MS KB v MS JR
| Jurisdiction | New Zealand |
| Judge | LCRO Vaughan |
| Judgment Date | 14 May 2014 |
| Neutral Citation | [2014] NZLCRO 19 |
| Docket Number | LCRO 191/2012 |
| Court | Legal Complaints Review Officer |
| Date | 14 May 2014 |
Concerning an application for review pursuant to section 193 of the Lawyers and Conveyancers Act 2006
Concerning a determination of [A North Island] Standards Committee
[2014] NZLCRO 19
LCRO Vaughan
LCRO 191/2012
LEGAL COMPLAINTS REVIEW OFFICER
Application for review of a Standard's Committee decision to take no further action — complaints in respect of the practitioner's handling of the complainant's father's affairs — complainant was father's attorney under enduring power of attorney — practitioner acted for father but had prepared a transfer for complainant's mother transferring property from a joint tenancy to a tenancy in common to ensure they were eligible for residential care subsidy — later prepared a will for her which left the residue of her estate (including the house) to her husband thereby undoing effect of severing tenancy — whether practitioner should have checked the property title when including the residue clause in the will — whether practitioner should have declined to act for either complainant's brother or complainant with regard to her obligations under the power of attorney — whether complainant had provided poor legal advice.
Ms KB has applied for a review of the determination by [A North Island] Standards Committee in which it declined to take any further action in respect of the various complaints raised by her about Ms JR's conduct.
Ms KB has made a number of comments on the content of the Standards Committee determination to correct what she sees as errors. In this decision, I have referred only to matters to which it is necessary to refer for the purposes of this decision and/or to provide balance to the determination. Resources do not allow for time to be expended to correct errors which have no bearing on the outcome of this review. Standards Committee determinations are not published other than to the parties.
Ms KB lodged her complaint with the New Zealand Law Society Complaints Service on behalf of and as attorney for her father, Mr CG. The application for review has been filed on the same basis. On receipt of the review application, Ms JR responded by providing a letter signed by Mr CG in which he advised that he had never been consulted about the complaints or approved of them. He requested that the complaints and review application be withdrawn.
Attached to the letter from Mr CG was a certificate dated 2 August 2012 by Dr [X] which had the following heading:
Health Practitioner's Certificate of Mental Incapacity for Enduring Power of Attorney in Relation to Property.
This is a certificate which is required where incapacity is a prerequisite to the attorney acting under the power of attorney. The certificate given by Dr [X] was however that Mr CG was mentally capable, and therefore able to withdraw the complaints. It is a somewhat unusual use of this form.
Subsequently, Ms KB provided an email addressed to her by Dr [X] dated 29 July 2013 in which Dr [X] formally revoked the certificate.
Although these events were the cause of some delay in processing this review while the validity of Dr [X]'s initial certificate was challenged, I do not consider that it would have been conclusive as to whether or not this review continued.
Section 132(1) of the Lawyers and Conveyancers Act 2006 (the Act) provides that “any person” may complain about the conduct of a lawyer, and I would have been minded to treat Ms KB's complaint as a complaint by herself, as some of the matters complained of relate to conduct that affected her (albeit as her father's attorney) as much as it affected Mr CG.
In the end therefore, this review would have proceeded regardless of the withdrawal. However, the withdrawal of the certificate does mean that the letter from Mr CG has no effect and the review will address all issues as they relate to Mr CG and Ms KB.
I also note that Mr CG has since passed away but that too does not affect my obligation to complete the review.
Ms JR had acted for Mr CG since 1998. Mrs CG's affairs were handled by the [Trust] but in June 2009 1 Ms JR was contacted by Mrs CG with a request to register a transfer of the property which she owned with her husband to effect a change of ownership from herself and her husband as joint tenants to tenants in common in equal shares. Ms JR carried out this instruction.
In January 2011, Mrs CG again contacted Ms JR and requested her to prepare a new will and enduring powers of attorney. Ms JR was appointed the sole executor and trustee of Mrs CG's will. The will was signed and dated 28 January 2011 and provided that the residue of Mrs CG's estate was to pass to Mr CG. The residue of Mrs CG's estate included her half-share in the property.
Mrs CG died on 26 June 2011. In July 2011 Mr CG signed enduring powers of attorney for his personal care and welfare, and property, in which he appointed Ms KB his attorney. The documents provided that Ms KB's brother, [Brother CG], was appointed successor attorney, and also provided that the attorney “must consult as far as practicable” with [Brother CG] and another brother, [Brother CG2].
