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New Zealand Legal Complaints Review Officer |
Last Updated: 2 October 2024
LEGAL COMPLAINTS REVIEW OFFICER ĀPIHA AROTAKE AMUAMU Ā-TURE
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Ref: LCRO 103/2022
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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 the [Area] Standards Committee
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BETWEEN
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RP
Applicant
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AND
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DQ
Respondent
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The names and identifying details of the parties in this decision have been changed
Introduction
[1] Ms RP has applied for a review of the determination by the [Area] Standards Committee, in which the Committee made a finding of unsatisfactory conduct against Ms RP and ordered her to reduce her fee.
Background
[2] On 1 June 2021, Ms DQ contacted Ms RP’s office with a view to instructing the firm to act for her, her husband, her son (BQ), and her mother (Mrs WK), who were selling a property in [suburb].
[3] Ms RP was not in the office and all contact was with Ms RP’s Legal Executive, Ms TJ.
[4] An email from Ms TJ to Ms RP provides some details of the events of the day:
Name: DQ & Husband
There are 4 people on the title – DQ + husband + DQ mother + DQ son
DQ mother has DQ’s brother as POA who is signing (he has his own lawyer) There is an REA involved
Wanting you to look over agreement and give the okay to sign + act for the sale They have a Property Sharing Agreement from when they purchased
3 different mortgages registered to the property
DQ & Husband have 2 of the mortgages with [Bank] DQ son has the other mortgage
DQ son does not have a lawyer They are NZ Citizens
I have let them know to send the agreement through to your email Found us on Google
Kind regards TJ
Legal Executive
[Law firm A]
[5] The timeline of events provided by Ms RP records that Ms DQ telephoned Ms TJ three times on that day and sent four emails. Ms DQ and her husband also attended the office to deliver the anti-money laundering documents which Ms TJ had provided to them.
[6] It was proposed that the Agreement would be signed by MK, who, Ms RP was told, had been appointed by Mrs WK as her attorney for both property and personal care and welfare.
[7] On the following day, Ms TJ sent the anti-money laundering forms to MK with advice as to what was required by way of supporting documentation.
[8] At 5 pm on the same day, Mrs WK’s lawyer (Ms CY) sent an email to Ms RP, in which she advised that she acted for Mrs WK, and that Mrs WK was wanting to move into a unit in a retirement village.
[9] Ms CY also sent a copy of the Enduring Power of Attorney for property in which Mrs WK appointed MK as her attorney. Ms CY advised that MK had been in contact with her to discuss the proposed sale agreement, and that she had suggested amendments.
[10] Ms CY continued:1
MK has signed the agreement as attorney. He incorrectly included our details as the vendor’s lawyer. It is agreed that the lawyer nominated by DQ, AQ and BQ will act on the conveyancing.
We will however attend WK on signing the A & I authority forms and approving your statement of distribution between the parties.
1 Email CY to RP (2 June 2021).
[11] On 3 June, Ms RP sent the firm’s terms and conditions by email, with a covering letter of engagement, addressed to:
The Owners [address]
[12] Included here are parts of that letter:2
Dear DQ, AQ, BQ, WK
RE: SALE OF [ADDRESS]
Thank you for choosing [Law firm A] to act on your behalf in relation to the sale of [address]. The receipt by us of your draft Agreement for Sale and Purchase of Real Estate [“the agreement”] on 1 June 2021 (10th edition 2012 (2)) means you are deemed to have instructed us to act for you in all matters and accepted our terms and conditions which are attached. We understand that the agreement is yet to be fully signed and that your brother MK is acting as attorney, for your mother WK, under her property endu[r]ing powers of attorney.
Enduring Power of Attorney – WK
We understand that WK is represented by CY of [Law firm B] but has consented that we act for her in the sale transaction. We will be required to obtain all relevant documents from [Law firm B] in order to ensure that the EPA is properly invoked.
... There has already been considerable emails and personal attendances with you at my offices to discuss WK’s capacity and the invocation of her power of attorney. This is not something that, e[i]ther professionally or ethically, we can overlook or not investigate given the vast powers an EPA provides and the potential ramifications. ...
...
Fees
Our fees are based on a range of factors approved by the New Zealand Law Society including but not limited to: time spent on your matter, the legal skills, expertise and experience of our staff, the importance, complexity and urgency of your matter (including whether urgency is as a result of your own circumstances and/or delays and what we need to do to accommodate your instructions at urgency), the nature of your legal matter and current market costs and charges for New Zealand lawyers. Our hourly rate is $500.00 per hour plus disbursements plus GST. ...
