SKAGEN v WELLINGTON STANDARDS COMMITTEE OF THE NEW ZEALAND LAW SOCIETY [2016] NZHC 1772

SKAGEN v WELLINGTON STANDARDS COMMITTEE OF THE NEW ZEALAND LAW SOCIETY [2016] NZHC 1772 [1 August 2016]THIS JUDGMENT IS SUBJECT TO THE SUPPRESSION ORDERSCONTAINED IN PARAGRAPH [99].IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYCIV 2015-485-61[2016] NZHC 1772IN THE MATTER OF the Lawyers and Conveyancers Act 2006BETWEEN CHRISTOPHER KNUTE SKAGENAppellantAND WELLINGTON STANDARDSCOMMITTEE OF THE NEW ZEALANDLAW SOCIETYRespondentHearing: 5 February 2016Further evidence received 18 and 22 February 2016Appearances: Mr Skagen appearing in personJ L Shaw for the respondentJudgment: 1 August 2016JUDGMENT OF MALLON JTable of contentsIntroduction ....................................................................................................................................... [1]The charges ........................................................................................................................................ [2]The background ................................................................................................................................ [3]Client E............................................................................................................................................. [14]W matter .......................................................................................................................................... [52]Investigation matters ...................................................................................................................... [69]NZBORA.......................................................................................................................................... [87]Penalty .............................................................................................................................................. [94]Result ................................................................................................................................................ [98]Introduction[1] Mr Skagen was practising as a barrister in New Zealand in 2010 and 2011. On 9 December 2014 the New Zealand Lawyers and Conveyancers Disciplinary Tribunal (the Tribunal) found him guilty of 11 charges of misconduct.1 The Tribunal ordered the removal of his name from the Roll of Barristers and Solicitors of NewZealand and also ordered him to pay its cost of $2,533, the respondent's costs of$22,238.98, and compensation to the two complainants of $4,100 and $7,700 respectively. Mr Skagen appeals the Tribunal's decision both as to its findings ofmisconduct and as to penalty. He also says his rights under the New Zealand Bill of Rights Act 1990 (NZBORA) were breached and he should receive compensation for that breach.The charges[2] The charges arose in relation to two clients and Mr Skagen's response to aninvestigation about those clients. They can be summarised as follows:2[1] Twelve charges of Misconduct have been brought against Mr Skagen. They are summarised as follows:(a) The "[E] Charges"(i) Accepting instructions directly;(ii) Accepting fees in advance;(iii) Failure to pay monies received into a trust account;(iv) Failing to act in a timely or competent manner;(v) Failing to repay monies.(b) The "[W] Charges"(i) Accepting a fee in advance;(ii) Failure to pay money received into a trust account;1 Pursuant to the Lawyers and Conveyancers Act 2006 (the Act), s 241(a).2 This summary comes from the Tribunal's decision: Wellington Standards Committee of the New Zealand Law Society v Skagen [2014] NZLCDT 82.(iii) Failing to act in a timely or competent manner;(iv) Failing to repay monies, and in the alternative;(v) Charging a grossly excessive fee. (This charge was abandoned at the hearing).(c) The "Investigation Charges"(i) Failing to permit an investigator to examine accounts;(ii) Failing to produce records to an investigator.The background[3] Mr Skagen is a citizen of the United States and New Zealand. He obtained his law degree in New Zealand but soon after doing so moved to Portland Oregon in the United States where he sat the bar exam and practised in that state. He was subject to disciplinary proceedings in Oregon.[4] First, in 2006 in Oregon Mr Skagen was suspended from practice for one year. This was for failing to cooperate with discovery of his trust account records and thereby engaging in conduct prejudicial to the administration of justice, failing to maintain client funds in a trust account, failing to maintain complete records of client funds in his possession and failing to have his trust account interest bearing.[5] Secondly, in 2008 in Oregon Mr Skagen was suspended from practice for 18 months. This was for inadequacies in his handling and tracking of client deposits and cheques on approximately 22 occasions over a period of one year. During this time Mr Skagen drew cheques on behalf of clients to pay court fees where those clients had not deposited sufficient funds to cover the cheques, with the consequencethat other clients' funds were used to meet the shortfall. A charge of failing torespond to lawful demands during the investigation was not upheld although MrSkagen's conduct was described as "troubling, at times". Mr Skagen alsounsuccessfully opposed, on the basis of privilege, an application by the Oregon Bar to produce trust account records sought in respect of an investigation.[6] Mr Skagen moved to New Zealand prior to the Oregon court's decision onthe second matter. In 2008 in this jurisdiction he was censured and ordered to paycosts of $8,000. Mr Skagen says this was in respect of the first Oregon matter. I am not clear, what if any action, was taken in this jurisdiction in respect of the second matter. In May 2012 Mr Skagen was subject to further disciplinary action in this jurisdiction arising out of failing to complete discovery in a proper manner in relation to a matter in May 2011. He was censured, required to reduce his fee and ordered to pay compensation and costs.[7] The charges relating to the present appeal related to matters in 2011 when Mr Skagen was practising in this country. The charges were brought on 26 June 2013. At this time Mr Skagen was back living in the United States. There were initially difficulties in serving Mr Skagen. The Standards Committee were using an email address for Mr Skagen that was no longer active. The Standards Committee obtained orders for substituted service and a formal proof hearing was scheduled for 14 October 2013.[8] Shortly before that hearing the Standards Committee obtained the correct email address. Mr Skagen was accordingly served by email on 1 October 2013. Mr Skagen emailed the case officer for the hearing (copied to the case officer). He advised that he had returned to the United States in February 2013 and since that time he had been homeless. He asked if he could attend the hearing via telephone (he provided a number) as he was unable to attend the hearing. He also requested that the hearing be adjourned to a later date "given that counsel will seek to have me stricken from the list".