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Censure for pleading deceit without good cause

23 November 2015

A lawyer, B, who pleaded the tort of deceit without good cause has been censured and fined $3,500.

In making the orders, the lawyers standards committee said it was of the view “that an order of censure was required in order to impress upon [B] and other practitioners the importance of the professional obligation breached and to emphasise the rejection of the matters asserted in response to the complaint”.

B was acting for a party in a contractual dispute over a building and renovation project.

A notice of claim was filed in the District Court, and a paragraph of the claim pleaded the tort of deceit.

The respondent in the District Court action complained to the New Zealand Law Society that B had, by pleading the tort of deceit, breached rule 13.8 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (RCCC).

B made various submissions why the complaint should be held in abeyance or not be accepted for consideration. These included:

  • the litigation was ongoing;
  • the complaint should be considered after the Legal Complaints Review Officer has reviewed another complaint; and
  • privilege prevented her from responding to the complaint and/or prevented a standards committee considering the complaint.

The standards committee said it rejected the arguments that ongoing litigation meant the complaint could be held unheard.

“The submission reveals confusion between whether an allegation is established at trial and the professional propriety of making the allegation in the first place,” the committee said.

“The purpose of rule 13.8 of the RCCC is to ensure that practitioners, as officers of the court, do not attack reputation without good cause and are not party to making serious allegations without reasonable grounds.

“The good cause and reasonable grounds must exist prior to filing.”

The committee said its view was that the LCRO review of another matter was not sufficient reason to hold the complaint about B in abeyance. The committee was concerned with the merits of the present complaint.

B’s submissions to the committee that privilege prevented her from revealing the basis for the plea of deceit “overlooked the procedural requirement to plead the grounds relied upon to support the allegation of dishonesty,” the committee said.

The committee also observed that “a plaintiff cannot plead a case without disclosing the essential requirements of the claim. If the grounds cannot be revealed because of privilege, the claim cannot be advanced.

“In summary the grounds for pleading an allegation of dishonesty are unlikely to attract privilege as they must be set out in the pleading.”

B also stated that she had pleaded the tort of deceit on the basis of client instructions which she could not refuse to follow and that “there was nothing to indicate to me that my client’s version of events was inaccurate”.

“A lawyer,” the standards committee said, “is expected to test the client’s subjective belief and advance the allegation only if there are reasonable grounds to support it.

“[B]’s reliance on her client’s subjective belief and instructions in pleading the tort of deceit did not fulfil her obligations under rule 13.8 of the RCCC.”

The committee also noted that: “The obligation [B] breached was one owed to the court”.

The committee found that B’s conduct had been unsatisfactory.

In ordering publication of the facts, the committee said: “It is in the public interest to remind the profession of its obligations to comply with rules 13 and 13.8-13.8.1 of the RCCC to protect the reputation of litigants and to ensure lawyers uphold their overriding duty to the court”.

Rule 13.8 of the RCC provides:

 13.8 A lawyer engaged in litigation must not attack a person’s reputation without good cause in court or in documents filed in court proceedings.

 13.8.1 A lawyer must not be a party to the filing of any document in court alleging fraud, dishonesty, undue influence, duress, or other reprehensible conduct, unless the lawyer has taken appropriate steps to ensure that reasonable grounds for making the allegation exist. (See further Gazley v Wellington District Law Society [1976] 1 NZLR 452 and Medcalf v Mardell [2003] 1 AC 120, [2002] 3 WLR 172, [2002] 3 All ER 721.)

 13.8.2 Allegations should not be made against persons not involved in the proceeding unless they are necessary to the conduct of the litigation and reasonable steps are taken to ensure the accuracy of the allegations and, where appropriate, the protection of the privacy of those persons.

As well as the censure and fine, B was ordered to pay the Law Society $1,000 costs.

Last updated on the 23rd November 2015