QQ v RR [2019] NZLCRO 143 (22 October 2019)

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CONCERNING an application for review pursuant to section 193 of the Lawyers and Conveyancers Act 2006

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

[X] which concluded there had been unsatisfactory conduct on his part and ordered him to reverse his fees and refund $150,000 in fees to Mrs RR.

For the reasons that follow, the Committee’s determination has been reversed on review, as a result the orders fall away. This Office will take no further action.

The judgment of Judge AP Walsh dated [Date] neatly encapsulates the background that brought Mrs and Mr RR to court.1 Mrs RR was represented by Mr QQ

Judge Walsh’s decision records that Mrs and Mr RR lived and owned property overseas. They married in 2002. They had two children. At some point they migrated to New Zealand and purchased property in the South Island. Mr RR became a director of [KLJ] Ltd, a company incorporated in late January 2005. In early February 2005, Mrs and Mr RR settled two discretionary trusts (the trusts) to which they transferred the majority of their combined assets, also in 2005. Trust money was lent to [KLJ], and one

By 20 September 2010 Mrs and Mr RR had settled their differences over property and signed a comprehensive relationship property agreement (the 2010 agreement) pursuant to the Property (Relationships) Act 1976 (the PRA). The 2010 agreement was based in part on [KLJ] shares having a value of $1,310,000 at that time, and included a division of trust assets. It recorded that their agreements related to:2

the future administration of the Family Trust and RR Trust, division of relationship property, maintenance, child support and care arrangements for the children. The agreement recorded the total value of relationship property, including the assets of the Family Trust ... as ... $2,433,300 ... half share ... $1,216,650.

Mrs and Mr RR agreed who was entitled to what, who would do what, and created mechanisms by which funds could be channelled to Mrs RR over time. Documents to provide Mrs RR and the bank with a level of security while Mr RR finalised his payments to her were incorporated into the agreement by reference. As part of those arrangements, Mr RR and the other trustee granted Mrs RR a power of attorney and signed a general security agreement (GSA) in her favour. Mrs RR agreed to relinquish control over and interest in trust property, but allowed the bank to register a mortgage against her home to facilitate borrowing, so she and the children could have a home that

1 [citation redacted] [an application to set aside a relationship property agreement].

2010 agreement pursuant to s 21A of the PRA. It can safely be assumed from the fact that the 2010 agreement was set aside by the Family Court for reasons other than non-compliance with s 21F of the PRA, that it complied with the requirements of s 21F.

Those requirements include Mrs and Mr RR having independent legal advice before they signed the agreement. In each case, the lawyer who witnessed her or his signature certified she or he had explained the effect and implications of the agreement to Mrs or Mr RR. That advice could reasonably be expected to have traversed the relationship between the agreement and the documents that were incorporated into it by reference, the uncertainties (known and unknown) associated with performance over time, that the agreement was full and final except to the extent that it could be set aside by the Family Court with reference to the statutory test of “serious injustice” in s 21J of the PRA, and perhaps adverting to the Courts’ preference for certainty over uncertainty,

In short, Mrs and Mr RR would have known that they had secured a level of certainty that was something less than absolute, and that the more obvious risks were as well managed as they could reasonably be. They would have been advised that if they were willing to crystallise their position with immediate effect, that would significantly reduce the uncertainties associated with performance over time. But that was not the deal Mrs and Mr RR agreed to: there were choices to be made, and they made them, for

Mrs and Mr RR would also have been aware from when the trusts were established that they personally were not the same, in a legal or beneficial sense, as Mrs or Mr RR the trustee, and Mrs or Mr RR the beneficiary. It is not entirely clear from the materials whether: Mrs or Mr RR was advised to take separate advice to accompany the advice they received in their personal capacities, whether one or both of them sought any such advice, or, if so, the extent to which either of them in whatever capacity may

In 2010, satisfied with the arrangements they had made in fully and finally dividing their interests in relationship property, and having received advice on the effect and implications of the 2010 agreement and related arrangements, Mrs RR resigned as a trustee, surrendered her interests in trust property and bought herself a house where

On [Date], there was another earthquake, this time centred in [Area], followed by another in [Date]. The earthquakes had wide-ranging impacts. [KLJ]’s business was affected. Although Mr QQ was not involved at the time, there is evidence from him that [KLJ] had business interruption insurance. That is not to say the directors of [KLJ] made or pursued a claim, or that the insurer paid out. However, Mr QQ’s evidence is accepted to the extent that [KLJ] had business interruption insurance, which may have opened up

Initially, Mrs RR acquiesced to Mr RR’s defaults continuing. However, Mrs RR then decided to sell her home and made plans with her reconstituted family to move on. Mr RR considered it appropriate, having taken legal advice, to register a notice of claim against Mrs RR’s home. The notice of claim hindered Mrs RR in giving effect to her intention to move. She shifted from acquiescence, to resistance. When it became apparent to Mrs RR that Mr RR was not going to be persuaded to meet his obligations, was taking steps to secure his own position as against her, and getting in the way of her

Mr QQ acted for Mrs RR personally in the matter of her relationship property from 23 October 2012 to around October 2014. As Mrs RR would have been advised when she signed the 2010 agreement and related documents, her position as against Mr RR would change in uncertain ways if the 2010 agreement were to be set aside. That

The indications from Mrs RR when she first saw Mr QQ were that she had a general idea of how the arrangements were all supposed to work in principle, but perhaps unsurprisingly, was not particularly clear on how they would work in practice given the factual matrix at the time. The factual matrix included earthquake, insured, uninsured

When she instructed Mr QQ, Mrs RR wanted Mr RR to pay child support and keep to the 2010 agreement, to sell her home and move. She could not sell or move because Mr RR had registered a notice of claim to preserve his position as against her, and she had been unable to persuade him to change his mind.

instructions, Mr QQ engaged the enforcement processes established by the 2010 agreement and related documents. That involved the issue of demands and requests for information from various institutions involved in the affairs of Mr RR, [KLJ] and other related entities including trusts of which Mrs RR had formerly been, but was not at the time, a trustee.

Mr RR commenced Family Court proceedings against Mrs RR aimed at holding her back and extinguishing the 2010 agreement. Mr RR was eventually able to extricate himself from his obligations under the 2010 agreement by persuading the Family Court to set that agreement aside. That opened up the world of uncertainties Mrs RR had been

That is the short of it. The parties know the detail, some of which is recorded in the materials available on review. I have read and carefully considered all of those. It is

Two years after the date on Mr QQ’s final invoice, Mr RR delivered a complaint signed by him and Mrs RR to the New Zealand Law Society (NZLS).

The joint complaint ran to 13 pages of blended narrative plus attachments. Mrs and Mr RR say Mr QQ breached s 4 of the Lawyers and Conveyancers Act 2006 (the Act) in that he failed to meet his fundamental obligations to:

(b) Protect, subject to his overriding duties as an officer of the High Court and to his duties under any enactment, the interests of Mrs RR.

Mrs and Mr RR list specific deficiencies they contend amount to misconduct as defined in s 7(1) of the Act, and say that emails dated 22 October and 4 November 2014 from Mrs RR to Mr QQ after the Family Court set the 2010 agreement aside best summarise Mrs RR’s complaints. In summary, those emails are critical of Mr QQ for:

(b) Failing to ensure Mrs RR understood the short or long term ramifications of the strategy;

(d) Engaging Mrs RR in a costly and futile exercise; (e) Failing to achieve Mrs RR’s objectives;

(g) Leaving Mrs RR to face consequences that were catastrophic to her and her children;

Those are perhaps best captured as wide-ranging allegations that Mr QQ breached his duties to Mrs RR through self-aggrandizement and lack of foresight. Unfortunately, the allegations lack any reliable evidential foundation in the contemporaneous materials. The only matter of any substance that emerges from all the materials available on review is whether Mrs RR was overcharged.

The blended narrative is married by internal inconsistencies. Some of the information on which the blended narrative relies is confidential and privileged to Mrs RR personally. She knows what actually happened in the course of her interactions with Mr QQ over the course of the retainer. Mrs RR’s feelings at the time about the legal processes in which she had been engaged, and about Mr QQ’s part in those, are clear

It is accepted that Mrs RR felt deeply disappointed. It is also accepted that the Act, along with the regulations and rules made under that, provide Mrs RR with a statutory right to complain about Mr QQ’s conduct, service and the quantum of his fees. If certain conditions are met, the Act provides a right to have the quantum of a lawyer’s

Unfortunately, the statutory processes of complaint and review have been complicated by the blended narrative.

