YS v DH [2019] NZLCRO 4 (21 January 2019)

Last Updated: 29 January 2019

	LCRO 102/2016
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	YS Applicant
AND	DH Respondent

_DECISION

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

_changed.

Introduction

[1] Ms YS has applied for a review of a determination of unsatisfactory conduct by the [Area] Standards Committee [X] (the Committee), which concluded that Ms YS contravened r 4.4.1 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (the Rules) by failing to act in accordance with authorities to uplift from Mrs DH and entities with which she was associated. The Committee ordered Ms YS to pay a fine of $1,000 and costs of $500. Ms YS invites this Office to reverse the Committee’s determination of unsatisfactory conduct.

Background

[2] The background to Mrs DH’s complaint is set out in some detail in the Committee’s decision and is not generally challenged. It is therefore unnecessary to repeat it here. Suffice to say, Mrs DH changed lawyers and those lawyers sent Ms YS

written authorities to uplift (the authorities). Ms YS acted on the authorities by sending documents and deeds but not files.

[3] The short point of Ms YS’ application for review is that the signed authorities she received requested all deeds and documents, but as they did not request current or archived files, she did not send any. Ms YS says that when Mrs DH’s new lawyers confirmed they had received the deeds and documents she had sent, they did not subsequently request files. She says the Committee’s decision erroneously suggests the files were requested when they were not.

Review on the papers

[4] The parties have agreed to the review being dealt with on the papers pursuant to s 206(2) of the Lawyers and Conveyancers Act 2006 (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, as I do.

[5] Mrs DH’s reservation on her consent is noted and her concern as to doctoring is addressed below.

Nature and scope of review

[6] The nature and scope of a review have been discussed by the High Court, which said of the process of review under the Act:1

... the power of review conferred upon Review Officers is not appropriately equated with a general appeal. The obligations and powers of the Review Officer as described in the Act create a very particular statutory process.

The Review Officer has broad powers to conduct his or her own investigations including the power to exercise for that purpose all the powers of a Standards Committee or an investigator and seek and receive evidence. These powers extend to “any review” ...

... the power of review is much broader than an appeal. It gives the Review Officer discretion as to the approach to be taken on any particular review as to the extent of the investigations necessary to conduct that review, and therefore clearly contemplates the Review Officer reaching his or her own view on the evidence before her. Nevertheless, as the Guidelines properly recognise, where the review is of the exercise of a discretion, it is appropriate for the Review Officer to exercise some particular caution before substituting his or her own judgment without good reason.

1 Deliu v Hong [2012] NZHC 158, [2012] NZAR 209 at [39]–[41].

[7] More recently, the High Court has described a review by this Office in the following way:2

A review by the LCRO is neither a judicial review nor an appeal. Those seeking a review of a Committee determination are entitled to a review based on the LCRO’s own opinion rather than on deference to the view of the Committee. A review by the LCRO is informal, inquisitorial and robust. It involves the LCRO coming to his or her own view of the fairness of the substance and process of a Committee’s determination.

Discussion

Mrs DH’s concern – Doctoring

[8] Mrs DH did not apply for a review. In her email to this Office of 25 May 2016 in which she consented to this review being determined on the papers, Mrs DH made reference to “[ABC] letters”, dated 11 November 2014, which Ms YS is said to have doctored. Mrs DH attached copies of those letters. They are from ABC Ltd (ABC) to Ms YS’ firm.

[9] Ms YS says Mrs DH did not apply for a review and should therefore not be allowed to raise the ABC letters on review.

[10] Mrs DH referred to and attached the ABC letter to her email to the New Zealand Law Society (NZLS), dated 26 August 2015, in reply to Ms YS’ reply to the complaint. Although the issue is of some concern to Mrs DH, and was an aspect of her complaint, it has been addressed by Ms YS, so can be dealt with on review. It is uncontentious.

[11] Ms YS explained in her letter of 23 October 2015 to NZLS that the “non- essential content of that letter was redacted” and “would not have made any difference” to the determination, given the Arbitrator was able to determine the matter on the basis of his own objective view of the contractual documentation.

[12] Redaction is a term lawyers use for the removal of information from documents. Documents can legitimately be redacted for a number of reasons, such as for relevance and privilege.

[13] As to relevance, evidence is relevant in a proceeding if it has a tendency to prove or disprove anything that is of consequence to the determination of the proceeding.3 Evidence that is not relevant is not admissible in a proceeding.4 A level

2 Deliu v Connell [2016] NZHC 361, [2016] NZAR 475 at [2].

3 Evidence Act 2006, s 7(3).

4 Section 7(2).

of professional judgement is required in the assessment of relevance. Parties can challenge relevance by bringing an application to the Court or Tribunal that determines the proceeding. In this case, that was the Tribunal that determined the building dispute between the [Hs] and Ms YS’ firm.

[14] Ms YS’ firm’s view was that the redacted sections of the letter from ABC were irrelevant to its case. That was their decision to make. Ms YS’ explanation is unexceptional. No professional standards issue arises. No further action need be taken on review.

