The New Zealand Law Society of Wellington v Mr Zj of Auckland
 NZLCRO 11
Concerning An application for review pursuant to Section 193 of the Lawyers and Conveyancers Act 2006
Concerning a determination of the Auckland Standards Committee 2
In accordance with s.213 of the Lawyers and Conveyancers Act 2006 copies of this decision are to be provided to:
The New Zealand Law Society as the Applicant
Mr ZJ as the Respondent
The Auckland Standards Committee 2 The New Zealand Law Society
The names and identifying details of the parties in this decision have been changed.
Application for review of Auckland Standards Committee decision — shortcomings on the part of the practitioner identified in five areas — omissions had been rectified and practitioner had sought assistance where needed — Committee resolved to take no further action pursuant to s152(2)(c) Lawyers and Conveyancers Act 2006 (power of Standards Committee to determine complaint or matter) — NZLS noted that the practitioner's conduct had involved serious breaches of the professional rules and Committee had made no adverse finding against practitioner — whether remedial action taken by the practitioner negated the need for punitive action.
Held: A lawyer providing inaccurate and unreliable information to the NZLS was a matter of concern. The practitioner had sent monthly certificates to the NZLS with certifications that were misleading and known to be misleading. This concealed and prolonged the problems. The practitioner admitted breaching s12(c) LCA (unsatisfactory conduct defined in relation to lawyers), which was sufficient for the Committee to make a finding of “unsatisfactory conduct”.
The principal purpose of the LCA was to maintain public confidence in the provision of legal services. The process of investigating and addressing complaints established standards for professional practice, with imposed penalties signalling the consequences to all. It was a concern the Committee's decision might send the wrong message — that no consequence would eventuate provided all reasonable remedial steps had been taken on discovery of the wrongdoing. This case involved a practitioner knowingly in breach of the Trust Account Regulations on an ongoing basis. The duration of the failures and concealment of problems by misleading certificates were serious matters and it was appropriate that a determination of unsatisfactory conduct was made against the practitioner. A modest fine of $500 was appropriate (taking into account costs already incurred by the practitioner) along with a contribution towards costs of the review. A censure pursuant to s156(1)(b) LCA (power of Standards Committee to make orders) was appropriate in respect of the misleading certificates.
Committee decision reversed.
The Standards Committee issued a decision in August 2010 following an own motion inquiry into the conduct of Mr ZJ (the Practitioner) concerning the operations of his firm's Trust Account. The own motion investigation was the result of a report prepared by the New Zealand Law Society Inspectorate in February 2010, which found “serious failures” on the Practitioner's part to comply with the Trust Accounting requirements of the Lawyers and Conveyancers Act 2006, the Trust Account Regulations and the Rules of Conduct and Client Care.
The Standards Committee had identified five areas in which there were shortcomings on the part of the Practitioner. The bulk of its decision sets out the steps taken by the Practitioner to remedy the various matters that had been uncovered.
Having noted that the omissions had been rectified and that the Practitioner had sought the assistance of an expert to address past problems, updated and corrected outstanding matters and established procedures for staff training, the Committee was satisfied that the remedies undertaken by the Practitioner were sufficient and that great improvement had been made. On that basis the Committee resolved to take no further action pursuant to Section 152(2)(c) of the Act.
The review applicant is the New Zealand Law Society (NZLS). The NZLS noted the Committee's satisfaction with the remedies undertaken by the Practitioner, and it's decision to not to take a punitive approach by making no adverse finding against the Practitioner. The NZLS noted that the Practitioner's conduct had involved serious breaches of the professional rules and that the Committee had made no adverse finding against the Practitioner.
The review application was made because the NZLS sought clarification of where such matters sit in the spectrum of unsatisfactory conduct, and in the interests of ensuring both the consistency and quality of the Complaints Service as required by Section 124(e) of the Lawyers and Conveyancers Act 2006. The NZLS referred to the stated purposes of the Act as is set out in Section 3, which is to maintain public confidence in the provision of legal services and to recognise the status of the legal profession. The NZLS questioned whether the remedial action taken by the Practitioner should have been taken into account in mitigation of penalty rather than the substantive decision to take no further action.
Responding to the application, the Practitioner basically outlined the background to how the trust account problem had arisen and the steps he had taken to remedy the concerns that had been identified by the Inspectorate. The Practitioner considered that the Standards Committee had in fact recognised that there had been no serious discretions warranting the use of punitive action. He wrote that by acknowledging that at worst the matter calls for a finding of unsatisfactory conduct the NZLS was clearly not suggesting that the Committee made a significant error in judgment.
The Practitioner concluded his submissions with, “If the NZLS wishes to review the Committee's decision the NZLS is effectively questioning the soundness of the Committee's decision and we do not believe that the seriousness of this matter warrants the NZLS exercising its discretion in undermining the authority of the Committee in that way.”
The Standards Committee advised that it did not wish to comment on the application.
Both parties have agreed that the Application may be determined without a formal hearing and therefore in accordance with section 206(2) of the Lawyers and Conveyancers Act 2006 the matter is being determined on the material made available to this office by the parties
This review application is unusual in that it was made by the NZLS. However, Section 197(1)(a) of the Lawyers and Conveyancers Act 2006 provides for a review application to be made by the NZLS and to do so is entirely appropriate in respect of a Standards Committee decision to take no further action where a lawyer's conduct has, in the NZLS view, involved a serious professional failing. That the NZLS sought clarification of “where such matters sit in the spectrum of unsatisfactory conduct” is consistent with its the functions in relation to the Complaints Service, in particular Section 124(e) which requires the NZLS “to ensure throughout New Zealand both the consistency and quality of the complaints service.”
I have reviewed all of the information on the file. The Practitioner's conduct that led to the own motion investigation is outlined in considerable detail in the Report of the New Zealand Law Society Inspectorate following an audit of the Trust Account of the Practitioner's firm in around early 2010.
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