That aspect of the complaint is vexatious within the meaning of that word in s 138(1)(c) of the Act. In P v H LCRO 02/09 the LCRO said:

[8] Vexatious has assumed a specific meaning in the law which departs somewhat from the way in which it might be used in ordinary language. In NZCYPS v B [1996] NZFLR 385 Judge Moss had occasion to consider the meaning of vexatious and concluded that “in a legal context the word

‘vexatious’ has come to mean ‘not having sufficient grounds’”. In that case his honour was considering whether a certain application in respect of care and protection proceedings in relation to a child should be struck out as “frivolous or vexatious or an abuse of the procedure of the Court”. His honour also observed that a high threshold must be reached before making such a finding. Clearly any tribunal should be cautious before finding that a litigant’s action (or complainant’s complaint) is vexatious. A similar approach was taken by Tipping J the Supreme Court in Murray v Morel & Co Ltd [2007] NZSC 27; [2007] 3 NZLR 721 where it was held that where a claim is clearly barred as outside a limitation period it will be considered vexatious (or frivolous or an abuse of process).

[9] In Dyson v Attorney-General [1910] UKLawRpKQB 203; [1911] 1 KB 410, 418 (CA), Fletcher Moulton LJ was considering the power of the Court to strike out an action as vexatious and observed that:

The Court has a right to stop an action at this stage if it is wantonly brought without the shadow of an excuse, so that to permit the action to go through its ordinary stages up to trial would be to allow the defendant to be vexed under the form of legal process when there could not at any stage be any doubt that the action was baseless.

Importantly his honour did not consider that the action must be brought with the intention of “vexing” or annoying the defendant. However where a claim is baseless the effect of it is simply to cause inconvenience to the defendant. It is the fact that it is clearly baseless and therefore has the sole effect of annoying the defendant that makes it vexatious. The intention of the plaintiff (or in this jurisdiction the complainant[s]) are therefore not relevant to this question. Where a complaint is brought which is in fact wholly groundless it may be vexatious even though the complainant[s] mistakenly think... it has merit.

[10] I note also that in s 138(1)(c) the word vexatious can properly be read along with the accompanying phrases of “frivolous” and “not made in good faith”. Although the sentence uses the disjunctive “or” between the concepts, there is considerable overlap in these terms: Cameron v Masters [1998] NZFLR 11. ...

[12] The question of whether it is proper for a Standards Committee to find that a matter is vexatious or frivolous or not made in good faith must also be considered against the wider background of the purposes of the Lawyers and Conveyancers Act 2006 and the objectives of the complaints process. The general purposes of the Act are set out in s 3 and include the protection of consumers of legal services and to maintain confidence in the provision of legal services. Clearly a robust complaints system is part of achieving those purposes. This requires both the efficient dealing with complaints, and that complaints should not be lightly turned away.

[13] Section 120 of the Act provides further guidance on the purposes of the complaints and discipline system and provides that complaints must be processed and resolved expeditiously. It is on this basis that Standards Committees are given the power to dismiss a complaint without further investigation under s 138 of the Act. It is of note that s 138 also refers to

other grounds upon which the complaint may be summarily dismissed. Those grounds include triviality and the existence of more appropriate remedies. The legislature has attempted to strike a balance between a comprehensive complaints process, and ensuring that that process is not clogged by undeserving complaints. It is also proper to recognise in the existence of the power to dismiss trivial, frivolous and vexatious complaints the fact that it is proper that lawyers not be inconvenienced by complaints which are wholly without foundation.

[14] I also take into account the fact that finding that a complaint is vexatious or frivolous or not made in good faith is a significant finding that should not be made lightly. In particular, it deprives the complainant of a full investigation of the complaint. Such a finding should therefore only be made where there are clear grounds: Ongley v Brdjanovic [1975] 2 NZLR 242 at 244.

The blended narrative entangles fact, some of which is supported by the contemporaneous materials, with supposed facts that are advanced with absolutely no support from the contemporaneous materials, and indeed are largely controverted or undermined by those materials. The blended narrative is also heavy on hearsay,

Complications of this type are not new to this Office or to Committees. However, the point warrants mention because in this case the joint complaint, supposedly supported by the blended narrative, highlights the need for caution on the part of Committees when a complaint is advanced as joint, and not all of the complainants were

The blended narrative was identified as a problem relatively early on in the complaint process. It was addressed by Mr RR being offered the opportunity to file a

Unfortunately, the same opportunity was not extended to Mrs RR. That left her to proceed with a complaint that was now hers in form but not in substance, based on a blended narrative that is married by internal inconsistencies, and disconcertingly

_{unreliable with reference to the presence and absence of contemporaneous
materials.}

It was open to the Committee to decide to take no action on the joint complaint pursuant to ss 137 and 138 of the Act. To the extent the complaint relies on the blended narrative, it is vexatious. The Committee could and, in my view, should have:

(a) dismissed the joint complaint pursuant to s 138(1)(c) on the basis that it was vexatious to the extent that it relied on the blended narrative; and

(b) expressly reserved the right for Mrs and Mr RR, independently of one another, to frame and lay a complaint under the Act.

The path the complaint process followed from that procedural defect was not fair to Mrs RR or Mr QQ. The process from then on was tainted by that procedural

It appears from the decision under review that the Committee was swayed by the blended narrative, and Mrs RR’s pleas for clemency and charity. It is accepted that Mrs RR found herself in the unenviable position of many an unsuccessful litigant. She lost. The Court set the 2010 agreement aside. Based on an overall consideration of the available materials, and noting the absence as much as the presence of information, it is more likely than not that Mr QQ had foreshadowed that outcome in his advice, Mrs RR

_{had received that advice, engaged with it, and, not unreasonably, relied
on it.}

Mr QQ’s involvement, in particular the allegations that he breached his fiduciary duties to Mrs RR and failed to protect her interests. Those allegations lack substance.

The Committee reached the point, wrongly given the contemporaneous materials, that Mr QQ should give Mrs RR more money ($150,000) than he had charged her in fees ($146,000). I have been unable to follow the Committee’s logic in this regard. Mr QQ’s four invoices were included in the contemporaneous materials that were before the Committee. It is clear from those that his fee was $146,000. It is not clear what the other $4,000 relates to. As a matter of logic, a refund of a fee cannot exceed the amount

Mr QQ made an application for review because he considers the Committee reached the wrong conclusion in finding his conduct in the course of his retainer with

It will be apparent from the foregoing that I agree with Mr QQ. The contemporaneous materials do not support a finding that his conduct was unsatisfactory as that term is defined in the Act. Without a finding of unsatisfactory conduct, any orders made by the Committee under s 156 fall away for the lack of a statutory basis. That line of thinking will come as no surprise to the parties because it was foreshadowed in my direction of 22 October 2019, a copy of which is attached to this decision.

Mr QQ provided a response to the joint complaint that runs to 42 pages, with contemporaneous materials from his files attached in support. Mr QQ rejected all elements of the complaint based on the blended narrative. He denied he was negligent, had breached his fiduciary duties to Mrs RR personally by act or omission or had been

guilty of misconduct. Mr QQ (correctly) says the complaint takes documents out of

From Mr QQ’s perspective, he took reasonable steps to ensure Mrs RR understood the nature of the retainer and kept her informed about its progress. Mr QQ says, and to a sufficient extent the contemporaneous materials confirm, that he consulted Mrs RR about the steps being taken to implement her instructions. Mr QQ describes Mrs RR as a:

very good and interested communicator frequently coming into the office to have meetings to discuss what was happening on a one-to-one basis so that she could better understand the same, particularly if she was unsure about any issue which had been covered by telephone or email.

