Auckland Standards Committee No. 3 v Grant Shand

• Jurisdiction: New Zealand
• Judge: D F Clarkson,Mr K Raureti,Ms S Sage,Mr T Simmonds,Mr W Smith
• Judgment Date: 11 November 2013
• Neutral Citation: [2013] NZLCDT 56
• Docket Number: LCDT 013/13
• Court: Lawyers and Conveyancers’ Disciplinary Tribunal
• Date: 11 November 2013

In The Matter of the Lawyers and Conveyancers Act 2006

BETWEEN

Auckland Standards Committee No. 3

Applicant

and

Grant Shand

Of Auckland, Barrister

[2013] NZLCDT 56

CHAIR

Judge D F Clarkson

MEMBERS OF TRIBUNAL

Mr K Raureti

Ms S Sage

Mr T Simmonds

Mr W Smith

LCDT 013/13

NEW ZEALAND LAWYERS AND CONVEYANCERS DISCIPLINARY TRIBUNAL

Penalty decision following admission of one charge under s241(c) Lawyers and Conveyancers Act 2006 (negligence or incompetence in professional capacity) — practitioner was negotiating a settlement in proceedings on behalf of the complainant — complainant had rejected a settlement proposal where by some of the amount would be paid in instalments which would cease if he died — practitioner departed from client's instructions and arranged settlement so that client would get the amount he sought but practitioner's fees would be taken from the instalments so that practitioner assumed the risk of them ceasing — practitioner did not tell the complainant about the arrangement but believed he was acting in complainant's best interests — whether a 3 month suspension was required in the public interest.

APPEARANCES

Mr M Hodge for the Auckland Standards Committee No. 3

Mr C Morris for the Practitioner

REASONS FOR DECISION OF NEW ZEALAND LAWYERS AND CONVEYANCERS DISCIPLINARY TRIBUNAL

Introduction

1 The practitioner admitted one charge of negligence or incompetence in his professional capacity “… of such a degree … as to tend to bring the profession into disrepute (s 241(c))”.

2 We considered submissions on penalty made on behalf of the Standards Committee and on behalf of the practitioner on 11 November. At the conclusion of the hearing after some deliberation, the Tribunal made orders and reserved reasons for the making of those orders. The decision which follows forms those reasons.

Background

3 The full background to this matter is contained in an agreed summary of facts provided to the Tribunal by the parties. The salient features are as follows:

4 Mr Shand and a colleague had been conducting proceedings on behalf of the complainant. In the days leading up to the hearing Mr Shand had been negotiating with opposing counsel and his colleague had been taking instructions from the complainant. The complainant had indicated for some period that while he would seek to recover $150,000 from the proceedings, if he could receive $100,000 net of legal fees he would be prepared to accept that on advice. In the late afternoon of the Friday preceding the Monday hearing, opposing counsel came back to Mr Shand with an offer of $120,000 in cash and a balance of $30,000 to be paid by instalments of $1,000 per month. However, there was a clause that should the complainant die before the repayments were completed, they would cease.

5 Mr Shand's colleague telephoned the complainant who initially accepted the offer but 15 minutes later telephoned him back to indicate he wished to reject it. The complainant's problem was with the instalments clause and the cessation on death aspect which, having discussed with his family he was unhappy about.

6 This was reported back to Mr Shand by his colleague. Mr Shand reassured him that he would sort it out and not to worry further. Mr Shand or his colleague had earlier indicated that although they had time recorded fees in the order of $78,000, they would charge the complainant $50,000 (so that a $150,000 settlement would give him the $100,000 clear which he sought).

7 Mr Shand then decided that he could make the settlement proposal work by assuming the risk of the instalment payments on the part of the firm and ensuring that the complainant received his $100,000 clear, from the $120,000 initial payment. In other words the firm would take its fee of the balance of $30,000 from the instalment payments. Mr Shand persuaded himself that since this met the client's earlier indicated wishes of receiving $100,000 nett of fees, he was acting within his instructions. However he did not clear that arrangement with the complainant and indeed did not telephone and tell him about what he had arranged until the client contacted him on the Sunday preceding the scheduled hearing.

8 The complainant was somewhat surprised to discover that the matter had resolved, given that he had thought he had rejected the last offer and of course he had not had the arrangement that Mr Shand had intended to put in place to make the settlement work explained to him.

Penalty Submissions for Standards Committee

9 It was submitted that departing from a client's clear instructions in respect of settlement of civil proceedings was a serious breach of the fiduciary relationship between lawyer and client. This was so even if the lawyer considered that he was acting in his client's best interests.

10 It was submitted that a...