New Zealand Law Society - Lawyer claimed lien over passport

Lawyer claimed lien over passport

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Names used in this article are fictitious

A lawyer who claimed a lien over a New Zealand passport has been fined $2,000 by a lawyers standards committee.

When finding unsatisfactory conduct on the part of the lawyer, the committee quoted Justice Laurenson in Vallant Hooker & Partners v Proceedings Commissioner [2001] 2 NZLR 357.

“… we have a real doubt,” Justice Laurenson said (at [28]), “whether it was ever possible to claim a solicitor’s lien over any passport in the first place. Clearly s 33 of the Passports Act [1992] prevents such a lien in the case of New Zealand passports.”

The client, Mr Bamber, engaged the lawyer, Rouncewell, to undertake immigration work for his wife.

Mr Bamber paid Rouncewell $3,000. He was told some time later that the total bill was $9,318 and the balance owing was $6,318.

The committee noted that Mr Bamber had been invoiced throughout the immigration work done for his wife and raised no queries about the invoices at the time.

He received a final bill on completion of the grant of residency to his wife and arranged with Rouncewell’s firm to pay monthly instalments. He never fulfilled that arrangement, despite reminders from Rouncewell’s firm.

Rouncewell told the committee that she had been asking for payment for more than two years. She submitted that the law permitted lawyers to hold a passport if there was “lawful authority” or “reasonable excuse”. She submitted that non-payment of a fee for more than two years was reasonable excuse, quoting the Australian Court of Appeal decision Xu v Council of the Law Society of New South Wales [2009] NSWCA 430.

The committee noted that the authority Rouncewell quoted was an Australian case and was not binding.

It also noted that s 33 of the Passports Act prohibits the right in a travel document conferred by the New Zealand Government being defeated by any security, pledge, deposit or encumbrance by the holder or by any other person.

While Rouncewell may genuinely have believed she had “reasonable excuse” to hold Mr Bamber’s passport, the committee did not accept her submission that this was purely a contractual matter and could not therefore be an offence under the Passports Act.

“In the committee’s view, [Rouncewell]’s conduct in purporting to exercise a creditor’s remedy in claiming a lien over Mr [Bamber]’s passport was conduct unbecoming of a lawyer and unprofessional.”

As well as fining Rouncewell $2,000, the committee ordered her to pay $1,500 costs and to release the passport to Mr Bamber immediately. The committee’s finding was upheld by the LCRO on review.

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