HALL V WELLINGTON STANDARDS COMMITTEE (NO. 2) HC WN CIV-2012-404-2608

HALL V WELLINGTON STANDARDS COMMITTEE (NO. 2) HC WN CIV-2012-404-2608 [18 April 2013]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYCIV-2012-404-2608[2013] NZHC 798UNDER the Lawyers and Conveyancers Act 2006AND UNDER the Law Practitioners Act 1982IN THE MATTER OF an appeal against a decision of the NewZealand Lawyers and ConveyancersDisciplinary TribunalBETWEEN DONNA MARIA TAI TOKERAU DURIEHALLAppellantAND WELLINGTON STANDARDSCOMMITTEE (NO. 2)RespondentAND NGATI TUWHARETOA WAI 575STEERING COMMITTEEIntervenerHearing: 11 and 12 February 2013Counsel: H A Cull QC and S J Arcus for the AppellantG L Turkington for the RespondentK S Feint for the IntervenerJudgment: 18 April 2013JUDGMENT OF WOODHOUSE JThis judgment was delivered by me on 18 April 2013 at 11:00 a.m. pursuant to r 11.5 of the High Court Rules 1985.Registrar/Deputy RegistrarCounsel: Ms H A Cull QC, Barrister, Wellington Mr G L Turkington, Barrister, Wellington Ms K S Feint, Barrister, Wellington Instructing Solicitors: Mr G McAsey, McAsey Gill, Solicitors, Lower Hutt Lawyers Complaints Service, New Zealand Law Society, Wellington Mr R Drummond, Gibson Sheat, Solicitors, Wellington[1] At a hearing before a Lawyers Disciplinary Tribunal the appellant, Ms Hall, applied for an order that a charge against her be dismissed on the grounds that there was no case to answer; that the evidence before the Tribunal did not establish a prima facie case against her. The Tribunal held that the test to be applied indetermining the application was the test applied on an application to strike out a civilproceeding on the grounds that the statement of claim does not disclose a reasonablyarguable cause of action. Applying that test the Tribunal dismissed Ms Hall'sapplication to dismiss the charge.1[2] Ms Hall appeals against the Tribunal's decision on the grounds that the wrongtest was applied and that, in a number of respects, the Tribunal failed properly to weigh the evidence.The primary issues[3] The primary issues that arise on this appeal are:(a) Issue 1: Did the Tribunal apply the wrong test?(b) Issue 2: If so, should this Court determine whether the charge is established by the affidavit evidence, or should the matter be sent back to a disciplinary tribunal for that purpose?[4] Ms Hall also appeals on two other matters. These raise discrete issues and are discussed after considering issues 1 and 2.The hearing before the Tribunal[5] The essence of the charge against Ms Hall is that she acted as a lawyer for more than one party to a transaction in circumstances where she should not have done so. It is alleged, in terms of the charge, that this occurred "with negligence or incompetence in her professional capacity, and the negligence or incompetence1 Wellington Standards Committee v Hall [2012] NZLCDT 7.has been of such a degree as to reflect on her fitness to practice or as to bring her profession into disrepute".[6] Ms Hall denies the charge and has vigorously contested it from the outset.[7] There was a hearing before the Tribunal which commenced on 2 April 2012.This was to determine Ms Hall's application that the charge be dismissed on thegrounds that there was no case to answer. Before the hearing commenced the following documents had been filed:(a) Four affidavits obtained and filed by the respondent Standards Committee. These affidavits contained the entire evidence relied on by the Standards Committee to seek to establish the charge.(b) Eight affidavits filed for Ms Hall and relied on by her in answer to the charge.(c) Written submissions of Mr Turkington for the Standards Committee and Ms Cull QC for Ms Hall. Both submissions addressed the question whether the evidence contained in the affidavits was sufficient to establish the charge. The submissions of Ms Cull QC for Ms Hall explicitly stated that the evidence relied on by the Standards Committee did not establish a case for Ms Hall to answer.[8] The course of the hearing is summarised in an earlier judgment of this Court as follows:2[9] Mr Turkington, counsel for the WSC took the Tribunal through his submissions and the evidence relied upon by the WSC. At approximately 3.45pm Ms Cull QC, counsel for Ms Hall commenced her submissions. Those submissions took most of the following day. By 4.10pm on 3 April 2012 the Tribunal had heard all submissions on whether or not there was a case for Ms Hall to answer. The Tribunal adjourned for ten minutes, then resumed its sitting at 4.20pm when it said:2 Hall v Wellington Standards Committee [2012] NZHC 1723, [2012] NZAR 790. This is a judgmenton an application by the Standards Committee to strike out Ms Hall's appeal on the grounds that MsHall had no right of appeal in respect of the matters under appeal. Collins J dismissed the StandardsCommittee's application.The Tribunal does find that there is a case for the practitioner to answer. We will in due course provide reasons for that decision but we are mindful of the time constraints and we would prefer to press on with the matter at this stage. I thought perhaps if we could have a brief discussion with counsel about where that takes us to in terms of the hearing and the timing.