UF v OU
 NZLCRO 11
Concerning an application for review pursuant to section 193 of the Lawyers and Conveyancers Act 2006
Concerning a determination of the National Standards Committee
Application for review of Standards Committee determination to take no further action in respect of complaint filed by the applicant (a lawyer) — lawyer employed by the applicant made representations in an affidavit about the respondent's (also a lawyer) alleged failure to identify a conflict of interest — respondent emailed employed lawyer saying that if allegations were not withdrawn, the respondent would lodge a complaint with the Law Society — applicant complained the respondent had made a threat for improper purpose — whether or not the applicant as employer had sufficient standing to lodge the complaint — whether or not respondent's communication constituted a ‘threat’ for an improper purpose.
The names and indentifying details of the parties in this decision have been changed.
The issues were: whether UF had sufficient standing to lodge the complaint; and whether OU's communications to UG that he would lodge a complaint against UG if he did not withdraw the critical statements about OU constituted a ‘threat for an improper purpose’.
Held: Rule 2.8 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (“CCC Rules”) (reporting misconduct) required a lawyer to make a confidential report to the Law Society if they had reasonable grounds to suspect that another lawyer was guilty of misconduct. Rule 2.9 CCC Rules provided discretion to a lawyer to make a similar confidential report to the Law Society where they suspected another lawyer's conduct amounted to unsatisfactory conduct. It was therefore open to the Complaints Service to treat UF's complaint as a report in terms of r2.8 or r2.9 CCC Rules. If the complaint had been treated in this way, whether or not UF had standing would have become irrelevant.
Alternatively, as UG's employer and/or as UG's mentor, UF had sufficient personal interest in lodging the complaint. There was no reason to decline to consider the complaint on the grounds that UF did not have sufficient personal interest in the matter. It was possible that UG did not pursue this complaint himself because he was aware that UF had done so. The fact situation was similar to that in and the Court in that case had not adopted a view that there had been no standing to complain apply for judicial review in that case.
The lodging of a complaint should have no ulterior motive. The CCC Rules existed to maintain professional standards and any person was able to make a complaint about a breach of the CCC Rules. It was one thing to draw the attention of a lawyer in a collegial way to a possible breach of the CCC Rules but it was another to say that a complaint would be lodged unless the lawyer acted in accordance with demands made by the potential complainant (in this instance, the withdrawing of statements which were critical of OU). In other words, the “purpose” of the complaints process was to maintain professional standards. It was an “improper purpose” to threaten to lodge a complaint to have statements which were critical of the complainant withdrawn.
OU's primary objective was to have the critical comments about him withdrawn and he was not driven by his concerns about UG's conduct. In writing to UG in the manner expressed in the email, OU breached r2.7 (threats). Since OU had breached the r2.7, a finding of unsatisfactory conduct followed in terms of s12(c) Lawyers and Conveyancers Act 2006 (unsatisfactory conduct in relation to lawyers and incorporated law firms). While OU had faced a dilemma in how to address the situation, the method he chose was an error of judgment. In the circumstances however, no further order other than payment of costs would be made.
Determination of Standards Committee reversed.
UF has applied for a review of the determination by the National Standards Committee to take no further action in respect of UF's complaint about OU's conduct. OU had formerly acted for ZB who had then instructed CCS Chambers to act for him in respect of civil and criminal proceedings against him. OU objected to criticisms of his representation of ZB by UG, a barrister within CCS Chambers.
ZB, his wife (WR) and a company owned by them, were all defendants in summary judgment proceedings brought by CCT (NZ) Limited. ZB also faced criminal charges.
OU was initially instructed as a barrister to act for all three parties in the civil proceedings and another barrister was instructed to act for ZB in respect of the criminal proceedings.
The instructions to represent ZB were withdrawn from both barristers, and CCS Chambers was instructed. UF was briefed to act on the criminal charges, and UG was briefed on the civil proceedings. OU continued to act for the company and WR.
At the time UG was briefed, the time allocated for filing affidavit evidence had passed. UG formed the view that further evidence was necessary and made an application to file further evidence out of time. In support of that application he filed an affidavit by ZB.
In the memorandum in support of the application and in the affidavit, ZB and UG alleged that OU had failed to identify a conflict of interest in continuing to act for all defendants, and that “one person's interests [were] being sacrificed in the interest of another” 1 i.e. that ZB's defence was being sacrificed for WR.
OU objected to these allegations, particularly as they had not been put before him to respond to before they were included in the Court documents. A telephone conversation between OU and UG took place on 13 December 2010 and UG followed that up with the following email: 2
You have advised me today via phone that the affidavit of [ZB] is incorrect, and that you advised him of the conflict before the evidence was filed on his behalf for the summary judgment application.
You have also advised me that you advised [ZB] of the conflict and requested him to obtain legal representation before the expiry of time of filing evidence by second defendant in Auckland High Court for the summary judgment application.
Pursuant to the above you have stated that “unless I withdraw the application for more evidence already filed on behalf of [ZB] you will file a law society complaint against me”.
You are aware that your conduct is not proper and ‘bullying’ me into withdrawing an affidavit of a defendant.
As a matter of urgency provide to me written and signed acknowledgement of [ZB] acknowledging the conflict before the expiry of the time the second defendant could file his evidence for the summary judgment application.
I will discuss the matter with [ZB] today. Thanks and regards, [UG].
OU responded on the same day: 3
I am not going to respond to your requests except to say that your statements of what I allegedly said in my voicemail message to you are not correct.
It was unethical for you to file the affidavit and memo in court without consulting me first and you will now have to deal with the consequences in court or with the Law society. In advising [ZB] and [WR] I explored fully the facts of this case with them. There is no conflict between [ZB] and [WR] as to the facts of what happened and so I do not see how [ZB's] interests conflict with those of [WR]. They are in perfect agreement about the facts of what occurred. There is nothing about [WR's] defence which conflicts in any way with any defence that [ZB] might have. We discussed that it might be of tactical advantage for [WR] to be separately represented from [ZB] but they did not want to incur the additional costs of doing so at that early stage of the proceeding. Given that there was no factual basis for [CCU] and [ZB] to have an arguable defence to the claim, the agreed strategy was to file the notice and affidavits in opposition raising such matters as could be legitimately raised with a view to negotiating a settlement once they had sold their house. That is what was done. I do not see what further true evidence [ZB] can give that could raise any defence.
I am very concerned that you seem to be aiming to string out both the criminal and civil matters against [ZB] for no benefit to him because he has no defence to either. The appropriate advice to him on the criminal matter was to plead guilty at the first opportunity to minimise his sentence. That was the advice given by [HS]. I do not understand how you can legitimately give any different advice in his best interests. If he pleads not guilty and is ultimately found guilty, as he will be, then he will face a greater sentence.
The appropriate advice on the civil matter is that he has no defence on liability and his best strategy is to attempt to reach a settlement with CCT based primarily on his impecuniosity. He may have an argument regarding quantum but he will have to produce some evidence. I do not see how you can give any different advice inhis best interests. There is no merit in any proposed Credit Contracts Act defence for [ZB].
I discussed these matters with you at some length on the telephone last week. At no point during those discussions did you suggest any conflict of interest or that you proposed to file the documents that you have filed making scandalous allegations against me and CCV Law. I was quite happy with the proposition that [ZB] be separately represented for tactical reasons but there is no conflict of interest between [ZB] and [WR] because they are in complete agreement about the facts.
I request that you file a further memo before Court tomorrow withdrawing the allegations against solicitors and counsel. If you are not willing to do that then I will immediately complain to the Law Society.
These emails capture the issues at the heart of UF's complaint.
The complaint and...
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