IR v NW [2019] NZLCRO 44 (18 April 2019)

Last Updated: 22 May 2019

	LCRO 65/2017
CONCERNING	an application for review pursuant to section 193 of the Lawyers and Conveyancers Act 2006
AND
CONCERNING	a determination of the [Area] Standards Committee [X]
BETWEEN	IR Applicant
AND	NW and EN Respondent

DECISION

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

Introduction

[1] Mr IR has applied for a review of a decision by the [Area] Standards Committee

[X] (the Committee) to take no further action in respect of his complaints concerning the conduct of the respondents, Mr NW and Mr EN (the respondents).

Background

[2] Mr EN represented Mr NW when he responded to a complaint made by Mr IR on 24 March 2016. The New Zealand Law Society (NZLS) file number for that complaint is 15684 (the first complaint).

[3] Mr NW responded to the first complaint and instructed Mr EN to make submissions on his behalf with respect to his fees and a report prepared by a costs assessor. The question for the Committee was whether Mr NW’s fees were fair and reasonable for the work he had done in respect of the administration of Mr IR’s mother’s

estate. Mr NW and Mr IR’s cousin, Ms SE, were the executors. Mr IR and his brother were among the beneficiaries.

[4] Mr NW expressed the view that Mr IR had over-involved himself in the administration of the estate, which had repercussions on Mr NW’s fees.

[5] The Committee determined the first complaint on the basis there had been unsatisfactory conduct on the part of Mr NW, in that he charged a fee which was greater than the Committee considered fair and reasonable for the services he had provided to the estate. In reaching that determination, the Committee considered the evidence and submissions filed by both parties, weighed and balanced that and reached conclusions that supported the determination the Committee had made.

[6] Neither party applied to this Office for a review of the first decision. Mr NW refunded money to the estate, having reduced his fees pursuant to an order made by the Committee under s 156(1)(e) of the Lawyers and Conveyancers Act 2006 (the Act). As there was no application for review, the Act’s jurisdiction over Mr IR’s complaint was exhausted on 28 October 2016.

[7] On 23 February 2017 Mr IR made two separate complaints to the NZLS, one relating to conduct on the part of Mr NW, the other to conduct on the part of Mr EN.

[8] Mr IR says Mr NW:

...filed false and misleading submissions/emails to New Zealand Law Society relating to NZLS file 14364 [LER Estate]...

[9] Mr IR says that in relation to the first complaint, Mr EN:

... submitted a signed false and misleading submission in several parts to the NZ Law Society details of which and evidence is attached...

[10] NZLS opened two files, 15684 relating to Mr NW, and 15685 relating to Mr EN. The Committee considered whether Mr NW or Mr EN had breached a duty owed to Mr IR, and said that an understanding of the relationship of a lawyer to a client was fundamental to understanding the outcome of the complaints. The Committee referred to a principle articulated by Cook J in Allied Finance and Investments Ltd v Haddow & Co [1983] NZLR 22 (CA):

...the relationship between two solicitors acting for their respective clients does not normally of itself impose a duty of care on one solicitor to the client of the other. Normally the relationship is not sufficiently proximate. Each solicitor is entitled to expect that the other party will look to his own solicitor for advice and protection.

Hence, Mr EN’s duty is to Mr NW and he has no duty to protect and promote the interests of Mr IR. Mr EN’s duty to Mr NW includes acting on his client’s instructions and it is in the context of those instructions that Mr EN has provided submissions in response to complaint 14364. Mr NW is entitled to take a position that does not accord with the position taken by Mr IR and his brother and is entitled to instruct Mr EN to advance that position in submissions provided to ASC2. For his part, Mr EN is entitled to rely on the instructions provided by Mr NW.

Neither Mr EN nor his client can be compelled through the complaints process to review the advice given or the instructions received in relation to those submissions.

