VL v YN [2019] NZLCRO 55 (8 May 2019)

Last Updated: 29 May 2019

	LCRO 229/2017 021/2018
CONCERNING	an application for review pursuant to section 193 of the Lawyers and Conveyancers Act 2006
AND
CONCERNING	a determination by [Area] Standards Committee
BETWEEN	VL Applicant
AND	YN Respondent

Introduction

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

been changed.

[1] Ms VL has applied for reviews of two determinations by the [Area] Standards Committee (the Committee). In the first, the Committee made a finding of unsatisfactory conduct (the findings determination) against Ms VL and in the second (the penalty determination) imposed penalties following the finding of unsatisfactory conduct in the findings determination.

Background

[2] Ms VL acted for Mr and Mrs YN. On 29 November 2016 Mr and Mrs YN entered into an Agreement to purchase the property at [Address]. The Agreement was conditional upon the YNs selling their own property by 4 pm on 16 December 2016.

[3] The Agreement also contained a clause (commonly referred to as a Vendor’s Escape Clause) which read:

If before this agreement becomes unconditional the vendor receives an acceptable offer from a third party to purchase the property, then the vendor may serve on the purchaser a notice requiring the purchaser to advise within 3 working days after service of the notice whether all conditions for the benefit of the purchaser have been satisfied or waived and whether the requisition procedure

in clause 6.0 of the General Terms of Sale has been completed to the purchaser’s satisfaction. If the purchaser does not notify the vendor within the period set out above that the above matters have all been satisfied and that this agreement is accordingly unconditional, then this agreement will immediately terminate.

[4] Clause 1.1(32) of the agreement provided that a “working day” was “deemed to commence at 9am and ... terminate at 5pm”.

[5] On Monday 5 December 2016, a notice pursuant to the escape clause was served on Ms VL by fax. Consequently, Mr and Mrs YN had until 5 pm Thursday 8 December to declare the agreement unconditional. Otherwise, the escape clause provided that the agreement would terminate.

[6] Clause 1.3 of the agreement contained specific provisions as to the method by which notices were to be served. The clause reads:

The following apply to all notices between the parties relevant to this agreement, whether authorised by this agreement or by the general law:

(1) All notices must be served in writing.

(2) Any notice under section 28 of the Property Law Act 2007, where the purchaser is in possession of the property, must be served in accordance with section 353 of that Act.

(3) All other notices, unless otherwise required by the Property Law Act 2007, must be served by one of the following means:

• (a) on the party as authorised by sections 354 to 361 of the Property Law Act 2007, or
  
• (b) on the party or on the party’s lawyer:
  
  • (i) by personal delivery; or
    
  • (ii) by posting by ordinary mail; or
    
  • (iii) by facsimile; or
    
  • (iv) by email; or
    
  • (v) in the case of the party’s lawyer only, by sending by document exchange or, if both parties’ lawyers have agreed to subscribe to the same secure web document exchange for this agreement, by secure web document exchange.
    

[7] Clause 1.4 of the agreement, went on to say:

In respect of the means of service specified in subclause 1.3(3)(b), a notice is deemed to have been served:

(a).............

(b)............

(c)...............

(d) In the case of email when acknowledged by the party or by the lawyer orally or by return email or otherwise in writing.......

[8] A legal executive (Ms AD), was the primary point of contact in the firm for Mr and Mrs YN, but all parties understood that Ms VL was Ms AD’s supervising lawyer and was involved at all times.

[9] At 1.35 pm on Thursday 8 December 2016 Mr YN sent an email to Ms VL which read:

Hi just FYI as sent to AD but S & P might get sent to you. We only had until today to confirm so hope this is sufficient.

[10] Mr YN was advising Ms VL that he and his wife had sold their existing property which would negate the effect of the escape clause.

[11] Ms VL replied:

All under control at our end YN, very good timing!

[12] Following receipt of the advice from Mr YN, Ms AD sent the following email at

1.48 pm to the vendor’s lawyer (Mr NL):

Dear Mike

We refer to the Agreement for Sale and Purchase dated 29 November 2016 and your fax dated 5 December 2016.

