Ragg v Legal Complaints Review Officer
[2020] NZHC 2057
•14 August 2020
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2020-409-43
[2020] NZHC 2057
UNDER the Judicial Review Procedure Act 2016 IN THE MATTER
of an application for review
BETWEEN
HUGH PETER PETRIE RAGG
Applicant
AND
LEGAL COMPLAINTS REVIEW OFFICER
Respondent
AND
NEW ZEALAND LAW SOCIETY
Intervenor
Hearing: 21 July 2020 Representation:
H P P Ragg (Applicant in person) Appearance of Respondent excused (abiding) C R Johnstone for New Zealand Law Society
Judgment:
14 August 2020
JUDGMENT OF OSBORNE J
This judgment was delivered by me on 14 August 2020 at 2.30 pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
RAGG v LEGAL COMPLAINTS REVIEW OFFICER [2020] NZHC 2057 [14 August 2020]
[1]Hugh Peter Petrie Ragg practises as a barrister and solicitor in Ashburton.
[2]As recorded by the Legal Complaints Review Officer (the Review Officer):1
Mr Ragg works alone. He runs his practice without assistance and communicates primarily via a gmail.com email address. Mr Ragg operates an IT system which generates hyperlinks to web-based information, such as his trust account details and transactional documents including settlement statements and undertakings.
[3] In 2018, Mr Ragg was acting for clients who were selling their property and purchasing another. The settlement date of both transactions was 20 April 2018.
[4] The conveyancing transactions were to be completed through e-dealing using the Landonline system.2 Mr Ragg’s clients’ transactions were to be carried out by Mr Ragg by e-dealings on 20 April 2018.
[5] That day, an issue was raised about the verification of Mr Ragg’s trust account details to be used by the purchasers’ solicitors, Anderson Lloyd.
[6] Mr Ragg released his part of the e-dealing (including the transfer signed by his clients and the discharge of the mortgage security executed by the clients’ bank). He did so before the purchasers’ settlement funds had been paid by their solicitors into Mr Ragg’s trust account, which occurred a little more than one hour later.
[7] There were email communications between the two law firms that day. Representatives of the purchasers’ law firm considered the content of Mr Ragg’s emails “rude”.
[8] A confidential report was made to the New Zealand Law Society regarding Mr Ragg’s conduct. The Southland Standards Committee commenced an own-motion investigation under s 130(c) Lawyers and Conveyancers Act 2006. It informed Mr Ragg that it intended to enquire into:
1 Ragg v Southland Standards Committee LCRO 61/2019, LCRO 92/2019, 23 December 2019 at [9].
2 The Landonline system, operated by Land Information New Zealand, provides an online registration facility for routine title transactions.
(a)whether he had breached r 3 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (the Client Care Rules), which states that in providing regulated services to a client, a lawyer must always act competently and in a timely manner consistent with the terms of the retainer and the duty to take reasonable care. In particular, the Committee referred to Mr Ragg’s releasing of the e-dealing for the transfer before the purchasers’ solicitors had paid the amount required to settle into Mr Ragg’s trust account; and
(b)whether Mr Ragg had breached r 10.1 of the Client Care Rules, which states that a lawyer must treat other lawyers with respect and courtesy.
[9] Following a hearing on the papers, the Committee considered Mr Ragg’s conduct in the context of the Client Care Rules and in particular, rr 2.7, 3, 10 and 10.1. The Committee made two findings of unsatisfactory conduct, that being for contraventions of rr 3 and 10.1.
[10] The Committee adjourned the hearing for the purpose of determining the penalty. After receiving submissions on the question of penalties, the Committee made the following orders under s 156(1) of the Act:
(a)Mr Ragg was to send a written apology to two practitioners from the other firm; 3
(b)Mr Ragg was to pay to the Society a fine of $750 for each breach (being a total of $1,500);4 and
(c)Mr Ragg was to pay costs of $500 to the Society.5
3 Lawyers and Conveyancers Act 2006, s 156(1)(c).
4 Section 156(1)(i).
5 Section 156(1)(o).
[11] In addition, the Committee resolved under s 159(1) of the Act to give notice to the Registrar-General of Land of the making of the determination of unsatisfactory conduct.
[12] Mr Ragg applied to the Legal Complaints Review Officer (Review Officer) for a review of both determinations of unsatisfactory conduct and the orders made under ss 156 and 159 of the Act.
[13] The Review Officer in her decision (Decision) found that it was open to the Committee to make the two adverse findings as it did.6
[14] The Review Officer nonetheless found that Mr Ragg’s conduct was “best corralled under one heading represented by a single determination of unsatisfactory conduct made pursuant to s 12(b)” of the Act, and determined the review on that basis.
The Committee’s decision was modified accordingly.7
[15] Turning to the orders made by the Committee, the Review Officer reversed the orders as to apologies and fines.8 She confirmed the costs order of $500.9
[16] The Review Officer reserved her review of the Committee’s notification to be made to the Registrar-General, and reserved whether she ought independently to notify the Registrar-General of her decision.
[17] Mr Ragg filed with the Review Officer a copy of his application to Court for judicial review, and submitted that there should be no notification to the Registrar- General before this judicial review application was determined.
[18] By a second decision, the Review Officer confirmed the Committee’s resolution to notify.
[19]Mr Ragg seeks a judicial review of the Decision and in particular seeks:
6 Ragg v Southland Standards Committee, above n 1, at [89].
7 At [90].
8 At [94] and [99].
9 At [100].
(a)a declaration that the Decision was invalid;
(b)an order setting aside the Decision;
(c)an order setting aside the finding of unsatisfactory conduct for breach of r 10.1 Client Care Rules;
(d)an order setting aside the order confirming the Standards Committee’s
$500 costs order; and
(e)an order setting aside the Standards Committee’s resolution to notify the Registrar-General.
[20] The Review Officer abides by this Court’s decision. The Law Society was joined (initially as “counsel to assist the Court” but now (on my procedural direction) as intervenor. It has filed submissions and been represented at the hearing.
Judicial review
[21] Neither Mr Ragg nor Mr Johnstone considered it necessary to make submissions as to the Court’s role in judicial review in the present context. That is understandable – the approach is well-settled, as illustrated in the explanation of Thomas J in G v Legal Complaints Review Officer, which I respectfully adopt.10
[5] Judicial review is the supervisory function of the Court which ensures public power is exercised according to the law. It is primarily concerned with examining procedural compliance, not the substance of the decision itself, when assessing whether a decision should be allowed to stand.
[6] Any error of law must be material, that is, “one which may well have altered the ultimate decision”. This can arise, for example, where a decision- maker has applied a gloss to a statutory test, or asked him or herself the wrong question. A failure by a decision-maker to take into account relevant considerations is an error of law whereas the weight the decision-maker places on a relevant consideration is a matter for the decision-maker. Therefore, failing to take into account relevant considerations is a ground of judicial review but failing to have sufficient regard to relevant factors is not.