[11] The Committee also referred to a decision by this Office in FC v RU LCRO 273/2012 (11 July 2014), noting:

... while s 132 of the Act gives any person a right to complain about the conduct of a lawyer, that does not give a person the right to complain about the same conduct repeatedly. Accordingly if a complaint is in substance identical to a complaint that has already been made, then the Complaints Service and the Standards Committee will have already discharged its obligations under the Act and will not be required to consider the complaint again.

[12] The Committee considered Auckland Standards Committee 2 had already dealt with the subject matter of Mr IR’s complaints in the first complaint and recorded that if it were to consider the complaints at the centre of this review again, it “would be considering material that is in substance identical to the material considered in complaint 14364”.

[13] The Committee declined to take the matter further, noting that Mr IR had not applied to this Office for a review of the first decision, and the time for him to do that had passed. The Committee considered further action was not necessary or appropriate and determined both complaints pursuant to s 138(2) of the Act.

[14] Mr IR disagrees with the Committee’s approach and applied for a review.

Application for review

[15] Mr IR says his complaints are different to the first complaint. He distinguishes the complaint about Mr EN on the basis that his first complaint was only about Mr NW. Mr EN’s involvement followed later in the first complaint process.

[16] In essence, Mr IR says Mr NW and Mr EN lied to their professional regulator in the course of the first complaint process and should be disciplined for that. Mr IR says NZLS refused to act on his complaints and maintains that Mr EN filed a false submission and Mr NW filed false evidence. He believes the Committee was protectionist and biased towards the lawyers.

[17] Mr IR wants his concerns acted upon and an order made publishing the names of Mr NW and Mr EN. Mr IR says he did not get an apology and neither lawyer was punished properly, or enough.

[18] The respondents rely on the Committee’s decision and did not wish to add any comment on review.

Review hearing

[19] Mr IR attended a review hearing in Hamilton on 11 April 2019 and was accompanied by his son as his support person. Mr NW and Mr EN were not required to attend and did not exercise their rights to do so.

Nature and scope of review

[20] 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.

[21] 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.

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

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

[22] Given those directions, the approach on this review, based on my own view of the fairness of the substance and process of the Committee’s determination, has been to:

• (a) consider all of the available material afresh, including the Committee’s decision; and
  
• (b) provide an independent opinion based on those materials.
  

Discussion

Mr EN

[23] Mr IR correctly says Mr EN’s conduct was not the subject of the first complaint. When the first complaint was made, Mr EN’s conduct had not occurred. He had not been retained by Mr NW. The first complaint was only about Mr NW.

[24] However, Mr NW retained Mr EN as his lawyer. Mr EN filed submissions. Submissions are arguments about how the law applies to facts in evidence. Mr IR confirmed at the review hearing that he understands the difference between argument and fact, or to put it another way, submission and evidence.

[25] It is part of a lawyer’s role to argue. Unlike evidence, arguments are not facts. There are fundamental differences, for example an argument may be valid or not, or could be rationally persuasive or not. There is no basis on which to say the arguments Mr EN advanced on the evidence were false or misleading.

[26] Mr IR’s complaint that Mr EN filed false or misleading submissions is misconceived. There is no cogent basis to Mr IR’s complaint about Mr EN’s conduct. Mr IR’s allegation that Mr EN was, or may have been, corrupt lacks a reasoned basis.

[27] No professional standards issue arises for Mr EN on the materials available on review. In the circumstances, further action is not necessary or appropriate and insofar as Mr EN’s conduct is concerned, the review is determined on that basis pursuant to s 138(2) of the Act, which means that, although for different reasons, the Committee’s decision insofar as it relates to conduct on the part of Mr EN is confirmed.

Mr NW

[28] In his application for review, Mr IR identified two particular aspects of Mr NW’s evidence that he found objectionable. Although he added others to the list at the review

hearing, and those concerns have all be considered, it is not necessary to address each individual item of concern to be able to determine this review. Many of Mr IR’s concerns relate to matters that the Committee weighed and balanced in determining the first complaint.