Our purchaser client has instructed us to inform you that all conditions of this contract have been satisfied. This contract is therefore unconditional.

We record that settlement is set down for Friday 27 January 2016.

Please advise your e-dealing contacts and we look forward to receiving your settlement statement in due course.

Kind regards AD

Legal Executive

[13] In a statement to the Lawyers Complaints Service, Ms AD said:

At 5.05pm that day I received a call from Mike NL. ... I asked him how he was and he said “I have some bad news I’m afraid” and went on to advise me that he could not accept our confirmation of the contract as emailed at 1.48pm that day as he never acknowledged it orally or in writing.

[14] Ms AD advised Ms VL immediately.

[15] Ms VL advises that she met Mr YN on the following day and in a statement to the Complaints Service says:

I was frank with Mr YN and said that the error was caused by our confirmation being made by email and not acknowledged. I apologised to him for this error.

[16] In her statement, Ms VL goes on to say that she formed the view that the vendor’s solicitor “had failed to properly cancel [the] contract and it still ran on”. She advises that she did not have any further contact with Mr YN after that day (9 December 2016) and on 16 December 2016 received an authority from another firm of lawyers ([ABC]) to uplift the YN file.

Mr YN’s complaints

[17] Mr YN lodged his complaint on 5 December 2017. After reciting the facts Mr YN posed the following questions:

Why was confirmation of the purchase not faxed as required.

Why was the email sent on the 8 December confirming the unconditional purchase of the property not followed up to ensure confirmation.

Why was not action taken to address this before the close of business that day. The lack of action and their incompetence caused us to lose the property we had wanted to buy and further because it was conditional on the sale of our own property which we sold we are now homeless.

Devon VL did not act in accordance to her duties of care for us as clients.

Devon VL did not act competently, in a timely manner or in accordance with instructions received.

Devon VL did not act to protect or promote our interests. Devon VL did not treat us fairly.

Mr CA’s submissions

[18] Ms VL instructed Mr CA QC to act for her with regard to the complaint. Mr CA submitted that it would be appropriate for the Committee to take no further action on the complaint as the cancellation by the Vendors was an issue that should be resolved by the Court, and/or if Mr and Mrs YN wished to claim damages against Ms VL, then that too was a matter to be addressed by the Court.

[19] Mr CA considered Mr NL’s conduct to be “unmeritorious” and questioned whether cancellation of the Agreement on the basis of this “unmeritorious” conduct would prove to be valid.

The findings determination

[20] The Committee identified the issues to be considered as being:1

1. In sending (or causing to be sent) confirmation that the purchase was unconditional by email and not obtaining an acknowledgement from NL Devereux or confirming by fax by end of business the same day, did Ms VL fall short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer, as required by s 12(a) of the Act and rule 3 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (RCCC)?
   
2. If the answer to a) is yes, did this constitute unsatisfactory conduct?
   

[21] In examining the first issue the Committee made the following comments:2

Ms VL appeared to have accepted from the outset the position adopted by the solicitor for the vendor, Mr NL, that the confirmation notice sent by email but not acknowledged orally or in writing by the applicable time limit was legally ineffective. This was despite there being no suggestion that there had been any delay in the delivery of the 1.47pm email to NL Devereux.

[22] It noted the submissions made by Mr CA on behalf of Ms VL who raised questions as to whether the terms of the escape clause operated to terminate the agreement without anything further and whether the “deeming provision of cl 1.(4)(d) appl[ied] despite actual prior and timely receipt of the notice by the vendors’ solicitor?”.

[23] Mr CA QC submitted:

The determination of that question is one which is likely to be resolved by a Court either as an issue between the vendors and Mr and Mrs YN, if they are disputing the cancellation and/or between the YNs and Ms VL if, as seems likely, they claim damages against her. For that reason it would be appropriate for the Standards Committee to exercise its discretion to decide to take no action as the YNs have an adequate remedy.

In any event Ms VL’s actions were not beneath the requisite standard in that it was not reasonably foreseeable that such an unmeritorious stance would be taken by the vendors’ solicitor or, if it were, that the cancellation based thereon would indeed prove to be valid. For similar reasons it did not constitute unmeritorious conduct. Further this was a tiny point of technical detail which does not warrant disciplinary sanction.

