McGuire v Manawatu Standards Committee
[2016] NZHC 1052
•19 May 2016
IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY
CIV-2015-454-000016 [2016] NZHC 1052
BETWEEN JEREMY JAMES MCGUIRE
Plaintiff
AND
MANAWATU STANDARDS COMMITTEE
First Defendant
LEGAL COMPLAINTS REVIEW OFFICER
Second Defendant
Hearing: 13 May 2016 Appearances:
Plaintiff Appears In Person
JLS Shaw for First Defendant
No Appearance for Second DefendantJudgment:
19 May 2016
JUDGMENT OF GENDALL J
Introduction
[1] The plaintiff, Jeremy James McGuire (Mr McGuire) seeks judicial review of:
(a) a determination of the first defendant, the Manawatu Standards Committee (the Committee) dated 3 December 2012 (the determination); and
(b) a review decision of the second defendant, the Legal Complaints
Review Officer (the LCRO), dated 4 September 2014 (the decision) in which the LCRO upheld the determination.
MCGUIRE v MANAWATU STANDARDS COMMITTEE [2016] NZHC 1052 [19 May 2016]
[2] This judicial review application is opposed by the Committee which has filed a statement of defence. The LCRO on 24 April 2015 filed an appearance indicating it would abide the decision of the High Court on the application. There was no appearance for the LCRO at the hearing of this application.
[3] Mr McGuire is a practising barrister and solicitor. The determination of the Committee was the result of a complaint against him by clients, Mr Ranganathan and his wife, who had instructed Mr McGuire to act for them on a house purchase.
[4] The determination concluded that Mr McGuire had breached two rules of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (the rules) as follows:
(a) rule 11.1, in that he had misled and deceived his clients by attempting to increase an agreed fee of $1100 to one of $1450; and
(b)rule 3.4, in that he had not provided a client engagement letter in advance of acting for the clients.
[5] The determination found that Mr McGuire was guilty of unsatisfactory conduct. He was censured and ordered to pay costs of $250 plus GST to the New Zealand Law Society, to refund $150 plus GST to Mr Ranganathan and his wife and to provide to them a written apology.
[6] Subsequently, Mr McGuire sought a review by the LCRO of the determination. By a decision dated 4 September 2014, the LCRO upheld the determination of the Committee. Following that LCRO decision, the present judicial review proceeding was filed by Mr McGuire.
Involvement of the first defendant Committee in this hearing
[7] The Committee is a body which performs judicial or quasi-judicial functions. Ordinarily, when decisions of parties who carry out judicial functions are the subject of judicial review, as is the case here, they take no part in the proceeding –
New Zealand Engineering, Coach Building, Aircraft, Motor and Related Trades
Industrial Union of Workers v Court of Arbitration.1
[8] In some circumstances, however, it is appropriate for a judicial body to appear by counsel on a judicial review application and to make submissions. In the present matter before the Court there is no party other than Mr McGuire and the Committee which has indicated that it wishes to raise considerations for the Court to consider on this review. As I have noted, the LCRO is abiding the decision of the Court. And, the original complainants who were clients of Mr McGuire, Mr Ranganathan and his wife, are not parties to the proceeding.
[9] I am satisfied therefore that it is proper in all the circumstances of this case, given also that Mr McGuire has raised no objection, for the first defendant Committee to take an active part in this proceeding as it did and to provide submissions on the judicial review application. It is on that basis that this matter proceeded.
Factual background
[10] In July 2012 Mr McGuire was approached to act for Mr Ranganathan and his wife as purchasers in a conveyancing transaction. The relevant agreement for sale and purchase, it seems, was received by Mr McGuire around 4 July 2012. Telephone conversations then took place between Mr McGuire and Mr Ranganathan. It is said that these parties agreed during one of these conversations that Mr McGuire would charge an all up fee of $1100 which would cover his conveyancing work and all disbursements on the purchase. This apparently occurred on 6 July 2012. Mr Ranganathan says he recorded this agreed $1100 fee in an email to Mr McGuire of that date.
