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New Zealand Legal Complaints Review Officer |
Last Updated: 15 June 2019
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LCRO 68/2016
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CONCERNING
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an application for review pursuant to section 193 of the Lawyers and
Conveyancers Act 2006
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AND
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CONCERNING
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a determination of [City] Standards Committee [X]
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BETWEEN
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ZA
Applicant
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AND
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YB
Respondent
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DECISION
The names and identifying details of the parties in this decision have been changed
Introduction
[1] Mrs ZA complained about the advice provided by Mr YB to herself and her late father (Mr XC), the subsequent administration of Mr XC’s estate and the fees charged by Mr YB.
[2] The [City] Standards Committee [X] (the Committee) determined to take no further action with regard to any of Mrs ZA’s complaints.
Background
[3] Mr YB acted for Mrs ZA’s parents. In February 2012 Mr XC executed a will in which he provided that if his wife survived him for a period of one month then he appointed her executrix of his will and bequeathed all of his estate to her.
[4] The will went on to provide that if Mrs XC predeceased Mr XC, then Mrs ZA was to be appointed sole executrix of the will and Mr XC’s estate was to be distributed equally between Mrs ZA, her brother (WD) and sister (VE).
[5] Mrs XC died in April 2012.
[6] Following Mrs XC’s death, Mr XC instructed Mr YB to prepare a new will in which he appointed Mrs ZA, WD and VE executors. The estate was to be distributed equally between his three children.
[7] Mr and Mrs XC had also established a Trust (the XC Family Trust) which owned a property in [Town]. The trustees of the Trust were Mr and Mrs XC. In February 2012 Mr and Mrs XC had signed a Memorandum of Wishes in which they expressed the wish that the Trust assets be distributed equally between their three children.1
[8] After Mrs XC’s death Mr XC was the surviving trustee and appointed Mrs ZA as a trustee to replace his wife.2
[9] Mr XC died on 9 January 2015 and Mr YB was advised of this on the day of his funeral (13 January 2015).
Mrs ZA’s complaints
[10] Mrs ZA’s complaints arise out of her dealings with Mr YB both before and after her father’s death, including the administration of her father’s estate and the Trust after his death.
[11] Mrs ZA has complained that Mr YB has failed to:3
- Act competently and in a timely manner.
- Provide [her] with information about the work to be done, who will do it and the way the services will be provided.
- Charge [them] a fee that is fair and reasonable.
- Give [them] clear information and advice.
- Treat [them] respectfully.
- Keep [them] informed about the work being done.
- [Tell them] how to make a complaint.
1 The memorandum of wishes expressed this as if it were a bequest in a will.
2 Mrs ZA was in fact appointed in the memorandum of wishes referred to in [7] above.
3 Letter ZA to Lawyers Complaints Service, 23 September 2015.
[12] She summarised her complaints as being that Mr YB had failed her and her siblings, his attention to detail had been poor and he had been rude and dismissive when asked for clarification of issues.
The Standards Committee determination
[13] The Standards Committee addressed the following issues:4
- Whether Mr YB failed to provide Mrs ZA and her late father Mr XC with competent advice during a meeting on 4 September 2012. At that time Mr XC signed a new will and a deed appointing her as a trustee of the XC Family Trust (to the extent that Mr YB reportedly assured Mrs ZA that she would be able to act independently of her brother and sister to tidy up Mr XC’s estate on his passing and questioned the need for a power of attorney when she raised the issue). If so, whether Mr YB breached his professional obligations under the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 200[8] (the RCCC) or any other enactment;
- Whether, following Mr XC’s passing, Mr YB failed to provide Mrs ZA and her siblings with information about the legal work to be done, who would do it and the way in which the legal services would be provided and, if so, whether Mr YB breached his professional obligations under Rules 3.4 and
3.5 of the RCCC or any other enactment;
4 Standards Committee Determination, 21 March 2016, at [8].
Competence
[14] Mrs ZA advised that:5
...she and her father expressed concern about his will because it was vital that she could act independently of her brother and sister to tidy up her father’s estate when the time came, her brother living in Sydney.
[15] The Committee noted that after his wife’s death Mr XC had instructed Mr YB to amend his will to provide that his three children were appointed executors. His earlier will had provided that Mrs ZA was to be the sole executrix of his will if his wife predeceased him.
[16] The Committee observed that at that time Mr XC was Mr YB’s client and that Mr YB had acted in accordance with Mr XC’s instructions. It said:6
The Standards Committee did not consider it a relevant consideration that one of the executors was based overseas. Mr YB was simply following his client’s unequivocal instructions and there is nothing unusual about a testator appointing a foreign-domiciled relative as one of their executors.
