New Zealand Law Society - Complaints decision summaries

Complaints decision summaries

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John Campion suspended from practice for two years

Former Hamilton lawyer John Campion has been suspended by the New Zealand Lawyers and Conveyancers Disciplinary Tribunal from practising for two years from 17 October 2019.

Mr Campion was found guilty of unsatisfactory conduct by the Tribunal on 19 July 2019 ([2019] NZLCDT 20). There were three sets of charges, under the Law Practitioners Act 1982 and the Lawyers and Conveyancers Act 2006. They alleged a large number of professional failures relating to the administration of estates, and of trusts. Some of the alleged failures involved an examination of Mr Campion’s dual role as a lawyer and a trustee.

The Tribunal noted that Mr Campion does not currently hold a practising certificate. It said he was elderly and in poor health at times. However, it said his conduct in the course of the disciplinary proceedings had deprived him of potential mitigating features of remorse and insight.

In considering an appropriate penalty, the Tribunal said it considered Mr Campion’s offending to be at the high end of misconduct. It said the primary aggravating feature was his previous disciplinary history which extended back to 2012.

The Tribunal accepted the submission of the lawyers standards committee which brought the proceedings that given the extent of Mr Campion’s failures, his extensive disciplinary history, and his failure to engage with the disciplinary process, a suspension from practice was necessary to mark the seriousness of his misconduct.

To properly uphold professional standards, to provide personal and general deterrence and to confirm that the Tribunal would not treat lightly such serious breaches of expected standards, it considered that a suspension of two years was required.

As well as suspending Mr Campion, the Tribunal ordered him to pay compensatory orders of $19,146 and total costs of $43,549.

Queenstown lawyer fined $15,000 and censured after criminal convictions

A Queenstown lawyer has been fined $15,000 and censured by the New Zealand Lawyers and Conveyancers Disciplinary Tribunal, after receiving two criminal convictions.

Adam McAra Copland was convicted in July 2018 for driving with excess breath alcohol and disqualified from driving for six months as part of his sentence. However, in September that same year, he was convicted of driving while disqualified.

Both of those offences carried penalties that include a maximum period of imprisonment of three months.

The first offence took place in Auckland and Mr Copland made the decision to not tell anyone about it, including his family and law firm partners.

But following the second conviction, Mr Copland promptly reported the situation to the New Zealand Law Society and disclosed everything to his family and to his law firm partners.

In making its penalty decision, the Tribunal highlighted significant steps Mr Copland took in addressing his issues and seeking help. It said that it was impressed by the level of insight shown by Mr Copland and that after the second offence “he did everything right”.

The steps taken by Mr Copland included:

  • reporting to all the people that mattered;
  • immediately seeking help;
  • taking time out from his practice;
  • cooperating with the disciplinary process;
  • engaging with a clinical psychologist to explore the underlying causes of his conduct, such as stress, his drinking and lifestyle patterns.

The Tribunal acknowledged that Mr Copland continues to see the psychologist on a monthly basis. Mr Copland also wrote a letter to the New Zealand Law Society, expressing his remorse and the steps he was taking to address his issues.

The Tribunal took these rehabilitative actions into account when deciding not to suspend Mr Copland and instead imposed a fine of $15,000 along with a censure.

It said Mr Copland had brought the profession into disrepute but agreed that he had taken steps which are ongoing to address his personal issues. The censure, it said, is more than mere words.

“It is a record that will always remain on your file and remind you and others that such behaviour will not be tolerated or go unmarked.”

Censure for breaching confidentiality

[All names used in this article are fictitious]

A lawyer who breached her obligation of confidentiality has been censured and fined $2,500 by a lawyers standards committee.

The lawyer, Somerset, acted for Mr and Mrs Clywd before they both died.

When one of their daughters, Ms Surrey, saw Somerset about her parents’ estates, Ms Surrey asked Somerset to contact the estate’s solicitor to ask whether she was a beneficiary of a trust and about other issues relating to her parents’ will and her entitlement.