[13] Much of the Letter of Engagement includes terms applicable to a purchase of a property.
[14] Each of the vendors3 signed a single “client authority” authorising [Law firm A] to ‘represent [them] in all matters...’.
[15] Ms TJ reported by email to Ms RP later in the day:4
Subject: Filenote – CY – WK
2 A full copy of the letter is attached to this decision.
3 MK signed as attorney for Mrs WK.
4 Email TJ to RP (2 June 2021) at 5:07 pm.
Today (being 2 June 2021) I contacted CY from [Law firm B] on [telephone number] in relation to the sale of [address].
CY let me know that they do have the original EPA on hand and they are sending a certified copy to [email address]. She let us know that WK had capacity and her EPA is not activated. MK (the son of WK) has been assisting WK to ensure his mother does everything correctly. CY confirmed WK has capacity with the comment “she wouldn’t be able to go into a retirement village if she didn’t have capacity”.
She also let me know she had reviewed the agreement for sale and purchase and notes it was very poorly written and had multiple changes made. She confirmed she is not acting for the sale of the property but provided advice on the agreement. She will put this into writing with the EPA and the code of compliance certificate that was issued for the property.
She also mentioned that WK and the couple have been having issues. Kind regards
TJ
...
[16] Subsequently, Ms RP emailed Ms CY:5
Hello CY
Thank you for your very helpful information. We note that WK’s son MK has already attended to signing the agreement on behalf of WK but given you advise the property EPA is not in effect, we consider this is not legally binding and therefore believe it is appropriate that WK also attends to signing the agreement herself, rather than her son MK. We will advise our clients to attend to signing and advise them that WK will be signing it as the property EPA is not in effect.
... Once our clients have signed the agreement, we will forward it to you for signing by WK.
For the sake of completeness, we would also be grateful if you could provide the following as we do not have copies on our file:
– we have sighted your letter invoking clause 4 to the other vendors and we believe it is appropriate to also hold a copy of the executed agreement on our file;
[17] She also sent an email to Ms DQ:6
Hello DQ, AQ and BQ
5 Email RP to CY (2 June 2021) at 6:29 pm.
6 Email RP to DQ (2 June 2021) at 6:47 pm.
Thank you for instructing [Law firm A] to act for you and your mother [WK] in relation to the sale of the above property. We have now received a partially signed agreement and after reviewing all documents, and discussing the legal position of WK with her lawyer CY, we advise the following:
1. Ms CY has advised that the property EPA for WK is not in effect and therefore her son, MK is not, in our view, able to sign the agreement on WK’s behalf. ...
...
...
[18] Further correspondence was exchanged between Ms RP and MK and at 10:02 the next morning, Ms RP emailed MK. She said:7
...
We are contacting your mother’s lawyer CY for clarity. It appears that your mother is only invoking the property EPA for you to sign the agreement yet will sign all other documents herself. ...
[19] MK responded, attaching the part of the power of attorney which reads:
I authorise my attorney to act:
[20] The correspondence continued, with Ms RP maintaining that MK could not “act immediately under the EPA, while [Mrs WK] has capacity, ...”.8
[21] She continued:
... In our view this is inconsistent and is potentially problematic. From an ethical and professional point of view, I am obligated to ascertain the exact grounds and background before we are prepared to act under an EPA.
I am sure you can appreciate that. Given why to date we have not been provided with any reasons as to why your mother can, given her lawyer says she has capacity, provide the other owners with notice under clause 4 of the property sharing agreement of 15/5/15 (which we have not yet seen) in April 2021, but then invokes the property EPA for you to sign the agreement as attorney, but later on sign all other legal documents herself with her lawyer. We believe this is extremely problematic and inconsistent and we require clarity from WK’s lawyers.
7 Email RP to MK (3 June 2021).
8 Email RP to CY (3 June 2021).
We will await an urgent update from CY who is acting on behalf of your mother. Thank you.
...
[22] Correspondence continued between Ms RP, Ms CY and MK with Ms RP insisting that Mrs WK:9
...should either:
[23] Ms CY disagreed.
