Unsatisfactory conduct. Estate management
This is a summary of a decision by a Lawyers Standards Committee under the Lawyers and Conveyancers Act 2006. This summary was published in LawTalk 756.
A lawyer was found guilty of unsatisfactory conduct for his handling of an estate, which included acting on instructions from the deceased’s brother and sister even though they were not the administrators, and making an unauthorised partial distribution. The Standards Committee ordered the lawyer to refund fees he had deducted from the estate, to account for other payments made out of the estate, and to pay costs to the New Zealand Law Society.
The complainant was the deceased’s former partner and the mother of his son. The son, who was 18 when his father died intestate in November 2008, had been estranged from the deceased for some time. In December 2008 the lawyer took instructions from the deceased’s sister to undertake the administration of the estate. The deceased’s siblings initially believed they should be the beneficiaries; later, when the existence of the son was revealed, they proposed that he receive half and they each receive a quarter share.
In April/May 2009 the lawyer did a register search for any children of the deceased, but this showed there was none. The lawyer learned of the son’s existence in June 2009. Soon afterwards the boy’s mother contacted the lawyer, making him aware that she was seeking to defend her son’s inheritance rights and asking the lawyer not to act on instructions from the brother and sister.
However, the lawyer continued to act on their instructions, even after he told the complainant the brother and sister would not be applying for a grant of administration. In the lawyer’s dealings with the complainant and her lawyer he also referred to the siblings as being the administrators. The lawyer made payments out of the estate on instructions from them to meet the estate’s debts and to reimburse them for expenses. The lawyer also deducted his legal fees from the estate.
The Standards Committee said the lawyer should not have waited so long to search the register, and should have asked the brother and sister about any children when they first instructed him in December 2008. Further, once the lawyer was aware of the son and of the complainant’s stance, he should have refused to take instructions from the brother and sister. He should also have told the complainant she had status to apply for administration.
Instead the lawyer had continued to treat the deceased’s siblings as de facto administrators, while at the same time receiving effectively contrary instructions from the complainant. This, the Standards Committee said, had placed him in a conflicted position. Only when the complainant had appointed her own lawyer and incurred costs did the lawyer start to take account of some of her instructions.
The Standards Committee found the lawyer guilty of unsatisfactory conduct, noting that he had caused the complainant significant stress and expense. It ordered him to refund the fees paid to him and to not issue any further invoices for his fees, and also to account to the complainant in detail for payments he had made to the brother and sister. The lawyer was also ordered to pay $500 in costs.