KEENE v LEGAL COMPLAINTS REVIEW OFFICER [2019] NZCA 559

KEENE v LEGAL COMPLAINTS REVIEW OFFICER [2019] NZCA 559 [14 November 2019]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA494/2018[2019] NZCA 559BETWEEN GREGORY ALEXANDER KEENEAppellantAND LEGAL COMPLAINTS REVIEWOFFICERFirst RespondentAND STEVEN LAU, JESSE LIU AND DINAHQIUSecond RespondentsHearing: 3 October 2019Court: Kós P, Miller and Goddard JJCounsel: Appellant in personNo appearance for First RespondentNo appearance for Second RespondentsM J Hodge for New Zealand Law Society as IntervenerJudgment: 14 November 2019 at 3.00 pmJUDGMENT OF THE COURTA The appeal is allowed.B The order of the High Court setting aside the determination of the LegalComplaints Review Officer in relation to r 13.5.3 is set aside.C There is no order as to costs.____________________________________________________________________REASONS OF THE COURT(Given by Goddard J)Table of contentsPara noIntroduction and summary [1]The legal framework for the complaints [10]Rules in relation to independence of lawyers [11]Framework for complaints [19]Background to these proceedings [27]Mr Keene's retainer [27]Mr Keene seeks payment of outstanding fees [28]The second respondents' first complaint to NZLS [30]Mr Keene seeks judgment by default [32]The second respondents appeal the default judgment to the High Court [36]The second respondents' second complaint to NZLS [41]Outcome of fee recovery proceedings [45]The LCRO decision [46]Application for judicial review of LCRO decision [52]High Court decision [54]The parties before the Court on this appeal [58]Mr Keene's submissions on appeal [62]Second respondents' submissions on appeal [65]NZLS submissions as intervener [66]Analysis [71]Was Mr Keene acting for himself in the fee recovery proceedings? [71]Was Mr Keene's conduct in issue in the matter before the Court? [80]Relief granted in the High Court [84]Result [93]Introduction and summary[1] Mr Keene, the appellant, is a barrister. He was instructed to representthe second respondents in connection with a civil dispute. The rules governingpractice by barristers sole meant that he could not accept direct instructions fromthe second respondents.1 Rather, the second respondents instructed their solicitor,Mr Derek Cutting, to act for them in connection with the dispute and Mr Cutting inturn instructed Mr Keene as their barrister.[2] The second respondents became dissatisfied with Mr Keene's performance astheir barrister, and terminated his retainer. The second respondents had been paying1 This prohibition, known as the "intervention rule", has subsequently been partially relaxed: seeLawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, ch 14 and inparticular rr 14.4–14.12.Mr Keene's fees by instalments. But at the date his retainer came to an end there wasan amount unpaid in respect of the fees he had invoiced. The second respondentsmade it clear in their correspondence with Mr Keene that they were unhappy with theservices he had provided and with the fees he had charged, and that they did not acceptthat they should have to pay the amounts invoiced by him.[3] The issues before the Court on this appeal arise out of the recovery proceedingsthat were taken in respect of Mr Keene's outstanding fees. The orthodox view is thatbarristers cannot sue to recover their fees; rather, their fees can be included asa disbursement in the instructing solicitor's bill, and recovery proceedings can bebrought by the solicitor as plaintiff.2 So proceedings were issued against the secondrespondents by Mr Cutting, in which he claimed the outstanding fees payable toMr Keene (fee recovery proceedings). Although Mr Cutting was the named plaintiff,he had no personal economic stake in the outcome of the fee recovery proceedings:from a practical perspective, the proceedings were brought for the benefit of (and atthe expense of) Mr Keene. Mr Keene decided to act as counsel in those proceedings,to avoid the cost of paying another barrister to do the work involved.[4] The second respondents made a number of complaints about Mr Keene'sconduct to the New Zealand Law Society (NZLS). A Standards Committee ofthe NZLS made a determination to take no further action in relation to a number ofthose complaints. But it found that by acting as counsel in the fee recoveryproceedings Mr Keene had breached certain rules in the Lawyers and ConveyancersAct (Lawyers: Conduct and Client Care) Rules 2008 (Rules) relating to the way inwhich lawyers conduct litigation. The Standards Committee made a determinationunder s 152 of the Lawyers and Conveyancers Act 2006 (Act) that this amounted tounsatisfactory conduct on the part of Mr Keene.3 The relevant rules were:4(a) Rule 13.5, which requires a lawyer engaged in litigation for a client tomaintain his or her independence; and2 Atkinson v Pengelly [1995] 3 NZLR 104 (HC).3 Determination by Auckland Standards Committee 3 5936, 20 August 2013.4 The Standards Committee also dealt with a number of other complaints that are not relevant forpresent purposes.(b) Rule 13.5.3, which provides that a lawyer must not act in a proceedingif the conduct or advice of that lawyer is in issue in the matter beforethe court. Rule 13.5.3 does not apply where the lawyer is acting forthemselves.[5] Mr Keene sought a review of these findings by the Legal Complaints ReviewOfficer (LCRO). The LCRO upheld the finding of the Standards Committee inrelation to r 13.5, but reversed the finding of unsatisfactory conduct based ona contravention of r 13.5.3.5[6] Mr Keene then applied to the High Court for judicial review of the LCROdetermination in relation to r 13.5. That application was successful: the LCRO findingof unsatisfactory conduct in respect of r 13.5 was set aside. But the second respondentsargued, and Downs J accepted, that there had been a contravention of r 13.5.3.The High Court set aside the LCRO determination in relation to r 13.5.3, and restoredthe Standards Committee's finding of unsatisfactory conduct based on a breach of thatrule.6[7] Mr Keene now appeals from that High Court decision.[8] We have concluded that the High Court erred in setting aside the LCROdetermination in relation to r 13.5.3, and restoring the Standards Committee findingof unsatisfactory conduct based on a breach of that rule. The appeal is allowed.