MR OT v MR PI

 
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[2012] NZLCRO 72

LCRO 101/2011

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

And

CONCERNING a determination of Auckland Standards Committee 4

BETWEEN
MR OT
Applicant
and
MR PI
Respondent
Counsel:

Mr OT for Appellant

Mr PI for Respondent

Auckland Standards Committee 4

The New Zealand Law Society

Review of Standards Committee determination that no further action be taken on a complaint that the practitioner had misled the Standards Committee in his responses to an earlier complaint — applicant had previously laid a complaint that the respondent practitioner had issued an opinion which the applicant asserted was inaccurate as to facts — opinion stated to bebased on certain factual assumptions — whether practitioner had a duty to verify facts before issuing an opinion — whether there was evidence practitioner had misled the Standards Committee in his responses to the earlier complaint.

The issues were: whether the practitioner had a duty to verify the facts before issuing an opinion; and whether the practitioner had misled the Committee.

Held: The applicant believed incorrectly that the review hearing was an appeal against the earlier LCRO decision. The review was not to be considered in any way a form of appeal from the decision in a previous review. The decision of the previous LCRO stood and if the applicant wished to challenge that decision he needed to take legal advice as to the means of doing so.

All of the material provided by the applicant sought to discredit the practitioner'opinion. The applicant asserted that a practitioner had an obligation to ensure all the facts presented to him or her by a party seeking an opinion, should be verified by that practitioner. The applicant'submissions amounted to a restatement of his allegation in the first complaint.

There were various options available to an aggrieved person in challenging any such document depending on the context and use to which it would be put. The applicant would need to seek advice in that regard.

The opinion provided by the practitioner was specifically and explicitly expressed as being based on certain assumptions and if those assumptions were not correct then the opinion ceased to have validity. This did not mean that the practitioner had a professional obligation to seek to verify all of the factual data provided to him. This was not his brief and the client would be somewhat aggrieved if the practitioner took it upon himself to conduct an independent investigation into the correctness of the facts provided to him. At the very least, the practitioner could not expect to be paid to carry out investigations outside of his brief.

The practitioner was careful to state the basis upon which the opinion was provided and that in providing the opinion he acted in good faith and in reliance on material that had been provided to him. There had been no professional breach.

There was nothing in the material provided to show that the practitioner had misled the Committee by stating that the opinion had been withdrawn. The opinion had been withdrawn as the practitioner'bill had not been paid. Once the fees were paid the withdrawal no longer applied.

Standards Committee determination confirmed.

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

DECISION

Introduction
1

Mr OT complained to the New Zealand Law Society in April 2009 about an opinion provided by Mr PI to an English law firm (BAJ). BAJ had sought the opinion from Mr PI in connection with proceedings which Mr OT had issued against Mr OU (his half brother for whom BAJ acted) for the return of funds held by Mr OU in a Swiss bank account.

2

The opinion was provided to support Mr OU'defence to the claim by Mr OT that he should not release the funds which he had received following liquidation of a company (SPL) until he was sure that the funds were not “tainted” with any tax fraud.

3

In his opinion, Mr PI concluded that Mr OT, a director and shareholder of the company, may be liable for tax offences committed by the company. His opinion was specifically expressed to be based on certain assumptions of fact as advised to him by BAJ.

4

Mr OT asserts that these facts were not correct and he contended that Mr PI had a duty to verify the facts before issuing his opinion. In particular, he contended that Mr PI had an obligation to verify the shareholding in the company as the material supplied to him by BAJ indicated some discrepancies in that regard.

5

The Standards Committee resolved to take no further action in respect of Mr OT'complaint on the grounds that Mr PI had acted in good faith and provided an opinion based on information presented to him. It also noted that at the time of the complaint Mr PI had withdrawn his opinion.

6

Mr OT sought a review of that decision by this Office. 1 The LCRO agreed with the Standards Committee that there had not been any wrong doing by Mr PI.

The new complaint
7

On 20 February 2011, Mr OT wrote to the New Zealand Law Society Complaints Service seeking that the Standards Committee review its September 2009 determination on the grounds that “new evidence [had become available] that BAK [Mr PI] did not verify/test BAJ brief” and had “ignored [the] true facts as well as misrepresenting to the [Standards Committee] that the legal opinion had been “unqualifiedly withdrawn”.

8

The Standards Committee issued its determination on 13 April 2011 and recorded its findings in the following way: -

[17] The Committee noted this complaint had been dealt with previously and had also been the subject of a review to the LCRO. The issue for consideration for the Committee was whether there was any evidence to support the allegation that Mr PI had misled the Standards Committee or whether the advice provided relating to the withdrawal of the opinion was inaccurate in any way.

[18] In relation to the allegation that Mr PI had misled the Committee, the Committee could find no evidence in the material provided by Mr OT to support this allegation. In the Committee'view, BAK'opinion was based on documents provide [ sic] by the English solicitors who instructed the firm. The “true facts” sent through by Mr OT did not, in the Committee'view, alter the fact that BAK provided their opinion based on information provided to them and that they were entitled to assume that information as correct. The Committee further noted that the alleged breach of Rule 8.04 had been dealt with by the LCRO and that it was unnecessary to canvas this issue of complaint again.

[19] In relation to the second issue of complaint, being the allegation that Mr PI had misled the Committee by stating that the legal opinion had been withdrawn, the Committee noted that at the time of Mr PI'response to the initial complaint,

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