After meeting with Ms Surrey, Somerset realised that she had previously advised Ms Surrey’s parents. However, on the basis that Ms Surrey simply wanted Somerset to act as a conduit between herself and her siblings, Somerset did not consider she had a conflict that prevented her from acting for Ms Surrey at that stage.

Somerset subsequently emailed the estate’s solicitor asking if he was the lawyer for the estates of Mr and Mrs Clywd.

Following an email from Ms Surrey seeking advice on progress, Somerset spoke to the estate’s solicitor. After that conversation, Somerset advised Ms Surrey that she could not continue to act for her and that she should instruct an independent lawyer.

Four days later, another lawyer, Dundee, advised Somerset that he was now acting for Ms Surrey and asked for certain information.

Somerset emailed Dundee and provided information about the late Mr and Mrs Clywd and copied the estate’s solicitor into the email.

Another of the Clywd’s daughters then complained to the Lawyers Complaints Service about Somerset providing Dundee with confidential information, which was then passed on to her siblings.

In her response to the complaint, Somerset initially denied she had breached Mr and Mrs Clywd’s confidentiality. The denial was based on the fact that Ms Surrey was already aware of the information Somerset provided.

By the time of the standards committee hearing, Somerset acknowledged that she had breached her clients’ confidentiality, apologised for the breach and said she was, in providing the information, trying to be “transparent” with all parties.

The standards committee determined that the breach of confidentiality was unsatisfactory conduct.

“The obligation to keep clients’ information confidential is a strict obligation and must be taken very seriously,” the committee said.

“The obligation cannot be ignored or waived.

“A desire to be ‘transparent’ or helpful does not excuse a breach of the obligation. Nor can the obligation be ignored or excused when a lawyer believes that information is already known to the person the information is provided to.”

As well as the censure and fine, the committee ordered Somerset to pay $500 costs.

Serious breaches of professional obligations

Anthony Morahan has been censured and fined $2,500 for serious breaches of the professional obligations he owed to both the court and his client.

A lawyers standards committee commenced an own motion investigation after a District Court Judge referred a copy of his minute to the New Zealand Law Society. The minute noted that Mr Morahan had failed to appear for his client “on at least three occasions ... or to adequately explain to the Court why he could not appear”. The client was due to stand trial in respect of a criminal matter.

The minute ordered Mr Morahan to personally pay $400 costs, pursuant to section 364 of the Criminal Procedure Act 2011.

When ordered by the District Court to file a memorandum explaining his failure to appear, Mr Morahan responded by emailing the case manager. Mr Morahan apologised for “any inconvenience to the Court resulting from my indisposition and inability to attend when this matter was called”. He said he had “endeavoured to emphasise” to his client that he was incapacitated, “out of action”, and unable to work. He said he had advised his client to instruct new counsel since he “would not begin rehabilitation nor be able to return to work until next month”.

Upon receipt of Mr Morahan’s response, court staff conducted an internet search and learned that Mr Morahan was suspended from practice. A three-month suspension had been ordered by the New Zealand Lawyers and Conveyancers Disciplinary Tribunal in respect of an unrelated matter. Mr Morahan had appealed that suspension but it was confirmed by the High Court about two months before Mr Morahan’s failure to appear.

Concern at failure to inform Court

The committee was concerned about Mr Morahan’s failure to inform the District Court about his suspension. “With a trial scheduled the matter was clearly urgent,” the committee said. Yet Mr Morahan, by his own admission, “took no steps to inform the Court of his suspension ahead of the trial date.”

“Mr Morahan, as an officer of the Court, had a positive duty to ensure that it was aware of his suspension so that arrangements could be made ahead of time to reschedule [the] trial.”

The committee said it “could see no reason why Mr Morahan could not have been completely frank in his dealings with the Court, particularly given the inconvenience that had already been caused by his failure to appear on [his client’s] behalf.”

The committee was also concerned that Mr Morahan had breached his duties to his client. It considered that, immediately upon learning that his suspension had been confirmed by the High Court, Mr Morahan should have contacted his client and advised him he was about to be suspended, explained that he could no longer act for him, and explained to his client that he would need to find alternative counsel. Mr Morahan was unable to provide any evidence to show he had done this.

