NZLII Home | Databases | WorldLII | Search | Feedback

New Zealand Legal Complaints Review Officer
You are here:  NZLII >> Databases >> New Zealand Legal Complaints Review Officer >> 2019 >> [2019] NZLCRO 53

Database Search | Name Search | Recent Decisions | Noteup | LawCite | Download | Help

TC v DM [2019] NZLCRO 53 (30 April 2019)

Last Updated: 29 May 2019


LCRO 34/2017

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

CONCERNING
[Area] Standards Committee[X]

BETWEEN
TC

Applicant

AND
DM

Respondent

DECISION

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

Introduction


[1] Ms TC has applied for a review of a decision by the [Area] Standards Committee (the Committee) which, following inquiry into complaints made against Ms TC by Ms DM, made an unsatisfactory conduct finding against Ms TC, together with various orders.

Background


[2] Ms TC is a sole practitioner.

[3] Ms DM instructed Ms TC to act for her on the sale of a Lower Hutt property.

[4] Ms DM resided in Australia.

[5] An unconditional agreement for the sale of Ms DM’s property was entered into on 8 June 2016. The settlement date was 24 June 2016.

The complaint and the Standards Committee decision


[6] Ms DM lodged a complaint with the New Zealand Law Society Complaints Service (NZLS) on 4 August 2016. The substance of her complaint was that Ms TC had:

[7] Ms TC provided a detailed response to the complaint in correspondence to the Complaints Service of 1 September 2016. A summary of her position is that:
[8] Ms DM responded to Ms TC in a submission which was also distinguished by its comprehensiveness.

[9] There was a significant amount of information for the Committee to consider.

[10] The Committee approached its inquiry by a consideration of the broad question, was Ms TC’s conduct unsatisfactory?

[11] The Committee delivered its decision on 14 December 2016 and determined, pursuant to s 152(2)(b)(i) and s 12(a) of the Lawyers and Conveyancers Act 2006 (the Act), that Ms TC’s actions amounted to unsatisfactory conduct.

[12] In reaching that decision the Committee concluded that:

Application for review


[13] Ms TC filed an application for review on 27 January 2017. The outcome sought is for the Committee’s decision to be reversed in its entirety.

[14] Ms TC’s submission runs to some 11 pages, together with 36 attachments.

[15] I do not propose to record all of the arguments advanced by Ms TC on review, but all have been considered. A summary of her position is that she submits that:

1 Ms TC repeats this allegation multiple times in the course of advancing her review submissions.

(n) the Committee had ignored aspects of her evidence which provided clear and compelling response to issues raised by Ms DM;

(o) the Committee had ignored the primary reason for suggesting that Ms DM terminate the retainer, which was that Ms TC could no longer continue to represent Ms DM in view of the serious allegations that Ms DM had made against Ms TC;

(p) statements made by Ms DM had been modified and softened in tone in order to make Ms DM’s position present as more reasonable; and

(q) the Committee had made false statements,

[16] Ms DM provided response to Ms TC’s review application.

[17] She submitted that:

Review on the papers


[18] The parties have agreed to the review being dealt with on the papers. This review has been undertaken on the papers pursuant to s 206(2) of the Act, which allows a Legal Complaints Review Officer (LCRO) to conduct the review on the basis of all information available if the LCRO considers that the review can be adequately determined in the absence of the parties.

[19] I record that having carefully read the complaint, the response to the complaint, the Committee’s decision and the submissions filed in support of and in opposition to the application for review, there are no additional issues or questions in my mind that necessitate any further submission from either party. On the basis of the information available I have concluded that the review can be adequately determined in the absence of the parties.

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:2

... 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:3

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.


[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:

Analysis


[23] The issues to be considered on review are:

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

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

(b) Was the Committee’s recommendation that Ms TC enlist the support of an experienced conveyancing practitioner to assist in mentoring a reasonable recommendation for the Committee to make?

(c) Did Ms TC have reasonable grounds to terminate the retainer?

(d) If the answer to (c) is no, was the Committee correct to impose a finding of unsatisfactory conduct?

Is there evidence of the Committee acting in bad faith?


[24] In her review submissions, Ms TC provides a comprehensive analysis of the Committee’s decision.

[25] In undertaking that analysis, her approach is to work systematically through the decision. She identifies numerous paragraphs in the decision where she considers that the Committee has made factual errors, failed to provide accurate account of the evidence, and failed to provide accurate summation of the relevant law.

[26] Her approach when working through each individual issue, is to identify the issue, provide her view as to where the Committee has erred, and then to describe this failure as evidence of “bad faith, corruption and discrimination” on the part of the Committee.

[27] I identify no fewer than 18 occasions in the course of her submissions where Ms TC repeats accusation that the Committee had acted in bad faith, and in a corrupt and discriminatory fashion.

[28] This unrelentingly harsh criticism of the Committee is not confined to general allegation of corruption and discriminatory behaviour.

[29] In the course of her submissions, Ms TC contends that the Committee:
[30] The extent of Ms TC’s trenchant criticism of the Committee members, is captured in the concluding paragraph of her submissions where she states:4

The Committee could not find any fact, evidence or law against me therefore it made up a false story to support its findings. The Committee has been heavily motivated by their prejudice against me and the competing loyalties to the other parties. The Committee in doing this did not give any regard to their position and duty as Standards Committee, the intention of the complaints process under the Act, the rule of law, fairness and the rules of natural justice. Instead, they abused their power, behaved in a corrupt manner, failed to uphold the rule of law, failed to facilitate the administration of justice, breached their obligation to not obstruct, prevent, pervert or defeat the course of justice and conducted themselves in a manner that renders those practitioners/Committee as not a fit and proper persons to engage in the practice of law or hold any position as a Standards Committee member.