Mr QQ says, and the contemporaneous materials support to a sufficient extent a finding, that Mrs RR asked sensible questions, engaged in discussions and appeared to fully understand what he was proposing. She agreed with the strategy and stand he was taking on her behalf, and it is apparent from the contemporaneous materials that she approved correspondence and communications of significance that he sent on her behalf. Mr QQ says, and the contemporaneous materials confirm, that he promptly

I would add at this point that although Mr RR was a joint complainant, he is not a party to this review. Consequently, Mr QQ was free to expand on his evidence on review beyond the information he had been able to share with the Committee in replying to the joint complaint. The further information reinforces my view of the

Mr QQ’s reply continues with reference to the contemporaneous materials, and refers to the advice he gave, including as to costs. Mr QQ explains his reasons for not pressing Mrs RR for payment as the matter progressed, and confirms the arrangements

they made with reference to the contemporaneous materials. With good reason, Mr QQ said he doubted the credibility of the complaint. He said, and I agree, that it made no sense for him to have volunteered to extend credit to Mrs RR as he did, without her having asked him to. Credit makes poor business sense. It was also inconsistent with the standard terms of engagement Mr QQ provided to Mrs RR, and which she signed. It appears from their conduct in the course of the retainer that they agreed to vary those

The Committee sent Mr QQ’s reply to the joint complaint by email to Mrs and Mr RR at what appears to have been Mr RR’s email address.3 I note also that it appears from the Committee’s file that Mr RR delivered the complaint and supporting materials to NZLS.

Mr RR did so by letter dated 24 April 2017. Perhaps not surprisingly, Mr RR wholly rejects Mr QQ’s response, saying there were outstanding and unsupported comments in that. The implication is that Mr RR wrongly believes that Mr QQ is

Mr RR tells his own story at some length and blames the continued conflict on Mr QQ. Mr RR describes Mr QQ as ignorant of the law and out of his depth. He says he disempowered and disenfranchised Mrs RR, and broke the rules. Mr RR’s response is overflowing with justifications for his own behaviour, denials of personal responsibility and subjective criticisms of Mr QQ for the assistance he provided to Mrs RR. Mr RR says “[no] lawyer would have gambled the family home on speculative and in [his] view baseless litigation”. The complaint goes on for 21 pages in a similar vein. It relies on hearsay and speculation, contains numerous examples of Mr RR’s superior knowledge,

_{and wide-ranging and persistent criticisms of Mr QQ for how he ran the
file for Mrs RR.}

Mr RR invited the Committee to give him “fair compensation and a determination appropriately criticising Mr QQ’s conduct”. Those claims are based on the misapprehension that Mr QQ owed wide-ranging professional duties to Mr RR. He did

Mrs and Mr RR also filed a joint reply on 25 April 2017 which runs to 9 pages, and flags deficiencies in the referencing in Mr QQ’s reply, none of which are material. The blended narrative continues. Mrs and Mr RR say the legal proceedings cost them over $500,000 and that Mrs RR was charged almost $260,000 ($146,000 of that was

The joint reply contends there are shortcomings in the contemporaneous materials that leave Mr QQ unable to demonstrate, for example, that he discussed the

While there are gaps in the contemporaneous materials, they are not shortcomings. The gaps are explicable by the fact that Mr QQ acted for Mrs RR personally in the matter of her relationship property. Confidence and privilege are fundamental protections for a client, such as her, in a professional relationship with a

The blended narrative repeats earlier themes of irresponsibility, negligence, incompetence, disrespect, advice on legal aid, inadequate advice on costs and overcharging on the part of Mr QQ. It is contended that Mrs RR had no real insight into

The contemporaneous materials do not support that view. For example, it is contended Mr QQ had no idea how much it might cost Mrs RR to continue down her chosen path. That is because of the level of uncertainty involved. Mr RR’s involvement was, more or less, a certainty. How he might behave was virtually impossible to predict. He makes that very concession in the complaint materials. Another example: contrary to an email between Mrs RR and her father’s partner BB which is among the contemporaneous materials, it is said in the blended narrative that no support was promised to Mrs RR by her father or BB. Clearly some support was offered at some

Mrs and Mr RR acknowledge their own shortcomings in their ability to predict how their dispute would play out. They say, for example, that Mrs RR had no idea that attempting to “clean out” Mr RR’s bank accounts by issuing demands would leave him with “no choice but to seek the Court’s urgent assistance meaning that litigation would

Serving demands did not leave Mr RR with no choices. What Mr RR was left with were difficult choices. At the time, the most palatable and expedient choice for him

was to protect his personal position as against Mrs RR. His agreement with her was the point of least resistance. It was always open to Mr RR to do nothing and await the eventual outcome of the enforcement process, then to declare himself bankrupt. It is noted that he took some tentative steps in that direction. Given his position as company director and trustee, bankruptcy would have been distinctly unpalatable, but it was nonetheless a choice Mr RR could have made in response to the pressure Mrs RR applied, with Mr QQ’s assistance.

Mr QQ replied to Mr RR’s complaint saying, were the forum different, Mr RR could be considered a vexatious litigant. Mr QQ is correct in acknowledging that this is the wrong forum for consideration to be given to that. However, to the extent the blended

Mr QQ referred to the many dozens of hours it would probably take him to respond and asked the Committee to consider whether it was at all necessary for him to respond to Mr RR’s separate complaint, saying he would prefer to focus on responding to the concerns raised by Mrs RR, acknowledging he owed her a duty of care in terms of his letter of engagement.

As Mr RR was not Mr QQ’s client, had been separately represented, and Mr QQ did not owe him a duty of care, the Committee resolved not to inquire into the matters he raised independently of Mrs RR’s complaints. In a letter dated 19 May 2017 the Committee advised Mr RR that, insofar as he was a complainant, the Committee would

By this point, I consider the Committee’s process had gone awry. It does not seem to have occurred to the Committee that Mrs RR and Mr QQ were both disadvantaged by the blended narrative. It is accepted that Committees exercise discretion over the process they adopt in each case. However, the internal inconsistencies in the blended narrative, and the lack of support from the

(b) Negligence regarding advice on removal of the Notice of Claim and enforcement of GSA costs, and advice that Mr RR or another party would meet all her costs in enforcing the GSA;

(c) Not providing Mrs RR with sufficient information, including the costs incurred to that point and likely ongoing or future costs, for her to determine whether or not to continue with the litigation or explore settlement in a more determined way; and

The Committee requested assistance from Mrs RR and Mr QQ in identifying which documents were relevant to each aspect of the complaint and suggested mediation. There followed an exchange of correspondence between Mr QQ and the

A list of dates of settlement offers was provided by Mrs RR, which were the occasions on which she said she had received negligent or inadequate advice. One of those was the Calderbank offer from the trustees. Mrs RR also provided an indexed

The index created a sense of order, but the bundle added nothing that would assist the Committee in identifying which documents were relevant to each aspect of the complaint. The Committee already had all the documents that were in the bundle. That should have raised another flag.

Mr QQ’s detailed response to Mrs RR’s complaint ran to 26 pages, plus attachments. He repeated and expanded on his account of the arrangements he had made with Mrs RR over payment of his fees, describing her as “relieved” that he would be prepared to wait to be paid until he had completed providing services to her. He also referred to copies of attached contemporaneous materials, for example where Mrs RR suggested she might be able to pay his fees by borrowing from family or a friend, and to instances when she had described herself having made efforts to do so, particularly in respect of meeting the cost of obtaining expert evidence.

particularly in a Property (Relationships) Act dispute is to attempt to negotiate a settlement in any way possible, as the cost, stress and risks of litigation are always vastly underrated.

Mr QQ says he could not provide Mrs RR with an estimate because her costs were contingent on the steps Mr RR took since it was he, as the applicant, who had

Mr QQ repeated that he had kept Mrs RR informed about fees in terms of the agreement they had reached. The contemporaneous documents indicate he produced four invoices (listed in the Schedule to the attached Direction) and sent those to Mrs RR. Mr QQ believes he made it clear to Mrs RR that he was open to discussion about fees and she raised no concern over the quantum of his costs until after the agreement was

very strong and knowledgeable as to what she wanted to happen in relation to the outcome, and always overlaid this in providing instructions as to whether or not to continue with the litigation or explore settlement in a more determined way.

I interpolate here that some of the correspondence Mrs RR sent to Mr QQ in the course of the retainer was available to the Committee. That correspondence provides significant support for Mr QQ’s explanation here. Mrs RR has not controverted that evidence in any meaningful way. Further, in response to the attached Direction Mrs RR

The doctor’s view set out in that email tends to support Mr QQ’s views of Mrs RR

at the time of his engagement and since. Her doctor describes her as sensible, logical, articulate and able to cope well with stress.

