MJY and VYW DECISION. The names and identifying details of the parties in this decision have been changed.

Transcription

1 LCRO 250/2016 LCRO 251/2016 CONCERNING applications for review pursuant to section 193 of the Lawyers and Conveyancers Act 2006 AND CONCERNING a determination by [Area] Standards Committee [X] BETWEEN MJY and VYW Applicants AND WLB Respondent AND BETWEEN WLB Applicant AND MJY and VYW Respondents DECISION The names and identifying details of the parties in this decision have been changed. Introduction [1] Following complaints by Mr MJY and Mrs VYW, [Area] Standards Committee [X] made four findings of unsatisfactory conduct against Mr WLB and ordered him to: (a) reduce his fees;

2 2 (b) (c) (d) provide an Authority and Instruction form to enable the property owned by the Trust to be transferred to new trustees; apologise to Mr MJY and Mrs VYW; pay a fine of $3,000; and (e) pay costs in the sum of $2,000. [2] Mr MJY and Mrs VYW, and Mr WLB, have all applied for review of the Standards Committee determination. Background [3] Mr MJY and Mrs VYW are two of Mr B JY and Mrs R JY s children. [4] In 1995, Mr and Mrs JY established the JY Family Trust. Mr and Mrs JY and their solicitor were the initial trustees. [5] In 2003, the initial solicitor trustee retired, and Mr WLB and Mrs EP (a family friend) were appointed trustees. [6] The only asset of the trust was Mr and Mrs JY s home at [address]. [7] The power of appointment of new trustees was vested in Mr and Mrs JY, or the survivor of them. 1 Mr B JY died in April 2012 and Mrs R JY continued to reside in the property until her death in April No additional or replacement trustees had been appointed by Mr and/or Mrs JY during their lifetimes and Mr WLB and Mrs EP remained as trustees. [8] Following Mrs JY s death, the power of appointment of new trustees vested in Mr MJY and Mrs VYW who were the executors of Mrs JY s will. [9] Mr WLB held Mrs JY s will and a meeting between the trustees and the five JY children 2 was held shortly after Mrs JY s death. At that meeting, various proposals were discussed for the refurbishment and sale of the property. One of the complaints, and a fact accepted by Mr WLB, is that there was no discussion as to whether Mr WLB and Mrs EP would continue as trustees and who held the power of appointment (and removal) of trustees. 1 Deed of Trust (16 October 1995), cl Mr MJY and Mrs VYW had three sisters.

3 3 [10] Mr WLB had sent Mr MJY and Mrs VYW a copy of Mrs JY s will by on 12 April 2014 and it is apparent that Mr MJY and Mrs VYW were aware that they were the executors of their mother s will. Mr WLB says it was not necessary to have the will admitted to Probate, as Mrs JY s estate was minimal. [11] A copy of the Trust Deed was sent to the Mr MJY and Mrs VYW and their siblings on 23 April [12] During Mrs JY s lifetime, Mr WLB had attended to a number of matters for her 3 and Mr WLB s fees for these matters had been paid by Mrs JY. However, some attendances on Mrs JY in respect of her personal matters had not been billed, as well as a significant amount of work on trust matters. As a result, by the time of Mrs JY s death, Mr WLB had accrued a significant amount of unbilled time. Further, increased attendances occurred after Mrs JY s death as the family and trustees debated what refurbishment (if any) should be undertaken prior to placing the trust property on the market for sale. [13] On 27 February 2015, Mr WLB rendered an account for $71,942 plus GST and disbursements, a total of $84, Subsequently, Mr WLB rendered two further accounts: 21 May 2015 $10,412 + GST and disbursements total $12, July 2015 $4,836 + GST and disbursements total $5, [14] Mr WLB s invoices were addressed to: JY Family Trust EP and WLB c/o [Law firm] 4 [City] [15] The invoices referred to attendances for the JY Family Trust and the R JY estate. All time records were entered on to the same ledger headed [JY], [RJY] and [BJY] and [EP], NT. Mr WLB did not produce these invoices until requested to by one of Mr MJY and Mrs VYW s siblings. 3 For example, Mr WLB prepared her will and powers of attorney. 4 Mr WLB was the sole principal of [Law firm].