1 Standards Committee determination 18 October 2017 at [11].

2 At [13].

[24] However, the Committee discounted Mr CA’s submissions and determined the issue on the basis that:3

...it is customary practice among conveyancing practitioners always to ensure, in any situation where time is of the essence, that a notice served solely by email is accompanied by a request for acknowledgment of receipt and followed up with a telephone call if such acknowledgment is not promptly received, as contemplated by the deeming provision in clause 1.3(4) of the standard form agreement. This is because doing so avoids any doubt about delivery of the notice and precludes any consequent argument about the matter.

The committee inferred either that she was not aware of clause 1.3(4)(d) of the standard form agreement or that she had not considered what it meant before the issue arose. She did not act, or ensure that her supervised legal executive acted, as if the clause determined the legal effectiveness of an emailed notice of confirmation. When the legal issue was raised, she simply accepted Mr NL’s position without apparently checking for legal authority on the effect of clause 1.3(4)(d).

[25] The Committee also noted that having advised Mr and Mrs YN of her view that the agreement had not been properly cancelled, Ms VL:4

...did not appear to have given them advice about the obvious immediate step to take in those circumstances and having that belief, namely to seek her clients’ instructions to lodge a caveat.

[26] The Committee also considered that if Ms VL believed that she had been negligent then she had a duty pursuant to r 4.2.4 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 to assist Mr and Mrs YN to obtain independent advice as to their remedies.

[27] The Committee determined that:5

... Ms VL and her firm took no steps to protect and promote the YNs interests between 8 December and 16 December 2016, when their retainer was terminated.

[28] The Committee summarised the situation in the following manner:6

In the circumstances, the consequences of Ms VL apparently failing to take any of those steps either in a timely way or at all speak for themselves. The YNs believed they had lost their contract. Nothing was done to preserve or promote their position. The property was in fact sold to someone else.

Having unconditionally sold their own house, the YNs ended up homeless and living in a camping ground. They described the whole experience as “devastation” and provided a graphic description of what the situation meant for them and their children.

3 At [20] and[22].

4 At [24].

5 At [28].

6 At [30] and [31].

[29] Having made these observations the Committee determined that Ms VL‘s conduct constituted unsatisfactory conduct as defined in s 12(a) of the Lawyers and Conveyancers Act 2006 (the Act) being “conduct that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer”.

[30] It listed four grounds on which it had reached this decision:7

• (a) she failed to act competently and in a timely manner, in breach of RCCC rule 3, in not taking the practical precaution of obtaining acknowledgement from NLE of the emailed notice of confirmation (regardless of whether or not the emailed notice was legally effective);
  
• (b) she failed to act competently, in breach of rule 3, in apparently not considering any interpretation of claue1.3(4)(d) of the standard form ADLS/REINZ agreement other than the interpretation advanced by Mr NL and apparently not undertaking any research for case authority on the point;
  
• (c) having formed the view that the contract “ran on”, she failed to act competently, in breach of rule 3, and/or failed to protect and promote the interests of her clients, in breach of RCCC rule 6, in failing to advise the YNs of the steps open to them to preserve their position in the circumstances, particularly as to the possibility of lodging of a caveat;
  
• (d) in the context of believing that she had made a mistake (regardless of whether or not in law she had been negligent) and given the urgency of her clients’ need to take steps to preserve their position, she failed to terminate the retainer of her own accord in breach of RCCC rule 5.4 and consequently failed to give her clients reasonable assistance in finding another lawyer, in breach of RCCC rule 4.2.4.
  

[37] Having determined that Ms VL was guilty of unsatisfactory conduct of a serious nature, the Committee determined to call for submissions on penalty from the parties and particularly to hear from Ms VL as to what steps, if any, she did take to protect and promote her clients’ interests once she became aware of her admitted failure and when she took such steps.

The penalty determination

[31] Following the finding of unsatisfactory conduct, the Committee called for submissions on penalties. Mr YN advised that he had spent $337 on a LIM report for the [Address] property which was then of no value. He sought compensation to the full extent of the Committee’s jurisdiction ($25,000) but reserved the right to continue civil action against Ms VL.

