Mr and Mrs Gq v Mr to
| Jurisdiction | New Zealand |
| Judgment Date | 12 January 2012 |
| Neutral Citation | [2012] NZLCRO 2 |
| Date | 12 January 2012 |
| Docket Number | LCRO 57/2011 |
| Court | Legal Complaints Review Officer |
Concerningan Application for Review Pursuant to Section 193 of the Lawyers and Conveyancers Act 2006
and
Concerninga Determination of the Auckland Standards Committee 2
[2012] NZLCRO 2
LCRO 57/2011
Application for review of decision of Auckland Standards Committee 2 not to take further action — applicant's mother instructed practitioner to prepare powers of attorney — practitioner was appointed property attorney along with the client's son, who was also welfare attorney — client assessed with dementia — following failed inquiries of applicant, practitioner instituted summary judgment proceedings for repayment of funds advanced to applicant — client died and practitioner became executor of will and therefore plaintiff in the summary judgment proceedings — whether the practitioner had breached professional obligations by not advising client against appointment of her son as attorney — whether practitioner ought to have taken steps when first instructed to establish full details of his client's assets and liabilities — whether the institution and continuation of the summary judgment proceedings incurred unnecessary costs
Mr and Mrs GQ as the Applicants
Mr TO as the Respondent
The Auckland Standards Committee 2
The New Zealand Law Society
This is a review of the Standards Committee decision dated 24 February 2011 in respect of a complaint lodged by Mr and Mrs GQ concerning the conduct of Mr TO. The Standards Committee decision refers to Mr GQ only as the complainant and he is the sole complainant listed in the complaint form, although it was signed by both Mr and Mrs GQ. The review application has been filed by both of them and they have specifically noted that the complaint is by both of them. They have therefore both been included in this decision as the Applicants.
In its decision, the Standards Committee made a number of errors in its recitation of the facts which Mr and Mrs GQ have noted in their application for this review. I have noted those and where I have recorded facts which differ from those as recorded by the Standards Committee, then the record of the facts herein will constitute a modification of the Standards Committee decision in this regard.
The facts giving rise to the complaint by Mr and Mrs GQ are well known to the parties, and recorded in the Standards Committee decision. However, it is necessary to briefly summarise the facts to provide context for this decision.
Mrs HA (Mrs GQ's mother) first consulted Mr TO in January 1997. At that time, she instructed him to prepare a will for her. He received further instructions from her again in December 2003 to effect changes to her will, and a draft of the changes was sent to her at that time.
In August 2004 she requested amendments to that draft which were made, and the will was signed in September 2004.
In January 2006 she again made contact with Mr TO to instruct him to prepare Enduring Powers of Attorney for her. She wished to appoint her son GR as her Personal Care and Welfare Attorney, and GR and Mr TO as her Property Attorneys. GR and Mrs GQ (Mrs) were Mrs HA's only two children.
At the time of making those Powers of Attorney, Mr TO met GR for the first time.
In July 2008, Mr HA advised Mr TO that Mrs HA had been placed in residential care.
Shortly thereafter, Mr and Mrs GQ became aware of the appointment of Mr HA and Mr TO as Attorneys, and on 19 August 2008, Mr GQ sent Mr TO a fax in which he advised that in a telephone conversation with his wife, Mrs HA had advised his wife that she wanted to alter the “present setup”.
The question as to whether Mrs HA had capacity to make decisions became relevant, both as to whether she had the capacity to alter the existing documentation and as to whether it was necessary for the Property Attorneys to assume management of her affairs.
In April 2008 a Supports Needs Assessment of Mrs HA had been carried out by the Auckland District Health Board, and it was noted that Mrs HA suffered from dementia. The report does not state the degree of dementia suffered by Mrs HA and otherwise noted Mrs HA's desire to stay in her own apartment for as long as possible.
Following the communication from Mr GQ, Mr TO sought a report from Mrs HA's family doctor (Dr X) who had provided medical care for Mrs HA over the previous ten years. In his report dated 24 August 2008, Dr X recorded his view that Mrs HA was incapable of managing her own affairs. His opinion was provided on the basis of a specific Mental State Test conducted by him in April 2008.