4 4 The complaints [16] The Lawyer s Complaints Service set out Mr MJY and Mrs VYW s complaints in a Notice of Hearing 5 in the following manner: (a) Whether Mr WLB breached any or all of rr 9 and 9.1 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (RCCC) by: (i) (ii) charging fees that were unfair and unreasonable; and incorrectly charging fees in relation to R JY s personal affairs to the JY Family Trust. (b) (c) (d) Whether Mr WLB breached r 9.6 of the RCCC by failing to render an invoice to the JY Family Trust in a timely manner. Whether Mr WLB had proper instructions to act in matters relating to the administration of R JY s estate. Whether Mr WLB breached any or all of rr 5, 5.1, 5.2, 5.4 and 6 of the RCCC where it appears that he has furthered his own interests by: (i) (ii) (iii) (iv) (v) (vi) failing to advise the named executors of R JY s estate, following her death, that they had powers to appoint and remove trustees and thereby securing his own position as trustee; using his position as trustee of the JY Family Trust to generate substantial and excessive income for his legal practice; withholding access to R JY s original will from the named executors of the estate; denying access to files so that the reasonableness of the fees charged would not be able to be assessed; unreasonably delaying his retirement as trustee of the JY Family Trust; and being obstructive and delaying the winding up of the JY Family Trust and the sale of the trust property. 5 Notice of Hearing, 11 July 2016.

5 5 (e) Whether Mr WLB breached any or all of rr 3, 3.2, 7, 7.1 and 7.2 of the RCCC by: (i) (ii) (iii) failing to advise the named executors of R JY s estate, following her death, that they had powers to appoint and remove trustees and thereby securing his own position as trustee; failing to provide regular updates to the beneficiaries of the JY Family Trust as to the fees being accrued or confirmation of the fee liability; and failing to provide requested information in a timely manner. (f) Whether Mr WLB breached r 2.3 of the RCCC by using his position as a trustee to enforce payment of his invoice by refusing to sign the Authority and Instruction forms. The costs assessor s report [17] Prior to considering the complaints, the Complaints Service commissioned a report from a costs assessor, Mr QT. Mr QT reviewed Mr WLB s files and considered Mr WLB s fees in two time periods the period prior to Mrs JY s death, and the period following. The period prior to death [18] Mr QT calculated that Mr WLB had charged for hours for the period from 22 September 2005 to the date of Mrs JY s death (6 April 2014). [19] Mr QT considered that a reasonable amount of time during this period related to the personal affairs of Mrs JY 6 and calculated that at least 20% of the attendances relates to Mrs JY personally. 7 [20] That meant that 82.8 hours related to matters pertaining to the JY Family Trust during that period for which Mr WLB had charged his usual rate of $300 per hour. However, Mr QT considered that 60 hours of that time was spent attending to what he termed administrative tasks 8 for the Trust, for which he did not consider Mr WLB 6 QT report, at 2. 7 Above n 6. 8 Attendances such as those relating to the proposed renovations of the property for example, attending to the details of carpets, the stove and flooring. Mr QT referred to this as micro-managing tasks which would not usually be attended to by a professional trustee.

6 6 could justify charging his usual rate. He considered that this time should be charged at $200 per hour. [21] Having adjusted Mr WLB s invoice by applying these figures (hours and hourly rates), Mr QT formed the view that a reasonable fee for this period of time was $22,560. The inclusion of GST and a disbursements charge of $2,100, brought Mr QT s assessment of a fair and reasonable fee for this period to $28,044. The period after Mrs JY s death [22] The balance of the time charged by Mr WLB (157 hours) was recorded after Mrs JY s death. Mr QT deducted 16.4 hours from this for time spent by Mr WLB responding to issues raised by the complainants about his fees time which Mr QT did not think appropriate to be charged. [23] Of this, Mr QT assessed that 75 per cent related to time spent by Mr WLB in his role as lawyer/trustee, 9 with the remaining 25 per cent being administrative in nature. 10 [24] Applying the different charge out rates to these calculations resulted in a fee of $38,665. [25] Mr WLB was not instructed by the executors of the will and Mr QT did not consider it appropriate for any time spent by Mr WLB on matters pertaining to Mrs JY s estate time to be included in his charges. [26] He calculated that 5 per cent of Mr WLB s fee could not be charged for this reason and deducted the amount of $1, [27] Mr QT allowed 4.1 hours at $300 per hour for work done by Mr WLB after the issue of costs had been raised, and reached the view that a fair and reasonable fee for this period was $36, After adding GST and disbursements, the overall fee for this period, assessed by Mr QT to be fair and reasonable, amounted to $44, [28] In a concluding comment, Mr QT noted that if Mr MJY and Mrs VYW had been made aware at an earlier time of the fact that the power to terminate Mr WLB s appointment as a trustee resided in them as executors of Mrs JY s will, they may have removed him as a trustee soon after Mrs JY s death, with the result that no fees would have been incurred after her death. 9 As described by Mr QT. 10 Above n 9.

