UF v OU

• Jurisdiction: New Zealand
• Judgment Date: 20 March 2013
• Neutral Citation: [2013] NZLCRO 11
• Date: 20 March 2013
• Docket Number: LCRO 90/2011
• Court: Legal Complaints Review Officer

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

Concerning a determination of the National Standards Committee

BETWEEN

UF

Applicant

and

OU

Respondent

[2013] NZLCRO 11

LCRO 90/2011

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failure to identify a conflict of interest — respondent emailed employed lawyer saying that if allegations were not withdrawn, the respondent would lodge a complaint with the Law Society — applicant complained the respondent had made a threat for improper purpose — whether or not the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.

Introduction

1 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.

Background

2 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.

3 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.

4 The instructions to represent ZB were withdrawn from both barristers, and CCS Chambers was instructed.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.

5 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.

6 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.

7 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

Dear Counsel,

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].

8 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 in

his 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.

9 These emails capture the issues at the heart of UF's complaint.

The complaint and the Standards Committee determination

10 UF listed seven complaints about OU's conduct. They were: 4

• 1. That he improperly threatened [UG] with a personal attack if he continued to advance [ZB's] instructions;

• 2. That he also, or in the alternative, failed to advise [ZB] of potential conflict-of-interest in representing both him and the wife;

• 3. That he further, or alternatively, was incompetent in not realising that the purported conflict-of-interest has nothing to do with a factual dispute, but rather potentially conflicting defences of CCT's claims;

• 4. That he furthermore, or additionally, has accused [UF] of giving poor criminal law advice when he is not a criminal lawyer and in any event not privy to the criminal file — and therefore disrespected [UF] without cause;

• 5. That he moreover, or also, has accused [UG] of giving poor civil law advice when [UG] is [ZB's] current counsel and acting on instructions — and therefore disrespected [UG] without cause;

• 6. That he fails to properly keep written records of important legal advice he gives to clients (as to conflicts) or on the other hand fails to properly keep file notes (as to non-conflicts); and

• 7. That it appears he failed to communicate important matters through his instructing solicitors.

11 He subsequently amended his complaint to include an allegation that OU had accused UG of providing false information to the Court without any evidence to support that claim. He also complained that OU had provided evidence from the Bar when he (OU) filed a memorandum with the Court in which he asserted that the allegations in the application and affidavit were not correct (and known by UG to be incorrect) and advised that he intended to lodge a complaint with the Law Society unless the allegations were withdrawn.

12 The Standards Committee recorded its determination in the following way: 5

• 1. Pursuant to section 138(1)(e) of the Lawyers and Conveyancers Act 2006 (“the Act”) it [the national Standards Committee] is of the opinion that [UF], as the complainant, does not have sufficient personal interest in the subject matter of the complaint; and

• 2. Pursuant to section 138(2) of the Act it appears that having regard to all the circumstances of the case, no further action is necessary or appropriate, for the reasons below:

  • a) there appears to be no evidence of any professional misconduct issues on the part of [OU];

  • b) the conflict of interest accusations made by [UF] against [OU] were matters that were more appropriate for [ZB] or [WR] to raise; and

  • c) the proceedings to which the subject matter of the complaint relates appear now to be resolved

13 UF has applied for a review of that determination.

Review

14 A review hearing took place in Auckland on 4 December 2012 attended by both parties.

Standing

15 UF advised that he was the director of CCS Lawyers...