[9] In order to explain why we consider that the High Court should not have setaside the LCRO determination in relation to r 13.5.3, it is necessary to set outthe background to the protracted complaint process in a little more detail. Before wedo so, however, we set out the legal framework under which the complaints againstMr Keene were made and determined.5 Keene v Liu LCRO 276/2013, 23 November 2017 [LCRO decision].6 Keene v Legal Complaints Review Officer [2018] NZHC 1869, [2018] NZAR 1361 [High Courtdecision].The legal framework for the complaints[10] Lawyers who provide legal services to clients must comply withthe obligations set out in the Act and in the Rules. The Act also establishes processesfor receiving and determining complaints about the conduct of lawyers, includingcomplaints that lawyers have breached the Rules.7Rules in relation to independence of lawyers[11] Section 4 of the Act provides that one of the fundamental obligations ofa lawyer is to be independent in providing regulated services to clients.That fundamental obligation is reflected in a number of provisions of the Rules.Chapter 5 of the Rules is headed "Independence". Rule 5 provides:5 A lawyer must be independent and free from compromising influencesor loyalties when providing services to his or her clients.[12] Chapter 5 goes on to deal with conflicting interests and duties, and certain othermatters that compromise the independence of a lawyer acting for a client.[13] Chapter 13 is headed "Lawyers as officers of court". The focus ofthe provisions of chapter 13 is on the obligations owed to the court by a lawyer actingin litigation. The Rules identify some key elements of that duty, and how it relates tothe obligation of the lawyer to their client. Rule 13 provides:13 The overriding duty of a lawyer acting in litigation is to the courtconcerned. Subject to this, the lawyer has a duty to act in the bestinterests of his or her client without regard for the personal interestsof the lawyer.[14] Rule 13.5 appears under the sub-heading "Independence in litigation".It provides:13.5 A lawyer engaged in litigation for a client must maintain his or herindependence at all times.13.5.1 A lawyer must not act in a proceeding if the lawyer may berequired to give evidence of a contentious nature (whether inperson or by affidavit) in the matter.7 Lawyers and Conveyancers Act 2006, pt 7.13.5.2 If, after a lawyer has commenced acting in a proceeding, itbecomes apparent that the lawyer or a member of the lawyer'spractice is to give evidence of a contentious nature, the lawyermust immediately inform the court and, unless the courtdirects otherwise, cease acting.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 not applywhere the lawyer is acting for himself or herself, or for themember of the practice whose actions are in issue.13.5.4 A lawyer must not make submissions or express views to acourt on any material evidence or material issue in a case interms that convey or appear to convey the lawyer's personalopinion on the merits of that evidence or issue.[15] Rule 13.5 does not apply to a lawyer representing themselves in litigation. Sofor example a lawyer who practises as a barrister and solicitor can bring proceedingsagainst a former client seeking to recover unpaid fees. That lawyer can act forthemselves in those proceedings. No concern arises about independence so far as aclient is concerned: there is no separate client. And the court does not expectthe lawyer to be independent in the manner required by r 13.5. The court understandsthat the lawyer's personal interests are engaged, and adjusts its expectationsaccordingly.[16] However the orthodox view is that a lawyer who practises as a barrister solecannot sue for their own fees.8 In Atkinson v Pengelly Tipping J summarisedthe position as follows:9Throughout my time in the profession I have never heard it seriouslysuggested that barristers sole either have or should have the right to sue theirinstructing solicitors or their lay clients for their fees. While the English rulethat they cannot do so might be thought in some quarters to be commerciallyanomalous, the rule is of considerable antiquity and can fairly be said to be afundamental feature of the relationship between a barrister and his clients,both lay and professional. It is now firmly established by the LawPractitioners Act 1982 that a solicitor may include counsel's fees as adisbursement in his bill to the lay client. If the bill is not paid the solicitormay sue for and recover the whole bill including counsel's fees 8 Atkinson v Pengelly, above n 2.9 At 111.[17] In Lai v Chamberlains, the Supreme Court explained the origin of thisapproach to the relationship between barristers and those who instruct them:10[98] In medieval times, barristers, as we now know them, were liable fornegligence and, so it seems, were able to take action to recover their fees.During the sixteenth century there was a revival of interest in many facets oflife in ancient Greece and Rome. Included in this renaissance was the studyof Roman law. It was a well-established tenet of Roman law that advocateshad no contractual right to sue for their fees. In that respect they had nocontract with their clients and what they received for their services was in thenature of an honorarium.[99] The importation of this Roman law approach into the Englishcommon law resulted in the medieval view being overtaken by the view thatas there was no contract between barrister and lay client, or between barristerand instructing solicitor for that matter, there was no basis for any action forbreach of any duty to take care. Until the twentieth century there was norecognised general cause of action for negligence, outside contract, in relationto services rendered by a professional person. The absence of any contractualbasis for a claim against a barrister, and the corresponding inability ofa barrister to sue for outstanding fees, was generally seen as the basis uponwhich barristers' so-called immunity was based.(Footnotes omitted.)[18] The rule that a barrister cannot sue to recover their fee has been criticised asanomalous, in particular following the 2015 amendments to the Rules that modifiedthe intervention rule to permit barristers to accept instructions direct from clients incertain circumstances.11 But that is not an issue we are concerned with on this appeal.Framework for complaints[19] Any person can complain to the NZLS about the conduct of a lawyer, whetheror not they were the lawyer's client at the relevant time.12 A complaint must bereferred to the relevant Lawyers Standards Committee.13 The Standards Committee10 Lai v Chamberlains [2006] NZSC 70, [2007] 2 NZLR 7.11 See Lawyers and Conveyancers (Lawyers: Conduct and Client Care) Rules, chapter 14, and inparticular rr 14.5–14.12. For criticism of the prohibition on barristers suing for their own fees seeDuncan Webb, Kathryn Dalziel and Kerry Cook Ethics, Professional Responsibility andthe Lawyer (3rd ed, LexisNexis, Wellington, 2016) at 417; Andrew Beck "Litigation section"[2014] NZLJ 257 at 260; Matthew Palmer (ed) Professional Responsibility in New Zealand(online ed, LexisNexis) at [230,035.5]; and Richard Scragg The Ethical Lawyer: Legal Ethics andProfessional Responsibility (Thomson Reuters, Wellington, 2018) at [14.3].12 Lawyers and Conveyancers Act, s 132.13 Section 135.can decide to take a range of steps in relation to a complaint, including inquiring intoit;14 directing the parties to explore a resolution of the complaint by negotiation,conciliation or mediation;15 or deciding to take no action