7 7 The Standards Committee determination [29] The Standards Committee identified the following issues arising from the complaints: (a) whether Mr WLB breached any or all of rr 9 and 9.1 of the RCCC by: (i) (ii) charging fees that were unfair and unreasonable; and incorrectly charging fees in relation to R JY s personal affairs to the JY Family Trust. (b) (c) (d) (e) (f) whether Mr WLB breached r 9.6 of the RCCC by failing to render an invoice to the JY Family Trust in a timely manner; whether Mr WLB had proper instructions to act in matters relating to the administration of R JY s estate; whether Mr WLB breached any or all of rr 5, 5.1, 5.2, 5.4 and 6 of the RCCC where it appears that he has furthered his own interests; whether Mr WLB breached any or all of rr 3, 3.2, 7, 7.1 and 7.2 of the RCCC; and whether Mr WLB breached r 2.3 of the RCCC using his position as a trustee to enforce payment of his invoice by refusing to sign the Authority and Instruction form. [30] The Committee addressed the issues: Breach of rr 9 and 9.1 [31] The Committee accepted Mr QT s assessment that fair and reasonable fees for the work carried out by Mr WLB was $28,044 for the period prior to Mrs JY s death and $44, for the period after her death. 11 It determined that Mr WLB s conduct constituted unsatisfactory conduct pursuant to s 12(c) of the Lawyers and Conveyancers Act 2006 (the Act) by reason of breaches of rr 9 and Both figures include GST and disbursements.

8 8 Breach of r 9.6 [32] The invoice rendered on 27 February 2015 by Mr WLB was expressed to be for professional services from 22 September 2005 to 31 December No other invoices had been rendered during this time. [33] Rule 9.6 of the RCCC requires a lawyer to render a final account within a reasonable time of concluding a matter or the retainer being otherwise terminated. The Committee concluded Mr WLB was in breach of this rule and his conduct constituted unsatisfactory conduct pursuant to s 12(c) of the Act. Instructions to act for the estate [34] The Committee noted that Mr WLB had handled initial arrangements for the administration of Mrs JY s estate but had not been retained by Mr MJY and Mrs VYW as executor of the estate to do so. As a result, he had not issued a Letter of Engagement as required by rr 3.4 and 3.5 of the RCCC. The Committee determined this to be unsatisfactory conduct pursuant to s 12(c) of the Act. It also determined that Mr WLB s conduct amounted to conduct that would be regarded by lawyers of good standing as being unacceptable thereby amounting to unsatisfactory conduct pursuant to s 12(b) of the Act. Breaches of rr 5, 5.1, 5.2, 5.4, 6 [35] The headings to these rules provide a general indication of their subject matter: Independence. Independent judgment and advice. Conflicting interests. Client interests. [36] In relation to these rules, the Committee considered six aspects of the complaints:

9 9 1. Failing to advise the named executors of R JY s estate, following her death, that they had powers to appoint and remove trustees and thereby securing his own position as trustee: 12 In the Committee s view, following Mrs [JY] s death on 6 April 2014 Mr [WLB] was duty bound to provide the complainants with all information relating to Mrs [JY] s financial affairs including providing the complainants with copies of Mrs [JY] s will, and related information including the fact of the power of appointment and removal of trustees under the trust having been conferred on the executors of Mrs [JY] s will. 2. Mr WLB using his position as trustee of the JY Family Trust to generate substantial and excessive income for his legal practice: (a) The Committee considered that this aspect of the complaints had been addressed by the Committee in its deliberations and conclusions relating to fees which it had concluded were not fair and reasonable. 3. Withholding access to R JY s original will from the named executors of the estate: (a) In addressing this aspect, the Committee set out the provisions of rr and of the RCCC, notwithstanding that it was being addressed in the context of the rules referred to above: Subject to any statutory provisions to the contrary, upon changing lawyers a client has the right either in person or through the new lawyer to uplift all documents, records, funds, or property held on the client s behalf. The former lawyer must act upon any written request to uplift documents without undue delay subject only to any lien that the former lawyer may claim If the matter in issue is urgent, the former lawyer who holds a lien over documents must make the documents available to the client s new lawyer on receipt of an undertaking from the new lawyer that the former lawyer s fee will be paid in priority to the fee of the new lawyer. (b) The Committee considered that following the death of Mrs JY on 6 April 2014 Mr WLB was duty bound to disclose to the family Mrs JY s will, and related information including the fact the trust 12 Notice of Determination at [86].

10 10 included the power of appointment and removal of trustees conferred on the executors of Mrs JY s will. 13 (c) Mr WLB claimed a lien over Mrs JY s will and delayed forwarding it to the complainants lawyer until 1 May 2016: 14 In the Committee s view this led to undue delay by Mr [WLB] in responding to the request and authority to uplift which in turn led to a delay for the complainants being able to commence their administration of Mrs [JY] s estate. By his conduct in failing to release Mrs [JY] s will to the executors the Committee considers that Mr [WLB] placed his firms interests ahead of the complainants desire to resolve the fees issue with Mr [WLB], and to proceed to administer Mrs [JY] s estate and relatedly, the affair of the trust. 4. Denying access to files so that the reasonableness of the fees charged would not be able to be assessed: (a) (b) Mr WLB declined access to his files for some time and suggested he would liaise directly with Mr MJY and Mrs VYW once the sale of the property had been settled when Mr NP s 15 retainer terminated. The Committee observed that it was this response from Mr WLB which led to Mr MJY and Mrs VYW laying their complaint against Mr WLB in this matter Unreasonably delaying his retirement as trustee of the JY Family Trust: (a) With regard to this aspect of the complaint, the Committee considered that Mr WLB was in breach of r This rule relates to a client s right to uplift documents subject to a solicitor s lien. 6. Being obstructive and delaying the winding up of the JY Family Trust and the sale of the trust property: (a) Mr WLB claimed a lien over all documents and files. The Committee noted that on 19 May 2016 the new solicitors engaged by the complainants wrote to Mr WLB and pointed out that Mr WLB had been removed as a trustee by Deed dated 21 July 2015 but 13 At [92] this is the wording of the Committee. 14 At [98]. 15 Mr NP was the lawyer instructed by the complainants to act in the administration of Mrs JY s will. 16 Above n 12 at [102].

11 11 that Mr WLB was still refusing to sign the Authority and Instruction form to enable the title to the property to be transferred to Mr MJY and Mrs VYW, thereby preventing the sale of the property. Mr NP also proposed that the disputed portion of Mr WLB s fee be retained from the sale proceeds so that Mr WLB could sign the required documentation to enable the sale to proceed. It was the Committee s considered view that this course of events further illustrates that Mr [WLB] continued to place his own interests payment of his disputed fees ahead of those of his client s interests. [37] After considering the above six aspects of the complaint, the Committee determined that Mr WLB s conduct constituted unsatisfactory conduct pursuant to s 12(c) of the Act by virtue of breaches of rr 5, 5.1, 5.2, 5.4 and 6 of the RCCC. The Committee also considered that Mr WLB s conduct would be considered unacceptable by lawyers of good standing, and therefore also constituted unsatisfactory conduct pursuant to s 12(b) of the Act. Breach of rr 3, 3.2, 7, 7.1, 7.2 [38] The headings to these rules are: Competence and client service. Respect and courtesy. Disclosure and communication of information to clients. [39] The aspects of Mr WLB s conduct considered in relation to these rules was Mr WLB s failure to advise Mr MJY and Mrs VYW that they held the power to remove and appoint trustees, his failure to provide regular updates to the beneficiaries of the Trust as to fees, and generally failing to provide information in a timely manner. [40] The Committee considered these issues had been addressed elsewhere in the determination in different contexts. Breach of r 2.3 [41] Rule 2.3 requires a lawyer to use legal processes only for a legal purpose. The issue addressed in the context of this rule was Mr WLB s refusal to sign the Authority and Instruction form until his invoices had been paid.

