such;

(f) he agreed with [ABC] that the distinction was a fine one, but it was nevertheless important;

(g) while pursuant to its decisions [ABC] acts for the body corporate, it does not act for the owners.

It is to be expected that a group of people who have no reason to be bound together other than the fact that they happen to occupy, or have some other interest in, a unit plan development created under the Act will have quite different interests to protect ...

[34] That last observation is vividly illustrated by the circumstances of the present case where the owners, who were clients of Mr DO, were at distinct odds with the body corporate on the question of with whom and how responsibility for the repair costs should rest.

(a) his reliance on the fact that the similarly worded equivalent of r 10.2 in the Solicitors’ Code of Conduct 2007 (England and Wales) (being r 10.4). This carries a guidance note that, where the other party is an organisation, contacting employees who are not responsible for giving instructions will not amount to a breach of that rule; 8

(b) the attention he draws to the fact that the UTA itself identifies that a body corporate has a separate legal personality from its members.9

(a) section 102(2) of the UTA deemed him to be one and the same person as his proxy giver;

(b) his statements were confined to communicating the Australia-based proxy giver client’s views and there was no bar to that client having his proxy- holding lawyer present, rather than entrusting the task to another owner;

(c) after he spoke, those views (that the litigation had thus far been unsuccessful and a waste of the members’ money) had in substance been repeated by his New Zealand resident client who was present at the meeting;

(d) his role at the meeting could not be bifurcated. The position taken by [ABC] would have both a lawyer proxy and a lawyer member silenced, a state of affairs antithetical to the operation of a mini-democracy;10

(a) the commentary attaching to r 10.2 suggests that it is unclear what the position is when the other party is a non-natural person;

(b) in that state of affairs, it would be reasonable to adopt the Solicitor’s Code of Conduct 2007 (England and Wales) approach and hold that the prohibition extended only to those responsible for giving instructions on behalf of the body corporate, viz, its chairperson or manager;

[38] Mr DO did not seek to rely on the consent exception to r 10.2 because he acknowledged the absence of prior advice to [ABC] that he would be attending the meeting.

[39] Finally, if r 10.2 did not apply but from a professional conduct point of view he ought to have forewarned [ABC] of his intentions, Mr DO advanced these matters in mitigation:

(a) there had been a relatively short time between receiving the proxy instructions and the commencement of the meeting, but he acknowledged

that it would have been possible to email forewarning to Mr [ER] (the lawyer at [ABC] principally involved);

(d) he genuinely did not believe that he was confronted with a prohibition whether on account the rule or professional courtesy; but

(e) he accepted that politeness or courtesy might have called for forewarning. [40] [Law firm X]’s accompanying letter:

(b) expressed the hope that a decision by the Committee would give clarity; (c) submitted that it would be unfair for a disciplinary finding to be made

against Mr DO when the interpretation of the rule in the current context was unclear and there was no deliberate attempt on Mr DO’s part to flout his professional obligations; rather, he had believed that he was acting within the Rules.

[42] The Committee decided, pursuant to s 152(2)(b)(i) of the Lawyers and Conveyancers Act 2006 (the Act) that Mr DO had breached r 10.2 in circumstances demonstrating unsatisfactory conduct as defined in s 12(c) of the Act.11

[43] However, as it considered that the unsatisfactory conduct was at the lower end of the scale and recognised that Mr DO had a previously unblemished record, it simply ordered him to pay $1,000 towards the costs and expenses of the New Zealand Law Society.

[44] Before the hearing, the Committee had raised for consideration an alternative issue of whether, if r 10.2 did not apply, Mr DO’s failure to give [ABC] reasonable advance notice of his intention to attend the meeting amounted to unsatisfactory conduct.

11 Section 12(c) of the Act defines unsatisfactory conduct as including a breach of the Rules.

[45] The Committee, having found that r 10.2 did apply, recognised that it was not necessary to make any determination on that issue and so resolved to take no further action on it.

[46] The Committee’s reasoning on the first issue, so far as is now relevant, was that:

(a) the plain wording of r 10.2 obliged it to find as it did; (b) the rule was important and well understood; namely –

(f) he had introduced himself a lawyer and had then begun to discuss legal options;

(g) anyway, whatever the wording of the UTA, he was bound by the rules of professional conduct which limited his ability to communicate about a matter on which the body corporate was represented by [ABC] when no representative from it was present;

(h) Mr DO had communicated with the body corporate itself as no distinction could be drawn between that and its members; because

(i) his communication had been within the confines of the formal processes of the body corporate as set down by statute.

[47] Mr DO filed an application for review on 17 January 2018. The outcome sought is the setting aside of the findings of rule breach and unsatisfactory conduct.

