KEENE v LEGAL COMPLAINTS REVIEW OFFICER [2021] NZCA 338

KEENE v LEGAL COMPLAINTS REVIEW OFFICER [2021] NZCA 338 [26 July 2021]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA541/2020[2021] NZCA 338BETWEEN GREGORY ALEXANDER KEENEAppellantAND LEGAL COMPLAINTS REVIEWOFFICERFirst RespondentSTEVEN LAU, JESSE LIU AND DINAHQIUSecond RespondentsNEW ZEALAND LAW SOCIETYThird RespondentCourt: Clifford, Thomas and Muir JJCounsel: Appellant in personA M Powell and L Dittrich for First RespondentSecond Respondents in personM J Hodge for Third RespondentJudgment:(On the papers)26 July 2021 at 10.30 amJUDGMENT OF THE COURTThe appeal is dismissed.____________________________________________________________________REASONS OF THE COURT(Given by Thomas J)Introduction[1] Gregory Keene and the second respondents have been involved in protractedlitigation concerning not only Mr Keene's attempts to recover legal fees from them,but also their complaints to the New Zealand Law Society (NZLS) andLegal Complaints Review Officer (LCRO) about Mr Keene's alleged professionalmisconduct. The latter resulted in judicial review proceedings which were finallyresolved in this Court.1[2] Mr Keene is now appealing a decision of Downs J in the High Court declininghis application for a costs order against the second respondents which he madefollowing his success in this Court.2 The first and third respondents abide.BackgroundFactual background[3] We need to go back to 2005, when Jesse Liu, the son of Mr Lau and Ms Qiu,was badly assaulted at his school. All three of them are the second respondents.They sought legal advice from a solicitor, Derek Cutting, who in 2007 briefedMr Keene as counsel.[4] Mr Keene prepared an opinion, engaged in correspondence and discussionsin an attempt to settle, and then filed proceedings in the District Court againstthe school. Mr Cutting and Mr Keene sought to persuade the second respondents toaccept the school's $20,000 settlement offer.[5] In December 2008, the second respondents wrote to Mr Keene terminatingtheir instructions, indicating that they considered his performance unsatisfactory andfees unreasonable. By that that point, they owed fees of $15,125.82 to Mr Cutting forMr Keene's services.1 Keene v Legal Complaints Review Officer [2019] NZCA 559.2 Keene v Legal Complaints Review Officer [2020] NZHC 2261 [Costs decision].[6] On 24 March 2009, Mr Cutting and Mr Keene filed proceedings inthe District Court seeking the balance of Mr Keene's unpaid fee. Mr Keene acted ascounsel in those proceedings.[7] The second respondents complained to the NZLS about a number of aspects ofMr Keene's services (primarily at that stage the reasonableness of Mr Keene's fees).The NZLS held that Mr Keene's fees were reasonable. The second respondents thenapplied to the LCRO for a review. That application was dismissed in October 2010.[8] In late 2010, Mr Cutting obtained judgment by default in the District Court forMr Keene's outstanding fees, which the second respondents unsuccessfully applied toset aside. They appealed to the High Court. In July 2011, Williams J set aside thedefault judgment, and observed that Mr Keene should not have appeared either beforehim or in the District Court,3 and had breached r 13.5.3 of the Rules of Conduct andClient Care in doing so.4[9] In May 2012, the second respondents complained again about Mr Keene to theNZLS, contending that Mr Keene should not have acted as counsel in the claim for hisfee. In August 2013, the Standards Committee of NZLS found Mr Keene's conductunsatisfactory and concluded that Mr Keene had breached both rr 13.5 and 13.5.3 ofthe Rules of Conduct and Client Care by appearing as counsel in the District andHigh Courts to recover his fee. For convenience, we set out rr 13.5 and 13.5.3 atthis point:13.5 A lawyer engaged in litigation for a client must maintain his or herindependence at all times.13.5.3 A lawyer must not act in a proceeding if the conduct or adviceof the lawyer or of another member of the lawyer's practice isin issue in the matter before the court. This rule does notapply where the lawyer is acting for himself or herself, or forthe member of the practice whose actions are in issue.3 Liu v Cutting HC Auckland CIV-2011-404-695, 14 July 2011 at [16]–[23]. The claim forMr Keene's fees later succeeded in the District Court but the fee was reduced from $15,125.82to $10,500. Mr Lau unsuccessfully appealed to the High Court.4 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008.[10] Both parties reviewed this decision to the LCRO, who, in November 2017,upheld the r 13.5 determination, but quashed the 13.5.3 finding.