12 12 [42] Mr WLB asserted a lien over the property and declined to sign the Authority and Instruction form to protect payment of his fees. [43] The Committee considered that by so doing, Mr WLB was putting his own interests ahead of those of the Trust, which was not a proper purpose in terms of the rule. It also considered that by declining to sign the Authority and Instruction form, Mr WLB caused unnecessary distress or inconvenience to Mr MJY and Mrs VYW and their family, and that this also constituted a breach of the rule. [44] The Committee determined that Mr WLB s conduct constituted unsatisfactory conduct pursuant to s 12(c) of the Act by virtue of the breach of this rule. Summary / Orders [45] Following the findings of unsatisfactory conduct, the Committee made the following orders: 1. Mr WLB s fee for the period prior to Mrs JY s death was reduced by the Committee by 10 per cent of the accepted fee ($22,560) as a penalty for the breach of r 9.6. This resulted in a fee of $20,304 plus GST. 2. The Committee ordered that Mr WLB reduce his fee for the period after Mrs JY s death to $5,000 plus GST on the basis that Mr WLB may not have continued to remain a trustee of the Trust if he had advised the Mr MJY and Mrs VYW of the fact the power of appointment and removal of trustees resided with them after Mrs JY s death. 3. The generic service fee of $2,100 invoiced by Mr WLB was cancelled. The above orders resulted in an order that Mr WLB reduce his total fees to $25,304 plus GST and actual disbursements. 4. Mr WLB was ordered to immediately sign the Authority and Instruction form to enable the property to be transferred to the executors. 5. Mr WLB was ordered to apologise to Mr MJY and Mrs VYW within 14 days of the date of the determination. 6. Mr WLB was fined the sum of $3,000 and ordered to pay costs of $2,000 to the New Zealand Law Society;

13 13 7. With regard to publication the Committee said: 17 The Committee considers it necessary that a summary of the facts, outcome and orders should be published, but not any details that might lead to the identification of Mr [WLB] or any of the other parties involved, as a reminder to lawyers of the importance of open and transparent billing. Accordingly, the Committee directs publication of a summary of the facts, outcome and order of the matter as the NZLS deems appropriate, but not any details that might lead to the identification of any of the parties. Applications for review [30] Both parties (Mr MJY and Mrs VYW, and Mr WLB) have applied for a review of the Standards Committee determination. The complainants application [31] Mr MJY and Mrs VYW request that all of Mr WLB s fees be cancelled. In essence, they argue that the Trust (and the beneficiaries of the Trust) should be compensated in this way for the delays caused by Mr WLB, and potential losses caused through the delay in selling the property. [32] They also request compensation for the stress caused to the replacement trustees and beneficiaries. [33] They submit that Mr WLB should be censured and his name published. [34] Finally, they seek compensation for expenses incurred by them for the costs to gain information from Mr WLB relating to their case, file the complaint to the Law Society, file [the application for review] and maintain the Trust property throughout the [period after Mrs JY s death]. 18 They calculated this amount to be $38, Mr WLB s application [35] Mr WLB requested that the determination of the Committee be overturned. He submitted that the Committee had made errors of fact and law. [36] He took issue with the assessments made by Mr QT of the amount of work carried out for Mrs JY personally, and of the work of an administrative nature carried out for the Trust. 17 Above n 12 at [143]. 18 Application for review.

