Property problems: Lawyer's lien conceals 'friend's' dodgy dealing

Q: I am a New Zealander but I have lived overseas for a number of years. I own a number of properties in New Zealand which I arranged to be looked after by a now former friend. My intention was that my friend would manage these properties in conjunction with my lawyer. While I was overseas my friend moved the legal work to another lawyer. On returning to New Zealand to inspect my properties I was told by one of my tenants that I was not his landlord. Based on this, I now suspect that there have been some dodgy dealings with my properties by my friend. I cannot contact my friend and the new lawyer will not pass over my files relating to the properties because a large amount of money is owed for unpaid legal work. What can I do about this?

A: It appears from your question that you are in the dark about what has happened to your properties in your absence. In order to work out what has happened obviously you wish to view the lawyers' files.

You may also want to speak to the original lawyer, undertake a title search at LINZ to confirm that you are still registered as owner of the properties and even, perhaps, consider hiring a private investigator to find your former friend.

Unfortunately for you it is likely that the new lawyer does have a right to hold on to the file until the legal work is paid for. Lawyers have rights over files known as liens. A lien gives a lawyer the right to retain a file until fees owing by the client are paid.

There are some exceptions that could be explored if necessary.

To access the files, your best option may be to arrange an appointment with the new lawyer. It seems from your question that the lawyer has been instructed by your friend that you are the lawyer's client. (If that was not the case, there would probably be further problems for you establishing that you are entitled to the file information.) It may be that after meeting with the lawyer, a satisfactory arrangement can be reached as to the fees.

If you are able to meet the new lawyer you should ask the lawyer to explain the situation regarding the properties and your friend.

You should also ask the lawyer to take you through what work has been done.

If you are concerned about the amount of the fees, you should ask the lawyer to explain the basis of the charges and, if necessary, give you a break down of the fees.

Once you have this information you may feel it is reasonable to pay the fees so that you can obtain the file.

If the new lawyer is not willing to meet you, or gives inadequate information regarding the work done, it would be advisable to seek separate legal advice, perhaps from the lawyer you originally instructed. Your lawyer will be able to write to the lawyer holding the file and hopefully negotiate a way forward.

If there are issues about the amount of the fees that cannot be agreed, you could apply to the District Law Society for a cost revision to determine whether the fees charged were reasonable. A cost revision will, however, delay your investigation. To avoid this delay you may be able to provide security for the fees (for example, by payment into a trust account) pending the cost revision, so that you can access the files now.

Once you have the files you can work out what your former friend has done regarding the properties, and then take any necessary follow-up action.

Good luck.