(a) he did not communicate directly with the body corporate but with the members of that;

(b) he attended the meeting as proxy for a client and that entitled him to be heard as if a member of the body corporate;

(c) it was noteworthy that the New Zealand rules of conduct offer no guidance where a non-natural person (such as the body corporate here) was involved.

[49] The body corporate and [ABC] were invited to comment on the review application but advised at that point that they did not wish to comment further.

[50] 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.

[51] I record that having carefully read the complaint, the response to the complaint, the Committee’s decision and the submissions filed in support of and in opposition to 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.

[52] Consistent with the advice of the High Court as to how the LCRO should approach a review12, I have reached my own view of the merits of this review by:

(a) considering all of the available materials afresh, including the Committee’s

[53] This decision focuses on the instant facts and the application of those to r 10.2 specifically, and to principles relevant to professional conduct generally.

[54] The decision cannot count as the precedent it has been suggested it might provide. Circumstance alter cases and the variety of circumstances that may arise under the UTA cannot be defined in advance. As well, decision-makers studiously avoid determinations of the “hypothetical”.

[43] This court has said on several occasions that the Rules are to be applied as specifically as possible. In my view, they are also to be applied as sensibly and as fairly as possible. These are practice rules, not a legislative code.

[56] The course chosen in cases that are at the margins, or where an applicable rule seems inadequate or ill-fitting, should be the one that best meets the rule’s purposes when viewed in the light of s 3(1)(a) and (b) of the Act.14

... reflects the sanctity and protective purpose of the lawyer and client relationship.

[58] If it stood alone, that proposition might well need to be tempered with the observation that client protection should not be paternalistic. However, that appears to be recognised by the rule itself, as it permits a direct communication if the third party is agreeable and their lawyer has reasonable advance notice of the intention to communicate. 16

14 Being to maintain public confidence in the provision of legal services and conveyancing services, and to protect the consumers of legal services and conveyancing services. See also s

15 Paul Collins “Annotated Conduct and Client Care Rules” in Matthew Palmer (ed) Professional

Responsibility in New Zealand (online loose-leaf ed, LexisNexis) at [410,470.5].

[59] The net effect is that the so-warned lawyer can counsel their client on the pros and cons of agreeing to the communication; but in the end, it is the client’s call.

[60] The UTA and its regulations do not appear to say anything about who may attend and speak at a general meeting. But experience would indicate a common disinclination to allow entry, let alone afford speaking rights, to non-members who do not hail from the office of body corporate manager, or are not lawyers or accountants retained by the body corporate to attend: proxy holders of course excepted.

Are the members of a body corporate and the body corporate itself one and indivisible?

[61] At this point I note the caution that the Legal Complaints Review Office (LCRO) is not a court of record, indeed not a court at all. It is not empowered to interpret, let alone lay down, the law as can a court of competent jurisdiction.

[62] However, on occasion (and this case presents as an example) the LCRO cannot discharge its statutory duties without recording its understanding of the law and working in light of that.

[63] The submissions of [ABC] appear to assimilate, without qualification, the unit owners (ipso facto the members) of the body corporate with the body corporate itself. Relying on s 88 of the UTA, [ABC] has submitted that a meeting of the owners is a meeting of the body corporate.

[64] In contrast, the theme of Mr [SI]’s opinion is that, albeit the distinction can be fine, the unit owners – even when taken as a group – do not equate to the body corporate.

[65] As a matter of law, a body corporate is a legal fiction created in the present context by s 75 of the UTA. Creation of a UTA body corporate precedes the identification by purchase of unit holders. It comes into being not at their behest but by operation of law upon the prior deposit of a unit title plan. It takes its name from the number allotted to that plan, as is exemplified by the name of the body corporate in question here.

[66] The unit owners do not own the body corporate but become members of it upon purchase of a unit or units – see s 76 of the UTA. Their position vis a vis the body corporate is similar to, but not quite the same as, that of shareholders in a company, which is an interest:17

... composed of rights and obligations which are defined by the Companies Act and by the memorandum of association and articles of association of the company.

[67] Noteworthy in the case of a UTA body corporate is that while it is the legal owner of the common property subject to the beneficial interests of the unit owners as tenants in common in proportion to their unit ownership, the members of the body corporate are the legal owners of the units.18

[68] The body corporate may be a legal fiction, but its individuality is underscored by s 77 of the UTA which empowers it to do anything authorised by statute and anything that a natural person of full age and capacity may do, except as proscribed by any statute.

