Canterbury Westland Standards Committee No. 1 v Kenneth Selwyn Grave
 NZLCDT 8
NEW ZEALAND LAWYERS AND CONVEYANCERS DISCIPLINARY TRIBUNAL
Judge D F Clarkson Mr M Gough Mr A Lamont Mr S Maling Mr S Walker
IN THE MATTER of the Lawyers and Conveyancers Act 2006
Mr J Shaw for the Standards Committee
Mr G Gallaway and Ms S Lester for the Practitioner
Penalty and name suppression decision following an admission of negligence of such a degree as to bring the profession into disrepute pursuant to s241(c) Lawyers and Conveyancers Act 2006-the practitioner had acted for a couple in the purchase of a house and the property was registered in the husband's name alone-the husband's will contained various legacies-when he died, the practitioner formed the view that the title was mistakenly registered in the husband's name and prepared a Deed of Correction-the practitioner did not inform the legatees of their legacies at this stage and continued to act while in a position of potential and actual conflict-whether the breach of the Client Care and Conduct Rules was “wilful or reckless” such as to constitute misconduct-whether a penalty of less than suspension was sufficient-whether name suppression should be granted because practitioners in smaller centres risked greater reputational damage than those in large centres-whether the matter should be referred to the Registrar-General of Land as a matter which might impact on Landonline registration capacity.
The issues were: whether G's breach was “wilful or reckless” such as to constitute misconduct; whether a penalty of less than suspension was sufficient to mark the seriousness of conduct; whether name suppression should be granted because a practitioner in a smaller centre risked greater reputational damage than a lawyer in a larger metropolitan area; whether the matter should be referred to the Registrar-General of Land as a matter which might impact on G's Landonline registration capacity.
Held: The Standards Committee agreed that there was no question of dishonest intent. Apart from these transactions, the practitioner was a reputable and competent lawyer who acted with integrity.
G accepted “with the benefit of hindsight and expert advice and scrutiny” that he should have recognised the material risk of conflict and turned his mind to the possibility of his error in the original title registration. He had narrowed his thinking to the consequences of that technical issue, and did not consider the overall implications for him continuing to act for PP or indeed for PP's own conflicts of interest.
Once the property was transferred into PPs name, G considered he had remedied the problem and unfortunately the wider ramifications were not perceived. While this was a serious omission, G's actions were neither reckless nor wilful such as to invoke the more serious finding of misconduct.
The correct finding was “negligence or incompetence of such a degree as to bring the profession into disrepute”.
This was the first disciplinary matter faced by G in his 17 years of practice as a solicitor. Further mitigating factors were G's acknowledgment of his failure, by admitting the charge of negligence and that the entire process had been for G a salutary one. G posed very low risk of future transgressions. G was held in high esteem by his colleagues, particularly as a practitioner of integrity.
The letter to X was troubling. However, the dicta in required the imposition the least restrictive outcome necessary to reflect the seriousness of the conduct. The penalty also had to reflect the purposes of the LCA, namely the protection of the public and of the reputation of the profession, so that it could continue to be trusted by the public. G did not pose any risk to the public given that he was by all accounts a careful and diligent practitioner.
A sentence of suspension was not necessary to demonstrate to the public that this matter had been taken seriously by the legal profession and its disciplinary institutions. This had been a lengthy process, which had been extremely stressful to G and he would no doubt be absolutely rigorous about conflicts of interest in the future.
The fine proposed by the Standards Committee of $5,000 was not be sufficiently high to recognise the seriousness of the repeated failure to recognise the conflicts of interest. Conflicts of interest were a very significant aspect of practice. In terms of the denunciation and deterrence principles of penalty, a fine of $10,000 was more appropriate.
The discretion to grant name suppression was a broad one (s240 LCA). The practitioner had to meet a threshold of displacing the presumption of openness, by establishing that his interests in privacy outweighed the public interest in knowing, not only the details of the conduct but also the name of the practitioner against whom the finding had been made.
The notion that a practitioner in a smaller centre risked greater reputational damage, was somewhat analogous to that put forward in , where it was submitted that a practitioner with a higher public profile ought to be given a greater consideration when name suppression was considered. That notion was firmly rejected by the Supreme Court.
In a smaller centre, other practitioners were potentially “under a shadow” should the practitioner who had been disciplined not be named. Further, there was no serious risk of reputational damage to G's firm, having regard to the contents of this decision which largely endorsed G's integrity and capability, other than in respect of these transactions. While publication of a practitioner's name was not intended to be punitive, realistically it had a salutary and at times punitive effect. Personal considerations (such as the health of a family member, where insufficient information was provided) could not outweigh the public interest in an open process without strong reason.
Application for permanent name suppression declined.
No comment could be made as to whether the matter ought to be referred to the Registrar-General of Land as the matter was not fully argued. The particulars concerning the Landonline alleged infringement were withdrawn in the final iteration of the charges. This was a matter for further consideration by the Committee.
Fine in the sum of $10,000 pursuant to s 242(1)(i).
Mr Grave faced one charge, pleaded with three alternative levels of conduct – misconduct, negligence and unsatisfactory conduct. After negotiations with the Standards Committee, Mr Grave agreed to admit the charge at the level of negligence and this, with an agreed set of facts was put to the Tribunal, along with suggested penalties.
The Tribunal accepted the proposed amended particulars but reserved the right to determine for itself the level of culpability and penalty, after hearing the evidence and submissions.
The other outstanding matter for the hearing was an application for final name suppression, which was opposed by the Standards Committee.
Following the hearing, we indicated we were prepared to accept culpability at the “negligence” level. We also told Mr Grave we would not suspend him from practice. This decision addresses the remaining matters and provides our reasons for the two indications already given.
The charges and agreed particulars are attached as Appendix I to this decision.
In summary, Mr Grave acted for Mr and Mrs P in the purchase of their home and the making of their wills. Mr and Mrs P paid for the home with a cheque drawn on their joint account, shortly before returning to the United Kingdom to settle their affairs before moving to New Zealand permanently. However, the agreement for sale and purchase was in Mr P's name as agent, and the transfer of the title to the property was ultimately registered in Mr P's sole name alone.
Mrs P suffered from dementia and although they had a son living locally, he was busy with work and a young family, and Mr and Mrs P were frequently assisted in their day to day needs by a friend they had made on arrival in New Zealand, Ms X.
In his 2008 will Mr P left certain legacies, including $50,000 to Ms X and the residue in the estate to his wife. In 2010 Mr P added to the legacy for Ms X a bequest of “my motor vehicle and the sum of $50,000 to my friend Ms X …”. Mr P predeceased his wife in February 2011. Mr P's son PP was appointed executor of the estate and queried with Mr Grave the registration of the title in his father's sole name.
After some consideration and after consultation with one of his senior partners, Mr Grave reached the view the registration of the title had been an error and he determined that he should regard the late Mr P as having held the title as trustee for both he and his wife. Mr Grave determined that he ought to correct the title but before this process was completed Mrs P also died.
Again PP was executor of his late mother's will but also the sole residuary beneficiary.
It is apparent that by this point there were a number of conflicts of interest. These are most clearly set out in the evidence of Mr Darlow, who provided expert evidence on behalf of the practitioner:...
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