AP v ZK

 
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[2011] NZLCRO 8

LCRO 66/2010

Concerning

An application for review pursuant to Section 193 of the Lawyers and Conveyancers Act 2006

And

Concerning

a determination of the Wellington Standards Committee 2

BETWEEN
AP

of Wellington

Applicant
and
ZK

of Wellington

Respondent
Counsel:

AP of Wellington Appellant

ZK of Wellington Respondent

The Wellington Standards Committee 2

The New Zealand Law Society

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

Application for review of a Wellington Standards Committee decision — practitioner had acted in the estates of the applicant's parents — both parties were executor trustees of the estates — applicant complained about the fees charged by practitioner — Standards Committee concludedthe fees were fair and reasonable — however legal fees were deducted without applicants consent — contravened an express directive — practitioner guilty of unsatisfactory conduct — whether the Standards Committee was justified in holding fees were appropriate while at the same time making an adverse finding as to practitioners conduct.

Held: At issue was whether the Committee was justified in holding the practitioners fees were appropriate, while at the same time making an adverse finding as to his conduct.

At the time of the original complaint, the Law Practitioners Act 1982 was in force and there was a higher threshold for disciplinary findings against lawyers than under the Lawyers and Conveyancers Act 2006. As AP complained that matters raised under the original complaints (lack of an investment strategy etc) were ongoing, this difference had to be borne in mind.

The practitioner had decided he could not continue to continue to act as a co-trustee with AP, given the complaints. He felt it would not be appropriate to embark on an investment strategy, which should be a decision made by the new trustee. It was necessary that both trustees agree an investment strategy and in the circumstances, consensus was unlikely. He had been actively looking for a replacement and had kept AP advised of progress. There was no basis for an adverse finding in this respect.

AP had also complained about the placement of the funds on deposit, which he considered an investment path decided solely by the practitioner. There was some dispute as to whether this amounted to an investment, but in the light of the practitioners confirmation that these funds had been placed on an on-call deposit, it was clear that the fund was never out of reach for another investment proposal. It was a prudent course of action. This did not amount to wrongful conduct.

The Committee arranged for an independent assessment of the fees in question. The Assessor examined the practitioners files and noted that the bill was fully itemised. As the fees had been considered by both an Assessor and the Committee there was no fault with the Committee finding the fees were fair and reasonable for the work done.

The Committee was entitled to make a separate adverse finding regarding the practitioners conduct. The conduct issue (deduction of fees) was separate to the quantum issue (amount of fees). There was no aspect of the quantum of fees that impacted on the action of deducting the fee without consent.

Standards Committee decision confirmed.

DECISION
Application for review
1

An application was sought by Mr AP (the Applicant) in respect of a decision made by the Wellington Standards Committee 2 in relation to his complaints against Mr ZK (the Practitioner). The decision is dated 25 March 2010. The Practitioner had acted in the estates of the Applicant's parents. He was one of the two Executor Trustees of their estates; the other being the Applicant. The Standards Committee noted that most of the complaints raised by the Applicant had been considered before and found to be unjustified. (This was a reference to previous complaints and an earlier decision dated 12 April 2008). The Committee noted that the Applicant accepted that the current complaints covered only the period between 1 August and 24 October 2008 when the complaint was made.

2

The Committee's decision further noted that a meeting between the parties in November 2008 had resolved many of the matters in issue, but as the Applicant nevertheless wished to pursue his complaints (which included complaints about fees charged by the Practitioner), the Committee thereafter resolved that one of two bills of costs should be subjected to a costs assessment. The other bill fell below the threshold for consideration and the Committee could find no special circumstances to justify further consideration of it.

3

The Standards Committee's file showed that the Committee had arranged for a Costs Assessor to evaluate the second bill. The Costs Assessor concluded that the Practitioner's fees were fair and reasonable for the work done. His report had been forwarded to both the Applicant and the Practitioner, with an invitation to them to comment, but neither had provided any comment. After some consideration of the matter, the Standards Committee adopted the Costs Assessor's report.

4

The Costs Assessor had also, however, brought to the attention of the Standards Committee that the Practitioner had deducted his legal fees in contradiction to the express directive of his Co-Executor, the Applicant, to not do so without his prior consent. In the light of these observations by the Costs Assessor, the Standard Committee considered the appropriateness of this action in the light of a prior decision by this office, A v Z, LCRO 40/2009, wherein LCRO, Mr Webb, had concluded that consent of a client was required before fees could be deducted. The Standards Committee had noted that the Applicant had given specific instructions to the Practitioner to not deduct fees without his prior approval, a directive that the Practitioner had ignored on the basis that his authority to deduct fees came from the wills of the Applicant's parents, (presumably the charging clauses), and the Trustee Act 1956. This led to the Standards Committee finding that the Practitioner was guilty of unsatisfactory conduct.

Review application
5

The Applicant sought a review of the Standards Committee decision essentially because in the light of an adverse finding against the Practitioner, he was unable to comprehend why the Practitioner's fees were nevertheless upheld to be appropriate. He also contended that the Practitioner had charged for his time in dealing with him (the Applicant) with regard to his complaint regarding deduction of fees, which caused him to question the Costs Assessor?s assessment that their fees were appropriate. In the Applicant?s view, fees were charged by the Practitioner for dealing with the complaints and he sought to have these fees restored to the estate, together with interest and costs. He calculated this to be in the vicinity of $6,532.00 (plus GST). He also contended that the hours he had spent in pursuing his complaint against the Practitioner should also be paid for, this comprising around 120 hours, but as there is no recognised basis for self represented persons to claim the value of their time in pursuing a complaint, this will not be considered further.

6

In addition the Applicant considered that there were elements in his earlier complaints that were relevant to the period of time covered by this review. He sought to resurrect these so as to ensure...

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