JurisdictionNew Zealand
Judgment Date25 February 2011
Date25 February 2011
Docket NumberLCRO 48/2010
CourtLegal Complaints Review Officer

CONCERNING An application for review pursuant to Section 193 of the Lawyers and Conveyancers Act 2006


CONCERNING a determination of the Auckland Standards Committee 3

Mrs AM of Auckland
Ms ZM of Auckland

LCRO 48/2010

Application for review under s193 Lawyers and Conveyancers Act 2006 (“LCA”) (right of review) of a decision of Complaints Service of Auckland Standards Committee declining to investigate complaint that respondent had breached r13.1 Lawyers: Conduct and Client Care Rules (2008) (duty of honesty to the court) — applicant alleged respondent provided untrue information to the court regarding applicant's application for interim spousal maintenance — whether respondent had engaged in unsatisfactory conduct under s12 Lawyers and Conveyancers Act 2006 — appropriate penalty — whether applicant entitled to compensation — whether the Standards Committee erred in only referring to judicial remedies open to the applicant.


Mrs AM as the Applicant

Ms ZM as the Respondent

The Auckland Standards Committee 4

The New Zealand Law Society


The New Zealand Law Society received and investigated a complaint by Mrs AM (the Applicant) against Ms ZM (the Practitioner) and decided that no further action would be taken in respect thereof. This was a decision made pursuant to Section 138(2) of the Lawyers and Conveyancers Act 2006, which confers upon a Standards Committee a discretionary power to take no further action on a complaint if, in the opinion of the Standards Committee, it is unnecessary or inappropriate to do so.


The Practitioner acted for the Applicant?s husband in respect of matrimonial and property relationship matters. When the Applicant applied for interim maintenance, the Practitioner appeared on her client?s behalf to oppose the application. The application was declined by the Court.


The complaint was that the Practitioner had deceived or misled the Court in her submissions of 7 July [200Z], filed in opposition to the Applicant?s application for interim maintenance, in particular that the Practitioner had submitted that her client was meeting all relationship debt. The Applicant said this information was not correct, and that the Practitioner knew it was not correct. The Applicant contends that the Practitioner breached Rule 13.1 of the Lawyers: Conduct and Client Care Rules 2008 which states:

A lawyer has an absolute duty of honesty to the court and must not mislead or deceive the court.


The Standards Committee had summarised the Practitioner?s response to the complaint, noting that the Applicant was represented by her own counsel throughout, and that there had been a right of reply in the Courtroom to the submissions. The Committee recorded that the Practitioner?s response had been forwarded to the Applicant for comment. The Committee had considered the Applicant?s response to the Practitioner?s explanation.


In declining to uphold the complaint, the Committee expressed the view that the Applicant had the right to take legal advice on matters currently before the Court, including the appropriate legal steps available to challenge the information before the Court. In the Committee?s view this did not prevent the Practitioner from acting in the best interests of her client.

Review application

The Applicant sought a review of the Committee?s decision because in her view the Committee had failed to examine the Practitioner?s actions and to consider whether the submissions were misleading. She considered the complaint was not answered by reference to actions she or her counsel took or could have taken, but that the Practitioner?s conduct should be assessed independently of such matters and in its own terms. The evidence provided to support the complaint included copies of correspondence exchanged between the Practitioner and the Applicant?s solicitor, and the Practitioner?s submissions and her client?s supporting affidavit.


A review hearing was held on 1 December 2010, attended by both parties. The Practitioner was accompanied by Counsel. The Applicant was accompanied by a support person. The Applicant reiterated the substance of her complaints, and presented a document setting out the basis of her complaints and the compensation that she sought. Submissions were also made by the Practitioner and her Counsel.


The Applicant and her husband separated in [200X]. The relationship assets (not yet divided) include the family home and adjoining land, commercial properties (one is rented by her husband?s business), and a [holiday bach]. Other assets are not material to this complaint and need not be mentioned. The commercial properties collectively have a reasonably small mortgage, but the bach has a large outstanding mortgage of some [$] which is an interest-only loan. The family home is mortgage-free.


