[2012] NZLCRO 89

LCRO 106/2011

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


Concerning a determination of Auckland Standards Committee 4


RM as the Applicant

RN as the Representative for the Applicant

LN as the Respondent

Auckland Standards Committee 4

New Zealand Law Society

Application for review under s193 Lawyers and Conveyancers Act 2006 (right of review) of an Auckland Standards Committee determination which found that the applicant had breached r3.1 (respect and courtesy), r3.6 (providing updated information), r9 (reasonable fees) and r9.6 (final account) Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 — respondent engaged applicant to seek damages in relation to drainage problems on a property she had purchased — respondent withdrew proceedings and settled directly with the Council — whether applicant was rude and discourteous in meetings and communication and fees were substantially over the estimate given.

Held: Rule 3.4 (provision of information with regard to fees) and r3.5 (copy of the client care and service information) referred to the provision of information about fees, and there was no reference to fee estimates. Fee estimates and the requirement to inform the client if an estimate was to be exceeded was covered by r9.4 (lawyer must upon request provide an estimate of fees and inform the client promptly if it becomes apparent that the fee estimate is likely to be exceeded). The Committee was therefore incorrect in finding that RM had breached r3.6 and the determination was reversed in that regard.

What constituted disrespectful and discourteous conduct varied according to the circumstances. The test was an objective one and the focus had to be on the lawyer's conduct as opposed to the client's response. To determine otherwise would impose an impossible standard based on a client's reaction to the lawyer's conduct. In making an assessment of what constituted appropriate conduct, it was to be expected that a lawyer should be required to conduct him or herself with due regard for the client's known standards and sensibilities.

LN had asked some direct questions of RM and had received some direct responses. LN's manner stemmed from the consequences of a car accident she had suffered. RM was aware of this. The difficulty that had arisen in this case was that in responding to LN's requests for information, the firm's costs escalated. Double booking a meeting was poor management and it was understandable that LN had considered that RM had little interest in her case. She had a legitimate expectation that full attention would be paid to her case at a meeting with her lawyers.

In response to LN's allegations, RM's responses had expressed the frustrations that they were experiencing in dealing with LN. He pointed out that they were obliged to respond to LN's communications, which in many instances they considered were unnecessary and only repeating what had already been dealt with. The overall tenor of some of the communications had been direct and confronted the queries raised by LN.

Even taking into consideration the fact that RM was aware of LN's condition, there was no reason why he should not have responded to LN's correspondence and comments with the degree of directness that he had. If RM had not done so, he could not be certain that he had delivered his message clearly enough. LN was direct and to the point in her messages to RM, and it was reasonable for him to assume that he could respond in the same manner. It was the overall frustration at the lack of a resolution, and her concerns at the mounting costs which resulted in LN becoming disenchanted with RM and his firm, resulting in the complaint.

While LN's reaction in each case was understandable, when the surrounding facts and circumstances were considered objectively, it could be considered that RM was responding directly to the challenges and queries raised by LN. In the circumstances, an adverse disciplinary finding was not appropriate. The finding of unsatisfactory conduct had not been established to the necessary degree. There were also some concerns that the Committee may have attributed some of LN's comments about the conduct of RO to RM. An adverse finding was not supported by an objective view of the facts.

Pursuant to s211(1) LCA (powers exercisable on review) the finding of unsatisfactory conduct arising out of a breach of r3.1 and r3.6 was reversed. The order for payment of costs was varied to reduce the amount of the costs payable to $500, based on the fact that the review had reversed the findings of unsatisfactory conduct in respect of the breaches of r3.1 and r3.6, whilst the findings of breaches of r9 and r9.4 remained. The remainder of the determination of the Standards Committee was confirmed.



RM has applied for a review of the determination by Auckland Standards Committee 4 in which it found that RM had breached Rules 3.1, 3.6, 9 and 9.4 of the Conduct and Client Care Rules 1, ordered RM to reduce his fees and ordered him to pay costs to the New Zealand Law Society.


In his review application, RM accepted the findings of the Committee with regard to the breaches of Rules 9 and 9.4 and the Orders to reduce his fees, and requested that the review focus on the findings of breaches of Rules 3. 1 and 3.6 and the order to make payment of costs.


LN instructed RM and his firm to act on her behalf to seek compensation for drainage problems encountered with her new property.


The day to day carriage of the file was undertaken by RO, a solicitor in the firm, with RM acting in a supervisory role.


Both RM and RO had contact with LN in connection with the file and although the Standards Committee determination (and consequently this review) relates to RM, LN's complaint referred to both lawyers.


Proceedings were issued against the developer / vendor and the Council.


A judicial settlement conference took place in September 2009 which for various reasons was unsuccessful.


LN was not in a position to incur significant legal costs and made it clear that she did not want to incur the costs of a court hearing.


Following the unsuccessful joint settlement conference, LN withdrew her instructions and settled the matter directly with the Council.

LN's complaints

LN complained that the advice from RM and RO had encouraged her to commence proceedings against the Council when it would have been in her interests to have pursued the matter through the Disputes Tribunal. She complained that as a result, she had incurred costs which had not only exceeded estimates provided by RM, but had also not produced a satisfactory result for her.


She also complained that RM and RO were rude and discourteous in their dealings with her, talked down to her, and generally, that their relationship with her was poor.


Having considered all of the material provided, the Standards Committee determined that it did not have jurisdiction to consider the bills of costs rendered prior to 1 August 2008.


In respect of the bills of costs after that date, it determined that there had been breaches of Rules 9 and 9.4 of the Conduct and Client Care Rules and ordered that the fees be reduced.


In addition, the Committee found that RM had breached Rules 3. 1 and 3.6 of the Conduct and Client Care Rules. No Orders were made in respect of those breaches, but RM was ordered to pay the sum of $1,000.00 by way of costs to the New Zealand Law Society.

The applicable law

LN instructed RM in March 2008. On 1 August 2008, the Lawyers and Conveyancers Act 2006 came into force and it was therefore necessary for the Standards Committee to separately consider the billing and conduct before and after that date. It is not necessary for me to traverse the issues relating to this as the Standards Committee has addressed the issue in its determination at paragraph [15].


Although the Committee's determination referred only to billing prior to 1 August 2008, it did not make any adverse findings in respect of the other conduct complained of prior to that date, and I concur with that determination.


I propose to address a number of preliminary issues in the first instance to establish the parameters of this review. I have noted that although the Committee stated in paragraph [17] of its determination that RM had failed to keep LN informed and to progress matters in a timely fashion, it did not make a specific finding of a breach of Rule 3 of the Conduct and Client Care Rules. 2 In addition, although the Notice of Hearing identified an issue as being the firm's performance at the judicial settlement conference no specific finding was made in this regard.


The outcome of this review is that the determination of the Standards Committee is confirmed, other than where specifically modified or reversed, and consequently the position in respect of both issues will be confirmed. I have not considered it necessary to take these matters any further but confirm that I am aware of these omissions. 3

Breaches of Rules 9 and 9.4

A review applicant cannot determine which parts of a Standards Committee determination is to be...

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