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Conduct failed competent, ethical and responsible behaviour test

01 December 2017

[Names used in this article are fictitious]

A lawyer, Lennox, has been censured for breaching his fiduciary duties to a client both as her lawyer and as her attorney.

Lennox’s conduct was “derelict to such a degree” that it satisfied the test of what was expected of “competent, ethical and responsible practitioners,” the lawyers standards committee said. It found the lawyer had engaged in unsatisfactory conduct.

Lennox acted in various matters for a client, Mrs C, over a number of years, including assisting her in making her final will.

Mrs C’s will left nothing to her children and the bulk of her estate to her former son-in-law, Mr Y.

Mrs B and Mrs A are Mrs C’s only children. On discovering they had received no benefit from their mother’s estate, Mrs B and Mrs A contested the will in the Family Court. They received what was left of their mother’s estate to divide between them.

The sisters then complained to the Law Society. The nub of their complaint was that Lennox had failed to take appropriate steps to safeguard Mrs C’s property and had caused significant losses to her and to her estate. Their complaint relied on Mrs C having lacked legal capacity to make decisions and properly instruct Lennox. The committee considered that:

  • There was sufficient evidence to confirm a general deterioration in Mrs C’s overall health, and that should have been apparent to Lennox,
  • Lennox should have taken into account the general lack of consistency and prudence in Mrs C’s instructions and decision-making from then on, and should have been alert to the need to take additional steps to verify her capacity and secure her interests,
  • Lennox should have obtained medical evidence as to Mrs C’s capacity, before allowing her to commit herself to arrangements that did not adequately safeguard her property interests,
  • Lennox had failed to properly consult with Mrs B over his exercise of powers under the enduring power of attorney over property under which Mrs C appointed Lennox and Mrs B,
  • By making a payment of $40,000 to Mr Y without first obtaining security, Lennox was in breach of his fiduciary obligations to Mrs C, both as her lawyer and as her attorney, and
  • Relinquishing the protection a registered caveat afforded to Mrs C’s investment was not in her best interests.

As well as the censure, the committee ordered Lennox to pay the sisters $5,000 compensation, ordered that written notice of its decision be given to the Registrar-General of Land, and ordered publication of its decision, including Lennox’s name.

Lennox applied for a review of the decision to the Legal Complaints Review Officer (LCRO) in respect of the publication and compensation orders. Lennox also applied for a review of the decision finding him guilty of unsatisfactory conduct and imposing a censure, but submitted the application outside the statutory timeframe. The LCRO therefore had no jurisdiction to review the unsatisfactory conduct and censure decision.

In LCRO 235/2014, the LCRO reversed three orders made by the standards committee.

“The disciplinary processes under the [Lawyers and Conveyancers] Act [2006] (LCA) are not well suited to the making of orders where, as here, there are potentially legitimate arguments around causation,” the LCRO said.

“Where there may be some doubt, as there is in the present case, the civil jurisdiction is better suited to testing conflicts of evidence.” The committee’s decision on compensation was therefore reversed.

The events happened before implementation of the LCA, and the Law Practitioners Act 1982 did not contain a provision that enabled notification to the Registrar-General of Land, the LCRO said. Accordingly, no such order was available to the Committee.

On name publication, the LCRO said that the education functions of publication – for the public and the profession – could be met by the committee’s decision, or the LCRO decision, being published without Lennox being identified.

Last updated on the 1st December 2017