[9] By email dated 9 October 2013 the case manager advised Mr Skagen that the formal proof hearing was vacated. He was to file his response to the charges by 17 October 2013 and he was to make a written request for an extension of time if he needed it. On 14 October 2013 Mr Skagen advised by email to the case officer, copied to the lawyer acting for the Standards Committee, that he hoped to have his response ready in the required time. He also said that "having reviewed the panel, Iwould object to the inclusion of Wayne Chapman as a member, as his presencewould make me feel uncomfortable." Mr Skagen received no response to thatobjection and he did not pursue it thereafter.3 Mr Skagen duly filed his response to the charges. He did so on 6 November 2013.[10] There was then a period of inactivity. Mr Skagen had serious medical issues in early 2014. He suffered an aneurysm and was admitted to hospital where he remained for 10 days. In June 2014 he had surgery as a result of a further aneurysm. An affidavit filed by Mr Skagen describes his health difficulties at this time and earlier, as well as more generally the emotional toll and other difficulties in his life that the disciplinary proceedings in Oregon and in this country have had on him. He was not in a financial position to return to New Zealand for the hearing on the charges.[11] A telephone conference took place on 31 January 2014.4 The participants were the Chair of the Tribunal, counsel for the respondent and Mr Skagen. Mr Skagen said he could not return for the hearing due to the cost and asked whether he could attend by telephone instead. The Chair promptly stated that a personal hearing was required. Mr Skagen did not take the point further. Counsel for the respondent expressed the view that there was little if any evidential dispute and the main issues were legal. He suggested that the evidence be admitted without challenge and the parties could each make written legal submissions on the basis of that evidence. Mr Skagen was not sure whether he wanted to raise evidential matters. The Chair suggested that the matter proceed as counsel for the respondent proposed but with the opportunity of reviewing this once submissions were filed. Timetable directions for the filing of submissions were made and a further telephone conference was scheduled for 1 April 2014.[12] The 1 April 2014 telephone conference did not proceed due to various extensions that were granted to Mr Skagen. The hearing was scheduled for 14 August 2014. This was vacated for administrative reasons and the hearing was then scheduled for 28 November 2014. Mr Skagen filed written submissions on 263 He referred to this in his submissions on this appeal but it was not part of his grounds of appeal.4 The parties filed evidence about what occurred at this telephone conference. Mr Skagen did not keep notes and said that the conference took place at a time he was very unwell. I have acceptedcounsel for the respondent's account of this telephone conference which was essentiallyconsistent with what Mr Skagen could remember and which fitted with how matters then proceeded.November 2014. Those submissions did not raise the need for a hearing on evidential matters nor did they point to any evidential matters that were in dispute. Counsel for the respondent reviewed the submissions and considered the original proposal to accept the evidence and argue the law was not being challenged by Mr Skagen.[13] The hearing proceeded on 28 November 2014. Counsel for the respondent canvassed the evidence and competing submissions. The Tribunal gave a short oral decision and issued a written decision on 9 December 2014. It found the charges proven and ordered that Mr Skagen be struck off the Roll of Barristers and Solicitors of New Zealand effective immediately. He was also ordered to pay the LawSociety's and the Tribunal's costs, and compensation to the two complainants.Client E[14] E sought Mr Skagen's assistance in relation to some family law issues. A meeting was arranged on or about 2 February 2011. Mr Skagen advised him he would charge a lump sum for the work and would need to see a solicitor to sign the retainer contract.[15] Following that meeting, by email dated 2 February 2011 Mr Skagen forwarded to E an invoice, his terms of engagement and an explanation of terms. Henoted that the latter two items were required by the Law Society and "we will need to see the instructing solicitor tomorrow". He also asked E to let him know by email that evening if E had made the deposit.[16] The terms of engagement referred to in that letter included the following:Representation of you for your [family law issues]Thank you for instructing me in this matter. I am pleased to accept your instructions on the basis set out below:1 Instructing solicitorKevin Smith 2 Services to be providedThe following is a summary of my brief:I will conduct all work needed to [scope of family law work to becarried out]Client will pay lump sum in 2 payments: one now andthe final payment within a month. $8,200. [17] The invoice was dated 2 February 2011. It set out the scope of the work Mr Skagen was to carry out and noted that the payment was to be in two parts, one now and the final payment within a month. The invoice was for $8,100.[18] By email dated Friday 4 February 2011 E advised Mr Skagen he had paid$4,100. Mr Skagen replied saying he was busy that afternoon but "Let's talk early Monday and meet Kevin for instructions."[19] An affidavit from Kevin Smith confirms that he had instructed Mr Skagen onprior occasions. On each occasion he made certain he met the client "before the final instruction was given to Mr Skagen to act". He required Mr Skagen to report to himon each file from time to time. His reports indicated to Mr Smith that Mr Skagen was acting properly and competently. On this occasion Mr Skagen and E agreed that they met with Mr Smith. He was, however, unable to act. This was because Mr Smith had already discussed the matter with E's wife.[20] E says that after this meeting he heard nothing further from Mr Skagen. He says he emailed Mr Skagen a couple of times but received no replies. As his family law issues were urgent, a month later he instructed WCM Legal to act on his behalf. Mr Skagen says he told E that E would have to find a new instructing solicitor before Mr Skagen could act for him. He did not hear from E again until WCM Legal contacted him.