[24] The focus then shifted to Ms RP’s requirements for completion of the anti- money laundering documentation. Ms RP was also required to conduct due diligence on MK, as a person having ‘effective control’ over Mrs WK.
[25] MK asked10 which of the forms he needed to sign as an individual, and which needed to be signed as attorney for his mother. In a somewhat confrontational manner, Ms RP responded:11
...
We are aware that you may not approve of our legal view on how we comply with our ethical and professional obligations as both lawyers and under the AML compliance requirements, but that is for us to determine not you or CY. As we have already explained to you and WK’s lawyers multiple times, and based purely in what CY stated to us that WK would sign the A&I, we are not happy to have WK sign for certain documents throughout the sale transaction and for you to sign others as her attorney. We believe this is inconsistent and is also unprofessional and we cannot see any logic or sense in why this would be done if you are acting as attorney. If CY believes differently, then that is up to her, however it is our law firm who has been asked to act for the vendors for the sale transaction and therefore we will transact it the way we feel we should in order to comply properly with our legal obligations.
...
We believe we have been clear on this matter and the more time we spend trying to explain to co-owners our professional obligations, the more expensive this matter becomes. We look forward to receipt of your AML CDD documents with urgency. Thank you.
9 Email RP to CY (3 June 2021) at 9:53 am.
10 Email MK to RP (4 June 2021) at 10:25 am.
11 Email RP to MK (4 June 2021) at 10:47 am.
[26] The Agreement was finally signed and dated 4 June 2021, with MK signing as attorney for Mrs WK.
[27] The correspondence between Ms RP, MK and Ms CY relating to the anti-money laundering documentation continued on 9 June. Ms RP found it necessary to consult with the Department of Internal Affairs and her anti-money laundering consultant to ascertain if the money laundering documentation was required for both Mrs WK and MK.12 Ms RP then found it necessary to spell out to Ms CY13 the requirements of the legislation and considered it necessary to have Ms CY confirm Mrs WK’s IRD number as provided to her by MK.
[28] A simple request from Ms CY for Ms RP to advise what she held in the way of evidence for the anti-money laundering documentation14 was met with a somewhat condescending response from Ms RP:
We are perplexed as to why the AML process seems to be such a difficult one for you, WK and MK. As a lawyer, you are well aware of the legislated obligations of all lawyers. We have been very clear about what we require and do not see this as being any kind of problem or onerous. Therefore please focus and provide us with [what] we have asked for from you for WK.
[29] She reminded Ms CY that all her attendances were chargeable.
[30] In an attempt to resolve the impasse, Mrs WK, Mr AQ and Ms DQ, and Ms DQ’s sister attended at Ms RP’s office on 11 June 2021 to complete the documentation. The meeting ended angrily.
[31] At 5:23 pm, Ms CY emailed Ms RP and advised that she had been instructed to complete the transaction.
[32] Ms RP responded:15
... Given your completely inappropriate involvement from the outset in this matter, alongside the bullying conduct of your clients at our office today, we are not surprised that they have engaged you, and we agree to terminate our retainer with them given the red flags we have seen arise in this matter over the last few days. We will issue our invoice for all attendances to date on Monday morning for immediate payment. ... 16
[33] Ms RP rendered her account on 21 June 2021.
12 Paragraph [2] of the Property Law Section Guidelines issued by the Property Law Section of the New Zealand Law Society makes it clear that it is required from both.
13 Email RP to CY (9 June 2021) at 9:45 am.
14 Email CY to RP (9 June 2021) at 1:12 pm.
15 Email RP to CY (11 June 2021) at 5:42 pm.
16 The termination of Ms RP’s instructions was not subject to her ‘agreement.’
Ms DQ’s complaints
[34] The Committee concisely summarised Ms DQ’s complaints:17
- 2.1 Ms DQ complains that Ms RP was “irrational and confrontational” in her dealings with the parties to the transaction and because of the way in which Ms RP approached the conveyance, there were a number of unnecessary instructions, including after the instructions were withdrawn by the complainant, all of which added to the costs invoiced to the parties.
- 2.2 Ms DQ also complains that Ms RP was unreasonable in her requirements regarding ID and the anti-money laundering (AML) legislation, particularly as it related to Mrs WK.