10 G v Legal Complaints Review Officer [2019] NZHC 601, [2019] NZAR 844 at [5]–[8] (footnotes omitted).
[7] I am, therefore, broadly concerned not with the substance of the Decision, but whether it was made according to the law, applying the correct legal tests and taking into account the correct considerations in applying that test.
[8] Unreasonableness is one of the most problematic grounds of Judicial review. As discussed above, judicial review is concerned with the legality, as opposed to the merits, of administrative decisions. As this Court will not substitute its decision for that of the specialist decision-maker, the reasonableness of a decision has historically been approached from the high standard of Wednesbury unreasonableness. Unreasonableness was explained in Wednesbury as a decision “that no reasonable body could have come to”. This high standard of unreasonableness has been applied in the context of Review Officer decisions, although there is some disquiet about whether this approach is too stringent.
[22] The appropriate test of unreasonableness was discussed by Palmer J in Hu v Immigration and Protection Tribunal.11 His Honour referred to the explanation of unreasonableness in the Supreme Court’s decision in Bryson v Three Foot Six Ltd.12 I respectfully adopt the test then identified by Palmer J (as representing a better account of unreasonableness than the circular words used in Wednesbury):13
[w]here a decision is so insupportable or untenable that proper application of the law requires a different answer, it is unlawful because it is unreasonable.
The review by the Review Officer
[23] Review by a Review Officer is the only procedure available under the Act for a practitioner unsatisfied with the determination of a Standards Committee.
[24] The obligations and powers of the Review Officer involve a particular statutory process.14 The Review Officer has all such powers as are reasonably necessary or expedient to enable their functions to be performed.15 The Review Officer may, in reviewing a determination of a Standards Committee, reconsider all or any of the aspects of the Committee process, including decisions over enquiry or any investigation.16 The Review Officer is required by s 200 of the Act to conduct a review:
11 Hu v Immigration and Protection Tribunal [2017] NZHC 41, [2017] NZAR 508 at [29].
12 Bryson v Three Foot Six Ltd [2005] NZSC 34, [2005] 3 NZLR 721 at [26].
13 Hu v Immigration and Protection Tribunal, above n 11, at [29].
14 Deliu v Hong [2012] NZHC 158 at [39].
15 Lawyers and Conveyancers Act, s 202.
16 Section 203.
… with as little formality and technicality, and as much expedition, as is permitted by –
(a)the requirements of this Act; and
(b)a proper consideration of the review; and
(c)the rules of natural justice.
[25] The Review Officer may confirm, modify or reverse a Committee’s determination or may direct a Committee to reconsider the whole or any part of a complaint or matter.17
[26] Significantly, the Act requires that the Review Officer appointed is not a lawyer or a conveyancing practitioner.18
[27] The nature of the jurisdiction exercised by the Review Officer, when reviewing a determination by a Standards Committee, is well-settled. It was explained by the Court of Appeal in Keene v Legal Complaints Review Officer:19
[24] The Act provides that certain people, including the complainant and the lawyer who is the subject of the complaint, are entitled to apply for a review by the LCRO of a determination by a Standards Committee.20 A review by the LCRO is:21
… neither a judicial review nor an appeal. Those seeking review of a Committee determination are entitled to a review based on the LCRO’s own opinion rather than on deference to the view of the Committee. A review by the LCRO is informal, inquisitorial and robust. It involves the LCRO coming to his or her own view of the fairness of the substance and process of a Committee’s determination.
…
[26] The LCRO is required to exercise their own judgement about the appropriate determination to make in respect of a complaint, having regard to all relevant circumstances.
17 Sections 209 and 211.
18 Section 190(1).
19 Keene v Legal Complaints Review Officer [2019] NZCA 559 at [24]–[26].
20 Lawyers and Conveyancers Act, ss 193 and 194.
21 Deliu v Connell [2016] NZHC 361, [2016] NZAR 475 at [2].
The facts
[28] The core facts leading to the own-motion investigation – as to the steps and timing in the solicitors’ e-dealings on the settlement day and as to the content of Mr Ragg’s communications – are documented and essentially were not in dispute before the Committee or the Review Officer. There is also little dispute as to the factual matters which provide context for the events of that day (notwithstanding that some of those were not matters of documentary record).
[29]The Review Officer set out the background:22
Mr Ragg’s clients were awaiting the proceeds of the sale to settle another purchase. They had been let down on previous attempted sales. Their instructions to Mr Ragg were to ensure that this sale went through. Both of his clients’ settlements were scheduled for 20 April 2018.
[30] In the sale and purchase transaction, Mr Ragg’s clients were the vendors. The purchasers were represented by Anderson Lloyd and, in particular, by Ms Thomas, a legal executive, whose supervising partner was Ms Simmers.
[31] The Review Officer summarised Mr Ragg’s portion on the dual issues of release of the e-dealing and rudeness:
[4] Mr Ragg admits that he released the e-dealing before he received confirmation from Anderson Lloyd that it had paid the amount due to settle into his trust account.
[5] Mr Ragg acknowledged at the review hearing that releasing the e- dealing prematurely was inconsistent with the New Zealand Law Society Property Law Section Property Transactions and E-Dealing Practice Guidelines (April 2015) (the E-Dealing Guidelines). He says those are expressed as not binding, and should be flexibly applied. Mr Ragg relies on his considerable experience in conveyancing over several decades as the basis for his assessment that the risks were minimal, and as justification for departing from his usual practice under the E-Dealing Guidelines.
[6]It is also alleged that Mr Ragg was rude to Anderson Lloyd staff.
[7]Mr Ragg denies he was rude.
22 Ragg v Southland Standards Committee, above n 1, at [89].
[32] The Review Officer in her decision set out Mr Ragg’s preparation in the period prior to the settlement date of 20 April 2018:
[10] On 16 March 2018 Mr Ragg sent Anderson Lloyd two emails regarding the sale and purchase transaction between their respective clients, both of which included a link to the name and number of Mr Ragg’s firm’s trust account. The first email said:
Below is the amount required to settle on the above Settlement. Please send a Notice of Sale and set-up a LINZ dealing - hragg001 is both our pc & cp
We now forward a signed copy of this statement & our Undertaking to Release LINZ documents
[11] The second email was forwarded with a hyperlink to items to view, and said:
Greetings
For your Information and Records
Please contact us if you have any concerns.
[13] Mr Ragg exchanged emails with Ms Thomas regarding the specific wording of undertakings and other preliminary matters. She did not ask him to verify the details of his trust account.
[33] The Review Officer then set out chronologically the relevant events of 20 April 2018:23
[13] Settlement was scheduled for 20 April 2018. Mr Ragg received an assurance from Ms Thomas at 10:26am on settlement day that she was ready to settle the transaction.
[14] Mr Ragg contacted his clients, who had packed and were ready to move on to their new property. Mr Ragg advised his clients that Anderson Lloyd’s purchaser client was ready to settle and told them they could start to make their way to their new property.