[11] As to this aspect, in a letter which is before the Court from Mr McGuire to the New Zealand Law Society dated 25 October 2012, he addressed this issue of an
$1100 agreed fee and confirmed:
1 Engineering, Coach Building, Aircraft, Motor and Related Trades Industrial Union of Workers v
Court of Arbitration [1976] 2 NZLR 283 (CA).
5.Some time after that he called me while I was walking down the street. He then proceeded to try and haggle over the cost of the conveyancing. He told me, among other things, that he “had no money to buy furniture” and that he was effectively broke (or words to that effect). I was in a hurry. I said I would reduce the fee to
$1250 I think it was, then $1200 and then $1100 on the basis that he kept on saying he could not afford any more than that. I think I
reluctantly said something like “ok, I will do this for you this one
time” or words to that effect but only because he said he could notafford any more.
[12] According to Mr McGuire, this 6 July 2012 telephone conversation followed an earlier telephone call he had with Mr Ranganathan. In that call Mr McGuire says from memory that he quoted an all up fee to him of $1395 which “he (Mr Ranganathan) told me that was accepted”. But, Mr McGuire in his 25 October 2012 letter, goes on to say that:
After that (several days later) he called me and said he did not want me to represent him after he had apparently been talking to the agent and told her that he did not want me to act for him. He rang me to ensure the agent had told me that he had told her he did not want me to be instructed.
And, elsewhere in that letter Mr McGuire states in various parts:
I absolutely deny Mr Ranganathan’s allegations about my behaviour…With respect to Mr Ranganathan he has not told you the full story…I also advised him that he was entitled to get another lawyer to represent him if he did not want me. He said he wanted to stay with me.
[13] Next, it seems on 23 July 2012, Mr McGuire received mortgage instructions from Mr Ranganathan’s bank, the National Bank. Mr McGuire then emailed the bank to query what amount the bank was paying towards Mr Ranganathan’s legal fees. The bank confirmed it was paying $3000 to Mr Ranganathan and that the sum was split $1000 for legal costs and $2000 “cash back”, but that Mr Ranganathan could utilise the funds as he wished. It seems Mr McGuire had not advised Mr Ranganathan that he was making this request to the bank.
[14] Arrangements were then made by Mr McGuire for Mr Ranganathan and his wife to attend his office to complete the documentation for the transaction. This occurred on 26 July 2012. Up to that point a letter of engagement had not been provided to Mr Ranganathan and his wife. This letter of engagement was provided at the meeting with Mr McGuire on 26 July 2012. The letter, which had been
prepared in advance of the meeting by Mr McGuire, stated that a new fee of $1450 all up was to be charged. An invoice for this sum had been prepared and was available then to be presented to Mr Ranganathan and his wife.
[15] At the 26 July 2012 meeting, discussions ensued and it seems these formed part of the initial complaint against Mr McGuire. Ultimately, following these discussions, a fee of $1250 was agreed, amendments were made to the letter of engagement to record this, and all parties signified their agreement to this arrangement by signing the letter.
[16] The purchase transaction settled, land registry matters were finalised and Mr McGuire completed his work for the Ranganathans. Subsequently Mr Ranganathan and his wife complained about Mr McGuire’s conduct.
The client complaint and the Standards Committee decision
[17] In September 2012 Mr Ranganathan and his wife lodged the complaint against Mr McGuire with the Complaints Service of the New Zealand Law Society. It alleged:
(a) Mr McGuire had initially quoted legal fees and disbursements all up of $1400 for the conveyancing work for their property purchase;
(b) a price had then been agreed between them on 6 July 2012 at $1100;
(c) on receiving advice from the National Bank as lender that it was advancing $3000 to the borrowers to assist with costs, Mr McGuire increased his fee to $1450;
(d)Mr McGuire had behaved in an aggressive manner and had threatened to withdraw his services if his revised fee was not accepted; and
(e) after a heated discussion at the meeting on 26 July 2012 a revised fee of $1250 was eventually agreed.
