Call for law society resignations after members veto sale

Article – BusinessDesk

Disgruntled Auckland District Law Society members want heads to roll at the top of the organisation after they defeated a divisive plan to sell the society’s heritage building.

The society’s president Joanna Pidgeon announced yesterday that members had voted almost 60:40 against selling the 1924 Chancery Chambers building. This was a much wider majority than at a previous vote in July.

Pidgeon and the society’s eight-person ruling council had pushed members to accept a $14.9 million offer from an unknown bidder, arguing preliminary seismic testing carried out by the potential purchaser indicated the building needed earthquake strengthening, which could be expensive. Opponents said Chancery Chambers brought in $660,000 a year in rents for the society and before making a decision members needed more information about seismic risk and possible market value for the building.

The ADLS council signed the $14.9 million sale and purchase agreement despite members also voting in July not to sell. Since then the society has received two more unsolicited bids, one for $15.5 million.

Barrister Chris Eggleston, a spokesman for opponents of the sale, called for Pidgeon and the council to resign.

“This is a vote of no confidence in the council,” Eggleston told BusinessDesk. “They tried to sell once and were told ‘no’. They tried it again with a short window and Christmas coming up and still failed.

“I think the 59 percent who voted against this are very fired up as to why this council tried again to sell the building after being given a clear message not to. This is a vote of no confidence and I’d want them to resign.”

Lawyer Gary “Keep the Buggers Honest” Gotlieb is one of the country’s more tenacious criminal defence lawyers and another strong opponent of the Chancery Chambers sale. He called for heads to roll.

“Great result. Need special general meeting for resignations,” he said in an email.

Pidgeon did not return BusinessDesk’s calls yesterday, but said in a statement the council would respect the outcome of the ballot.

“The members have voted and this building sale will not proceed,” she said. ADLS presidents normally serve only a one-year term, which means Pidgeon is likely to be replaced in March.

Chancery Chambers is a 1924 heritage building on the corner of Chancery and O’Connell Streets. The ADLS website stresses its unique qualities.

“Many of Auckland’s well-known identities have worked in the building, which for a time housed a tea room in the sixth floor tower and a Turkish bath complex in the basement,” the site says.

ADLS bought and renovated the building as its headquarters in 1989. It was listed on its 2017 accounts (the most recent available) as being worth just under $11 million.

Meanwhile, some ADLS lawyers, spearheaded by Russian-born Serge Roud of law firm Loughlin McGuire, are pushing for constitutional changes they say will bring the ADLS framework more in line with the incorporated society-type organisation it is now, rather than the regulatory body it was until 2009.

At that time, all statutory powers for district law societies were transferred to the New Zealand Law Society and the ADLS became what Roud calls a “union of like-minded lawyers”.

Its roles include professional development, organising events, liaison with government and the media, and selling a ‘WebForms’ service to lawyers.

A second membership ballot, due to close on Dec 17, calls for a number of rule changes designed, Roud says, to make the society more transparent and accountable to members. These include: getting rid of unelected members of council, so all councillors are elected; allowing members to attend council meetings and to have easy access to agendas and minutes; and replacing the ‘chief executive’ with a ‘secretary of the society’ role, accountable to members.

The ADLS council has urged members to vote against the rule changes, arguing the CEO and council model worked well for the organisation, and appointed (rather than elected) council members brought “particular skills and attributes to enhance the quality of governance”.

In notes to the rule change, the ADSL leadership said the corporate model with closed meetings did not work against the interests of members.

“There is ample opportunity for consultation between the members and councillors and there is no need to have council meetings open for attendance by all members, in the same way that a board of directors of a company would not be open to attendance by every shareholder.”

The proposal to hold open meetings and to make meeting agendas and minutes easily available to members “seems to be motivated by distrust and suspicion of the Council, which is unjustified”, the council said.

Barrister Helen White, another opponent of the sale, said while the rule changes were important and members should vote to adopt them, more sweeping change was needed. She said the sale process and the difficulty of communicating with ADLS had been eye-opening in terms of not-for-profit organisation governance.

“We were a bunch of lawyers and we found it difficult to get our message across to the organisation we are part of,” White said. “We learnt a big lesson about how important the constitution of an organisation is and how important it is to participate.

“Hopefully now we will have an opportunity to sit down and talk about having a constitution that works well for members.”

Pidgeon didn’t comment to BusinessDesk about the rule changes, any culture of secrecy within the organisation, or calls for her resignation. However, BusinessDesk was interested to note that when we rang the organisation, no one at ADLS was allowed to confirm either the exact wording of the two resolutions, or the cut-off date for the vote on the member-initiated rules changes.

“I’ve got to do what I’m told,” one staffer told BusinessDesk.

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