[11] Both parties then applied to the High Court for judicial review of theLCRO's decision. In July 2018, Downs J set aside the LCRO's finding ofunsatisfactory conduct in respect of r 13.5, but accepted Mr Lau's argument that therehad been a contravention of r 13.5.3.5 Therefore, the High Court restored theStandards Committee's finding of unsatisfactory conduct based on a breach of r 13.5.3.[12] Mr Keene then appealed. In November 2019, this Court allowed Mr Keene'sappeal, concluding that the High Court erred both in setting aside the LCROdetermination in relation to r 13.5.3 and in restoring the Standards Committee findingof unsatisfactory conduct based on a breach of that rule.6 Thus, Mr Keene was foundnot to have breached either rule.[13] Importantly for the purposes of this case, this Court declined to make anyorder as to costs, stating that an order for costs was not appropriate, as Mr Keenerepresented himself.7[14] Following this Court's decision, Mr Keene filed a memorandum raisingthe question of costs. In a minute dated 24 April 2020, Goddard J said:[2] The question of costs in this Court or in the High Court could only berevisited by this Court following the delivery of our judgment if the Courtwere to recall that judgment. It would be open to Mr Keene to apply for arecall of the Court's judgment on the basis that the judgment did not addressa claim by him for costs from the second respondents. However the difficultythat any such application would face is that Mr Keene did not seek any ordersin relation to costs in this Court or in the High Court in his notice of appeal;he did not seek costs against the second respondents (or any other party) in hiswritten submissions; and when the President raised the question of costs at theconclusion of the oral hearing Mr Keene did not seek an award of costs againstthe second respondents. So this is not an issue that Mr Keene raised butthe Court failed to address: rather, the issue of an award of costs against thesecond respondents was never raised by Mr Keene in this Court.Before making any application for recall Mr Keene should give careful5 Keene v Legal Complaints Review Officer [2018] NZHC 1869, [2018] NZAR 1361 [Substantivedecision].6 Keene v Legal Complaints Review Officer, above n 1.7 At [95].consideration to whether that would be warranted in terms of the criteria setout in Horowhenua County v Nash (No 2).[3] We observe that our judgment does not preclude Mr Keene fromseeking costs in the High Court in light of our judgment.(Footnote omitted.)[15] Following this, Mr Keene applied to the High Court for costs. On 1 September2020, Downs J dismissed the application in a short, pithy decision, relevantly saying:8[1] Mr Keene successfully appealed a decision I made 27 July 2018.Mr Keene now seeks costs.[2] There were two aspects to my decision. I found for Mr Keene inrelation to one, and against him in relation to the other. I said this about costsat the end of the decision:Mr Keene wished to be heard on costs. I invite his memorandum ofnot more than five pages by 5 pm, Monday 13 August 2018. Mr Laumay reply with a memorandum of not more than five pages by 5 pm,Monday 20 August 2018. Each is to be served by the same dates.For completeness, my preliminary view is costs should lie where theyfall. The position is very much like it was below — the adversedeterminations have been swapped.[3] Mr Keene was then represented by Mr Illingworth QC. Neitherresponded.[6] Mr Keene contends he should now have costs because of his successin the Court of Appeal. I acknowledge this could favour belated costs inthis Court. However, I exercise my discretion to decline costs. Mr Keenemade a considered decision not to seek costs in this Court two years ago,despite an available timetable. The lay litigants on the other side of the casewould have assumed — quite reasonably — the issue of costs was no longerlive, especially as they did not participate in the Court of Appeal hearing.[16] Mr Keene has now appealed that decision as of right.9SubmissionsThe appellant[17] Mr Keene's submissions essentially consisted of three arguments.8 Costs decision, above n 2 (footnotes omitted).9 Senior Courts Act 2016, s 56(1)(a).[18] First, that Downs J attached too much importance to the fact that Mr Keenehad decided not to seek costs in 2018. According to Mr Keene, this was an irrelevantand incorrect consideration as the starting point is that the winning party should beawarded costs. In this case, the fact that there was no clear winner from the 2018High Court decision meant that Mr Keene chose not to seek costs at that time. It washis success in this Court which influenced Mr Keene's decision to apply for costs.