[21] By letter dated 7 March 2011 WCM Legal wrote to Mr Skagen. The letter advised that WCM Legal had been instructed to act for E, E had advised Mr Skagenhe wished to terminate Mr Skagen's retainer, an authority was enclosed for Mr Skagen to release E's file, and Mr Skagen was to provide an itemised bill of costs forany work he had undertaken. When WCM Legal did not receive a response to that letter, WCM Legal sent follow up letters on 15 and 23 March 2011 and advised MrSkagen the matter was urgent. WCM Legal requested Mr Skagen to refund the $4100 which E had paid.[22] It seems that Mr Skagen had endeavoured to reply by email dated 18 March 2011, but WCM Legal had not received that email. WCM Legal did, however, receive an email from Mr Skagen dated 25 March 2011. In this email Mr Skagen advised he was out of the country until early April. He intended to refund the entirefee, even though he had spent some hours on the matter, because "our relationship never fully got off the ground." He was, however, unable to refund the payment atpresent, but would do so as soon as his finances permitted. He set out his understanding of why he had understood the instructions were not urgent.[23] WCM Legal replied on 29 March 2011. They sought repayment as soon as possible and by the end of April 2011. WCM Legal sent a further letter dated 3 May 2011, Mr Skagen replied by email dated 6 May 2011 advising that he had been"experiencing a terrible financial drought the last month but will make payment as soon as possible." Following this response, WCM Legal wrote to the Law Societyadvising it of the situation.[24] The respondent enquired into the matter. In his response to the investigationMr Skagen explained Mr Smith's conflict and said "I was not thus instructed at that time." He said he had then endeavoured to set up meetings so that he could be instructed after that but E failed to respond. He then said that because E did not fulfil his part of the agreement, E was in breach of contract. E had failed to instructhim and thereby prevented him from acting on E's behalf. He described the amountE paid as "an alleged debt". On 14 December 2012 the respondent determined thatthe matter should be referred to the Disciplinary Tribunal.5[25] Charge one was that Mr Skagen had accepted instructions from a client directly in breach of rule 14.4 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (Conduct and Client Care Rules). That rule provides as follows:65 Lawyers and Conveyancers Act 2006, s 152(2)(a).6 For present purposes rules 14.6, 14.7 and 14.8 are not relevant.Subject to rules 14.6, 14.7, and 14.8, a barrister sole must not accept instructions to act for another person other than from a person who holds a practising certificate as a barrister and solicitor.[26] The Tribunal held that Mr Skagen did receive instructions directly from E. Mr Skagen contends the Tribunal was wrong about this. He refers to the documentation discussed above which makes it plain that it was a condition of his acting for E that Mr Smith would have to instruct him to do so first. As Mr Smith was not able to instruct him, and no alternative instructing solicitor was arranged, he did not carry out the representation.[27] The respondent submits that the rule is concerned with accepting instructions to act. It therefore does not matter that Mr Skagen did not in fact take any activesteps on E's behalf. The respondent submits that Mr Skagen did accept instructions to act directly from E through invoicing E and receiving and keeping the payment E made.[28] I consider that Mr Skagen always intended to act on E's behalf only once MrSmith had formally instructed him to do so. He therefore intended to comply with rule 14.4. The breach of the rule arose when Mr Skagen required payment from E in advance of receiving instructions from Mr Smith. At that point he had accepted instructions to act for E, albeit that he did so on a conditional basis (namely, that he would not carry out the work until such time as Mr Smith had provided the instructions). The breach of the rule may have been short-lived and without any consequence had Mr Skagen immediately returned the payment when Mr Smith could not instruct Mr Skagen. However Mr Skagen did not do so. Nor did he take any immediate steps to arrange an alternative instructing solicitor. The Tribunal was not therefore wrong to find this charge proven.[29] Charges two and three overlapped. Charge two was that, by accepting fees in advance, not placing them in a trust account and immediately applying them to his practice account as payment for work not yet undertaken, Mr Skagen breached rule 9.3 of the Conduct and Client Care Rules and regs 9 and 10 of the Lawyers and Conveyancers Act (Trust Account) Regulations 2008 (the Regulations). Chargethree was that, by failing to place the monies received into a trust account, Mr Skagen breached s 110 of the Act and reg 10 of the Regulations.[30] Section 110 of the Act provides:(1) A practitioner who, in the course of his or her practice, receives money for, or on behalf of, any person –(a) must ensure that the money is paid promptly into a bank in New Zealand to a general or separate trust account of –(i) the practitioner; or(ii) a person who, or body that, is, in relation to the practitioner, a related person or entity; and(b) must hold the money, or ensure that the money is held, exclusively for that person, to be paid to that person as that person directs.[31] Sections 111 to 114 contain further provisions relating to money held on behalf of another person (keeping records, not using the money for other purposes and ensuring the funds earn interest). Section 115 provides for regulations to be made in respect of trust accounts including as to a practitioners duties in regard to trust accounts.[32] Rule 9.3 of the Conduct and Client Care Rules provides:A lawyer who wishes to debit fees held in trust or receive funds to cover fees in advance must comply with the requirements of regulations 9 and 10 of [the Regulations].[33] Regulation 9 provides:(1) No trust account may be debited with any fees unless –(a) a dated invoice has been issued in respect of those fees, and a copy of the invoice is available for inspection by the inspectorate; or(b) an authority in writing in that behalf, signed and dated by the client, specifying the sum to be so applied and the particular purpose to which it is to be applied has been obtained and is available for inspection by the inspectorate.[34] Regulation 10 provides:All money paid to a practice in respect of professional services for which an invoice has not been issued, whether described as a retainer or otherwise, must be retained in a trust account until it is –(a) disbursed on the client's behalf; or(b) applied in payment of fees in accordance with regulation 9.[35] The Tribunal dealt with these charges together. It rejected Mr Skagen'scontention that these provisions did not apply to him because he received payment of an invoice issued in advance of carrying out the work. It followed a disciplinary tribunal decision in Canterbury Standards Committee v Parsons.7 That decision held that the requirements of the Regulations could not be bypassed in this manner.Neither the Tribunal's decision in this matter nor the decision in Parsons analysed the words of the relevant provisions in reaching this conclusion.