[32] Mr YN advised that he and his wife had found/purchased a similar property but had been obliged to “pay a significant amount more”.

7 At [35] and [37].

[33] Mr CA QC addressed the Committee’s request for submissions as to penalty on behalf of Ms VL as to “what steps, if any, she took to protect and promote her clients’ interests once she became aware of her admitted failure and when she took such steps”.

[34] Having recited the sequence of events Mr CA noted that following an unreserved apology from Ms VL, Mr YN took it upon himself to pay a visit to Mr NL’s office. That of course did not relieve Ms VL of her obligations and she obtained instructions to write to Mr NL challenging the cancellation.

[35] Mr CA noted that:

... the situation was still developing until late Friday 9 December and [ABC] were instructed on 14 December at latest (that being the date of the authority to uplift in favour of [ABC]...

[36] Mr CA is effectively submitting that there was very little time in which Ms VL could have done anything to protect and promote the YN’s position as they had instructed new solicitors by 14 December. He summarised the situation in the following manner:

Clearly Ms VL did not act appropriately as the Committee would have had her act. However she did:

1. Accept and apologise unreservedly to Mr YN for her error in failing to obtain confirmation of receipt of the notice prior to 5pm.
   
2. Challenge the cancellation.
   

100. Know from 16 December that [ABC] were advising from at least 14 December.
     

[37] He notes that if a caveat was to be lodged then it fell to [ABC] to do this.

[38] Mr CA argues against publication:

...given the limited public interest arising particularly given the very short duration of the breaches and the absence of consequences for the complainants in relation to their rights to challenge the purported cancellation.

[39] The Committee considered the submissions from Mr YN and Mr CA. It said:8

• [5] The Committee while accepting the initial error was minor considered that it was exacerbated exponentially by Ms VL’s failure to take timely steps toward remedial action. The Committee considered that the unsatisfactory conduct was therefore serious and accepted that it had had a significant effect on the complainant and his family.
  
• [6] The Committee considered that compensation towards the upper limit of the jurisdiction the Committee had was therefore appropriate. The Committee also determined that a reprimand and a fine and costs payable to NZLS were also appropriate in all the circumstances. The Committee also considered the
  

8 Standards Committee determination 20 December 2017.

profession would benefit from publication of the facts of the case for education purposes.

[40] Having made these comments:

• [7] The Committee determined that Ms VL:
  
  • (a) be censured under s.156(1)(b) of the Act for unsatisfactory conduct;
    
  • (b) pay the complainant $18,337.00 compensation under s.156(1)(d) of the Act;
    
  • (c) pay a fine of $3,000.00 to the New Zealand Law Society under s.156(1)(i) of the Act;
    
  • (d) pay costs of $1,500.00 to the New Zealand Law Society under s.156(1)(n) of the Act.
    

Review

[41] Ms VL has applied for reviews of both the findings and penalty determinations.

[42] The reviews progressed by way of a hearing with both parties in Dunedin on 5 April 2019. Ms VL and Mr and Mrs YN were in attendance. Ms VL was represented by Mr CA QC.

[43] The hearing was conducted by Mr Vaughan acting as a delegate duly appointed by the Legal Complaints Review Officer (LCRO) pursuant to cl 6 of sch 3 of the Act. The LCRO has delegated Mr Vaughan to report to me and the final determination of this review as set out in this decision is made following a full consideration of all matters by me after receipt of Mr Vaughan’s report and discussion.

[44] During the course of the hearing Mr Vaughan questioned the parties as to whether or not the complaint included a complaint about Ms AD. Section 132 of the Act provides that complaints may be made about a person employed by a practitioner.

[45] Mr YN advised he did not complain about Ms AD because he considered that Ms VL was the person responsible for the events that occurred. Ms VL said she accepted responsibility herself for what had occurred.

[46] Consequently, the complaint proceeded (and proceeds on review) as a complaint against Ms VL directly and not as a complaint arising out of a lack of supervision.

