Vj and Vl v Ae

• Jurisdiction: New Zealand
• Judgment Date: 14 May 2013
• Neutral Citation: [2013] NZLCRO 19
• Date: 14 May 2013
• Docket Number: LCRO 88/2012
• Court: Legal Complaints Review Officer

BETWEEN

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

and

Concerning a determination of the Auckland Standards Committee

VJ and VL

Applicants

and

AE

Respondent

[2013] NZLCRO 19

LCRO 88/2012

Application for review of the Standards Committee's decision to take no further action in respect of complaint about practitioner's refusal to refund any part of fee paid for representing applicants on criminal charges — applicants were US citizens visiting NZ when charged with receiving stolen property — paid practitioner agreed sum of $10,000 — practitioner gave the matter high priority and expedited resolution instructed — before plea, applicants advised that they intended to stay in NZ to defend charges, terminated services of practitioner, briefed another practitioner and sought refund of half of fee — said amount charge was dependent on appearance at sentencing indication hearing — whether there had been a conditional fee agreement — whether fee charged was fair and reasonable.

DECISION

Introduction

1 This is an application for review of a decision of the Auckland Standards Committee 5 which considered a complaint by VJ and VL (the Applicants) against AE (the Practitioner). The Standards Committee resolved to take no further action on the complaint and the Applicants seek a review of that decision.

2 The complaint concerned the Practitioners refusal to refund any part of the fee that had been paid by the Applicants when the Practitioner represented them in relation to certain criminal charges.

3 The Applicants had paid the Practitioner the agreed sum of $10,000. Matters did not eventuate as originally planned or envisaged and the Applicants then briefed another lawyer, and sought a refund of part of the payment made to the Practitioner.

Background

4 The Applicants are a mother and daughter who were visitors to New Zealand. They were detained at [a New Zealand] Airport when attempting to leave the country with an amount of jewellery in their luggage. This jewellery was alleged by the Police to have been stolen and therefore they were each charged with receiving stolen property. While the initial estimate of the value of the alleged stolen property was $500,000, at the Applicants' second appearance in Court a second charge of receiving was laid, meaning that that the total estimated value of the jewellery was $770,000.

5 One of the Applicants contacted the Practitioner from the [Auckland] Police Station by means of the Police Detention Legal Assistance Scheme roster and as a result she met with the Applicants at the Auckland District Court the next morning, Friday [date] May 2011. A bail application made by the Practitioner was successful and the Applicants were remanded until the following Tuesday ([date] May 2011). After their release the Practitioner attended upon the Applicants in her office for some hours.

6 The Practitioner later informed the Complaints Service that the instructions she had received were that the Applicants wanted to resolve the matter quickly so that they could return home to the United States within the week. She wrote that they made it clear that they wanted their matter to be given top priority. The Practitioner advised that she had discussed with them what was involved and that considerable thought would need to be given as to how the matter could be resolved. She advised that her fee of $10,000 including GST was discussed and agreed upon, and that she had handed them an invoice dated [date] May 2011 for that amount.

7 The narration of her invoice is as follows:

My fee for professional attendances in respect of receiving charges, including attendances on yourselves and Police, attending to execution of Official Information & Privacy Act forms for request of disclosure of Police file, serving same on Police, all attendances at Auckland District Court for bail and resolution of charges, reporting to you and to all incidental matters thereto.

8 The timesheet provided by the Practitioner showed that she gave the matter high priority as requested by the Applicants. There was a record of numerous telephone discussions with the Applicants and the Police, work done over the weekend, and an excess of six hours spent on the following Monday attending upon the Applicants at her office, more telephone discussions with the Police, and research and preparation for the Applicants' second appearance at Court the next morning.

9 At that appearance the Police sought a two week remand for further enquiries, but over the Police opposition, the Practitioner was successful in obtaining a shorter remand to the Friday (three days later) for a sentence indication where the Practitioner proposed to make the application by oral submissions so as to expedite resolution of the matter quickly, as had been sought by the Applicants.