[36] The respondent submits the Tribunal's approach was correct. The respondentemphasises the need to take a purposive approach to the regulations in order to protect clients from what occurred here. However in my view the relevant provisions, as they are worded, were not breached in the present situation.[37] Section 110 of the Act did not apply because Mr Skagen did not receivemoney "for, or on behalf of, any person". The agreement between Mr Skagen and Ewas that E would pay a fixed fee for the work to be performed once he had been instructed by Mr Smith, half of which was payable immediately. This was therefore different from an arrangement where money is paid in advance to meet fees yet to berendered. In that situation the money is held on the client's behalf until the work iscarried out and an invoice is issued in accordance with regs 9 and 10.[38] Likewise rule 9.3 and regs 9 and 10 are directed at the situation where money is paid in advance in anticipation of fees to be rendered at a later date. Regulation 9did not apply to E's situation because the payment was not, and was not required tobe, paid into a trust account. Regulation 10 did not apply because Mr Skagen had already invoiced E and E had made the payment on the basis of that invoice.7 Canterbury Standards Committee v Parsons [2013] NZLCDT 48.[39] Mr Skagen had made it plain to E that he was charging a fixed fee and that part of that fee was payable in advance. E agreed to that arrangement and paid Mr Skagen's invoice pursuant to that agreement. In my view if s 110 of the Act and regs9 and 10 were intended to apply to fixed fees payable in advance of work to be carried out they needed to do so expressly.8[40] The respondent submits that rule 3.4A(c) of the Rules supports the Tribunal'sview that s 110 of the Act and regs 9 and 10 apply to the payment made by E. Thisrule provides that the Lawyers' Fidelity Fund does not provide any cover in relationto a barrister sole because he or she does hold client funds. The respondent submitsthat because clients of barristers do not have the protection of the Lawyers' FidelityFund, it is necessary to interpret these provisions to provide protection in cases like the present.[41] Rule 3.4A(c) came into force on 1 July 2015.9 In any event I consider the rule reinforces my view that these provisions do not apply to Mr Skagen. A barristerdoes not hold a trust account because it is not a barrister's function to hold funds onbehalf of a client. Client funds paid in advance to cover work yet to be carried out and invoiced are to be held by the instructing solicitor. Mr Skagen was not holding client funds for work yet to be invoiced. He was paid in advance a fixed fee for work to be carried out. He was not charged with improperly requiring that part of his fixed fee be paid in advance.[42] That is not to say that Mr Skagen's actions were proper. He ought not to haveaccepted payment until he had an instructing solicitor in place, he ought to have ensured that he was in a position to refund the fee if he could not arrange for that to happen promptly and ought to have refunded the fee promptly when no instructing solicitor had been arranged. However, in my view, his actions did not breach the particular regulations relied on for charges two and three.8 Mr Skagen refers to Hart v Auckland Standards Committee 1 of the New Zealand Law Society[2013] NZHC 83, [2013] 3 NZLR 103 in support of his view that payment of fixed fees to a barrister in advance of work to be carried out is not prohibited. However the charge faced by the barrister in that case concerned an excessive fee and it is not clear whether the fee was held in a trust account or not. The case therefore does not assist in the present matter.9 Inserted by r 4(1) of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Amendment Rules 2015 (LI 2015/187).[43] Charge four was that Mr Skagen failed to act in a competent and timely manner for E in breach of rule 3 of the Conduct and Client Care Rules. That rule provides:10 a lawyer must always act competently and in a timely manner consistent with the terms of the retainer and the duty to take reasonable care.[44] The Tribunal found this charge proven because, having accepted instructions to act, Mr Skagen then did not carry out any work on the matter. The respondent supports this finding, noting that Mr Skagen carried out no work between 2 February 2011 (when he was retained by E) and 7 March 2011 (when E terminated the retainer).[45] Mr Skagen says he did not carry out any work because it was first necessary to arrange an instructing solicitor. He says he left a telephone message with E that E was to arrange an instructing solicitor. He says he did not hear from E again until the retainer was terminated.[46] I consider the Tribunal correctly determined that this charge was proven. Mr Skagen had invoiced E and accepted payment from E on the basis that Mr Smith would be the instructing solicitor. Having accepted payment from E it was necessary either that Mr Skagen immediately return the payment when Mr Smith could not act, or for Mr Skagen to immediately arrange an alternative instructing solicitor. It was not appropriate that Mr Skagen hold on to the money and take no steps to put in place arrangements that would enable him to carry out the work he had agreed to undertake when he invoiced and accepted payment from E.[47] Charge five was that E breached rule 3 by accepting that he would repay the monies to E and failing to do so. Mr Skagen submitted to the Tribunal that he was unable to repay the money because E had breached the contract they had entered into and there was no requirement under that contract for Mr Skagen to repay the money.The Tribunal's view was that this position was "disingenuous and dishonest, and in10 Rule 3 goes on to provide specific rules under this general rule. This includes, for example, rule3.3 which provides "A lawyer must inform a client if there are any material and unexpecteddelays in a matter."terms of the Act, [was] disgraceful and dishonourable". The Tribunal found the charge proven.[48] Mr Skagen submits the Tribunal failed to consider rule 4.3 of the Conduct and Client Care Rules. Clause 4.3 provides that a client has the right to terminate aretainer "subject only to compliance with any agreed terms in the retainer". Clause4.3.1 provides:Termination of the retainer by the client does not affect any entitlement of the lawyer to be reimbursed for services reasonably and properly provided to the client prior to the termination of the retainer and any entitlement of the lawyer to seek damages for breach of a fixed-term retainer when it is reasonable to do so in the circumstances of the particular case.