[2013] NZLCRO 6

LCRO 03/2012

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


Concerning a determination of the Nelson Standards Committee


TX as the Applicant

NE as the Respondent

The Nelson Standards Committee

The New Zealand Law Society

Application for review of a Standards Committee's determination not to take any action against a practitioner — practitioner had acted for the applicant's mother through her attorney appointed under an enduring power of attorney — suggestion that mother had intended to move affairs to Public Trust — issues as to capacity arose andthe practitioner deferred transfer of files — a medical report suggestedthe mother lacked capacity to make a decision — second medical report said she had capacity — practitioner sought Family Court orders on a without notice basis — whether practitioner had acted in accordance with acceptable professional standards — what was the appropriate course of conduct for a lawyer faced with uncertainty concerning an elderly client and competency.

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

The issue was whether the practitioner had acted in accordance with acceptable professional standards.

Held: There would often be some doubt as to the competence of an elderly person and this review concerned the question of what was the appropriate course of conduct for a lawyer faced with such uncertainty. A valid power of attorney had been in place since 1997 and was expressed to remain in place and not be revoked in the event of incapacity. In light of the existence of that power of attorney it had been entirely appropriate for the practitioner to have acted on the instructions of ND until that power had been effectively revoked.

The practitioner had concerns about the validity of TY's legal capacity to transfer her files to the Public Trust in late December 2009 (notice of which was received by the practitioner in early January). Arrangements were underway for a medical assessment of TY and therefore the practitioner had concluded that it would be best to wait for the outcome of that assessment before actioning the request because if it transpired that TY lacked capacity, then the request to transfer the matters to the Public Trust would be invalid. That assessment was carried out on 1 February 2010 which was not an unreasonable length of time, and there was no evidence of any resulting prejudice or harm to TY. It had been reasonable for the practitioner to have deferred taking further steps, until after the medical assessment. In the event, the doctor had concluded that TY was not mentally competent to manage her own affairs. That provided further support for the practitioner's decision not to action the transfer of files to the Public Trust.

It had been appropriate for the practitioner to have followed the instructions of ND. TY's lack of capacity meant that instructions that she herself issued (or conveyed via the complainant) could not be relied upon, and it had been entirely appropriate for the practitioner to have followed the instructions of ND in the circumstances. That included acting on ND's instruction to not transfer TY's files to Public Trust. For the same reason it was also appropriate for the practitioner not to have acted on the basis of the purported revocation of the Power of Attorney of ND.

The practitioner had then been faced with two conflicting medical opinions. While it may have been open to the practitioner to have acted on the basis of one or other of the medical opinions, the practitioner would have been at risk of making the wrong decision. The practitioner could not be criticised for having taken a reasonable step in seeking the guidance of the FC as to the appropriate course to take. That was an entirely appropriate step to take, and no disciplinary issues arose.

The Standards Committee had reviewed substantial material from the complainant and the practitioner. Having considered that information, the decision to take no further action was reasonable. There was no evidence that the practitioner had misled the FC. The practitioner's memorandum to the FC suggested that it would be appropriate to appoint independent counsel for TY. This reflected a responsible approach which was clearly focussed on protecting TY's interests.

Any disputes between various family members did not mean that the practitioner should not have followed the instructions of ND. There was no evidence that the practitioner had any information that ought to have put her on notice about whether it was appropriate to follow the instructions of ND at the relevant time.

The practitioner had acted competently throughout. There was no evidence that the practitioner had breached her duty of competence or duty of care to her client. She had acted with the proper degree of independence. There was no evidence of any conflicting interest or consideration in the way in which she acted. There was no evidence the practitioner had breached any of her fiduciary duties of loyalty, care, confidence or otherwise. N had not breached her duty to the Court or otherwise acted inappropriately in the manner in which she brought the ‘without notice’ application before the FC.

There was no evidence that the practitioner had acted other than in the interests of TY. There was no wrongdoing when a lawyer took guidance from the Attorney as to the best interests of a person who was incapacitated. The practitioner's conduct appeared to be professional, restrained and courteous throughout. The practitioner had properly deferred transferring files to Public Trust and when uncertainty arose due to conflicting medical reports, she had acted correctly in seeking the direction of the FC, and in acting on the basis of that direction.

Pursuant to s211(1)(a) LCA (powers exercisable on review), the decision of the Standards Committee was confirmed.


The Standards Committee declined to uphold a complaint made by TX against a lawyer, NE (the Practitioner). TX sought a review of the Standards Committee's decision and she is referred to as the Applicant throughout.


The Applicant's complaint relates to the conduct of the Practitioner when she acted for the Applicant's mother, TY, through TY's attorney, ND (the Attorney). TY was elderly at the time and issues arose as to whether she had capacity to manage her own affairs. The Applicant complained to the New Zealand Law Society that the Practitioner had acted inappropriately when she acted as the lawyer for TY on the instructions of TY's Attorney.


At the heart of the complaint was the Applicant's belief that the Attorney was not acting in the interests of TY when he was exercising his powers under the Enduring Power of Attorney that he held, and that he continued to act after the power had been validly revoked. The Applicant was of the view that the Practitioner acted inappropriately in following the instructions of the Attorney in a manner which she considered not to be in the interests of her mother and after he had been replaced as Attorney.


A key question underlying these matters was whether, at the relevant times, TY was competent to give the instructions she gave and take the steps that she in fact took, which included revoking the Power of Attorney she had given to ND. If she was not competent to revoke her Power of Attorney then ND continued to be authorised to act.


There is a fundamental divide in the views of the parties involved, insofar as the Applicant is of the view that her mother was at all relevant times competent and that steps taken by other parties which were premised on a lack of competence were ill-motivated. On the other hand the Practitioner states that there were genuine concerns that TY lacked the competence to make important decisions and therefore the Practitioner's actions were proper and justifiable on this basis.

The Complaint

The Applicant complained to the Law Society in September 2011. It is not necessary for the purposes of this review to go over all aspects of the complaint; however it centred on an allegation that in December 2009 TY wished to change her Power of Attorney to remove ND (who is her son-in-law) and to move the management of her affairs to Public Trust. It is alleged that the Practitioner ignored the wishes of TY and did not cooperate in moving the affairs of TY to Public Trust. It was further alleged that the Practitioner continued to act on the instruction of ND when she ought to have known ND was acting without authority.


It was also alleged that when the matter was brought before the Court on a ‘without notice’ application the Practitioner failed to properly inform the Court of all relevant facts (including the existence of certain documents signed by TY) when urgent directions were sought.


The Applicant also complained about certain letters being sent to her in respect of taking belongings from TY's house, and also in respect of requiring her to vacate the house.


A number of allegations were also made against ND that suggested that he was also being obstructive and not acting properly in accordance with the directions of TY. I note that ND is not the subject of the complaint and it would not be appropriate to make any findings about his conduct. The only conduct under scrutiny is that of the Practitioner NE.

The Response

In her response to the complaint the Practitioner provided a very detailed analysis which...

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