14 14 [37] In all, Mr WLB raised 28 points on review. These will be addressed in the relevant parts of this decision. Review Delegation / hearing [38] The review progressed by way of a hearing in Auckland on 21 August [39] The hearing was conducted by Mr Vaughan acting as a delegate duly appointed by me pursuant to cl 6 of sch 3 of the Act. Mr Vaughan has been delegated to report to me and the final determination of this review as set out in this decision is made following a full consideration of all matters by me after receipt of Mr Vaughan s report and discussion. Mr MJY and Mrs VYW were represented by Mr GB and Ms ZT. Mr WLB was represented by Mr SM. Both parties were accompanied by support persons. Fees [40] At the commencement of the hearing, Mr SM reiterated the acknowledgment in his submissions, namely, that Mr WLB accepted the fee assessed by Mr QT for the period prior to Mrs JY s death as being a fair and reasonable fee ($22,560 plus GST) but did not accept the reduction by 10 per cent imposed by the Committee for breach of r 9.6 of the RCCC. [41] Mr WLB did not, however, accept the findings of unsatisfactory conduct which resulted in the orders to reduce his fees. [42] Mr QT has carried out a careful and comprehensive review of Mr WLB s files and time records. He calculated that 20 per cent of the time invoiced by Mr WLB was time spent attending to matters for Mrs JY personally and was not chargeable to the Trust. He deducted 20.7 hours from the time charged by Mr WLB for this, leaving 82.8 hours chargeable. [43] Mr QT considered, that of the 82.8 hours remaining, 22.8 hours should not attract Mr WLB s usual rate of $300 per hour as these attendances were what Mr QT referred to as administrative work on behalf of the Trust. This included attendances relating to the details of the proposed renovation of the property such as the detail of carpets and the positioning of services in the kitchen. Mr QT did not consider these matters would usually involve the attendances of a professional trustee.

15 15 [44] Mr QT applied an hourly rate of $200 to this work. [45] The fee assessed by Mr QT as a fair and reasonable fee for this period is $22,560 plus GST, a total of $28,044. [46] Mr QT disallowed the generic service fee of $2,100 as it did not relate to any specific disbursements and I concur with that. The specific disbursements included in the invoice of 27 February 2015 are without challenge. [47] Mr WLB invoiced 157 hours after Mrs RJY s death. Mr QT assessed that 25 per cent of this work was administrative in nature. That resulted in chargeable hours as a lawyer which, at $300 per hour, amounted to $31,635. [48] Mr QT and the Standards Committee discounted $1,933,25 for what was described as estate work but allowed a further fee of $1,230 for work associated with the trust. I concur with those adjustments. The resulting fee for the post death period is $31, Less: $1, $29, plus: $1, $30, plus GST $4, $35, [49] Mr MJY and Mrs VYW argue that no fees at all should be payable to Mr WLB. That is not a tenable argument. Mr WLB carried out a significant amount of work for the Trust and Mrs JY for which he should be fairly paid. His work as a trustee after Mrs JY s death secured the Trust property and ensured that outgoings in respect of the property were paid, and this was of some value to Mr MJY and Mrs VYW as they were not in New Zealand at the time. [50] The Committee reduced Mr WLB s fees to $5,000 for the post-death period on the basis that Mr WLB may not have been retained as a trustee after Mrs JY s death if the complainants had been advised of their power to remove and appoint trustees. [51] Mr MJY and Mrs VYW had a copy of Mrs JY s will and knew that she had appointed them as executors of her will. [52] The power to remove and appoint trustees was contained in [4] of the Trust Deed. The Trust had been established in 1995 and Mr and Mrs JY could have

16 16 provided a copy of the Trust Deed to Mr MJY and Mrs VYW at any time during their lifetimes. [53] Mr WLB provided a copy of the Trust Deed to all beneficiaries on 23 April 2014, shortly after Mrs JY s death. [54] Mr WLB did not act for Mr MJY and Mrs VYW. He did not have a lawyer/client relationship or duty to them. Mr MJY and Mrs VYW were able to seek advice at any stage from any other lawyer. [55] There is no basis for the reduction in Mr WLB s post-death fees. [56] Mr WLB invoiced $102,918 by way of fees, GST and disbursements. The fair and reasonable fees assessed by Mr QT, and accepted on review, amount to $72,165.01, a reduction of some 30 per cent. Rule 9.6 failure to render an account [57] Rule 9.6 of the RCCC provides: A lawyer must render a final account to the client or person charged within a reasonable time of concluding a matter or the retainer being otherwise terminated. The lawyer must provide with the account sufficient information to identify the matter, the period to which it relates, and the work undertaken. [58] As noted by the Committee: Mr WLB commenced recording attendances for Trust work on 22 September No invoices were rendered to the Trust until the invoice rendered on 27 February [59] That amounts to a clear breach of r 9.6. [60] The reasons provided by Mr WLB for not providing an invoice as required by the rule were: (a) (b) the Trust s only asset was [address] and there was an expectation that he would not be paid until that property had been sold; a tax liability would have been incurred if an invoice had been rendered; and

