JY v QD

 
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[2012] NZLCRO 78

Legal Complaints Review Officer

LCRO Bouchier

LCRO 111/2011

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

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.

The issues were: whether the conduct complained of (pre August 2008 conduct) fell short of the standards under the provisions of Law Practitioners Act 1982 (“LPA”); and 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 (“CCC Rules”).

Held: A large part of the conduct in question occurred prior to 1 August 2008 and so, the standards applicable to that part of the complaint were under the provisions of the LPA and the Rules of Professional Conduct for Barristers and Solicitors. The threshold for disciplinary intervention under the LPA was relatively high. Misconduct generally amounted to conduct that was reprehensible or negligence was of such degree or frequency that reflected the fitness to practice. In the present case, the pre 1 August 2008 conduct involved an error in failing to pay a small bequest and considerable delays in dealing with QD in respect of the trust funds. The conduct did not fall short of the standards in force at the time.

The post 1 August 2008 conduct had to be viewed against the background of the delays and errors that had already occurred. This involved ongoing email communications since 2006. QD did not receive responses to her emails in 2008. It was only on 14 September 2009, after the complaint was lodged that payment of the remaining funds were made.

While some of the earlier delay could be attributed to administrative error or the co-trustee's approach to the bequests, it did not provide a reasonable explanation of the significant delay of in responding to the enquiries. By August 2006, when it became apparent that the funds were wrongly paid to the account of her brother, QD continually contacted the practitioner but there was no response from him for a long time. It was not until April 2008 that the practitioner indicated that he needed to confer with his co-trustee on the matter. This still had not occurred by mid July 2008 (in the pre 1 August 2008 period). Against that background, the conduct of the practitioner was unsatisfactory.

Although QD was not a client of the practitioner, she was still entitled to be dealt with respect and courtesy under r12 CCC Rules (a lawyer when acting in a professional capacity had to conduct dealings with integrity, respect, and courtesy). While a lawyer administering an estate was not required to respond immediately to all enquiries and requests of beneficiaries, in the present case, the matter had been ongoing for some time. Errors were made and it was incumbent on the practitioner to get to the bottom of the matter. It was unacceptable for the practitioner to simply ignore QD for several years. Progress in the matter was only made due to the fact that a complaint was made to the Society. It should not require a complaint to be made to the Society against a lawyer before he or she properly attended to an enquiry which was reasonable.

The conduct was in breach of the obligation of courtesy found in r12 CCC Rules and was also unacceptable under s12(b) Lawyers and Conveyancers Act 2006 (unsatisfactory conduct defined in relation to lawyers and incorporated law firms).

Standards Committee decision confirmed.

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.

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