[10] Discussions then took place about whether or not Ms Hall would be giving evidence. Ms Cull asked the Tribunal to give in writing its reasons for concluding that there was a case for Ms Hall to answer and reserved the option of Ms Hall giving evidence once she had an opportunity to considerthe Tribunal's reasons for its determination.The Tribunal's decision[9] The Tribunal recorded at the outset that its decision addressed Ms Hall'ssubmission that there was no case to answer and that the charge should be dismissed. It then said:[3] This is of course not a criminal case, the Tribunal considers it is an application to strike out a case on the basis that it discloses no reasonably arguable cause of action. The principles to be applied in such a case are summarised by the Court of Appeal in Attorney-General v Prince & Gardner3 and endorsed by the Supreme Court in Couch v Attorney-General.4Significantly an application to strike on this basis must proceed only in those cases where the cause of action is clearly untenable and indeed in Couch, Elias CJ and Anderson J held at para 33 that:"It is inappropriate to strike out a claim summarily unless the courtcan be certain that it cannot succeed."[10] I will refer to this as the "strike out test". There was no discussion in thedecision as to why the strike out test should be applied beyond what is contained in [3].[11] The Tribunal referred to the applicable rule relating to conflict of interest for lawyers and judicial comment on conflict of interest.5 It then noted Ms Hall'scontentions that there was no conflict, or none that had not been properly managed, and the contrary contentions for the Standards Committee.3 [1998] 1 NZLR 262 (CA).4 [2008] 3 NZLR 725 (SC).5 At [6]-[7] the Tribunal referred to Farrington v Rowe McBride and Partners [1985] 1 NZLR 83(CA) at 90 and Taylor v Schofield Peterson [1999] 3 NZLR 434 (HC) at 440.[12] The Tribunal then said, in summary:(a) It had resolved to focus on whether a conflict existed.(b) The matters raised by Ms Hall amounted to positive defences and were not appropriately part of a strike out application.6(c) There was no evidence from Ms Hall.(d) Ms Hall did not wish to cross-examine any of the deponents for the Standards Committee.[13] When noting the evidence before it, the Tribunal said:[15] The Tribunal while assisted by the affidavits, believed that it should look for contemporaneous records of the conduct of the parties. In that regard it is greatly assisted by the bundles of documents prepared by the Society.[14] Following this the Tribunal set out in considerable detail the contents of minutes of meetings of one of the parties for whom Ms Hall was said to have been acting, and the content of some letters. There was a summary of some subsequent events. All of this covered approximately 10 pages of the 16 ½ page decision (in its original format).[15] In the remainder of its decision the Tribunal discussed the evidence it had setout. It commenced by directing itself as follows:[41] The Tribunal is conscious that it should exercise its power of strike out sparingly and only in a situation, where there is no evidence which could support the charge. It is intended that the threshold in this regard is of necessity pegged as a low evidential threshold.[16] The Tribunal applied this test to only some of the elements of the charge and to only some of the evidence that was before it. It then concluded:6 At [11].[45] Whether these matters are sufficient for a finding of guilt is of course a matter for another day. The Tribunal makes clear, that it has reached nofinal decision in this regard and specifically notes Ms Cull's advice from the practitioner that no final decision has been made as to whether the practitioner will herself give evidence.[46] All that the Tribunal is required to do at this stage is to decide whether or not there is evidence which prima facie could support the charge brought by the Society. For the reasons given above, the Tribunal does so find, it is a matter for another day as to whether this evidence, together with any evidence which the practitioner may elect to give or call meets the higher burden of proving the charge to the requisite standard.[47] It is the decision of the Tribunal therefore, that the practitioner'sapplication to have the charge dismissed on the basis that there is no case to answer fails.Discussion: Issue 1: Did the Tribunal apply the wrong test?[17] Mr Turkington submitted that the Tribunal reached the correct decision. However, it is fair to say that he did not argue to any extent that the strike out test was appropriately applied in response to a submission that there was no case to answer. That was a responsible approach. I am in no doubt that the Tribunal did apply the wrong test. I am also satisfied that, in consequence, the issues raised by Ms Hall were not properly addressed.[18] There is no good reason why a practitioner facing a disciplinary charge should not be entitled to apply to have the charge dismissed on the grounds that the evidence relied on by the body bringing the charge is insufficient to establish it.7[19] Such an application is the equivalent of a submission in a civil proceeding that there is no case to answer. It is the broad equivalent of an application in a criminal proceeding under s 347 of the Crimes Act 1961 to dismiss the charge at the conclusion of the evidence for the prosecution on the grounds that a prima face case has not been established.7 Malfanti v The Legal Professional Disciplinary Tribunal [1993] NSWCA 171 (unreported, 23August 1993). This case was cited by Collins J in the earlier judgment in the present proceeding citedabove at n 2.