[29] The first concern Mr IR raised in his application for review relates to a comment by Mr NW that medical evidence was required before Mr IR could purport to act as his mother’s attorney pursuant to a power of attorney document she had executed.

[30] Mr IR said he did not know he had to obtain a medical certificate.

[31] A copy of the power of attorney document was among the materials provided on review. Mr IR provided a further copy at the review hearing. That document named Mr IR as his mother’s attorney and gave detailed instructions about the medical evidence he as attorney would need to obtain before he could exercise powers on his mother’s behalf.

[32] It is assumed Mr IR had, or had seen, the power of attorney document when he sought to exercise powers under it. As the power or attorney document clearly records the requirement for medical evidence, there is no basis on which it could be argued that Mr NW’s comment was false or misleading in some, or indeed any, way. Mr NW simply pointed out that the document obliged the attorney, Mr IR, to obtain the medical evidence specified before purporting to act as his mother’s attorney.

[33] Although Mr IR seems unable to see it that way, Mr NW’s comment could well be seen as protecting Mr IR’s interests. No attorney would want to be troubled by the issues that can arise from the exercise of powers the attorney cannot lawfully invoke if the attorney has not followed the prerequisites set out in the power of attorney document.

[34] In all the circumstances, no professional standards issue arises for Mr NW.

[35] The second aspect of Mr NW’s evidence to which Mr IR objected in his application for review arose from Mr NW’s attendance at the auction of Mr IR’s late mother’s property. It appears from the materials filed in support of the first complaint that Mr NW and Ms SE, the executors, attended the auction in that capacity. Mr NW explained his reasons for personally attending the auction in the response he gave to NZLS on the first complaint. Those related to the executors’ duties to the estate. They did not relate to Mr NW’s professional obligations as a lawyer.

[36] Committees and this Office exercise jurisdiction over lawyers. The Act does not provide a statutory jurisdiction over executors. Professionally speaking, Mr NW’s client

was the estate, and it was to the estate that he owed professional obligations. The fact that Mr IR was not Mr NW’s client severely limits the professional obligations Mr NW owed to him. Mr NW was obliged to treat others such as Mr IR with integrity respect and courtesy. The evidence does not support the contention that Mr NW’s conduct towards Mr IR before he made his complaint fell below those standards.

[37] As Mr NW’s regulator, the Committee weighed and balanced Mr NW’s evidence in the first complaint process and dealt with the substance of the conduct complaint against him on the basis that Mr IR was a beneficiary and therefore entitled to raise concerns about Mr NW’s fees pursuant to the Act. The Committee assessed the evidence available to it, which was limited by the fact that the estate, and not Mr IR, was Mr NW’s client. The estate was entitled to have its confidence and privilege respected, even in the face of a complaint by Mr IR.

[38] If the Committee was concerned that Mr NW had misled it, it had the power to address those concerns. While it is accepted that they are heartfelt, Mr IR’s residual concern that Mr NW lied to his regulator in the first complaint process cannot be sustained. It can be difficult for a lawyer to navigate the path between professional obligations to clients and complaints by beneficiaries about fees. It is assumed Mr NW faced those difficulties in the first complaint process.

[39] The principal of finality is of relevance here. The interests of finality are not served by taking further action to continue Mr IR’s complaints about Mr NW. In all the circumstances, further action is not, and was not, necessary or appropriate.

[40] There is no reason to depart from the Committee’s decision that further action with respect to Mr IR’s complaints about Mr NW is not necessary or appropriate in all the circumstances.

Decision

Pursuant to s 211(1)(a) of the Lawyers and Conveyancers Act 2006, the decision of the Standards Committee is confirmed.

DATED this 18th day of April 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:

Mr IR as the Applicant

Messrs NW and EN as the Respondents Mr RR of [AB] Law as a related person [Area] Standards Committee [X]

New Zealand Law Society