[31] It is abundantly self-evident that the particular nature of these allegations, present as the most serious that can be made of independent decision makers.

[32] Ms TC does not simply contend that the Committee made errors. She does not confine her criticism to complaint that the Committee got the law or facts wrong (although she is emphatic in her view that they did). She argues that the Committee members were corrupt, that they fabricated and manipulated evidence, that they massaged Ms DM’s evidence to make that evidence present as more palatable, and that they ignored evidence and deliberately made false findings. This all with purpose to enhance Ms DM’s position and to ensure that the Committee’s ulterior purpose of reaching a contrived finding of unsatisfactory conduct against Ms TC was achieved.

[33] The conduct of the Committee members is said by Ms TC to be so egregious that Ms TC considers it to be disqualifying not only of their right to occupy positions as members of a Standards Committee, but also of their authority to practise as fit and proper persons in the legal profession.

[34] Fundamental to the effective functioning of a Standards Committee, is the requirement that Committee members bring to their role, an unrelenting commitment to ensuring that their inquiry is conducted fairly, and without any hint of suggestion that the interests of one party are preferred over the other.

4 TC review submissions, p 37.

[35] The requirement for Committee members to be fair, unbiased, lacking in conflict and independent is so fundamental and well understood, that it approaches the trite to emphasise those requirements.

[36] In making such serious allegations, Ms TC has an obligation to provide substantive evidence to substantiate the allegations made.

[37] Standards Committees are made up of practising lawyers, familiar with the practice of law including the conduct of litigation in the Courts, as well as lawyers’ duties and obligations and the pressures under which lawyers often find themselves. Standards Committees must also include a lay member. This format allows for a range of views — legal and non-legal — to be considered.

[38] Members of Standards Committees are appointed by the New Zealand Law Society.5

[39] Where any person is appointed as a member of a Standards Committee, that appointment is to be notified to the Minister of Justice.6

[40] Each Standards Committee is to comprise at least three persons (commonly more) and at least one member of a Committee must be a lay member.7

[41] To be eligible for appointment as a lawyer member of a Standards Committee, a person must have practised as a lawyer for a period or periods aggregating not less than five years.8

[42] In appointing any lawyer member of a Standards Committee, the board must have regard, among other things, to:9

[43] Before the board may appoint a lay member to a Standards Committee, it must similarly be satisfied, that the person to be appointed is of good character, is a fit

5 Lawyers and Conveyancers Act 2006, s 126(2).

6 Section 128(1).

7 Section 129(2).

8 Lawyers and Conveyancers Act (Lawyers: Complaints Service and Standards Committees) Regulations 2008, reg 15(1).

9 Regulation 15(2).

and proper person and has the skills, experience and judgement to equip them to make appropriate decisions in respect of complaints.10


[44] A Standards Committee must exercise and perform its duties, powers and functions in a way that is consistent with the rules of natural justice.11

[45] It is from that context, that Ms TC’s accusation that several lawyers, and an independent lay member, charged with responsibility for conducting fair enquiry into the complaint before it, carried out their duties with a total disregard of their obligation to conduct a fair and impartial enquiry, must be measured.

[46] I do not suggest that the criteria required to be met to be considered for appointment as a member of a Standards Committee provides total immunity against the possibility of a lawyer being appointed to a Committee who lacks the requisite personal and professional attributes required for the position, but the requirement for lawyers to be appointed with both the necessary level of experience and demonstrable personal characteristics to equip them for a quasi-judicial position, would seem to provide a robust bulwark against the possibility of the membership of an entire Committee being so manifestly unsuitable (as Ms TC argues them to be) for the job.

[47] Ms TC provides no explanation as to why lawyers entrusted with the responsibility and obligation to conduct a fair and impartial inquiry would compromise their personal and professional reputations in such egregious fashion, other than to suggest that the Committee members had a desire (for reasons which are not made clear) to promote and support Ms DM’s complaint.

[48] It presents as approaching the inconceivable that a Committee comprised of experienced lawyers, would be so abjectly dismissive and ignoring of its fundamental obligations, that its members would, in apparent unison, engage in the behaviours that Ms TC accuses them of.

[49] The allegations made by Ms TC are not simply that the Committee made errors, but rather that it deliberately set out to make an adverse finding against Ms TC, and in order to do so, fabricated evidence, ignored evidence, made false statements, cast itself in the role of advocate for Ms DM, and conducted its enquiry in a corrupt and discriminatory manner.

[50] Ms TC provides no evidence to support or sustain the serious allegations made.

10 Regulation 18(4).

11 Lawyers and Conveyancers Act, s 142(1).

[51] Her submissions are, on occasions, characterised by an elevated level of rhetoric which presents as jarringly discordant with the events she is describing.

[52] Committees will, from time to time, make errors. All bodies charged with the responsibility for determining disputes between parties can get things wrong.

[53] The fact that Committee members are chosen for their particular skills and experience and are individuals who are perceived to have the necessary personal characteristics required of a decision maker, does not cloak those Committee members with a shroud of infallibility. Inevitably on occasions, mistakes will be made. But Ms TC does not identify any errors, oversights or omissions on the part of the Committee that would remotely substantiate or provide justification for the extremity of the comments she makes.

[54] It is one thing to attack the decision, but another to attack the decision makers. This is not to suggest that decision makers are immune from criticism, but that criticism should be directed towards the argument rather than the individual. Criticism that a decision-making body has exhibited bias, or lacked independence, constitutes reasonable grounds for a challenge, but if that argument is to be advanced, evidence must be provided to substantiate the seriousness of the allegations.

[55] Ms TC’s consistent response to the Committee taking a view of events that differs from hers, is to default to accusation that the Committee is corrupt and dishonest. Her approach, bluntly put, is to dismiss in scathing terms, any elements of the decision with which she disagrees.

