Published on 29 March 2018

[All names used in this article are fictitious.]

A lawyer in a firm that was acting for an estate should not have provided advice on possible claims against that estate, a lawyers standards committee has said.

This was a breach of rule 6.1 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, the committee said.

Rule 6.1 states that “a lawyer must not act for more than one client on a matter in any circumstances where there is more than a negligible risk that the lawyer may be unable to discharge the obligations owned to one or more of the clients”.

Rule 6.2 states that rule 6.1 applies whenever lawyers who are members of the same practice act for more than one party.

“Accordingly, the fact that another member of the law firm was acting in the estate … does not absolve [the lawyer, Wickfield] from his obligations under [rule] 6.1.”

The committee found unsatisfactory conduct by Wickfield.

Background

Mrs Clennam and Mr Clennam had been married for about 30 years when Mrs Clennam died. Both had been previously married and had children from their prior marriages.

Mr and Mrs Clennam became occupants of a retirement village, and bought a licence to occupy. Mr Clennam acquired Mrs Clennam’s interest in the licence to occupy by survivorship.

Mrs Clennam’s family said there was an agreed understanding that the surviving spouse was to have the right to use the apartment until death or until it was sold. It was also agreed that they would make provision in their wills to ensure the shares they had originally contributed would be disbursed to their respective families.

However, Mr Clennam elected not to make a claim against Mrs Clennam’s estate under the Property (Relationship) Act 1976 (PRA).

On Mr Clennam’s death his estate went to his children but not to Mrs Clennam’s children.

One of Mrs Clennam’s children and her husband, who knew Wickfield socially, met with the lawyer regarding the administration of Mr Clennam’s estate. Wickfield said he would make enquiries about the estate and provide them with any information to which they might be entitled.

Wickfield subsequently emailed Mrs Clennam’s daughter and her husband, in which he raised the possibility that there might be a constructive trust claim in relation to Mrs Clennam’s cash contribution towards the purchase of the occupation licence. He said there was a potential argument that Mr Clennam’s estate would have a defence because he elected not to make a claim against Mrs Clennam’s estate under the PRA. However, Wickfield also said that a constructive claim could put Mrs Clennam’s children in a position to negotiate with the beneficiaries of Mr Clennam’s estate.

Wickfield disputed that he had provided advice, saying instead that he was simply providing information to Mrs Clennam’s children.

Both the committee and LCRO on review, found Wickfield had provided advice and that there was a contract of retainer for legal services to be provided.

Decision

“In the committee’s view, [Wickfield] should not have provided any advice to [one of Mrs Clennam’s children and her husband] as he was, in essence, acting for the estate and at the same time providing advice on possible claims against that estate,” the committee said.

The committee fined Wickfield $5,000 and ordered him to pay $1,000 costs. On review, the LCRO reduced the fine to $1,000, but confirmed the $1,000 costs order.

“The situation in which [Wickfield] found himself is not unique and the pitfalls of becoming engaged as [Wickfield] did bear drawing to the profession’s attention,” the LCRO said.