[35] Ms DQ’s complaints were lodged prior to Ms RP rendering her account.18
Ms RP’s response
[36] Ms RP advises that she considered attendances by her were “legitimately spent at [the] instruction [of the vendors] on a sale transaction involving: a short turnaround sale contract, review of a contract, 4 co-owners, a property EPOA and the donor’s lawyer, an attorney based in [Country] (thus AML CDD on 5 persons) and a property sharing agreement”.19
[37] She considered that Ms CY had substantially interfered with her ability to act independently and had provided conflicting and out of date information, necessitating that she meet personally with the vendors and, in particular, Mrs WK.
[38] Ms RP says that she was obstructed from properly completing AML processes for Mrs WK by Ms DQ and Ms CY.
[39] Ms RP’s response largely lays responsibility for the steps she took to ensure that AML requirements were met on the advice provided by Ms CY to Ms DQ and MK.
The Standards Committee determination
[40] The Standards Committee identified the following issues to be addressed:20
- 4.1 Was the conduct of the practitioner towards the complainant (and her co- owners) acceptable and professional?
- 4.2 Were the fees charged by [Law firm A] fair and reasonable for the work done, taking into account the factors set out in Rule 9.1 of the Rules of Client Care and Conduct and the Terms of Engagement?
17 Standards Committee determination (23 May 2022) at [2].
18 Ms DQ lodged her complaint on 11 June 2021. Ms RP rendered her account on 21 June 2021.
19 Email RP to LCS (2 July 2021).
20 Standards Committee determination, above n 17, at [4].
[41] The Committee determined to address only the fee component of the complaint and considered that matter should be capable of resolution by mediation.
[42] That option was declined by both parties.
[43] The Committee considered that there was nothing unusual about the work required to complete the sale and that much of the work undertaken could have been, and was, undertaken by Ms TJ.
[44] The Committee resolved to appoint a costs assessor to review the fee charged by Ms RP and subsequently noted21 his conclusions that “the conveyancing sale was very straightforward and should have been carried out professionally and promptly”.
[45] Having considered the report and all of the material on the file, “the Committee resolved, pursuant to Section 152(2)(b) to make a finding of unsatisfactory conduct against Ms RP”.22 The determination also records that: 23
The Committee endorsed the full findings of the Costs Assessor and resolved that the amount owing to Ms RP by Ms DQ in respect of the invoice dated 21 June 2021 be reduced to $2,649.35 inclusive of GST and disbursements.
Ms RP’s application for review
[46] Ms RP seeks “a review of [the] investigation, decisions, reports, and outcome of the complaint itself, and the way (procedures and natural justice) that the [Area] Standards Committee and the [Area] Complaints Officer managed the complaints process...”.24
[47] Ms RP lists 10 issues which she submits need to be addressed in this review:25
- Ms RP believes that the [Area] Standards Committee had “failed to take into consideration any of the factual background that supports our submissions, the evidence we provided as well as our submissions themselves, in their investigation, decision making process and their ultimate determination”.
- Ms RP’s request that this Office review and inform her of the “exact reasons why the Complaints Division sent the complaint to the [Area] Standards Committee”.
21 At [6.3].
22 At [8.2].
23 At [8.3].
24 RP supporting reasons (1 July 2022).
25 RP supporting reasons (1 July 2022).
Ms RP says this has given her “the impression that the complaints staff of NZLS do not like practitioners who assert themselves and their legal rights/position/dissatisfaction with the process under the Act, and potentially must be submissive for fear of being punished with a negative finding under the LCA and RCCC by the Complaints Division of NZLS”.
Ms RP advises that she has “insight into the procedures, practices and conversations that can take place” within Standards Committees, having been a member of a Standards Committee for seven years.
Ms RP refers to the affidavit provided by Ms TJ and other submissions made by her.
Ms RP also expresses dissatisfaction with the report of the costs assessor (Mr FG).
Ms RP is dissatisfied that the LSO did not express “any concern that [Mr FG’s] investigation and simple report took over four months and could have been even longer”.
Ms RP also takes issue with the content of Mr FG’s report.
Ms DQ
[48] There has been no response from Ms DQ to all correspondence sent from this Office.
Process
[49] This review proceeded by way of an audio-visual applicant-only hearing with Ms RP on 8 August 2024. During the course of the hearing, Ms RP advised that she had sent an electronic copy of her file to the Lawyers Complaints Service (LCS). This had not been provided by the LCS to this Office with its file.
[50] As requested, Ms RP has provided her file direct to me, to ensure that all material before the Committee was considered in the course of this review.
