LG v OTAGO Standards Committee


[2012] NZLCRO 41



LCRO Vaughan

LCRO 275/2011

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


Concerning a determination of the Otago Standards Committee

Otago Standards Committee

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.

The issue was whether a Standards Committee had jurisdiction to make a finding of unsatisfactory conduct for breach of an undertaking.

Held: There was nothing in the LCA or the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 which prevented a Standards Committee from determining that a breach of an undertaking constituted unsatisfactory conduct. A Standards Committee had to give consideration to whether to lay charges or not. However, that did not mean that every breach of an undertaking had to result in charges being laid.

The LCA provided a Standards Committee with a significant range of powers and penalties which it could exercise where there had been a breach of an undertaking, rather than laying charges before the Tribunal. A Standards Committee must exercise its discretion as to the seriousness of the breach and whether the breach was serious enough to be considered misconduct as defined in s7 LCA. If the Standards Committee decided it was misconduct, then it had to refer the matter to the Tribunal, being careful not to draw the conclusion that the conduct constituted misconduct. Only the Tribunal could make such a finding under s152(2) LCA (power of Standards Committee to determine complaint or matter - a determination that there had been unsatisfactory conduct). If the Standards Committee formed the view that the conduct was not misconduct, then unless there were other reasons for referring the matter to the Tribunal, it could make a finding of unsatisfactory conduct.

There was no statement that would lead to a conclusion that a breach of an undertaking must automatically result in charges being laid before the Tribunal. It would be incorrect to postulate that there was such a presumption. A Standards Committee had to consider all of the facts of the case and properly exercise its discretion to determine whether to lay charges or not.

The Standards Committee had proceeded under a mistaken impression that it could not make a finding of unsatisfactory conduct where the complaint related to a breach of an undertaking. The misapprehension as to its jurisdiction had resulted in it not exercising its discretion in a proper and informed manner. Pursuant to s211(1)(a) LCA (powers exercisable on review) the decision of the Standards Committee was reversed. Pursuant to s209 LCA (power to direct reconsideration) the Standards Committee was directed to reconsider its determination.


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...

To continue reading