As noted above, [Brother CG] had contacted Ms JR in December 2010 and sought her assistance in resolving a dispute which had arisen in the family over the distribution of a trust fund established by a deceased brother. 2 Subsequently, when further differences arose relating to Ms KB's conduct as Mr CG's attorney, [Brother CG] made contact with Ms JR again, and some of the complaints raised by Ms KB relate to Ms JR's actions as a result of the communications between her and [Brother CG].
Generally, Ms KB's complaints relate to Ms JR's conduct in acting for Mr CG, hence the reason why the complaint was made on behalf of Mr CG and signed by Ms KB in her capacity as attorney.
In her complaint to the New Zealand Law Society Complaints Service Ms KB referred to the following issues:
1. The provisions in Mrs CG's will which provided that the residue of Mrs CG's estate (which included the half-share in the property) passed to Mr CG, defeated the purpose of severing the tenancy of the property owned by Mr and Mrs CG, as it meant that Mr CG was obliged to expend some of his own funds in rest home care before he became eligible for a rest home subsidy. Ms KB's complaint is that Ms JR did not check her own records when preparing the will and/or did not take heed of the reminder from Ms KB at the time or after the will was prepared.
2. Ms JR continued to consult and plan with [Brother CG] when all communications with regard to her father's affairs should have been through her as her father's attorney. This included:
"plans to have Ms KB removed as the attorney and replaced by a guardian appointed by the Court;
"retention of money payable to Mr CG from Mrs CG's estate; and
"discussion with [Brother CG] about instructions from Ms KB to pay the sum of $1,500 to each of the four children from Mr CG's funds.
3. Poor advice:
"Ms JR prepared a deed to distribute the gifts referred to in complaint two and had Ms KB execute this as attorney and as one of the recipients. Ms KB has been advised that this should not have been done.
"Ms JR failed to act on Mr CG's instructions to make proper arrangements for his [text redacted] daughter (Ms KB's sister) instead telling Ms KB that this could wait until Mr CG had died.
4. Ms JR had communicated with Ms KB telling her that she was required to consult with her brothers in respect of proposed actions as Mr CG's attorney.
Ms KB sought compensation in the sum of $37,000 being the amount that Mr CG would be obliged to spend before he qualified for a rest home subsidy, which would not have occurred if Ms JR had provided for Mrs CG's share in the property to be held for her and her siblings subject to a life interest for Mr CG.
The Standards Committee decision
The Standards Committee distilled eleven issues out of the matters raised by Ms KB: 3
a) Whether Ms JR omitted to include a clause in respect of tenants in common in Mrs CG's Will which resulted in Mrs KB's father not being eligible for a
Residential Care Subsidy. Despite being advised, Ms JR did nothing to remedy the matter.who is [Mr & Mrs CG's] son who lives [overseas]. He asked me to assist in resolving a bitter family dispute over the distribution of a fund from a trust established by his [brother], who had passed away.”
b) Whether Ms JR was negligent because of her forgetfulness and whether she should have included a life interest clause in the Will.
c) Whether Ms JR's communication with [Brother CG] behind [Ms KB] and her father's back amounted to a breach of professional standards.
d) Whether Ms JR got [Ms KB] to sign a Deed of Gift for $6000 knowing that she was to be a beneficiary and should not have signed the Deed.
e) Whether Ms JR expected [Ms KB] not to declare to WINZ, money that Ms JR held in her trust account on behalf of Mr CG, as part of Mr CG's Residential Care Subsidy application.
f) Whether Ms JR passed judgment on [MsKB] as EPOA.
g) Whether Ms JR's refusal to transfer Mrs CG's 1/2 share in [Property] to Mr CG breaches professional standards.
h) Whether Ms JR has a conflict of interest because [Brother CG] is a client of hers.
i) Whether there has been collusion between [Brother CG] and Ms JR because Ms JR has been stalling distributing funds to Mr CG.
j) Whether Ms JR refused to follow Mr CG's instruction in relation to his Will and his wishes regarding his daughter [Sister CG].
k) Whether Ms JR and [Brother CG] have colluded to discredit, undermine and displace Dianne as EPOA for Mr CG.
In each case the Committee determined to take no further action and other than as...
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