During the marriage the debt on the three commercial properties was met by the rental income which was paid into a joint [bank] account from which was paid the mortgage interest, rates, GST, and other outgoings. The other significant debt (for the purposes of the complaint) related to a mortgage on the parties bach, the interest being paid from the husband?s business income directed through the S account, he also meeting outgoings on the family home. This pre-separation arrangement continued for a time after separation during which time the Applicant occupied the family home.


During the latter part of [200Y] (or perhaps even earlier) disagreements between the Applicant and her husband impacted on these financial arrangements. Some of the financial activity is recorded in the correspondence exchanged between the Practitioner and the Applicant?s lawyer. The pivotal letters are dated 26 November [200Y], 18 March [200Z], 9 April [200Z], and 7 May [200Z] and record the following activity.


The 26 November [200Y] letter sent by the Practitioner to the Applicant?s lawyer enclosed the rates demand (Council and ARC), and called on the Applicant to pay these as she occupied the house. The letter confirmed that the husband would meet the then outstanding rates on the bach.


On 18 March [200Z] a further letter was sent by the Practitioner to the Applicant?s lawyer reiterating the Applicant?s responsibility for paying the rates, and adding to that the responsibility for payment of house and contents insurance. There is no evidence to show that the husband paid rates on the matrimonial home from the second half of [200Y]. A further letter sent by the Practitioner to the Applicant?s lawyer on 27 March enclosed a copy of the rates demand.


The 9 April [200Z] letter sent by the Practitioner to the Applicant?s lawyer concerned rental money that had been transferred (by the husband) from the joint [bank] rent account to the S account to pay the bach mortgage. The Practitioner had written, “My client arranged for a rental payment to be transferred directly into the (bach) account to ensure the status quo until all matters had been dealt with by the Court.” The remainder of the letter noted that the husband had continued to pay other outgoings (rates, power) on the bach notwithstanding that the Applicant also used it.


A 7 May [200Z] letter sent by the Applicant?s lawyer to the Practitioner included specific details about the income and outgoings from the rental properties, which included information about the mortgage payments for the bach being met from the rental income of the commercial properties, and not from the personal income of the Practitioner?s client.


In addition to the above letters exchanged between the lawyers, there was also a letter sent by the husband to the Applicant?s lawyer (and cc?d to the Practitioner) which is dated 13 May [200Z] and in it the husband confirmed that part of the income from rental property had been diverted to paying the bach mortgage.


The Applicant filed an application for interim maintenance in July [200Z]. Her application was opposed by the husband, on whose behalf the Practitioner prepared a notice of opposition. The Practitioner filed her submissions in the Court along with the husband?s affidavit. The particular paragraphs in the Practitioner?s submissions (which became the basis of the Applicant?s complaint to the New Zealand Law Society) appear under the sub-heading of “ Summary of the Respondentv's Case”, and are as follows:

Under the heading “ Factors relevant to the Applicant's reasonable needs” appear:

  • “22. The respondent asserts that:

    • [a]…

    • [b]…

    • [c] That the respondent has assumed responsibility for payment of, without contribution from the applicant, since separation until June [200Y], all of the relationship debts and mortgages which total [$].”

  • “26. [e] The respondent has paid outgoings since separation without contribution from the applicant on the family home, bach and sections.

  • ….

  • [j] The parties have been separated for more than two years now, and during that time the respondent has paid the relationship debt without contribution from the applicant. The applicant has not had to contribute towards the outgoings in respect of any of the relationship property including the family home. The respondent has only recently suggested that the applicant should make some contribution to the family home, and has requested that the applicant pay the rates on the property at … as well as the section. Tsso date the respondent has met these payments himself but cannot continue to do so.”


The husband?s affidavit filed with the Practitioner?s submissions had stated, in paragraph 5, Not all the rental payments were changed to the (bach) account, just sufficient to ensure the continued payment of the mortgage”. … It is required to meet relationship property mortgage commitments”.


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