TL v NM

 
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[2013] NZLCRO 2

LCRO 34/2012

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

and

Concerning a determination of the Otago Standards Committee

BETWEEN
TL
Applicant
and
NM
Respondent

Review of Standard Committee's decision that there had been a technical breach of r8 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (duty to protect and to hold in strict confidence all information concerning a client) when the practitioner had given a vendor's real estate agent a copy of an agreement entered into by the complainant (his client) as purchaser, and which had been drafted by the agent — agent had mislaid its copy — footnote to r8 stated that information that was widely known or a matter of public record would nevertheless be confidential information — whether footnote formed part of rules — whether agreement was confidential — whether provision of information was within the implied authority of a lawyer.

The issues were: whether the footnote to r8 constituted part of the rule; whether the agreement constituted confidential information; and, whether there had been a breach of any other rule by the provision of the copy of the agreements.

Held: It was clearly incorrect to say that the footnote was not part of r8 itself. The footnote was part of the CCC Rules. For reasons of convenience and clarity of expression, the drafters chose to put the explanatory statement in respect of the scope of the rules in the footnote. However the footnote formed part of the rules and clearly affected the scope and meaning of the rule to which it related.

Not all information held by a practitioner was confidential. It could not be a breach of confidence to provide information to a party who already knew it. While in this case it was clear that the agent did not have to hand a copy of the agreement, the agent had prepared the agreement. Therefore the disclosure of the agreement could not have been a breach of confidence as the agent was aware of all of the details in the agreement, having authored them. There was no breach of r8.

It was not clear to what extent (if any) the practitioner was at that time aware of, or had considered whether there was, a case against the estate agency separate from any claim against the vendor (he had advised NM and NL that there was no viable case against the vendor for misrepresentation).

There was some force in the argument that a client impliedly authorised actions that were routine in the day to day handling of a transaction, although caution had to be exercised. At the time, the provision of the agreement would have appeared to the practitioner to be entirely unexceptionable. It would have been seen as a normal incident of managing the file, and also an obvious professional courtesy. To have obtained the client's consent to providing a copy of an agreement that had been drafted by the agent and provided to NM's lawyer in the first place would seem somewhat perverse. What the conduct amounted to was the practitioner gave the agent a copy of a document that the agent had provided in the first place. This should not lead to a disciplinary outcome for the practitioner.

Standards Committee decision reversed.

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

DECISION
Background
1

This review concerns the short but important question of whether the release of a document by a solicitor to another person who had mislaid their copy of that document is a breach of the duty of confidence.

2

TL acted for NM who was the purchaser in a conveyancing transaction. NM complained about the conduct of TL in a number of respects. The Standards Committee upheld the complaint on one ground only (and no review is sought by NM in respect of those other matters). That ground was that TL had provided a copy of an agreement for sale and purchase agreement (the Agreement) to the agent (CCD) who acted for the vendor and who had prepared it.

3

The Standards Committee found that this conduct was unsatisfactory as “a technical breach of Rule 8 (and associated footnote 9)” of the Rules of Conduct and Client Care for Lawyers (Rules). Rule 8 provides:

A lawyer has a duty to protect and to hold in strict confidence all information concerning a client, the retainer, and the client's business and affairs acquired in the course of the professional relationship.

4

The footnote to which the Committee also referred provides:

Information acquired in the course of the professional relationship that may be widely known or a matter of public record (such as the address of the client, criminal convictions, or discharged bankruptcy) will nevertheless be confidential information.

5

There was no dispute about the facts. TL accepted at an early stage that, at the request of the agent, (and without reference to NM) he released a copy of the Agreement to CCD.

6

NM complained that TL had released “some documents” to CCD (and it appears to be accepted that this was only the Agreement). NM stated that CCD had sought copies from him, but he refused, and that he was in dispute with the agent.

7

In response to the complaint TL stated (in letters of 16 June and 19 September 2011) that the agent had prepared the Agreement and therefore as between the agent and NM the Agreement was not confidential, that the agent would have been able to obtain a copy from other sources, and that if the Agreement was part of a dispute or complaint in respect of the agent then it would have been available on discovery by the agent. I note that there is no evidence that CCD would have been able to locate a copy of the Agreement had it searched further (other than the assertion of TL) and therefore I do not consider that assertion to be of relevance to this review.

8

The simple question therefore is whether in releasing the Agreement to the agent TL breached the duty of confidence that he owed to NM.

What Information is Confidential?
9

The obligation under Rule 8 is not constrained to information which is not otherwise available. The footnote to that...

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