HONG v AUCKLAND STANDARDS COMMITTEE NO. 5 [2020] NZHC 1572

HONG v AUCKLAND STANDARDS COMMITTEE NO. 5 [2020] NZHC 1572 [3 July 2020]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2019-404-2236CIV-2020-404-11[2020] NZHC 1572UNDER the Lawyers and Conveyancers Act 2006IN THE MATTER of an appeal against a Misconduct Liabilitydecision of the Lawyers and ConveyancersDisciplinary TribunalBETWEEN BOON GUNN HONGAppellantAND AUCKLAND STANDARDS COMMITTEENO. 5RespondentHearing: On the papersAppearances: Appellant in personP Collins for the RespondentJudgment: 3 July 2020JUDGMENT OF GAULT J(Leave to appeal)This judgment was delivered by me on 3 July 2020 at 4:00 pmpursuant to r 11.5 of the High Court Rules 2016.Registrar/Deputy RegistrarParties / Solicitors:The AppellantMr P Collins, Barrister, AucklandMr J Kleinbaum (respondent's instructing solicitor), New Zealand Law Society, Auckland[1] Mr Hong seeks leave to appeal against my judgment dated 16 April 2020,1dismissing his appeal against the liability and penalty decisions of the New ZealandLawyers and Conveyancers Disciplinary Tribunal (the Tribunal).2 The respondentopposes leave. The parties consented to the application for leave being determined onthe papers.Leave to appeal[2] Leave to appeal to the Court of Appeal is required under s 254 of the Lawyersand Conveyancers Act 2006 (the Act), which provides:254 Appeal to Court of Appeal on question of law(1) Any party to an appeal under section 253(1) who is dissatisfied withany determination of the High Court in the proceedings as beingerroneous in point of law may, with the leave of that court, or, if theHigh Court refuses leave, with the leave of the Court of Appeal,appeal to the Court of Appeal against the determination; and section56 of the Senior Courts Act 2016 applies to any such appeal.(2) In determining whether to grant leave to appeal under this section, theCourt of Appeal must have regard to whether the question of lawinvolved in the appeal is one that, by reason of its general or publicimportance or for any other reason, ought to be submitted to the Courtof Appeal for its decision.[3] Although s 254(2) is directed to the Court of Appeal, the approach of this Courtis essentially the same, applying the well established principles relating to the grantingof leave to bring a second appeal,3 namely:4The appeal must raise some question of law or fact capable of bona fide andserious argument in a case involving some interest, public or private, ofsufficient importance to outweigh the cost and delay of the further appeal.1 Hong v Auckland Standards Committee No. 5 [2020] NZHC 744.2 Auckland Standards Committee 5 v Hong [2019] NZLCDT 28 and [2019] NZLCDT 40.3 Sisson v Standards Committee (2) of the Canterbury Westland Branch of the New Zealand LawSociety Complaints Service Standards Committee [2014] NZHC 223 at [11]; Deliu v NationalStandards Committee [2015] NZHC 67 at [17]; Deliu v National Standards Committee of the NewZealand Law Society [2015] NZCA 399 at [18]; Morahan v Wellington Standards Committee 2[2018] NZHC 1583 at [13]-[14]; Deliu v National Standards Committee and Auckland StandardsCommittee 1 of New Zealand Law Society [2018] NZHC 2873 at [11]; and J v Auckland StandardsCommittee 1 [2018] NZHC 789 at [2]-[3].4 Waller v Hider [1998] 1 NZLR 412 (CA) at 413; Snee v Snee (1999) 13 PRNZ 609 (CA) at [22];and Downer Construction (New Zealand) Ltd v Silverfield Developments Ltd [2007] NZCA 355,[2008] 2 NZLR 591 at [30]-[31].[4] Ultimately, the question is whether granting leave is in the interests of justice.5[5] Mr Hong submitted this Court is functus officio and should not deliberate onthe question of whether the judgment is erroneous. But I must assess whether thealleged errors are capable of bona fide and serious argument and of sufficientimportance in the sense outlined. In doing so, I am conscious that, if I decline leaveand leave is sought from the Court of Appeal, that Court may wish to have my reasonsfor considering whether a further appeal is warranted.Questions of law[6] Mr Hong's application claims the following errors/questions of law arise:(a) In the course of a general trust account audit review, is the inspectorateempowered by the Act and the Lawyers and Conveyancers Act (TrustAccount) Regulations 2008 (the Regulations) to require production ofnon-trust account records or documents of clients from a lawyer whenthe clients have refused to grant consent and had instructed theappellant not to release their files (other than trust account records)?(b) Is it lawfully correct for the lawyer who had relied on the literalmeaning of the Regulations in his decision to abide by his clients'instructions not to release the files, undertaken a thorough search ofjudicial decisions affecting the interpretation of the Regulations andfound none that is relevant, and not finding any, had decided that hemust abide by his clients' instructions due to the strict duty ofconfidence owed to his clients as their lawyer and had decided best toseek a judicial determination for a clear ruling thereon, to be held ashaving misconducted himself pursuant to s 7 of the Act?