JY v QD

• Jurisdiction: New Zealand
• Judge: LCRO Bouchier
• Judgment Date: 10 September 2012
• Neutral Citation: [2012] NZLCRO 78
• Docket Number: LCRO 111/2011
• Court: Legal Complaints Review Officer
• Date: 10 September 2012

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

And

Concerning a determination of the Otago Standards Committee

Between

Jy

Applicant

and

Qd

Respondent

[2012] NZLCRO 78

LCRO Bouchier

LCRO 111/2011

Legal Complaints Review Officer

Application for review of Standards Committee determination that delay in making payments of bequests to beneficiary amounted to unsatisfactory conduct — beneficiary entitled to funds under her father's will — estate administered by practitioner along with a co-trustee — considerable delay in payment of funds and delay in responding to enquiries from beneficiary — part of conduct complained of occurred pre August 2008 — whether the conduct complained of (pre August 2008 conduct) fell short of the standards under the provisions of Law Practitioners Act 1982 — whether the post 1 August 2008 conduct of the practitioner was in breach of the provisions of Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008.

DECISION

1 Mr JY seeks a review of the Otago Standards Committee determination that certain delays in making payments of bequests to Ms QD from an estate (of which he was a trustee and solicitor) were unduly and amounted to unsatisfactory conduct.

2 While the existence of the delay is not disputed, Mr JY states that the delays were, substantially, not due to his failure and that in any event he took steps to ameliorate any loss to Ms QD due to the delays.

3 Under the terms of the will of the testator Ms QD was entitled to:

• a. $1,000 immediately (the bequest);

• b. $5,000 as the beneficiary under an education trust (the education trust funds); and

• c. $10,000 when she attained age 30 which would occur in 2013 (the general trust funds).

4 Similar bequests were made to Ms QD's brother, QC. The trustees were Mr JY and QB (Ms QD's Aunt).

On the Papers Review

5 This review has been undertaken on the papers pursuant to section 206 of the Lawyers and Conveyancers Act 2006. The parties have consented to this process, which allows a Legal Complaints Review Officer (LCRO) to conduct the review on the basis of all the information available if the LCRO considers that the review can be adequately determined in the absence of the parties.

Chronology

6 An outline of the course of events in this matter may assist:

31 October 1995	Testator dies.
23 July 1996	Funds transferred to AEW trust account.
21 May 1998	Payment by QB to QD.
18 August 2000	Payment to AEU of: • QD bequest ($1,000) • QD education trust funds ($5,000) • QD general trust funds ($10,000) • QD interest ($1,500) • QC education trust funds ($2,800)
28 August 2001	Payment to AEU of: • QC interest ($410.33)
2002	First request of QD for trustees to use power of advancement to pay education trust funds for Open Polytechnic fees.
2003	Date at which QD turned 20, the bequest vested and ought to have been paid.
7 October 2003	AEU wrongly pays QD education trust funds to her brother.
Early 2005	Ms QD retains firm of AEV to assist in obtaining general trust funds.
20 April 2005	AEW seeks QD funds from AEU.
20 May 2005	Copy of will provided to QD.
20 May 2005	Payment of QD bequest and QD general trust funds to QD ($11,497.26).
2006 – 2008	Numerous email communications between Ms QD and Mr JY in respect of trust fund entitlements.
10 April 2009	Complaint made to the New Zealand Law Society.
Mid 2009	Funds obtained from AEU.
14 September 2009	Education trust funds paid to QD ($3122.71) with “top up” from Mr JY ($877.29).

7 The Applicant and Respondent settled their differences in respect of the payments before the Standards Committee determined this matter. On 13 July 2009 Ms QD indicated (by email to Mr JY) that the payment of the funds, including an additional top up sum, would be “an acceptable settlement” and that she would “withdraw the complaint immediately”. This was notified to the Standards Committee by Ms QD by an email of 14 July.

8 Mr QA of the Law Society Inspectorate had commented in a letter of 17 September 2009 to the Committee that the transactions involved were “worthy of further consideration”. On the basis of this report, the Standards Committee resolved to continue to consider the complaint.

9 The root cause of this complaint is the long delay in payment of funds to Ms QD from her father's estate. This is exacerbated by the fact that the funds lost a significant part of their value when invested with AEU over a period when most investment funds of this type declined in value.

10 It should be noted that Ms QD was not entitled to the funds (other than the $1,000 bequest) except in terms of the trusts created by the will. These required, in respect of the education trust, that the funds be used for educational purposes, and that in respect of the general trust, that Ms QD achieve the age of 30. There was, however, a power of the trustees to pay out this latter fund early under a common power of advancement found in the terms of the will.

11 Mr JY's primary argument on review is that the delays were not caused by any dilatoriness on his part, but rather were a result on the part of AEU who wrongly paid the funds to QC.

12 Two other arguments are raised on review. First, that the omission to pay the $1,000 bequest was an error of an unnamed solicitor in the firm who was handling the file and not of Mr JY. Second that his co-trustee refused to make payments under the power of advancement to Ms QD.

13 Mr JY has accepted that there was an oversight in respect of the payment of the $1,000 legacy and has apologised for the delay in resolving these matters.

Pre August 2008 Conduct

14 A large part of the conduct in question occurred prior to 1 August 2008. As such the standards applicable to that part of the complaint are those found in the Law Practitioners Act 1982 and the Rules of Professional Conduct for Barristers and...