The committee accepted that Mr Morahan did eventually advise his client to seek alternative counsel but considered that he had been deliberately vague when telling his client why he could not act. It considered Mr Morahan should have disclosed the fact of his suspension, so that his client had an understanding of the real reason he was unable to act.

Further, despite claims by Mr Morahan that he had been attempting to help his client find alternative representation, his client was still without representation by the time a standby trial date arrived. “In the circumstances [Mr Morahan’s client] was required to attend Court unrepresented, with the result that the trial could not proceed,” the committee said.

Breach of professional obligations

The committee concluded that “Mr Morahan’s failure to promptly advise [his client] of the fact of his suspension and to take steps to ensure, at a much earlier date, that [his client] had found alternative counsel for his standby trial date of 9 February 2016 was a breach of his professional obligations.”

The committee determined there had been two incidents of unsatisfactory conduct by Mr Morahan – the first in respect of breaches of his duties to the court, and the second in respect of breaches of his duties to his client. It rejected Mr Morahan’s submission that he had already been “punished” by the imposition of a costs order by the court and should therefore not be subject to further penalties, on the principle of double jeopardy. The purpose of the court’s costs award was not to punish Mr Morahan for any possible breach of professional standards, the committee said.

“Rather the costs award was intended to sanction Mr Morahan for the very real disruption and inconvenience, in terms of time and money, which had been suffered by the Court and the various participants in the Court process as a result of his failure to appear.”

As well as the fine of $2,500, being $1,250 for each of the two findings of unsatisfactory conduct, the committee ordered Mr Morahan to pay $1,500 costs to the New Zealand Law Society and ordered publication of his identity.

The Legal Complaints Review Officer upheld the committee’s decision on review.

“Protect us for our costs” does not create obligation

[All names used in this article are fictitious]

The phrase “protect us for our costs” does not create a professional obligation to pay fees, a lawyers standards committee has said.

The committee was considering complaints from two lawyers in relation to payment of an invoice. The complaint arose after one lawyer, Staffordshire, received an urgent request from a firm, on behalf of a client, to execute certain documents.

Staffordshire completed the work and returned the documents to the firm under a cover letter addressed to the other lawyer, Monmouth. That letter stated: “The documents are released on the basis you protect us for our costs.”

Staffordshire’s firm subsequently issued an invoice for the work, addressed to Monmouth’s firm’s client. The fees were not paid.

Staffordshire complained to the Lawyers Complaints Service that Monmouth was in breach of his professional obligations by using the documents without first ensuring Staffordshire’s firm’s fees were paid.

In response, Monmouth also complained about Staffordshire, alleging he had failed to provide adequate information regarding the fees and acted inappropriately when the fees were not paid.

“The essential issue at hand in this matter was [Staffordshire]’s use of the phrase ‘protect us for our costs’,” the committee said.

“[Staffordshire] was strongly of the view that this phrase created a professional obligation on [Monmouth] to ensure that the fees rendered by [Staffordshire’s firm] to [Monmouth]’s client were paid, and that [Monmouth] was obliged to ensure the fees were paid prior to using the documents provided.”

Staffordshire submitted that it was common practice to place conditions on the release of documents, especially when the documents are required urgently, and it was not possible to retain them pending payment. He explained that he had provided documents to other lawyers in similar circumstances before and had never encountered any problems.

However, Monmouth submitted that it was not appropriate to hold him, or his firm, responsible for the payment of fees due by his client in the absence of a lien or an undertaking.

No precedent

The committee began its consideration by noting that there did not appear to be any legal precedent to support Staffordshire’s position.

“While the standards committee did not doubt that [Staffordshire], and other practitioners, had used this practice in the course of their legal career, there was no basis in the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 or in common law to support the proposition that the phrase ‘protect us for our costs’ professionally obliged [Monmouth] to pay [Staffordshire’s firm]’s fees.

“In light of the lack of support for this proposition, the standards committee was not prepared to conclude that the phrase created a professional obligation on the part of [Monmouth]. The words used by [Staffordshire], by their plain meaning, were not sufficient to create a condition on which the documents were to be used.”