Rule 4.4.1

[15] The professional standards issue that does arise is whether Ms YS complied with r 4.4.1 of the Rules, which relevantly states:

... upon changing lawyers a client has the right ... through the new lawyer to uplift all documents, records, funds, or property held on the client’s behalf. The former lawyer must act upon any written request to uplift documents without undue delay ...

[16] It is apparent from an exchange of correspondence between Ms YS and Mrs DH on 29 October 2014 that Ms YS acted promptly on a written request from Mrs DH to uplift “all the personal records” the firm held for her and her husband, and any correspondence the firm received relating to them or their children.

[17] The complaint, however, relates to the authorities signed by Mrs DH and her husband on 6 November 2014 that the new lawyers sent to Ms YS on the morning of

10 November 2014. The authority for Mr and Mrs H says:

We, [GH] & [DH] hereby request that you release to [BJ] of [lawfirm], at ...

all documents and deeds which are held by you on our behalf (including any documents or deeds held on behalf of any company, partnership or other entity of ours).

[18] The authorities for DEF Ltd and GHI Ltd (GHI) follow a similar format and

request “all documents and deeds which are held by you on its behalf”.

[19] On receiving the authorities, Ms YS acted promptly and sent an email to Mrs DH’s new lawyers mid-afternoon that same day. Ms YS set out her understanding of her firm’s position, namely that the firm had not acted for GHI and held no documents, the file for DEF had been destroyed in an earthquake and the “personal deeds for Mr and Mrs H are available for collection at the [location] Office as previously advised to Mrs DH”.

[20] Mrs DH’s new lawyer responded on 11 November 2014 asking her to check her records regarding GHI, saying she had a copy of a terms of engagement letter from the firm to GHI, dated 16 April 2013, in relation to a refinancing.

[21] Mrs DH’s complaint was received by NZLS eight months later, on 20 July

2015. She contends Ms YS should have produced everything her firm held, including its entire files (some of which were destroyed by earthquake), not just deeds and documents.

[22] It is important to note the obligation r 4.4.1 imposed on Ms YS. She was obliged to “act upon any written request to uplift documents without undue delay”. Ms YS acted on Mrs DH’s request to uplift and the authorities sent by her new lawyer with virtually no delay. She explained what files she had and that they were available. Although Mrs DH is suspicious of Ms YS, objectively there is no basis on which to suggest she was being deliberately obstructive. Ms YS’ explanation for the mix-up over GHI and the lack of a file for that company is unremarkable. The fact that files were destroyed is regrettable, but it does not raise a professional standards issue.

[23] Ms YS sent only documents and deeds in response to the [Hs]’ personal authority. That is precisely what she was authorised to release. Beyond the follow up email the next day to check whether Ms YS held anything for GHI, no files were requested.

[24] Mrs DH’s complaint relies on the premise that Ms YS must have understood the new lawyers were requesting everything she had. That is not accepted. Lawyers’ files can contain all kinds of materials, not all of which belong to the client.5 Ms YS says she adhered to her usual practice, in the absence of a signed authority to release a particular file or files, by sending documents and deeds. Even if that was a misapprehension on her part, it could not be argued that she went beyond the terms of the authorities. If the new lawyers had wanted more, there is nothing in the materials to suggest Ms YS would not have cooperated to the fullest extent if they had asked.

[25] It is accepted that the Committee’s decision is flawed in that it erroneously suggests the files were requested when they were not. The evidence demonstrates compliance by Ms YS with r 4.4.1 of the Rules. The conclusion that Ms YS’ conduct

_{was unsatisfactory is rejected. The decision is therefore reversed.}

5 See for example Wentworth v De Montfort (1988) 15 NSWLR 348 (CA).

For completeness

[26] For completeness, all of the matters Mrs DH raised in her complaint and subsequent correspondence have been considered on review. There is nothing in the materials that affects the conclusions the Committee reached except that Ms YS did, in fact, act for GHI on the refinancing. That said, the refinance was an entirely discrete matter and any information Ms YS had as a result would have been available to her as the [Hs]’ lawyer in any event.

[27] Importantly, there is no evidence of any connection between the refinancing and Ms YS’ subsequent conduct. As a lawyer owes only limited continuing duties to former clients, none of which are relevant on the facts, there is no basis on which to conclude that Ms YS’ conduct fell below a proper professional standard.

[28] It is accepted that Mrs DH felt betrayed by Ms YS’ part in the events that led to the end of their professional relationship. It is not accepted that that sense of betrayal is supported by evidence of conduct on Ms YS’ part that fell below a proper professional standard.

Decision

Pursuant to s 211(1)(a) of the Lawyers and Conveyancers Act 2006, the decision of the

Standards Committee is reversed.

_{DATED this 21}ST _{day of January 2019}

D Thresher

Legal Complaints Review Officer

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

Ms YS as the Applicant

Mrs DH as the Respondent

Mr QX as a Related Person [Area] Standards Committee [X] New Zealand Law Society