on the complaint.16[20] Section 138 identifies a wide range of factors that may lead to a decision totake no (further) action on a complaint. It provides:138 Decision to take no action on complaint(1) A Standards Committee may, in its discretion, decide to take no actionor, as the case may require, no further action, on any complaint if, inthe opinion of the Standards Committee,—(a) the length of time that has elapsed between the date whenthe subject matter of the complaint arose and the date whenthe complaint was made is such that an investigation ofthe complaint is no longer practicable or desirable; or(b) the subject matter of the complaint is trivial; or(c) the complaint is frivolous or vexatious or is not made in goodfaith; or(d) the person alleged to be aggrieved does not desire that actionbe taken or, as the case may be, continued; or(e) the complainant does not have sufficient personal interest inthe subject matter of the complaint; or(f) there is in all the circumstances an adequate remedy or rightof appeal, other than the right to petition the House ofRepresentatives or to make a complaint to an Ombudsman,that it would be reasonable for the person aggrieved toexercise.(2) Despite anything in subsection (1), a Standards Committee may, in itsdiscretion, decide not to take any further action on a complaint if, inthe course of the investigation of the complaint, it appears to theStandards Committee that, having regard to all the circumstances ofthe case, any further action is unnecessary or inappropriate.14 Section 137.15 Section 143.16 Section 138.[21] If the Standards Committee proceeds to inquire into a complaint and conducta hearing in relation to a complaint, it has the power to make one or more ofthe determinations described in s 152(2):152 Power of Standards Committee to determine complaint or matter(2) The determinations that the Standards Committee may make are asfollows:(a) a determination that the complaint or matter, or any issueinvolved in the complaint or matter, be considered bythe Disciplinary Tribunal:(b) a determination that there has been unsatisfactory conduct onthe part of—(i) a practitioner or former practitioner; or(ii) an incorporated firm or former incorporated firm; or(iii) an employee or former employee of a practitioner orincorporated firm:(c) a determination that the Standards Committee take no furtheraction with regard to the complaint or matter or any issueinvolved in the complaint or matter.[22] Section 152(3) provides that nothing in s 152 limits the power of a StandardsCommittee to make a decision under s 138 with regard to a complaint.[23] Section 12 defines the term "unsatisfactory conduct" to include conductconsisting of a contravention of the Act, or of any regulations or rules made underthe Act that apply to the lawyer (not being a contravention that amounts to misconductunder s 7). Thus where a Standards Committee considers that there has been a breachof the Rules, it is open to the Committee to make a finding of unsatisfactory conductunder s 152(2)(b). However that is not an inevitable outcome — in a particular casea Standards Committee may consider that although there is evidence of conduct thatmay amount to a breach, the appropriate determination is to take no further action.17Put another way, not every breach of the Rules will warrant disciplinary action.The Standards Committee must exercise judgement about the appropriate17 See for example DO v Law Firm ABC & Body Corporate LCRO 10/2018, 30 August 2019.determination to make having regard to a number of factors, including the factorsidentified in s 138.[24] The Act provides that certain people, including the complainant and the lawyerwho is the subject of the complaint, are entitled to apply for a review by the LCRO ofa determination by a Standards Committee.18 A review by the LCRO is:19 neither a judicial review nor an appeal. Those seeking review ofa Committee determination are entitled to a review based on the LCRO's ownopinion rather than on deference to the view of the Committee. A review bythe LCRO is informal, inquisitorial and robust. It involves the LCRO comingto his or her own view of the fairness of the substance and process ofa Committee's determination.[25] The LCRO can direct a Standards Committee to reconsider a decision,20 ordetermine the complaint themselves under s 211, which provides:211 Powers exercisable on review(1) The Legal Complaints Review Officer may, on a review undersection 193, do any 1 or more of the following things:(a) confirm, modify, or reverse any decision of a StandardsCommittee, including any determination, requirement, ororder made, or direction given, by the Standards Committee(or by any person on its behalf or with its authority):(b) exercise any of the powers that could have been exercised bythe Standards Committee in the proceedings in whichthe decision was made or the powers were exercised or couldhave been exercised.(2) Section 189 applies, with all necessary modifications, to any ordermade or power exercised under this section by the Legal ComplaintsReview Officer as if that order had been made or that power had beenexercised by a Standards Committee.(3) Nothing in this section limits section 209, section 210, section 212, orsection 215.[26] The LCRO is required to exercise their own judgement about the appropriatedetermination to make in respect of a complaint, having regard to all relevantcircumstances.18 Lawyers and Conveyancers Act, ss 193 and 194.19 Deliu v Connell [2016] NZHC 361, [2016] NZAR 475 at [2].20 Lawyers and Conveyancers Act, s 209(1)(a).Background to these proceedingsMr Keene's retainer[27] In 2007 Mr Keene was instructed by Mr Cutting to act for Mr Lau, Ms Qiu andtheir son Jesse Liu in connection with an assault on Mr Liu that took place at the schoolhe was attending. The professional relationship deteriorated: the second respondentsbecame concerned about delay in resolving the dispute and legal costs, among othermatters. On 19 December 2008 the second respondents wrote to Mr Keene toterminate his retainer. Their letter made it clear they considered his fees unreasonable.Mr Keene seeks payment of outstanding fees[28] Mr Keene wrote to the second respondents on a number of occasions seekingpayment of the fees he had invoiced. The fees remained unpaid.[29] The fee recovery proceedings were filed on 24 March 2009. The statement ofclaim named Mr Cutting as plaintiff and the second respondents as defendants.It claimed an amount representing the balance of Mr Keene's unpaid fee: a little over$15,000. The claim identified Mr Cutting as the solicitor on the record, acting on hisown behalf, and named Mr Keene as counsel. The claim referred to the anticipatedcomplaint to the Auckland District Law Society about Mr Keene's services and fees,and asserted there was no reasonable basis for it. The claim recorded that the secondrespondents had paid all Mr Cutting's bills for services provided by him: the claimrelated solely to Mr Keene's fees as their barrister.The second respondents' first complaint to NZLS[30] The second respondents made a complaint to the NZLS on 14 April 2009.The complaint alleged that Mr Keene's services were unsatisfactory and his feesunreasonable. The complaint about Mr Keene's fees meant that the claim for recoveryof those fees could not be pursued until the complaint had been finally determined.2121 Lawyers and Conveyancers Act, s 161.