Lawyers Complaints Service: Serious errors lead to suspension
Helen Monckton made a number of “serious errors” in assisting a client with a property transaction, the New Zealand Lawyers and Conveyancers Disciplinary Tribunal said.
In  NZLCDT 51, the Tribunal suspended Mrs Monckton for one month from 1 September.
“In early October 2011 members of the S family were horrified to find that a property, which they understood was a family trust property, had been transferred to their sister’s sole name (Dr S),” the Tribunal said.
“This had come about as a result of the efforts of Helen Monckton to rescue the purchase of another property by Dr S.”
In late August 2011, Dr S – who had signed an agreement to purchase a residential property in Dinsdale – instructed Ms Monckton.
Dr S advised that she had arranged finance with her bank, and also emphasised she was very keen on the property.
Around this time Dr S told Mrs Monckton she and her father owned a property in T Street, which she thought had been vested in a family trust. She told Mrs Monckton she wished to buy this property outright.
Dr S was buying the Dinsdale property with 100% finance, but Mrs Monckton says that she did not turn her mind to that issue and therefore was unprepared for what occurred, namely a very late insistence by the bank on collateral security for the mortgage. This came two days before the proposed settlement date.
To salvage the situation Mrs Monckton suggested to Dr S that the bank mortgage over T Street be discharged and the property transferred into her sole name in order that it could be used as collateral security for the Dinsdale purchase.
The other registered owner of T Street was Dr S’s father and Dr S told Mrs Monckton he was suffering from dementia and his affairs were managed under a power of attorney by two of her sisters. Thus it was arranged that one of the attorneys sign on behalf of Dr S’s father, that he resign as a trustee and transfer the property into Dr S’s name.
However Mrs Monckton was aware that if the property was, in fact, a trust property, rather than simply being owned by Dr S and her father in their personal capacities, there may well be beneficiary interests undermined. She sought to prevent this by registering a caveat against the title by the “attorney”, who in fact was not even a beneficiary.
“Mrs Monckton made a number of serious errors,” the Tribunal said.
“One, she relied on her client’s assurance that her father lacked capacity, without seeking any medical evidence to verify this. She appeared to be swayed by the fact that her client was an academic with a doctorate.
“The second error was that she did not carefully examine the power of attorney to ascertain that it ought to be exercised jointly by two sisters and that it could not deal with property which Dr S’s father owned as a trustee.
“The next error was that she was aware that a brother in the family had been appointed as a trustee but she accepted her client’s assurances that he was being kept apprised of the situation and had no difficulties with it, rather than checking this with him or his lawyer.
“She did not ensure that her client and the attorney who was executing documents were fully apprised of the ramifications of the various conflicts of interest.
“Furthermore she did not advise the bank to review its security position in the light of the uncertainties over T Street and its ownership. She had a caveat executed by the attorney, with the sensible intention of protecting the interests of the beneficiaries. That sister (attorney) was not, in fact, a beneficiary of the trust which had owned T Street prior to these dealings,” the Tribunal said.
Following cross-examination of Mrs Monckton and Dr S, Mrs Monckton accepted that in combination these errors amounted to negligence and pleaded guilty.
“We regard the number of errors, the consequences, which have meant that this family has a difficult mess to unwind and has not yet done so some two years further on, together with the numerous duties which the practitioner failed to fulfil, constitute relatively serious negligence.”
The Tribunal said it was satisfied that the series of errors was “entirely out of character” for Mrs Monckton, and that she is normally an extremely careful practitioner who generally refers to other lawyers matters which are beyond her area of expertise. “She is also a practitioner who works hard for her clients and takes her responsibilities to them seriously.
“We consider that the level of negligence in this case was so serious that any penalty short of suspension would not properly fall within the principle of penalty imposition that must be observed by the Tribunal and the purposes of the [Lawyers and Conveyancers] Act ,” the Tribunal said.
“We do not consider that the public requires protection from this practitioner but deterrence is required in a general sense as well as in a specific sense.”
Mrs Monckton has had a 34-year unblemished record of service to the public. She is also involved in various charitable undertakings, thereby giving back to her community.
The Tribunal censured Mrs Monckton and suspended her for one month from 1 September 2014. It also ordered her to pay $10,000 as a contribution to legal expenses to be incurred by the S family in instructing a solicitor of their choice to carry out steps by way of relief from the errors and omission of Mrs Monckton in the transactions. In the event the legal costs incurred for this purpose are less than $10,000, the Tribunal directed that the balance is to be refunded to Mrs Monckton.
The Tribunal ordered Mrs Monckton to provide a written apology to the complainant and to undertake training as set out in the lawyers standards committee submissions. It also ordered Mrs Monckton to repay the Law Society the Tribunal costs of $7,765 and standards committee costs of $46,764.09.
Last updated on the 17th March 2016