[15]There was a hitch.
[16] About an hour after she had told Mr Ragg the purchaser was ready to settle the transaction, Ms Thomas sent Mr Ragg an email saying:
Can you please also forward your trust account deposit slip. Our accounts require the deposit slip to make payment.
Thanks
[17]At 11:37am Mr Ragg replied:
The ANZ bank do not have deposit slips
23 Ragg v Southland Standards Committee, above n 1.
[18] Mr Ragg was perturbed. He was obliged to comply with his clients’ instructions to settle this sale (others having previously fallen by the wayside) and complete their consequent purchase. Relying on what Ms Thomas had told him, he had told his clients they could start their move.
[19] He was then presented with a belated requirement from Anderson Lloyd’s accounts department to verify his trust account details, which he had provided weeks before, so the sale and purchase transactions could proceed on settlement day.
[20] Mr Ragg decided the best option for complying with Ms Thomas’ requirement for a deposit slip was to go to the bank in person. He says his experience of dealing with banks over the phone was an exercise in futility if what one wanted was a speedy reply and the right result, namely a deposit slip, preferably encoded with his trust account details.
[21] Mr Ragg says he was concerned that Anderson Lloyd’s accounts department might suddenly decide that it was satisfied with the trust account details he had already provided.
[22] If that happened, Mr Ragg says he was concerned that Anderson Lloyd would pay money into his firm’s trust account then criticise him for failing to immediately release his part in the e-dealing in accordance with the E-Dealing Guidelines.
[23]Mr Ragg found all those prospects distinctly unappealing.
[24] So, on the basis that he was under instruction from his clients to let nothing get in the way of the sale, and having formed the view that the risks to his client were negligible because Anderson Lloyd could be trusted to act with integrity and not be a party to defrauding his clients or the bank, Mr Ragg released his part of the e-dealing.
[25) Mr Ragg’s part of the e-dealing included the transfer signed by his clients and the discharge of the bank’s security signed by the bank.
[26] Mr Ragg says at the time he believed, although he had not checked into the details, that his release of those documents into the e-dealing workspace was temporary and reversible.
[27] It is not entirely clear from the materials what time Mr Ragg left his office and what time he returned. Mr Ragg cannot recall. With no one else to mind his practice or send to the bank, and his view that there was no prospect that he would be able to speak to anyone at the bank on the phone, Mr Ragg went to the local ANZ bank to try to meet with the Manager and find out if he could obtain a deposit slip, or identify some other means of satisfying Anderson Lloyd’s belatedly imposed settlement requirement.
[28] ANZ told Mr Ragg that encoded deposit slips have to be ordered and printed in advance, and could not be produced on the spot. However, Mr Ragg says ANZ “did provide details of my Trust Account” in the form of a verified bank statement.
[29] At 12:06pm, perhaps while Mr Ragg was out at the bank, Ms Thomas replied to Mr Ragg’s email of 11.37pm saying:
We bank with ANZ and have deposit slips. Can you please provide us with the following in order for us to be able to make payment.
Ms Thomas cut and paste a segment from Anderson Lloyd’s website saying:
2So that we may make a payment to you, please provide us with one of the following:
(a)an encoded deposit slip (we will accept a copy sent by email or fax);
(b)a bank statement showing your account name* and number (you may black out balances and transaction details if you wish);
(c)a screenshot from your online banking showing your account name*and number;
(d)a copy of a cheque (again, we will accept a copy sent by email or fax); or
(e)verification from your bank of your account name*and number.
*The account name must show as the legal name of the account holder, not the nickname that may have been given to the account.
[30] At 12:17pm, when he was at his office, Mr Ragg sent an email to Ms Thomas saying:
There will be no settlement until I have spoken to your Senior Partner - I also want proof that your requirement [sic] are not just your dreamt up Office Rules.
Get you [sic] Senior Partner to ring
[31] Mr Ragg is unsure whether he saw Ms Thomas’ 12.06pm email or sent his 12.17pm email before or after he went to the bank. He is not sure how long he was out of his office, but Mr Ragg is confident he had returned to his office by 12.27pm because he sent an email to Ms Thomas attaching a copy of the bank statement he had been given which showed the account number of his solicitor’s trust cheque account in the name of “ASHBURTON LAW CENTRE - TRUST ACC”.
[32]At 12:32pm Mr Ragg emailed Ms Thomas saying:
I probably will report your Firm to the Law Society and as part of my case will be to find out the requirement you made to the Agent before the deposit of 36,000 was paid by your Firm or your client.
[33] Anderson Lloyd paid settlement funds to Mr Ragg’s trust account at 1:19pm.
[34]At 1:27pm Mr Ragg sent an email to Ms Thomas saying:
Regrettably
I have found your firm to be more than disrespectful - Impertinent even
I am still almost certain to report you all to the Law Society unless I get a personal apology from your senor [sic] Partner.
[35]Mr Ragg settled his clients’ purchase at 1.42pm.
[36]At 1:44pm Ms Simmers emailed Mr Ragg saying:
I have been forwarded the email below.24
We do not have a record of having previous [sic] made a payment to your firm or to the agent, which was why a deposit slip was requested.
NZLS Trust Account Guidelines call for evidence of bank account details to be provided before making an electronic payment from our Trust Account (see clause 6.7 which refers to an “encoded deposit slip”):
our “Payments to you” policy (which is set out on our website) we allow a broader range of evidence: would be happy to discuss this further with your firm’s Trust Account Partner.
I have been advised that your e-dealing for the transfer of 40 Rogers Street, Hinds to our client was released before we paid the amount required to settle into your firm’s trust account. Can you please explain why.
[37] Mr Ragg and Ms Simmers spoke on the phone. He says “nothing contentious was said” during that call.
[38] At 1:50pm Anderson Lloyd submitted documents to LINZ for registration.
[39]Mr Ragg replied to Ms Simmers’ email at 1:51 pm saying:
Your explanation is not accepted.
The ANZ Bank here in Ashburton do not issue deposit slip [sic] unless specially ordered.-
I view your conduct as impertinent. [sic] and I am not impressed by your explanation.
Property Transactions and e-dealing Practice Guidelines
[34] The Property Law Section of the New Zealand Law Society publishes the Property Transactions and e-dealing Practice Guidelines (the Guidelines).
24 Mr Ragg’s email sent at 12.32 pm saying he would probably report Anderson Lloyd to NZLS.
[35] The Guidelines bear the date July 2012 (although they were updated, and recorded as such, in April 2015). These are the Guidelines which applied on the 20 April 2018 settlement date.
[36] The introduction to the Guidelines records that they are designed to reflect recommended practice for e-dealings. Part 1 of the Guidelines contains “Property Transactions Practice Guidelines” whereas pt 2 contains the “e-dealing Guidelines”. The pt 2 Guidelines are endorsed by the Registrar-General for recommendation to lawyers using Landonline.