[56] A disappointing consequence of this approach is that the exaggerative rhetoric and confrontational approach adopted by Ms TC can obscure the fact, as will become clear later in this decision, that she raises a number of fair criticisms of the Committee’s decision.

[57] But I am not persuaded that the trenchant criticisms which impugn the reputations of the Committee members have any validity whatsoever, and whilst I am reluctant to be critical of Ms TC, the force and extent of her attacks on the Committee cannot be left unanswered.

[58] The extent to which Ms TC is prepared to descend to unsubstantiated and unmerited attack on the personal reputations of the Committee members is reflective, in my view, of a practitioner who has lost any sense of proportion in dealing with the complaint made against her. Her response is also reflective of a practitioner who has

adopted, in defending her position, an extremely casual approach to her choice of words.


[59] I give but one example of many. Ms TC constantly repeats allegation that she has been the victim of corruption and discrimination without once clarifying how her disagreement with the Committee’s views, or her account of errors she considered had been made by the Committee, could reasonably, sensibly or responsibly, constitute conduct that could properly be described as corrupt or discriminatory.

[60] Loss of perspective can be an early casualty of the process of responding to a conduct complaint.

[61] I see no evidence of the Committee having acted in bad faith.

Was the Committee’s recommendation that Ms TC enlist the support of an experienced conveyancing practitioner to assist in mentoring a reasonable recommendation for the Committee to make?


[62] The Committee was critical of the manner in which Ms TC had managed the conveyancing transaction. Whilst the Committee’s decision does not particularise in detail where it considered Ms TC had fallen short (except to the extent that it concluded that Ms TC did not have reasonable grounds to terminate the retainer) its recommendation (not part of its formal orders) that Ms TC seek out an experienced conveyancing practitioner to assist her in a mentoring role in areas relating to LINZ registration requirements, gives indication that the Committee felt that Ms TC’s management of some aspects of the conveyancing transaction fell short.

[63] Whilst I am critical of Ms TC for losing a sense of proportion in responding to the complaint, in fairness to Ms TC, there was much in my view to commend her for in the way in which she managed the retainer itself.

[64] Ms TC has taken the criticisms of her conduct (particularly those which are critical of her expertise as a specialist conveying practitioner) to heart. It is also apparent that she is a practitioner who places considerable store in her ability to provide competent and professional services to her clients. Her perception (although in my view overstated by her) that the Committee had unfairly formed a view that she had not managed the conveyancing transaction particularly well, may provide explanation in part, for her overly robust response to the Committee’s decision.

[65] As I have noted, the Committee’s decision does not identify any specific areas where Ms TC’s conveyancing practice was considered to be deficient, but it can

reasonably be inferred from the nature of its mentoring recommendation that the Committee was critical of Ms TC’s insistence on having documents witnessed by a notary public, and of her requirement that Ms DM provide her with an original of her rates notice. Delay in obtaining this documentation played a significant part in contributing to the falling out between Ms TC and her client.


[66] An examination of the steps that Ms TC took, from the time she received instructions to the time she terminated the retainer, gives indication of a conscientious practitioner, who was attentive to ensuring that the conveyancing transaction was managed in a competent fashion.

[67] Ms TC was initially advised by Ms DM’s mother that Ms DM was intending to sell her home.

[68] Ms TC immediately wrote to Ms DM, making request of Ms DM to confirm her instructions to act. Ms TC’s letter of engagement is comprehensive and provides Ms DM with a detailed summary of the steps that would be involved in the transaction.

[69] Ms TC cautioned Ms DM that it would be advisable to have the sale and purchase agreement allow at least 20 working days for settlement, to cover the possibility of any unanticipated and unexpected delays.

[70] On receipt of the sale and purchase agreement Ms TC noted that the agreement provided for a shorter settlement date then she had recommended.

[71] Mindful of the tight frames, she immediately wrote to the vendor’s lawyer making request for the E-dealing facility to be set up. She followed up that request with further correspondence to the vendor’s lawyer the following day. It is clear that she was conscious of the tight timeframes and doing her best to ensure that she is able to meet the settlement date.

[72] Ms TC then writes to her client advising that the shorter settlement date negotiated may present problems.

[73] Documents are promptly prepared for forwarding to Ms DM. Ms TC advises her client that she would need to have the A&I form witnessed by a notary public.

[74] Ms TC suggests to her client that it would be prudent to arrange an extension of the settlement date.

[75] It is clear that Ms TC is aware that there could be problems with having the transaction ready to settle on the contract date.
[76] Ms DM responds by informing Ms TC that she had asked the purchaser for a week’s extension and that had been granted.

[77] Ms TC then advised Ms DM that it would be appropriate to have the agreement to an extension formally recorded.

[78] Ms TC says that she received no response to that request.

[79] It is difficult in view of the differences in time zones, and the uncertainty as to whether time recorded on some of the email documentation is indicative of when the particular email was sent or received, to be absolutely certain as to the timing of certain events.

[80] When Ms TC says that she failed to receive a response from Ms DM she may have been intending to suggest that she did not receive a prompt response to her inquiries. Certainly, there is evidence that Ms DM did confirm to Ms TC that she agreed to a formal extension being sought, with proviso that the parties were able to settle earlier if in a position to do so.12

[81] Ms TC was right to be apprehensive about being in a position to comply with the settlement date.

[82] Having done what she could to get matters underway, Ms TC’s attention understandably then turned to ensuring that she would receive the documents that had to be executed by her client in time for settlement.

[83] Ms TC is convinced that the Committee, in providing account of the problems that arose in respect of the settlement, was slanted in its view, consistently preferring the evidence of Ms DM, whilst ignoring hers.

[84] I don’t accept that to be the case, though I do think it would have been helpful if the Committee had provided a fuller account of the difficulties that Ms TC faced. I agree with Ms TC, that there are occasions when the Committee’s explanation of events could have benefitted by a more fuller exposition of the circumstances.

