New Zealand Law Society

Navigation menu

Fined for delays in dealing with Official Assignee

27 February 2015

A lawyer, M, has been censured and fined $5,000 for serious delays in dealing with an estate and communicating with the Official Assignee (OA).

M was administering a deceased estate. A beneficiary and daughter of the deceased was bankrupt, and the OA’s office wrote to M advising that the bankrupt daughter’s interest vested in the OA.

After M acknowledged receipt and provided some initial information, almost nothing further was heard by the OA from M for nearly three years.

The OA had attempted to communicate with M on several occasions in the first year, and very regularly after that, in the second year. Due to the almost complete lack of response, the OA then briefed a barrister. The barrister wrote several times to M, and eventually the principal sums due to the bankrupt estate from the deceased estate were paid.

The OA complained to the Law Society. The complaint detailed the delays, and how they had impeded the administration of the bankruptcy. As a result, the OA said that extra legal costs had been incurred.

The Assignee also complained that one of the beneficiaries had been paid out over 18 months before the bankrupt estate, and that sums had been improperly deducted from the estate by M.

M said that he accepted that the delays had been unacceptable. He apologised and advised he could offer no explanation except that he had simply not acted properly in the context of a busy practice.

He acknowledged that he had paid out another beneficiary of the deceased estate before paying the OA but said it was not deliberate or intentional. M also acknowledged that those parts of his fees which related to matters caused by his delay ought to be refunded to the bankrupt estate.

M, however, noted that it appeared the OA had not taken account of borrowings of the bankrupt from the deceased, and he provided explanations for the deductions. M also questioned whether the OA had suffered any direct loss.

The OA accepted M’s explanation for some of the deductions. However about $4,000 of the deductions M had made, together with $10,000 of extra legal expense, remained owing to the bankrupt estate.

M paid the remaining amounts claimed to the OA and asked that the standards committee take no further action.

The OA’s office indicated that it was satisfied by the apology and the payment of the sums claimed but asked that the standards committee continue with its process. This was because M had not apologised nor repaid the sums until the formal complaint had been made.

The OA’s office noted that it dealt with hundreds of solicitors every year and said, “it is extremely rare to have to lodge a complaint of this nature. The complaint was an absolute last resort after experiencing three years of totally unsatisfactory conduct from [M]”.

The standards committee accepted that there were some explanations for M’s conduct and that he had accepted responsibility promptly. However the committee determined that the delays were serious and at the upper end of the scale of unsatisfactory conduct.

As well as the censure and fine, M was ordered to pay $2,000 costs.

Last updated on the 17th August 2015