Published on 5 October 2018

[Names used in this article are fictitious]

Failure to reply to a liquidator who was seeking information under the Companies Act 1993 was unsatisfactory conduct, the Legal Complaints Review Officer (LCRO) has found.

An accountant, Mr Handford, was liquidator of a company. He complained that Mr Bardell, the partner of law firm B, failed to respond to his requests to provide information about the company. These requests came after a director of the company being liquidated stated under oath that law firm B had acted for the company.

Mr Handford sent a letter to law firm B asking it to provide information it held about the company. He sent a follow-up request about six weeks later and a formal Notice to Deliver Documents a month after the follow-up request.

Mr Handford then arranged service of a Notice of Examination requiring Mr Bardell to attend his office on a named date to provide information about the company.

Mr Bardell told the LCRO (in LCRO 178/2016) that after receiving Mr Handford’s first letter, the firm’s trust account records were checked. They showed the firm had not acted for the company and did not hold any record whatsoever.

Mr Bardell said he asked the firm’s accounts administrator to call Mr Handford’s office and inform him, and that he was satisfied that had been done. However, the accounts administrator did not recall being asked to respond to Mr Handford.

Mr Bardell said he was surprised to receive the second letter. He “took no steps” because he assumed that the second letter had been sent prior to the receipt of his response to the first.

When the service agent came to serve the Notice of Examination, Mr Bardell informed the agent that there was no point in him attending a hearing as “the firm had never acted for [the company].”

At that time, Mr Bardell said he “was satisfied that [Mr Handford] had been served with notice that [the firm] had never acted for [the company].”

The LCRO said he accepted Mr Handford’s statements that he did not get a response from the firm to his first letter, and that if he had been advised that the firm did not act for the company he “would have referred back to [the company’s director] for [the director’s] comment and made further enquiries.”

The LCRO also accepted Mr Bardell’s statement that first he delegated the tasks of checking whether the firm had acted and responding to Mr Handford.

While Mr Bardell did not and had not acted for the company, “he nonetheless owed a professional duty to respond to Mr [Handford]’s requests for information about the company,” the LCRO said.

Upon receipt of the second letter, Mr Bardell “ought to have followed up with his firm’s administrator to ascertain whether the firm had responded to Mr [A]’s first letter and, if not, to do so immediately.

“This applied equally to Mr [Handford]’s … Notice to Deliver Documents and to the attempt by the service agents to serve [Mr Bardell] with the Notice of Examination.”

By not responding, Mr Bardell contravened rule 12 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008. That constituted unsatisfactory conduct.

Rule 12 requires that a lawyer “must, when acting in a professional capacity, conduct dealings with others, including self-represented persons, with integrity, respect, and courtesy”.

Noting that Mr Bardell had since retired from practice and had an unblemished disciplinary record, the LCRO concluded that a finding of unsatisfactory conduct was sufficient without need for additional penalty. However, in accordance with LCRO costs orders guidelines, the LCRO ordered Mr Bardell to pay $900 costs to the New Zealand Law Society.