Nature and scope of review
[51] The High Court has described a review by this Office in the following way:26
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.
[52] This review has been conducted in accordance with those comments.
26 Deliu v Connell [2016] NZHC 361, [2016] NZAR 475 at [2].
[53] Acting in accordance with this direction results in an examination of all of the matters raised in the complaint, notwithstanding that they are not referred to by Ms RP.
Review
[54] A number of the matters raised by Ms RP in her application for review as set out in paragraph [47] above can be readily addressed. I do so using the numbering adopted by Ms RP.
- Ms RP does not identify what evidence and submissions has not been taken into consideration by the Committee.
- Ms RP expressed puzzlement as to why the complaint was referred to the [Area] Standards Committee. The allegation of complaints to Committees is an administrative process and does not come within the purview of this Office. I do not understand Ms RP’s concern that Ms CY or a member of her firm was a member of an [City] Standards Committee.
- This Office has no jurisdiction to investigate and address the conduct of staff of the LCS.
- This query repeats the matters raised in paragraph 1, above. All the submissions, evidence and material provided by Ms RP has been considered in this review.
- The Committee was investigating the complaint by Ms DQ against Ms RP. In correspondence, Ms RP has advised that she was in the process of lodging a complaint about Ms CY’s conduct. There was no reason why the Committee should have instigated an own motion investigation against Ms CY.
- The conduct of staff employed by the LCS is not a matter which is subject to review by this Office. Any complaints about staff should be referred to the New Zealand Law Society.
- The complaint which Ms RP threatened to make to the NZLS Board would have been the appropriate step to take. Ms RP was provided with the opportunity to comment on Mr FG’s report.27
27 Email LCS to RP (17 February 2022).
All submissions, evidence and material provided by Ms RP to the LCS and on review has been taken into account.
10.a) Ms RP has acknowledged that Ms CY acted for Mrs WK and MK. Ms RP was instructed by MK to attend to the ‘conveyancing’ in relation to the sale.28
Whether or not Ms RP accepted the invitation to mediate does not need to be justified by her and the fact she did not do so has no bearing on the Committee’s determination, or this review.
28 Email RP to DQ (2 June 2021), 6.47 pm at 7.
29 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, r 9.1(d).
Ms DQ’s complaints – fees
[55] Ms DQ lodged her complaint prior to Ms RP rendering her account. At that stage Ms DQ’s complaints lay with Ms RP’s conduct in the course of her dealings with Mr AQ and Mrs DQ, and her mother’s lawyer, Ms CY. She was particularly concerned about Ms RP’s conduct and requirements relating to the anti-money laundering client due diligence, and the power of attorney. She also objected to Ms RP’s personal conduct towards her and her husband.
[56] The LSO requested further information and documents from Ms DQ on 26 June which included a request for invoices rendered.
[57] Ms RP had rendered her invoice on 21 June 2021 and Ms DQ provided a copy with her response. She made a number of handwritten comments on the copy provided, which included the comment that the total fee was excessive.
[58] The Committee resolved to address only the complaint about Ms RP’s fee but the chronological sequence does require that the conduct issues raised by Ms DQ in her complaint be addressed. In these circumstances, my initial reaction is that the matter should be returned to the Committee with a direction that it address other aspects of Ms DQ’s complaints.
[59] However, it is in the interests of both parties that the process be brought to an end. It is also not helpful to prolong matters, given that Ms DQ has not responded to correspondence and we are unable to make telephone contact with her.
[60] Accordingly, while Ms DQ’s complaints about Ms RP’s conduct are addressed, I have done so within the context of the Committee’s finding of unsatisfactory conduct based on the breach of r 9 of the Rules.
Ms DQ’s complaints – conduct
[61] The matters complained about by Ms DQ in her complaint dated 11 June 2021, are:
- Ms RP was irrational and confrontational in her dealings with Ms DQ and several other parties, including the Real Estate Agent, all of whom ‘had confrontation directed at them’ by Ms RP.
The Enduring Power of Attorney
[62] Ms RP expended a considerable period of time raising issues around execution of documents by MK and Mrs WK and created confusion by her comments.
[63] On 2 June 2021 and the days following, at the time the Agreement for Sale and Purchase was being signed by the vendors, there was a flurry of emails:
2 June 2021
1. Ms CY has advised that the property EPA for WK is not in effect and therefore her son, MK is not, in our view, able to sign the agreement on WK’s behalf. We note that he has already signed the agreement, but this will not be legally binding. Therefore we have asked Ms CY to have WK sign the agreement after you, AQ and BQ have signed it.