It is accepted that Mr QQ’s involvement coincided with a period of significant stress in Mrs RR’s life. That is rarely not the case with family law matters. One of the persistent themes of the blended narrative is that Mrs RR completely fell apart when Mr RR stopped paying her and never really recovered her equilibrium. It is implied that she was so overwhelmed by her situation that she was in a pattern of making bad decisions, starting with instructing Mr QQ. Those themes are not borne out in any way by the contemporaneous materials. That view is reinforced by Mrs RR’s doctor’s recent email which indicates that, faced with significant uncertainties, Mrs RR was equipped to make difficult but informed choices for herself and her children at a difficult time.

acted on Mrs RR’s instructions, ... questioning them or fine tuning them or advising differently whenever I thought appropriate, but otherwise doing what she wished me to do, and which I considered to be appropriate in the circumstance.

That too is borne out by the contemporaneous materials. As are Mr QQ’s repeated denials that he gave negligent advice. It seems bizarre, but Mr QQ is correct when he says that Mrs RR’s complaint (based on the blended narrative) is the opposite of what actually happened in the course of his retainer with her. That disconnect is best explained by the fact that Mrs RR’s complaint relied on the blended narrative, which does not seem to have been closely scrutinised by or compared with Mr RR’s complaint. Mr RR confirms he was entrenched in his position, and was not prepared to negotiate anything less than a fresh start as though the 2010 agreement had never existed. Legal

Mr QQ submitted on the basis of all the information before it, that the Committee should have taken no further action. The blended narrative and contemporaneous

Mr QQ followed up with a letter dated 30 October 2017 in which he described the complaints made against him as “unsubstantiated and outrageous” as well as defamatory. He said the process had resulted in him having to prove his innocence, rather than Mrs and Mr RR proving the accuracy of their complaints with evidence in support. Mr QQ explained what he considered would be necessary for adverse findings to be made against him, including evidence of Mrs RR expressing ongoing concern throughout the retainer about what was going on, which she did not. In summary, Mr QQ says he acted with competence and diligence, and met all his obligations to Mrs RR

Both parties then provided further submissions which generally traverse the same ground. Mr QQ submits no finding or orders should be made and, in the event of conflict, his evidence should be preferred to that of Mrs and Mr RR. The

Mrs RR’s submissions dated 30 November 2017 are advanced almost entirely on the basis of the blended narrative, lacking the benefit of any reliable contemporaneous evidence to support them. Overall, the submissions for Mrs RR convey the impression that they may well have been prepared without reference to the

contemporaneous materials, or materials that would have been confidential within the

Further correspondence followed over evidential matters, and Mr QQ wrote again on 11 December 2017 expressing reservations about the further exchanges of submissions and whether the complaint process was fair. He repeated his view that the

2010 agreement should not have been set aside and that Mrs RR could well have been successful if she had appealed. He referred to the potential that [KLJ] might have rebounded in the not too distant future, and to Mrs RR’s reluctance to invest in an expert

Mr QQ says Mrs RR’s instructions to him at the time were that Mr RR had sequestered funds overseas and he could well afford to meet his obligations to her, he just chose not to. As noted above, Mrs RR has since given evidence on review that she was wrong about Mr RR’s financial position. She now says he was genuinely unable, rather than just unwilling, to meet his obligations. Only Mr RR really knows where the

Mrs RR responded further, defending her position and saying how Mr QQ had advised her to be emphatic in her negotiations with Mr RR, which he quite properly did, for example, over Mr RR’s obligation to pay Mrs RR under the 2010 agreement and the

Although there is no request from Mrs RR in the contemporaneous materials to that effect, she suggests Mr QQ should have provided her with a formal written opinion instead of sending her ad hoc emails. If Mr QQ had provided a formal written opinion, that would have been confidential and privileged as between Mrs RR and Mr QQ, and not for wider consumption. Given the wider uncertainties of the position Mrs and Mr RR found themselves in, there is also a risk that any such advice could have been lacking in utility and of little real substance.

The Committee determined, pursuant to s 138(2) of the Act that no further action on the complaint by Mr RR was necessary or appropriate. There is no reliable evidence that Mr QQ breached any of the limited duties he owed to Mr RR.

The issue that drove the Committee’s finding of unsatisfactory conduct with regard to Mrs RR’s complaint was the negligence alleged in the blended narrative. The Committee connected deficiencies in Mr QQ’s advice on cost recovery under the GSA with the accumulation of substantial fees, and echoed wide-ranging criticisms from the blended narrative. The Committee’s view was that Mrs RR had incurred significant costs while being insulated against a full understanding of the impact on her of incurring

In the Committee’s view, this was essential information that should have been explicitly drawn to Mrs RR’s attention when she was considering the various offers made to settle the dispute. It believed she had made decisions without a full understanding of

The Committee referred to Mrs RR’s minimal income, the fact that her home was her only asset at that time, and accepted that Mr QQ was driving speculative litigation with credit at Mrs RR’s expense and without advising her of the costs on an

Logic and the contemporaneous materials do not bear this argument out. It is not difficult for a lawyer to let a client know what his fees are from time to time by referring to time records. It is also relevant to note that Mrs RR knew, because Mr QQ had told her, that the GSA should, not would, generate a result for her. He is right. It should have. Mr RR’s admitted recalcitrance, based on what Mrs RR now says was his genuine inability to pay, combined with the costs and risks of carrying on with the enforcement action alongside the Family Court proceeding were all factors in Mrs RR’s decision to

At a time when Mr YY and Mr QQ were advising her, Mrs RR chose to forego her right to advance her position under the GSA. As the Family Court Judge put it, her rights and interests could not at that stage be defined. That said, there was what appears to me to have been a fairly sound argument that whether the agreement stood or fell, the GSA founded some right to costs, albeit probably limited to while the agreement

It is unfair for Mrs RR to accuse Mr QQ of putting her children’s home at risk. She had made choices long before Mr QQ became involved. She was the litigant. It was her duty to pay him. It was not up to Mr QQ to work out how she might do that. Further, Mrs RR had given Mr QQ assurances of payment at the start by signing the letter of engagement, as well as saying she felt “flattened” by the worst case scenario Mr QQ had painted. I take that to mean that if there was no money to have, or Mr RR

fought beyond her ability to fund her litigation, she might lose more or less everything, and have to pay her own costs and Mr RR’s. It was not part of Mr QQ’s role to stand in

_{the way of Mrs RR exercising free will or the rights she had secured in
2010.}

The stakes were high. The contest fervently fought between Mrs and Mr RR right up to the point when the Family Court set the 2010 agreement aside. It is clear from the Family Court’s decision that it had been presented with a choice between serious injustice to Mr RR and serious hardship to Mrs RR, neither of which was a

The Committee did not accept that the amount of time Mr QQ was obviously devoting to Mrs RR’s matter, evident among other things from the emails, correspondence and attendances on her and others, was sufficient for her to be aware of the escalating costs. It also did not accept Mr QQ’s submission that Mrs RR could

_{and should have asked, if she was “truly concerned” about
what her legal costs were.}

I agree with the Committee in this. A client should not have to ask what her fees are. A lawyer should provide regular updates. It is clear from Mr QQ’s letter of

However, Mr QQ was open to a different arrangement and Mrs RR had proposed one because she did not want to be distracted from her overall objective by the costs risk. Reasonably enough, Mrs RR wanted to be able to rely on the 2010

Mr QQ and Mrs RR had agreed that he would bill her as infrequently as possible, and that is what he did. He rendered invoices, and it is accepted that he gave her advice from time to time, including around the time of settlement offers. I repeat, the stakes were high. Mrs RR had a lot to lose and good reasons to stand firm on all she had secured in the 2010 agreement, including certainty. It is unusual for a court to set a relationship property agreement aside. Based on the paperwork, Mrs RR’s legal position was strong. The odds were stacked in her favour. Her position was undermined by events beyond her control, Mr RR’s admitted intransigence, and what Mrs RR now says

judicial settlement conference was “properly considered”, and regarded it as having given Mrs RR a false impression of the strength of her position.

