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Fined for failing to provide receipt

02 February 2015

Delay in issuing a receipt to a client who paid a $1,500 lump sum towards fees and failure to provide the client with terms of engagement for 22 months has led to a $1,000 fine for a lawyer, A. As well as imposing the fine, the lawyers standards committee ordered A to pay $500 costs.

A received instructions from Ms B after her father had given her notice to quit her home, which the father owned, for non-payment of rent. A advised Ms B that she had a claim to ownership of the property on the basis that her father had bought it for her and held it on trust for her. Her father resisted this claim.

A successfully resisted a Tenancy Tribunal application the father brought to have Ms B evicted for non-payment of rent.

The property was eventually transferred into Ms B’s name, with her father giving her a payment of $7,000 to complete repairs. The outcome was achieved by negotiation.

There were also issues about defective workmanship carried out on the property by the previous owner. A advised Ms B about the difficulty in pursuing the previous owner for faulty workmanship once the house had been transferred into her name.

Ms B then complained that:

A misled her, saying she had a claim against the previous house owner in relation to defective workmanship when it should have been her father pursuing the claim;

  • she had been billed for this work;
  • legal aid was not offered to her;
  • she was misled by a letter A wrote to Housing New Zealand as to the extent of her legal fees to date;
  • she did not receive a receipt for a $1,500 payment she made towards her legal fees, or acknowledgement of that payment; and
  • A did not follow her instructions to take a claim against her father to court.

The standards committee resolved to hold a hearing but only on one of Ms B’s complaints, together with a concern the committee had. These were:

  • delay in acknowledging receipt of payment of $1,500; and
  • delay in providing terms of engagement.

On the complaints that A had misled Ms B in that she had a claim against the former owner, that she had been billed for the work and that legal aid had not been offered to her, the committee found there was no fault in the advice. The file indicated there was some discussion about legal aid, and a claim against the former owner was ultimately not pursued. The committee said it was satisfied with the advice A gave Ms B.

On the complaint that A misled her in a letter to Housing New Zealand, the committee said it was likely that Ms B misconstrued A’s letter when A said his firm held $1,400 on her account and mistakenly thought the $1,400 related to A’s fees.

On the complaint that A did not follow her instruction to take her father to court, the committee noted that the property was transferred to her name without the need to issue proceedings and that she had also received $7,000 from her father to carry out repairs.

The committee found A guilty of unsatisfactory conduct in relation to the delay in providing Ms B a receipt and the delay in providing her terms of engagement. It noted that Ms B paid $1,500 to A’s firm on 10 September 2012 and asked for a receipt. A sent her a letter on 11 April 2013 acknowledging receipt of the $1,500. This was seven months after Ms B paid the money.

[Ms B] was entitled to a receipt for the $1,500 she had paid,” the committee said.

“The committee considers that [Ms B]’s dissatisfaction with [A] could have been avoided by clear and regular written reports of progress with regular interim bills and statements.”

The committee also found that A did not send a letter of engagement to Ms B until 25 June 2012, some 22 months after he received instructions from her.

The committee said it considered that this breach “was likely to have impacted on [Ms B]’s understanding of billing and her other complaints related to billing”.

Last updated on the 17th August 2015