[17] The Committee determined to take no further action with regard to that complaint.
Compliance with rules 3.4 and 3.5 CCCR7
[18] Mrs ZA disputes that Mr YB provided her and her siblings with information about the legal work to be done, who would do it and the way in which the legal services would be provided. She does not accept Mr YB’s contention that he supplied terms of engagement and client care information at the outset of the retainer.8
[19] The Committee noted Mr YB’s advice that he had provided Mrs ZA with the required information but that it was not his practice to have clients sign a copy of the Terms of Engagement and consequently he could not produce evidence that he had complied with the requirements of Rules 3.4 and 3.5.
[20] The Committee noted that:9
...the only evidence the firm holds that the executors were provided with a copy of the terms of engagement is the file copy and the word of his secretary who prepared the letter and him who handed it to Mrs ZA.
5 Standards Committee Determination, 21 March 2016, at [10].
6 At [16].
7 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008.
8 Standards Committee Determination, at [18].
9 Standards Committee Determination at [19].
[21] The Committee decided that “Mr YB should be given the benefit of the doubt”10 and determined to take no further action in respect of this complaint.
Failure to keep executors informed
Failure to treat Mrs ZA and siblings with respect and courtesy
[22] The Committee addressed these issues together, along with the complaints relating to Mr YB’s competence, which have been separately referred to above. It noted Mr YB’s assertion that “he at all times explained to all three executors the process of obtaining Probate and provided them with approximate timeframes”.11 Mr YB also denied he had been rude to Mrs ZA or either of her siblings.
Review
[23] The parties attended a review hearing in Auckland on 9 May 2019.
Delegation
[24] The hearing was conducted by Mr Vaughan acting as a delegate duly appointed by the Legal Complaints Review Officer (LCRO) pursuant to clause 6 of schedule 3 of the Lawyers and Conveyancers Act 2006. 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.
Nature and scope of review
[25] The nature and scope of a review have been discussed by the High Court, which said of the process of review under the Act:12
... 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” ...
10 Standards Committee Determination at [22].
11 Standards Committee Determination at [27].
12 Deliu v Hong [2012] NZHC 158, [2012] NZAR 209 at [39]- [41].
... 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.
[26] More recently, the High Court has described a review by this Office in the following way:13
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.
Application for Review
[27] Following receipt of Mrs ZA’s application for review, the Review Officer asked Mr YB to provide a copy of his file relating to the administration of Mr XC’s estate.
[28] A number of issues referred to in this decision arise from consideration of that file. These were matters the Standards Committee was not aware of because it did not have Mr YB’s file.
Competence
[29] In her complaint Mrs ZA raised issues regarding the documentation Mr YB had prepared in seeking the Grant of Probate. She did not have a copy of the High Court Minute dated 14 April 2015, but a copy of the Minute was on Mr YB’s file that has been considered on review.
[30] The Minute from the High Court raised 13 matters that arose from the documentation Mr YB had prepared.
[31] In response to this aspect of Mrs ZA’s complaint Mr YB advised the Standards Committee that:14
WD’s Affidavit was rejected by the High Court as the same had not been witnessed properly by a Solicitor in Australia. This had nothing to do with me failing to complete it in a proper manner.
13 Deliu v Connell [2016] NZHC 361, [2016] NZAR 475 at [2].
14 YB letter to Lawyers Complaints Service 19 November 2015.
[32] That is not correct. Further, the matters raised in the Minute indicate some disturbing failings in the application for Grant of Probate Mr YB prepared and filed. The Committee did not have a copy of the Minute and consequently it was unaware of the matters referred to. The Committee should consider and determine the issues raised.
[33] In addition, the documentation which Mrs ZA provided in conjunction with her complaint relating to the [town] property raises issues which the Committee has not addressed.
[34] Mr YB had advised Mrs ZA and her siblings that the Trust property could not be dealt with until Probate had been issued. Because of the delays that occurred, Mrs ZA and her husband decided to purchase the property themselves. An Agreement for Sale and Purchase prepared by Mr YB records the vendors of the property as Mrs ZA and her siblings.
[35] Mrs ZA was the sole remaining trustee, so a transmission transferring title to the property to her following Mr XC’s death was all that was required, because at that stage she should have been the sole registered proprietor.
[36] It is not the role of this Office to consider and issue an initial determination of complaints. In addition, Mr YB should have the opportunity to respond to these concerns. In the circumstances, the Committee should consider and determine the matters which arise. These are set out in the appendix to this decision.
