LG v OTAGO Standards Committee
| Jurisdiction | New Zealand |
| Judge | LCRO Vaughan |
| Judgment Date | 29 May 2012 |
| Neutral Citation | [2012] NZLCRO 41 |
| Docket Number | LCRO 275/2011 |
| Court | Legal Complaints Review Officer |
| Date | 29 May 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
[2012] NZLCRO 41
LCRO Vaughan
LCRO 275/2011
LEGAL COMPLAINTS REVIEW OFFICER
Application for review of a determination of the respondent to lay charges against applicant in the Lawyers and Conveyancers Disciplinary Tribunal in respect of a breach of an undertaking — applicant had given undertaking to complete registration of easements, which he had failed to do — respondent determined to lay charges in Tribunal on the grounds that a breach of an undertaking was inherently serious and almost invariably amounted to misconduct — said would have preferred to make a finding of misconduct but that it did not have jurisdiction to make such a finding — whether a Standards Committee had jurisdiction to make a finding of unsatisfactory conduct for breach of an undertaking.
In a determination issued on 25 October 2011, the Otago Standards Committee determined to lay charges against LG before the Lawyers and Conveyancers Disciplinary Tribunal in respect of a breach of undertaking given by LG. LG has applied for a review of that determination. The outcome of this review is that the determination of the Standards Committee will be reversed and the matter returned for reconsideration by the Committee pursuant to section 209 of the Lawyers and Conveyancers Act 2006.
LG acted for Mr and Mrs LH. Registered against their property was an easement in favour of the neighbouring property owned by Mr and Mrs LI, pursuant to which various water supply rights were granted to Mr and Mrs LI.
In 2002 Mr and Mrs LH effected a subdivision of their property and entered into agreements to sell the resultant lots. To enable the sales to proceed free of the easement Mr and Mrs LH entered into an agreement with Mr and Mrs LI whereby it was agreed that Mr and Mrs LI would surrender the existing easement in return for Mr and Mrs LH granting them a new water supply easement over land being retained by them.
The new easement plan could not be prepared until [construction] had been completed on the LH property, and until that plan had been deposited, the replacement easement could not be registered.
Mr and Mrs LH wished to proceed with a sale of one of the lots and to enable this to occur, it was necessary for the existing easement to be surrendered.
To achieve this, LG wrote to Mr and Mrs LI's lawyer on 20 August 2002 and requested that the surrender of the existing easement be made available to him in return for the following undertaking provided by him:–
“We undertake to complete the transfer creating the replacement easements as soon as the surveyor's plan is available and to register it on our client's title without delay.”
On 18 February 2003 LG wrote to Mr and Mrs LI's lawyer, Mr LJ of ADZ, enclosing an easement instrument for approval by him, and if approved, execution by Mr and Mrs LI. He also wrote to a solicitor who had lodged a caveat against the title to the property over which the easement was to be registered, requesting that the caveat be removed to enable registration to take place.
Neither Mr LJ nor the caveator's solicitor responded and the matter was overlooked by both LG and Mr LJ.
It was not until some years later, in 2010, when Mr and Mrs LI wished to effect a subdivision themselves, that it became apparent the replacement easement had not been registered.
LG, Mr LJ, Mr and Mrs LH and Mr and Mrs LI all co-operated to execute the various documents and effect registration. The only additional work necessary in 2010 that would not have been necessary in 2003 was that registration of the easement was effected by electronic means rather than the paper system in place in 2003.
On 31 May 2010, LK of ADZ wrote to LG in the following terms:–
“Earlier this year, it was brought to our clients' attention that their old easements were surrendered but the new easements had not been registered. As a result of this failure we have been obliged to drive the process to have the new easements registered and their future water rights protected. Therefore our clients now require that you pay their remaining costs for this firm undertaking this work on their behalf.
We enclose herewith copies of our account for $1,227.49 and $587.49 and look forward to your immediate payment of the full amount. If you have any questions, please contact the writer.”
LG was at that time on sabbatical leave and LM of the firm responded. She did not accept that it was the responsibility of LG to complete the registration and pointed out that their client had already contributed $1,200 towards Mr and Mrs LI's costs pursuant to a term of the agreement.
Following further correspondence between Mr LJ and LN of AEA (the firm in which LG was a partner), it was acknowledged by LN that LG had not fulfilled his obligations in terms of the undertaking, but suggested that both firms were at fault given that LJ had not followed the matter up with LG and specifically had not responded to LG's letter of 18 February 2003. LN also observed that he thought the quantum of the bills was excessive given the minimal additional work required to effect registration by e-dealing. He also objected to the perceived “threat” to lodge a complaint with the Law Society if the bills were not paid.
In due course, as the matter had not been resolved, Mr and Mrs LI did lodge a complaint with the New Zealand Law Society.
The Standards Committee directed the parties to mediate and under protest the bills were ultimately paid by AEA. However, the Standards Committee considered that as the complaint related to a breach of an undertaking, payment of the accounts did not necessarily result in a determination of the matter.
The Committee proceeded with a hearing on the papers and ultimately issued its determination on 25 October 2011 to lay charges before the Lawyers and Conveyancers Disciplinary Tribunal in respect of the breach of undertaking.
LG lodged an application for review of that determination and submitted the following reasons for his application:
“6. Reasons for application
(a) The Lawyers Standards Committee failed to address the circumstances in which the breach of undertaking took place and the subsequent circumstances placing the conduct at the very lower end of unsatisfactory conduct and in particular;
(i) The breach was through oversight through the nature of the transactions
(ii) The solicitor for the complainant also failed to pick up the oversight
(iii) Once the oversight was discovered the solicitors between them agreed on how it was to be rectified and with cooperation of both Counsel the easements were registered.
(iv) The argument arose over the invoices forwarded by the complainant's solicitor to the complainant with advice that he should take it to [AEA] for payment.
(v) [AEA] was of the view that such an invoice was excessive for what needed to be done and declined to pay it.
(vi) A complaint was made unfortunately whilst [LG] was out of the country and unable to deal with the matter himself.
(vii) In April 2011 the account was paid and apology given to the complainant to the satisfaction of the complainant. [AEA] remain of the view that the account from [ADZ] was excessive.
(viii) The failure to honour the undertaking was at the very lower end of a conveyancing error in the circumstances and does not justify the determination by the Lawyers Standards Committee that a breach of undertaking could ‘constitute misconduct and should be considered by the Disciplinary Tribunal under Section 152(2)(a).’
(ix) There is ample scope within Sections 152 and 156 of the Lawyers and Conveyancers Act 2006 taking into account the circumstances of...
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