[18] On the first issue of whether Mr McGuire behaved in a threatening and aggressive manner and failed to treat Mr Ranganathan and his wife with proper courtesy and respect, the Committee dismissed the complaint. On the other two issues, first, the Committee held that Mr McGuire had engaged in conduct that was misleading in breach of r 11.1 in that he had misled Mr Ranganathan and his wife with respect to the fee to be charged for his services. And, secondly and finally, with regard to the question whether Mr McGuire in breach of r 3.4 had failed to provide Mr Ranganathan and his wife in advance with a letter of engagement as required, the Committee held that Mr McGuire had indeed failed to provide his clients with this information in advance and thus was in breach of r 3.4.
[19] Mr McGuire’s application to the LCRO to review the Committee’s decision followed. The LCRO considered the application and gave a detailed written decision in which he confirmed that he agreed with the decision of the Committee, and saw no grounds on which the decision should be disturbed.
[20] At this point I interpolate two matters which are of some possible importance and need to be noted. The first is that on 24 July 2013 following the Committee’s determination but before the review of it by the LCRO, Mr Ranganathan advised the LCRO that he and his wife wished to withdraw their complaint against Mr McGuire. Mr Ranganathan apparently also advised Mr McGuire of this around that time. Notwithstanding this, the LCRO continued with his consideration of the review. This was explained as being necessary, on the basis that his office had an obligation to do so, given particularly that it was Mr McGuire’s application for a review of the Committee’s decision which was under consideration.
[21] The second matter involved an earlier letter dated 21 November 2012 from Mr Ranganathan to Mr Greer, the Legal Standards Officer for the Committee headed “Submissions on the Case. Complaint ID/6583” relating to the complaint by he and his wife against Mr McGuire. This letter was sent some six days before the hearing of the Ranganathan complaint, by the Committee, (a hearing which it conducted on the papers) and its determination. Mr McGuire did not receive a copy of the letter. He has in fact confirmed that he had never seen this 21 November 2012 letter until 4
August 2015 and he has no idea why it was not disclosed to him by the Committee
or during the review by the LCRO. Obviously he had no chance to respond to the letter or to matters raised in it.
Issues on review
[22] From Mr McGuire’s statement of claim and the material he has placed before the Court, the issues raised here appear to be Mr McGuire’s contentions that:
(a) there have been breaches of natural justice or the rule that a fair hearing is required on the part of the Committee (and thus the decision of the LCRO is similarly tainted) in that:
(i)Mr McGuire says he did not receive adequate notice of the matters to be determined by the Committee, nor was he provided with a copy of Mr Ranganathan’s letter to the Legal Standards Officer dated 21 November 2012 and given an opportunity to respond;
(ii) the notice of hearing of the complaint failed to advise
Mr McGuire what his submissions should address;
(b)the determination of the Committee was in error of law in its description of the relevant rules regarding provision of information to clients and its application of the rule;
(c) the Committee breached Mr McGuire’s legitimate expectation to attend before it;
(d)the notice of hearing of the complaint was irrational because it invited submissions on orders when such orders were prescribed by statute;
(e) the determination of the Committee was in error of the law because it failed to determine whether special circumstances existed pursuant to reg 29 of the Regulations to consider a fee complaint regarding a bill of costs under $2000;
(f) the Committee breached reg 26 of the Regulations through having inadequate minutes of its meeting; and
(g)the determination of the Committee was invalid because there was no evidence it is a valid determination of the Committee or was approved by it and, further, because it was signed by a Mr Greer in breach of ss
183 and 184 of the Lawyers and Conveyances Act 2006.
[23] In considering these issues on review, I usefully repeat that Mr McGuire’s initial complaint is against the Committee’s determination finding him guilty of unsatisfactory conduct in that he had breached the following rules:
(a) rule 11.1 in that he had misled and deceived his clients by attempting to increase an agreed fee of $1100 to one of $1450; and
(b)rule 3.4 in that he had not provided a client engagement letter in advance of acting for these clients.
