Waikato Bay of Plenty Standards Committee no.2 v Mr M

 
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[2016] NZLCDT 24

NEW ZEALAND LAWYERS AND CONVEYANCERS DISCIPLINARY TRIBUNAL

CHAIR

Judge D F Clarkson

MEMBERS OF TRIBUNAL

Ms J Gray

Mr C Lucas

Ms C Rowe

Mr W Smith

LCDT 007/16

In the Matter of the Lawyers and Conveyancers Act 2006

BETWEEN
Waikato Bay of Plenty Standards Committee no. 2
Applicant
and
Mr M
Practitioner
COUNSEL

Mr P Davey for the Standards Committee Practitioner In Person

Charges against a practitioner in respect of his actions under an Enduring Power of Attorney (EPA) — the practitioner had been appointed as the attorney of one of his friends — a doctor certified that she was incapable of handling her affairs and the practitioner took over their administration — at the time he did not hold a practising certificate but later obtained one — he made payments from the donor's accounts to a charity with which he was associated — he then obtained a barrister's practising certificate and began to invoice the EPA donor for various services, including time spent answering queries as to how money had been spent — whether the existence of supervisory powers under another piece of legislation, in removed the disciplinary jurisdiction of the Tribunal — whether the practitioner was providing regulated services — whether the donor was not a client as she lacked capacity to instruct him — whether the practitioner had breached r 5 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (independence) — whether the practitioner had breached the intervention rule.

The issues were: whether the existence of supervisory powers under another piece of legislation, in removed the disciplinary jurisdiction of the Tribunal; whether M was providing regulated services; whether G was not a client as she lacked capacity to instruct him; whether G had breached r 5 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (independence); and, whether G had breached the intervention rule.

Held: The existence of supervisory powers under another piece of legislation, in this case the PPPRA, did not remove the disciplinary jurisdiction of the Tribunal. Certainly the examination of conduct in the criminal justice setting in no way removed its jurisdiction, and in fact at times formed the platform for it.

There was no gap between personal and professional conduct considered in ss 7(1)(a) and 7(1)(b)(ii). It was clear that personal misconduct, with its higher threshold, was limited to situations clearly unconnected with the work environment (Orlov).

In assessing M's role, following was to be noted:

  • • He stated on a number of occasions in the correspondence that he was justified in charging fees when acting in his professional capacity; He issued invoices referring to professional attendances such as drafting and having declarations sworn for the estate claim;

  • • He had G sign an acknowledgement that he was entitled to charge and take payments as her attorney when acting “in any professional capacity”.

The correct section under which the conduct was to be considered was therefore s7(1)(a). The notion that G was not a client because she lacked capacity to give instructions was rejected. Such a reading of the LCA would totally undermine the protective purposes contained in s 3.

The most serious alleged breach was that of r 5, which concerned acting when a conflict of interest existed. The following examples of conduct was of concern, because of rule infringements:

  • • M was not alert to the conflict of interest which existed between his role as Chairperson of the charity which received a donation from G's funds, and his role as her attorney (Rule 5);

  • • He was a barrister acting as an Attorney under an EPA (r 14.2(c));

  • • He was a barrister without an instructing solicitor (r 14.4), and in addition charged fees directly;

  • • He held cash funds for a client (r 14.2(e));

  • • He did not provide his client with the statutory information required (r 3.4, which applied to barristers at that time);

  • • He billed seven hours for a simple query about his conduct, when no charge ought to have been made;

  • • He did not provide fulsome details about the $20,000 payment, when asked to explain it;

  • • In allowing the building purchase (by ‘his’ charity) to proceed after the $20,000 payment had been questioned he again acted in conflict of interest;

  • • He appeared to consider his subsequent resignation from the charity position resolved any conflict;

  • •He failed to seek guidance from the court on his role, although it was accepted he did seek advice.

The breaches of these rules were not wilful or reckless. M was inexperienced and misguided in his actions. This was the first time he had acted as an attorney under an EPA. He did seek advice, but unfortunately did not follow through on and application to the Family Court to clarify his position. Although serious and muddled, his conduct was not intended to do anything other than enact the wishes of G while competent.

M's behaviour was not disgraceful or dishonourable. He was well-motivated to assist a person who had been a longtime friend and who shared the same concerns as him, as reflected in their charitable work. This fell short of misconduct.

Viewing the listed conduct above overall, M was not guilty of negligence or incompetence, to the degree specified by s241(c) LCA, namely of such a degree as to reflect on his fitness to practice, or as to bring the profession into disrepute. The failure to be attuned to a possible or actual conflict of interest was a very serious one. If lawyers are not so attuned, there was a significant potential for damage to the lay person. Clarity of role was essential in a lawyer, and M failed to maintain that clarity.

The charge was proved at the standard of negligence.

DECISION OF TRIBUNAL ON LIABILITY FOR CHARGE
Introduction
1

The practitioner, Mr M, had been friends with the complainant, Ms G, for over 40 years. In 2012 she appointed him as her attorney under an Enduring Power of Attorney (“ EPA”), having consulted with her own lawyer, Mr G.

2

When, following hospitalisation in early 2014, a doctor certified in May 2014, that Ms G was no longer competent to manage her own affairs, the EPA “crystallised” and Mr M stepped up to help out his old friend.

3

Sadly, Mr M was not attuned to the different (and, as we have found, conflicting) roles imposed on him. He did not understand that in acting as Attorney, as well as being Chairman of the local branch of a charity, to which Ms G would make donations, he was placing himself into a position of divided loyalties.

4

When shortly after, he resumed practice as a barrister, and charged fees for his attendances to Ms G, he had become even more muddled and unaware of the ethical obligations to which he needed to pay attention.

Issues
5

The issues which emerged as requiring determination are:

1
    Do the supervisory provisions of the PPPR Act1 deprive this Tribunal of jurisdiction? 2. Was the conduct of the practitioner of a professional or personal nature? (s 7(a) or (b)).2 1 Protection of Personal and Property Rights Act. 2 Lawyers and Conveyancers Act 2006 (“LCA”). 3. Were the breaches of the Rules by Mr M, such as to be characterised as wilful or reckless, so as to constitute “misconduct”? 4. Alternatively, was Mr M's conduct disgraceful or dishonourable, so as to constitute misconduct? 5. If not, did the evidence establish negligence or incompetence to the extent set out in s 241(c)? 6. If not, was Mr M's conduct such as to be categorised as “unsatisfactory” pursuant to s 12 of the LCA?
Background
6

We wish to note that the charge brought relates to conduct after a practising certificate was granted to Mr M on 15 July 2014. The events prior to that date are recorded simply to contextualise the conduct under consideration after 15 July, for example, to provide information about how he came to be in possession of certain funds of the complainant.

7

Mr M had practised as a barrister sole for a number of years until 30 June 2013, took a break for approximately 11 to 12 months and sought a further practising certificate, which was issued on 15 July 2014. He retired from practice at the end of January 2015. Mr M is in his early 70s.

8

He had been friends with the complainant Ms G for well over 40 years and they both shared an interest in a particular area of charitable work. Ms G had been supportive of various charities aligned with this area for her entire working life, as reported by Mr M.

9

As stated in the introduction Ms G executed an EPA on 25 May 2012 appointing Mr M as her Attorney. The terms of the EPA were standard. The particular clauses which have been under scrutiny are Clauses 6 and 7 which read:

Attorney's power to benefit self and others

6. I authorise my attorney to do the following when acting on my behalf when I am...

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