[69] There may be little that matters in this regard when the body corporate is dealing, through lawyers, with outsiders. As an American legal author has said:19

personifying the corporation in terms of its agents is a useful cognitive and legal device across a broad range of situations in which the lawyers assist managers in dealing with outsiders on behalf of the corporation. In these situations, the legal fiction that treats the corporation as a unified, organic entity rests in part on the shared interest of its constituents in enhancing its value. There is good reason to presume in this situation that those in control will act on behalf of this interest. To be sure, there may be differences among constituents about the best way to pursue their shared interest, and constituents may sometimes have selfish interests that may bias their judgments, but where there is no manifest disagreement and no apparent conflict of interest, it is reasonable to presume that those in control are serving the shared interest.

[70] What can be gathered from the matters canvassed above? It seems to me that: (a) there can be no doubting the individuality of the body corporate;

(c) it is wrong to equate the body corporate with its members or vice versa, in terms treating them as in every sense one and the same; thus

(d) when somebody is addressing a quorum of members present at a general meeting they are not addressing the body corporate (here the client of

19 William H Simon “Whom (Or What) Does the Organization's Lawyer Represent: An Anatomy of Intraclient Conflict” (2003) 91 Cal L Rev 57.

(e) the interests of the body corporate and those of its members acting in that capacity coalesce when the necessary majority of members have resolved to pursue a particular course of action; so

(f) when a decision of the body corporate is to be made by its assembled members – by the requisite majority of them – it is as if the body corporate was being addressed and in the context of professional conduct, nice points of legal difference or individuality ought not to be permitted to obscure that reality.

[71] As far as I can see, the English solution promoted by Mr DO does not appear to have survived the subsequent rewriting of the Solicitors’ Code of Conduct 2007. A new Code was promulgated in 2011. Its name is the Solicitors Regulation Authority Code of Conduct 2011.

This chapter is about ensuring you do not take unfair advantage of those you deal with and that you act in a manner which promotes the proper operation of the legal system.

The outcomes in this chapter show how the principles apply in the context of your relations with third parties.

IB(11.4): ensuring that you do not communicate with another party when you are aware that the other party has retained a lawyer in a matter, except:

[73] When a UTA body corporate’s lawyers are dealing with issues where there is internal conflict within the membership, and there has not been or cannot be a delegation to the entity’s committee or chairperson of a power to instruct, the majority vote of the unit owners will determine the path to be taken.

[74] In such circumstances, which look to be the position in the present case, lawyers retained by a body corporate and lawyers acting for one or more unit-owners ought both to be suitably circumspect in their dealings with the owners generally up until the point where a majority decision has been made. They should each avoid the risk of taking “unfair advantage”, to use the English rules’ language.

[75] Circumspection is important where an entity with several or many members is involved (some of whom may well have taken legal advice) and there is no clear and complete demarcation of responsibility for giving instructions as one would expect in the case, say, of a public company.

[76] Given the conclusions I have reached as set out at (e) and (f) of [70] above, and looking at the purpose rather than the letter of r 10.2, Mr DO’s conduct can be recognised as in breach of the rule if, in what he did and said, he communicated as his proxy-giving client’s lawyer rather than a stand in for him as just a proxy.

[77] In the presenting circumstances the case sought to be made by [Law firm X] and Mr DO is that he was acting as a mere proxy. Identifying himself as lawyer did not necessarily change matters.

[78] The rule is expressed in the widest of terms. It does not require for a breach that there be an attempt to give advice – communication that is direct, is enough. But common-sense would say that whether or not the lawyer avoided taking “undue advantage” of his or her professional skills of persuasion in the absence of competing professional voices should be the touchstone.

[79] It is important that lawyers remain ever mindful that their conduct-related decisions should be made not only with a consciousness of the law – be it case-law or

statutory – but also within the context of their professional obligations and responsibilities as lawyers.20

[80] It will be obvious by now that there is room for debate, approaching the arcane, about the relationship of unit owners to a body corporate. But the real issue here is professional conduct, and in addressing the unit owners Mr DO was speaking to those who, by majority vote, would determine the course that the body corporate would follow.

[81] I turn to what Mr DO finally had to say after the chairman’s endeavour to stop him in his tracks was apparently abandoned. Materially it was this:

... Now I want you to vote against Mary’s motion because I would love to go to the District Court and get a precedent in this area. I know [ER] wants that as well as he wants a precedent in this area so when he goes out and advises people he can advise (them) I have got this precedent and this is how it works and I would love to go to the District Court and prove him wrong as well. I don’t know where it is going to end up, you guys could win or we could win. Chances are at the moment that we have beat one so far and we probably will again. When it comes down to it best case scenario is that you win and recoup some of your costs. Worst case scenario is you spend another $25,000 which is what your lawyers predicted you will need to spend and then you will have to pay costs to us on that action and you won’t get a single cent more out of people here. I don't understand because this is your guys’ body corporate and you can decide what to do. You can decide well let’s not keep going here pushing against a closed door. We are down a huge amount of money we are still down $36,000 for this deck repair while there is somebody else we can get that from, why don’t we have a vote and get that out of Unit 5 because that’s the avenue we’ve got. I don’t understand why you haven’t gone down that route but it’s your body corporate guys you can decide to do that or not. Again vote against this motion so I can go up (sic) in the District Court, that would be great for me.