[85] At paragraph 4.3 of its decision, the Committee noted that Ms TC had rejected the documents as she required them to be executed before a notary public. Ms TC is also said to have insisted on being provided with originals rather than scanned documentation.

12 DM email to TC June 22, 2016, 5.54pm.

[86] At paragraph 5.2 of its decision, the Committee suggests that Ms DM arranged an extension of the settlement date because she was concerned about the delay caused by completing the necessary documentation.

[87] The Committee goes on to say at paragraph 5.4 that there were other complications resulting from Ms TC’s insistence on being provided with an original rates notice and her insistence on the A&I being sent to Ms DM’s mother, instead of directly to Ms TC’s office.

[88] The cumulative effect of these comments, in my view, creates an inference that Ms TC’s insistence on having matters done in a certain way was delaying the settlement. It may have been the case that Ms TC’s requirement that documents be executed a certain way contributed to delay, but the critical question in determining whether it was reasonable of the Committee to recommend mentoring (and in so doing inferentially raising issue of Ms TC’s competency) is whether Ms TC was right to insist on the documents being managed in the way she had required.

[89] It is important to reiterate that Ms TC had informed Ms DM before the sale and purchase agreement was entered into, that it would be desirable to allow sufficient time for settlement.

[90] This was sensible advice. Ms DM resided in a rural area of Western Australia. She herself acknowledged to Ms TC that communications were difficult.

[91] Ms TC made it clear at the outset that she required the documentation to be executed before a notary public.

[92] The involvement of a notary public in circumstances such as these is clearly contemplated by the relevant Land Transfer Act identity verification guidelines which applied at the time of the transaction, and referred to in reg 16(4) of the Land Transfer Regulations 2002.

[93] Those guidelines also confirm that it was Ms TC who was responsible for the verification of identity, notwithstanding that another party may complete the verification when the client is outside of New Zealand.

[94] As Ms TC was held to be ultimately responsible for the veracity of the identification process, it was reasonable for her to stipulate that the process anticipated by the guidelines and regulations be followed. I note in this regard that Ms TC gave her client early notice of her verification requirements.
[95] Ms DM makes complaint that she was put to the inconvenience of having to travel to a notary public. She says that the lawyer who had taken over her file had told her that it was unnecessary to have the documents witnessed by a notary public.

[96] I think it unfortunate if Ms TC is criticised for insisting that the documents be witnessed by a notary public. Her approach was careful and prudent. Her client was well aware of what was required of her. It could reasonably be argued that Ms DM’s failure to follow Ms TC’s advice, had contributed to the delay.

[97] Suggestion that Ms DM arranged an extension because of her concerns that settlement could be delayed, fails to acknowledge that it was Ms TC who was urging Ms DM to extend the settlement date.

[98] Rather than, as would conventionally be the case, have her solicitor confirm and formally record an agreement to extend the settlement date, Ms DM elected to deal directly with the purchaser. She then informed Ms TC that an extension has been agreed. She told Ms TC that:

anyway I have asked for a week extension and the buyers have said yes on the condition that they start collecting rent from Saturday (as they would have if it was to settle on Friday). I agree on this with the provision of being able to settle earlier i.e. on Friday as planned (providing the documents arrive on time) or Monday.


[99] Ms TC, quite properly, sought Ms DM’s consent to formalise the agreement to extend the settlement date. Her suggestion was to arrange for settlement to take place on 1 July 2016. This, she considered, would allow sufficient time to ensure that everything was in place to enable the transaction to proceed.

[100] It was Ms DM’s preference to settle as soon as possible, thus avoiding the possibility of her incurring a penalty for late settlement in the form of a requirement to compensate the purchaser for rent the purchaser would have received from the sitting tenant.

[101] Whilst Ms DM had advised Ms TC of the agreement to extend the settlement date, she had not provided a specific date for Ms TC to work to. Ms TC was understandably aware of the difficulties that could arise if there was any uncertainty over the settlement date.

[102] Ms DM’s expectation that settlement could be achieved at short notice would inevitably have been putting pressure on Ms TC.

[103] To try and expedite the process, arrangements were made for documents to be delivered to Ms DM’s mother’s home. The Committee’s decision records that Ms

TC had insisted on the documents being forwarded to Ms DM’s mother. That, in my view, does not either fairly or accurately explain the situation. Couching the arrangement in terms that suggest Ms TC was “insistent”, further contributes to the impression that Ms TC’s actions were responsible for delaying the settlement.


[104] Arrangements were made to deliver the documents to Ms DM’s mother’s home. It was thought that the documents may get through to her mother’s home more quickly. Ms TC, in what was an obvious attempt to assist Ms DM, agreed to arrange to have the documents uplifted. Unfortunately, there appeared to have been some misunderstanding, as no one was present at the home when a person Ms TC had organised to uplift the documents arrived at the home.

[105] I do not agree with the Committee’s description of the arrangements made to deliver documents to the mother, as being complicated.

[106] The Committee noted that there were also “complications” arising from Ms TC’s insistence on being provided with an original of the rates notice. Here again, inference can be drawn that Ms TC had been, if not obstructive, possibly less co- operative than she could have been.

[107] Ms TC provided reasonable explanation as to why she wished to be provided with an original copy of the rates notice.

[108] Ms TC was confronted with a number of difficulties leading up the settlement, many of which were not of her making.

[109] I think it probable that Ms DM’s anxiety to achieve a prompt settlement in order to avoid financial penalties, had put her under some pressure and possibly made her less receptive to appreciating the difficulties that Ms TC was striving to overcome.

[110] Ms TC’s confidence in the Committee decision was shaken by what she considered to have been a number of demonstrable errors made by the Committee.

[111] I have examined each of the concerns identified by Ms TC.