The legislative framework for Standards Committee and LCRO decisions
[24] In considering whether judicial review may lie in a particular case, it is necessary to consider the applicable statutory context. Here, the statute in question is the Lawyers and Conveyancers Act 2006 (the Act). Section 3(1) sets out three purposes of the Act:
3 Purposes
(1) The purposes of this Act are—
(a) to maintain public confidence in the provision of legal services and conveyancing services:
(b) to protect the consumers of legal services and conveyancing services:
(c) to recognise the status of the legal profession and to establish the new profession of conveyancing practitioner.
[25] In achieving these purposes, the Act “provides for a more responsive regulatory regime in relation to lawyers and conveyancers” and “states the
fundamental obligations with which, in the public interest, all lawyers and conveyancing practitioners must comply in providing regulated services” – s 3(2)(b) and (d).
[26] A complaints and disciplinary regime is established in Part 7 of the Act. This deals with allegations of misconduct or unsatisfactory conduct by lawyers.
[27] In a recent decision of this Court, involving judicial review of a decision by the LCRO Deliu v Connell,2 Palmer J said at [9]:
[9] In [judicial review involving] professional discipline cases I simply note that the interests at stake, namely professional reputations, can reasonably be expected to be keenly felt by the participants. The purpose of the Act here is undoubtedly focused on the expeditious resolution of complaints. However, the process and substance of that resolution is explicitly required to be consistent with the principles of natural justice. It must also accord with the other orthodox principles of lawful decision- making that are upheld by the judicial review. Those principles are not to be either read down or elevated in the context of professional discipline.
[28] The Act also goes on at s 138 in addressing the situation where a Standards
Committee is enquiring into and investigating a complaint to provide:
138 Decision to take no action on complaint
(1) A Standards Committee may, in its discretion, decide to take no action or, as the case may require, no further action, on any complaint if, in the opinion of the Standards Committee,—
…
(d) the person alleged to be aggrieved does not desire that action be taken or, as the case may be, continued; or
(e) the complainant does not have sufficient personal interest in the subject matter of the complaint;
…
[29] Further, in s 138(2) of the Act a Standards Committee may decide to take no further action on a complaint if, in the course of its investigation it appears to the Committee that, having regard to all the circumstances of the case, any further action
is unnecessary or inappropriate.
2 Deliu v Connell [2006] NZAR 475 at 479.
[30] In this case, as I have noted at para [20] above, on 24 July 2013, Mr Ranganathan and his wife specifically withdrew their complaint against Mr McGuire. This withdrawal, of course, came after the determination of the Committee had been given on 3 December 2012. It pre-dated however the review decision of the LCRO which was given some nine months later.
[31] Although therefore the fact that the complaint was subsequently withdrawn had no bearing on the Committee’s determination, it was of some relevance to the later decision of the LCRO.
[32] In considering the nature of what an LCRO review entails, Winkelmann J in this Court in Deliu v Hong and Legal Complaints Review Officer3 considered that:
[40] The Review Officer has broad powers to conduct his or her own investigations including the power to exercise for that purpose all the powers of a Standards Committee or an investigator and seek and receive evidence. These powers extend to “any review”. He or she may also postpone the review while attempting to negotiate, conciliate or mediate a resolution.
[41] …in my view the power of review…clearly contemplates the
Review Officer reaching his or her own view on the evidence before her…
[33] What does seem clear is that the powers and duties of the LCRO to conduct a review generally require that it should be relatively informal and inquisitorial whilst at all times complying with the principles of natural justice. The LCRO needs to form her or his own view of the evidence and to provide independent scrutiny of the fairness of the substance and process of a Standards Committee’s determination in conducting its review.