[31] On 21 December 2009 a costs assessor recommended that Mr Keene's bills ofcosts were fair and reasonable in all the circumstances. On 18 February 2010 an NZLSStandards Committee advised it would take no further action on the secondrespondents' complaints about Mr Keene's fees (among other matters). The secondrespondents appealed to the LCRO. On 1 October 2010, the LCRO confirmedthe Standards Committee's finding.22Mr Keene seeks judgment by default[32] On 14 October 2010 Mr Keene wrote to the Registrar of the District Courtseeking judgment by default on the basis the claim had been served on 2 April 2009and the second respondents had not taken steps to defend it. A default judgment wasissued on 18 October 2010.23[33] On 15 November 2010 the second respondents (who at this stage wererepresenting themselves) applied to set aside the default judgment. Their applicationsaid, among other things, that the claim was "highly disputed".[34] Mr Keene filed a notice of opposition to the application, and an affidavit swornby him attaching correspondence between himself and the second respondents.The second respondents then filed an application for an order that Mr Keene "ceaseacting in the proceedings". Their application said Mr Keene had been their lawyerand they wished to "clarify facts". It described the proceedings as "contentious".The application referred to rr 13.5 and rr 13.5.1–13.5.4 of the Rules. Mr Keene fileda notice of opposition to that application, saying that he and Mr Cutting were both ineffect acting for themselves, not for a client, to recover fees owing by former clients.The fact that they are lawyers "is really incidental. They are in the same position aslitigants in person". Mr Keene subsequently filed a further affidavit sworn by himattaching the report of the Law Society costs assessor and a copy of his 14 October2010 letter to the District Court Registrar.22 Liu v Keene LCRO 44/2010, 1 October 2010.23 Cutting v Liu DC Auckland CIV-2009-004-678, 18 October 2010.[35] The applications by the second respondents to set aside the default judgmentand to preclude Mr Keene from acting in the proceedings were heard together on20 January 2011. Judge M E Sharp issued a direction on 19 January 2011 saying thatthere was no reason why Mr Keene could not appear as counsel and witness as he wasin effect acting for himself, and the evidence he was giving was not of a contentiousnature. The Judge reiterated these points in her judgment delivered orally on20 January 2011.24 She dismissed the application to set aside the default judgment.25The second respondents appeal the default judgment to the High Court[36] The second respondents appealed to the High Court in relation to the dismissalof the application to set aside the default judgment, and the refusal to make an orderpreventing Mr Keene from acting as counsel.[37] On 27 June 2011 Mr Keene filed submissions in the High Court. He saidthe second respondents' complaint in relation to fees had been dismissed by the LawSociety, and there was no basis to preclude him from acting. He also submitted thatr 13.5.3 did not preclude his appearance as he was "acting for himself". Mr Keeneappeared as counsel at the hearing of the appeal in the High Court on 6 July 2011.[38] Williams J allowed the appeal on the basis that the period enabling defaultjudgment to be entered had not expired.26 The Judge expressed the view thatthe combined effect of Atkinson v Pengelly and r 13.5.3 was that Mr Keene ought notto have appeared as counsel in either the District Court or the High Court:27[16] The question under this heading is whether Mr Keene was allowed toappear on this proceeding either in the District Court or this Court. I think thecombined effect of Atkinson v Pengelly and r 13.5.3 of the Rules of Conductand Client Care (RCCC) is that Mr Keene should not have been allowed toappear in either court. Pengelly stands for the intervention rule that precludesa barrister from suing for his or her own fees. There are, I accept, moves afootto abolish that rule. I neither express nor have an opinion in that debate butuntil abolition occurs, Pengelly remains good law.[17] Mr Keene is not of course in breach of that rule in this proceedingbecause he is technically appearing for Mr Cutting not for himself, even24 Cutting v Liu DC Auckland CIV-2009-004-678, 20 January 2011.25 At [26].26 Liu v Cutting (2011) 20 PRNZ 806 (HC).27 Atkinson v Pengelly, above n 2.though the fee Mr Cutting sues for is entirely Mr Keene's. That is notthe problem.[18] Rule 13.5.3 of the RCCC provides as follows:A lawyer must not act in a proceeding if the conduct or advice of thelawyer or of another member of the lawyer's practice is in issue in thematter before the court. This rule does not apply where the lawyer isacting for himself or herself, or for the member of the practice whoseactions are in issue.[19] The first proposition is that Mr Keene's conduct is squarely in issuein this appeal — both as to the quality of the work he did when instructed, andas to the fact that he appeared in the District Court to procure the defaultjudgment and in this Court to defend it. Mr Keene says his conduct is not atissue because his fee for work has been upheld "finally and conclusively" bythe LCRO. He argued it is no longer open to the appellants to contestthe substance of his work or the bill itself. I do not think that submission canbe correct technically because it will always be open to this Court to correcterrors of law committed by entities exercising statutory powers. In this case,the appellants argue that Mr Keene's performance fell below the standardrequired by the Lawyers and Conveyancers Act. They say for example thathe withheld documents from them and told them he had not. Whatever theirrights and wrongs, they are clearly allegations relating Mr Keene's conduct.[20] Even if the foregoing is wrong, it is clear in my view that by appearingin support of the application for default judgment, and for the respondent inthis appeal, in circumstances where his appearance is specifically objected to,as a ground of opposition and appeal, Mr Keene engaged in conduct now atissue in this appeal in accordance with the first sentence in r 13.5.3. In short,I am clear that appearing in support of this proceeding amounts to "conduct in the matter before the court" and it is obviously in issue.