Committee’s logic. The advice Mr QQ provided after the JSC was not provided in a

vacuum. It was provided in the context of ongoing discussions and events in which Mrs RR had been closely involved. It is extremely difficult to accept that Mrs RR, who had stepped out of a successful career to have children, had run at least one business, a gallery, had been involved at the peripheries of other businesses, had been a trustee in trusts, and had complex personal and family affairs is as naïve as she, the blended

The contemporaneous materials give no indication that Mrs RR might have been anything but actively and intelligently engaged on her own behalf. While Mrs RR may have been lacking information on some of the details, the contemporaneous materials indicate she was generally as well informed as anyone in her position might have been. It is not accepted that Mrs RR was some kind of intellectual weakling. There is nothing except an unreliable blended narrative that supports that proposition. It is refuted by her own doctor’s evidence. If, as Mrs RR says, she acted out of vulnerability

The Committee said that Mr QQ’s failure to recognise and advise Mrs RR on the significance to the security of her costs position if the agreement were to be set aside and therefore void (making the GSA unenforceable), was significant to its consideration of the complaint. The contemporaneous materials indicate that Mr QQ did consider that. There is no evidence of Mr QQ giving any guarantees about the efficacy of the GSA, or

There is no evidence of Mr QQ providing false reassurance to Mrs RR that her costs position was secure. Costs are a fact of litigation (and life). Mr QQ’s letter of engagement specifically said that whether or not Mrs RR was able to recover her costs from someone else, he would be looking to her for payment. If Mr QQ had given Mrs RR some kind of false reassurance about cost recovery under the GSA, it would make no sense for costs to have been a distraction for her. The contemporaneous materials

Mr QQ sent an email to Mr YY in the course of them acting for Mrs RR in litigation. They discussed Mrs RR’s position on costs. It is not clear from the materials available on review if that discussion went anywhere, and if so, where. If it developed, any advice would have been confidential and privileged to Mrs RR. The lawyers’ views were not entirely in accord by the time Mr YY provided formal advice to Mrs RR on costs, but the point about diligence is that Mr QQ did consider costs and the GSA. He and Mr YY may have reached different conclusions. Reasonable minds may differ. It seems to me that Mr QQ’s view was clearly arguable. It has not been tested. Beyond the unsupported allegations in the blended narrative, there is no substance to the allegation

that Mr QQ lacked competence in relation to his advice on costs risk and the GSA, pre or post the setting aside of the 2010 agreement. Mr QQ saw the risk and, to the extent

There is a difference between advice being clearly wrong, and differences of opinion. The whole retainer was fraught with uncertainty and litigation risk, not just the advice on appeal. There was little by way of comparable fact and law, and Mr QQ’s arguments have not been tested. While I am reluctant to disagree with the Committee’s collective expertise on the point, I am equally reluctant to accept that the Committee is right and Mr QQ is wrong about a specific nexus of fact and law that has not been tested or determined in the proper forum. It seems to me that Mrs RR had an arguable case

There is also a problem with the Committee’s view that some of the significant difficulties Mrs RR would face on appeal related to the value of [KLJ]. The contemporaneous materials contain evidence that, from 2010 onwards, Mr RR had or may have had other sources of income and other assets. In an email he sent to Mrs RR, Mr RR chose to reveal that he was involved in some kind of consultancy business in Australia from which he might have been able to draw income. Mrs RR was certain at the time that he had other assets, they just had not been flushed out. She knew Mr RR and his financial situation better than Mr QQ could have. Mrs RR now says she was

There were also the problems Mr QQ and the expert had identified with the value of [KLJ] shares. It is not accepted, as the Committee says, that Mr QQ’s advice paid insufficient heed to the finding that Mr RR’s obligations were impossible to perform, and could well have resulted in costs orders being made against Mrs RR. There were risks, but there was also the potential for significant gains on Mrs RR’s part, to Mr RR’s

The Committee’s view was that Mr QQ’s advice fell short of the standard of competence and diligence that is to be expected of a reasonably competent lawyer providing regulated services within the field of relationship property. The advice of concern to the Committee related to Mrs RR’s prospects of success based on the interplay between the GSA and the 2010 agreement, which it considered “overly

optimistic” given the effect of s 21M of the PRA was to void the 2010 agreement if it were

The Committee appears to have become distracted on this point by what the blended narrative says about his advice, rather than giving close consideration to the contemporaneous materials. What can be seen on review of Mr QQ’s advice, which generally takes the form of email correspondence, is best described as robust but guarded. He advised Mrs RR she should, not would, succeed in pressing Mr RR into paying her by taking enforcement action. He advised her not to act rashly. He advised her to talk it through with him. He advised her that her legal position was strong. On

The only way Mr RR could extinguish his obligations under the 2010 agreement was by persuading a Court to set it aside. He could not talk Mrs RR into agreeing to that. Mrs RR was willing to allow Mr RR more time, but she was not willing to concede all the ground she had gained. Mr RR could have avoided his responsibilities by declaring himself bankrupt, and took steps in that direction. It appears from the contemporaneous materials and the blended narrative that, at least while Mr QQ was engaged by Mrs RR,

The contemporaneous materials support the view that Mrs RR was competently and diligently advised. No one could have known all of the implications of the 2010 agreement, as Mrs RR acknowledged at the time in an email to Mr QQ. Mrs RR made informed choices. Like most other adults, she is responsible for the consequences of those. It was not Mr QQ who was the gambler. The available materials sufficiently demonstrate that Mr QQ appraised Mrs RR of the risks to the extent that was possible

commencing proceedings after receiving demands triggering processes under the GSA

What actually triggered Mr RR commencing proceedings was Mrs RR’s refusal to relinquish the 2010 agreement. Her instructions to Mr QQ were to engage the mechanics of the agreement in the hope of breaking the deadlock and allow her to move to a new home with her reconstituted family. It would have made little sense for Mrs RR to go to all the trouble of negotiating and documenting the agreements she and Mr RR had reached over relationship property in 2010, and then take no steps to enforce continuing obligations, when according to her evidence to the Family Court, she firmly believed at the time, that Mr RR could, but would not, pay her. Add to that the

provocation of him registering a notice of claim against her home, reviving his involvement in her post-separation life, and it makes sense for Mrs RR to have taken

In the Committee’s view Mr QQ relied too heavily on a combination of arguments that may or may not have been successful. In my view the Committee has overstepped the line into considerations of negligent advice that would be better suited to the civil jurisdiction if there was adequate reliable evidence to support such allegations, which,

The Committee also considered that Mr QQ had let Mrs RR down by not advising her to apply for legal aid at particular times, including when it became apparent that the proceeding was likely to become protracted and she would incur significant

While there is some merit to this, it is to be recalled that Mr QQ had discussed legal aid with Mrs RR at the outset, and had formed the view that she would be unable to pass the “capital test”. Her capital position did not change. She owned her home at the start and at the end of Mr QQ’s retainer. Mrs RR might have obtained legal aid for the Family Court proceeding, but she would probably have had to change lawyers, pay Mr QQ, and would probably still have ended up with a charge from the Legal Services Agency against her home. It is difficult to see that as a lack of competence on the part of Mr QQ, although that is how the blended narrative, echoed in the decision,

The Committee links its thinking on legal aid to Mr QQ’s perceived assumption that the GSA would cover the costs to Mrs RR. Other than the blended narrative, there is no basis on which to generate that assumption. It is not supported by the contemporaneous materials. Mr QQ’s advice was robust but guarded. There is no evidence of Mr QQ having advised Mrs RR that the GSA would, rather than should,

The Committee was dismissive of the suggestion that Mr QQ might have relied on Mrs RR’s assurance that family members had agreed to provide her with financial support and assistance. Curiously, that is exactly what the contemporaneous materials evidence. As mentioned earlier, there is an email from Mrs RR’s father’s partner BB that suggests some financial support might be available from them. Although Mr RR produced a statement supposedly signed by Mrs RR’s father and partner in the course of the complaint process, that is not as compelling in an evidential sense as the contemporaneous email.

Mrs RR’s attention, but considered she lacked sufficient information about costs to be able to properly assess the risks and benefits of settling.