[82] What Mr DO endeavoured to convey was that if the members voted for the motion, this would have the effect of stopping the body corporate from throwing good money after bad.

[83] History has proved him largely correct, but that is not the point. On the day, so it would seem, his plea fell on mostly deaf ears because the motion was defeated.

[84] There is no reason to doubt that what Mr DO said accorded with his instructions from his client. A belief that the litigation was unfair and wasteful appears to have been the client’s concern; a belief apparently echoed at the meeting by Mr DO’s New Zealand

[85] In my view, foreshadowed above at [70](f), to address those owners was for practical and professional conduct purposes to engage in dialogue with – to communicate with – the fictional body corporate: [ABC]’s client.

[87] However, that is not an end of the matter. Not every rule or conduct breach by a lawyer will automatically reach the threshold whereby a finding of unsatisfactory conduct must follow.

(a) he had a relatively short time between receiving the proxy instructions and the commencement of the meeting but acknowledged that it would have been possible to email forewarning to Mr [ER], the principally involved lawyer at [ABC];

(d) he genuinely did not believe that he was confronted with a prohibition whether on account of the rule or professional courtesy; but

(e) he accepted that politeness or courtesy might have called for forewarning. [89] I accept that submission as sincere.

[90] I also take note of the fact that Mr DO has not sought to take this matter lightly. To the contrary; he has industriously, and helpfully, applied himself to the issues to a degree far from always apparent in review cases.

[91] This indicates to me that he is conscientious and that he takes seriously his responsibilities as an Officer of the Court and a practitioner with ethical and professional duties.

The ability to take no further action on a complaint can be exercised legitimately in a wide range of circumstances, including those which would justify taking no action under s 138(1) and (2). It is not confined to circumstances where there is no basis for the complaint at all.

... it appears to me that the LCRO may have assumed that her finding of unsatisfactory conduct inevitably led to the setting aside of the Committee’s decision to take no further action under s 138. No point has been taken on this but any such assumption would be incorrect. The discretion which s 138 confers subsists throughout.

[94] In CW v XB the LCRO held that “an honest mistake is not a proper basis for disciplinary action”.23

[43] This Court has said on several occasions that the Rules are to be applied as specifically as possible. In my view, they are also to be applied as sensibly and fairly as possible. These are practice rules, not a legislative code.

[96] What I count important is that what Mr DO said (albeit reading the printed word is no substitute for hearing the speech as it was made), does not strike me as anything approaching an egregious example of a lawyer taking advantage of the absence of the opposing lawyer or lawyers.

(a) given that the motion in question was listed on the agenda and had the potential to result in a vote stopping the recovery litigation in its tracks, Mr DO had good reason to think that Mr [ER] or another or others from [ABC] would be at the meeting;

_{(b) thus this is not a case of a lawyer setting out to take an unfair
advantage;}

(c) it is understandable that he should have spoken despite the absence of Mr [ER] or one or other of his colleagues, because his Australian client proxy-giver was no doubt relying on him to do so;

(d) although he spoke as a lawyer, and as one seemingly versed in the legal merits of the litigation, what he said had some degree of balance albeit expressed with the hope that it would see fulfilled his clients’ wishes that the litigation be put to rest;

(e) I say that because in what he colloquially said, he did in some degree acknowledge that there were, at that point, two sides to the story;

(f) all in all, his efforts were not such as could be identified as constituting conduct that was by a clear and distinct margin unprofessional and thus unsatisfactory.

[98] The Act sensibly makes provision for cases where, even if a practitioner has breached the rules or conducted themselves in a way that could be counted unprofessional, the fair and just outcome is to take the matter no further and thus avoid a formal and adverse finding.25

[99] Such outcomes can still serve to maintain public confidence in the provision of legal services as well as protect the consumers of legal services by providing educational instead of punitive outcomes.

[100] Given what I have made of the case, I conclude that this is one of those unusual cases where, despite the breach of a conduct rule, a finding of unsatisfactory conduct is not warranted.

[101] Pursuant to s 211(1)(a) and (b) of the Lawyers and Conveyancers Act 2006 the decision of the Standards Committee is reversed and a finding that no further action is either necessary or appropriate is substituted.

[103] Pursuant to s 206(4) of the Act, this decision is to be made available to the public but with the names and identifying details of the parties removed.

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

DO v Law Firm ABC [2019] NZLCRO 109 (30 August 2019)