We spoke with CY this afternoon and she stated th[at] MK was simply helping your mother and that the EPA is definitely not in effect. Given I have not been a party to the background leading up to this point, I am not sure what the difficulty is and/or what has taken place in terms of conversation. In our view, the EPA is not in effect, then MK cannot sign on behalf of your mother and this would not be a legally binding contract given one vendor has not properly signed.
Ms RP directed that the Agreement would need to be re-signed.
3 June 2021
We are contacting your mother’s lawyer CY for clarity. It appears that your mother is only invoking the property EPA for you to sign the agreement yet will sign all other documents herself. In our view this is inconsistent and is potentially problematic. From an ethical and professional point of view, I am obliged to ascertain the exact grounds and background before we are prepared to act under an EPA.
We are simply requiring full and frank disclosure in writing from WK’s lawyers about the background and copies of the executed documents that have led
to this transaction. CY had provided some information and some documents, and some of the background but we require further disclosure surrounding the invocation of the EPA, when and why.
I did not tell her this. I also sent her a copy of the property EPA which clearly states that it is effective immediately.
I have however received an email from her which I will respond to.
You are entitled at your mother’s request to act for her in this transaction as her attorney. Upon receipt of the copy epa document this should not be questioned.
We have sent to you a copy of the enduring power of attorney. WK has the right to request her attorney to act for her in this transaction. This is not a matter that should be queried or explained.
We are still waiting on CY to specifically clarify to us what part of the transaction MK is acting on for WK under the EPA. We do require this in writing from CY as lawyer acting for WK. We will keep you informed. Thank you.
We have been instructed to act for you all in respect of the sale of the above property. We have finally had it confirmed in writing from WK lawyers that MK is immediately acting as the attorney for WK (under the property EPA) for the sale of WK’s share. Accordingly we will be taking instructions from MK as to WK share and MK will be required to sign all legal documents we issue, including our AML client due diligence (which was issued to him yesterday and is yet to be returned).
4 June 2021
As per previous emails, we are advised that you are acting in the sale of [address] for your mother WK as her attorney under her property EPA. We have been provided with a certified copy of WK’s EPA from her lawyer, CY of [Law firm B], [City] who confirms that you are acting for WK as attorney for the entire sale transaction and that WK/you consent to us acting for her/you in the sale transaction. Accordingly, and given [Law firm A] are responsible for the sale transaction (and not [Law firm B]) we will be requiring you (and not WK or CY) to sign all legal documents necessary to effect the sale transaction for WK’s share. [Law firm B] have confirmed that you and WK are aware of and consent to [Law firm A] acting for you and the other three co-owners [at] the same time. If you disagree with anything, please advise us immediately.
[64] This correspondence was essentially unnecessary. The Power of Attorney was operable whether or not Mrs WK had capacity. MK was able to sign the Agreement and any subsequent documents as attorney for Mrs WK.
[65] Ms RP’s insistence that Mrs WK sign all documents added to the family’s frustrations. Execution of the Agreement and the A&I should have required minimal attendances.
[66] This exchange culminated in Ms RP insisting that Mrs WK attend in person at her office to sign all documents, including the AML documents. It is this meeting which degenerated into the confrontation between Mr AQ and Ms DQ and Ms RP.
Mrs WK
[67] Mrs WK was living in the property with Mr and Ms DQ and Ms RP was aware that there was some issues between them.30 Although she has not directly stated this, I perceive that she was concerned that Mrs WK was being ‘railroaded’ into a situation that she was unhappy with, namely, that she sell the property and move into a residential care facility.
[68] If that was the driving force giving rise to Ms RP’s conduct, the appropriate course of action would be to ensure that Mrs WK had independent advice.
[69] Mrs WK did in fact have her own lawyer, Ms CY. However, it seems that Ms RP developed what could be termed to be ‘suspicions’ about Ms CY, who was proceeding on the basis that Mrs WK had capacity to understand and sign documents relating to the purchase of the residential care licence.
[70] It would seem therefore, that Ms RP assumed responsibility for ‘protecting’ (if that can be considered to be the correct description) Mrs WK from the actions of her family, assisted (as she saw it) by Ms CY.