[20] The procedure to be adopted on such applications differs. In particular, in a civil proceeding, the defendant (or other party bringing the no case application)would usually be required to elect whether to call evidence. It may be that in thiscase the Tribunal should have required Ms Hall to elect whether she wished toadduce any further evidence, including her own evidence, before hearing theargument.[21] The point of immediate relevance is that a submission that there is no case to answer directed, as in this case, to all of the evidence relied on by the party bringing the charge, and with all the evidence before the Tribunal, is a long way removed from a submission that a statement of claim does not disclose a reasonably arguable cause of action. The latter is concerned with an issue of law: do the matters of fact alleged in a statement of claim, which are assumed for the purpose to be true, give rise to a cause of action recognised in law? In a disciplinary proceeding the equivalent question would be whether the charge is one which constitutes a recognised form of professional misconduct. But Ms Hall plainly was not arguing that the charge as formulated was not a recognised form of professional misconduct.[22] The Tribunal misdirected itself. It applied a test for which the threshold is too low to decide whether a prima facie case is established and a test which does not address the correct issues. As a result the Tribunal failed to weigh all of the evidence to determine whether it was sufficient to establish all of the elements of the particular charge. These latter omissions were expressly acknowledged by the Tribunal itself in respect of much of the evidence and in respect of essential elements of the charge.[23] The result is that a determination Ms Hall was entitled to have made was not made. The question then is: what is to be done? This is the subject of the next section.Discussion: Issue 2: Should this Court determine whether there is a case to answer?[24] Ms Cull submitted that this Court has jurisdiction to determine whether the charge has been made out having regard to all of the affidavit evidence. I will referto this as a substantive determination or a determination on the merits. Ms Cull further submitted that the proper course would be for this Court to make a determination on the merits.[25] I was not attracted to the proposition that this Court should embark on an assessment of the merits with Ms Hall then adducing further evidence if the initial finding was against her. This was addressed by Ms Cull's obtaining instructions in the course of the hearing. Ms Cull advised that Ms Hall did not seek to reserve a right in this Court to adduce further evidence if a decision on the merits was made. It would therefore be a final decision subject only to any rights of appeal.[26] I am satisfied that this Court does have jurisdiction to determine the application that there was no case to answer. This follows from s 253(4) of the Lawyers and Conveyancers Act 2006 (the Act) which provides that on an appeal the High Court may confirm, reverse or modify the order or decision appealed against. It may also be that this Court has jurisdiction to make a final determination, either dismissing the charge or finding it proved, with all of the evidence effectively nowbeing before the Court because of Ms Hall's acknowledgement that she did not wishto reserve a right in this Court to call further evidence. However, I do not need to make a determination on the point.[27] There are reasonable arguments in favour of the course urged on me by Ms Cull. Section 120(2)(b) of the Act anticipates that complaints will be processed and resolved expeditiously. However, the complaints leading to the charge were made in February and May 2009. At the date of the hearing before the Tribunal the most recent events which are the subject of the charge had occurred some five years before. A final disposal of the charge has been further delayed, not just by Ms Hall'sappeal, but also by the unsuccessful application by the Standards Committee to strike out the appeal.[28] It will usually be preferable that, where there is a disciplinary tribunal, the original decision on matters of substance relating to professional conduct and discipline are made by the tribunal as a specialist body constituted for the purpose. In this case, however, there are two countervailing factors. One is that the subjectmatter of the complaint, in a technical sense, is something judges are familiar. The second factor is that all of the evidence is contained in affidavits, and documentsattached to the affidavits, with no oral evidence on cross-examination. This Court istherefore not at a disadvantage in weighing the evidence compared with the Tribunal.