[37] Chapter 2, pt 1 of the Guidelines is headed “Acting for the Vendor” with a warning immediately following the heading:
Warning: this chapter identifies some issues which often arise in agreements for sale and purchase of land. The chapter should not be treated as an exhaustive checklist for all potential problems.
[38]Guideline 2.56 (in pt 1) provides:
Remote settlement
Where a conveyancing practitioner acts for the purchaser, the vendor’s lawyer should not release the instruments until settlement moneys are received in cleared funds.
[39] Part 2 of the Guidelines specifically provides e-dealing guidelines. “Releasing and submitting” are dealt with in Guideline 8.71 and 8.72. Using Landonline, a practitioner “releases” instruments into the electronic “workspace”. When all the instruments in the e-dealing have been released, the purchaser’s solicitor has responsibility to “submit” the dealing for registration of all the instruments to be confirmed (failing which a rejection or requisition may occur).
[40]Guideline 8.72 provides for release to occur after settlement. It states:
Release should occur immediately after settlement in accordance with the undertaking given. At the same time, the purchaser’s lawyer should be advised by telephone, email or facsimile that release has occurred.
[41] The Commentary to Guidelines 8.71 to 8.74 provides a number of explanations, including as to the consequence of a solicitor releasing instruments. It
states: “Release gives effective possession and control to the purchaser.” In other words, the purchaser is put into a position of controlling the process and timing of the registration of transfer. If, for instance, the vendor’s solicitor has released the vendor’s e-dealings without achieving settlement through payment of the balance of the purchase price, the purchaser’s solicitor gains control of the transaction and may vest the title in the purchaser without the vendor having received the settlement monies or the vendor’s mortgagee having been repaid its debt.
[42] Matters of land transfer at the date of settlement were governed by the Land Transfer Act 1952 and the Land Transfer Regulations 2012.25 Under the 1952 Act (as under the subsequent 2017 Act), lawyers and conveyancing practitioners hold an important role as a class authorised by regulations to certify electronic instruments. Registered electronic instruments have the same legal effect as the (previous) paper equivalent.26
[43] The particular aspect of e-dealing which was the subject of the disciplinary proceedings was Mr Ragg’s releasing the e-dealing for the transfer of his clients’ property (including the discharge of their mortgage) before receipt from the purchasers’ solicitor of the settlement monies into his trust account. Notwithstanding the provision of Guideline 8.72, Mr Ragg has maintained that, in the circumstances applying on 20 April 2018, he was justified in releasing the vendor’s instruments before settlement occurred.
Unsatisfactory conduct under the Lawyers and Conveyancers Act
[44] The purposes of the Act include the maintenance of public confidence in the provision of legal and conveyancing services and protection of consumers of legal and conveyancing services.27
[45] Under s 152(2) of the Act, a Standards Committee may determine (amongst other things) that there has been unsatisfactory conduct on the part of a practitioner.
25 The Land Transfer Act 2017 subsequently came into force on 12 November 2018, together with the Land Transfer Regulations 2018.
26 Land Transfer Act 1952, s 164E. See also Land Transfer Act 2017, s 31.
27 Lawyers and Conveyancers Act 2006, s 3.
[46] The definition of “unsatisfactory conduct” is provided by s 12 of the Act which defines the term to have four meanings including:
(a)conduct of the lawyer or incorporated law firm that occurs at a time when he or she or it is providing regulated services and is conduct that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer; or
(b)conduct of the lawyer or incorporated law firm that occurs at a time when he or she or it is providing regulated services and is conduct that would be regarded by lawyers of good standing as being unacceptable, including—
(i)conduct unbecoming a lawyer or an incorporated law firm; or
(ii)unprofessional conduct; or
(c)conduct consisting of a contravention of this Act, or of any regulations or practice rules made under this Act that apply to the lawyer or incorporated law firm, or of any other Act relating to the provision of regulated services (not being a contravention that amounts to misconduct under section 7); or
…
The Committee’s findings under rr 3 and 10.1 Client Care Rules
[47] The Committee, in relation to the two matters on which it made a finding of unsatisfactory conduct, identified two specific rules under the Client Care Rules:28
Competence and client service
3In providing regulated services to a client, a lawyer must always act competently and in a timely manner consistent with the terms of the retainer and the duty to take reasonable care.
Respect and courtesy
10.1 A lawyer must treat other lawyers with respect and courtesy.
[48] The Committee’s findings, in relation to its two determinations of unsatisfactory conduct, were as follows:
Did Mr Ragg fail to comply with Rule 3 (e-dealing)
16.Anderson Lloyd say that Mr Ragg released the e-dealing for the transfer before they paid the amount required to settle into his firm’s
28 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, rr 3 and 10.1.
trust account. Anderson Lloyd say they pointed this out to Mr Ragg and received no response.
17.The Committee is of the view that Mr Ragg’s actions in releasing the e-dealing for the transfer on settlement before the purchaser’s solicitor had paid the settlement monies into his firm’s trust account constituted a serious breach of Rule 3 relating to an important aspect of conveyancing.
18.In the circumstances, Mr Ragg’s actions in releasing the transfer constituted a breach of his obligations to LINZ, his client and to his client’s banker, therefore the breach was of significant gravity to warrant a finding of unsatisfactory conduct.
19.Accordingly, the Committee determines that Mr Ragg has breached Rule 3 of the Lawyers and Conveyancers Act (Lawyers, Conduct and Client Care) Rules 2008 and finds there is unsatisfactory conduct pursuant to s 152(2)[b].
Did Mr Ragg fail to comply with Rule 10.1 (respect and courtesy)
20.Anderson Lloyd state that Mr Ragg was rude to their staff. Mr Ragg in an email said “regrettably I have found your firm to be more than disrespectful – impertinent even” – “I view your conduct as impertinent and am not impressed by your explanation” – “I will probably report your firm to the Law Society…”
21.Mr Ragg was unhappy being asked to supply a deposit slip. Anderson Lloyd have a policy of requesting deposit slips for trust account (sic) where they have not dealt with the firm previously.
22.The Committee is of the view that there was unsatisfactory conduct regarding Mr Ragg’s failure to treat Anderson Lloyd staff with respect and courtesy.
23.The Committee notes the important obligations and duties imposed upon a lawyer pursuant to Rule 10.1. Mr Ragg’s conduct fell well short of the respect and courtesy required by the rule, therefore the facts warrant a finding of unsatisfactory conduct.
24.Accordingly, the Committee determines on this aspect of the complaint that Mr Ragg has breached Rule 10.1 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 and finds there unsatisfactory conduct pursuant to s152(2)(b).
[49] I will not dwell on the rules identified by the Standards Committee. As matters progressed, the Review Officer moved beyond the Rules and the Committee’s focus on breach of specific rules, instead assessing Mr Ragg’s conduct by reference to the statutory definition of unsatisfactory conduct.
The Review
The review hearing
[50]Mr Ragg exercised his right to seek a review of the Committee’s decision.
