Mr We v Mr Aw and Mr Ax


[2013] NZLCRO 29

LCRO 82/2012

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


Concerning a determination of the Waikato Bay of Plenty Standards Committee

Mr AW and Mr AX

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

Application for review in respect of a complaint regarding fees charged by law practitioner — practitioner was a friend of applicant — applicant complained that he was under the impression that the practitioner was assisting him in his bankruptcy matter as a friend and was not aware of the fees charged by the practitioner until very late in matter and had not been sent client care information — practitioner produced letter of instructions and letter of engagement to show that the applicant instructed the practitioner and also asked him to instruct a barrister in the matter — whether there was delay in providing the requisite client information and if so, whether it constituted unsatisfactory conduct.

The issues were: whether there was a delay in providing the requisite client information and if so, whether it constituted unsatisfactory conduct; whether AW had threatened to disclose confidential information; and whether AW did not act competently.

Held: Rule 3.4 and r3.5 CCC Rules provided that a lawyer had to provide client information “in advance” and “prior to undertaking significant work. This included “the basis on which fees would be charged”. The two letters signed by WE showed that he had instructed AW to act for him as well as to instruct AX. But this did not absolve AW from the fact that he did not provide the required client information “in advance” and “prior to undertaking significant work”. In addition, the terms of engagement did not include hourly rates to be charged by AW and AX.

Section 12(c) Lawyers and Conveyancers Act 2006 (“LCA”) (conduct consisting of a contravention) defined unsatisfactory conduct as being conduct consisting of a contravention of the Act, regulations, or practice rules made under the LCA. The CCC Rules were practice rules made under the Act and therefore, AW's failure to provide the client information constituted unsatisfactory conduct.

The fact that AW did not provide the client information as required by the CCC Rules, did not disentitle him to any fees at all. Once it was accepted that a lawyer had been engaged, it followed that the lawyer should be paid for his or her services. The appropriate penalty was a $500 fine.

In respect of the complaint about threatened media disclosures, the standard of proof in professional disciplinary proceedings was the civil standard, i.e. the balance of probabilities. There were conflicting accounts from the opposing parties and no evidence was available to the requisite standard to make a finding in support of either position. In addition, the comment as related by WE did not amount to a “threat”. Consequently, there were no grounds on which an adverse finding against AW could be sustained on this issue.

The standard of competency required was that which could be expected by a member of the public of a reasonably competent and diligent lawyer, to be proved on the balance of probabilities. The only course of action that could have been adopted was to try and minimise the impact on WE of the exercise of the foreign Official Assignee's rights. It was difficult to see what WE expected of his lawyers. It would seem that the strategy was to negotiate an outcome, and this was achieved.

The allegations in the case was so broad and general that it was difficult in the context of professional disciplinary proceedings to attempt any further examination of the allegations without details from WE. The proper forum for an examination of that detail would be in the courts by way of an action in negligence, and for that reason, no further action would be taken in respect of this aspect of the complaint.

Standards Committee determination confirmed in regard to costs complaint.

Standards Committee determination modified to the extent that AW's conduct in failing to provide the required client information in terms of r3.4 and r3.5 constituted unsatisfactory conduct by reason of s12(c) LCA.


Mr WE's complaint primarily concerned the fees charged to him by Mr AW and Mr AX. Mr AX is a barrister who was instructed by Mr AW. Prior to the review hearing, Mr AX and Mr WE settled the complaint about Mr AX's fees, and Mr WE's complaint about Mr AW's fees was settled during the course of the review hearing.


There remains some issues as to Mr AW's conduct which need to be addressed to complete this review.


It is unnecessary to relate the facts of the matter on which Mr WE instructed Mr AW and Mr AX, as they have no bearing on the matters complained of.


Mr WE's complaints (other than costs) were:-

  • (a) Mr AW did not provide the client information required by Rules 3. 4 and 3.5 of the Conduct and Client Care Rules 1 until long after he had commenced working for (and billing) Mr WE;

  • (b) the client information, when provided, did not include Mr AW's (or Mr AX's) hourly rates;

  • (c) Mr AW did not keep him informed about the work that was being conducted on his behalf;

  • (d) Mr AW misled him as to the extent of his involvement once Mr AX was instructed;

  • (e) Mr AW did not follow instructions to make representations to the Official Assignee as to the process to be followed in remitting funds from New Zealand to the [country];

  • (f) Mr AW threatened to disclose confidential information about Mr WE's affairs to the media; and

  • (g) Mr AW did not act competently in representing Mr WE, resulting in Mr WE receiving limited benefit from the services provided by Mr AW.


All of the above matters impact on the complaint about fees which was settled between the parties. The Standards Committee did not address any of these conduct issues separately and determined to take no further action in respect of Mr WE's complaint about fees, after considering the Costs Assessor's report.


However, for the sake of completeness, the conduct issues do need to be separately addressed and I will undertake that in this review, rather than returning the matter to the Standards Committee to consider.


Prior to the hearing (on 27 March 2013) Mr WE was invited to withdraw his application to review the Standards Committee determination insofar as it related to Mr AX, as the complaint about Mr AX's fees had been settled. Mr WE responded that although it had been settled and payment made, Mr AX had not acknowledged receipt of payment. Mr AX was at the review hearing and verbally acknowledged receipt of payment. He indicated he would provide a written receipt if required. On the basis of these acknowledgements by Mr AX, the review as it relates to Mr AX is withdrawn.


The complaint as to Mr AW's fees was also settled at the review hearing, and the terms of that settlement were recorded in a Minute issued on 28 March 2013.


The parties were initially invited to mediate the complaints and endeavoured to do so. This was not successful, partly I suspect, because Mr WE was at that time residing in England and the mediation lacked the immediacy that would otherwise have been the case.


A review hearing took place in Hamilton attended by Mr WE, Mr AW and Mr AX. Mr AW objected to the presence of a support person for Mr WE as he intended to pursue recovery of his fees and there was a possibility that evidence provided or statements made during the course of the review hearing could prejudice these proceedings if statements made during the course of the hearing were known to the support person.


I was uncertain as to how knowledge by the support person could affect Mr AW's recovery proceedings, but nevertheless, as the Lawyers and Conveyancers Act provides that review proceedings are private, I acceded to Mr AW's request that the support person be requested to leave the hearing.


She was invited to remain outside the hearing room to be consulted at any time during the course of the review by Mr WE if he wished to do so.

Delay in providing client information

Rules 3. 4 and 3.5 of the Conduct and Client Care Rules provide that a lawyer must “in advance” and “prior to undertaking significant work under a retainer” provide the client with information as set out in those Rules, which includes “the basis on which fees will be charged”.


In his letter of complaint, Mr WE notes that Mr AW's bill related to the period commencing on 23...

To continue reading