Wellington Standards Committee 2 v Morahan
| Jurisdiction | New Zealand |
| Judge | BJ Kendall,Mr J Bishop,Mr W Chapman,Mr S Maling,Mr K Raureti |
| Judgment Date | 22 September 2017 |
| Neutral Citation | [2017] NZLCDT 24 |
| Docket Number | LCDT 022/16 |
| Court | Lawyers and Conveyancers’ Disciplinary Tribunal |
| Date | 22 September 2017 |
Judge BJ Kendall (retired)
MEMBERS OF TRIBUNAL
Mr J Bishop
Mr W Chapman
Mr S Maling
Mr K Raureti
LCDT 022/16
NEW ZEALAND LAWYERS AND CONVEYANCERS DISCIPLINARY TRIBUNAL
Law Practitioners — the respondent was charged with misconduct and in the alternative conduct unbecoming of a barrister and solicitor and negligence or incompetence under the Law Practitioners Act 1982 (“LPA”) and Lawyers and Conveyancers Act 2006 (“LCA”) — whether the charge under the LPA should be struck out on the grounds it breached s351 LCA (complaints about conduct before commencement of section — no person was entitled to make a complaint in respect of conduct that occurred more than 6 years before the commencement of this section) — whether R had engaged in misconduct — conflict of interest between clients
Mr D La Hood and Mr I Auld for the applicant
Mr A Beck for the respondent
REASONS FOR THE DECISION OF THE NEW ZEALAND LAWYERS AND CONVEYANCERS DISCIPLINARY TRIBUNAL CONCERNING CHARGES
The respondent has pleaded not guilty to two disciplinary charges brought by the applicant.
The first charge is under s 112(1)(a) of the Law Practitioners Act 1982 (the 1982 Act). That charge alleges that between 1 August 2002 and 1 August 2008 the respondent engaged in conduct that constituted misconduct in his professional capacity. He is charged in the alternative with conduct unbecoming of a barrister and solicitor (s 112(1)(b) of the 1982 Act). There is a further alternative charge of negligence or incompetence in his professional capacity (s 112(1)(c) of the 1982 Act).
The second charge is under s 241 of the Lawyers and Conveyancers Act 2006 (the 2006 Act). That charge alleges that he engaged in conduct after 1 August 2008 that constituted misconduct pursuant to s 241(a) of the 2006 Act. He is also charged in the alternative with unsatisfactory conduct. (s 241(b) of the 2006 Act). There is a further alternative charge of negligence or incompetence (s 241(c) of the 2006 Act).
Full details of the charges and particulars of the charges are attached as appendix A.
At the commencement of the hearing of the charges on 17 August 2017, counsel for the respondent applied for Charge 1 to be struck out on the ground that it had been laid in contravention of s 351 of the 2006 Act and alternatively for lack of evidentiary foundation.
The Tribunal heard argument from both counsel. It retired to consider the application. It advised counsel that it had declined the application and that it would record its reasons for doing so.
The relevant parts s 351 of the 2006 Act provide:
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“(1) If a lawyer or former lawyer… is alleged to have been guilty, before the commencement of this section, of conduct in respect of which proceedings of a disciplinary nature could have been commenced under the Law Practitioners act 1982, a complaint about that conduct may be made after the commencement of this section, to the complaints service established under section 121(1) by the New Zealand Law Society.
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(2) Despite subsection (1), no person is entitled to make under this Act—
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(b) a complaint in respect of —
(i) conduct that occurred more than 6 years before the commencement of this section;”
The section commenced on 1 August 2008 (cl 2 Lawyers and Conveyancers Act Commencement Order 2008 SR 2008/182).
Mr Beck submitted that paras [8] to [25] of the particulars relating to Charge 1 concern events that occurred before 1 August 2002 and were relied on by the applicant in relation to that charge (para [52](a) to (c)). His submission was that by so doing, Charge 1 is a complete charge which includes conduct occurring before 1 August 2008. He said that the applicant had refused to separate out the disparate conduct included in charge 1 and that the result must be that the whole of charge must stand or fall together and be dismissed.
The alternative argument for dismissal of Charge 1 was that the applicant had not laid an evidentiary foundation for the charge. With reference to paras [52](d), (e), (f), (g), and (h)] relating to alleged breaches of the rules, the submission was:
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(a) That the complainant had not provided evidence that the respondent was acting for her;
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(b) That the applicant had not provided any evidence of the respondent's prior knowledge about the complainant's affairs;
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(c) That there was no evidence of any advice given by the respondent in respect of relevant transactions.