[49] This provision does not assist Mr Skagen. As he points out in relation to charge one, he did not in fact act for E because an instructing solicitor was never arranged. His instructions were conditional on Mr Smith instructing him. This did not occur. Mr Skagen therefore had no entitlement to be reimbursed for services reasonably and properly provided to the client prior to the termination of the retainer because no services were provided. Further, the client did not breach the retainer because it was subject to a condition precedent, that Mr Skagen be instructed by a solicitor, which was not fulfilled. Mr Skagen seeks to cast the obligation to fulfil that condition on E by saying that he advised E to find another instructing solicitor. However this was not part of the original contract pursuant to which the invoice was paid. Under that contract Mr Skagen identified Mr Smith as the instructing solicitor and was to put in place arrangements for that to occur with E. As there was no breach of the retainer by E, Mr Skagen suffered no damage as a result.[50] Mr Skagen also takes issue with the Tribunal's description of him as"disingenuous and dishonest" and "disgraceful and dishonourable". He says thisfinding was made without a charge of dishonesty having been brought against him. He says it was made without any notice that an adverse credibility finding would be made against him and as such it breached his right to be heard.[51] The charges brought against Mr Skagen were for "misconduct". The Actdefines misconduct as including conduct that would reasonably be regarded bylawyers of good standing as "disgraceful or dishonourable". Mr Skagen wastherefore on notice that the Tribunal could make this finding. Moreover therespondent's written submissions to the Tribunal described Mr Skagen's conduct as disgraceful or dishonourable and "bordering on cynical and intentionally dishonestoffending." Mr Skagen was therefore on notice that the Tribunal, if it accepted thissubmission, might make an adverse credibility finding against him and he had the opportunity to respond to this submission in his written submissions. His submissionto the Tribunal was that the respondent's submission in this respect was "a shallow artifice". There was no breach of his right to natural justice in this respect.W matter[52] On about 12 May 2011 W contacted Mr Skagen with a view to having Mr Skagen represent him in family issues that were before the court. At that time W was represented by another lawyer but W felt that this lawyer had been unresponsive. Wadvised Mr Skagen that there was a call of the matter in the Registrar's List on 20May 2011. W said he would appreciate it if he could count on Mr Skagen's servicesas time was running out and his existing lawyer was not responding.[53] Mr Skagen replied that he could assist but they would need to agree on his fee and his representation. On 16 May 2011 he forwarded to W by email his terms of engagement, information for clients and his invoice for $6,900. His emailexplained that once he had received payment he would contact Kevin Smith "so that you can instruct him to instruct me". The terms of engagement stated that MrSkagen is pleased to "accept your instructions on the basis set out below". The firstcondition was that Mr Smith will be the instructing solicitor.[54] Mr Skagen received payment that day. On 17 May 2011 he provided an email to W for forwarding to Mr Smith asking him to instruct Mr Skagen and noting that his case was set for a call on 20 May 2011. On 19 May 2011 Mr Smith emailed W confirming that he had instructed Mr Skagen to act on his behalf. Mr Skagen obtained an adjournment of the 20 May 2011 call.[55] A telephone conference took place on 9 June 2011 at which the Court directed that W was to file and serve affidavit evidence concerning relationshipproperty. Mr Skagen emailed W on 21 June 2011. This email advised W that Mr Skagen needed more detailed information from W for an affidavit that covered"requested information" and that W also needed to provide "disclosure to the other side". Mr Skagen did not advise W of the date for providing disclosure nor set atime for when they would discuss matters further. For his part W says he did not know what orders had been made, nor what was required of him and when the next hearing was to occur.[56] Mr Skagen's practicing certificate expired at the end of June 2011. It was notrenewed. Mr Skagen says he did not find out until late June 2011 that it would not be renewed, and he did not find out until late July or August 2011 that this was because he had not paid the $8,000 costs order made by the Tribunal as a result of the first disciplinary matter in Oregon.[57] Mr Skagen says he prepared the affidavit required by the Court but Mr Smith refused to allow anything to be filed. Mr Smith says that sometime around the middle of July 2011 Mr Skagen advised that he was having difficulty meeting the fee required for a practising certificate. Mr Smith said Mr Skagen was obliged to protect his clients and the only way he could do that without a practising certificate was to immediately return all outstanding files to Mr Smith. He received the file for W on 20 July 2011 and saw that a conference was scheduled for the next day.[58] On 20 July 2011 Mr Smith notified the Court and counsel for W's former partner advising that it had come to his attention "in the last few hours" that Mr Skagen's practising certificate had not been renewed and W would need time to instruct other counsel. A telephone conference took place on 21 July 2011. The Judge directed that Mr Smith was to remain on the record until alternative counsel was instructed, W was directed to comply with the 9 June directions by 1 August 2011, the proceedings were adjourned to a conference on 2 August 2011 and W was ordered to pay costs of $800 which W could seek to recover from Mr Skagen.[59] W spoke with Mr Skagen by telephone. Mr Skagen told W he could not paythe $800 nor return the $6,900 because he was "broke". On 28 July 2011 W made acomplaint to the Law Society about Mr Skagen. Mr Skagen was advised by the LawSociety of the complaint by letter dated 8 August 2011. By email dated 26 August 2011 Mr Skagen replied. He said he performed the work until he was no longer able to due to the Law Society refusing to issue him with a practising certificate. He also said he had passed the file on to Mr Smith. On 17 December 2012 the Standards Committee determined to refer the matter for consideration by the Disciplinary Tribunal.