MR OP v MR PQ
| Jurisdiction | New Zealand |
| Judgment Date | 16 August 2012 |
| Neutral Citation | [2012] NZLCRO 71 |
| Date | 16 August 2012 |
| Docket Number | LCRO 32/2012 |
| Court | Legal Complaints Review Officer |
Concerning An Application For Review Pursuant To Section 193 Of The Lawyers And Conveyancers Act 2006
and
Concerning A Determination Of The Nelson Standards Committee
[2012] NZLCRO 71
LCRO 32/2012
Review of Standards Committee decision not to uphold complaint against lawyer — complainant failed to pay legal fees — complainant unsuccessful in an appeal against Disputes Tribunal award in favour of lawyer who subsequently bankrupted the complainant — complainant argued that the lawyer'conduct was heavy handed, unreasonable and unjustifiable in light of small amount owing (approximately &2000) — whether lawyer had breached r2.3 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (use of legal processes for proper purposes).
In accordance with s 213 of the Lawyers and Conveyancers Act 2006 copies of this decision are to be provided to:
Mr OP as the Applicant
Mr PQ as the Respondent
The Nelson Standards Committee The New Zealand Law Society
Mr OP (the Applicant) was unsuccessful in his appeal of a decision by the Disputes Tribunal that had ordered him to pay the balance of the Practitioner' fees.
The Practitioner (or his firm) subsequently pursued bankruptcy proceedings against him and eventually the Applicant was made bankrupt.
The Applicant'complaint arose out of the above. In his view the bankruptcy proceeding was bullying and unjustifiable given the small amount involved (which was less than &2,000). The Applicant acknowledges that the Practitioner may well have been within his legal right to take such action, but in terms of the Practitioner being a lawyer, and within the Code of Ethics imposed on lawyers, he considers that the Practitioner'conduct was heavy-handed, unreasonable and unjustifiable.
The Standards Committee did not uphold the complaint, and noted that prior complaints by the Applicant about the quantum of fees and quality of legal services had not been upheld. The Committee accepted that the firm had exercised its available legal remedies to try and enforce payment of the balance of moneys owing, together with additional costs arising from the enforcement action. The Standards Committee could see no basis for criticism of the Practitioner or his firm for doing so.
The Applicant was aggrieved that his complaint had been considered by a local Standards Committee which he doubted would give him a fair hearing. He thought there had not been a thorough investigation, and was unhappy that he had not been contacted which would have created an opportunity for him to have clarified a number of details.
He contended that the Standards Committee had confused two separate debts, i.e. the original debt (which he said he had paid off), and the second debt that was, and is, disputed he alleged.
He also wondered whether the Standards Committee'dismissal of his prior complaint had left the Committee with a negative view of his credibility.
Ultimately, the Applicant is of the view that being bankrupted by a lawyer for unpaid fee reflects poorly on the profession, and is not in the public interest. He argued that in comparison with the treatment he had received from other lawyers in that firm, that the Practitioner had dealt very harshly with him and had pursued the debt in a bullying manner, finally bankrupting him. He claimed that the Committee had not given serious considerations to the points that he had made.
He further claimed that he had been paying the debt, and had always been prepared to discuss a solution with the Practitioner or his firm.
The factors that the Applicant sought to have considered in the course of the review included the following:
These are not all of the factors, but are the main matters that he discussed at the review hearing.
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• That the amount was always in dispute.
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• That the firm'acceptance of his periodic payments established a payment arrangement by agreement.
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• That the firm had other (less harsh) ways of attempting to satisfy the claim (e.g., mediation, Disputes Tribunal, collection agency).
A review hearing was held, attended only by the Applicant. The Practitioner was given the opportunity to attend but was not required to do so.
The review offered a full opportunity for all matters to be discussed.
Dealing first with the allegation that two different amounts were involved and that the second debt was disputed, the Standards Committee cannot be criticised for disagreeing with this submission. The additional amounts (which were added to the original debt) related to standards costs associated with enforcement actions taken by the Practitioner, and were identifiable as such in the demands made to the Applicant. These were not separate debits that were independent of the original debt.
Dealing next with the conduct complaints, in light of the Applicant'submissions, both in his written review application and as discussed at the review hearing, I considered the complaint not only in terms of section 12 of the Lawyers and Conveyancers Act 2006 but also, in part, pursuant to Rule 2.3 of the Conduct and Client Care Rules, for the reason that a number of his submissions questioned whether the Practitioner had pursued his bankruptcy for a proper purpose.
Rule 2.3 states:
A lawyer must use legal processes only for proper purposes. A lawyer must not use, or knowingly assist in using, the law or legal processes for the purpose of causing unnecessary embarrassment, distress, or inconvenience to another person'reputation, interests, or occupation.
The evidence showed that the Applicant had initially been paying the Practitioner'fees in small regular amounts. This was not reflective of any specific agreed arrangement, but for the duration that these payments were being made, no action was taken by the firm, and it is reasonable to conclude that this created an expectation on the part of the Applicant that this was acceptable to the firm.
At some point the Applicant decided he had paid enough and declined to make any further payments. The firm'response was to inform the Applicant that it required payment of the amount in full in order to avoid legal process. Subsequently the Practitioner took the matter to the Disputes Tribunal which upheld the Practitioner'fees. The Applicant appealed that decision but was unsuccessful.
The Applicant submitted that there were other, less harsh, means that the Practitioner could have used to pursue the debt, mentioning the Disputes Tribunal as an example. In this regard I note that the Practitioner had in fact taken the matter to the Disputes Tribunal and been successful. That the Applicant appealed that decision is evidence of his dissatisfaction with that outcome.
The Applicant'unsuccessful appeal added further costs to the original debt. The Practitioner and the Applicant reached an agreement about how the debt would be paid (which included costs agreed at a sum less than the applicable scale). The Judge recorded this agreement in a Consent Order dated 4 November 2010 which stated that the amount to be paid by the Applicant was fixed at &2,955.63, and that this sum would be paid by instalments as agreed between the parties, with payment to be completed by 31 January 2011.
Although he later claimed (in a letter to the High Court) he had been pressured into this agreement, there is no evidence that the Applicant did not freely enter this agreement. He did not meet the deadline and at the end of January there remained an amount owing of
&1,945.63.
On 21 March the firm'credit controller wrote to the Applicant to say that a bankruptcy...
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