XG v BC

• Jurisdiction: New Zealand
• Judgment Date: 24 July 2013
• Neutral Citation: [2013] NZLCRO 33
• Date: 24 July 2013
• Docket Number: LCRO 131/2011
• 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 [a North Island] Standards Committe

BETWEEN

MR XG

Applicant

and

MR BC

Respondent

[2013] NZLCRO 33

LCRO 131/2011

LEGAL COMPLAINTS REVIEW OFFICER

Complaint that a practitioner refused to pay a bequest from his trust account until the beneficiary provided identification in the form of a driver's licence with photographic ID — beneficiary objected on privacy grounds — practitioner referred to the Land Information New Zealand standard for verification of identity which was ratified by the New Zealand Law Society — whether practitioner was entitled to insist on the photographic identification before paying the bequest.

Introduction

1 Mr XG has sought a review of the determination by [A North Island] Standards Committee to take no further action in respect of his complaint about Mr BC who required identification from Mr XG before he would pay Mr XG a bequest due to him from his trust account.

Background

2 Mr XG is a beneficiary of an estate.

3 Mr BC acts for the executors in the administration of the estate.

4 The amount due to Mr XG was approximately $29,000 and the funds to make payment of this amount were held in Mr BC's trust account. The executors instructed Mr BC to make payment to Mr XG provided he was satisfied as to Mr XG's identity.

5 Mr BC requested all beneficiaries of monetary bequests (of which there were 70) to provide photographic ID such as a driver's licence or passport as proof of identity. The photographic ID was to include all data, including the expiry date and the relevant number.

6 Mr XG objected to this on privacy grounds. He provided a copy of his licence (verified by a JP) but obliterated all details apart from his name and signature. This was attested to by a JP who certified that he had sighted the original driver's licence.

7 Mr BC rejected this on the basis that a copy of the original licence (showing all details) was not provided. He also rejected another photograph provided by Mr XG in which he had covered his face with his hair.

8 Mr BC declined to make payment to Mr XG unless his requirements as to identity were satisfied.

9 Mr XG complained to the New Zealand Law Society Complaints Service.

10 The Standards Committee recorded its determination in the following way: 1

Mr BC is acting on the express instructions of the executors and, to comply with the trust account rules is entitled to satisfy himself as to the standard of acceptable identification. The Committee compared this to the identity requirements for the Financial Transactions Reporting Act 1996 and for regular e— dealing with Land Information NZ.

The complainant provided copies of his Driving Licence with the face and unique identifier obscured as well as providing photographs of himself with his hair over his face but with his identify confirmed by a JP. The Committee believes that Mr BC was acting appropriately in not accepting either of these as adequate identification. The practitioner has told the complainant that if he does not have some form of photographic identification, a photograph of himself along with the statutory declaration from somebody who has known Mr XG for a number of years would be reasonable.

The Committee noted that there has been some sort of a ruling from the Privacy Commissioner but the Committee believes that Mr BC is perfectly entitled to nominate the form of reasonable identification that he requires to make payment from his trust account.

The Committee believes that Mr BC is acting reasonably and would be considered imprudent to do otherwise. Furthermore there were express instructions from the executors to be rigorous in the identification process, to avoid any personal liability coming back on the executors.

Review

11 The parties were invited to attend a mediation to enable them to agree on a form of identification that would meet each of their requirements.

12 Mr BC responded: 2

May I remind you that my legal obligation is to my client, the Trustees of the Estate of Mrs XG. My obligation is not to [Mr XG] and his views on whether he accepts or otherwise my requirements for identification are irrelevant.

Likewise, with respect, nor am I obligated to your office to attend any mediation. A mediation that will serve no purpose whatsoever as I will not change my requirements. Further I am not going to waste time by attending, unpaid, a mediation when I have wasted hours already on XG who is pushing his personal barrow on identification matters. Either he accepts the Trustees terms for identification, as the other 70 beneficiaries have done or he doesn't inherit through want of identification.

13 Mr BC was not prepared to consider alternatives to his requirements.

14 A review hearing was therefore scheduled and took place [on 27 March 2013]. It was hoped that by providing the parties with the opportunity to meet that they would each moderate their positions and reach a pragmatic solution. Unfortunately that did not occur. It therefore remains for me to complete a formal decision on Mr XG's application.

15 The operation of a lawyer's trust account is regulated by the Lawyers and Conveyancers Act (Trust Account) Regulations 2008. Regulation 12(6) requires:

A practice may make transfers or payments from a client's trust money only if

• (a)the client's ledger account has sufficient funds and they are available for that purpose; and

• (b)the practice obtains the client's instruction or authority for the...