NR v JM

• Jurisdiction: New Zealand
• Judgment Date: 16 June 2022
• Neutral Citation: [2022] NZLCRO 61
• Docket Number: Ref: LCRO 62/2021
• Court: Legal Complaints Review Officer

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

AND

CONCERNING a determination of [Area] Standards Committee

Between

NR

Applicant

and

JM

Respondent

[2022] NZLCRO 61

Ref: LCRO 62/2021

LEGAL COMPLAINTS REVIEW OFFICER

ĀPIHA AROTAKE AMUAMU Ā-TURE

Law Practitioners — application for review of a determination of an Area Standards Committee which made a finding of unsatisfactory conduct — failure to send a client's will to their new lawyer — failure to keep client files secure — breach of natural justice — compensation for distress — Lawyers and Conveyancers Act 2006

In accordance with s 213 of the Lawyers and Conveyancers Act 2006 copies of this decision are to be provided to:

Mr NR as the Applicant

Mrs JM as the Respondent

[Area] Standards Committee

New Zealand Law Society

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

Introduction

1 On 17 November 2020, [Area] Standards Committee made a finding of unsatisfactory conduct against Mr NR. The Committee called for submissions on penalty.

2 Mr NR provided submissions on 3 December 2020. UH Law forwarded Mrs JM's submissions on 2 December 2020.

3 Neither submission was sent to the other party.

4 The Committee issued its determination as to Orders on 19 April 2021.

5 Mr NR has applied for a review of that determination.

Background

6 The background to Mrs JM's complaint is best explained by the Standards Committee: 1

Mr NR acted for Mr and Mrs JM in the drafting of their wills. Both wills were signed and kept by Mr NR.

Mrs JM subsequently bumped into Mr NR “ a few years ago” and he told her he was moving away and that he had given all their files to UH lawyer. …

Mr JM died on 18 November 2019. Mrs JM contacted Mr UH to be advised by him that he did not have any of Mr NR's files and so did not have Mr JM's will.

Mrs JM was unable to access Mr JM's Kiwi Saver worth $20,000.00 which was to be available to cover funeral expenses, so she had to borrow to pay for the funeral.

Mrs JM was struggling emotionally and financially with only her Superannuation to live on.

The Standards Committee determinations

7 The Committee determined: 2

Mr NR had ample time from when the will was executed to when he ceased to be a lawyer to make sure that something so profoundly important as a will was stored in a way which would be safe until it was needed. He failed to do so and therefore breached the above specified rules. In the circumstances as outlined by Mrs JM, the effect of his failure was serious and ongoing. In such circumstances the Committee determined that Mr NR's breaches of his obligations constituted unsatisfactory conduct under s 152(2)(b)(i) of the Act.

8 The Committee called for submissions on penalty.

9 After considering submissions from both parties, the Committee determined that Mr NR: 3

• a. Be censured, s 156(1)(b)

• b. Must pay:

  • i. compensation of $10,000.00 to Mrs JM made up of the specified costs incurred at the time of her submissions of $6,300.95 and the balance for the loss of dignity and distress she suffered. s 156(1)(d)

  • ii. a fine of $2,000.00 to the New Zealand Law Society, s 156(1)(i)

  • iii. costs of $1,500.00 to the New Zealand Law Society, s 156(1)(n)

Mr NR's application for review

10 Mr NR's grounds for review includes a submission that the Committee has breached the rules of natural justice by not forwarding Mrs JM's submissions to him for further comment, prior to making its determination as to orders.

11 He says: 4

… At paragraph 7 of its Determination on Penalty the Committee refers to the supporting evidence provided by the complainant. This evidence was not disclosed to me prior to the Committee's determination. There are matters provided in evidence that I would have wished to challenge or seek clarification of. …

12 Mr NR's further reasons in support of his application for review are:

• • The Committee did not reflect the fact that he had “consistently expressed willingness to contribute to the complainant's costs”. 5

• • The order for compensation is excessive and there is no jurisdiction to make orders for loss of dignity and distress.

• • The fine imposed is punitive and exemplary.

• • The costs order is excessive in the circumstances.

Mrs JM's response

13 Mrs JM says that it is “a matter for the rules and powers of the Committee” as to whether or not the Committee has “overstepped its powers and the Act by granting additional compensation”.