[34] In the present case, the LCRO was fully aware and acknowledged that the Ranganathans had withdrawn their complaint against Mr McGuire shortly after the Committee’s determination had been given. Notwithstanding this, the LCRO did note that it was appropriate for him to continue with his review of the Committee’s decision.
[35] But, that said, an issue must arise as to whether the LCRO here gave sufficient importance to the fact that the Ranganathans had withdrawn their
3 Deliu v Hong and Legal Complaints Review Officer [2012] NZHC 158.
complainant and presumably therefore had no further gripe with the actions of their lawyer, Mr McGuire. What effect that fact may have had on their complaint, and the “evidence” before the Committee as to what had transpired in their dealings with Mr McGuire, may well leave open some questions.
[36] As an aside, I simply note at this stage that, what seems of some importance to me here is that the LCRO, before reaching its decision, does not appear to have called for comment from any party regarding that aspect. But at this point I leave that matter on one side and turn to consider the Committee’s two determinations noted at [23] above.
Alleged breach of r 11.1 in that Mr McGuire misled and deceived his clients
[37] Rule 11.1 provides:
11.1 Misleading and deceptive conduct
A lawyer must not engage in conduct that is misleading or deceptive or likely to mislead or deceive15 anyone on any aspect of the lawyer’s practice.
15 These words are identical to those used in the Fair Trading Act 1986 and lawyers are referred to texts and authorities on that legislation for further guidance.
[38] In its decision relating to r 11.1, the Committee made findings as follows:
…The Committee considers that Mr McGuire breached r 11.1. The complainant agreed to use Mr McGuire’s services on the basis that he would be charged legal costs of $1100 and Mr McGuire subsequently attempted to charge legal costs of $1450. In fact it is arguable, that Mr McGuire should only have been charging the standard fee specified in his promotional brochure. He advised the Committee that the brochures were out of date. That being the case he should have advised the agent of this fact.
[39] And, in the decision of the LCRO, this aspect of the review was dealt with as follows:
[53] It was the Committee’s view that Mr McGuire had agreed to set his fee at $1100 and had then resiled from that position. I agree with that conclusion and see no grounds to depart from the Committee’s findings.
[54] Mr McGuire concedes in correspondence to the New Zealand Law Society of 25 October 2012 that he advised Mr Ranganathan that he would charge him a fee of $1100…
[55] Mr McGuire may, on reflection, have felt that he had been ambushed in an unguarded moment and that he had been subjected to insistent negotiation which bordered on unpleasant haggling, but the fact remains he provided Mr Ranganathan with a firm undertaking to complete the work for an agreed price.
[56] In correspondence to the Manawatu Law Society Mr McGuire further confirms that he agreed to a fee of $1100. He argues however that this was not a “genuine consensus and true agreement by me in all the circumstances”.
[57] Arguments advanced by Mr McGuire that he was not bound by the agreed fee are unconvincing. As an experienced practitioner he should have agreed that once a fee is agreed, he is obliged to honour it.
[58] I reject argument that in the absence of evidence to support conclusion that Mr Ranganathan was coerced into accepting a revised fee, the conclusion must be drawn that Mr Ranganathan willingly agreed to the revised fee. Argument that Mr Ranganathan agreed to accept the fee, in the absence of evidence of coercion, does not inevitably lead to conclusion that he willingly consented to accept the revised fee, or was not misled.
[59] Mr McGuire’s accounts of his discussions with Mr Ranganathan regarding fees gives clear indication that Mr McGuire perceived Mr Ranganathan to be a client who was acutely sensitive to cost issues, and a person who was prepared to resolutely negotiate the best possible price.
[60] Mr Ranganathan would have had the expectation when he attended the meeting at Mr McGuire’s office that an issue of critical importance to him, how much he had to pay, had been settled. Mr McGuire had agreed a fee, and Mr Ranganathan had responded to Mr McGuire’s office confirming agreement on the fee.
