An Auckland lawyer found guilty of a "one-off reckless breach" said the experience has been a hard, four-year lesson.
Royal Reed, who was found guilty of misconduct last month, has suffered a heavy financial penalty through fines and legal costs as a result of the disciplinary process. It followed a client going to the High Court, after an earlier effort by Reed in a lower court failed.
It has also taken a heavy personal toll on the lawyer who has a high profile in the New Zealand Chinese community and has been a strong advocate for increasing workplace diversity and inclusiveness.
The Lawyers and Conveyancers Disciplinary Tribunal found her guilty in December of one charge of misconduct, for a failure to disclose relevant information to the High Court during an urgent application for an asset freezing order - an order that prevents any disposal of assets by a respondent.
The New Zealand Law Society said in its report on the Tribunal's decision that Reed and the firm she operated at the time, acted for a wife in relationship property proceedings.
A freezing order filed with the Family Court was declined, and the matter adjourned to allow the wife to file further evidence. Reed's client then filed an application in the High Court instead.
Auckland lawyer Royal Reed. Photo / Doug Sherring
The High Court was unaware that a previous application had been refused in the Family Court, and made the order, relying on the "defective information provided".
The order was discharged several months later, on application by the husband. The High Court held that had it been aware of the missing facts, then "unequivocally" it would not have granted the order.
Reed avoided suspension but was fined $15,000 and ordered to pay costs of $37,000 to the Standards Committee and to reimburse the New Zealand Law Society for the $11,674 in costs it was instructed to pay the Tribunal.
Reed admitted the failure to disclose but assessed it at the higher end of unsatisfactory conduct. The Tribunal found it constituted misconduct and that it was hard not to see it as "forum shopping" – choosing a court likely to have the most favourable rules.
The Tribunal said no matter how it arose, the impression given by forum shopping did the profession no credit, and should be scrupulously avoided by counsel.
Although the matter also involved an employee at the firm Reed operated at the time, she took responsibility.
The Tribunal said in its written decision that Reed had demonstrated a growing awareness and concern about her conduct, having minimised it early on by referring to the Family Court Judge as wrong, and trying to justify the omissions.
It said Reed had since satisfied one of the central aims of the disciplinary process which was protection of the public and maintenance of professional standards.
Reed told Open Justice she had always accepted she was at fault, and that the decision and penalty were fair.
"The Tribunal's very positive comments about my character were very kind. It's been a hard four-year lesson about the risks associated with running fast-growing boutique law firms, in a profession that rightly has such high standards.
"It's why I decided over two years ago to keep growing my practice with all the administrative support of New Zealand's biggest litigation firm."
Reed merged her business with large legal firm Meredith Connell, having fully disclosed details of the investigation underway at the time. Meredith Connell put a support structure in place for Reed and her team, which satisfied the Tribunal there was no risk of repeat misconduct.
Meredith Connell managing partner Steve Haszard told Open Justice that Reed had always had, and continued to have, the firm's full support.
"The decision and penalty speak for themselves – including the criticism of the 2017 error and the laudatory comments about the professional manner in which she responded, to ensure it could never happen again," Haszard said.
The Tribunal had weighed up whether suspension was necessary but stopped short of finding the action was deliberate. It acknowledged Reed's contributions to the legal and wider community, along with the personal toll she had suffered, including guilt and stress, and harm to her family as a result of the disciplinary process.
The Tribunal also noted the legal costs incurred by Reed through the proceedings amounted to about $100,000.
Reed told the Tribunal she intended to use the experience to help others understand that everyone made mistakes, but they did not need to be defined by them - only by what could be learned from them and the changes made to address them.