[51] The Review Officer conducted a hearing. The Committee did not exercise its right to attend. Mr Ragg represented himself and spoke to the issues. The hearing took 104 minutes, the transcript of discussions between the Review Officer and Mr Ragg running to 52 pages.
The Decision – recording of the facts
[52] The Review Officer in the Decision set out an extensive review of the background and factual context as it had been before the Committee.
[53] The Review Officer then recorded that Mr Ragg sought reversal of both determinations of unsatisfactory conduct. Mr Ragg also asserted at the hearing that, if either finding were sustained, the Committee’s orders were “harsh, too wide-ranging and excessive in the circumstances”.29
[54] The Review Officer recorded that Mr Ragg had confirmed he had released the LINZ transfer before he received confirmation that Anderson Lloyd, had made payment of the settlement monies to his firm’s trust account, but that Mr Ragg considered more emphasis should be placed on Ms Thomas’s part in events.
[55] The Review Officer then recorded the following additional information which Mr Ragg had provided at the review hearing:30
[51] Mr Ragg refers to the statement and undertaking he sent to Anderson Lloyd on 16 March 2018 with a note saying:
NOTES & SETTLEMENT REQUIREMENTS
•Payable: - by “Cleared Funds” as defined by clause 1.1[5] of the Agreement to Ashburton Law Centre - Trust Account - at the ANZ Bank Ashburton Branch account [bank account details] – [fax
29 Ragg v Southland Standards Committee, above n 1, at [50].
30 At [51]–[58].
number] for Notices of payment. Click “Authenticate” in email signature block for verification.
[52] Mr Ragg says Ms Thomas could easily have ascertained that a copy of his Trust Account Cheque was “Kosher”, but did not, and must have been aware that there were other alternatives that should have been acceptable to Anderson Lloyd. Mr Ragg says that instead, Ms Thomas hounded him on 20 April 2018, and he suspected from her behaviour that she was overwhelmed and stalling.
[53]Mr Ragg says that Ms Thomas:
was ready to settle at 10:26 am but refused to settle until I provided a deposit slip which I didn’t have and couldn’t obtain on the day. She had a copy of my Trust Account Cheque which I have provided on numerous previous occasions by providing a link on the Signature Block of every email sent to Anderson Lloyd. This refusal to settle by Ms Jackie Thomas on the grounds given was contrary to even the public notice on Anderson Lloyd’s own website that stated that copies of Trust Account Cheque are acceptable. She wrongly said that this was the policy of “Accounts”.
It is central to the understanding of this whole episode that in EVERY EMAIL I sent to Anderson Lloyd in the Signature Block are [sic] these words appear:-
“Click underlined items to view - “Trust Account”
... when this is done a coloured copy of my Trust Account Cheque is shown. This is better VERIFICATION of Trust Account details than a black and white copy of an encoded deposit slip which Jackie Thomas wrongly demanded as the only acceptable verification.
[54]Of his release of his part of the e-dealing Mr Ragg says:
In desperation I went to the ANZ Bank to try and get a deposit slip but the Bank did not have any for Ashburton Law. Whilst away I temporary [sic] and conditionally released the LINZ transfer in case Anderson Lloyd settled in my absence and complained about a delay in releasing the same in breach of my undertaking. They settled before my return. This early release is the second subject of complaint - the Southland Standards Committee in its decision did [not] refer to any of my arguments ·
[55] With regard to the finding of unsatisfactory conduct for contravention of r 10.1, Mr Ragg submits:
The Rules are not designed to suppress deserved criticism robustly delivered. If a Braach [sic], then only a minor one NOT deserving a “disciplinary response” of a finding of “unsatisfactory conduct” .
[56] With regard to the finding of unsatisfactory conduct for contravention of r 3, Mr Ragg submits he has:
very good reasons for the early release of the Transfer [to avoid a complaint because of breach of undertaking]
To say I was negligent is to say that Anderson Lloyd cannot be trusted to do the right thing viz not register, There is only a risk if Anderson Lloyd is a Legal Firm that might act fraudulently.
[57] Mr Ragg notes that he acted for the vendors, not, as the decision (and the confidential report) incorrectly said, for the purchasers. He also says:
(a)His release of the e-dealing was reversible; and
(b)He could rely on Anderson Lloyd to pay over the settlement funds and not register documents fraudulently with LINZ.
[58] Mr Ragg says he is a sole practice conveyancer with over 50 years of experience as a partner/sole practitioner and does not believe he poses any danger to the public, nor ever has. Mr Ragg says he runs his practice with no support staff of any kind, and has, on occasion, handled numerous settlements in one day. He also says that on 20 April 2018 he was unwell, and Ms Thomas’s belated insistence that he provide a deposit slip caused real problems for him and his clients and others, even though he had provided on numerous previous occasions a link to a copy of his trust account cheque account “which even Anderson Lloyd on its website acknowledges is adequate verification of Trust Account details”.
The Decision – discussion of the review process
[56] The Review Officer discussed the nature and scope of the process of review under the Act, citing the passage from the judgment of Palmer J in Deliu v Connell, which was in turn adopted by the Court of Appeal in Keene (as set out at [27] above].31
The Decision – analysis of Mr Ragg’s conduct
[57]The Review Officer then discussed Mr Ragg’s review application in detail.
[58] She referred to the two determinations of unsatisfactory conduct made by the Committee.32 She recorded:33
The documents Mr Ragg released were a transfer and a discharge of mortgage. The discharge relinquished the bank’s security. The transfer relinquished Mr Ragg’s clients’ title to their property.
[59] The Review Officer noted the absence of any complaint against Mr Ragg from either the bank or his clients.34
31 Deliu v Connell, above n 21, at [2].
32 At [62]–[63].
33 At [64].
34 At [65]–[66].
[60] The Review Officer referred specifically to the commentary following Guidelines 8.71–8.74 which contains the observation: “Release gives effective possession and control to the purchaser.”35 The Review Officer elaborated that release of the bank’s security removed what would otherwise be an impediment to the transfer of title to the property’s new owners. The Review Officer recorded that Mr Ragg should not have relinquished possession or control of the signed transfer or the bank’s security, and that by releasing the documents prematurely, Mr Ragg exposed his client, the bank and himself to risk. The Review Officer noted that the Committee had considered Mr Ragg’s conduct not consistent with the Guidelines and professionally unacceptable. She noted Mr Ragg’s conduct may also be relevant to the discharge by the Registrar-General of Land of their duties under the Act or some other enactment.36
[61]The Review Officer continued:37
Without Anderson Lloyd having first confirmed it had paid the settlement funds into Mr Ragg’s trust account and provided him with the relevant undertakings, Mr Ragg should not have relinquished possession or control of the signed transfer or the bank’s security.
By releasing the documents prematurely Mr Ragg exposed his client, the bank and himself to risk. The latter is the only risk that appears to have materialised, in the form of an adverse professional conduct finding. The Committee considered Mr Ragg’s conduct was not consistent with the Guidelines and was professionally unacceptable. His conduct may also be relevant to the discharge by the Registrar-General of Land of his or her duties under the Land Transfer Act 2017 (LTA) or some other enactment.