17 17 (c) Mrs JY had been agreeable to this approach. [61] Mr WLB s concerns about tax liability could have been easily rectified by writing off the bill for tax purposes. [62] There is no evidence to support Mr WLB s contention that Mrs JY had agreed to Mr WLB deferring the rendering of his account, but it was inappropriate to ask Mrs JY to do so in any event. Mrs JY was the person who would and/or should have been aware of what work was being carried out and the cost thereof. The opportunity for Mrs JY to challenge any bill was lost. [63] It is doubtful whether any purported agreement to defer rendering an account will stand against the clear requirements of the rule and it is absolutely unacceptable to defer rendering an account for some nine years. The purpose of the rule is to ensure that clients are kept fully and promptly appraised of the level of fees accruing. Mr WLB has not taken the point that it was unclear when matters for the Trust could be regarded as concluded. However, the matters included in the invoice included work done for Mrs JY personally, and invoices should have been rendered to her for those in any event. [64] Mr WLB s conduct constitutes unsatisfactory conduct pursuant to s 12(c) of the Act by reason of the breach of r 9.6 of the RCCC. No retainer [65] The Standards Committee determined that Mr WLB had not been instructed by Mr MJY and Mrs VYW to act in the administration of Mrs JY s estate. That is clear from the evidence. In support of this finding, the Committee noted that Mr WLB had not provided a letter of engagement to Mr MJY and Mrs VYW. 19 [66] However, the Committee then proceeded to determine that Mr WLB s conduct constituted unsatisfactory conduct in that he proceed[ed] to act in such circumstances without complying with the formalities required by rules 3.4 and 3.5, 20 which require a lawyer to issue Letters of Engagement when instructed. [67] There is something of a non sequiter in this finding. The Standards Committee did not identify which of the Orders made related to this finding, and it is 19 Standards Committee determination at [76]. 20 At [77]

18 18 assumed the fine imposed relates (in part) to this finding. That has been taken into account in the orders made on review. [68] The Committee also determined that Mr WLB s conduct in this regard constituted unsatisfactory conduct pursuant to s 12(b) of the Act. It cannot be discerned from the Standards Committee determination what conduct the Committee is referring to and that finding will also be reversed. Withholding documents / declining to sign the Authority and Instruction form [69] The Committee made three findings of unsatisfactory conduct against Mr WLB for failing to forward the will and other documents to Mr NP, and declining to sign the Authority and Instruction form when requested. The Committee has largely determined these on the basis that by so doing, Mr WLB was favouring his own interests over those of Mr MJY and Mrs VYW. [70] On 23 February 2015, NP Law, acting for Mr MJY and Mrs VYW as executors, sent Mr WLB an authority to uplift the estate file and deeds for Mrs JY. Mr WLB delayed complying with this request as he claimed a lien over the documents for payment of his accounts. [71] Subsequently, Mr NP sent Mr WLB an authority to uplift Mrs JY s will and that was sent to Mr NP on 1 May [72] Mr WLB was removed as a trustee by Deed dated 21 July 2015, but refused to sign the Authority and Instruction form for some time. The Standards Committee ordered Mr WLB to sign the form in its determination of 30 September [73] Rule of the RCCC provides that a client has the right to uplift all documents, records or funds held on the client s behalf subject to any lien claimed by the lawyer. Mr WLB had rendered accounts but they had not been paid. In his letter of 16 July 2015, Mr NP advised he was authorised to provide an undertaking that the disputed portion of Mr WLB s fees would be held from the proceeds of sale of the property. [74] It is to be noted, however, that Mrs EP had advised Mr MJY and Mrs VYW in an dated 17 March 2015, that Mr WLB himself was prepared to undertake to hold the disputed portion of the fees in his trust account, presumably on the basis that he remain as a trustee and the property was then sold. Mr WLB confirmed on several