[112] The Committee noted at 4.2 of its decision, that Ms TC received a copy of the unconditional agreement for sale and purchase on 8 June 2016. That is incorrect. Ms TC received the agreement on Friday 10 June 2016 and was able to review the agreement the following Monday. The error in recording the date the agreement was received is significant when considering the reasonableness of the time available to Ms TC to prepare the matter for settlement.
[113] At paragraph 4.3 of its decision, the Committee notes that Ms TC had, in responding to the complaint, said that a Notary Public “must” be used to verify the execution of documentation outside of New Zealand. Ms TC challenges that account of her response, noting that in her submission to the Committee, she had stated that a notary person was “the appropriate person to verify the identity of Ms DM...I believe it was reasonable to request Ms DM to provide notarised copies of her identity”.

[114] The difference in account is not simply one of minor semantics, but nor is the difference to be overstated. I think it reasonable of Ms TC to object to her position being described in the emphatic terms it was. It was her view that it was necessary to have a notary public witness the documentation. There is a world of difference between a lawyer recommending the best course of action for their client, as opposed to them demanding that the client follow a particular path. Intended or not, descriptions of Ms TC’s conduct as being “insisting” and “must”, considered in the context of the conduct complaint made, carry inference of possible unreasonableness and obduracy.

[115] At paragraph 4.3 of its decision, the Committee noted that:

Ms TC insisted on the original documentation being returned to her rather than relying on scanned copies on the basis that it was her practice policy to require the original documentation.


[116] What Ms TC had said in her response to the Committee, was that:

the reason for requesting originals was for the purpose of compliance with the standard for verification of identity. Further it is against my practice’s policy to settle a high-risk transaction and give certification on land – online relying solely on limited scanned documents.


[117] Ms TC describes the Committee’s omission of reference to a “high risk transaction” and “limited documents”, as evidence of the Committee “craftily” editing her explanations to change their meaning, this providing further evidence of the Committee’s corruption, bad faith and discriminatory conduct.

[118] Ms TC’s overwrought response clouds the kernel of her argument, which fairly was to note that it was her practice to take extra care with certifying documents, in circumstances where she considered there was high risk.

[119] Her approach was one that could be said to be reflective of a careful and prudent practitioner.

[120] At paragraph 5.2 of its decision, the Committee stated that it did not appear that confirmation of the extension was sent to the purchaser’s solicitor.
[121] Discussion of this issue should fairly have noted that on receipt of advice from Ms DM that an extension had been agreed (albeit informally and without exact confirmation of the settlement date), Ms TC wrote immediately to Ms DM seeking Ms DM’s consent for her to formalise the extension with the purchaser’s solicitor.

[122] She also advised the purchaser’s solicitor of the possibility of the settlement being deferred and says that request was made of her to put the request in writing.

[123] On 23 June 2016, Ms TC wrote to the purchaser’s solicitor advising that the “settlement date has been extended as agreed by our respective clients”.

[124] It was not the case that Ms TC failed to confirm the extension.

[125] At paragraph 5.5 of its decision, the Committee noted that Ms TC had, on the original day of settlement 24 June 2016, terminated her retainer and rendered an invoice for $500 plus GST. This is an error. Ms TC issued her invoice on 27 June 2016. She maintains the mistake is indicative of a continuing pattern of the Committee misrepresenting evidence in order to undermine her position.

[126] The error is reflective of the Committee being inattentive to detail. But the error does not constitute a mistake in the nature of which could remotely sustain Ms TC’s accusation that the Committee was fabricating evidence.

[127] At paragraph 5.6 of its decision, the Committee stated that “at very short notice Ms DM had to instruct a new solicitor and settlement of the sale was effected, one day later than the original settlement date”. At paragraph 8.3, the Committee reiterates that none of the reasons provided by Ms TC as giving her “good cause" to terminate the retainer justified that step as settlement of the sale was due in 24 hours.

[128] The date the transaction was initially intended to settle was Friday 24 June 2016. The purchase settled on 29 June 2016. Again, the Committee has erred in failing to provide accurate account of when a particular event occurred. This error is interpreted by Ms TC as the Committee going to great lengths to fabricate evidence in order to sustain its argument that Ms TC had, on terminating the retainer, given her client little time to secure fresh representation.

[129] As it transpired, settlement was achieved on Wednesday 29 June 2016, later than initially anticipated, but sooner than allowed for by the extension that had been agreed.

[130] I have identified aspects of the Committee decision where Ms TC, correctly in my view, identified errors that the Committee had made.
[131] I have been clear that I consider that Ms TC compromises her argument when she suggests that these errors constitute evidence of a Committee acting corruptly and in bad faith, but I do accept that Ms TC was troubled by the mistakes made by the Committee and that those errors have likely contributed to her feeling that she has not received the benefit of a fair process.

[132] That said, whilst Ms TC is highly critical of the Committee, it is to be noted, that the Committee upheld only one (and there were many) of the complaints made by Ms DM. Importantly, the adverse conduct finding was not in my view compromised by the errors the Committee had made in failing to provide accurate account of some of the events.

[133] The errors the Committee made in identifying dates at which particular events occurred, were quite immaterial to its consideration of the issue as to whether Ms TC had inappropriately terminated the retainer.

[134] I am satisfied however that the Committee’s recommendation that Ms TC be mentored by an experienced conveyancing practitioner was both unnecessary and unfair to Ms TC, in that the recommendation inevitably carried implication that Ms TC’s management of the practical conveyancing aspects of the retainer had been inadequate in some areas. I do not consider that to be the case.

[135] The recommendation that Ms TC receive mentoring is to be reversed.

Was Ms TC entitled to terminate the retainer?


[136] A lawyer, having been retained by a client, must complete the regulated services required by the client under the retainer unless:13
[137] Good cause includes:14

13 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, r 4.2.