[29] I have nevertheless decided that the proper course is to decline Ms Hall'sapplication that this Court determine the merit of the complaint, and to decline the application to determine whether there is a case to answer or, which is essentially the same thing, whether the Standards Committee made out a prima facie case. My reasons are as follows.[30] Section 253 of the Act provides that both the practitioner and the Standards Committee have a general right of appeal from any order or decision of a disciplinary tribunal. Under s 254 there is a right of appeal from the High Court to the Court of Appeal, but only on a question of law. There has been no correct decision by the Tribunal on this case on any issue of substantive merit. As a result, a decision by this Court as to whether the charge is established, as now urged by Ms Hall, or whether there is a case to answer, will mean that rights of appeal will be lost.It may be that Ms Hall's request for this Court to make the ultimate decision as towhether the charge is established also constituted an effective waiver of the right of general appeal that she would have had if there had been an adverse decision by the Tribunal on the ultimate issue. But this is by no means clear. The important right of general appeal should not be lost inadvertently. In any event, and equally importantly, the Standards Committee cannot be deprived of its right of general appeal from a decision on the merits.[31] Loss of the right of general appeal that would occur if this Court determines the matter on the merits is sufficient reason to send the case back to a disciplinary tribunal. There are other reasons. Because they are important they should be noted.[32] A disciplinary tribunal is the body designated by the legislature as the appropriate body to make the original determination on the merits. When hearing proceedings, a tribunal is required to have no fewer than five members. At least one member must be a lay person. Lay people may constitute up to half of the membersof a Disciplinary Tribunal. A disciplinary tribunal may admit matters in evidence that are not admissible in a court and is free to set its own procedure.8 This provides considerable flexibility.[33] Commenting on Australian provisions, Ysaiah Ross argues that the flexible procedure for a disciplinary tribunal means it is sui genris – it is neither strictly adversarial nor inquisitorial.9 This reflects the fact that the purpose of disciplinary proceedings is protection of the public interest as well as discipline of the practitioner.10 Ross suggests that the flexible procedure also justifies an expectation on the part of a disciplinary tribunal that a practitioner will not be obstructive.11Much, if not all, of this will be lost, for the practitioner as well as the profession and the public, if this Court determines the no case to answer issue, let alone the ultimate issue as to whether the charge is established. The original decision, on either issue, would be that of the High Court.[34] A further point of consequence is that it is a disciplinary tribunal which has been designated as the body which should make the original decision on penalty if a charge is established.12 The Act contemplates that the tribunal will be assessing penalty in the light of all of the evidence which will have been weighed by the tribunal itself. This would not occur if this Court were to find that the charge is established.[35] For these reasons I am satisfied that the proceeding should go back to a disciplinary tribunal for determination. In coming to this conclusion I have not overlooked the cases cited by Ms Hall involving appeals against decisions on applications to dismiss a charge on the grounds that there was no case to answer.13Some of these cases involve breaches of director's duties and are really not on point,8 Sections 239, 250 and 252 of the Act.9 Ross Ethics in law: Lawyers' responsibility and accountability in Australia (5th ed, LexisNexis,Australia, 2010) at [7.89].10 Section 3 of the Act, setting out the purposes of the Act.11 Above n 9, at [7.89]-[7.92].12 Section 242 and ss 243-249 of the Act.13 Byrne v Baker [1964] VR 443; Mudge v O'Grady [1965] VR 65; May v O'Sullivan [1955] ALR671; Re A Solicitor [1932] St R Qd 33; Malfanti v Legal Professional Disciplinary Tribunal [1993]NSWCA 171 (unreported, 23 August 1993); Re Veron, ex parte Law Society of New South Wales[1966] 84 WN (pt 1) (NSW) 136; Lucas v Millman & Solicitors Disciplinary Tribunal [2002] EWHC2470 (Admin), [2003] 1 WLR 271; Re Evatt (1976) 67 SR (NSW) 236; Re a barrister and solicitor,ex parte Attorney General (1972) 20 FLR 234.particularly having regard to the nature of disciplinary proceedings. The other cases support aspects of the arguments on appeal for Ms Hall, but they turn on their particular statutory context and, of course, on their own facts. None is persuasive authority to the effect that, in the present statutory context, the High Court should determine the question whether there is a case to answer or the ultimate question as to whether the charge is established. It is also relevant to record that, in my judgment, these cases do not support a proposition that a disciplinary tribunal would be bound to consider the merit of a charge without requiring all of the evidence for the practitioner to be put before the Tribunal.The two discrete issues on appeal.