14 As a final comment, she says: 6

Finally, my understanding is that the delay was because of the original will not being available and that any coroners investigation has no bearing on the ability to apply for probate, the fact of death occurring being the only thing to be establish[ed] before a probate application and cause of death has no bearing on this.

Nature and scope of review

15 The High Court has described a review by this Office in the following way: 7

A review by the LCRO is neither a judicial review nor an appeal. Those seeking a review of a Committee determination are entitled to a review based on the LCRO's own opinion rather than on deference to the view of the Committee. A review by the LCRO is informal, inquisitorial and robust. It involves the LCRO coming to his or her own view of the fairness of the substance and process of a Committee's determination.

This review has been conducted in accordance with those comments.

Review

16 This is a review of the Committee's determination as to orders only. No submissions in the nature of evidence can be considered in this review. Only Mr NR's submissions as to the orders imposed by the Committee can be addressed.

Natural justice

17 Mr NR says that the Committee has breached the principles of natural justice by reason of the fact that Mrs JM's submissions were not sent to him prior to the Committee issuing its determination.

18 A similar scenario arose in McGuire v Manawatu Standards Committee. 8

19 Mr McGuire had applied for judicial review of a Standards Committee determination which had been confirmed on review by this Office. The facts insofar as they relate to the same issues as arise in this instance, are set out by the Court in [21]:

The second matter involved an earlier letter dated 21 November 2012 from Mr Ranganathan to Mr Greer, the Legal Standards Officer for the Committee headed “Submissions on the Case. Complaint ID/6583” relating to the complaint by he and his wife against Mr McGuire. This letter was sent some six days before the hearing of the Ranganathan complaint, by the Committee, (a hearing which it conducted on the papers) and its determination. Mr McGuire did not receive a copy of the letter. He has in fact confirmed that he had never seen this 21 November 2012 letter until 4 August 2015 and he has no idea why it was not disclosed to him by the Committee or during the review by the LCRO. Obviously, he had no chance to respond to the letter or to matters raised in it.

20 Gendall J describes the content of that letter at [42] of the judgment:

… Although this letter from Mr Ranganathan in part repeated material which he had placed in his original letter of complaint, other aspects in this letter including the degree of ill-feeling, outrage, and hurt allegedly suffered by the Ranganathans, strongly emphasised by Mr Ranganathan in the letter, were matters available to be taken into account by the Committee. These additional matters and strong comments were clearly quite unknown to Mr McGuire.

21 His Honour continues: 9

In terms of issues of procedural impropriety, it is a fundamental requirement of natural justice that a party must be given a reasonable opportunity to present his or her case with knowledge of the case that she or he has to meet. An underlying principle in all this is that a party should normally be given the opportunity to respond to an allegation that, with adequate notice, might be effectively refuted. Decisions in this area such as Daganayasi v Minister of Immigration 4 and Khalon v Attorney-General 5 are of relevance and make this clear. Key elements in all this must be the need to avoid questions of real surprise and potential prejudice.

22 His Honour concluded: 10

… but only by a reasonably fine margin, that by failing to provide to Mr McGuire the 21 November 2012 letter from Mr Ranganathan received by the Committee shortly before its hearing, a letter no doubt taken into consideration as part of its deliberations, a breach of natural justice occurred in this case. …

23 I distinguish that case in this review for the following reasons:

• • Mrs JM's submissions were sent to the Committee following the Committee's request for submissions on penalty. The basis of Mr NR's objection is that he deduced from those submissions that the enquiry into the reasons for Mr JM's death was ongoing and therefore not the cause of Mrs JM's losses. That issue is addressed in [33] supra and consequently has no bearing on the Committee's penalty decision.

• • Legal costs and interest incurred on the loan from the bank are supported by evidence and cannot be disputed. The disputed difference arises out of the Committee's imposition of an additional amount of $3,699.05 awarded to Mrs JM by way of compensation for loss of dignity and distress.

• • The Judge's decision was made “by a fine margin”, a margin which I consider has been surpassed in this case.

The purpose of penalty in a professional context

24 In Wellington Standards Committee 2 v Harper, 11 the Tribunal summarised the purposes of penalty in the following way:

[24] In a later Auckland Standards Committee 1 of the New Zealand Law Society v Fendall 4 case the Tribunal summarised the purposes of penalty by reference to eight factors. That was a case involving strike off, and we adapt those factors to the more relevant ones for this case as...