14 Rule 4.2.1.

(c) the client misleading or deceiving the lawyer in a material respect:

(d) the client failing to provide instructions to the lawyer and a sufficiently timely way:

(e) except in litigation matters, the adoption by the client against the advice of the lawyer of a course of action that the lawyer believes is highly imprudent and may be inconsistent with the lawyer’s fundamental obligations.

[138] In general, it is assumed that the retainer will endure until the task given to the lawyer is completed.15

[139] A retainer has, as a general rule, traditionally been seen as an entire contract pursuant to which the lawyer undertakes to finish the business for which he or she is retained.16

[140] Having accepted a retainer, it is clear then that a lawyer must have sound good cause to terminate the retainer.

[141] Ms TC terminated the retainer in correspondence forwarded to Ms DM on 24 June 2016.

[142] In that correspondence, Ms TC advised that:

on the basis of our assessment and in accordance with Rule 4 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 we have decided to terminate our retainer.


[143] She describes her grounds for terminating the retainer as being:

[144] It is clear that in providing summary of her reasons for terminating the retainer, Ms TC placed considerable reliance on the “good cause” provisions of r 4.2.1.

[145] She does not however rely solely on the good cause exceptions, noting at paragraph 29(c) of her review submissions, that the Committee had ignored her

15 Warmingtons v McMurray [1936] 2 All ER 745 (KB) at 748.

16 Baker v Legal Services Commissioner (No 2) [2006] QCA 145, [2006] 2 Qd R 249 at [3].

primary (emphasis added) reason for terminating the retainer, this being that Ms TC considered she was unable to continue to represent Ms DM, because Ms DM had “made and maintained” serious allegations against her.


[146] It is a serious matter for a lawyer to terminate a retainer, and a step that is not to be taken lightly.

[147] A lawyer in the process of completing a conveyancing transaction, must have sound grounds to terminate the retainer, when settlement is, as was the case here, imminent.

[148] The distress, inconvenience and cost to a client that is likely to result from having their conveyancing lawyer withdraw their services just prior to settlement cannot be underestimated. It is analogous to a litigation lawyer withdrawing their services shortly before a trial is due to commence.

[149] I will address each of the main arguments advanced by Ms TC to support her decision to terminate.

[150] Ms TC says that prior to deciding to terminate the retainer, she spoke with the Deputy Complaints Manager at the Lawyers Complaints Service. She says that she was advised by the Complaints Manager that she should terminate the retainer and that she took this advice into account when making her decision.

[151] I am surprised that the Complaints Service would advise a lawyer to terminate a retainer. The function of the Complaints Service is to deal with complaints. In doing so, it must adopt a neutral stance and avoid providing opinion on possible outcomes.

[152] If it was the case that Ms TC received advice from the Complaints Service to terminate the retainer, Ms DM could fairly argue that her opportunity to receive fair inquiry into complaint made that the retainer had been improperly terminated, was irretrievably compromised.

[153] I accept Ms TC’s evidence that she did raise the issue with the Complaints Service, but I have no evidence of the manager’s recall of the conversation that took place. In any event, what Ms TC may or may not have been advised by the Complaints manager, does not absolve her of responsibility for the decision she made. It was her responsibility to determine whether she had good cause to terminate the retainer.
[154] Of the “good cause” provisions relied on, Ms TC places considerable emphasis on argument that Ms DM had failed to follow her advice and failed to provide instructions in a sufficiently timely manner.

[155] In advancing these arguments, Ms TC is especially critical of Ms DM’s failure to negotiate a sufficiently lengthy settlement date.

[156] This criticism is misguided.

[157] Ms DM was free to negotiate a settlement date that was convenient for her.

[158] If Ms TC considered that it was impossible to complete the transaction in the time allowed, she could advise Ms DM accordingly. It would have been open to her, as the Committee noted, to decline to continue with the retainer on the basis that she did not consider she was able to complete the transaction in the time frame provided by the agreement.

[159] Ms TC did not do so. She confirmed the retainer. On receipt of the agreement she set about putting arrangements in place to ensure that the settlement could proceed on the agreed settlement date. She knew the timeframes were tight. She quite properly advised Ms DM of her concerns.

[160] Ms TC however takes the view that the failure of Ms DM to negotiate an extended settlement date in terms consistent with Ms TC’s advice, presents as a serious breach on the part of her client, which should be given weight when considering the validity of her decision to terminate the retainer. She complains that “the Committee in briefly addressing this failed to address the most important question- why did MK not act on my advice?”.

[161] Ms TC, throughout the course of her submissions, frequently returns to the argument that Ms DM’s failure to follow advice created problems which ultimately gave Ms TC no option but to terminate the retainer.

[162] A further example cited by Ms TC, of Ms DM’s failure to follow advice, was Ms DM’s decision to have documents witnessed by a Justice of the Peace.

[163] Whilst Ms TC is correct to note that she had advised Ms DM to have the documents witnessed by a notary public, Ms DM’s decision to have the documents witnessed before a Justice of the Peace was understandable, particularly in circumstances where it was clearly difficult for Ms DM to access a notary public. Her decision to do so could not reasonably be seen to constitute a failure to follow advice of sufficient seriousness to warrant or justify Ms TC’s decision to terminate the retainer.
[164] On occasions, clients will take steps that are at odds with the advice the lawyer gives them. It is the lawyer’s job to assist their clients to manage any obstacles that arise.

[165] In placing the emphasis she does on what she perceives to be Ms DM’s failure to follow her advice, Ms TC both overstates the consequences of Ms DM actions, and ignores the obligation and responsibility she had as Ms DM’s lawyer, to assist Ms DM in working through the issues.

[166] Ms TC is critical of what she describes as the Committee’s failure to acknowledge her obligations as a conveyancing professional.

