New Zealand Law Society - Lawyers Complaints Service: Solicitor's Certificate requires enquiries to be made

Lawyers Complaints Service: Solicitor's Certificate requires enquiries to be made

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A lawyers standards committee has censured a lawyer, E, after he failed to satisfy himself as to the correctness of a solicitor’s certificate provided to a bank.

E signed the certificate at the request of another lawyer, D. The standards committee began an own motion investigation into E’s actions after a hearing in relation to a complaint by a bank, Bank A, against D.

D appeared to have discharged a first mortgage in favour of Bank A and registered a first mortgage in favour of another bank, Bank B, without the required authority of Bank A to do so.

While investigating the complaint against D, the committee observed that the solicitor’s certificate E provided Bank B made certain statements as to other interests in the property and the solicitor making these certifications would have had to make some enquiries in order to be in a position to do so.

E had made the certifications after Bank B had referred D’s certificate back to him. D had initially made the certifications himself. Bank B required the certificate to be signed by another solicitor, as D had an interest in the matter.

In response to the committee’s own motion investigation, E stated that he had relied on the assurance from D that he would comply with the terms of the certificate and that the instructions from Bank B would be fully complied with.

At all times, Bank B was fully aware, or ought to have been aware, of the limited nature of his representation. Bank B chose to proceed and accepted his certification on that limited basis.

E stated that at all times his actions were honest and in an attempt to assist D in his personal matter and to assist Bank B to expedite the transaction.

The committee said that a practitioner, when making a certification, had to be able to stand behind the certification. It was not enough for E to say that he had done so to assist a fellow practitioner.

“A practitioner assumes responsibility for the certifications and the committee was of the view that [E] had failed to do even basic checks to satisfy himself of the matters in the certificate, such as requesting to sight [Bank A]’s instruction to discharge the mortgage,” the committee said.

“The committee observed further that [Bank B] was not without blame in this matter. The committee was of the view that, in the first place, [D] should not have been instructed to act in his own personal matter. It was also not appropriate to then later simply request another practitioner to execute the solicitor’s certificate.”

The committee said it thought E would have been prudent to refer the matter back to Bank B to instruct him, or to qualify the certificate he provided with an appropriate letter to the bank.

The committee said it sympathised with E that he had been involved in this matter by D, but nonetheless determined that E was in breach of his professional obligations and made a finding of unsatisfactory conduct.

The committee said it accepted how easily a momentary lapse of judgement could have occurred in E’s attempts to assist a fellow practitioner and thought it appropriate to limit the penalty to censuring.

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