[21] Mr Keene argued that while that might be the case in terms of the strictwording of the rule, its spirit is not engaged. I am not quite sure I understandthe point being made, but in any event the words appear to me to be reasonablyclear, and must be applied.[22] Mr Keene is therefore caught by the primary rule in [r] 13.5.3 unlesshe can fit within its exception. That is only, as Judge Sharp correctly noted, ifhe is acting for himself. Judge Sharp said he effectively was. The problemwith that conclusion is that it offends the rule in Pengelly. Mr Keene is notallowed to act for himself so cannot, in my view, bring himself within theexception to this rule.[23] I am not sure whether that problem is enough on its own to allowthe appeal. I need not express an opinion on that given my conclusion on latermatters. But it must be relevant in my overall assessment of the appeal.(Footnotes omitted.)[39] Mr Keene (on behalf of Mr Cutting) sought leave to appeal to the Court ofAppeal from the 2011 High Court decision on a number of questions of law concerningthe ability of Mr Keene to act as counsel in the proceedings. Leave was declined byWilliams J on the basis that the primary ground on which the appeal from the DistrictCourt decision had been allowed related to the calculation of the period for entry ofjudgment by default. So, the Judge said, the issues that Mr Keene sought to raise "donot challenge the determinative factor in my decision".28[40] Mr Keene subsequently applied to the District Court for leave to continue toappear as counsel on Mr Cutting's claim in relation to Mr Keene's fee. Leave wasdeclined.29 An appeal to the High Court was unsuccessful.30The second respondents' second complaint to NZLS[41] On 22 May 2012 the second respondents made a further complaint to the NZLSabout Mr Keene. This complaint included a contention that Mr Keene should not haveacted as counsel in the fee recovery proceedings.[42] As noted above, the Standards Committee made a finding of unsatisfactoryconduct under s 152 in relation to breaches of rr 13.5 and 13.5.3. The StandardsCommittee considered that Mr Keene had breached rr 13.5 and 13.5.3 by appearing ascounsel in the District Court and High Court in the fee recovery proceedings:3171. The Committee took note of what had taken place in court in terms ofMr Keene appearing in the matter, reflected inthe comments/directions/minutes of the various Judges involved inthe various proceedings. The Committee concluded that, whatever thefinal outcome was in court regarding the issues, seen overallMr Keene should have known that it was inappropriate that hecontinued to act as counsel in the matter, particularly oncethe proceedings reached the High Court where an appearance inperson was required.72. The Committee considered that it was unsatisfactory for Mr Keene totry to rely on very technical arguments to get around what appearedon the face of it to be inappropriate in the circumstances.Outcome73. On the basis of its deliberations, the Committee considered thatMr Keene had contravened rr 13.5 and 13.5.3 of the RCCC.Accordingly, in respect of this aspect of the complaint, the Committee28 Liu v Cutting HC Auckland CIV-2011-404-695, 6 October 2011 at [4].29 Cutting v Liu DC Auckland CIV-2009-004-678, 1 November 2013.30 Cutting v Liu [2014] NZHC 1063, [2014] 3 NZLR 224.31 Determination by Auckland Standards Committee 3, above n 3.made a determination that there had been unsatisfactory conduct onthe part of Mr Keene in terms of s 12(c) of the Act, pursuant tos 152(2)(b) of the Act.[43] The Standards Committee upheld some additional complaints againstMr Keene, and rejected a number of other complaints.[44] Both Mr Keene and the second respondents sought a review by the LCRO ofthe Standards Committee decision. As noted above, the LCRO upheld the r 13.5determination, but reversed the r 13.5.3 finding.32 The LCRO decision is described inmore detail below.Outcome of fee recovery proceedings[45] The claim for Mr Keene's fee was largely successful in the District Court.The District Court Judge reduced the fee from $15,125.82 to $10,500. The secondrespondents appealed to the High Court. That appeal was dismissed.33The LCRO decision[46] The LCRO found that Mr Keene had breached r 13.5 because he had appearedas counsel for Mr Cutting, and Mr Cutting's action was for the balance of Mr Keene'sfee:34[30] It is fundamental to the proper conduct of litigation that counsel actingis as independent and free from personal interests as possible. AlthoughMr Keene was acting for Mr Cutting, the objective of the litigation was torecover Mr Keene's fee from the complainants. Mr Keene therefore cannotsay he acted without regard to his personal interests. The fact that he hada personal interest in the litigation, undermined what should have been a moreor less unassailable presumption of independence on the part of counsel.[47] The LCRO then went on to consider whether Mr Keene had breached r 13.5.3.32 LCRO decision, above n 5, at [111].33 Liu v Cutting [2018] NZHC 33.34 LCRO decision, above n 5.[48] The LCRO noted that Mr Keene:35 was not acting for himself. He was acting for Mr Cutting, albeit infurtherance of his own personal interests. Mr Keene therefore could not availhimself of the exception to r 13.5.3.[49] On that basis, the key question that the LCRO needed to determine waswhether Mr Keene's conduct was in issue in the matter before the Court.[50] The LCRO focused on Mr Keene's involvement as counsel in the periodleading up to, and at, the hearing of the appeal in the High Court in 2011.She considered it was not clear Mr Keene's conduct was in issue at that stage ofthe proceedings. Her conclusions in relation to r 13.5.3 were as follows:[53] It is not entirely clear from the materials available on review thatr 13.5.3 was engaged before the appeal, or that any conduct on Mr Keene'spart after the appeal was determined contravened r 13.5.3, when conduct ofMr Cutting's proceeding was handed to other counsel.[54] While there certainly were problems with Mr Keene acting, I am notpersuaded that his conduct warrants a determination of unsatisfactory conductbased on a contravention of r 13.5.3. That determination is reversed.[51] The LCRO went on to deal with a number of other issues raised by the secondrespondents' complaints, and by the review applications before her. She summarisedher findings as follows:[97] After carefully considering all of the materials available on review,and having heard from the parties, there is a basis for a determination thatthere has been unsatisfactory conduct on the part of Mr Keene fora contravention of r 13.5. Mr Keene acted for Mr Cutting in litigation in whichMr Keene had a personal interest, he is unable to demonstrate that he beganfrom a neutral position, and therefore cannot show that he maintained hisindependence in that litigation.[98] A disciplinary response to the balance of the complainants' complaintsis not necessary or appropriate.35 At [35].Application for judicial review of LCRO decision[52] Mr Keene applied to the High Court for judicial review of the decision ofthe LCRO in relation to r 13.5, on the basis that the LCRO had erred in law in findingthat there had been a breach of r 13.5.