GK v ZR

• Jurisdiction: New Zealand
• Judge: LCRO Thresher
• Judgment Date: 13 December 2016
• Neutral Citation: [2016] NZLCRO 69
• Docket Number: LCRO 192/2013
• Court: Legal Complaints Review Officer
• Date: 13 December 2016

CONCERNING an application for review pursuant to section 193 of the Lawyers and Conveyancers Act 2006

and

CONCERNING a determination of the [City] Standards Committee [X]

Between

GK

Applicant

and

ZR

Respondent

[2016] NZLCRO 69

Court:

LCRO Thresher

LCRO 192/2013

Legal Complaints Review Officer

Penalty decision — a review determined that there had been unsatisfactory conduct on the practitioner's part pursuant to s12 Lawyers and Conveyancers 2006 (LCA) in that as a barrister, he held money on the complainant's behalf and failed to comply with obligations in relation to legal aid — the practitioner was a listed legal aid provider — he received $15,000 from the complainant before an application for legal aid was made — aid was then granted and the practitioner invoiced the Legal Services Agency (LSA) — the LSA paid the practitioner's fees — the practitioner quantified the fee the complainant would pay him privately, although he did not issue an invoice — the practitioner then took the agreed fee by deducting it from the money he was holding on the complainant's behalf — he had the complainant's authority to do so, and he refunded the balance as they had agreed — the practitioner said he received the $15,000 before the LCA came into effect on 1 August 2008 and therefore the money was absolutely and incontestably his — whether the money held by the practitioner could be said to be a retainer — whether the failure to seek approval from the LSA in advance was unsatisfactory conduct — whether the practitioner's name should be published.

DECISION

Introduction

[1] A decision was issued in respect of this review on 18 August 2016 setting out the relevant facts and conclusions arising from Mr GK's complaint. The review was determined on the basis that there had been unsatisfactory conduct on Mr ZR's part pursuant to s 12 of the Lawyers and Conveyancers Act 2006 (the Act) as follows:

• (a) Holding money on behalf of Mr GK as a barrister sole; holding money received in advance of providing legal services and an invoice, and not accounting for money received in contravention of rules 9.3 and 14.2(e) of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, and failing to comply with the Lawyers and Conveyancers Act (Trust Account) Regulations 2008, regs 9 and 10, are unsatisfactory conduct pursuant to ss 12(a), (b) and (c) of the Act.

• (b) Failures to comply with obligations in relation to legal aid, including not advising Mr GK about his obligations and taking a top up payment, are unsatisfactory conduct pursuant to ss 12(a), (b) and (c) of the Act.

[2] The parties were provided with an opportunity to tender submissions with respect to:

• (a) The imposition of a censure and/or fine payable to New Zealand Law Society (NZLS).

• (b) Factors affecting whether a direction should be made pursuant to s 206(4) of the Act that this decision, including Mr ZR's name, should be published; and

• (c) Whether Mr ZR should be ordered to contribute to the costs of this review, pursuant to s 210 of the Act.

[3] The Committee imposed orders under s 156(1) of the Act, and decided not to publish Mr ZR's name. The orders imposed were a reprimand, an order that Mr ZR refund $3,000 to Mr GK, and pay costs of $750 to the NZLS. The reprimand remains on his record, and Mr ZR says he has otherwise complied with those orders. Those orders can be confirmed, reversed or modified on review.1

[4] Section 206(4) also enables a Legal Complaints Review Officer (LCRO) to direct publication of decisions as she or he considers necessary or desirable in the public interest. Unlike publication by a Committee pursuant to s 142(2) and regulation 30 of the Lawyers and Conveyancers Act (Lawyers: Complaints Service and Standards Committees) Regulations 2008, it is not necessary for the practitioner to have first been censured. A direction that the decision including Mr ZR's name be published has been carefully considered, with no opposition from Mr GK, and the assistance of submissions and authorities provided by counsel for Mr ZR.

Submissions for Mr ZR

[5] Counsel contends that Mr ZR was not given the opportunity to be heard in relation to the fact that he took and held money in advance and failed to account for it, or that he took an unauthorised top up payment. It is submitted that the $15,000 was a retainer, which included no element of fees, and that Mr ZR could take a retainer in advance of legal aid being granted without then having to seek authorisation from the Legal Services Agency (LSA) to retain the money.

[6] Counsel contends that Mr ZR received the $15,000 before the Act came into effect on 1 August 2008. That being the case, the money was absolutely and incontestably his. Counsel submits the $15,000 cannot subsequently be recategorised

“to impress [Mr ZR's] funds somehow with an obligation to account for it and/or to disclose it to the Legal Services Agency”.2McGuire v Sheridon3 and Sissons v Canterbury–Westland Standards Committee 24 are distinguished, while the effect of Weal v Wilson5 is discussed. Counsel submits that Mr ZR's conduct is at the “lowest end of the scale”. On that basis, counsel submits a fine or censure is not appropriate in addition to what the Committee ordered.

[7] Counsel also opposes publication of Mr ZR's name on several bases including that the Committee's decision has already been published in a manner that does not identify Mr ZR, so that re-publication would be double jeopardy. It is submitted that publication is counter to the presumption of privacy of the review process and that the conduct occurred a long time ago. Counsel submits there is no precedent value in publishing Mr ZR's name in the context of a one-off error on his part in unusual circumstances at a time the legislation changed, reoffending is said to be highly unlikely, and that, on the basis of counsel's analysis, “offending is at the lower end of the scale”.

[8] Counsel submits Mr ZR has “totally been successful” on review, has paid $750 costs to NZLS arising from the Committee process, and should not be required to pay anything further.6

Analysis

[9] Receiving money, charging a fee and taking a payment are not one and the same.

[10] It is accepted that Mr ZR received $15,000 before 1 August 2008.

[11] Counsel submits the $15,000 cannot subsequently be recategorised “to impress [Mr ZR's] funds somehow with an obligation to account for it and/or to disclose it to the Legal Services Agency”.

[12] By paying back most of the $15,000 that he received, Mr ZR acknowledged implicitly that money was not absolutely and incontestably his. That undermines the position on which counsel's primary submission relies.

[13] Although counsel's submission that the $15,000 was a retainer has some attraction, the fact that Mr ZR paid back all but the $3,000 he took for his private fees is contrary to the definition of a retainer on which counsel relies.

[14] Mr ZR's conduct is a strong indication that he did not consider he had taken a $15,000 retainer, as counsel would define that term, or that the $15,000 was absolutely and incontestably his.

[15] Medical Practitioners Disciplinary Weal that Mr ZR could have charged a fee for privately funded work done before aid was granted. That is not what he did. 1 August 2008 was long past when Mr ZR charged Mr GK a fee.

[16] Mr ZR received the $15,000 before an application for legal aid was made. Aid was granted. Mr ZR invoiced LSA. LSA paid Mr ZR's fees. Mr ZR quantified the fee Mr GK would pay him privately, although he did not issue an invoice. Mr ZR then took the agreed fee by deducting it from the money he was holding on Mr GK's behalf. He had Mr GK's authority to do so, and he refunded the balance as they had agreed.

[17] Mr ZR was a listed...