[60] Charges six and seven overlapped and were similar to charges two and three. Charge six was that by requesting fees in advance from W, not placing them into a trust account and immediately applying them to his practice account as payment for work not yet undertaken, Mr Skagen breached rule 9.3 of the Conduct and Client Care Rules and regs 9 and 10 of the Regulations. Charge seven was that by failing to place the monies received into a trust account, Mr Skagen breached s 110 of the Act and reg 10 of the Regulations.[61] The Tribunal dealt with these charges together. It found them proven on the same basis as it found charges two and three proven. For the reasons discussed in relation to those charges I consider Mr Skagen did not breach the provisions referred to in those charges.11[62] Charge eight was that, by accepting instructions to act for W, failing to advise W what was required in respect of the discovery order made on 9 June 2011, failing to advise W that he no longer held a practising certificate and could no longer act for him, failing to arrange alternative representation when he was aware he could not appear for W, with the result that a costs award was made against W, Mr Skagen failed to act in a competent and timely manner in breach of rule 3 of the Conduct and Client Care Rules.[63] The Tribunal found this charge proven. Mr Skagen says that the LawSociety's decision not to renew his practising certificate was a breach of his right of freedom of expression, was negligent and unlawful. He contends that this decision was the reason he was prevented from carrying out the work for W in a timely manner.11 Refer [29]-[42] above.[64] To the extent that Mr Skagen challenges the Law Society's decision, thatchallenge is beyond the scope of this appeal (which is concerned with the Tribunal'sdecision on the charges). In any event, whatever the reason for not renewing the practising certificate or providing Mr Skagen with information about that, Mr Skagen was under an obligation to ensure W's interests were protected. He did notdo that.[65] W instructed Mr Skagen because W had regarded his previous counsel to be unresponsive. Mr Skagen accepted W's instruction with that knowledge. The discovery direction was made on 9 June 2011. The information provided to W about that direction was not specific and did not adequately alert W of what was required of him and by when. Mr Skagen was aware in late June 2011 that his practising certificate was not being renewed. He did not inform W of this at any time prior to the 21 July 2011 conference, nor that he would not be able to act for W as a result. He did not inform Mr Smith of this until the middle of July and he did not alert Mr Smith of the outstanding discovery direction nor of the conference scheduled for the next day. Because of Mr Skagen's failings, a costs order was made against W. Iagree with the respondent that in these circumstances the Tribunal's finding that MrSkagen failed to act in a timely and competent manner was soundly based.[66] Charge nine is that by failing to repay W, in respect of the monies advanced and the costs award, Mr Skagen failed to act in a competent and timely manner in breach of rule 3 of the Conduct and Client Care Rules.[67] The Tribunal noted that Mr Skagen admitted failing to repay these sums because he was unable to. The Tribunal considered in these circumstances the charge was proven. I agree. Mr Skagen had received payment for services he was not able to perform. At the time he became aware that he could not perform the services he had carried out some work. He had obtained an adjournment of the 20 May 2011 hearing and he may also have carried out some initial work on the discovery. It is apparent he had not completed the discovery because it had not been finalised with W when Mr Smith learned that Mr Skagen did not have a practising certificate. Mr Skagen ought to have returned the fixed fee paid by W in these circumstances, or at least a substantial portion of it. Mr Skagen ought also to havepaid the costs award as it was his failing that led to the award. Mr Skagen'simpecuniosity provides a reason why he did not do so but it does not excuse the conduct.[68] Charge 10 was that, in charging a fee of $6,900, Mr Skagen breached rule 9 of the Conduct and Client Care Rules and s 7(1)(a)(iv) of the Act because the fee charged was not fair and reasonable for the services provided and the fee was grossly excessive for the legal work carried out by Mr Skagen. This charge was withdrawn at the hearing.Investigation matters[69] Following E's complaint, on 3 August 2011 Mr Hicks was appointed by the respondent. As set out in Mr Hicks report to the respondent dated 23 May 2012, his appointment was made under s 144 of the Act and reg 33 of the Regulations 2008. As also set out in that report, he was appointed to:a) investigate the operation of the barristerial practice of Christopher Knute Skagen, including to identify and report on any unusual circumstances or aspects of the practice;b) investigate the manner in which funds have been deposited and held for clients, in particular:a. whether there had been compliance with section 110 of the Lawyers and Conveyancers Act 2006; andb. the manner in which funds were received and held for [E].[70] Mr Hicks made contact with Mr Skagen on 25 August 2011. At this time Mr Skagen did not have an office or other premises from which he was practising law. A meeting was arranged for 29 August 2011. Mr Hicks asked to inspect MrSkagen's bank statements and client files. Mr Skagen described clientconfidentiality as a "sacred trust". He wanted to discuss this with the Law Societybefore making client records available to Mr Hicks. He was prepared to provide Eand W's client records. He was prepared to provide bank statements only in so far as they showed transactions relating to E and W and he would blank out all other transactions until client confidentiality was resolved.[71] Mr Hicks obtained the bank statements from Westpac Bank pursuant to s 147 of the Act. Mr Hicks noted a number of direct credits and large deposits made between May 2010 and August 2011 which he assumed to be fees. These payments were made into Mr Skagen's personal bank account. Mr Hicks requested that MrSkagen provide the invoices relating to these. Mr Skagen refused to do so on the grounds of client confidentiality. He advised Mr Hicks that the invoices were created before payment was received and normally in advance of work being carried out.[72] The respondent referred W's complaint to Mr Hicks on or about 2 November 2011. On 23 May 2012 Mr Hicks provided his report to the respondent. This reportdiscussed the E and W matters as well as Mr Skagen's failure to cooperate in theinvestigation. This lack of cooperation led to charges eleven and twelve.