[53] The second respondents did not make a formal application for judicial reviewof the LCRO decision in relation to r 13.5.3. That issue was not raised in the pleadingsthey filed in relation to the application for judicial review. But shortly beforethe hearing of the judicial review proceedings they filed submissions whichchallenged the correctness of that aspect of the LCRO's decision. Downs J issueda Minute indicating that he was willing to hear the challenge to the r 13.5.3 decision.In effect, the Judge proceeded as if the second respondents had applied for judicialreview in relation to that aspect of the LCRO decision.36High Court decision[54] Mr Keene's judicial review application was successful. The Judge found thatMr Keene had not breached r 13.5 merely by acting in proceedings in which recoveryof his fees was sought.37 The LCRO had erred in law by proceeding on the basis thatthe mere fact that Mr Keene had a financial interest in the outcome of the litigationmeant that he had breached r 13.5.38[55] The Judge then turned to the argument in relation to r 13.5.3. The Judge heldthat the LCRO had erred in law because in the wider context of the litigation,Mr Keene's advice and conduct were in issue.39 The basis on which the secondrespondents sought to oppose the claim was that Mr Keene's services had beenunsatisfactory and his fee excessive.40 It was artificial and inappropriate to focussolely on the application to set aside the default judgment, ignoring the wider contextof the litigation.4136 High Court decision, above n 6, at [2] and n 4.37 At [37].38 At [37].39 At [42].40 At [44].41 At [39]–[49].[56] Counsel for Mr Keene submitted that if the Judge considered that the LCROhad erred in law in relation to r 13.5.3, that issue should be remitted to the LCRO.The Judge did not accept that argument:[51] Mr Illingworth submitted if I reached this conclusion, I should remitthe r 13.5.3 determination to the review officer. Remission is common injudicial review, but not invariable. Delay and cost enter the mix. Substitutionof the Court's view for that of the decision maker is permissible whenthe outcome could not truly be in doubt.[52] I decline to remit. No further evidence could be adduced. The caseis old. Remission would cause yet more delay, and place additional pressureon an apparently overburdened Legal Complaints Review Officer. Relatedlitigation is now seemingly over Most significantly, the facts discloseobvious infraction of r 13.5.3. Mr Keene should not have appeared onthe claim because his conduct was in issue from the outset. And by the timeof the appeal to Williams J, that conduct was central. The High Court said soback in 2011.(Footnotes omitted.)[57] The Judge quashed the determinations of the LCRO in relation to both r 13.5and r 13.5.3.42 The result was that the determination of the Standards Committee inrelation to r 13.5.3 was restored, as was the Standards Committee's unsatisfactoryconduct determination based on a breach of that rule, and the fine and costs orderimposed by that Standards Committee.43The parties before the Court on this appeal[58] Mr Keene appealed to this Court in relation to the High Court decision to quashthe LCRO determination in relation to r 13.5.3, and restore the Standards Committee'sfinding of unsatisfactory conduct and consequential orders.[59] The LCRO, who was named as first respondent, abided the decision ofthis Court and took no part in the proceedings.[60] The second respondents did not wish to take an active role in the appeal beforethis Court. The Court excused them from participating in the appeal. However theysought, and were granted, permission to file brief written submissions.42 At [53].43 At [53].[61] The NZLS, which appeared as an intervener in the High Court, was grantedintervener status in this appeal and was directed by the Court to act in a contradictorrole. We record our gratitude to the NZLS for its assistance.Mr Keene's submissions on appeal[62] Mr Keene's written submissions had as their main focus an argument thatr 13.5.3 did not apply to his conduct up to and including the time of his appearancebefore the High Court in connection with the setting aside of the default judgment,because his conduct was not in issue. He argued that the issues raised bythe application to set aside the default judgment were technical issues relating tothe timeframe for seeking default judgment, and whether the District Court couldrevisit the reasonableness of his fees in circumstances where those fees had beenupheld by the costs assessor. Mr Keene accepted that his conduct would be in issue ifthe default judgment was set aside, and if it was open to the District Court to considerthe second respondent's defence to the claim for his fees. But, he argued, that issuewas not live in the circumstances in which he appeared as counsel. In particular, itwas not live in the proceedings in the District Court and High Court in relation tosetting aside the default judgment.[63] In the alternative, Mr Keene argued that if he did breach r 13.5.3 it was unfairfor the Standards Committee and the High Court to make a finding of unsatisfactoryconduct in circumstances where a District Court Judge and the LCRO had interpretedand applied r 13.5.3 in the same way that he did at the relevant time and had acceptedthat the rule did not prevent him from appearing at the relevant hearings. So, hesubmitted, the finding of unsatisfactory conduct should be set aside.[64] In oral argument, in response to questions from the Court, Mr Keene alsoadvanced the argument that had been accepted by the District Court to the effect thatr 13.5.3 did not apply because the mischief at which the rule is aimed was not engaged.The second respondents were not the relevant "client" as he was no longer acting forthem at the time of the fee recovery proceedings. His "client" as a matter of form wasMr Cutting, his instructing solicitor and the named plaintiff in the proceeding. Butthe "in-substance" client was Mr Keene himself. No concerns arose about Mr Keene'sindependence vis-á-vis Mr Cutting. And in circumstances where it was transparent tothe Court that the proceedings were for the purpose of recovering his fee, there wasalso no concern about independence vis-á-vis the Court: Mr Keene was in exactlythe same position, so far as the Court was concerned, as a barrister and solicitorbringing proceedings to recover their own fee.Second respondents' submissions on appeal[65] The written submissions filed by the second respondents referred to a numberof affidavits filed by Mr Keene in the fee recovery proceedings, and emphasised thathis "conduct was in issue from the outset and throughout". Their submissions set outextensive criticisms of Mr Keene's conduct. They concluded by submitting thatthe High Court decision was correct, and the appeal should be dismissed.NZLS' submissions as intervener[66] The NZLS' written submissions argued that the High Court decision wascorrect, and that the High Court approach of assessing Mr Keene's conduct inthe context of the proceeding as a whole was appropriate.