[19] Mr Keene says Downs J incorrectly assumed that, because he did not apply forcosts at the conclusion of the hearing in the High Court, the second respondents wouldhave had an expectation that there would not be a later application following thehearing in this Court. Furthermore, Downs J erred when he said the secondrespondents "would have assumed — quite reasonably — the issue of costs was nolonger live, especially as they did not participate in the Court of Appeal hearing",10because they did in fact file written submissions in this Court, one day prior to hearing.[20] Therefore, according to Mr Keene, Downs J had elevated his opinion as to whatthe expectations of the second respondents would have been in relation to theirexposure to costs, as a factor to be considered above all other important factors.[21] Secondly, Mr Keene submitted that Downs J erred in considering otherimportant factors when making his decision. These included:(a) The principle that the successful party in litigation will normallyreceive an award of costs against the unsuccessful party.(b) The conduct of the parties can generally be taken into account whenassessing the liability for and quantum of costs. The actions ofthe second respondents (by taking part in the High Court case whenthey could have abided, as the first and third respondents did, andrepeating accusations of dishonesty to the Judge) should result in costsconsequences against them.10 Costs decision, above n 2, at [6].(c) The second respondents continued to play an active role in theHigh Court proceedings to the point that they were effectivelycross-applying to have one of the decisions of the LCRO (concerningr 13.5.3) reversed, and that, but for their actions, Mr Keene'sapplication for judicial review would have been completely successful,rather than leading to him having to appeal to this Court. The secondrespondents should not have been permitted to interfere with theprocess to the extent that they did, free of costs consequences.[22] Thirdly, Mr Keene submitted that throughout the proceedings, the secondrespondents levelled a number of allegations of dishonesty against him (such as thathe had lied to the NZLS Standards Committee, and gave false information to the NZLScosts assessor). According to Mr Keene, these unfounded allegations should justifyan award of costs in the High Court against the second respondents. While ordinarilya court might make greater allowances for lay litigants, Mr Keene submitted that thelarge number of allegations, many of which attacked his integrity but were rejected bythe District Court, should have caused Downs J to award costs in his favour.[23] Following the filing of the respondents' submissions, Mr Keene filedsubmissions in reply. He focused on two points:(a) Mr Lau had downplayed his role in the High Court proceedings beforeDowns J and that, while his oral submissions were brief, he filedsubstantial written material to the point where Downs J treated thesituation as one where Mr Lau was cross-applying for judicial reviewof the LCRO's decision finding that r 13.5.3 was not breached; and(b) Mr Lau has continued to make attacks on Mr Keene's integrity,suggesting that he broke undertakings and lied to the Court, whichMr Keene suggests may have influenced Downs J's decision-making indetermining the judicial review, which in turn may have influencedthe subsequent application for costs.The second respondents[24] The second respondents' submissions can be broken down into sevenarguments:(a) They played an inactive or limited role: Mr Lau did not file anapplication for judicial review in the High Court, and did not requestthat Court treat his submissions on r 13.5.3 as a cross-application.He filed submissions as directed by the Court, and made very brief oralsubmissions. It was likely that, even if Mr Lau had not raised the issue,the High Court would have addressed r 13.5.3, because Williams J hadpreviously considered it. They did not take an active role in the hearingin this Court and were excused from participating.(b) Mr Keene had chosen not to claim costs in the High Court.(c) Ordinary members of the public should not suffer an order for costs asa result of exercising their rights: by appealing the LCRO decision tothe High Court and this Court, Mr Keene was essentially challengingthe decisions of the disciplinary bodies. The second respondents say,as ordinary members of the public exercising their rights of complaintto the NZLS, it would be unjust for them to suffer an award of costsbecause the High Court in part, and ultimately this Court in full,quashed the disciplinary body's decision.