Review grounds

[47] Mr CA’s submissions on review were based on two main grounds; the first concerning the process adopted by the Committee, and the second as to whether or not Ms VL’s conduct was such that a finding of unsatisfactory conduct was an appropriate finding.

Process

[48] At [35] of the findings determination, the Committee determined that Ms VL’s conduct was deficient for the following reasons:

• (a) the failure to get confirmation from Mr NL that he had received the email

— breach of r 3;

(b) not considering any interpretation of the relevant clause in the agreement other than the interpretation on which Mr NL relied — breach of r 3;

(c) failing to take steps to reinforce her view that the contract remained in force such as by lodging a caveat against the title of the property — breach of r 3; and

(d) failing to terminate the retainer by Mr and Mrs YN because of the conflict that had arisen between her and them and not assisting them to find another lawyer — breach of r 4.2.4.

[49] The failure to ensure that Mr NL had received the confirming email was the only issue raised by Mr YN in his complaint and the Committee had not pursued any of the other matters by way of an own motion complaint, or otherwise put Ms VL on notice that it was considering those issues in relation to the complaint.

[50] Mr CA submits that the Committee has breached the rules of natural justice in not raising these issues with Ms VL but then including them in its reasoning in support of the finding against her.

[51] That submission is accepted and the option available on review is to return the complaint to the Committee to reconsider after Ms VL and her counsel have made full submissions on these issues. However, the Committee’s finding of unsatisfactory conduct would not be reversed if this process was followed and on review, all issues have been thoroughly considered.

[52] The additional matters referred to by the Committee are matters which, in the end, are matters which go to penalty, and full submissions have been provided on review and taken into account in completing this decision.

Was Ms VL’s conduct such that the finding of unsatisfactory conduct was appropriate?

[53] Mr CA submits that Ms VL’s conduct was not unsatisfactory conduct as determined by the Standards Committee. He contends that “the real question....is raised by the absence of confirmation of receipt [of the confirming email] before 5 p.m.”. He says “the notice was indeed received by the vendor’s solicitor before 5 p.m.”, and categorises Mr NL’s conduct as “unmeritorious”.

[54] The conduct issue for Ms VL is that she omitted to obtain from Mr NL confirmation of receipt of the notice Ms AD sent at 1.48 pm on 8 December 2016 to Mr NL. Confirmation of receipt would have been unnecessary if the notice had been served by facsimile, or, if sent by email, could have been obtained orally, such as by making a phone call. Ms VL could have requested confirmation by asking for a return email or by seeking confirmation in writing in some other way. Ms VL did none of those things.

[55] A conveyancing practitioner should be thoroughly familiar with the terms of the standard form agreement for sale and purchase of real estate that has been in use for many years. Even if there is no vendor escape clause, the standard form agreement contains specific requirements governing the manner in which notices are to be served. A diligent conveyancing practitioner would ensure that any notice given complies with the terms of the agreement thereby minimising or eliminating any opportunity for the other party to challenge the fact of notice having been given.

[56] Ms VL may have been correct in her view that Mr NL had “failed to properly cancel [the] contract”. The contract may have run on, but without instructions from Mr YN, it is difficult to see what more Ms VL could have done after her last contact with him on 9 December 2016. Those contractual matters are beyond the jurisdiction of this Office to resolve.

[57] Mr CA argues that if Mr YN was not going to instruct Ms VL to take steps, which he did not, Mr and Mrs YN’s new lawyers should have taken steps to challenge the cancellation by Mr NL if that was the course the YNs’ wanted to adopt. That submission is accepted.

[58] It is also appropriate to address the characterisation of Mr NL’s conduct as “unmeritorious”. It can sensibly be assumed from the fact that the vendors had invoked the escape clause that Mr NL had been instructed by his clients to take advantage of any opportunity that may present itself to ensure the YNs’ contract did not proceed. Mr NL took the step that had been left open to him by Ms VL’s omission to seek confirmation of receipt. It is somewhat unfair to Mr NL to characterise his conduct as “unmeritorious”

when he must be presumed to have been acting in accordance with his clients’ instructions, and to have achieved their objective.