_{That concern has been addressed above. It is not well founded in the
evidence.}

I disagree. What Mr QQ lacked was prescience. Mr QQ could not know or reliably predict how determined Mr RR was, against the Family Court’s general reluctance to set agreements aside, to rid himself of the obligations he had accepted in

2010, and start again with the division of relationship property between him and Mrs RR

Given the foregoing discussion, it will be apparent that I disagree with the Committee’s view that Mr QQ’s conduct was unsatisfactory within the definition of s 12(a) of the Act. The contemporaneous materials defeat the notion that Mr QQ was somehow

Like the Committee, I note Mrs RR’s request of Mr QQ that he “help her work out an affordable course of action”. Given Mr RR’s determination, and the arrangements he and Mrs RR had made in 2010, the prospect of an affordable course of action would have been excellent if it had been possible to give effect to the strategy Mr QQ had worked out. The strategy was not wrong. It just did not work. That was at least in part because, as Mrs RR now appears to accept, Mr RR could not, rather than would not,

The Committee’s view was that any other practitioner exercising a proper standard of competence and diligence would have resolved the issues with substantially less cost. Given the lack of precedent, uncertainties, complexities, risks, odds, Mr RR’s admitted intransigence, Mrs RR’s apparent acceptance, albeit late, that she was wrong about his financial position, and contemporaneous materials in general, it is far from clear how any other practitioner in the same situation would have accomplished that. I do not

The Committee did not carry out a formal costs assessment or carry out any other analysis of costs. Nonetheless, it considered Mr QQ had significantly overcharged

Mrs RR, ordered him to reduce his fee to $18,449.4 and to refund $150,000 to Mrs RR

Reference is made to the difficulties with the Committee’s arithmetic in the attached Direction. Even without all the evidential difficulties associated with the findings of unsatisfactory conduct, that order would have to addressed somehow on review.

The nature and scope of a review have been discussed by the High Court, which said of the process of review under the Act:4

... 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.

More recently, the High Court has described a review by this Office in the following way:5

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.

Mr QQ applied for a review on the grounds that Mrs RR’s complaints were demonstrably factually inaccurate. It will be apparent from the foregoing that I agree with Mr QQ. The unsatisfactory conduct finding made against him lacks substance and is

Based on a careful assessment of all of evidence available on review, my view is that Mr QQ:

(a) Advised Mrs RR regarding her entitlement to legal aid and told her that he was not a legal aid provider, but she still wanted him to act for her.

(b) Did not provide Mrs RR with negligent advice in respect of the notice of claim, the rights she then had in relation to the GSA or otherwise;

(c) Received instructions from Mrs RR to the effect that she did not want him to send her interim bills because they would stress her, but kept her informed as best he could and sent her as few interim bills as he felt he could, given her instructions were that she did not want to receive any interim bills at all; and

(d) Promptly disclosed all settlement offers to Mrs RR personally, discussed those with her and obtained her instructions on her response on every occasion that he was required to do so.

_{evidence with sufficient care. It will be apparent from the foregoing
that I agree.}

Mr QQ says Mrs RR’s allegations are false. In my view, much of the blended narrative ignores, overlooks or is simply inconsistent with the contemporaneous materials. For the reasons discussed earlier, the blended narrative is unreliable. Weight is placed on the contemporaneous materials such as they are.

I have carefully considered the matters advanced by Mrs RR in reply. None of those affect the views set out. The Committee’s decision is based on a multitude of errors of fact if the blended narrative is given its proper weight (very little) and careful consideration is given to the contemporaneous materials which carry significantly more

_{for her, the decision is not, as Mrs RR now describes it,
“balanced”, nor is it “fair”.}

There is no basis on which to increase the amount refundable to Mrs RR and no reason to traverse her reply in any detail. Her criticisms, differences of view, disappointment and regrets are all noted, as is Mrs RR’s concession that she was wrong in instructing Mr QQ that Mr RR was a man of means. As mentioned earlier, she says

she now feels “the need to make clear that, at the time proceedings were commenced,

no one had money”. I assume Mrs RR has now seen the relevant accounts for the period, and any other evidence she accepts as reliable.

Mrs RR says she regrets that everyone’s focus was not on negotiating or mediating an agreed outcome. It is assumed that comment is aimed at herself and Mr RR, because there is clear evidence of repeated attempts being made to reach a negotiated solution throughout the time Mr QQ was engaged. I have not counted them.

It is also noted that Mrs RR describes the litigation as “irresponsible”. Her view on that is accepted. However, there is no evidential basis on which to attribute that

Mrs RR says her expectations were not met and she did not get what she wanted. She says she was swept along with the momentum of the proceedings and did not have the information she needed that could have guided her into “electing to cease

Aside from capitulation, it is not clear how Mrs RR could have done that as the respondent to Mr RR’s application. Mrs RR confirms that the offers advanced by Mr QQ “were about her interest only”, as they rightly should have been. Her interest was in maintaining and enforcing the 2010 agreement. Everything Mr QQ did appears to have

Curiously, Mrs RR says Mr QQ “had a duty to protect her from the unnecessary cost and accompany stress of the litigation”. Those are laudable ideals, but they are not

Mrs RR provided a copy of emails she had received from Mr QQ and the expert in November 2014, shortly after she had sold her home. The emails refer to the expert taking preliminary steps towards recovering its fees from Mr QQ. Mr QQ politely indicated to Mrs RR that both he and the expert wanted to be paid. Mr QQ explained, again politely, how Mrs RR could accomplish that when the sale proceeds arrived in [TDM]’s trust account, thereby avoiding a High Court debt recovery proceeding and the

There is nothing in those materials that raises any concern whatsoever about Mr QQ’s professionalism. If there are defamation claims to be made, those are beyond the purview of this Office on review.

maintained her reliance on the joint complaint and blended narrative. Mrs RR submits

_{Mr QQ should indemnify her against all costs and his name should be
published.}

Mr QQ sent Mrs RR a letter of engagement setting out the terms on which he would act for her personally in relationship property matters, and then undertook a considerable amount of work on her instructions. That work included everything that might be expected in such a retainer as evidenced by the contemporaneous materials,

_{which include Mr QQ’s and Mr YY’s time records. Broadly
speaking, they correlate.}

Mr QQ took and continued to take detailed instructions from Mrs RR. He developed a strategy to assist her in retaining the advantages she had secured in the

2010 agreement. Mr QQ laid out and discussed his strategy for her in depth, made adjustments where necessary and deployed the strategy on her instructions. In parallel, negotiations continued with Mr RR and his lawyer in an attempt to keep the 2010 agreement in place. A multitude of settlement offers were exchanged, some of which had cost implications. Mr QQ and Mr YY, after Mr RR commenced proceedings, advised

On Mrs RR’s instructions, Mr QQ corresponded with various people and entities, obtaining and reviewing information and generally giving effect to her instructions to maintain the 2010 agreement. When Mr RR commenced proceedings to try hold Mrs RR back, as foreshadowed in his letter of engagement, Mr QQ instructed counsel, Mr YY, and remained involved as instructing solicitor. The strategy shifted to accommodate the

It is apparent from the contemporaneous materials that Mr QQ provided balanced and realistic, if unwelcome, advice, including as to “the worst case scenario”. He made predictions, albeit guardedly, based on the documents and information available to him. The materials included Mrs RR’s instructions, the 2010 agreement and related documents, and included a valuation of [KLJ] for insurance purposes that Mr RR had supplied, and Mrs RR did not wholly trust.

exchanges between Mrs RR and Mr QQ at various points along the way, with any gaps explained by the confidence and privilege that characterises the relationship between lawyer and client. There are clear indications, including from Mr RR himself, that he would continue to resist any compromise that did not involve extinguishment of the 2010 agreement. On the basis of her rights and entitlements under the 2010 agreement and related documents Mrs RR claimed what she was still owed, $754,042.40 plus costs and disbursements, whatever those may have worked out to be, pursuant to the 2010 agreement. She did not believe Mr RR did not have access to money. Her evidence, albeit very late in the course of the process of review, was that she had been wrong about that.

By 20 December 2012, the preliminary matters between Mrs and Mr RR had been heard by the Family Court. Interim orders were made by consent. Judge Ellis said the securities held by Mrs RR provided her with “rights and interests which cannot in fact yet be defined”, and considered that as far as possible in the meantime, the status quo

relied on the 2010 agreement. Mr RR wanted it set aside. The parties did not reach an agreed settlement.