[167] I appreciate that Ms TC was anxious to ensure that settlement was achieved on time, but she is overly sensitive when she argues that the possibility of not being able to settle put her professional reputation at risk and compromised her position with third parties.

[168] It is not an uncommon occurrence in conveyancing transactions for settlement to be delayed.

[169] Ms TC had advised Ms DM of the need to allow ample time for settlement. She had advised Ms DM as to how she required the documents to be witnessed. If the transaction was unable to settle because of delays that had been occasioned by Ms DM’s failure to follow Ms TC’s advice, then settlement would be delayed, and Ms DM would suffer the inevitable financial consequences.

[170] As an experienced conveyancer, Ms TC would inevitably have had experiences of transactions where there were difficulties in finalising settlement.

[171] I am not persuaded that Ms TC’s professional reputation was being compromised as a result of the difficulties around settlement.

[172] In suggesting that her professional reputation was in danger of being compromised, Ms TC refers to her obligations to third parties, and in particular, to the bank.

[173] I am uncertain as to how Ms TC’s position with the bank would have been compromised if settlement was delayed and she does not explain how that would be the case. It is a matter of daily occurrence for banks to have to deal with delayed settlements. There are numerous reasons as to why a settlement may be delayed, many of which are quite unrelated to the conduct of the lawyers involved in the settlement.
[174] But problems with a delayed settlement, whilst challenging for both lawyer and client, do not customarily result in the retainer being terminated.

[175] What clearly was a significant factor in the termination of the retainer, was the conversation that took place between Ms TC and Ms DM on 23 June 2016. That conversation took place around 2.30 pm.

[176] That conversation, and the correspondence which followed between lawyer and client, are critical in determining whether Ms TC had reasonable grounds to terminate the retainer.

[177] Ms TC says that in the course of that conversation, Ms DM endeavoured to pressure her to change the settlement date. She complains that Ms DM spoke to her in a disrespectful and condescending manner, and that she abruptly terminated the call.

[178] Ms DM has a different recollection of the conversation. She contends that she terminated the phone call because Ms TC was talking over her, and speaking to her in a rude and disrespectful way.

[179] I am unable to reconcile the parties’ differing accounts of the conversation, but it is clear that whilst Ms TC may have been upset by the conversation, she nevertheless continued to work on the file. She says that while she was assessing the situation, she continued to take steps to complete the transaction.17

[180] Ms TC was clearly concerned about the issues that Ms DM had raised, and the criticisms that Ms DM had made of her.

[181] Late in the afternoon of 23 June 2016, she forwarded an email to Ms DM in which she:

17 TC review application, paragraph 78

(e) advised Ms DM that she intended to formally address those allegations in due course.

[182] In the client information provided, Ms TC advised Ms DM of the process her firm has in place for managing complaints. She explains that if a client has concerns about the service provided, the first step is to raise those concerns with the lawyer who has overall responsibility for the client’s work.

[183] The second step is for the lawyer to provide a response to the concerns that have been raised.

[184] If that does not resolve the problem, Ms TC then quite properly advises her clients of their opportunity to access the Law Society Complaints Service.

[185] Ms TC’s indication to Ms DM in her correspondence of 23 June 2016 that she required Ms DM to “substantiate” each of her allegations, presents as a surprising request from Ms TC, and inconsistent with the process for addressing complaints she had described in her client information.

[186] Expressed in those terms, Ms TC’s request has the hallmark of a demand being made of Ms DM that she justify her position.

[187] Ms DM was entitled to express her concerns. Ms TC was entitled to respond to them, and clearly indicated an intention to do so.

[188] Ms TC’s correspondence of 23 June 2016 gives no hint that she is intending to terminate the retainer; rather, she makes clear her intention to formally address Ms DM’s concerns “in due course”.

[189] Ms DM responded to Ms TC on 23 June 2016 at 7.07 pm. Allowing for the time difference, it would be assumed that Ms TC would have received that email on the morning of 24 June 2016.

[190] In her response, Ms DM expresses disagreement with aspects of the account Ms TC had provided of their conversation and provides explanation as to where she considered some of the difficulties with finalising the settlement had arisen.

[191] Importantly, whilst Ms DM does not resile from defending her position, she advises Ms TC that she had no objection to the settlement occurring the following week but confirms her preference to have the matter settled earlier if possible.
[192] Further, Ms DM makes it clear that she has no intention of terminating Ms TC’s services, and in a clear statement of her position, tells Ms TC that she simply wishes to get the settlement “over and done with”.

[193] In providing her account of events, Ms DM avoids expressing her position in provocative or confrontational terms. Her correspondence gives every indication that she wishes to put her disagreements with Ms TC to one side, and to get the transaction completed.

[194] On 24 June 2016, Ms TC terminates the retainer.

[195] In her correspondence to the Complaints Service of 1 September 2016, Ms TC describes Ms DM’s response of 23 June 2016, as “maintaining the allegations without any supporting information”.

[196] From this it can be concluded that Ms TC was not satisfied with the explanation provided by Ms DM, and that she considered that Ms DM’s failure to substantiate her concerns, provided reasonable grounds to terminate the retainer.

[197] Ms TC’s decision to terminate the retainer presents as inexplicable. The reasons advanced by her to support her decision are unconvincing.

[198] I characterise Ms TC’s decision to terminate the retainer as inexplicable, because there is no identifiable reason as to why Ms TC could reasonably have formed a view that Ms DM’s correspondence of 23 June 2016, provided her with justifiable grounds to terminate the retainer.

[199] It is difficult to escape conclusion that in making demand of Ms DM to substantiate her criticisms, Ms TC was demanding acquiescence by Ms DM to Ms TC’s view of events. Having received an explanation from Ms DM which did not accord with her views, Ms TC proceeded to terminate the retainer.