[59] Ms VL allowed Mr and Mrs YN to be placed in a situation they should not have been in. A facsimile, or a simple phone call to Mr NL would have protected Mr and Mrs YN’s position. Those omissions evidence a lack of diligence on the part of the practitioner concerned. Unsatisfactory conduct is defined in s 12(a) of the Act as including conduct of the lawyer that occurs at a time when she is providing regulated services and is conduct that falls short of the standard of diligence that a member of the public is entitled to expect of a reasonably competent lawyer. Ms VL’s conduct fell below the standard established by s 12(a) of the Act.

Decision

[60] Although for different reasons, pursuant to s 211(1) of the Lawyers and Conveyancers Act 2006 the finding that there has been unsatisfactory conduct on the part of Ms VL is confirmed.

Consequential Orders

Compensation

[61] The Committee ordered Ms VL to pay Mr and Mrs YN the sum of $18,337 by way of compensation. The amount of $337 is clearly identifiable as being the cost of the LIM report obtained by Mr and Mrs YN for the property which became of no value when the purchase did not proceed.

[62] It is somewhat difficult to determine what factors the Committee took into account when ordering Ms VL to pay the sum of $18,000 by way of compensation. The identifiable reasons include the comment by the Committee that it “considered that the unsatisfactory conduct was therefore serious and accepted that it had had a significant effect on the complainant and his family”.9

[63] In this regard, Mr CA pointed out that the Committee had referred to Ms VL’s conduct as:

...minor but proceeded to impose a penalty by reference to matters which were not the subject of the complaint and of which Ms VL had not been given notice namely ‘Ms VL’s failure to take timely steps towards remedial action’.

9 Standards Committee determination 20 December 2017 at [5].

[64] Mr CA again takes the point that Ms VL was not provided with any opportunity to address the other issues, and therefore the Committee could not take them into account when considering what compensation to award.

[65] The maximum compensation that a Committee can award is $25,000 and an award of $18,000 is significant.10 In his submissions, Mr YN referred to the impact that losing the property had on him and his family. He says:

I had worked extremely hard to prepare our house for sale in the short timeframe. We went out of our way to make our home available for viewing and were so happy to have achieved this within such a short time frame.

[66] It is difficult to see how matters such as having to work “extremely hard” to make a house presentable for sale in a short timeframe can be linked to conduct on Ms VL’s part. There is no reason to believe it was not the YNs’ decision to sell their house, or that there was some externally imposed time constraint on them doing that.

[67] Although Mr YN says he and his family were obliged to pay more for a similar property, they have presumably received value for the money expended and, in any event, it is far beyond the role of the disciplinary process to resolve or consider matters that would call for detailed valuation evidence.

[68] That leaves to be considered whether it is appropriate to award compensation for anguish and distress Mr and Mrs YN say they and their family suffered by reason of Ms VL’s conduct.

[69] One of the earliest decisions of this Office where compensation was awarded for anguish and distress is the decision in Sandy v Kahn.11 That review involved a situation where two lawyers from the same firm acted for different parties in a commercial transaction resulting in a finding against the lawyer of breaching fiduciary duties to his client. The LCRO accepted that it was appropriate to award compensation for anguish and distress noting in particular that one of the purposes of the Lawyers and Conveyancers Act is “to protect the consumers of legal services” (s 3(1)(b)).

[70] It is accepted that Mr and Mrs YN suffered anguish and distress in finding they had not secured the property they and their family had believed would be their future home. A facsimile or a simple phone call could have secured the agreement. That would have avoided the anxiety and distress associated with losing a secured agreement,

10 Lawyers and Conveyancers Act (Lawyers: Complaints Service and Standards Committees) Regulations 2008, reg 32.

11 Sandy v Khan LCRO 181/2009 (25 December 2009).

having to consider the remaining alternatives, whatever those were, and decide how to proceed.

[71] It is not necessarily the case that the agreement was properly cancelled, or that the YNs could not have offered resistance to the purported cancellation and potentially won that argument. The point is that the YNs understood their future was certain. If confirmation of compliance with the provisions of the contract had been diligently pursued, their future would have been certain. Furthermore, the question of compensation could not have arisen.

