[2012] NZLCRO 1

LCRO 61/2011

Concerning an application for review pursuant to section193 of the Lawyers and Conveyancers Act 2006


Concerning a determination of the Waikato Bay of Plenty Standards Committee 2


Application for review of determination of Standards Committee not to take further action on complaint of inappropriate client contact, and its finding that it did not have jurisdiction to investigate certain bills of cost — complaint laid under r11.2(b) Lawyers and Conveyancers Act 2006 (Lawyers: Conduct and Client Care) Rules 2008 (“CCC Rules”) (inappropriate client contact — mental and emotional state of client) — practitioner contacted applicant with regard to an insurance policy of his son, who died intestate, and offered to help with administration of estate — three months later applicant instructed respondent to handle administration — delay while confirmation sought as to whether son had fathered a child who would take under administration rules — applicant claimed respondent contacted him at a time when he was upset over his son's death, had charged excessive fees and had mishandled the administration application — whether practitioner had contacted client at a time when client's emotional state was such that he could not exercise reasonable judgment in engaging a lawyer; whether there was jurisdiction to investigate the bills of cost; and whether the fees charged were excessive.

The names and identifying details of the parties in this decision have been changed.

The issues were: whether TQ had contacted GO at a time when his emotional state was such that he could not exercise reasonable judgment in engaging a lawyer; whether there was jurisdiction to investigate the bills of cost; and whether the fees charged were excessive.

Held:There was no evidence that TQ had knowledge that GO's physical, emotional or mental state was such that he was not in a position to exercise reasonable judgment when engaging a lawyer. However, it was reasonable to assume that GO and his wife would have been upset over the death of their son at the time TQ made the call. There was therefore a possibility that TQ could have breached r11.2(b) CCC Rules, but she was not instructed until some three months following the call. GO then attended at her office to discuss what was required to administer the estate. There were no adverse consequences resulting from that potential breach and so the Committee's determination was appropriate.

The Standards Committee had wrongly considered that each of the three bills sent to GO should be treated as separate items. The consequence of doing this was that it had ruled that it could not consider the first two bills in the absence of special circumstances, as required by reg 29. It was not clear whether this was because of the time limit in reg 29(a) (bill of costs rendered more thatn two years prior to the date of the complaint) or it did not consider the accounts were grossly excessive. It declined to consider the third bill as it was for an amount that was less than the $2000 limit imposed by regulation 29.

However where there were a series of accounts all relating to the same matter, the bills were to be treated as a single account and were therefore able to be reviewed ( Maidenhead v Margate, LCRO). The total of the bills exceeded the $2000 restriction and this constituted special circumstances in terms of reg 29, allowing investigation of the three bills of costs.

There was no reason to consider that the bills were anything other than fair and reasonable. The amount invoiced coincided with the time records for the period. The work had been undertaken by various authors at appropriate levels. TQ's charge out was modest at $250 per hour.

Further, the work was properly undertaken. Any delays had been occasioned by GO telling TQ not to progress the letters of administration until the child's status had been determined. Once that had been cleared up, GO had in fact instructed TQ to continue with the application. It was apparent that tensions arose because of TQ's concerns that GO had somehow managed to have his son's employer pay him a substantial death benefit when in fact that payment properly belonged to the child.

Decision of the Standards Committee confirmed.


Mr GO's son GP died in July 2007. At the time of his death GP was living in Australia.


His estate comprised substantial assets in New Zealand and Australia and included death benefits, insurance policies and bank accounts.


GP died apparently without a Will, although Mr GO formed the view that there may have been a Will or a reference to a Will in a bundle of correspondence that was held for GP by a person in Australia.


One of the assets of his estate was a ACR insurance policy. It seems that a ACR employee made contact with Ms TQ about the requirement for Letters of Administration to enable the policy to be redeemed. Mr GO says that Ms TQ telephoned him to offer her assistance, and while Ms GO cannot recall this phone call, she accepts that she may have been asked by the ACR employee to make contact with Mr GO to discuss the requirement for Letters of Administration.


On 30 October 2007, Mr GO and his wife met Ms TQ at her office to discuss what was required to progress administration of the estate. Ms TQ advises that she made a preliminary record of GP's assets and liabilities and also noted the possibility that GP was the father of a child.


The discussion between Ms TQ and the GOs included advice as to as to what Letters of Administration were and the requirement for Letters of Administration to be obtained to enable assets to be realised.


Whether or not GP had a child affected the distribution of his estate if no Will existed. Under the Administration Act 1969, any child would inherit all of GP's estate, whereas if there were no child, his parents would inherit his estate.


It was therefore important to ascertain whether or not there was a child and to be certain that GP had died intestate. Mr GO's instructions to Ms TQ were to ascertain whether there was a paternity order in existence, to communicate with ACR to ascertain their requirements, and to establish what was required to comply with section 6A of the Status of Children Act 1969 to enable Mr GO to obtain Letters of Administration.


Ms TQ reported to Mr GO by letter dated 11 February 2008 and advised Mr GO of the information she had obtained from the Department of Internal Affairs and confirmed that Letters of Administration could be applied for in New Zealand. She also advised Mr GO of the need to make full enquiries concerning the existence of the child and to ensure that the matter was clarified prior to any distributions of the Estate.


On Instructions Ms TQ proceeded to draft the Letters of Administration but Mr GO wanted to make sure that there was no Will in existence, and to verify whether or not there was in fact a child.


In November 2008 Mr TQ rang Ms GO to advise that he had been visited by the child's mother, and referred again to the missing bundle of correspondence in Australia, which Mr GO considered may have referred to a Will.


Mr and Mrs GO met with Ms TQ on 24 November 2008 at which time Mr GO provided a copy of a paternity order that had been made in relation to the child. Mr GO subsequently advised Ms TQ that he had ascertained that the order had been made on the basis of DNA testing which confirmed that GP was the father.


Ms TQ then proceeded to amend the draft Letters of Administration to take this information into account and in addition to comply with the new High Court rules insofar as they affected the Application.


The drafts were sent to Mr and Mrs GO on 23 January 2009 but Mr GO provided no further instructions. On 25 February 2009 Ms TQ sent a further account for $1,139.31 and this account remains unpaid. Previous accounts rendered in February and May 2008 had been paid.


In December 2009, a meeting took place between Mr and Mrs GO, Ms TQ, and her partner Mr TP. Following that meeting Mr TP wrote to Mr and Mrs GO with a summary of the options available to them. Whichever option they adopted, payment of Ms TQ last account was required.


In June 2010, Ms TQ received a letter from a solicitor who Mr GO had consulted expressing Mr GO's concerns that despite having received accounts totalling $3,713.06, administration of the Estate was no closer to being finalised. Ms TQ responded to that letter but no further correspondence was received from the solicitor.


Mr GO lodged his complaint with the Complaints Service of the New Zealand Law Society on 10 August 2010.

The Complaint and the Standards Committee Determination

In his complaint, Mr GO expresses concerns with regard to the three invoices received from Ms TQ. He advises that he was in a vulnerable state of mind when he was contacted by Ms TQ not long after GP's death and accepted her offer of assistance.


He states that he believes now that it was not in his best interests to have instructed Ms TQ and considers that it would have...

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