TX v NE
| Jurisdiction | New Zealand |
| Judgment Date | 18 February 2013 |
| Neutral Citation | [2013] NZLCRO 6 |
| Date | 18 February 2013 |
| Docket Number | LCRO 03/2012 |
| Court | Legal Complaints Review Officer |
Concern Ing an application for review pursuant to section 193 of the Lawyers and Conveyancers Act 2006
and
Concerning a determination of the Nelson Standards Committee
[2013] NZLCRO 6
LCRO 03/2012
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.
TX as the Applicant
NE as the Respondent
The Nelson Standards Committee
The New Zealand Law Society
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 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.
In her response to the complaint the Practitioner provided a very detailed analysis which traversed the history of the matter. At the heart of the response was that in December 2009 concerns existed that TY's mental health had deteriorated such that she may have been unable to manage her affairs.
In respect of the transfer of the affairs to Public Trust it was noted that discussions occurred with Public Trust which included the concern that TY did not have the capacity to make the decision to move her affairs. After those discussions the Practitioner states that she understood that Public Trust would not take any further steps without consulting her (the Practitioner) and she noted this in her letter to Public Trust of 15 December 2009, which was provided to the Committee. However it appears that without any consultation, Public Trust in late December 2009 / early January 2010 sought the transfer of TY's files to Public Trust on the basis of a handwritten authority. The Practitioner doubted that TY had the capacity to authorise the transfer of the files to Public Trust. In light of her concerns and the previous discussion (and the fact that the request arrived in the summer holiday period) no action was taken in January on the matter.
The Practitioner outlined the steps that she took which, in her view, were appropriate to protect the interests of TY in the event that she was making inappropriate decisions due to the status of TY's capacity. This included ensuring that only ND as Attorney could withdraw funds from bank accounts and arranging for a medical assessment to determine the capacity of TY. The Practitioner explained that she had spoken to the Applicant on a number of occasions about the matter at around this time and emphasised the need for a medical assessment before it was safe to rely on, and act on the basis of, the decisions of TY.
A medical report was obtained on 1 February 2010 and it indicated that TY lacked the capacity to make important decisions. On the basis of this report the Practitioner continued to act on the instructions of the Attorney, ND, who had been properly appointed and whose appointment had not been revoked (and was expressed not to be revoked in the event of incapacity of TY).
It appears that around this time concerns were raised by family members about the conduct of the Applicant towards TY. The Practitioner wrote to the Applicant explaining her view of the position in relation to the Power of Attorney (advising that ND held the appropriate power) and referring to a suggestion that if property of TY's was to be removed by the Applicant, that this would not be appropriate.
At this time it also appears that ND instructed the Practitioner not to provide documents to the Applicant because although the request appeared to be signed by TY, he did not consider that TY was competent to give that instruction. The Practitioner followed the direction of ND in that regard.
The Practitioner also noted that in early May 2010 some confusion arose as to whether ND's Power of Attorney was effectively revoked by a revocation executed in early May and replaced by a power in favour of Public Trust. The Practitioner corresponded with Public Trust in this regard but it appears that matters were not resolved. Consequently a ‘without notice’ application was made to the Family Court for a direction on 17 May 2010. The Court ordered that the powers held by ND were valid and were to remain in place until any further order of the Court at a substantive hearing.
The Applicant provided a lengthy reply to the Practitioner's correspondence to the Standards Committee. The Applicant reiterated her view that ND had acted inappropriately and that the Practitioner ought not to have followed his instructions. She considered that the Practitioner ought to have sought instructions directly from TY. The Applicant raised several objections to the Practitioner's response, suggesting that it lacked detail and disagreeing with a number of the factual assertions or inferences made. She also provided her further views and information about the factual background to these matters.
The main thrust of her reply was that the Practitioner ought not to have blindly followed the instructions of ND and ignored the requests of TY. The Applicant maintained that ND was acting inappropriately and against the interests of TY. She alleged that ND (who was not only TY's Attorney but also a trustee of the family trust and a beneficiary under the will) preferred his own interests and was motivated by greed. In support was a Deed of Forgiveness of Debt between TY and the TY Trust, showing the gifting of around $150,000.00 by TY to the trust over a period of some five or six years.
The Applicant also stated that the Practitioner ought not to have acted in the absence of a certificate in respect of the lack of competence of TY from a medical practitioner. She stated that the Practitioner owed duties not only to TY but also to her as a beneficiary under TY's will.
The Standards Committee considered in some detail the complaint, as well as the response of the Practitioner and...
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