[72] In Sandy v Khan the LCRO said:12

There is of course no punitive element to an award of damages for anxiety and distress. Such an award is entirely compensatory: Air NZ Ltd v Johnston [1992] 1 ERNZ 700; [1992] 1 NZLR 159 (CA). Such orders should also be modest (though not grudging) in nature.

[73] In that decision, the LCRO made an award of $2,500.

[74] The punitive element in this matter is met by way of the fine imposed on Ms VL and I consider that the fine of $3,000 is sufficient for these purposes. It is acknowledged that Mr NL’s response was unexpected but the reasons for his response are unknown. Ms VL’s role included ensuring she provided no basis on which the vendors could argue cancellation of the Agreement.

[75] It cannot be taken for granted that Ms VL or Ms AD would have been able to make telephone contact with Mr NL to confirm he had received the email but that points up the reason for providing such notices by facsimile, receipt of which does not have to be acknowledged.

[76] It is my view that an award of $18,000 for compensation for anguish and distress is too high. An award of this level may be appropriate if the losses caused by the conduct of the lawyer were quantified but there has been no information provided in this matter which would support an award on this basis. In addition, as noted earlier, the disciplinary process is not to be regarded as an alternative for civil proceedings in court.

[77] Another decision of this Office where an award of compensation for anguish and distress has been made is LCRO 79/09 which involved a situation where dilatory conduct by a lawyer resulted in clients being out of time for lodging an appeal in court.13 In that review, the applicant had claimed a sum of $18,000 by way of compensation for “stress

12 At [29].

13 LCRO 79/09 (24 September 2009).

of an emotional and financial kind”.14 Again, the applicant did not provide any evidence to support the amount claimed.

[78] In that case, the LCRO reduced the amount claimed to $1,000, for a number of reasons, including an observation that the lawyer could not be held responsible for all of the anguish and distress experienced by his client.

[79] In the present instance, it is accepted that the anguish and distress caused to Mr and Mrs YN and their family was the result of missing out on the property and having to regroup and reconsider their options.

[80] As noted above, there is no information available which would establish compensation at the level awarded by the Committee. I therefore commence by reaching a view that a claim for compensation that cannot be quantified should not exceed $2,000. This follows the rationale that an award of compensation should be “modest (though not grudging) in nature”.15

[81] Rather than endeavour to further analyse the effect of Ms VL’s conduct on Mr and Mrs YN and their family, that is the amount which I consider to be appropriate in these circumstances.

[82] Pursuant to s 211(1) of the Lawyers and Conveyancers Act, the determination of the Standards Committee is modified to reduce the sum awarded by way of compensation pursuant to s 156(1)(d) of the Lawyers and Conveyancers Act 2006 to

$2,000.

Other orders

[83] The Standards Committee censured Ms VL, imposed a fine of $3,000, and ordered her to pay costs of $1,500.

[84] It is appropriate that Ms VL should be censured by a Committee of her peers. As noted above a conveyancing practitioner should be thoroughly familiar with the terms of the standard form agreement for sale and purchase. The role of a conveyancing practitioner is to comply with the terms of the agreement and not place clients in a situation where their interests are put at risk.

[85] Ms VL did not do this. The disapproval of her peers is warranted.

14 At [2].

15 Sandy v Khan, above n 11 at [13].

[86] The Standards Committee ordered Ms VL to pay a fine of $3,000. A fine is imposed by way of penalty for a lawyer’s failure and the quantum of the fine is determined after a consideration of all the circumstances surrounding the adverse finding. It is acknowledged that Ms VL did not anticipate Mr NL’s response, but her duty as Mr and Mrs YN’s lawyer was to ensure the terms of the agreement were complied with so that her clients’ position was protected.

[87] The maximum fine which can be imposed is $15,000. The Standards Committee’s view was that a fine of $3,000 was appropriate. This represents an exercise of a discretion and there is no compelling reason to interfere with that.

[88] Pursuant to s 211(1)(a) of the Lawyers and Conveyancers Act 2006, the censure by the Standards Committee and the imposition of the fine of $3,000 is confirmed.

DATED this 8th day of May 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 VL as the Applicant

Mr CA QC as the Representative for the Applicant Mr YN as the Respondent

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