[67] The NZLS submitted that this was a case where Mr Keene knew the secondrespondents took issue with his performance, and on that basis disputed his fee.They had told Mr Keene they were going to complain about him. When Mr Keenethen acted in proceedings to recover his fee, he did so knowing that they wereproceedings where — rightly or wrongly — his conduct was in issue. That is the typeof structural conflict r 13.5.3 exists to prohibit.[68] The NZLS submitted that the extent of the breach warranted a finding ofunsatisfactory conduct.[69] In his oral submissions Mr Hodge emphasised that the purpose of chapter 13of the Rules is primarily to ensure the independence of a lawyer vis-á-vis the court.Mr Hodge accepted that a barrister and solicitor can sue for their own fee, and that itis clear that in those circumstances the rule is not engaged because it does not applywhere the lawyer is acting for himself or herself. Mr Hodge also accepted that in thiscase, as a matter of substance Mr Keene was acting for himself. But, he submitted,because of the intervention rule Mr Keene was unable to bring proceedings to recoverhis own fee: so the plaintiff was Mr Cutting. As a matter of form, Mr Keene was actingas a barrister instructed by his client and instructing solicitor Mr Cutting. That in turnmeant that Mr Cutting was exposed to an order for costs, and potentially also tocriticism by the court for the conduct of the litigation. He was dependent on Mr Keeneas counsel to relay to him events in connection with the proceeding, and anyobservations the court might make in the course of hearings. So, Mr Hodge argued,Mr Cutting's interests were engaged.[70] Mr Hodge did however accept that so far as the court is concerned, incircumstances where it is transparent that a barrister is acting in proceedings to recovertheir own fee there is no distinction of substance from the scenario where a barristerand solicitor sues in person for their own fee, and represents themselves.AnalysisWas Mr Keene acting for himself in the fee recovery proceedings?[71] The Rules are concerned with the ethical obligations of lawyers. It isimportant, in that context, to focus on substance rather than form.[72] The second respondents were at one stage clients of Mr Keene. But they wereno longer his clients at the time the fee recovery proceedings were filed. So far asthe fee recovery proceedings are concerned, it is quite clear that the purpose of r 13.5.3is not to protect the interests of the second respondents.[73] If Mr Keene had been free to bring proceedings to recover his own fee, hecould have acted for himself and r 13.5.3 would not have applied. Rule 13.5.3 mustbe read in light of r 13.5, which is concerned with a lawyer engaged in litigationfor a client. And r 13.5.3 expressly provides that it does not apply "where the lawyeris acting for himself or herself".[74] On the orthodox approach, as noted above, Mr Keene could not sue for his ownfee. Rather, the only way that his fee could be recovered from the second respondentswas for his instructing solicitor, Mr Cutting, to bring proceedings seeking to recoverthat fee. That approach was adopted in this case. So Mr Keene had an instructingsolicitor, Mr Cutting. But in substance the proceedings were being brought forthe benefit of Mr Keene.[75] In the normal scenario where a client instructs a solicitor, and that solicitorinstructs a barrister to act for the client, the obligations of the barrister to "the client"under the Rules are owed to the person who has instructed the solicitor, and throughthe solicitor, the barrister. They are not owed to the instructing solicitor. As a matterof form, Mr Cutting was Mr Keene's client in the fee recovery proceedings as well asbeing his instructing solicitor because the fee recovery proceedings were brought withMr Cutting named as plaintiff. But in this case the arrangements between Mr Cuttingand Mr Keene meant that Mr Cutting's interests were not directly engaged.44 Rather,the benefit of the proceedings would accrue to Mr Keene, and the cost burden ofthe proceedings also fell on him.[76] We recognise the theoretical possibility of Mr Cutting being exposed to a costsaward, or criticism, in relation to the conduct of the proceedings. But this risk seemsremote, and one that Mr Cutting was well placed to understand and manage.[77] Our approach to the interpretation of r 13.5.3 must be informed by the natureof the Rules, which as noted above are ethical rules that require a focus on substancerather than form, and by the purpose of r 13.5.3 read in context.45 We do not considerthat the mischief at which r 13.5.3 is directed was present here, in circumstanceswhere:(a) There was no client who was looking to Mr Keene to act independentlyof his own interests, whose reasonable expectations of independencewere disappointed because Mr Keene's conduct was in issue.Mr Keene was the "in-substance" client. Mr Cutting was the client asa matter of form, but he knew that the proceedings were brought for44 Mr Cutting had an ethical obligation to seek to recover Mr Keene's fee: McGuire v New ZealandLaw Society [2019] NZHC 2748. But he had no economic stake in the proceedings.45 Interpretation Act 1999, s 5(1); and Commerce Commission v Fonterra Co-operative Group Ltd[2007] NZSC 36, [2007] 3 NZLR 767 at [22].Mr Keene's personal benefit in circumstances where their mutualformer client had raised concerns about the fees. There is no suggestionthat his interests were compromised by Mr Keene acting in thesecircumstances.(b) The position vis-á-vis the Court was also transparent. The Court knewMr Keene was acting as counsel in order to recover his own fee, and hecould not be expected to be completely independent in thosecircumstances. The Court was able to adjust its expectation ofindependence in this context in precisely the same way that it would ifhe were a barrister and solicitor suing a former client for payment ofoutstanding fees.[78] Adopting a purposive and contextual approach to the interpretation of r 13.5.3,we consider that the better view is that on the facts of this case Mr Keene was "actingfor himself". Form should not distract from substance.[79] It follows that there was no breach of r 13.5.3 in this case, as the rule did notapply.Was Mr Keene's conduct in issue in the matter before the Court?[80] We consider that Mr Keene's conduct was in issue in these proceedings atthe latest when the second respondents applied to set aside the default judgmentagainst them. It was a necessary element of that application that they had a genuinedefence that they wished to pursue. That defence turned on the conduct of Mr Keenewhen he was acting for them.