[37] Section 209(1)(a) of the Lawyers and Conveyancers Act 2006 provides:
209 Power to direct reconsideration of complaints, matters, or decisions
(1) The Legal Complaints Review Officer may—
- (a) direct a Standards Committee to reconsider and determine, either generally or in respect of any specified matters, the whole or any part of the complaint, matter, or decision to which any application for review relates:
...
[38] Pursuant to that section the Committee is directed to consider the matters identified in the Appendix to this decision in relation to Mrs ZA’s complaints as to Mr YB’s competence and issue a further determination in respect thereof. The determination is to be regarded as a new determination for the purposes of s 198 of the Act so that either party will have the right to apply for a review of that further determination.
[39] It is unfortunate that the foregoing direction will have the result of prolonging the finalisation of Mrs ZA’s complaints but, as noted, this Office should not undertake an
initial consideration of complaints. Its role is to review determinations of Standards Committees. In this instance matters have been identified which the Committee has not addressed and they are required to be returned to the Committee to enable it to do so.
The Terms of Engagement
[40] The evidence provided by each party with regard to the provision of Terms of Engagement, conflict. Mr YB provided a copy of Terms of Engagement dated 26 February 2015 which he says were given to Mrs ZA. A copy of this document is on the file provided by Mr YB to this Office.
[41] There is no evidence to support a decision that the Terms of Engagement produced by Mr YB were created after Mrs ZA lodged her complaint or that Mr YB did not give these to Mrs ZA when she attended Mr YB’s office on 26 February 2015.
[42] The Committee has recorded its decision on the basis that “Mr YB should be given the benefit of the doubt”.15 It could have recorded that the basis of its determination was that there was insufficient evidence to support an adverse finding against Mr YB.
[43] For this reason, nevertheless, the determination of the Committee to take no further action with regard to this issue, is confirmed on review.
Respect and courtesy
[44] Mrs ZA complained that Mr YB was rude and dismissive to her in their conversations. Her sister says that in “90% of the phone calls ... made left [her] feeling unheard or cut down”.16 Mr YB denies he has been rude or dismissive towards Mrs ZA or any of her siblings.17
[45] Each party has a view about the manner in which Mr YB related to Mrs ZA and her siblings but, again, there is no firm evidence which would support an adverse disciplinary finding against Mr YB.
[46] The Standards Committee determination to take no further action with regard to this matter is confirmed.
15 Standards Committee Determination [22].
16 Letter Lovell to Lawyers Complaints Service, 24 September 2015.
17 Letter YB to Lawyers Complaints Service, 21 September 2015.
Keeping Mrs ZA and her siblings advised
[47] Mr YB says:18
At all times we explained to all three Executors the process of obtaining Probate and approximate time frames. Obtaining Probate is not a simple matter and becomes even more complicated when one of the Executors resides in another Country.
[48] He also asserted that Mrs ZA was aware of the process required to obtain Probate because “her husband had just gone through the same with his father”.
[49] That is not accepted by Mrs ZA, and in any event Mr YB cannot rely on what he thought another lawyer had told Mr ZA. It is his duty to advise his clients.
[50] In his response to Mrs ZA’s complaint, Mr YB says that he had kept the executors advised at all times. It would be expected that any information provided to WD would have been in writing as he resided in Australia. There are no emails or letters on Mr YB’s file to WD advising as to the process and time frames for obtaining Probate.
[51] In addition, there are no file notes of telephone conversations with Mrs ZA or Mrs VE, nor of what information was imparted when they attended Mr YB’s office to swear the affidavit to lead Grant of Probate.
[52] The time line provided by Mrs ZA with her complaint does indicate that on occasions Mr YB instigated communications with her and her siblings. It is apparent however, that Mr YB did not provide a copy of the High Court Minute to them or explain what was required to rectify the issues raised.
[53] In his response to the complaint Mr YB minimises the issues raised in the Minute, and says that it “was mainly of an administrative nature” and the problems were “rectified with a replacement affidavit”. Reference to the copy of the Minute attached to the Appendix to this decision will readily establish Mr YB’s response was not correct.
[54] Rule 7 of the RCCC provides:
A lawyer must promptly disclose to a client all information that the lawyer has or acquires that is relevant to the matter in respect of which the lawyer is engaged by the client.
[55] Rule 7.1 requires a lawyer to “take reasonable steps to ensure that a client understands the nature of the retainer and must keep the client informed about progress on the retainer.”
18 Above n 15.
[56] Mr YB has not met his obligations in terms of these Rules. He wrongly downplays the reasons for the Probate documentation he prepared being rejected. This is unfair to Mrs ZA and her siblings because the rejection of the documentation caused delays in administering Mr XC’s estate.