(d) Mr Keene's conduct contributed to the unfavourable decisions in theHigh Court in a material way: the second respondents refer to thisCourt's observations that Mr Keene's conduct was in issue when hecontinued to act as counsel in the litigation concerning his fee recovery.(e) The exceptional circumstances of this case: the second respondentsnoted that, before Mr Keene appealed the r 13.5.3 finding in theHigh Court, he had essentially failed in the High Court proceedings(as the Court ruled that he had breached that rule) and was actually theunsuccessful party. After the High Court decision was appealed, therespondents did not participate in the hearing in this Court, justifyingthe Court's decision to not make any order for costs.(f) Mr Keene had failed to comply with the timetabling orders in theHigh Court.(g) Relevant legal principles and cases supported the second respondents'position.11Analysis[25] The approach to be taken on an appeal against a costs decision is well settled.In the recent decision of this Court in Kinney v Pardington, Gilbert J explained itas follows:12[1] Questions of costs are ultimately a matter of discretion. The exerciseoften requires assessment of a wide range of factors. The overall objective isto achieve an outcome that best meets the interests of justice in the given casein accordance with any applicable costs rules and consistent with establishedprinciples. The trial judge is uniquely placed to make this assessment. It iswell-settled that an appellate court should not interfere with a costs awardunless satisfied that the judge acted on a wrong principle, failed to takeaccount of some relevant matter, factored in the irrelevant or wasplainly wrong. This is why appeals against costs awards seldom succeed.[26] The underlying principle in costs decisions is that costs follow the event —the party who lost should pay the costs of the party who won.13 However, in complexor lengthy litigation, or in disputes that have carried on throughout a number ofproceedings (and a number of years), it is sometimes more difficult to ascertain the"winning party".14[27] Mr Keene had partial success in the High Court but did not seek costs at thetime, despite being invited to do so in accordance with a Court-ordered timetable.11 The second respondents referred to the case of Lagolago v Wellington Standards Committee 2[2018] NZHC 1102 where a lawyer charged with negligence successfully appealed her charges tothe High Court, but was refused costs by the High Court and this Court. It was submitted that thiscase was analogous here.12 Kinney v Pardington [2021] NZCA 174 (footnotes omitted). This statement was affirmed inMiddeldorp v Avondale Jockey Club Inc [2021] NZCA 238 at [3].13 Weaver v Auckland Council [2017] NZCA 330 at [20].14 Matthew Casey (ed) Sim's Court Practice (online ed, LexisNexis) at HCR14.2.5(a).Had Mr Keene done so, his appeal to this Court could have included the High Courtcosts decision, as Goddard J observed in his minute set out at [14] above.[28] We reject Mr Keene's contention that Downs J considered r 13.5.3 only at thesecond respondents' instigation. While Downs J's judgment records that Mr Lausought judicial review of the quashed determination in relation to r 13.5.3,15 it wasin any event inevitable that the High Court would consider it, given the decisionunder review.[29] We reiterate that an award of costs is ultimately discretionary.16 The secondrespondents were lay litigants caught up in an arcane discussion on the Rules ofConduct and Client Care which involved protracted litigation. Downs J was, in ourview, correct to consider they deserved finality and that, in the circumstances,Mr Keene lost his opportunity to be awarded costs when he failed to apply for themwhen he had the chance. The Judge was well placed to determine where the interestsof justice lay. Mr Keene has not shown that the Judge acted on a wrong principle,failed to take into account a relevant matter, took into account an irrelevant matter, orwas plainly wrong. Indeed, we are satisfied his decision was an appropriate exerciseof his discretion.Result[30] The appeal is dismissed.Solicitors:Crown Law Office, Wellington for First RespondentMeredith Connell, Auckland for Third Respondent15 Substantive decision, above n 5, at [2].16 However, we acknowledged that this discretion is not unfettered, as it is qualified by the specificcosts rules and principles set out in rr 14.2–14.10. See Manakau Golf Club Inc v Shoye VentureLtd [2012] NZSC 109, [2013] 1 NZLR 305 at [7].