[62] The Review Officer then identified as the question raised on review “whether Mr Ragg should have followed the Guidelines”.38
[63] She noted Mr Ragg’s submission that the e-dealing Guidelines are not binding. She nevertheless concluded:
[71] … While that is accepted as correct, the fact that they are not binding, without more, is not a reason to disregard them. It could not sensibly be argued that lawyers and other conveyancing professionals should generally not follow the E-Dealing Guidelines. It could not sensibly be argued that they are irrelevant to the discharge by the Registrar-General of Land of his or her duties under the LTA.
35 Above at [67].
36 At [67].
37 At [68]–[69].
38 At [70].
[72] Generally, lawyers and other conveyancing professionals should follow the E-Dealing Guidelines.
[64] The Review Officer then identified, as the next question on review, whether the circumstances around the transaction were exceptional in such a way that excused Mr Ragg from following the Guidelines.
[65]The Review Officer concluded that “the short answer for that question is no”.
She noted that Mr Ragg had some choices about what happened next.39
[66] The Review Officer noted that it was open to Mr Ragg, faced with Anderson Lloyd’s belated verification requirements to have delayed settlement, emailed Ms Thomas as to what he was doing, and attend to the settlement later with “several hours left in the working day”.40
[67] The Review Officer noted that it was clear from Mr Ragg’s emails that at the time he was flustered and that he had also indicated to the Review Officer that he was unwell. The Review Officer rejected that as any excuse for his reaction to the unexpected turn of events on the settlement day.
[68] The Review Officer then referred to submissions received from Mr Ragg to the effect that his release of instruments was reversible. The Review Officer recorded that Mr Ragg’s premature release of the documents was only reversible as long as the other party to the e-dealing did not take advantage of it. The Review Officer concluded that Mr Ragg had “enabled a disorderly transaction”.41
[69] The Review Officer then addressed a submission by Mr Ragg that the risks involved were minimal because there were other safeguards in place to protect his clients and the bank. The safeguards included undertakings “that could readily be implied” and “Anderson Lloyd’s integrity”. The Review Officer concluded that Mr Ragg could not rely on someone else to protect his client’s interests or those of the bank.42
39 At [75]–[76].
40 At [77]–[78].
41 At [80].
42 At [81].
[70] The Review Officer noted Mr Ragg’s explanation that he had instructions from his clients to settle and that they supported the position he had taken on the settlement day. The Review Officer noted that it was not clear whether there had been any explanation given to Mr Ragg’s clients as to his having put their interests at risk (even if he assessed the risk as negligible). The Review Officer recorded that it was not part of Mr Ragg’s role as lawyer to put his clients’ interests at risk in any way.43 The Review Officer made a similar observation in relation to putting the bank’s interests at risk.44
[71] The Review Officer noted an observation by Mr Ragg that he felt that he had been at risk of complaint (from his clients) if he was not available to attend to settlements immediately. The Review Officer noted that Mr Ragg could have protected everyone’s interests by sending an email to Ms Thomas.45
[72] The Review Officer then referred to the last-minute nature of the problem which confronted Mr Ragg (in being required to verify his trust account details) and recorded that it was understandable that Mr Ragg was “ruffled, not least because of the predicament it left his client in”.46 The Review Officer went on to note: “[s]ympathy is due for the position Mr Ragg found himself in. However, sympathy is not a sufficiently compelling reason to reverse the Committee’s determination of unsatisfactory conduct”.47
[73] The Review Officer recorded that lawyers as professionals are expected to be able to withstand the pressure of practice, react to the unexpected in an appropriate manner and to be intimately familiar with the Guidelines. It is following the Guidelines which helps conveyancing professionals to manage the pressures of settlement day in a logical and predictable way.48
[74]The Review Officer therefore concluded:49
43 At [82].
44 At [83].
45 At [84].
46 At [85].
47 At [86].
48 At [87].
49 At [89]–[90].
[89] It was open to the Committee to make adverse findings as it did. Another alternative, and the one I consider more appropriate, is that Mr Ragg’s conduct on 20 April 2018 fell below the standard in s 12(b) of the Lawyers and Conveyancers Act 2006 in that it was conduct that occurred at a time when Mr Ragg was providing regulated services and was conduct that would be regarded by lawyers of good standing as being unacceptable. It could be argued that finding Mr Ragg’s conduct was unacceptable according to two particular rules, as the Committee did, puts too fine a point on it. It is accepted that the Committee has more current expertise in conveyancing practice than this Office.
[90] Nonetheless, in my view the conduct is best corralled under one heading represented by a single determination of unsatisfactory conduct made pursuant to s 12(b). This review is determined on that basis. The Committee’s decision is modified accordingly.
[75] The decision of the Review Officer does not specifically refer to a development which took place in the course of the hearing before the Review Officer. Mr Ragg, in the course of the review hearing, intimated to the Review Officer that, after he had released the instruments into the e-dealing workspace, he could have taken them back by “just clicking”, thereby “unreleasing them”. The Review Officer noted that that argument was only good if supported by the facts. She therefore reserved to Mr Ragg the opportunity immediately after the hearing to provide any evidence in support of his “unclicking/unreleasing” contention.
[76] Mr Ragg had correspondence with the Law Society the day after the hearing. He referred to a LINZ confirmation that there are numerous ways to reverse a release of an instrument, with one way being to right click on the instrument and choose the option of “revert to signed status”. This additional information is not expressly referred to in the decision of the Review Officer but it is indirectly acknowledged in the Review Officer’s Decision where she records:50
It is accepted for the purposes of this review that in some circumstances, Mr Ragg may be correct.
The Review Officer, however, went on to put that contention to one side for the reason set out in the passage I have referred to at [68] above.
50 At [80].
The application for judicial review
[77] By his statement of claim, Mr Ragg asserted the Decision was invalid by reason of an error of law and for unreasonableness.
[78] Mr Ragg’s statement of claim is a relatively lengthy and discursive document, which does not satisfactorily lend itself to full quotation. I will instead refer to the two cited grounds – error of law and unreasonableness – first, summarising what I understand to be Mr Ragg’s specific grounds under each heading and then analysing them.
Error of law
Mr Ragg’s pleadings
[79] Mr Ragg pleaded that the Review Officer erred in law by finding there had been a breach of r 10.1 of the Client Care Rules in that:
(a)the Guidelines as to release of instruments do not apply to Mr Ragg’s release of the transfer and discharge instruments before payment;
(b)the Guidelines, as indicated by the Introduction to the Guidelines, are subject to exceptions including the exercise of professional judgment by a lawyer in particular conveyancing situations;
(c)a number of the Guidelines in Chapter 6 relating to settlement and payment of the purchase price are subject to the paramountcy of the REINZ/ADLS standard form agreement for sale and purchase (ADLS Agreement);51
(d)the Registrar-General of Land has his own guidelines which appear to take precedence in relation to e-dealings; and
51 Form of Agreement for Sale and Purchase approved by the Real Estate Institute of New Zealand Inc and the Auckland District Law Society Inc (Ninth Edition, 2012 (2)).