[71] My comment in this regard is that Ms RP was intervening with the lawyer/client relationship between Mrs WK and Ms CY on the basis of her assumptions. This resulted in the relationship with Mr AQ and Ms DQ deteriorating to the extent that Ms RP may have been wise to suggest that she could not continue to act for them. Instead, that was a step that Mr AQ and Ms DQ took of their own volition.
30 As mentioned in Ms TJ’s file note (2 June 2021).
[72] Ms RP cannot be criticised for whatever steps she considered necessary to ‘protect’ Mrs WK, but unfortunately the manner in which the relationship with Mr AQ and Ms DQ developed was not in the interests of any party.
AML attendances
[73] Although AML and CDD requirements are detailed, all lawyers are required to be familiar with them. The legislation has now been in place since 2009 and completion of the required documentation should be relatively straightforward. The only factor out of the ordinary in this instance was that Ms RP was required to have MK complete the documentation together with the four owners. That should not have presented any difficulties.
[74] I consider that Ms RP’s confrontational and condescending approach to Ms CY, and to a lesser extent MK, to have been unnecessary and the ongoing correspondence to ensure compliance with the requirements to have unnecessarily added to the time expended on the matter.
[75] Mr FG calculated that Ms RP expended 10 hours on AML attendances. One half of this time should have sufficed.
The cost assessor’s report
[76] The Committee resolved to appoint a costs assessor to review Ms RP’s invoice, and appointed Mr FG to this role.
[77] Mr FG’s report included the following observations and comments:
- The sale transaction should have been a routine conveyancing matter.
- Ms RP’s hourly rate of $500 was towards the upper end of what could be regarded as reasonable.
- The time and labour expended by Ms RP was not reasonable.
- Most of the work could have been carried out by a reasonably qualified Legal Executive yet most of the recorded time was carried out by Ms RP.
- The rough calculation of the time spent by Ms RP on AML was 10 hours, which was on its own, excessive.
[78] Mr FG recommended that a fair and reasonable fee would be $1,900 plus GST and disbursements.31
Ms RP’s response
[79] Ms RP’s response included a number of criticisms of Mr FG and his approach to completing the report, none of which amount to an objective consideration of the report. I refer for example to:
- Ms RP’s criticism of the time taken by Mr FG to produce the report, and her allegation that the report was only provided after she had indicated she would be making a complaint about Mr FG.32
- Ms RP’s assertion that Mr FG was biased against her.
- Comments that Mr FG approached his task through the lens of a big firm with more resources available than were available to her.
- Mr FG had not taken into account the contributing conduct of Ms DQ and Ms CY.
[80] Overall, Ms RP rejected Mr FG’s report, and stood by her invoice as rendered.
Discussion
[81] Ms RP rendered her invoice on 21 June 2021 for $4,000 plus GST and expenses, a total of $5,134. The narration to the invoice is unusual in that it includes matters which do not describe the work for which Ms RP was rendering her account.33
[82] The invoice records that the time spent preparing the invoice was also included in the charges.
[83] These observations do not affect the underlying decision as to whether or not the fee charged was fair and reasonable.
31 Mr FG did not consider the amount of $75 shown as an expense for reviewing the agreement was properly chargeable as an expense.
32 Mr FG was not providing regulated services which is a pre-condition for a finding of unsatisfactory conduct as defined in s 12 of the Lawyers and Conveyancers Act 2006.
33 I refer for example to:
[84] At the review hearing, Ms RP took issue with what she viewed as the approach taken by the Standards Committee and myself, as amounting to the Committee and myself telling her, and lawyers, what they could charge for their services.
[85] Ms RP insisted that her clients had accepted her hourly rate ($500) and were therefore bound to accept whatever her fee amounted to, based on the figure arrived at by multiplying the hourly rate by the time spent.
[86] It is expected that Ms RP would be thoroughly familiar with the role of the Committee and this Office when deliberating on a complaint about a lawyer’s fees. Suffice to say, that it is a fundamental role of the Standards Committee and this Office to reach a view as to whether or not a fee charged is fair and reasonable, after taking into account all of the factors included in r 9.1, of which time is but one.