Mrs RR received yet another settlement offer in early May 2013, this time advanced on a Calderbank basis by the lawyers acting for the trustees of a family trust from which Mrs RR had resigned as a result of the 2010 agreement. The offer was admittedly ““light” on details”,6 but, predictably, the trustees (one of whom was Mr RR) sought Mrs RR’s consent in principle to setting aside the 2010 agreement. Without knowing the trusts’ financial position, the offer was so light on details it seems to have

2010 agreement was set aside, that offer was so light on details that advising on it would have been so speculative as to be of virtually no assistance at all in the overall context of the relationship property proceedings. In any event, Mr QQ was not acting for Mrs RR in her capacity as a trustee who might be restored to that position. He was acting for her

_{counter the valuation advanced by Mr RR. Negotiations continued without
the parties}

reaching an agreed settlement. By July 2013, Mr RR had made an application to the court for voluntary bankruptcy. The bank had begun taking steps towards protecting its

_{position in relation to defaults on the loan secured by a mortgage over
Mrs RR’s home.}

Mr QQ provided further advice on Mrs RR’s legal position. Mrs RR continued to receive bills from her advisers and she instructed them to continue with their work. That included Mr QQ and Mr YY exchanging views on how to better position Mrs RR in respect of costs recovery from other parties, which might also have indirectly benefitted them, because Mr QQ and Mrs RR had agreed early on that she would pay him once

Mrs and Mr RR did not reach agreement, and Mr RR’s applications proceeded to a defended hearing before the Family Court over four days at the end of May 2014. Mr YY represented Mrs RR as counsel. Mr QQ remained actively involved as instructing

_{solicitor. Both parties called expert evidence with regard to the value
of [KLJ].}

Mrs RR would have felt flattened, albeit Mr QQ appears to have set that as a realistic expectation very early on. The odds had been in her favour, and still she had

The Family Court decision contains a number of references to Mrs RR refusing to accept Mr RR’s explanations for failing to meet his commitments, and rejecting the values he attributed to property.7 It also contains an explanation of the circumstances in which Mr RR came to register the notice of claim,8 and a detailed analysis of the methodologies used to value [KLJ]. The Family Court considered it would be unfair and unreasonable to hold Mr RR to the 2010 agreement and yet that setting it aside would cause Mrs RR serious hardship. After carrying out what was clearly a very difficult balancing exercise, the Family Court set the 2010 agreement aside and opened up the

_{world of uncertainties Mrs RR, with Mr QQ’s support, had worked so
hard to avoid.}

Mrs RR was understandably disappointed. She requested and received advice on appeal, which she did not take, and advice on her exposure to costs, which she did

_{not like. Mrs RR chose to engage Mr RR directly in further discussions,
and they settled.}

augured a disinclination to pay him. Mr QQ rendered his fourth and final invoice on

7 October 2014. Mrs RR responded to Mr QQ by email, relating her views on his part in the process, and attempting to draw Mr QQ into a negotiation over his fees.

_{requested payment of his fees together with those of counsel and the
expert witness.}

As Mr QQ is taken to have foreshadowed the worst case scenario to Mrs RR early on, once the agreement was set aside Mrs RR was left to realise the value of her home. Some or all of that value fell back into the reopened relationship property pool the moment the Family Court set the 2010 agreement set aside. It appears that sale proceeds were received into the trust account of [TDM], and paid from there to Mr QQ’s trust account where they were receipted as “Legal & Valuation costs”, and disbursed accordingly. It is assumed Mr RR would like to be able to claim an interest in relationship property in those funds, hence the blended narrative. It is not clear from the materials

No professional standards issues arise for Mr QQ. The determination of unsatisfactory conduct is unsustainable on the facts the contemporaneous materials represent. The determination is reversed.

The only remaining issue relates to Mr QQ’s fees. As noted in the attached Direction, the Committee did not consider or address whether those were fair and reasonable as r 9 and 9.1 require. It would be unusual for this Office to make such a determination at first instance. There are good reasons for it not to, many of which are

Mrs RR’s fees are substantial. A fee of over $100,000 would almost invariably warrant consideration at first instance by an independent costs assessor with expertise in the area of law to which the bill relates. A Committee should determine whether a

A Committee should not simply look at a fee of $150,000 and say that nothing the lawyer did was of any value whatsoever, that he should get nothing, or in this case, less than nothing. If there was evidence of such appalling incompetence, the Committee should have laid charges in the Disciplinary Tribunal. Giving due weight to the blended narrative, there was no reliable evidence that could lead to that conclusion. Fortunately, the Committee did not lay charges.

I could err on the side of caution and the consumer, and accept that although the date on Mr QQ’s final invoice is 7 October 2014, it was not rendered on that date, and therefore reg 29 does not apply. Counsel for Mrs RR says he has searched for authority on that point and been unable to locate any. Mr QQ has not offered any authority on the point. I am not aware of any binding authority on the meaning of “rendered” in reg 29. I would probably rely on the plain and ordinary meaning, whatever

As to the reliability of dates, Mr QQ says the date of his invoice is to be trusted,

_{but the date on the complaint is not to be trusted. Mr QQ cannot have
it both ways.}

The alternative approach is to say the date on the bill is the date it was rendered,

7 October 2014. That could well be so, in which case the clock stopped in terms of reg 29, as Mr QQ says, at midnight on 6 October 2014. If he is correct, the gate had closed by the time NZLS received the complaint. In that case, the fee complaint would have to pass through the “special circumstances” gateway to avoid reg 29’s prohibition on the Committee considering the fee complaint.

Interestingly, in her submissions filed in response to the Direction, Mrs RR has not referred to any circumstances that could be described as special for the purposes of reg 29. In summary, she says that after she paid Mr QQ his fees she carried on with her life and making a complaint simply was not a priority for her. Essentially, she did not care enough about $146,000, or whatever her share in that might have been, to make a complaint. Given Mrs RR’s pleas for clemency and charity in the blended narrative that

Mr QQ’s reluctance to see all of his fees reviewed after they had been paid in full without complaint nearly two years before the joint complaint was made is

receive a windfall of $150,000. But the Committee’s decision that Mr QQ was obliged to give Mrs RR $150,000 is unsupportable and wrong.

I am left with a discretion to exercise in how I proceed. I revert to my earlier comments.

Section 211(1)(b) of the Act allows a LCRO to exercise any of the powers that could have been exercised by a Committee in the complaint process. The Committee could have decided to take no further action pursuant to s 138(1)(c) of the Act on the basis that the joint complaint was vexatious. As I mentioned earlier, in my view, that is

Having carefully considered all of the materials available on review, it is clear to me that the standards issues raised in the joint complaint were an attempt to persuade

_{or compel Mr QQ to reduce his fee so Mrs and/or Mr RR could get some
money back.}

There is no sound evidential basis on which to find that Mr QQ’s conduct in representing Mrs RR was deficient. Without close analysis, it appears to me that the records available on review support the general proposition that Mr QQ’s fees were fair and reasonable given the service he provided to Mrs RR personally, and generally

_{having regard to the factors set out in r 9.1. There is no clear breach
of the rules.}

On that basis I exercise my discretion and decline to give further consideration

Mr QQ would never have charged Mr RR personally with his fee. There was no contractual relationship between them. The terms of engagement Mrs RR signed specifically say she is the person chargeable. How that might play through into the realms of relationship property is beyond the statutory jurisdiction of this Office. Any refund would have had to have been paid not to Mrs RR because the money did not come from her. It came from [TDM] and if it was to go anywhere it would have had to go

_{back to [TDM]. That was one of the problems with the Committee’s
order for a refund.}

It remains open to Mrs RR to exercise her rights under the Act if she chooses to do so. At this late stage, she would have to be able to come up with some special

circumstances for the purposes of reg 29 to be able to pass through that gateway. To date, she has presented no such circumstances.

The determination of unsatisfactory conduct is reversed, which deprives the orders made under s 156(1) of their statutory basis. Lacking a statutory basis, those

This review is determined on the basis that the joint complaint about Mr QQ’s fees, based as it was on a blended narrative, was vexatious, and that further action with regard to complaints about his advice, the service he provided to Mrs RR and his conduct towards her in the course of the retainer is not necessary or appropriate. No conduct or service issues arise from the materials available on review.