The committee was of the view that “it would be extraordinary for a practitioner to be able to unilaterally impose a professional obligation, akin to an undertaking, on a fellow practitioner simply by invoking a particular phrase in a letter.”

Ethical or moral obligation

However, although the phrase ‘protect us for our costs’ did not create a professional obligation akin to an undertaking, the standards committee considered that it could be characterised as creating an ethical or moral obligation.

“The standards committee was of the view that an ideal lawyer, when presented with a situation of the type that [Monmouth] was, would respond promptly and advise whether they accept the terms on which the documents were being released. This would allow the lawyer releasing the documents to take further action to secure the payment of their fees, if they wished to do so.

“Had Monmouth promptly advised Staffordshire that he did not accept any responsibility for [Staffordshire’s firm’s] fees, Staffordshire would not have been under the impression that the fees would be paid and may have been able to take steps to pursue the fees in the usual manner”, the committee said.

However, in the circumstances, having considered the material provided, the committee determined that neither Staffordshire nor Monmouth’s actions met the threshold required for disciplinary action and resolved to take no further action on either complaint.

Failure by instructing lawyer to pay barrister’s invoice

In dismissing an action for judicial review, the High Court has confirmed that Rule 10.7 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 “represents what has always been the commonly understood position in this country. Instructing solicitors cannot simply wash their hands of their obligation to a barrister because the client refuses to pay” [at 61].

This case related to a finding by a lawyers standards committee that r 10.7 is breached when an instructing lawyer fails to pay the invoice of a barrister that the lawyer has engaged on behalf of a client. In McGuire v New Zealand Law Society [2019] NZHC 2748, lawyer Jeremy McGuire sought judicial review of the standards committee determination decision which resulted in him being censured.

Mr McGuire represented a client (Mr W) on a relationship property matter. Mr W wanted a second opinion and so Mr McGuire asked Mr A, a barrister, to provide that opinion.

Mr A provided Mr McGuire with an estimate and via a series of emails made it clear that he wanted payment on the day the opinion would be rendered. He also clarified that he would start that opinion once he was assured the money for payment was put into Mr McGuire’s trust account.

The opinion was delivered on 22 December 2017 via email along with an attached invoice.

Mr McGuire replied saying: “I look forward to your views. Your opinion needs to address these other issues.” Mr McGuire did not pay the invoice, instead saying that he was disappointed with the lack of reasoning and legal sophistication and that: “Once and after all of the issues have been carefully and thoroughly considered then an opinion can be said to have been given”.

Mr A wrote back that he did not accept Mr McGuire’s view and asked for a yes or no answer regarding whether he would be paid or not.

Numerous emails were exchanged with a final email on 12 February 2018 by Mr A setting out the facts. Mr McGuire made a brief reply indicating that he disagreed.

On 11 April 2018, Mr A complained to the Lawyers Complaints Service that Mr McGuire had breached r 10.7 of the Rules by failing to pay the invoice and the balance of another disbursements invoice.

Standards committee decision

The standards committee upheld the complaint and determined Mr McGuire’s breach amounted to unsatisfactory conduct pursuant to s 12(b) and (c) of the Lawyers and Conveyancers Act 2006. Mr McGuire was censured and ordered to pay a fine of $5,000, costs of $2,000 and to pay Mr A’s fee immediately.

The standards committee accepted Mr McGuire’s contention he could not release funds held on trust without authority from his client. However, the committee considered that, having instructed Mr A on behalf of his client, Mr McGuire was personally responsible for the payment of Mr A’s fee in accordance with the Rules.

If Mr McGuire was unhappy with the opinion, he should have disputed the fees through the “proper professional channels”. The committee said that it was unacceptable to simply refuse to pay – especially so because a barrister is unable to sue for his fees. There was no agreement between the parties that Mr McGuire’s client was to be solely responsible for paying Mr A’s account.

Mr McGuire sought review on the grounds that the committee erred in finding there was no agreement between the parties that Mr W would be solely responsible for paying Mr A’s fee and in holding that Mr A was entitled to be paid his fee despite Mr McGuire’s dissatisfaction with the opinion. He also said that the committee’s determination was “bad for bias” in breach of natural justice and resulted in a miscarriage of justice.

