Father-and-son practitioners failed to ensure independent legal advice in a property transaction
The Lawyers and Conveyancers Disciplinary Tribunal has censured two lawyers and ordered them to pay fines, compensation, and costs after finding that their failures to identify and address conflicts of interest contributed to a client losing her registered interest in a family home.
The tribunal found that the lawyers, who practised together as father-and-son partners in the same firm, failed to ensure that a client received independent legal advice during a series of property transactions involving members of an extended family. The tribunal said those failures ultimately resulted in the complainant being removed as a titleholder to an interest in her home.
The matter arose from the purchase of a residential property by the complainant, her husband, and the husband’s parents. The husband’s parents could not obtain mortgage financing on their own, leading the parties to become joint owners. The tribunal said the arrangement should have prompted the lawyers to recognise the potential for conflicts of interest and the need for all parties to obtain independent legal advice.
The senior practitioner handled the initial conveyancing transaction in 2018. The tribunal found that he failed to recognise the potential conflict despite concerns about the consequences of joint ownership and indications that the complainant’s husband wanted to separate his wife from aspects of the family dealings.
The second practitioner later acted on the husband’s instructions to transfer the property into a trust. Under the trust structure, the complainant was neither a settlor, trustee, nor beneficiary. The beneficiaries included the husband’s parents and the couple’s son. The transaction proceeded without the complainant receiving independent legal advice.
The tribunal noted that the second practitioner had expressed concern in an email that the complainant would likely need independent advice, but neither lawyer followed through on that concern.
The tribunal accepted admissions from both lawyers. It found that the senior practitioner's conduct amounted to negligence or incompetence that reflected on his fitness to practise and brought the profession into disrepute. It found the second practitioner guilty of misconduct, describing his conduct as reckless.
According to the decision, as reported by the Law Society, the complainant ultimately lost her registered interest in the property after the successive failures of the practitioners to provide independent advice. The parties are now involved in relationship property proceedings.
While the tribunal acknowledged the lawyers’ eventual acceptance of responsibility and remedial efforts, it concluded that disciplinary sanctions were necessary. It ordered the practitioners to apologise to the complainant, imposed fines, and required them to contribute to compensation for emotional distress, legal costs, and regulatory proceedings. The tribunal also directed the second practitioner to complete NZLS courses on conflicts of interest and residential property transactions.
