Published on 10 September 2020
A lawyer who used an Authority and Instruction (A & I) form in a way that was inconsistent with the purpose for which it was given has been censured and fined $10,000 by a lawyers standards committee.
The committee said that the conduct of the lawyer, C, was “high end unsatisfactory conduct”.
C acted for Mrs D in relationship property matters.
Mr and Mrs D reached agreement on both separation and relationship property. The terms of the agreement included that Mr D would transfer his interest in the family home to Mrs D. In consideration for that, Mr D was released from all liability and personal covenants under the mortgage on the family home. C attended to removal of Mr D’s name from the property title.
Mr D complained to the Lawyers Complaints Service that despite the agreement, while he was removed from the title of the property, he remained liable under the mortgage. He said that Mrs D had failed to refinance the debt secured by the mortgage and obtain the consent of the mortgagee to his removal from the title.
Mr D said the mortgagee advised him to lay a complaint as it did not authorise the transfer, and the memorandum of mortgage required that the mortgagee consent to such a transfer.
C maintained that it was not necessary to obtain the consent of the mortgagee before a transfer of property was registered. He said he did seek consent of the mortgagee; however, it was not forthcoming.
Quoting correspondence between the parties’ lawyers, the committee said it considered that C had provided an undertaking that he would hold onto the transfer documents and that Mrs D would make best endeavours to obtain the release of Mr D’s personal covenant or alternatively sell the property. The transfer of title could not occur unless one of the two agreed conditions were met.
“In the committee’s view, [C] should not have acted on the A & I form knowing that they were conditional and contrary to the undertaking provided,” it said.
Mr D was not C’s client, and for that reason, C “needed to exercise more care” when dealing with the A & I form.
The committee considered that C’s use of the A & I forms in a way that was inconsistent with the purpose for which they were given fell short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer. Accordingly, it was unsatisfactory conduct.
A censure was appropriate to “convey the committee’s disapproval of [C]’s conduct,” the committee said.
As well as the censure and fine, the committee ordered C to take advice from a lawyer appointed by the NZLS in relation to the management of his practice. C was also ordered to pay $3,000 costs.