A Firm v LCRO & Ors [2026] NZHC 1039 (22 April 2026)

The High Court has overturned a decision of the Legal Complaints Review Officer (LCRO) concerning when a lawyer must cease acting under rule 13.5.2 of the Conduct and Client Care Rules, on the grounds that a member of the lawyer’s firm “is to give evidence of a contentious nature”.

The judgment provides important guidance on the meaning of contentious evidence and confirms that unsupported allegations alone will not trigger an obligation to withdraw.

Philippa Fee and Tim Daley were counsel for the firm.

Background

There was an unfortunate family background to the dispute. An elderly man was the settlor of a trust and had the power to appoint and remove trustees (the father). The trustee was a company, Trustee A, in respect of which one of his sons (son A) was the director.

The father went to live in Australia with his other son (son B). Son A refused to provide information relating to the trust that the father needed in order to obtain the Australian pension.

A law firm acted for the father. Ultimately, the father removed Trustee A and nominated a new trustee company to act. This removal was challenged by Trustee A on the grounds that the father lacked capacity and was subject to improper influence by son B.

The firm obtained confirmation of the father’s capacity from his doctor. The father filed proceedings seeking a declaratory judgment that the replacement trustee was validly appointed. Trustee A filed a memorandum in court formally asserting that members of the firm would need to give evidence about their dealings with the father and therefore should be debarred from acting.

The firm ultimately consented to a debarment order. After the substantive dispute settled, a complaint was made to the New Zealand Law Society contending that the firm should have stepped aside much sooner.

Standards Committee and LCRO decisions

The Standards Committee dismissed the complaint, finding that the firm had been properly instructed, had taken appropriate steps to assess capacity, and had not acted improperly.

On review, the LCRO concluded that the firm and its litigation partner had breached rule 13.5.2 by continuing to act once allegations of lack of capacity were raised in the proceeding.

Rule 13.5.2 reads:

If, after a lawyer has commenced acting in a proceeding, it becomes apparent that the lawyer or a member of the lawyer’s practice is to give evidence of a contentious nature, the lawyer must immediately inform the court and, unless the court directs otherwise, cease acting.

The LCRO found that it should have been “apparent” that firm members might be required to give contentious evidence, triggering an immediate obligation to inform the Court and cease acting. A reprimand, fine, and costs were imposed.

Judicial review

The firm and the litigation partner sought judicial review of the LCRO’s finding that rule 13.5.2 had been breached.

The High Court noted the role of judicial review in this context, and confirmed that the LCRO’s decision was subject to review for material error of law or fact, and for findings unsupported by evidence.

The issues

The firm argued that the test in rule 13.5.2 had not been satisfied, as it was not apparent that its lawyers would give evidence. They relied in particular on the fact that the father and his doctor were available to give evidence as to capacity, if necessary. Accordingly, the threshold for triggering the rule had not been met, as it required a high degree of certainty that the lawyers would be required to give evidence.

As contradictor, the New Zealand Law Society submitted that the threshold was much lower—namely, that what is required is a “material prospect” that a member of the firm will give evidence. It argued this threshold had been met here.

The key findings

Justice Johnstone accepted that the threshold for triggering rule 13.5.2 is not as high as inevitability, and a “material prospect” of giving evidence may be sufficient. However, crucially the rule requires that it be apparent that the evidence from the lawyers will be “contentious”. On this issue, the Court found:

The allegations of incapacity and undue influence were not supported by evidence.
The firm had taken documented steps to address capacity concerns, including arranging a medical assessment.
While firm members could potentially have given evidence about their instructions, that evidence was not controversial or conflicting in the absence of any evidential foundation challenging it.
Mere assertion by an opposing party that a lawyer might be a witness does not, without more, make the lawyer’s evidence “contentious”.

Importantly, the Court warned that interpreting rule 13.5.2 too broadly risks enabling tactical or unmeritorious allegations, potentially disrupting proceedings, increasing costs, and undermining clients’ choice of counsel.

The LCRO’s finding that it had become “apparent” that firm members would give contentious evidence was therefore unsupported by the evidence and wrong in a reviewable sense.

The High Court quashed the LCRO’s finding of unsatisfactory conduct, reprimand, fine and costs order.

Comment by Philippa Fee

This decision provides welcome clarification for lawyers, who often have to deal with allegations that give rise to the possibility that a member of the firm may give evidence. In particular allegations of a lack of capacity are common in the trust and estates area, sometimes with little evidence in support.

This decision is good news because it clarifies that:

Allegations alone do not trigger rule 13.5.2—there must be a real, evidence-based risk that a lawyer will need to give contentious evidence.
Evidence is not “contentious” simply because it relates to disputed issues. It must place the lawyer in a position where independence is genuinely compromised.
While lawyers should still remain alert to developing conflicts, the rules do not require premature withdrawal in response to unsubstantiated claims.

The judgment strikes a careful balance between protecting the independence of counsel and preventing abuse of the Conduct Rules as a forensic tactic.

Resources

High Court clarifies when lawyers must step aside

Fee Langstone