[81] Mr Keene says that because he chose not to argue that there was no defence tothe claim, if it was open to the Court to go behind the decision of the StandardsCommittee, his conduct was not in issue in the context of the application to set asidethe default judgment.[82] We prefer the submission of Mr Hodge that the question cannot be approachedthis narrowly. The conduct of a lawyer is not necessarily in issue in proceedingsmerely because the proceedings seek recovery of the lawyer's fee. But wherethe defendant is actively seeking to pursue a defence based on the conduct ofthe lawyer, the conduct of the lawyer is in issue in the proceeding as a whole. Fromthat point onwards, if r 13.5.3 applies (i.e. if the lawyer is not acting for themselves)the lawyer cannot continue to act. It is irrelevant that a particular procedural step doesnot directly raise the issue of the lawyer's conduct: the lawyer's independence iscompromised in relation to the proceeding as a whole.[83] We therefore agree with Downs J's view that Mr Keene's conduct was in issueat a time when he continued to act as counsel in the litigation. But as we have foundthat r 13.5.3 did not apply in the circumstances of this case, there was no breach of therule.Relief granted in the High Court[84] If we had taken a different view on the proper approach to r 13.5.3, and hadfound that the rule properly interpreted did apply to Mr Keene's conduct as counsel inthe fee recovery proceedings, we would nonetheless have allowed the appeal.We consider that the relief granted in the High Court, setting aside the LCRO decisionand restoring the Standards Committee finding of unsatisfactory conduct andconsequential orders, was not appropriate in these judicial review proceedings.46[85] It did not necessarily follow from the Judge's finding that there had been abreach of r 13.5.3 that the Standards Committee was right to make an unsatisfactoryconduct determination and impose a fine. There were a number of other factors thatit was necessary for the Standards Committee and the LCRO to consider. It was opento the LCRO to decide not to make a finding of unsatisfactory conduct.[86] This was a case where the complaint was pursued by complainants whoseinterests were not within the scope of the protection that the rule is intended to provideto existing clients (here, Mr Cutting) and the court. There was no suggestion of anyconcern on the part of the relevant client, Mr Cutting. The position was entirelytransparent vis-á-vis the court. These factors were relevant to an assessment of46 See High Court decision, above n 6, at [51]–[52], set out at [56] above.the appropriate determination to be made in respect of the complaint, even if they didnot establish that there was no breach of r 13.5.3.[87] Moreover Mr Keene's view that he was able to act in the proceedings wasreasonably open to him, even if it was wrong. His view that the rule did not applybecause he was in substance acting for himself was accepted by Judge Sharp beforewhom he appeared. We also consider it is correct. Even if both we and the Judge arewrong, the view can hardly be dismissed as untenable.[88] Mr Keene's view that his conduct was not in issue in the proceedings up to andincluding the time of the hearings to set aside the default judgment, though we havenot accepted it, also was not untenable. It was accepted as correct by the LCRO in herdecision.[89] So Mr Keene was proceeding on the basis of an understanding of the Rulesthat was genuinely held and that was reasonably open to him. That is anotherimportant factor that needed to be weighed before reaching a view on the appropriatedisposition of the complaint.[90] Thus the High Court erred in proceeding from a conclusion that the LCRO haderred in law in her interpretation of r 13.5.3 to a finding that the LCRO decision shouldbe set aside, and the Standards Committee restored. It was open to the LCRO, properlydirecting herself on the law, to reach the view that a disciplinary response was notwarranted in this case even if the rule may have been breached. Indeed that is how weread her decision, at least in part. The LCRO did not make a definitive finding thatthere had been no breach of r 13.5.3 by Mr Keene at any stage of the fee recoveryproceedings. Rather, she proceeded on the basis that:(a) it was "not entirely clear" that r 13.5.3 was engaged before the appealto the High Court in relation to the setting aside of the default judgment,or that any conduct on Mr Keene's part after the appeal was determinedcontravened the rule;47 and47 LCRO decision, above n 5, at [53].(b) she was not persuaded that his conduct warranted a determination ofunsatisfactory conduct based on a contravention of r 13.5.3.48[91] It would have been open to the LCRO to reach the same result even if herinterpretation of r 13.5.3 had been the same as that of the Judge. Contrary to the viewexpressed by the Judge, this was not a case where the outcome "could not truly be indoubt".49[92] We agree with the Judge that it would be unsatisfactory to prolong thiscomplaint process, which originated in events that occurred almost 10 years ago. Butin those circumstances it seems to us that the appropriate course would have been todecline relief. This was not a case where there was only one possible outcome if thematter was referred back to the LCRO, and was considered on the basis ofthe approach to r 13.5.3 preferred by the High Court. The factors identified at [86]–[89] above could well have resulted in a finding that a disciplinary response was notwarranted, and that no further action should be taken in respect of the r 13.5.3complaint. Thus even if we had reached a different view in relation tothe interpretation of r 13.5.3, we would have allowed the appeal and set aside thedecision of the High Court quashing the LCRO determination in relation to r 13.5.3.Having regard to all the circumstances of this case, and in particular the amount oftime that has elapsed, we consider that the appropriate response in these judicialreview proceedings would have been to decline relief.Result[93] The appeal is allowed.[94] The order of the High Court setting aside the LCRO determination in relationto r 13.5.3 is set aside.[95] An order for costs is not appropriate in this case. Mr Keene representedhimself. The NZLS sought an order under s 178(2)(b) of the Senior Courts Act 2016that its costs be paid from public funds. However, we consider that this was a case in48 At [54]. See also [98].49 High Court decision, above n 6, at [51].which it was appropriate for the NZLS to appear and assist the Court, in the same waythat the Commerce Commission appears to assist the court in appeals from itsdecisions. The appearance was an integral aspect of the performance of the NZLS'regulatory functions. We do not consider that an order for payment of the costs ofthe NZLS out of public funds would be appropriate.Solicitors:Meredith Connell, Auckland for Intervener