[200] This was an extreme response from Ms TC. A client is entitled to express dissatisfaction with their lawyer. Absent the “huff and puff” which on occasions is the inevitable by-product of situations where complaint is made and the parties’ positions become entrenched as the disagreement becomes more expansive, Ms DM’s complaint in essence was simply that she was concerned that some of the steps taken by Ms TC had delayed settlement.

[201] A careful explanation to Ms DM of the reasons as to why those steps were required to be taken was called for, rather than an insistence by Ms TC that Ms DM justify her criticisms.
[202] I do not accept Ms TC’s argument that the relationship had deteriorated to the point where it wasn’t possible for her to continue to act.

[203] In advancing that position, she places considerable emphasis on the acrimonious telephone conversation.

[204] As has been noted, Ms DM has a different recollection to that of Ms TC as to what was said in that conversation, but the subsequent correspondence between the parties makes clear that Ms TC’s decision to terminate was not prompted by concerns over the tone of the conversation, but rather her dissatisfaction with the explanation provided by Ms DM.

[205] Ms DM’s confirmation that she did not wish to terminate the retainer, and that she wished for Ms TC to finalise the settlement, were clear indications to Ms TC to put aside any concern about the criticisms Ms DM had made of her and to get on with the job.

[206] Nor was Ms TC’s response consistent with the complaints process that she had alerted Ms DM to, or consistent with her indication that she was anticipating receiving a response from Ms DM to which she would respond in due course. Ms TC’s decision to terminate presented as arbitrary and capricious.

[207] Termination of the retainer could not be justified on the basis of argument that Ms TC received directions that were outside the scope of services she provided. Ms TC was not prepared to comply with Ms DM’s request of her to personally uplift the rates notice, but a disagreement on an issue of that magnitude could never provide reasonable grounds for a lawyer to terminate the retainer.

[208] Nor was it the case that an apparent refusal by Ms DM as alleged by Ms TC to pay a fee for extra work completed, provided reasonable grounds for termination. Ms TC is drawing the longest of longbows when she advances this argument. There had been no disagreement of significance over payment of fees.

[209] The difficulty that Ms TC has in her wholesale adoption of the good cause provisions of r 4.2.1 is that she pays insufficient attention to whether the conduct she argues is captured by the rules, is of a sufficient level of seriousness to justify the rule being invoked in support of her argument.

[210] An example of Ms TC citing a conduct rule to bolster her position without, in my view, having given adequate consideration as to whether there was a sufficient

factual matrix to support the application of the rule, is Ms TC’s argument that she was unable to continue to represent Ms DM as she was at risk of breaching r 5.11.


[211] That rule provides that when a lawyer becomes aware that a client has or may have a claim against him or her, the lawyer must immediately advise the client to seek independent advice and must inform the client that he or she may no longer act unless the client, after receiving independent advice, gives informed consent to do so.

[212] I do not consider that Ms DM’s raising of concerns about the delay in settlement was indicative of her signalling the possibility of her pursuing a claim against Ms TC.

[213] Ms TC’s reliance on argument that she was apprehensive of facing a claim from Ms DM, does not sit comfortably alongside Ms DM’s clear indication in her correspondence of 24 June 2016, that she had no intention of terminating the retainer, and wished for Ms TC to finish the job.

[214] The steps taken by Ms TC were not consistent with those of a practitioner who had concerns that r 5.11 may be engaged. Ms TC did not advise Ms DM to seek independent advice. Nor did she advise Ms DM that she was unable to act until that advice had been sought and consent to continue acting provided.

[215] Ms TC’s decision to terminate the retainer was lacking in good cause and in breach of her obligation to continue to provide representation to Ms DM.

[216] What was particularly regrettable about Ms TC’s decision to terminate the retainer was that she had completed a substantial amount of the work, and the difficulties in securing the necessary documents to finalise settlement were close to resolution. I appreciate that she considered the criticisms made of her by Ms DM to be unfair, but her magnification of the extent of the concerns raised by Ms DM appear to have diverted Ms TC’s attention from the opportunity that was clearly available to her to promptly finalise the settlement.

[217] I agree with the Committee that none of the reasons advanced by Ms TC for terminating the retainer justified that step when settlement of the sale was imminent.

Was the Committee correct to impose a finding of unsatisfactory conduct?


[218] It is a serious matter for a lawyer to terminate retainer without good cause.

[219] I agree with the Committee’s conclusion that Ms TC’s actions amount to unsatisfactory conduct.

Costs


[220] Where a finding of unsatisfactory conduct is made or upheld against a practitioner on review it is usual that a costs order will be imposed. I see no reason to depart from that principle in this case.

[221] Taking into account the Costs Guidelines of this Office, Ms TC is ordered to contribute the sum of $900 to the costs of the review, that sum to be paid to the New Zealand Law Society within 30 days of the date of this decision. The order for costs is made pursuant to s 210(1) of the Lawyers and Conveyancers Act 2006.

[222] Pursuant to s 215 of the Lawyers and Conveyancers Act 2006, I confirm that the order for costs may be enforced in the civil jurisdiction of the District Court.

Publication


[223] Pursuant to s 206(4) of the Act I direct that this decision be published so as to be accessible to the wider profession in a form anonymising the parties and bereft of anything as might lead to their identification.

Decision

The Committee’s recommendation at paragraph 10 of its decision, that Ms TC receive mentoring in areas relating to LINZ registration requirements is reversed.

In all other respects, pursuant to s 211(1)(a) of the Lawyers and Conveyancers Act 2006 the decision of the Standards Committee is confirmed.

DATED this 30th day of April 2019


R Maidment

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 TC as the Applicant Ms DM as the Respondent

[Area] Standards Committee

New Zealand Law Society

NZLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback
URL: http://www.nzlii.org/nz/cases/NZLCRO/2019/53.html