It is accepted that Mr QQ has been put to considerable inconvenience by the joint complaint based on the blended narrative, and by the Committee’s failure to respond to that with a procedure that was fair to lawyer and client. That said, if Mrs RR alone had

_{made the complaint, Mr QQ would have been expected to respond, at his
own cost.}

Mrs RR has also been put to some cost and inconvenience, but as she put her name to the joint complaint and subscribed to the blended narrative, that situation is at

It seems to me that the procedural defect is primarily the result of constraints on the complaint system. Committees are constituted of members who give their time voluntarily. The reality is that although Committee members act in the service of their profession as a whole, time and energy are limited resources. That is all part of the trade-off for the privilege of self-regulation, which is a mark of the status of the legal profession. That status is explicitly recognised in the purposes of the Act set out at

Pursuant to s 206(4) of the Act I direct publication of this decision with all features that might identify any of the natural and non-natural persons involved removed.

Pursuant to ss 211(1)(b) and 138(1)(c) of the Act, no further action on the joint complaint about Mr QQ’s fees is taken on the basis the joint complaint based on the

Pursuant to s 211(1)(b) and 138(2), further action with regard Mr QQ’s advice and service to, and conduct towards, Mrs RR in the course of the retainer is not necessary or appropriate.

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

CONCERNING an application for review pursuant to section 193 of the Lawyers and Conveyancers Act 2006

Overcharging was part of the original joint complaint, and has continued as a theme from Mrs RR’s personal perspective. It is clear from Mrs RR’s response to Mr QQ’s review application that, among other things, she remains concerned about the

It is important to manage the parties’ expectations of this process of review. I

Emails Mrs RR has sent to this Office since the review hearing in February appear to suggest Mrs RR believes $150,000 is her due. She should not build her hopes up. For various reasons, some of which will be apparent from this Direction, this process of review is unlikely to result in that outcome.

In the course of the complaint process Mr QQ raised two jurisdictional arguments arising from reg 29 of the Lawyers and Conveyancers Act (Lawyers: Complaints Service and Standards Committees) Regulations 2008 which says:

If a complaint relates to a bill of costs rendered by a lawyer ..., unless the Standards Committee to which the complaint is referred determines that there are special circumstances that would justify otherwise, the Committee must not deal with the complaint if the bill of costs—

(a) That he rendered three of his four invoices more than 2 years prior to the date of the complaint;

(b) That the date of the complaint is not the date written on the complaint, but the date on which the Complaints Service received the complaint; so

The first point is that the jurisdiction of Standards Committees and this Office under the Lawyers and Conveyancers Act 2006 (the Act) extends to fees, but it does not extend to GST or disbursements. The GST on a lawyer’s fee is calculated on the basis of a statutory formula. Unless the disbursement is the fee of a lawyer, and that lawyer’s fee is the subject of a complaint, Standards Committees and this Office have no statutory jurisdiction to decide whether a disbursement, such as an expert witness’ fee, is fair and reasonable.

In the present case Mrs RR’s initial instructions were to provide her with advice on Child Support and other financial issues, the notice of claim Mr RR had registered against her home, and the enforcement mechanisms available to her under the 2010

Relationship Property Agreement and related documents. Those instructions flowed into the instructions Mrs RR gave to Mr QQ in the Family Court proceeding initiated by Mr RR. Fees for attendances on all those aspects of Mrs RR’s instructions are contained in

to Mrs RR thereafter. Mrs RR’s legal issues were intertwined to the point it would have

I note at this point that the Committee’s orders appear to be based on a misapprehension that Mr QQ charged fees of $150,000. It is not clear to me that the Committee could order Mr QQ to reverse a fee that was $4,000 more than the fee he had charged. In my view it could not. It is also not clear to me that the Committee could order Mr QQ to refund $4,000 more in fees to Mrs RR than he had charged her. In my view it could not. It is also not clear that Mrs RR paid Mr QQ’s fees, when according to his trust account records payment was received from TDM Limited (TDM). If there were to be a refund, it should be to TDM. Those orders will have to be addressed in

_{determining this review, but first there is the question of what to do
about Mr QQ’s fee.}

At this point in the review process, the question is whether $146,000 was a fair and reasonable fee pursuant to rr 9 and 9.1 of the Lawyers and Conveyancers Act

That question has yet to be determined. The Committee did not address it, and may have been jurisdictionally barred from doing so by the absence of “special circumstances” as set out in reg 29.

That is precisely two years after the date of Mr QQ’s fourth and final invoice,

In the course of the complaint process, Mr QQ asked the Complaints Service to advise him of the date on which the Complaints Service had received the complaint,

that involves an inquiry into the date on which Mr QQ’s invoice was rendered. Was it

If the jurisdictional hurdle in reg 29 was not present on the facts, the Committee

$146,000 at first instance. While $146,000 falls far short of the largest fee that has come up for consideration on review, it is a significant amount. Quantum should be properly considered.10 A costs assessment should be carried out by a suitably qualified practitioner. A Committee should make the decision at first instance. If either party is not satisfied, it remains open to this Office to exercise its review function having been

_{provided with sufficient information to reach an informed, fair and
balanced decision.}

I have been unable to find a reply to Mr QQ’s inquiry of the Complaints Service

I have been unable to find evidence on the Committee’s files, or in the decision

_{under review, of the Committee having engaged with Mr QQ’s
jurisdictional arguments.}

The decision does not record that the Committee claimed or rejected jurisdiction

The Committee’s files and the decision do not indicate that the Committee engaged a costs assessor, or independently considered whether the fee was fair and

11 See for example Cortez Investments Ltd v Olphert & Collins [1984] 2 NZLR 434 (CA); Nicholl v Roche HC Auckland CIV-2004-404-6552, 27 June 2005; RV v Auckland Standards Committee LCRO 299/2011 (18 October 2012); and Chean v Kensington Swan HC Auckland CIV-2006-404-

whether there were “special circumstances”, or requested information from the parties so it could address and determine the jurisdictional points raised by reg 29, as highlighted by Mr QQ.

In the circumstances, pursuant to s 204(c)(ii) of the Act, by 30 October 2019 the

Committee is invited to confirm to this Office the date on which the joint complaint was originally received into the complaint system.

Given the circumstances set out above, I am considering whether Mrs RR’s fee complaint should be referred back to a Committee pursuant to s 209 of the Act with directions along the following lines:

(b) If it is, that Committee could be directed to request an explanation from Mrs RR as to any “special circumstances” she relies on, recalling that her focus should be on the reasons for the two-year delay between the invoice being rendered and the complaint, rather than anything else.

(c) That Committee would then be in a position to decide whether any of the circumstances Mrs RR relays are “special circumstances” that enable her to overcome the jurisdictional hurdle presented by reg 29.

(d) If that Committee considers reg 29 was engaged, but there are no “special circumstances”, then its only alternative would be to determine Mrs RR’s fee complaint on the basis that reg 29 prevents it from considering the fee complaint. That would be an end to the matter for that Committee, but would give rise to the usual options including the statutory power of review.

(e) If reg 29 is not engaged, or there are “special circumstances”, that Committee could be directed to consider Mrs RR’s fee complaint, arrange for a suitably qualified costs assessor to prepare a report in the manner set out in the relevant Committee guidelines, and determine Mrs RR’s fee

The Registry will advise the parties of the response this Office receives from the

Committee, referred to in paragraph [33] above. Once advised, the parties will then have

14 days in which to provide submissions if they wish to. Given the point this review has reached, I do not anticipate extending that deadline without good reason.

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

Date	Fee	GST	Total Inc GST	Disbursements	TOTAL
10/04/13	$51,000.00	$7,650.00	$58,650.00	$343.40	$58,993.40
31/03/13	$60,000.00	$9,000.00	$69,000.00	$196.00	$69,196.00
04/07/14	$17,000.00	$2,550.00	$19,550.00	$5.00	$19,555.00
07/10/14	$18,000.00	$2,700.00	$20,700.00	$10.00	$20,710.00
TOTALS	$146,000	$21,900.00	$167,900	$554.40	$168,454.40

New Zealand Legal Complaints Review Officer

QQ v RR [2019] NZLCRO 143 (22 October 2019)