(e)there are accordingly various guidelines and considerations applying, together with the sanctity of a lawyer’s undertaking.
[80] Bringing these matters together, Mr Ragg submitted that the Review Officer had erred by basing her decision on the (incorrect) legal proposition that the Guidelines applied in circumstances where the instruments had been released before payment was made by the purchasers’ solicitors.
[81] Additionally (or alternatively) the Review Officer is said to have erred by failing to have regard to the fact that release of instruments after payment of the purchase price is significantly more potent than mere release before payment.
[82] Finally, it was submitted that the Review Officer’s decision proceeded on an incorrect understanding that Mr Ragg had admitted that his actions were in breach of the Guidelines.
Evidence
[83] At the first call, the Court directed that any party wishing to file additional relevant evidence must do so by 2 June 2020. This hearing was scheduled for 7 July 2020. Mr Ragg was directed to file and serve his submissions by 26 June 2020, with the Law Society to file their submissions by 2 July 2020.
[84] On 3 July 2020, Mr Johnstone filed a common bundle of documents following agreement with Mr Ragg as to the timing of that event.
[85] Mr Ragg on the same date purported to file a bundle of documents entitled “additions to common bundle” without following the High Court Rules 2016 in that regard. The bundle contained a mixture of documents, some in the nature of matters of record and others in the nature of evidence. On 6 July 2020, Doogue J granted leave to Mr Ragg to file three of the documents and granted him leave to file by 13 July 2020 an affidavit addressing matters referred to in other documents.
[86]The hearing of the proceeding was rescheduled to 21 July 2020.
[87]On 15 July 2020, Mr Ragg filed an affidavit sworn on 13 July 2020.
[88] I will refer to matters in Mr Ragg’s evidence to the extent it fell within the leave which Doogue J had reserved to him.
[89] To the extent Mr Ragg’s affidavit contained inadmissible material such as submissions, opinion and irrelevant matters, I heard submissions at the commencement of the hearing and ruled that identified passages in Mr Ragg’s affidavit were not to be read. This ruling is evidenced by my drawing a red line through the inadmissible material in the original affidavit held on the Court file.
[90] Mr Ragg did not adduce evidence from an experienced conveyancing practitioner or similar expert as to conveyancing practice.52
Mr Ragg’s submissions – the time for release
[91] At the hearing before me Mr Ragg did not develop all the points relating to alleged error of law which had been contained in his pleadings. For instance, he did not develop submissions as to particular guidelines of the Registrar-General himself, or develop the proposition that provisions in the agreement for sale and purchase in some way cut across his professional responsibilities as a practitioner involved in an e-dealing.
[92] Mr Ragg focused on the central proposition that the Guidelines did not apply to his release of the instruments before payment. Mr Ragg submitted that the Guidelines properly read, recognise there will be circumstances in which it is appropriate for the vendor’s solicitor to release instruments before the purchase funds are paid. Mr Ragg noted the Review Officer’s reference to the Guideline (at 8.72) and the Commentary to those Guidelines. He conceded that instruments should not normally be released by the vendor’s solicitor before the purchaser’s has paid the
52 Mr Ragg explained that he had lacked time to obtain any such evidence. The Court notes the Review Officer’s decision was given on 23 December 2019, Mr Ragg commenced this proceeding on 29 January 2020 and in early May 2020 he requested the allocation of a fixture on the first available date after 30 June 2020. On 11 May 2020 the Court issued directions for the hearing, including that all evidence be filed at least 20 working days before the hearing. Mr Ragg elected to file and rely on only his own affidavit. He did not seek an adjournment of the hearing in order to pursue other evidence. The Court must proceed on the evidence as adduced.
settlement monies into the vendor’s solicitor’s trust account, but submitted exceptions were permissible in abnormal circumstances, which the Committee and the Review Officer should have found the circumstances at the time of settlement to be.
[93] Mr Ragg submitted an entitlement to release instruments before settlement is illustrated by Guideline 2.56 which deals with “Remote settlement” (set out at [38] above):
2.56 Where the conveyancing practitioner acts for the vendor and the lawyer acts for purchaser, the instruments should be released into the control of the purchaser before the funds are paid. The conveyancing practitioner is protected by the lawyer’s undertaking, which he or she could enforce.
Where a conveyancing practitioner acts for the purchaser, the vendor’s lawyer should not release the instruments until settlement moneys are received in cleared funds.
[94] Mr Ragg submitted in other unusual circumstances a practitioner will also be justified in releasing instruments before settlement (through the purchaser’s payment of the settlement sum). Mr Ragg suggested earthquakes and heart attacks as events justifying a release of instruments before settlement funds have been received.
[95] Mr Ragg identified the justifying circumstances arising in this case as the potential for delay in the vendor’s settlement of their sale and a consequential delay in their ability to settle their subsequent purchase. Mr Ragg characterised his decision to release the instruments as ensuring the transaction could be completed immediately after the resolution of issues over the arrangements for the deposit.
[96] In response to my question as to whether to justify an early release of the instruments there would need to be truly exceptional circumstances, Mr Ragg submitted the test would not be that high but would rather incorporate unusual circumstances. He submitted the circumstances on the day of settlement giving rise to delay constituted such circumstances.
[97] Mr Ragg noted the Review Officer (at [4] of the Decision, above at [31]) recorded that Mr Ragg had acknowledged his releasing the e-dealing prematurely was inconsistent with the Guidelines. Mr Ragg observed he had not, in fact, conceded at
the hearing before the Review Officer that his release of the e-dealing was premature and inconsistent with the Guidelines.
Mr Ragg’s submissions – risk
[98] Mr Ragg submitted the Review Officer had made an incorrect assessment of the risks involved in his releasing the e-dealing when he did. Before me, as before the Review Officer, he submitted the risks were minimal because there were other safeguards in place to protect his clients (from the consequences of release of the transfer) and the bank (from the consequences of release of the discharged mortgage).53
[99] Mr Ragg in particular referred to Anderson Lloyd’s implied undertakings and Anderson Lloyd’s integrity.
[100] Mr Ragg referred also to the concept that his release of the e-dealings was “reversible”. Mr Ragg referred to communications he had with LINZ (as recorded in correspondence rather than admissible evidence from an officer of LINZ or an experienced conveyancer). Mr Ragg referred to a process by which the Landonline system permits the editing of an e-dealing.54 Mr Ragg also referred the Review Officer (but did not include in his submissions to this Court) to the ability his clients would have had, in the event of the purchasers not settling, to lodge a caveat against the title of the property.