[36] The Tribunal granted leave for a third party to intervene and gave that party an opportunity to argue that an affidavit filed on behalf of Ms Hall contained information in respect of which the third party was entitled to claim interest. TheTribunal upheld the third party's contention and struck out two paragraphs and, in effect, an annexure referred to in one of the paragraphs.[37] Ms Hall appealed against the decision to grant leave to intervene and appealed against the decision to strike out the two paragraphs.[38] Having considered the submissions on this point from Ms Cull and from Ms Feint, on behalf of the intervener, I ruled against Ms Hall on both points and gave my reasons.[39] As a consequence of this decision the following is to be done with the affidavit of Peter Clarke sworn on 29 March 2012, and any copies of that affidavit on the High Court or Tribunal files:(a) Paragraphs 12 and 14 of the affidavit are to be erased.(b) Annexure "PC4" to that affidavit is to be removed from it andshredded.[40] Ms Hall also appealed against an apparent determination of the Tribunal, by implication, that pages missing from an agreement for sale and purchase had beenremoved by Ms Hall.14[41] Mr Turkington accepted that there is no evidence to justify any imputation against Ms Hall in respect of pages that may be missing from the agreement for saleand purchase. Consequently, any finding to that effect is set aside.Directions on referral back to a disciplinary tribunal and observations for further proceedings[42] I consider that it is appropriate that a new Tribunal be constituted; that is to say, a Tribunal with different members from those on the original Tribunal. This is because the original Tribunal, although it purported to apply the strike out test, did appear to make findings on the merits, or at least reach provisional conclusions on the merits, against the practitioner. One example is the apparent finding that Ms Hall removed pages from an agreement for sale and purchase. More broadly, the tenor ofmuch of the decision is adverse to Ms Hall on the merits, notwithstanding the testthat the Tribunal said it was applying.[43] It will be for the newly constituted Tribunal to determine matters of procedure. This applies, in particular, if Ms Hall again submits that there is no case to answer.[44] The procedure adopted by the Tribunal was unusual and it caused problems. It heard argument on the matter over two days, then ruled there was a case to answer with reasons to follow without first putting Ms Hall to an election as to whether she wished to adduce further evidence. When the reasons were issued Ms Hall was then given the opportunity to adduce further evidence. I am not making a ruling on this appeal that Ms Hall should have been put to an election, although the general practice with disciplinary proceedings of this nature seems to be that both sides should put in all their evidence, by affidavit, before there is a hearing on the merits.14 The notice of appeal refers to an observation made by the chair or a member of the Tribunalrecorded in the transcript at p 84 and to the decision at [38].[45] The practical problem with the Tribunal's approach is that it heard argumenton the merits for almost two days, but at the end of this, and delivery of the reserved judgment, the proceeding had not in substance advanced beyond the point it was at at the outset of the hearing. To an extent it had moved back a step because Ms Hall was given the opportunity to adduce further evidence.[46] If the new Tribunal decides that it should determine an application that there is no case to answer without putting Ms Hall to an election to adduce all evidence she wishes to rely on, including any evidence from herself, the test to be applied is the following: whether all of the evidence before the Tribunal at that point is sufficient to establish the charge, on the balance of probabilities so that, if there is no further evidence, there would be a finding against the practitioner on the charge. In other words, the question would be whether on the evidence as it stands Ms Hall would be found guilty of the charge.Result[47] The appeal is allowed in respect of the test applied by the Tribunal on MsHall's application to dismiss the charge on the grounds that there was no case toanswer. The Tribunal's decision that there is a case to answer is set aside. The question whether there is a case to answer is left open.[48] The proceeding is referred back to a New Zealand Lawyers and Conveyancers Disciplinary Tribunal, the chair and members of which are not to be the chair and members of the original Tribunal.[49] The appeal on the intervener issue and privilege is dismissed.[50] The appeal on the determination relating to the pages missing from theagreement for sale and purchase is allowed and all findings in that regard are setaside.[51] Ms Hall has leave to apply for costs. If the parties are unable to reach agreement in that regard, a memorandum on behalf of Ms Hall should be filed andserved within one month of the date of this judgment and a memorandum on behalf of the Standards Committee is to be filed and served within three weeks after receipt of the memorandum for Ms Hall.____________________________________Woodhouse J