Counsel for the applicant emphasised that Charge 1 made it clear that it covers only conduct occurring after 1 August 2002 and that the “particulars of the charge” being the “facts and matters relied on” to prove the charge are distinct from the charge itself, (Form A of the Schedule to the Lawyers and Conveyancers Act (Disciplinary Tribunal) Regulations 2008).
He accepted that the charge can only be proven by conduct that post dates 1 August 2002. He argued, however, that conduct prior to that date is relevant to consideration of the charge because it would be artificial and inappropriate for a course of conduct to be looked at by only considering evidence relating to part of that course of conduct. He said that the Tribunal's view of the nature and effect of that conduct needs it to consider the full context of that conduct, which cannot be considered in isolation from, and without reference to, the earlier conduct. He referred the Tribunal to the Court of Appeal's decision in Duncan v Medical Practitioners Disciplinary Committee. 1 That decision was cited by Judge Clarkson in her pre-trial direction of 9 March 2017 on this matter as allowing a course of conduct or a cumulative approach to charging a single charge of misconduct. There was emphasis on the need for such a charge to be appropriate to the width of the case and for the decision maker to transparently consider the gravity of the conduct overall.
The Tribunal reminds itself that the charge can be proved only on findings made in respect of conduct alleged to have occurred after 1 August 2002. It finds that a consideration of related conduct prior to that date is relevant in establishing context. To decline to consider that relevant conduct would create artificiality of the kind contended for by counsel for the applicant. See also National Standards Committee v Jeanne Denham 2.
As to there being no evidential foundation for the charge, the matter can be dealt with directly by saying that the application is premature and should await the hearing of the evidence. We agree with Judge Clarkson's comment in her direction of 9 March “that pleadings are not evidence”. There has been no challenge that the amended charges fail to inform the respondent of the substance of the allegations made against him.
For the reasons set out here the Tribunal declined to dismiss Charge 1.
The factual background, which is not disputed, is that the respondent acted as the solicitor for PJ and his family trust. He was also a trustee of the trust. Ms B commenced a de facto relationship with PJ in about July 1998. She owned her own freehold home at that time. In January 1999 PJ and Ms B entered into an agreement to purchase a home at Rosetta Road Raumati. The respondent acted for them both on the purchase.
Ms B loaned $150,000.00 towards the purchase by taking a mortgage for that amount secured over her home. The respondent acted for her in registering the mortgage.
Mr J and Ms B married in April 1999. In April of that year Ms B was appointed an additional trustee of the family trust and in May 1999 she and her children were added as discretionary beneficiaries of the trust. The respondent acted for all parties on both of these changes.
Title to the Rosetta Road home was transferred into the joint names of PJ and Ms B on 27 July 1999 with the respondent acting on that conveyance. Prior to that they had borrowed $50,000 from Guardian Assurance Limited which was secured over the property and in respect of which the respondent registered the mortgage against the property.
On 29 February 2000, ownership of the Rosetta Road home was transferred to the trust. The respondent acted for all parties in respect of this transaction.
On 1 March 2002 Ms B was removed as a trustee of the trust.
Ms B sold her home in or around December 2004 and at about that time loaned the net proceeds of the sale ($60,000.00) to the trust to assist with the purchase of a property at Golf Road, Paraparaumu. The respondent acted on the purchase of that property.
Between February 2000 and July 2005 the trust obtained loans from various financial institutions security for which was provided over the Rosetta Road home. The respondent acted for the trust on those matters. In or around July the respondent acted for the trust in arranging a restructure of the various mortgages so that the property became the subject of a single mortgage in favour of TSB.
The trust sold Rosetta Road for $680,000.00 in or around July 2005. The net proceeds of sale of $34,071 were credited to the trust. The respondent acted for the trust in relation to the sale.
The applicant alleges a failure by the respondent to discharge his professional obligations to Ms B as follows:
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(a) In acting for Mr J, Ms B, and the trust he failed to advise her of the conflict of interest or the need to get independent legal advice about the transfer of the Rosetta Road property from joint ownership to the trust;
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(b) By acting for Mr J on the removal of Ms B as a trustee of the trust without first obtaining her consent;
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(c) By continuing to act for the trust and Mr J after her removal as a trustee without obtaining her prior informed consent;
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