[73] Section 144 of the Act provides that a Standards Committee may appoint a person to act as an investigator in relation to complaints and matters being inquired into by a Standards Committee. Section 145 provides that the Standards Committee must supply to the person appointed a written instrument of appointment signed by at least two members of the Standards Committee. It further provides that theproduction of the instrument is sufficient proof of that person's authority to act andthat person must, if required, produce the instrument of appointment before exercising any power under s 147. Section 146(1)(a) provides that the investigatormay be appointed to "inquire into the complaint or matter and any matters related to,or arising from, the complaint or matter". Section 146(2)(a) provides that aninvestigator, in enquiring into and reporting on the complaint or matter, may"examine any accounts (including trust accounts) kept by a practitioner".[74] Section 147 provides that, for the purposes of an investigation, an investigator may require a practitioner to (amongst other things):(a) Produce for inspection and allow copies of or extracts to be made of"all books, documents, papers, accounts, or records which are in thepossession or under the control of [the practitioner] and which arereasonably necessary for the purposes of the investigation".12(b) Produce "any trust account records" required to be kept by thepractitioner.13(c) Allow, to such an extent as may reasonably be required in relation tothe investigation "inspection of all records and documents relating tomoney received by the person to whom the complaint or inquiryrelates whether the money has been paid into a private account or a trust account".14[75] Section 271 provides that "Nothing in this Part limits or affects legalprofessional privilege".[76] Regulation 34(b) provides:Every practitioner must, on an investigator's request, produce to theinvestigator any records required by the investigator and assist the investigator to take copies of those records[77] Charge eleven was that, in failing to produce his bank statements to Mr Hicks during the investigation, Mr Skagen breached reg 34(a). Mr Skagen contended that Mr Hicks exceeded his powers of investigation. He said Mr Hicks was informed that all payments were fixed fees and went into his personal account. He contended that Mr Hicks only had authority to investigate trust accounts. The Tribunal held that MrSkagen was wrong to hold this view. It said an investigator's powers under ss 146 and 147 of the Act and reg 34 of the Regulations are wide ranging and extended toall the practitioner's accounts.[78] The Tribunal is correct that the investigator's powers extended beyond trustaccounts. Section 147(2)(a) permits the investigation to examine "any accounts(including trust accounts)". Mr Skagen submits that Mr Hicks exceeded his powers of investigation by seeking records beyond those relating to E and W. However s12 Section 147(a)(i) and (ii).13 Section 147(2)(a)(v).14 Section 147(2)(a)(vi).146(1)(a) provides that an investigator may be appointed in relation to "matters related to, or arising from the complaint". The complaint from E (and the latercomplaint from W) raised issues about how Mr Skagen was obtaining instructions and receiving payment for those instructions and how he was treating the payments in his accounts. The respondent was therefore entitled to appoint Mr Hicks to investigate matters beyond the specific complaints made by E and W and Mr Hicks was authorised by the respondent to investigate those matters.[79] Mr Skagen submits that s 147 is subject to s 173. The latter section provides that a Standards Committee may apply to the Court for a warrant to empower a person to examine the account of any person in any bank and to require the bank to produce any information. The Court may issue the warrant where it is satisfied there is reasonable cause to believe that money entrusted to a practitioner in connection with legal or conveyancing services has been fraudulently or wrongfully paid into that account. Mr Skagen contends that a warrant was required in order for Mr Hicks to obtain the bank account records from the bank.[80] Section 173 does not assist Mr Skagen. The charge is concerned with hisactions in failing to provide the bank records sought by Mr Hicks. Mr Hicks' powerto seek those records from him was pursuant to s 147. That section is not subject to s 173, which is concerned with seeking records from a bank pursuant to a warrant where fraud or wrongful payment is believed to have occurred. The appeal is concerned with the Tribunal's decision on the charges brought against Mr Skagen, not how Mr Hicks obtained records from the bank.[81] Mr Skagen contends that there is no evidence of the instrument of appointment required by s 145 in relation to the investigation into W. An affidavit from the legal standards officer for the Law Society deposes that Mr Hicks'appointment on 3 August 2011 was by way of an instrument of appointment executed by Mr Crotty and Mr Barnett (members of the Standards Committee). It does not appear that Mr Skagen raised this at the time or at any time prior to his submissions on this appeal. In any event, the terms of Mr Hicks' appointment, as set out in Mr Hicks' report, covered the W complaint when it arose without it beingnecessary for there to be any further instrument of appointment.[82] Mr Skagen contends that the producing the bank statements would breachlegal professional privilege and his clients' confidentiality to the extent theyprovided information about clients other than E and W and this provided him with a defence to this charge. However he has not produced evidence of any notation on the statements to show whether they might have contained confidential or privileged information about his clients. The amounts paid to him by clients are not on their face privileged.[83] Mr Skagen relies on B v Auckland District Law Society in support of his submission.15 That decision concerned privileged communications provided to an investigator under predecessor legislation. It did not relate to bank account records and it did not hold that such records were subject to legal professional privilege. The decision therefore does not assist Mr Skagen in respect of this charge.[84] Charge 12 is that, in failing to provide the invoices for the deposits, discovered by Mr Hicks in the bank account records, Mr Skagen breached reg 34(b). Mr Skagen contended that the records requested were subject to privilege. TheTribunal held that the privilege was not Mr Skagen's to claim. It was for the clientsto claim privilege. They had not done so and instead had made complaints.[85] The Tribunal's reasoning is correct in so far as the investigator was seekinginvoices from E and W. However Mr Skagen had indicated he would provide the records relating to E and W. Mr Hicks report dated 23 May 2012 confirms that he did so and that these records included the invoices sent to E and W. The investigator was seeking invoices from other clients and this is what Mr Skagen objected to. The Tribunal made no finding about that.