(c) As a corollary, is it proper and satisfactory for a lawyer who has cometo the view that the inspectorate is not so empowered to require5 Deliu v National Standards Committee [2015] NZHC 67 at [18]; Deliu v National StandardsCommittee of the New Zealand Law Society [2015] NZCA 399 at [18(c)]; and Morahan vWellington Standards Committee 2 [2018] NZHC 1583 at [10].production of clients' non-trust account records as legislated, to goagainst the clients' instructions notwithstanding that there is arequirement under the Regulations that requires the inspectorate to keepall such information as provided confidential but the prerogative rightwhether to trust them rests with the affected clients?(d) Is the three months' suspension and the Tribunal's order requiring theappellant to apply for consent to practise again, under the undisputedcircumstances, fair and reasonable in accordance with the objectivesand purposes of the Act and judicial principles and precedents on suchwhen it had been a clear ruling the appellant sought and will abide by?(e) Is the costs award erroneous when, by the literal interpretation of theAct and Regulations, the inspectorate is only entitled to trust accountrecords and as such, this challenge by the appellant is a test case?Trust account records[7] Mr Hong's primary question (a) pursues his argument that his literalinterpretation of "trust account records" enables a practitioner to extract or copy thoserecords for disclosure to a Law Society inspector and to refuse to allow inspectorsaccess to client files even to verify the scope of the records required.[8] I accept this raises a question of law as to the interpretation of the Act andRegulations. However, I do not consider it is a question capable of bona fide andserious argument. For the reasons given in the judgment,6 I consider that a narrowinterpretation of the meaning of "trust account records" loses sight of the purpose ofthe statutory regime.[9] In submissions seeking leave, Mr Hong also raised cultural distrust ofregulatory authorities, but the statutory regime applies equally to all.6 Hong v Auckland Standards Committee No. 5 [2020] NZHC 744 at [48]-[53].Misconduct[10] Question (b) challenges the finding of reckless (not wilful) contravention.7This was a factual assessment and I do not consider it raises a point of law that oughtto be submitted to the Court of Appeal. The finding was that Mr Hong was persistentin his obstruction of the inspector's review and failed to acquaint himself with his legalobligation to permit the inspector to carry out the review notwithstanding clientconfidentiality, not merely that he overlooked the legal position. Also, I considerquestion (b) does not raise a question of law capable of bona fide and serious argumentregarding client confidentiality or privilege and reg 33, for the reasons given in thejudgment.8 The corollary question (c) is no different.[11] Subsequent to his submission in reply, Mr Hong filed a further submissionrelying on Keene v Legal Complaints Review Officer.9 He submitted Keene supportedhis submission that a lawyer should not be found guilty of misconduct orunsatisfactory conduct where he or she has interpreted rules or regulations and theinterpretation is arguable or not wholly untenable. However, in Keene the Court ofAppeal was dealing with a High Court judgment that had set aside an LCRO decisionand restored a Standards Committee finding of unsatisfactory conduct incircumstances where it was open to the LCRO to reach the view that a disciplinaryresponse was not warranted.10 Moreover, the Court considered that Mr Keene's viewwas reasonably open to him.11 I do not understand Keene to decide that a disciplinaryresponse is not warranted whenever a lawyer's conduct is based on an arguable view.In any event, as indicated, here the finding was one of reckless contravention basedon Mr Hong's persistent obstruction of the inspector's review and failure to acquainthimself with his legal obligation.7 Hong v Auckland Standards Committee No. 5 [2020] NZHC 744 at [64], having put asideMr Hong's subsequent conduct at the Tribunal hearing.8 At [48] and [54].9 Keene v Legal Complaints Review Officer [2019] NZCA 559.10 At [85] and [90].11 At [87] and [89].Penalty and costs[12] Questions (d) and (e) also do not raise questions of law but rather challenge thepenalty and costs on the basis of Mr Hong's characterisation of his conduct at the timeas merely seeking a clear ruling in a test case. But at the time of the audit, he refusedto provide the files required or otherwise cooperate with the Law Society. Further, inhis response to the inspector's report, he expressed concern as to why the inspectorwanted access to client files.12 Otherwise, these questions essentially raise the primaryquestion again.Importance or other reason[13] For the reasons given, I also do not consider the intended appeal raises aquestion of law that, by reason of its general or public importance or for any otherreason, ought to be submitted to the Court of Appeal. If I had considered the primaryquestion was capable of bona fide and serious argument, I would likely have acceptedthat it was of importance to warrant a further appeal.[14] Mr Hong's submission also raised allegations of discrimination against theLawyers Complaint Service. He filed yet another submission referring to a judicialreview application and raising issues of corruption. These new factual allegationscannot be raised by way of leave to appeal.________________________________Gault J12 Hong v Auckland Standards Committee No. 5 [2020] NZHC 744 at [23]-[24].