Published on 9 November 2018

[Names used in this article are fictitious]

A barrister failed to serve the required application and affidavit to set aside bankruptcy notices on the judgment creditors within time which constituted unsatisfactory conduct, the Legal Complaints Review Officer (LCRO) has found in LCRO 35/2015.

The barrister, Bantam, represented Mr Crimple and Ms Datchery in High Court proceedings to set aside bankruptcy notices.

The High Court dismissed the application to set the notices aside because they were not served within the time stipulated in the bankruptcy notices, as well as on the merits.

Although there was a difference in the parties’ recollection of events, the parties agreed that the two applications (one by Mr Crimple and one by Ms Datchery) had been filed in the High Court at about 4pm on the last day applications could be made, and that service copies were available at the latest by 4:30pm.

Bantam claimed that it was impossible to serve the applications on the judgment creditors’ lawyers “due to the lateness in filing”. He said that was not his fault, and he blamed Mr Crimple and Ms Datchery for leaving matters until the last minute.

Bantam said he knew the applicable time limits, which he always explained to clients, and that he would have explained this to Mr Crimple.

Mr Crimple, however, said that Bantam did not advise him that service of the applications on the vendors had to be done within 10 working days after service of the bankruptcy notices.

He said that had Bantam advised him it was necessary to file and serve the applications that day and warned him of the consequences of not doing so, he could have driven from the High Court to the vendor’s lawyers’ address to serve the documents that afternoon.

There could be no denying that the fact service copies were not available until around 4:30pm made it more difficult for Bantam, the LCRO said.

“Having said that, in most areas of the practice of law, lawyers must, as a matter of routine, meet deadlines when acting for their clients, often in difficult and trying circumstances.”

“Mr [Crimple] and Ms [Datchery] entrusted [Bantam] with the task of opposing the bankruptcy notices served on each of them by making applications to set aside. Critical to those instructions the applications had to be both filed in the High Court and served on the judgment within the time stipulated in the bankruptcy notice.”

“[Bantam] acknowledges he was also aware of the two lines of authority concerning the service of applications to set aside. As such, he would have known that at that time the approach taken in Re Memelink HC Wellington CIV 2008-485-2691, 10 March 2009, and Re Guthrie HC Auckland B 92/02, 23 August 2002 is the correct one and a valid application to set aside a bankruptcy notice must be both filed and served within the time for compliance with the notice,” the LCRO said.

When it considered the complaint, a lawyers standards committee fined Bantam $1,000 and ordered him to undergo practical training or education in insolvency. The committee also found Bantam had contravened rule 9 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (RCCC) in respect of one of his invoices, and that was unsatisfactory conduct.

The LCRO also confirmed the committee’s finding that Bantam contravened rule 3 of the RCCC which was unsatisfactory conduct under s 12(c) of the Lawyers and Conveyancers Act 2006. However, the LCRO also modified the committee’s finding in so far as the conduct also constituted unsatisfactory conduct under s 12(a).

The LCRO confirmed the $1,000 fine but reversed the committee’s order that Bantam undergo further training. That was because Bantam was aware of the deadline, but on this occasion took insufficient care.

The LCRO reversed the unsatisfactory conduct finding relating to one of Bantam’s invoices, and instead referred all five of Bantam’s invoices back to the committee for reconsideration.

Bantam was also ordered to pay $1,600 costs to the New Zealand Law Society.