[87] Inherent in a consideration of the time recorded is whether or not the time recorded was appropriate for the matter on which the lawyer was acting to be completed. Ms RP should be aware that the calculation of a fair and reasonable fee is not an arithmetical exercise arrived at by multiplying the time spent by the lawyer’s hourly rate.34
[88] Rule 9.1 of the Conduct and Client Care Rules also provides that the fee charged is to take note of the “fee customarily charged in the market and locality for similar legal services”. In this regard, accommodation costs for a suburban practice are generally much lower than those paid by firms in a city centre and overall costs are lower in proportion to a large city firm, or to practices of a similar size to [Law firm A] Ltd in a more central area.
[89] Standards Committees and this Office are aware of the hourly rates charged by lawyers in general, and I endorse the comment by Mr FG that Ms RP’s hourly rate of
$500 is towards the upper end of the hourly rate for lawyers generally, and particularly for lawyers engaged in a standard conveyancing transaction in a suburban environment.
[90] In addition, notwithstanding that Ms RP did not have the services of a suitably qualified Legal Executive at her disposal, it is not appropriate that she should apply her full hourly rate to all tasks undertaken in the course of this transaction, particularly to routine matters such as complying with AML requirements.
[91] Mr FG’s comments about the risk factors and purposes of the AML legislation are also particularly pertinent in this regard.
34 Gallagher v Dobson [1993] NZHC 1523; [1993] 3 NZLR 611 (HC).
Conclusions
[92] Ms RP will be aware that Standards Committee members are practising lawyers, and at least one is a lay member.35 In addition to their own personal knowledge, complaints about fees often come before Committees and, as a result, information about hourly rates and charges for particular types of information are available to them.
[93] Notwithstanding Ms RP’s criticism of Mr FG, costs assessors by the very nature of the role undertaken by them also have a significant degree of knowledge about fees charged throughout the profession.
[94] The views of the Committee members and costs assessors are not to be discounted.
[95] Mr FG calculated that Ms RP had expended 10 hours on AML matters, and I also consider that much of the time expended in relation to the Enduring Power of Attorney to be unnecessary. Ms RP’s understanding of these matters seems to be deficient.
[96] However, as noted above,36 I decline to pursue these matters further but they do have an impact on the calculation of what constitutes a fair and reasonable fee when applying the other factors set out in r 9.1.37
[97] Taking an overview of all matters, I consider that the fee recommended by Mr FG and adopted by the Committee to be somewhat generous to Ms RP. However, to make an order varying the amount of the fee accepted by the Committee as being fair and reasonable would be a somewhat arbitrary exercise. In the circumstances, I defer to, and accept, the determination of the Committee that Ms RP has charged a fee that is more than fair and reasonable. This constitutes a breach of r 9 of the Rules and unsatisfactory conduct by reason of that breach.
[98] Pursuant to s 211(1)(a) of the Lawyers and Conveyancers Act 2006 the finding of unsatisfactory conduct is confirmed.
[99] The Orders made by the Committee in paragraph [9] of the determination are also confirmed.
35 Lawyers and Conveyancers Act 2006, s 129(2).
36 At [60].
37 For example, r 9.1(c) – results achieved.
Costs
[100] Where a finding of unsatisfactory conduct is made or upheld against a practitioner, it is usual for a costs order to be made against the practitioner in favour of the New Zealand Law Society.38
[101] Accordingly, and pursuant to s 210(3) of the Lawyers and Conveyancers Act, Ms RP is ordered to pay the sum of $1,600 to the New Zealand Law Society.
Enforcement of costs order
[102] Pursuant to s 215 of the Act, I confirm that the order for costs made by me may be enforced in the civil jurisdiction of the District Court.
Publication
[103] Decisions of this Office are routinely published with all identifying details removed. Pursuant to s 206(4) of the Act, I order accordingly.
[104] Ms RP has been critical of Ms CY in her correspondence with the Committee and this Review. I authorise Ms DQ to provide a copy of this decision to Ms CY.
[105] Ms DQ may also provide a copy of this decision, to her mother, MK, and her husband.
[106] Other than the publication authorised in the preceding paragraphs, no publication of this decision may be made to any other person.
DATED this 25TH day of SEPTEMBER 2024
O Vaughan
Legal Complaints Review Officer
38 Refer paragraph [3], LCRO Costs Orders Guidelines.
In accordance with s 213 of the Lawyers and Conveyancers Act 2006 copies of this decision are to be provided to:
Ms RP as the Applicant Ms DQ as the Respondent
[Area] Standards Committee New Zealand Law Society
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