[57] Breaches of the Conduct and Client Care Rules constitute unsatisfactory conduct pursuant to s12(c) of the Lawyers and Conveyancers Act 2006, and the determination of the Committee with regard to this aspect of Mrs ZA’s complaint is reversed and modified accordingly.
Fees
[58] Mrs ZA’s complaint about fees was simply that Mr YB had failed to “charge ... a fee that is fair and reasonable”. In her further comments following Mr YB’s response to the complaint19 she added that she “regarded Mr YB’s invoices for work done in September 2012 to be retrospective and vindictive billing”. In this regard she is referring to the statement issued by Mr YB on 21 July 2015 in which he included accounts for the work carried out for Mr XC in 2012.
[59] That was not “retrospective billing”. Mr YB advises that the fees rendered in 2012 had not been paid and it was in order for him to include his unpaid invoices in the statement issued by him in 2015.
[60] Regulation 29 of the Complaints Service and Standards Committee’s Regulations20 provides that a Standards Committee must not deal with a complaint about fees rendered more than two years prior to the date of complaint unless there are special circumstances. There are no special circumstances in this regard to enable the Committee to consider these invoices. The comment raised on review by Mrs ZA as to invoices being dated 2011 for the work carried out in 2012 does not alter that view.
[61] The invoices rendered by Mr YB in 2015 were:
- (a) $575 with regard to the proposed purchase by Mr and Mrs ZA of the Waihi property; and
- (b) $1,750 with regard to the work carried out administering the Estate.
19 Letter ZA to Lawyers Complaints Service 23 September 2015.
20 Lawyers and Conveyancers Act (Lawyers: Complaints Service and Standards Committees) Regulations 2008.
[62] The Committee did not call for Mr YB’s time records but determined that “the fees charged seemed fair and reasonable in the circumstances having regard to Mr YB’s significant experience and the considerable amount of work undertaken”.21
[63] Given that matters have been referred back to the Committee to consider, it may be that the fees rendered were in respect of work that should not have been necessary. In addition, it is usual for a Committee to request a lawyer to produce time sheets when a complaint about fees is made but the Committee did not do so in this instance.
[64] In the circumstances the complaint about fees rendered in 2015 is also referred back to the Committee for it to reconsider after it has called for and considered Mr YB’s timesheets.
Summary / Decision
[65] Pursuant to s 209(1) of the Lawyers and Conveyancers Act 2006 I direct the Committee to consider the matters set out in the Appendix attached to this decision (which include the matters identified in the High Court Minute) and to determine whether Mr YB’s conduct was competent in this regard
[66] Pursuant to s 211(1)(a) of the Act, the determination of the Committee to take no further action with regard to Mrs ZA’s complaint about a lack of information is reversed. The determination is modified by replacing the determination of the Committee with a finding of unsatisfactory conduct pursuant to s12(c) of the Act for breaches of the Conduct and Client Care Rules as discussed in [41] to [50] above.
[67] Pursuant to s 211(1)(a) of the Act, the determinations of the Committee with regard to all other matters are confirmed.
Penalty
[68] Having made the finding of unsatisfactory conduct against Mr YB, it remains to fix an appropriate penalty in that regard. By not keeping Mrs ZA and her siblings fully informed as to all matters relating to administration of their late father’s Estate, it is appropriate that Mr YB should apologise to them, and accordingly pursuant to s 156(1)(c) he is ordered to do so. The form of the apology is to be tendered first to this Office within two weeks of the date of this decision for approval.
21 Standards Committee Determination at [39].
Costs
[69] Mrs ZA has been successful in her application for review in several respects. In the circumstances it is appropriate that Mr YB should meet the costs of this Review.
[70] Where an adverse finding is made, costs will be awarded in accordance with the Costs Orders Guidelines of this Office. Pursuant to s210 of the Lawyers and Conveyancers Act 2006 (and the Costs Orders Guidelines issued by this Office) Mr YB is ordered to pay the sum of $1,600 by way of the costs of this Review to the New Zealand Law Society. It may be appropriate to have regard to this costs order if a further review is sought.
Enforcement of costs order
[71] Pursuant to s 215 of the Lawyers and Conveyancers Act 2006, the order for costs may be enforced in the civil jurisdiction of the District Court.
Mr YB’s file
[72] The copy of Mr YB’s file provided to this Office is to be passed to the Committee to refer to when considering the matters to be addressed by it as directed in [57(a)].
DATED this 23rd 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:
Mrs ZA as the Applicant Mr YB as the Respondent
[City] Standards Committee [X] New Zealand Law Society
Appendix to decision LCRO 68/2016
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