Mr Ragg’s submissions – state of mind at settlement
[101] Mr Ragg submitted the Review Officer had incorrectly concluded he was flustered and his statement that he was unwell might to some extent account for the way he reacted.55
[102] These were not matters which Mr Ragg particularly addressed in his affidavit evidence. Largely through speaking to his submissions he invited the Court to
53 Ragg v Southland Standards Committee, above n 1, at [81].
54 Property Transactions and e-dealing Practice Guidelines (NZLS, July 2012, updated April 2015) at [5.8].
55 Ragg v Southland Standards Committee, above n 1, at [80].
conclude the Review Officer’s observations as to his being “flustered” and having said that he was unwell involved an incorrect conclusion that his judgment had been impaired in some way. In his submissions he described himself as having been “superbly prepared” for the day and “better than most at dealing with stressful and/or difficult situations”. He submitted nothing warranted the Review Officer concluding he was operating below par on the day, with that incorrect conclusion unreasonably underpinning a finding of “unsatisfactory conduct”.
Mr Ragg’s submissions – honesty
[103] Mr Ragg invoked as the decision of central importance on this application the judgment of the Court of Appeal in Keene v Legal Complaints Review Officer.56
[104] In Keene, disciplinary proceedings had resulted from a barrister’s decision to take recovery proceedings against clients for outstanding fees, a step alleged to have been in breach of the Client Care Rules. Findings of a Standards Committee of unsatisfactory conduct were themselves the subject of altering decisions of the Review Officer, the High Court and the Court of Appeal. In allowing Mr Keene’s final appeal, the Court of Appeal concentrated on the ethical focus of the Rules and on Mr Keene’s approach to the Rules. Goddard J, delivering the reasons of the Court, observed:
[71] The Rules are concerned with the ethical obligations of lawyers. It is important, in that context, to focus on substance rather than form.
…
[89] So Mr Keene was proceeding on the basis of an understanding of the Rules that was genuinely held and that was reasonably open to him. That is another important factor that needed to be weighed before reaching a view on the appropriate disposition of the complaint.
[145] In Keene, the crucial finding was Mr Keene had been proceeding on the basis of an understanding of the Rules that he genuinely held and that was reasonably open to him. The Court observed this to be an important factor that needed to be weighed before reaching a view on the appropriate disposition of the complaint.
[146] Mr Ragg, here, submitted he was “acting honestly in the belief that [he] was not careless” and he believed the interests of all parties would be best served by the early release (a “temporary and conditional and revocable” step) intended to be short- lived.
[147] As I have noted, there is nothing to suggest the Review Officer took a view other than that Mr Ragg had an honest view that he could proceed as he did. But it was equally clear on the evidence before the Review Officer that Mr Ragg, appreciated that the usual practice expectations in relation to e-dealing involved the receipt of funds into the vendor’s solicitor’s trust account before the release of the vendor’s e- dealings.70 The reasons for that practice, when transactions to be affected in the Land Transfer Registry electronically, are obvious.
[148] It is clear what led the Review Officer to reach a finding of unsatisfactory conduct71 is that Mr Ragg did not think through the situation with full objectivity, having time within the working day to deal with the situation without releasing the e- dealings and attracting the risks that the Review Officer recognised.
69 Keene v Legal Complaints Review Officer, above n 56.
70 Notwithstanding any view he had as to the possibility that the Guidelines could be departed from in some circumstances.
71 That is, conduct falling short of the standard of competence and diligence that a member of a public is entitled to expect of a reasonably competent lawyer.
[149] Mr Ragg himself recognised (albeit in hindsight) at least a degree of departure from appropriate standards. Mr Ragg’s written submission to the Review Officer recorded, under a heading “Final Submission” (in relation to the e-dealing aspect):-
FINAL SUBMISSION:- If this situation occurred in the future I would not release the Transfer until payment. I submit I took reasonable care to protect all concerned – the release was conditional and only for a short time and it was done to avoid difficulties arising during my absence and was made because of Anderson Lloyd difficult behaviour. This was no risk to anyone, but unwise [not to be repeated] and accordingly it is not deserving of a “disciplinary response”
The Review Officer’s modification
[150] The Review Officer had the express power to confirm, modify or review the Committee’s decision.72
The Review Officer’s decision involved:
(a)A modification – corralling the two adverse findings into a single finding of unsatisfactory conduct as defined in s 12(b) of the Act;73
(b)reversal of the order of apology;74
(c)reversal of the fines;75
(d)confirmation of the costs order.76
[152]All these orders were reasonably available to the Review Officer.
[153] The focus of Mr Ragg’s submission in relation to these aspects of the Decision was on the modification by which the two adverse findings were “corralled” into one. Mr Ragg’s principal objection lay in the fact that s 12(b) of the Act, on which the Review Officer based her finding of unsatisfactory conduct, is a definition section.
72 Lawyers and Conveyancers Act 2006, (s 211(1)(a)).
73 Ragg v Southland Standards Committee, above n 1, at [90].
74 At [94].
75 At [99].
76 At [100].
[154] It is clear from the Decision that the Review Officer – conducting the “broad and robust review of all the circumstances” as is required – focussed on Mr Ragg’s conduct in releasing the e-dealing. The Review Officer did not discuss in detail the Committee’s second finding in relation to Mr Ragg’s rudeness. The Review Officer clearly drew the distinction between the s 12(b) and (c) limbs of unsatisfactory conduct
– subs (b) involving contravention of regulations and practice rules77 and subs (c)
focussing on unacceptable conduct, whether or not involving breach of a regulation or rule. She accepted as correct Mr Ragg’s submission that the Guidelines are not “binding”.78 What she then found was the circumstances that confronted Mr Ragg that day did not excuse Mr Ragg from following the Guidelines, which represented professional standards.79 Mr Ragg’s emphasis upon his genuine view as to the appropriateness of the early release of the e-dealing, while recognised by the Review Officer,80 did not in her assessment outweigh the general requirement to follow the Guidelines in the circumstances which existed. Mr Ragg had failed to deal with the situation objectively, so as to achieve settlement within the Guidelines.81
[155] These findings led, with the focus on the e-dealing, to the Review Officer’s modification of the Committee’s dual finding. Such an outcome was jurisdictionally available to the Review Officer. The Review Officer’s determination of unsatisfactory conduct was not unreasonable or untenable either as to the factual premises on which it was based or the exercise of judgement in deciding that the conduct should attract such a finding.
Conclusion
[156] Mr Ragg has established neither that the Decision of the Review Officer proceeded on an error of law nor that the Decision was so insupportable or untenable that the proper application of law requires a different answer.
[157]Mr Ragg’s application will be dismissed.
77 My emphasis added.
78 At [71].
79 At [74].
80 At [71].
81 At [78].
[158]Appropriately, there has been no application for costs.
Order
[159] The application for judicial review is dismissed, with no order as to costs or disbursements.
Osborne J
Solicitors:
Crown Law Office, WellingtonR Johnstone, Barrister, Christchurch Copy to: H P R Ragg (Applicant)
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