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

• Jurisdiction: New Zealand
• Judge: D F Clarkson,Ms J Gray,Mr C Lucas,Ms C Rowe,Mr W Smith
• Judgment Date: 06 September 2016
• Neutral Citation: [2016] NZLCDT 24
• Docket Number: LCDT 007/16
• Court: Lawyers and Conveyancers’ Disciplinary Tribunal
• Date: 06 September 2016

In the Matter of the Lawyers and Conveyancers Act 2006

BETWEEN

Waikato Bay of Plenty Standards Committee no. 2

Applicant

and

Mr M

Practitioner

[2016] NZLCDT 24

CHAIR

Judge D F Clarkson

MEMBERS OF TRIBUNAL

Ms J Gray

Mr C Lucas

Ms C Rowe

Mr W Smith

LCDT 007/16

NEW ZEALAND LAWYERS AND CONVEYANCERS DISCIPLINARY TRIBUNAL

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.

COUNSEL

Mr P Davey for the Standards Committee Practitioner In Person

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 Act 1 deprive this Tribunal of jurisdiction?

• 2. Was the conduct of the practitioner of a professional or personal nature? (s 7(a) or (b)). 2

• 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 mentally incapable:

• • make payments in respect of out-of-pocket expenses incurred by my attorney:

• • make payments in respect of professional fees incurred by my attorney in any professional capacity:

Attorney to provide information on exercise of powers

7. My attorney must provide the following persons with the specified kinds of information relating to the exercise of the attorney's powers under the enduring power of attorney if those persons should request it:

• RDG of Auckland, New Zealand, Solicitor and JAB of Auckland, Retired as to significant expenditure over $5,000 and provide copies of financial statements.

10 On 5 May 2014 Dr S certified that Ms G was mentally incapable of handling her own affairs.

11 Following this Mr M visited Ms G and discussed with her the management of her affairs. He gathered up a number of papers that he found at the rest home where she lived and carried out due diligence in relation to her financial affairs.

12 In the course of doing so Mr M uncovered a Westpac account about which Ms G had been unaware and which had simply continued as a term deposit for some 25 years. Ultimately the discovery of this account provided over $39,000 to Ms G's assets of which she had previously been unaware.

13 Ms G was also the beneficiary in an estate in the United Kingdom which required some input from Mr M in terms of assisting her to make her claim on the estate. The difficulties arose in this, and indeed in some of the banking transactions because Ms G no longer had any form of verifiable identification, having destroyed her driver's licence and having no current passport. The interest in the estate was a significant one and was expected to yield Ms G some $500,000 to $600,000.

14 Prior to the EPA becoming operative, Mr M's evidence is that he and Ms G had had conversations concerning the use of her expected inheritance. While Ms G had a will, she had no children or close relatives in New Zealand and had intended to make some charitable bequests. Mr M made the suggestion that she might derive more enjoyment from seeing the money utilised during her lifetime, by means of a gift to charity, and she was said to have agreed wholeheartedly with this notion. Mr M then discussed with Ms G certain projects within his own charity — one whereby wages were required for a certain staff member in the charity and another which involved the purchasing of land and building from which the charity's operations could be conducted. In relation to the first project Mr M said that Ms G agreed to contribute $20,000 which was the annual salary of the staff member (although ultimately this was not required for that purpose and the funds were applied to the building project as far as we are able to ascertain). This donation was to come from the maturing of another term deposit held by Ms G.

15 Further, however, Mr M says Ms G agreed to the suggestion that she pledge $80,000 of her expected inheritance towards the building project. Mr M is clear, and there is no reliable evidence to the contrary (Ms G now suffering from dementia to the extent that her evidence was not available and would not, in any event, be reliable) that Ms G made this pledge verbally at a time when she was still competent.

16 However the two $10,000 payments which comprised the $20,000 donation were not...