[86] The respondent submits that invoices are not subject to privilege. However the E and W invoices contain a narration of the scope of the work to be carried out on their behalf. It seems likely that the other invoices sought by Mr Hicks would have similarly narrated the scope of the work to be carried out for those clients. It is arguable that the narration would be subject to legal professional privilege. The respondent submits Mr Skagen could have provided the invoices but redacted the15 B v Auckland District Law Society [2003] UKPC 38, [2004] 1 NZLR 326.narration. However there is no evidence that he was asked to do so. Mr Skagen sought an opportunity to explore the question of confidentiality and privilege with the Law Society, but it seems that this was not provided by the Law Society during the investigation. In these circumstances the Tribunal's finding on charge 12 cannot be upheld.NZBORA[87] Mr Skagen contends that his right to natural justice was breached because he was not to permitted to attend the hearing before the Tribunal by telephone conference. The respondent accepts it was open to the Tribunal to consider allowing Mr Skagen to attend the substantive hearing by telephone and the Chair was wrong if she considered that a personal appearance was always required at the substantive hearing.[88] I agree. Regulation 33 of the Lawyers and Conveyancers Act (Disciplinary Tribunal) Regulations 2008 provides that the Tribunal may convene byteleconference and video link for a hearing "other than the substantive hearing of charges or other proceedings". However reg 31 permits the Tribunal or Chair todispense with any matter required by the regulations "if it appears just to do so". Mr Skagen's impecuniosity provided a basis for the discretion to be exercised in hisfavour.[89] That said, Mr Skagen was given the opportunity to have this matter reviewed following the filing of submissions. He did not raise the matter again pursuant to that opportunity. He proceeded on the basis the respondent had proposed. In these circumstances no breach of his right to be heard occurred in this respect.[90] Mr Skagen contends his right to be heard was also breached because the Tribunal proceeded to consider the penalty to be imposed without giving him an opportunity to be heard about that. The respondent notes that Mr Skagen was put on notice in 2013 that the respondent would be seeking that Mr Skagen be struck off the Roll of Barristers and Solicitors of New Zealand. The respondent also submits thatthis matter had been a drawn out and the Act is intended to provide a framework under which complaints are resolved expeditiously.16[91] I understand from the respondent's counsel that the Tribunal does not alwaysconsider the penalty at the substantive hearing. The desirability of expedition did notoverride Mr Skagen's natural justice rights. In my view it was unfair to proceed to penalty without seeking submissions from Ms Skagen on that issue. The Tribunal ought to have adjourned once they had found the misconduct charges proven to give Mr Skagen an opportunity to make submissions on penalty. This would have allowed Mr Skagen an opportunity to reflect on his position in light of the findings and make submissions in light of that reflection.[92] However Mr Skagen had a full opportunity to present evidence and submissions in respect of penalty on this appeal. He has filed detailed medical evidence as well as the decisions in Oregon concerning the disciplinary matters he faced in that jurisdiction. These are the matters he would like to have put before the Tribunal. He also says he would have submitted to the Tribunal that he was not acting dishonestly or disingenuously. Rather he says he was genuinely intending to act within the rules having learnt from his previous experiences and he genuinely considered the records he refused to provide were subject to privilege.[93] In these circumstances the respondent submits that it is open to me to takeinto account Mr Skagen's evidence and submissions and confirm or modify thepenalty imposed or refer the matter back to the Tribunal for reconsideration of the penalty.Penalty[94] I have concluded the Tribunal erred in finding proven charges two, three, six, seven and twelve. I have also concluded the Tribunal was correct in finding proven charges one, four, five, eight, nine and eleven. Although the Tribunal erred in respect of some of the charges, I am satisfied that the essential concerns about MrSkagen's conduct are covered by the charges which were upheld. The matters were16 Lawyers and Conveyancers Act 2006, s 120(2)(b). See also s 3(2)(b).serious. Mr Skagen did not act in a competent and timely manner on the matters for E and W. He sought payment in advance and then refused to repay the money when he could not carry out the instructions on their behalf. He was given a reasonableopportunity to do so by E's new solicitors but was unable to do so. When acomplaint was made he contended he was not required to repay the money. His conduct was poor and fell well below that expected of a barrister. The Tribunal was correct to find that overall his conduct was dishonourable.[95] Although Mr Skagen says he endeavoured to comply with the requirements having learnt from his previous disciplinary experiences, it is apparent he had not. Those matters were not identical to the present, but given that background it was particularly important that he conduct his practice properly and professionally in accordance with the requirements in this country.[96] The purpose of the Act includes maintaining public confidence in theprovision of legal services and protecting consumers of legal services. Mr Skagen'smedical and financial difficulties cannot be given much weight in view of these purposes. Even at the hearing on the appeal Mr Skagen maintained he had acted properly. He did say he regrets not having repaid the money to E and W but this was because he believes he would not then have had to face these charges. He maintained his view that he was entitled to retain the money under the terms of the retainers with E and W.[97] In these circumstances I am unable to accept Mr Skagen's submission that heshould have been subject to a penalty less than being struck off the Roll. I am satisfied that the penalties imposed on Mr Skagen by the Tribunal were appropriate.Result[98] The appeal is allowed in relation to the Tribunal's findings on charges two,three, six, seven and twelve. Those findings are quashed and Mr Skagen is dismissed on those charges. The appeal is dismissed in respect of the charges one,four, five, eight, nine and eleven. The Tribunal's findings on those charges areupheld. The appeal against penalty is dismissed.[99] I make orders suppressing from publication the names and all identifying particulars of the complainants in the disciplinary proceedings subject to further order of the Court.Mallon J