[61] Rule 11.1 directs that a lawyer must not engage in conduct that is misleading or deceptive, or likely to mislead or deceive on any aspect of the lawyer’s practice. Confirming an agreed fee, then seeking to resile from that agreement, constitutes conduct which is likely to mislead a client.
[40] I turn now to discuss the issues raised by Mr McGuire in this judicial review application as outlined at para [22] above.
Issue (a) Breaches of natural justice
[41] On this Mr McGuire complains that he did not have fair notice of what the matters being considered by the Committee were. This is disputed on behalf of the Committee. It suggests that all the material before the Court amply demonstrates that Mr McGuire knew the issues being considered, given particularly that he had first received a copy of the complaint by way of letter dated 26 September 2012. At
that point the Committee invited submissions from Mr McGuire in response to the complaint and further correspondence ensued.
[42] On these aspects, however, as I have noted at para [21] above, what is clear in this case is that at the operative time, Mr McGuire was not aware that Mr Ranganathan had written to the Committee some six days before the hearing with his 21 November 2012 letter. Although this letter from Mr Ranganathan in part repeated material which he had placed in his original letter of complaint, other aspects in this letter including the degree of ill-feeling, outrage, and hurt allegedly suffered by the Ranganathans, strongly emphasised by Mr Ranganathan in the letter, were matters available to be taken into account by the Committee. These additional matters and strong comments were clearly quite unknown to Mr McGuire.
[43] In terms of issues of procedural impropriety, it is a fundamental requirement of natural justice that a party must be given a reasonable opportunity to present his or her case with knowledge of the case that she or he has to meet. An underlying principle in all this is that a party should normally be given the opportunity to respond to an allegation that, with adequate notice, might be effectively refuted. Decisions in this area such as Daganayasi v Minister of Immigration4 and Khalon v
Attorney-General5 are of relevance and make this clear. Key elements in all this
must be the need to avoid questions of real surprise and potential prejudice.
[44] Issues of consistent application of the law, and equal and even-handed treatment of all persons similarly situated together with concepts of substantive fairness, must arise in all situations such as those before the Court in this case.
[45] With all this in mind, I conclude here, but only by a reasonably fine margin, that by failing to provide to Mr McGuire the 21 November 2012 letter from Mr Ranganathan received by the Committee shortly before its hearing, a letter no doubt taken into consideration as part of its deliberations, a breach of natural justice occurred in this case. The consequences for Mr McGuire of the ultimate findings of
the Committee as confirmed by the LCRO were major and of such importance that
4 Daganayasi v Minister of Immigration [1980] 2 NZLR 130 (CA).
5 Khalon v Attorney-General [1996] 1 NZLR 458.
he should have been provided with a fair and reasonable opportunity to place before the Court his response to matters raised and emphasised by Mr Ranganathan in the letter in question. This did not occur.
[46] For these reasons I find that the process by which the Committee reached its decision that Mr McGuire had misled and deceived the Ranganathans did not comply with its natural justice obligations.
[47] That is enough to dispose of the matter before me so far as the decision on r 11.1 is concerned.
[48] Nevertheless, for the sake of completeness I now proceed to mention briefly the further issues outlined by Mr McGuire in his submissions as noted at para [22] above.
Issue (b) That the determination was in error of law in its description of the rules regarding provision of information to clients and its application of r 3.4
[49] This issue, as noted, relates specifically to r 3.4. It is useful to deal with this issue in some detail as a separate matter, and I do so at para [61] and following below.
Issue (c) That the Committee breached the plaintiff ’s legitimate expectation to
attend its hearing in person.
[50] In my view there is little in this claim on the part of Mr McGuire. Although the correspondence between Mr McGuire and the Committee prior to its hearing as to processes to be undertaken was somewhat confusing, I am satisfied that Mr McGuire did not protest the absence of a meeting to be held under s 141(b) of the Act. It is clear, too, that the ordinary position is that Standards Committee hearings are conducted on the papers pursuant to s 153 of the Act, as confirmed in Cambridge
v Whitehaven.6 Mr McGuire’s legitimate expectation here was to be properly heard
on the issues and I am satisfied this could have occurred by way of written submissions and material from him. The factors I have noted at para [46] above
6 Cambridge v Whitehaven LCRO 122/09.
relating to natural justice issues are separate from this question of attending the
Committee’s hearing in person.
