CRIFFEL DEER LIMITED v ANZ BANK NEW ZEALAND LIMITED [2022] NZHC 2175

CRIFFEL DEER LIMITED v ANZ BANK NEW ZEALAND LIMITED [2022] NZHC 2175 [30 August 2022]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2021-485-384[2022] NZHC 2175BETWEEN CRIFFEL DEER LIMITEDFirst PlaintiffPRIME COMMERCIAL LIMITEDSecond PlaintiffMICHAEL ROBERT GARNHAMThird PlaintiffSBF PROPERTIES LIMITEDFourth PlaintiffAND ANZ BANK NEW ZEALAND LIMITEDDefendantOn the papers:Counsel: C M Stevens, M Robertson and T Mijatov for PlaintiffsJudgment: 30 August 2022JUDGMENT OF CHURCHMAN J[Leave to withdraw]Introduction[1] Counsel for the Garnham companies (the unsuccessful plaintiffs) have soughtleave to withdraw. The memorandum filed by counsel records that they haveterminated their retainer with the Garnham companies for failure to pay counsel's feesor make satisfactory arrangements for payment. The instructing solicitor remainsunchanged.Law[2] The circumstances in which a solicitor on the record may seek leave towithdraw are set out in r 5.41 of the High Court Rules 2016. The rules provide threeways to withdraw:(a) by obtaining an order that the solicitor has ceased to be the solicitor onthe record for the party, serving the order on every party who has givenan address for service, and filing an affidavit proving that service;1(b) by filing and serving a notice of change of representation in accordancewith r 5.40, an affidavit proving service of the notice on every otherparty, as well as the previous address for service;2 or(c) by the party filing and serving a notice that the party intends to act inperson, with the party's new address for service, as well as filing anaffidavit proving service on the solicitor on the record and every otherparty who has given an address for service.3[3] The rules do not set out a process or requirement for counsel to seek leave towithdraw. However, a practice has developed for counsel to seek the leave of theCourt to withdraw. This was the approach taken in Burgess v Monk.4[4] Burgess dealt with an application by counsel for Mr Burgess to withdraw in atrustee dispute. Counsel submitted that their interlocutory application for leave towithdraw was based on the ground that serious professional conduct issues had arisen.This included a potential conflict between counsel's interests and those of the client,and that "the relationship of trust and confidence between counsel and client [had]broken down irretrievably".51 High Court Rules 2016, r 5.41(3).2 Rules 5.40(4) and 5.41(2)(a).3 Rule 5.41(2)(b).4 Burgess v Monk (No 4) [2017] NZHC 2618.5 At [7].[5] In the absence of a legislative instrument dealing squarely with the withdrawalof counsel, Heath J considered that a first principles analysis was required, particularlyconsidering the principles contained in the Lawyers and Conveyancers Act (Lawyers:Conduct and Client Care) Rules 2008. The rules set out the duty to complete a retainer,and provide:4.2 A lawyer who has been retained by a client must complete theregulated services required by the client under the retainer unless—(a) the lawyer is discharged from the engagement by the client;or(b) the lawyer and the client have agreed that the lawyer is nolonger acting for the client; or(c) the lawyer terminates the retainer for good cause and aftergiving reasonable notice to the client specifying the groundsof termination.4.2.1 Good cause includes—(b) the inability or failure of the client to pay a fee on the agreedbasis or, in the absence of an agreed basis, a reasonable fee atthe appropriate time:4.2.3 A lawyer must not terminate a retainer or withdraw from proceedingson the ground that the client has failed to make arrangementssatisfactory to the lawyer for payment of the lawyer's costs, unless thelawyer has—(a) had due regard to his or her fiduciary duties to the clientconcerned; and(b) given the client reasonable notice to enable the client to makealternative arrangements for representation.[6] After setting out the relevant aspects of the Client Care Rules, the Courtconsidered that an application to withdraw on the 19th day of trial required theadministration of justice to be weighted heavily in the balance as a factor forconsideration.6 Leave to withdraw was refused on the basis of this consideration – if6 At [20].counsel withdrew and the trial was aborted, then a new one would need to be scheduledfor the following year.7 The Court also considered that none of the r 4.2.1 situationsof "good cause" in the Client Care Rules applied.8[7] This approach illustrates that the courts maintain oversight over barristers andsolicitors pursuant to ss 268 and 270 of the Lawyers and Conveyancers Act 2006.Under its inherent jurisdiction, the Court may make an order restraining counsel fromacting for a particular client where it is required in the interests of justice, or may allowwithdrawal where good cause exists.9 As counsel are officers of the Court owingduties to the Court to complete a retainer unless good cause exists, it is appropriate forcounsel to seek leave to withdraw despite there being no explicit requirement createdby the rules to do so.10Should leave to withdraw be granted?[8] Counsel rely on the fact that the plaintiffs have failed to pay their fees, or tomake satisfactory arrangements for payment. A failure to pay fees is capable ofconstituting good cause for the termination of a retainer under r 4.2.1(b) of the ClientCare Rules.[9] Counsel submit that r 4.2.3 has been complied with. Counsel say they thatthey have had regard to their fiduciary duties, including the fact that Mr Garnham isan experienced solicitor, that judgment has been delivered, and that costs are yet to bedetermined. Counsel say that they have taken reasonable steps to enable the Garnhamcompanies to make arrangements for alternative representation, by raising payment asan issue for several months.[10] In Burgess, counsel filed an interlocutory application in reliance on the Court'sinherent jurisdiction and a memorandum in support of that application (no affidavitwas filed).11 A question in this case is whether counsel should be required to provide7 At [49].8 At [51].9 Black v Taylor [1993] 3 NZLR 403 (CA).10 Burgess v Monk, above n 4, at [20].11 At [8].an affidavit setting out in more detail the steps they have taken in pursuit of compliancewith r 4.2.3.[11] I do not think that is necessary. On the basis of the information in thememorandum received, it is clear why counsel wish to withdraw. The sole reasonadvanced is an appropriate one. Unlike Burgess v Monk, good cause exists, and theconsideration of the administration of justice need not weigh so heavily, given thatjudgment has been entered, with only the issue of costs needing resolution.Conclusion[12] To the extent that leave is needed, I grant counsel leave to withdraw.Churchman JSolicitors:Stephens Lawyers, Wellington for PlaintiffsBell Gully, Wellington for Defendant