10 In a five page letter that the Practitioner hand delivered to the Applicants later that day ([date] May 2011) the Practitioner provided a thorough and detailed report setting out the facts, summarising the Applicants' instructions, the relevant law, penalty and plea, and informing them of their options. Under the discussion relating to “Penalty” the Practitioner recorded the maximum penalty and the approximate value of the jewellery and informed the Applicants that in the circumstances, and notwithstanding that they were each first offenders, there was no guarantee that they would not receive a sentence of imprisonment.

11 The Practitioner went on to explain the “sentence indication” process and concluded her letter with the request that she receive clear instructions regarding their plea before the next Court appearance on Friday. This letter also reiterated to the Applicants that the Police regarded the matter as “a serious offence” at the top of the range. She continued that in normal circumstances one would expect the Judge to indicate a significant term of imprisonment, and she informed them that “[i]n putting forwarded [their] case [she] [would] be emphasising the fact that all the jewellery [had] been recovered and that [they were] U.S citizens with responsibilities and commitments.” 1

12 The next morning, Wednesday [date] May 2011, the Applicants advised the Practitioner that they wished to defend the charges and that they intended to stay in New Zealand for that purpose, and also advised the Practitioner that her services were no longer required. They raised the issue of a fee refund.

13 The Practitioner informed the Complaints Service that in response to the request for a refund she advised that she would check her timesheet to see what time had been spent. She further stated that on checking her timesheets it was clear that she had already spent time on the matter in excess of the agreed fee, adding that she was nevertheless willing to complete the retainer as per the agreed fee. In any event the matter was not resolved between the parties and a complaint was then made to the New Zealand Law Society.

Complaint

14 In their complaint the Applicants sought the return of “at least half of the money … given that [the Practitioner] did not fulfil her role.” 2 The basis of the complaint was that they felt they had been “overcharged”. They wrote that they had agreed to a pay a fixed price until the resolution of the case. They did not consider their case had been resolved, and considered they were entitled to a refund. They also disagreed with the timetable (presumably the Practitioners time records) which they perceived to be exaggerated.

Practitioners response

15 The Practitioner responded to the complaint, which she understood to be that she had agreed to a fixed fee until the case was disposed of, and that this fee potentially included the Applicants' changing their instructions and defending the case.

16 The Practitioner clarified that “the fee was based on the ‘disposing’ of the charges within the week, and would involve a guilty plea and possibly a substantial fine.” 3 She explained that during the period she acted for the Applicants there was never any suggestion on their part to the Practitioner that they wished to remain in the country to defend the charges.

17 The Standards Committee file showed that the Practitioners response was sent to the Applicants who were invited to respond. The possibility of the appointment of a Costs Assessor was signalled. A Costs Assessor was in fact appointed and the parties were advised accordingly. The Cost Assessors report was eventually sent to the parties with an invitation to comment. The Practitioner took the opportunity but the Applicants did not. They were sent a copy of the Practitioners comments and advised that the complaint file would be placed before the Standards Committee “within the next month or two”, 4 which was done.

Cost assessment

18 After examining the relevant information (time and attendance records) the Costs Assessor concluded that the complaint was justified and that the Practitioner should refund $4,000 of the $10,000 to the Applicants. In a detailed report the Costs Assessor concluded that the parties had entered into a “conditional fee agreement”. In reaching this conclusion he relied on the following part of the Practitioners response to the complaint: 5

• [AE] put the terms of agreement as follows:

  “There was a clear understanding between the three of us that the resolution would be on the basis of a guilty plea and an appropriate penalty. There was no suggestion they wished to defend the charges as it would have been impossible within that time frame. If there had been any suggestion or contemplation of a jury trial I would not have quoted a fixed fee of $10,000 inclusive of GST.”

19 The assessors view was that the complaint was justified and that the Practitioner was obliged to...