[51] There is little in Mr McGuire’s argument under this issue (c) and I reject it.
Issue (d) That the notice of hearing was irrational because it invited submissions on orders
[52] Again, I reject this argument advanced by Mr McGuire. The intention behind the notice of hearing, as I see it, was to invite submissions as to penalty and this was entirely proper in all the circumstances.
Issue (e) That the determination was in error of law because it failed to determine special circumstances to consider a bill of under $2000.
[53] On this aspect, reg 29 provides:
29 Complaints relating to bills of costs
If a complaint relates to a bill of costs rendered by a lawyer or an incorporated law firm, unless the Standards Committee to which the complaint is referred determines that there are special circumstances that would justify otherwise, the Committee must not deal with the complaint if the bill of costs –
(a) Was rendered more than two years prior to the date of the complaint;
or
(b) Relates to a fee that does not exceed $2000, exclusive of goods and services tax.
[54] Here, Mr McGuire contends that the complaint by Mr Ranganathan and his wife in reality related to the amount of his fee and that, as it was under $2000, reg 29 prevented this complaint proceeding.
[55] I reject this argument however. As I see the position, it is clear here the complaint focused not on the quantum of Mr McGuire’s legal fee but rather on his alleged conduct in seeking to alter the already agreed fee.
[56] I conclude that reg 29 does not apply in this case.
Issue (f) That the Committee breached reg 26(5) through having inadequate minutes
[57] Again I reject this contention advanced by Mr McGuire. Full and accurate minutes of the proceedings were kept in accordance with reg 26, and in any event it is quite unclear what detriment Mr McGuire claims to have suffered from the minutes which might, because of any lack of detail, require a remedy. There is nothing in this issue (f) advanced by Mr McGuire.
Issue (g) That the determination is invalid because there is no evidence it is a valid determination of the Committee and further it is signed by Mr Greer in breach of ss 183 and 184 of the Act
[58] The Committee has provided evidence from Mr Howie to confirm that the determination was issued by it. In my view, that is sufficient here.
[59] As to Mr McGuire’s second complaint, which appears to be a claim that Mr Greer wrote the determination without a proper delegation from the Committee, Mr Greer was the Legal Standards Officer for the New Zealand Law Society and his tasks included the provision of professional and administrative assistance to the Committee.
[60] The fact that Mr Greer signed the determination does not mean that he wrote it. The determination states quite clearly that it is signed “on behalf of the Manawatu Standards Committee”. In addition, the evidence of Mr Howie confirms the determination was one made by the Committee. That is sufficient for present purposes and I reject this Issue (g) argument advanced by Mr McGuire.
B. Rule 3.4 finding that by not providing a client engagement letter in advance of acting for the clients Mr McGuire was guilty of unsatisfactory conduct
[61] I turn now to this second determination by the Committee relating to r 3.4. Rule 3.4 provides:
A lawyer must, in advance,3 provide a client with information in writing on the principle aspects of client service including the following:
(a) the basis on which fees will be charged, when payment of fees is to
be made…
3 The expression “in advance” is contained in s 94(j) of the Act. Accordingly lawyers are recommended to provide the information set out in r 3.4 prior to commencing work under a retainer.