On the basis of Dr X's report, Mr TO formed the view that he needed to ascertain in more detail the nature of Mrs HA's financial arrangements with Mr GQ which she had mentioned at the times that she had consulted with Mr TO with regard to her wills. As a result, correspondence passed between Mr TO and Mr GQ in which Mr TO asked for further details of the financial arrangement on several occasions.
Mr GQ resisted providing this information, for the reason that he did not want this information being provided to Mrs GQ's brother.
On 4 December 2008, Mr TO made formal demand of Mr and Mrs GQ for repayment of the funds. A further demand was made on 13 January 2009, and having received no reply, Summary Judgement proceedings were issued on 5 February 2009.
In October 2008 Mrs HA had visited Mr HB, a solicitor with the firm of ACS, with her friend Mrs H, with a view to revoke the Powers of Attorney. Mr HB has deposed that this followed an earlier visit by Mr and Mrs GQ. However, when Mr HB received the assessment made by Dr X he did not action the revocation. The GQ's attempted to have Mrs HA assessed again by a Dr Y, but Mr HA would not consent to that.
On 19 February 2009, Ms TN, who had been instructed by ACS, wrote to Mr TO advising that she had been instructed by Mr and Mrs GQ to make application to the Family Court under the Protection of Personal and Property Rights Act 1988 for revocation of the Powers of Attorney and at the same time requesting the support of Mr HA to have Mrs HA assessed by Dr Y. That assessment was carried out ultimately in February 2009 and resulted in confirmation that Mrs HA did not have sufficient mental capacity to either revoke the existing Powers of Attorney or to make new appointments.
As a result of Summary Judgement proceedings having been filed with the District Court, Mr GQ produced a document dated 7 October 2008 signed by Mrs HA which recorded the basis on which funds had been provided to Mr and Mrs GQ by Mrs HA. That document contained an acknowledgement that the funds which Mrs HA had made available to Mr and Mrs GQ were to be treated as a loan and were “to be settled as part of the wind up of her estate”. By this it was meant that the loan would be off set against Mrs GQ's share of her mother's estate.
Mr GQ had previously advised Mr TO that the arrangement had been documented “at a time when [GS] thought [A] was still competent, and prior to [them] having any information that [A] was not competent”. GS was a solicitor who had been previously instructed by Mrs HA who was referred to by her christian name of A.
That document was used by Mr and Mrs GQ to defend the proceedings instituted in the District Court by Mr TO and Mr HA as Attorneys to recover Mrs HA's funds from Mr and Mrs GQ.
Discovery in the District Court proceedings was delayed due to Mr GQ's ill health, and before discovery was effected, Mrs HA died on 7 November 2008. Following issue of Probate of Mrs HA's last will which appointed Mr TO as executor, he became substituted as the plaintiff in the District Court proceedings against Mr and Mrs GQ. At the time of the complaint, these proceedings remained on foot, primarily for the purpose of ascertaining the balance due to the estate.
The Family Court proceedings were ultimately discontinued on the basis that all costs were borne by Mrs HA's estate.
Mrs GQ has indicated that she reserves her position to apply to have Mr TO removed as executor of Mrs HA's will, and in addition, has alleged that Mr HA has not accounted for funds in Mrs HA's personal bank account. It is anticipated that Mr TO may apply to the High Court for directions as to how to proceed with administration of the estate given that Mrs GQ has indicated that she will not accept that administration of the estate has been properly completed without these funds being fully accounted for.
Against this background, Mr and Mrs GQ complained to the Complaints Service of the New Zealand Law Society on 1 October 2010.
The core of their complaint is identified as being the fact that the costs of administering Mrs HA's affairs and her estate are seriously out of balance with the value of the estate. The value of the Estate has been estimated by Mr GQ as being $635,312.00 against which estimated costs of $110,190.00 have been incurred.
The complaint concerning costs involves a criticism of the conduct of Mr TO in the following ways:
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1) That Mr TO failed to obtain a credible assessment of Mrs HA's mental capacity to ascertain whether she was capable of revoking the Powers of Attorney or not. Mr and Mrs GQ argue that if a credible assessment had been obtained, they would not have needed to bring the Family Court proceedings.
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(2) That Mr TO had failed to undertake a proper assessment of Mrs HA's financial position at the time the wills and the Powers of Attorney were made. They assert that this was a result of the secrecy surrounding completion of the documents. They also assert that having received these instructions, Mr TO was obliged to carry out an estate planning process which would have resulted in Mrs HA confirming...
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