New Zealand Law Society - Lawyers Complaints Service: Fined for unsatisfactory file-record keeping

Lawyers Complaints Service: Fined for unsatisfactory file-record keeping

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A lawyer, G, was accused of either knowingly altering a lease or not properly supervising an employee who knowingly altered the lease. A lawyers standards committee determined that G’s conduct concerning her file and record keeping was unsatisfactory, and reprimanded her.

This followed an own motion investigation by the lawyers standards committee. The committee undertook the investigation after the New Zealand Law Society received a confidential report which raised issues about an unexplained alteration of a lease.

The confidential report’s author was acting for the proposed purchaser of a business from a client of G, who was also acting for the landlord.

G sent a copy of the deed of lease and an earlier deed of assignment to the author so that he could draft an agreement for sale and purchase and a new deed of assignment of lease (Lease 1).

In preparation for settlement, there was discussion about the liability to pay rates and insurance. The author disputed that his clients were liable to pay the rates and insurance under the terms of the lease they had signed. G took a different view.

Subsequently, G produced a lease in support of her contention that the rates and insurance were payable by the author’s clients (Lease 2). The lease was identical to Lease 1 save for a different outgoings page. It appeared that the lease had been altered, but no record of how or when could be found. At this point in time, the confidential report was filed.

The original lease dated 2009 initially had had the rates and insurance payable by the landlord. It was submitted for G that this was not the intention of the parties and the lease was altered in 2009 to reflect that the rates and insurance were payable by the tenant (Lease 2).

However, following enquiries (as advised to the author) G had confirmed that:

  • she was the partner in charge of the file from 2009, when it was leased to the tenants until she could no longer act on their behalf earlier this year;
  • she did not alter the lease and nor did she instruct anybody to do this on her behalf;
  • she did not know how the original lease came to be altered, when this occurred or who undertook this. Nor was there any file note or documentation which assisted in clarifying this;
  • she had made enquiries of all current staff and none of the current employees had any knowledge of this; and
  • the former employees in 2009 had no recollection of this file and did not recall amending the original lease or being asked to do so.

The standards committee noted G’s acknowledgement that there appeared to have been no formal steps taken in respect of a variation to the lease and that a deed of variation ought to have been prepared and signed by all parties.

In considering this aspect of the matter, the standards committee had regard to Rule 10 of the Rules of Conduct and Client Care which provides that a lawyer must promote and maintain proper standards of professionalism in their dealings.

In this case, and having reviewed the files, the standards committee said it was satisfied that G had not maintained proper professional standards because her standard of record keeping was inadequate and considered to be so poor as to amount to a breach of Rule 10. There was no copy of the original lease on the file, no file notes or letters surrounding the apparent alteration to the lease and no formal execution of a variation to the lease. It could not be proven one way or the other who had altered the lease.

The committee determined that G’s conduct regarding her file/record keeping amounted to unsatisfactory conduct.

The committee reprimanded B, fined her $1,000 and ordered her to pay the Law Society $500 costs.

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