Alloa v Ullapool
 NZLCRO 22
Concerning An application for review pursuant to Section 193 of the Lawyers and Conveyancers Act 2006
Concerning a determination of the Wellington Standards Committee 2
Mr Alloa as the Applicant
Mr Ullapool as the Respondent
The Wellington Standards Committee 2
The New Zealand Law Society
Mr Alloa (the Applicant) is the sole director and shareholder of a company that owns a residential rental property in Wellington. R, a lawyer, became the owner of the property next door to the Applicant's property, and they became involved in a protracted dispute concerning a deck that the Applicant intended to build on his rental property. The respondent is Mr Ullapool (the Practitioner) who represented R at a later stage when R decided to issue proceedings against his vendor in which the Applicant was involved.
The Applicant had initially established with the local authority that he did not need a resource consent for his proposed deck, and his building consent was approved. This process occurred, or was at least well advanced before R purchased the property next door. R, acting for himself, filed proceedings in the Environment Court objecting on various grounds to the deck. The specifics are not relevant. The Environment Court decision seems to have found to some degree in favour of R, but the overall effect was that the Applicant was still able to build the deck, with some modifications. R appealed to the High Court, and the Applicant and the local council cross-appealed. The High Court dismissed both appeals. The end result was that the Applicant could proceed to build his deck.
The Practitioner's involvement arose in relation to a dispute between R and the vendor of the property he had purchased and the real estate agent. R had alleged a breach of warranty under the agreement, misrepresentation and a breach of the Fair Trading Act 1986 ( FTA) in relation to what he was or was not told by the vendor and the agent about the deck on the Applicant's property. R issued proceedings for damages. The Practitioner acted for him in relation to these proceedings (the FTA proceedings). I note the Practitioner did not act in the Environment Court or High Court proceedings.
The Practitioner wrote at least two letters to the Applicant, the first dated 13 October 2008 and the second dated 21 October 2008. In the first letter the Practitioner told the Applicant that, in relation to the FTA proceedings, because the vendor maintained he had made certain representations to her, he would be required to give evidence, and could be summonsed for that purpose.
The second letter (21 October 2008) became the subject of the Applicant's complaint to the New Zealand Law Society. In this letter the Practitioner informed the Applicant that he could face potential liability as a party for the losses claimed by R. The Practitioner enclosed a draft amended statement of claim showing the Applicant and his company named as defendants and suggested he may want to take legal advice on this. The Practitioner continued, and with reference to the deck (paragraph 3 of the 21 October letter) he stated his client had seen the latest plans, which appeared to show a larger structure and noted it would be for the Council to determine whether the design was a permitted activity. In paragraph 4 the Practitioner stated, on a ‘without prejudice’ basis, that his clients were prepared to agree to the original deck design with certain provisos. He then states: “not only will this save you considerable expense, it would seem to remove the likelihood that you will be joined as a defendant to this litigation.”
The Applicant made a complaint to the New Zealand Law Society about the Practitioner, alleging that the letter of 21 October 2008 was a breach of rule 2.3 of the Lawyers' Conduct and Client Care Rules. This rule provides that a lawyer must use legal processes only for proper purposes.
I should at this point note that the Applicant had also made complaints to the New Zealand Law Society about R and the law firm that employs him. The Standards Committee determined in relation to both these complaints to take no further action. The reason in relation to R was that, because he was acting for himself he was not providing regulated services under the Lawyers and Conveyancers Act 2006 (the Act) and accordingly the Standards Committee did not have jurisdiction to determine the complaint. The reason in relation to the law firm was that the Act applies to lawyers and incorporated law firms only, and that as the firm was neither (it is an unincorporated firm), the Standards Committee had no jurisdiction to consider a complaint against the firm. The Legal Complaints Review Officer, upon applications for review, found that the Standards Committee's determination in each case was correct.
The Standards Committee, in relation to the complaint against the Practitioner, also determined that it should take no further action. The reason given for this was the Committee was of the view that the Practitioner had not acted improperly. It stated:
“ His conduct in relation to the witness summons and the likelihood of joinder were not threats; the letters were a correct statement of the law and an indication to (the Applicant) of the consequences of any refusal to provide evidence. The validity of any application for joinder is a matter for a court to rule on, not a Standards Committee.”
The Applicant's application for review of that decision in essence alleges that the Standards Committee has misconstrued his complaint. I acknowledge, from a review of the correspondence relating to this matter, that the Applicant has consistently said that his complaint was not about being required to give evidence, nor was it about the prospect of being joined to the FTA proceedings (although he has maintained, based on his own legal advice, that he had no liability and there was no proper basis to claim he did have). His complaint against the Practitioner is spelt out clearly in the application for review, and for the avoidance of any doubt about the matter I set out the relevant part:
“…the Standards Committee's interpretation of the (Practitioner's) letter dated 21 October 2008 seems to have stopped at paragraph two and have missed the fourth paragraph of the letter whichintroduces an irrelevant point (the size of my lawful deck) to the current District Court proceedings which is a breach of warranty against the vendor and estate agent and invites me to reduce it and then I will be removed from the litigation. My lawful entitlement of the deck was already determined by the Environment Court in May 2008 under the Resource Management Act and[the Practitioner]was not involved in it in any form and that the two matters are completely unrelated to each other.” (Emphasis in the original).
He alleged that he was effectively threatened with being joined to the FTA proceedings unless he agreed to reduce the size of a deck he was lawfully able to build.
I am satisfied, notwithstanding the finding of no threat by the Standards Committee, that any fair reading of paragraph four of the letter of 21 October 2008 has the meaning that the Applicant attributes to it. The issue that I must determine is whether that is a breach of rule 2.3. This rule provides that:
A lawyer must use legal processes only for proper purposes. A lawyer must not use, or knowingly assist in using, the law or legal processes for the purpose of causing unnecessary embarrassment, distress, or inconvenience to another person's reputation, interests, or occupation.
The Practitioner's response to the complaint focused on his assertion that it was perfectly proper for him to alert the Applicant to the witness summons and joinder issues, and in relation to joinder, it was open to his client to bring a claim against the Applicant pursuant to sections 9 and 43 FTA and Rule 76(3) of the District Court Rules. The Standards Committee, as noted above, said it was up to a Court to decide the joinder issue, not the Committee. I find the Standards Committee has misconceived the issue. The issue to determine is the motive behind the letter and not strictly the question of the tenability of the potential joinder. The Practitioner is right in saying that the mere fact of proceedings being struck out does not of itself determine whether a proper purpose existed for the proceedings in the first place; proceedings are struck out all the time. However, the issue of the tenability of the potential FTA claim against the Applicant may be a factor to weigh in deciding whether rule 2.3 has been breached.
The Standards Committee thus, appears to have determined the matter solely on the basis that the Practitioner had not acted improperly because it found the letter in relation to...
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