19 19 occasions 21 to Mr NP that he considered this to be the best way forward. Rule provides that a lawyer must make documents available to the new lawyer in urgent situations where the new lawyer provides an undertaking to hold funds to meet outstanding costs. [75] The matter was not urgent, and although Mr NP advised he was authorised to provide an undertaking, he did not do so. [76] It was not until 21 July 2015 that Mr NP provided Mr WLB with formal notice of his removal as a trustee, and the appointment of Mr MJY and Mrs VYW as replacement trustees. Until formally removed as trustee, Mr WLB remained a trustee together with Mrs EP. He was not obliged to forward any of the Trust documents or records to Mr NP until that time, but retained the right to a lien, whilst acknowledging that he may be obliged to apply to the Court for confirmation of the lien. [77] The overall impression from a review of the correspondence between Mr WLB and Mr NP is that there was something of a stand-off between the parties, but Mr WLB s conduct was not completely without grounds, such that would support the various findings by the Committee that Mr WLB was motivated solely by self-interest without colour of right, to the prejudice of Mr MJY and Mrs VYW. [78] The findings of unsatisfactory conduct on these issues cannot be sustained. Summary 1. Pursuant to s 211(1)(a) of the Act, the following determinations of unsatisfactory conduct by the Standards Committee are confirmed: (a) Breach of r 9 (fees) at [47]. (b) Breach of r 9.6 at [72]. 2. Pursuant to s 211(1)(a) of the Act, the following determinations of unsatisfactory conduct by the Standards Committee are reversed: (a) Breach of rr 3.4 and 3.5 at [77]. (b) Breach of rr 5,5.1,5.2,5.4 and 6 at [119]. (c) Breach of r 2.3 at [129]. 21 For example WLB to NP 17 July 2015

20 20 Orders / penalty [79] Pursuant to s 211(1)(a) of the Act: (a) (b) (c) (d) (e) The finding of unsatisfactory conduct pursuant to s 12(c) of the Act by reason of the breach of r 9 of the RCCC is confirmed. The orders of the Standards Committee at [131] [136] of their determination are modified by reversing the orders as to fees made by the Committee. The order by the Standards Committee that Mr WLB reduce his fees to $25,304 plus GST is modified. Mr WLB is ordered to reduce his fees to $48, plus GST. The service fee of $2,100 is cancelled. The disbursements included in Mr WLB s invoices are allowed. The order that Mr WLB sign the Authority and Instruction form is confirmed. 22 The order that Mr WLB apologise to the Mr MJY and Mrs VYW is reversed. In the circumstances, an ordered apology would have little meaning for either party. [80] The Standards Committee imposed a fine of $3,000. On review, and pursuant to s 211(1)(a) of the Act, that fine is attached specifically to the breach of r 9.6 of the RCCC. [81] The order for payment of costs in the sum of $2,000 is confirmed. Costs on review [82] Both parties applied for a review of the Standards Committee determination. On review, the determinations of the Committee have been confirmed, reversed and modified. It is not appropriate for costs to be awarded against Mr WLB and the general principle that costs will be awarded against lay applicants only in rare or unusual circumstances continues. 22 Mr WLB has complied with this order.

21 21 Publication [83] Section 206(1) of the Act provides that reviews conducted by this Office are conducted in private. This establishes the presumption of no publication to identify any of the parties. There is no reason to depart from this presumption and there will be no publication of identifying details of any of the persons referred to in this decision. In the usual manner, this decision will be published on the website of this Office with all identifying details removed. DATED this 21 ST day of September 2018 D Thresher Legal Complaints Review Officer In accordance with s 213 of the Lawyers and Conveyancers Act 2006 copies of this decision are to be provided to: Mr MJY as the first party Mrs VYW as the second party Mr WLB as the third party Mr GB and Ms ZT as the representatives for the first and second parties Mr SM and Ms BF as the representatives for the third party [Area] Standards Committee [X] New Zealand Law Society