MR VN v MR AG

 
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[2013] NZLCRO 20

LCRO 224/2011

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

and

Concerning a determination of the Canterbury-Westland Standards Committee

BETWEEN
MR VN
Applicant
and
MR AG
Respondent

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

Review of Standards Committee decision declining to uphold applicant's complaints of negligence, unprofessional behaviour and obstructing client's interest in failing to protect and advance that interest — applicant had sold land to local Council which later rezoned it and sold it at a profit — applicant wished to challenge sale transaction — alleged there had been a conflict of interest on the part of the solicitor who had acted for him on that sale as the same solicitor also acted for an individual (a property developer) who was one of the Councillors, and who had, on behalf of the Council, fronted the negotiations and sale involving the applicant's land — whether there was any professional failure on the part of the solicitor.

Held: The complaint concerned conduct that occurred in 2005/06. A complaint about conduct that occurred prior to 1 August 2008 could only be considered by the Committee if it could have led to disciplinary proceedings against the lawyer under the (former) Law Practitioners Act 1982. If the Committee concluded that the conduct did reach that threshold it could then turn to consider whether a disciplinary finding of unsatisfactory conduct should be made against the practitioner under s12 Lawyers and Conveyancers Act (2006) (Unsatisfactory conduct defined). The starting question was whether the practitioner breached the professional standards that applied at the time of the conduct and if so, whether it was of a degree of seriousness that could have led to disciplinary proceedings against him under the Law Practitioners Act.

It was clear that on receiving instructions, the practitioner undertook a thorough examination of historical matters relating to the transactions. The practitioner provided the applicant with a full report of his findings and analysis covering concerns about conflict of interest, wrong valuations, zoning issues, pressure and independent advice issues, relocation costs, and a final heading which referred to the prior lawyer and who had also undertaken a review of a number of these matters for the applicant.

The practitioner informed the applicant that he was of the view that the original lawyers did not have a conflict of interest as there was evidence to show that the issue of a ‘potential’ for a conflict was raised by the Councillor himself early at the commencement of the sale negotiations and explained to the applicant what was required for an actionable conflict of interest. The practitioner finally concluded that there was no fault in the transaction.

In terms of conflict of interest, the practitioner explained what was required for an actionable conflict of interest and noted the reasons for discounting any prospect of an action against the lawyers who acted in the sale transaction. Although the applicant relied heavily on a statement in a report written by a Resource Management Consultant who stated that there was a conflict of interest, the report writer was not a lawyer and the report did not consider or explore the basis for legally actionable conflict. Further, the matter was thoroughly canvassed in the HC which rejected the applicant's assertion as to the existence of a conflict of interest, as did the Court of Appeal.

The concept of actionable conflict of interest had been explained to the applicant but it was not clear whether he had not yet understood, or whether he was simply unwilling to let go of his grievance. Materially, there was nothing wrong with the practitioner's analysis or advice, and there could be no criticism of the Standards Committee for having found no wrong doing.

In advising the applicant on the rezoning, the practitioner relied on the evidence he had gleaned from the file of the original lawyer to the transaction. A review of that material supported the advice the practitioner gave to the applicant. There was no basis for arguing that he had been pressured into selling. The practitioner also responded to the applicant's concerns that the change of zoning may have adversely affected the agreement for sale and purchase. The practitioner noted that there was evidence of the applicant having had full knowledge as to the zoning at the time of the agreement for sale and purchase. The correspondence available to the practitioner upon was supplied to the Standards Committee, there was no basis for criticism of the practitioner in the advice he gave.

The applicant assumed that by going to the practitioner he would succeed in his objective of remaining in occupation of the land. While it was the function of lawyers to assist their clients to the best of their ability, ultimately a lawyer had the duty to provide sound legal advice to his or her client, and if that advice was correct then there was no basis for any professional criticism of it. A lawyer could not guarantee to achieve the outcome desired by the client.

There was no professional failure on the part of the practitioner. Decision of the Standards Committee was confirmed.

DECISION
Background
1

Mr VN (the Applicant) sought a review of a Standards Committee decision declining to uphold his complaints against law practitioner AG (the Practitioner). Mr AG was the third lawyer that the Applicant had complained about in relation to the same transaction. His prior complaints (against his original lawyer and the second lawyer who acted for him) were also not upheld by the New Zealand Law Society, decisions that were confirmed on review by this Office.

2

The background to the complaint is that the Applicant sold his rural property to the local District Council; the sale and purchase Agreement allowed the Applicant to remain on the land for a year for a peppercorn rental. On the expiry of that year the Applicant entered into a commercial rental arrangement with the Council with the lease being extended for a three year period. When he was asked to leave the property at the expiry of the lease, he objected, having meanwhile discovered that the Council had rezoned the land and sold part of it for a substantial profit.

3

He approached the Practitioner at the time that the Council sought to have him removed. One of the several matters he wanted the Practitioner to explore was whether there was a basis for challenging the original sale of the land to the Council. One of the grounds he wished to pursue was whether there had been a conflict of interest on the part of the solicitors who had acted for him on that sale. He alleged that there was a conflict on the basis that the same lawyer also acted for an individual (a property developer) who was one of the Councillors, and who had, on behalf of the Council, fronted the negotiations and sale involving the Applicant's land. The Applicant's view was that the lawyer had failed to protect his interests. He also alleged irregularities with the Council's rezoning processes.

4

Before approaching the Practitioner, the Applicant had explored these same issues with another lawyer. That lawyer had analysed the information, and obtained a report from a Resource Management Consultant about the Applicant's concerns. The lawyer advised the Applicant that there was no conflict of interest, and (relying on the Consultant's Report) also advised that there had been no irregularities in the rezoning process.

5

Dissatisfied with this, the Applicant then approached the Practitioner. By this time the Applicant was under the threat of forcible removal from the land. The Practitioner was asked to consider whether there was a basis for challenging the entire sale transaction. After consideration of all information (which included a copy of the original sale file) the Practitioner could find no basis for challenging the sale transaction, thus essentially confirming earlier advice that had been given to the Applicant by the previous lawyer.

6

After the Applicant terminated his relationship with the Practitioner, he filed a proceeding in the High Court where he was self represented. He was unsuccessful in that action, and a subsequent appeal also failed. The Applicant feels much aggrieved by what has happened. He has filed complaints against all lawyers involved at various times. This review decision deals with the complaints against the Practitioner.

Complaints
7

The Applicant's complaints against the Practitioner broadly covered the following areas:

  • • negligence;

  • • unprofessional behaviour; and

  • • obstructing the client's interest in failing to protect and advance those interests.

8

When these complaints were notified to him, the Practitioner also discerned allegations of criminal behaviour and vitriol, and his response to the complaints covered those additional areas as well.

9

After considering the information the Standards Committee declined to uphold any of the complaints. The Applicant sought a review of the Committee's decision.

Review Application
10

The Applicant's review application was a lengthy and detailed explanation of what he perceived the Standards Committee's failures to be. His submissions were lengthy and detailed, much of it asserting a legal basis for his claim to have the land returned to him. In that context he contended, in broad terms, that the...

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