Long-established obligation

Clark J said rule 10.7 reflects a long-established obligation. “…the importance of the obligation arises from the nature of the relationship between solicitor and barrister, namely that a barrister cannot sue for her or his fees and must rely on the instructing solicitor for payment,” (at [54]).

“The case law suggests that it will be particularly egregious for a solicitor to receive funds into a trust account for the purpose of paying a barrister or third party but fail to do so,” she said (at [58]).

After examining the evidence of the arrangement between the parties, Clark J concluded that there was no explicit arrangement reached that the client would be solely responsible for the fee. Mr A was very deliberate about his fee and that he would begin the opinion once the fee was deposited into the trust account. Mr McGuire’s insistence that his client’s authority constituted an agreement between his client and Mr McGuire and absolved Mr McGuire from his obligation to pay Mr A under r 10.7 was misplaced. Rule 10.7 regulates the conduct of lawyers.

Rule 10.7 is clear that if a solicitor disputes a barrister’s fee the solicitor must advance that through “proper professional channels”. A judicial review of a standards committee decision is not the proper professional channel.

The application for judicial review was dismissed.

Threat made for improper purpose

[All names used in this article are fictitious]

Advising a lawyer that one’s clients were considering making a complaint to the New Zealand Law Society, and their decision may depend on “how much longer it takes to bring matters to a close”, was unsatisfactory conduct, a lawyers standards committee has determined.

The committee was considering a complaint from a lawyer, Mr Sussex, about another lawyer, Leicester.

Mr Sussex was acting for the plaintiffs in proceedings and Leicester was acting for the third and fourth defendants. In the course of the proceedings, Mr Sussex was instructed to file an amended statement of claim, in which it was pleaded that there had been fraudulent conduct on the part of Leicester’s clients.

Leicester’s clients considered that such allegations were baseless and an attempt by the plaintiffs to circumvent a potential limitation problem with their claim. Leicester subsequently filed, and then withdrew, an application to strike out the amended statement of claim.

The plaintiffs discontinued the action against the fourth defendant at a judicial conference. Mr Sussex and Leicester were negotiating on the plaintiffs discontinuing action against the third defendant, and the position regarding costs.

Email "a threat"

Mr Sussex complained to the Law Society that the second of two emails Leicester sent him was a threat that comprised blackmail in terms of s 237 of the Crimes Act 1961. Mr Sussex was of the view that Leicester could not use the threat of making a complaint to attempt to obtain an advantage for his clients.

The committee noted Mr Sussex’s emphasis on the alleged threat amounting to blackmail, rather than being a breach of rule 2.10 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, which provides: “A lawyer must not use, or threaten to use, the complaints or disciplinary process for an improper purpose.”

The committee said it was of the view it was not required to answer the question about whether the email amounted to blackmail, as it was not its role to investigate alleged criminal action. Mr Sussex “could lodge a complaint with the New Zealand Police if he wished to pursue this matter further.”

Looking at rule 2.10, the committee said its view was that Leicester’s email “was effectively a threat to use the complaints process to assist in negotiations and that was an improper purpose”.

“While the committee accepts that the email was not advising [Mr Sussex] that a complaint would be made, it was clearly intended to influence [Mr Sussex] and his client.”

Leicester’s email said that his clients were considering making a complaint to the Law Society, and “their decision may depend on how much longer it takes to bring matters to a close (inclusive of resolving costs), coupled with the additional costs they are forced to incur”.

The committee said that in its view Leicester’s email was “intended for the improper purpose of influencing the negotiations between the lawyers’ clients and to achieve a more desirable outcome for his client”.

Leicester asserted he was drawing the attention of a lawyer in a collegial way to a possible breach of the rules, and that was not done for an ulterior purpose.

“In fact [Leicester] had already pointed out the fact that he believed the actions of Mr [Sussex] breached the rules by alleging fraud where there was no basis for such. His second email took that further,” the committee said.

As well as finding unsatisfactory conduct by Leicester, the committee ordered Leicester to pay $250 costs.

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