(Emphasis added)
[62] There is no dispute in this case that written information in the form of a detailed letter of engagement was provided to Mr Ranganathan and his wife in compliance with r 3.4 but that this did not occur until 26 July 2012. This written information contained the final fee agreement which Mr McGuire has referred to at
$1250. The only issue here relating to r 3.4 therefore must be one of timing. Questions arise over whether in terms of r 3.4, the requirement for a lawyer “in advance” to provide a written letter of engagement with the required information, has been breached here, and if so, what implications should properly follow. A complication obviously arises when one considers footnote 3 to r 3.4 which, as part of the rule itself, I have outlined above at [61]. This uses the language “lawyers are recommended” to provide the information “prior to commencing the work under a retainer”. What seems at first glance to be the mandatory nature of r 3.4(a) would appear to be significantly softened by what is only a “recommendation” explanation for advance notification prior to “commencing work”.
[63] On all of this, Mr McGuire throughout had endeavoured to suggest that his retainer with Mr Ranganathan and his wife did not commence until 26 July 2012. In all the circumstances prevailing here, however, this is simply not supportable. Mr McGuire had received the agreement for sale and purchase well prior to this along with instructions for mortgage preparation from his clients’ bank and indeed he had communicated with the bank. Also no doubt, he would have prepared the bank’s mortgage and loan documentation well in advance of the 26 July 2012 meeting when these were signed.
[64] Clearly the policy behind the requirements for letters of engagement specified in r 3.4 is to fully inform clients of important matters including fee levels, and fee payment arrangements, indemnity insurance and fidelity fund arrangements, and complaints mechanisms. A question must arise, however, as to whether any mischief has occurred in this case from what might be thought to be only a short delay which occurred in Mr McGuire providing this information/letter of
engagement to the Ranganathans. In my view, any delay that did occur here might be seen at most as a technical breach of r 3.4 and nothing more. And, as I have noted, little if any mischief was caused. Certainly, as I understand the position, this delay was not a significant target in the Ranganathans’ complaints against Mr McGuire.
[65] And, it is still not entirely clear as I have outlined above, whether taking into account footnote 3, the r 3.4 requirement to provide a letter of engagement “in advance” is simply a recommendation rather than a mandatory requirement. Issues arise too as whether any work can be undertaken by a lawyer before a letter of engagement is provided. On all of this, as I see it, the better view here is that, in making the findings they did, arguably both the Committee and the LCRO misapplied the law relating to r 3.4 by failing to apply the right legal test. If I am wrong on this and even if, however, the requirement for a letter of engagement in advance is mandatory and there had been a purely technical breach of that rule here, the fact that this has resulted in serious findings of unsatisfactory conduct against Mr McGuire from both the Committee and the LCRO, with all the consequences that follow from that, is flawed and wrong. The determination and the decision had such significant consequences for Mr McGuire and his future professional reputation that a cautious approach was required and that did not occur here.
[66] For these reasons, I conclude that the Committee was wrong to reach that determination relating to this r 3.4 aspect against Mr McGuire.
Conclusion
[67] For the reasons outlined above:
(a) the determination by the Committee that Mr McGuire had breached r 11.1 of the Rules and thereby it found that he was guilty of unsatisfactory conduct, breached the principles of natural justice and was reached in error; and
(b)the determination by the Committee that Mr McGuire had breached r 3.4 of the Rules and thereby it found that he was guilty of
unsatisfactory conduct, was in error in that the Committee failed to apply the right legal test and, in any event, was flawed and wrong.
[68] Similarly, and as a direct result, of the findings in [67] above, the decision of the LCRO was also one reached in error.
[69] That said, and in accordance with the usual relief provided in successful judicial review proceedings, I quash the determination of the Committee and the decision of the LCRO. However, I do not see it as productive here to order that there be a reconsideration of this matter either by the Committee or the LCRO. There is little to be gained in subjecting the parties to the further expense and effort of a re- hearing and I make no such order.
Result
[70] Mr McGuire’s application for judicial review is granted. The determination of the Committee and the decision of the LCRO are now set aside, as are the orders for costs made in the determination and the decision.
[71] As to costs on the present application, Mr McGuire is self represented in this proceeding. There is to be no order made as to costs which are to lie where they fall.
...................................................
Gendall J
Solicitors:
Wynn Williams, Christchurch
Copy to:
Mr McGuire
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