McGUIRE v NEW ZEALAND LAW SOCIETY [2019] NZHC 2748

McGUIRE v NEW ZEALAND LAW SOCIETY [2019] NZHC 2748 [29 October 2019]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2019-485-165[2019] NZHC 2748UNDER the Judicial Review Procedure Act 2016AND Part 30 of the High Court Rules 2016BETWEEN J J McGUIREApplicantAND NEW ZEALAND LAW SOCIETYRespondentHearing: 18 July 2019Appearances: Applicant in PersonP N Collins for RespondentJudgment: 29 October 2019JUDGMENT OF CLARK JIntroduction[1] The applicant, Mr McGuire, was censured by the Central Standards Committee3 (the Standards Committee) for non-payment of invoices rendered by an Aucklandbarrister, Mr Twist. In this application for judicial review, Mr McGuire seeks to havethe Standards Committee's determination declared invalid and set aside.[2] The issue raised by the proceeding concerns a lawyer's duty to pay a barrister'sfees, costs and expenses in circumstances where that lawyer instructed the barrister onbehalf of a client.Background[3] Mr McGuire is a barrister and solicitor practising mainly in Palmerston North.In November 2017, he was representing a client ("W") in a relationship propertymatter.1 The client instructed Mr McGuire to obtain a second opinion. Havingapproached Mr Twist, Mr McGuire then sent him a memorandum on 17 November2017, summarising the facts and legal issues for Mr Twist's opinion.[4] On 21 November 2017, Mr Twist provided an estimate of the cost of anopinion and confirmed that, in accordance with his agreement with Mr McGuire, thetime he had spent to that point would not be charged. The final paragraph ofMr Twist's letter stated:As you know my fee is $300 plus GST per hour and disbursements. I estimatethat my opinion would take about 10 hours work, so your client should deposit$3,600 in your trust account. Once you have advised me that he has depositedthis sum in your trust account and you have sent me the other documentsrequested, I will begin work.[5] On 11 December 2017, Mr McGuire instructed Mr Twist to commence workon the opinion:I just met my client and convinced him of the merits of a second opinion. Ihave funds of $3,600 (GST inclusive) to pay for it, assuming you still want togive one. I have attached my client's authority and also an amended statementof claim from Friday for you to consider. Please advise if you need any otherinformation.[6] The client authority attached to Mr McGuire's 11 December email was in thefollowing terms:I agree to pay a barrister in Auckland legal fees of $3,600 (GST inclusive) fora second opinion on my legal proceedings with [V] after discussions withJeremy McGuire.[7] On 13 December 2017, Mr Twist accepted the instruction from Mr McGuire.1 During the hearing, Mr McGuire asked that his client's name be anonymised to protect his privacy.The request related to a discussion about whether his client had waived privilege. Mr McGuireassured the Court his client was aware of the matter and privilege had been waived.He wrote the following email:I have received what I understand is the whole file. I accept instructions towrite the opinion.I shall try to get an opinion to you before Xmas, but I shall see how I go andlet you know.[8] On 15 December 2017, Mr Twist wrote to confirm an aspect of the feearrangement:Although your client has agreed to pay me legal fees of $3,600 (GSTinclusive) for an opinion, could you please confirm that you are holding fundsof $3,600 in your trust account for this purpose?[9] Mr McGuire replied on the same day:I have your agreed fee.[10] On 18 December 2017, Mr Twist emailed Mr McGuire:I should be able to get you an opinion by Friday 22 December 2017, but Iwould have to insist on payment being made the same day you get the opinion.Please confirm![11] Mr McGuire replied a few minutes later:No problems Peter.[12] On 22 December 2017, Mr Twist emailed his opinion to Mr McGuire:Please find attached my opinion dated 22 December 2017 to you in this matter.I have also attached a copy of my letter dated 21 November 2017 to you,which is referred to in the opinion.I will send you an invoice shortly, so you can pay me today (as agreed).[13] Some 20 minutes later, Mr Twist emailed his invoice to Mr McGuire:Please find attached my account dated 22 December 2017 to you in this matter.I actually spent 13.5 hours on my opinion (i.e $4,050 plus GST anddisbursements) but I have charged you only for 10 hours in accordance withmy estimate.[14] Mr McGuire replied on 22 December 2017 some 15 minutes followingMr Twist's emailed invoice. The unredacted portion of Mr McGuire's email is hisconcluding sentence:I look forward to your views. Your opinion needs to address these other issues.[15] Mr Twist replied some 15 minutes following Mr McGuire's assertion theopinion needed to address other issues:It would be impossible for me to look at the further issues raised in your lateste-mail before the close of business today. Be that as it may, I expect to be paidfor my opinion by the end of the day as I have done the work.I just want to reiterate that I agreed to provide an opinion for you on the basisthat I would be paid on the same day as you received the opinion. Thisagreement is in writing. You have received the opinion. I understand that youhave trust funds held for that purpose. Could you please make payment directto my bank account (as agreed) by 5pm today.After you have paid me, we can address the further issues raised by you inyour latest e-mail next year.[16] Mr McGuire replied on the evening of 22 December 2017:Peter, I am now at home. I think we didn't allow enough time to fully ventilateall of the issues. We should review things next year I am not being difficult or dogmatic. I was a bit disappointed with the lack ofreasoning and legal sophistication in today's letter. Once and after all of theissues have been carefully and thoroughly considered then an opinion can besaid to have been given.[17] On 9 January 2018, Mr Twist emailed Mr McGuire asking once again forpayment:I do not accept your view in your e-mail dated 22 December 2017 (6:03 pm)to me that I have not completed my opinion. You are asking me to do extrawork without payment when I have already completed my opinion and givenyour client 3.5 extra hours without charge. I hope you have forwarded a copyof my opinion to your client?I do not want a long diatribe in response from you. All I want to know iswhether or not you are going to pay my account by the close of businesstomorrow. This is simply a yes or no answer.[18] Fifteen minutes later Mr McGuire replied:I got my file back thanks and I hope you copied it. I haven't received youropinion yet.You do not communicate well.[19] On 24 January 2018, Mr Twist wrote to Mr McGuire. Mr Twist:(a) noted his account dated 22 December 2017 had still not been paid;(b) reminded Mr McGuire of his obligation under r 10.7 of the Lawyersand Conveyances Act (Lawyers: Conduct and Client Care) Rules 2008(the Rules);(c) reminded Mr McGuire he held $3,600 in his trust account deposited forthe purpose of paying for Mr Twist's opinion;(d) attached an account for the disbursement ($41.90) incurred forreturning Mr McGuire's file to him by courier as requested byMr McGuire and in respect of which he had undertaken to pay; and(e) asked once more for Mr McGuire's confirmation that he had disclosedMr Twist's opinion to his client.[20] Numerous emails were exchanged on 24 and 25 January 2018 about thedisbursement invoice, $35.40 of which Mr McGuire paid. On 1 February 2018,Mr Twist emailed:I note that, when I checked my bank account earlier today, you had still notpaid my invoice dated 22 December 2017 (no. 17032) to you for my opinion.I note that you have also not paid the balance of $6.50 owing on my invoicedated 24 January 2017 (no. 17033) to you for disbursements.[21] Mr McGuire replied three hours later:Peter, why are you sending me these emails?[22] Mr Twist wrote to Mr McGuire again on 5 February 2018:Our agreement is that I provide you with an opinion and you would pay meon the same day as you receive the opinion I am sending you these e-mails because you have not paid me $3,474.26 dueon my invoice dated 22 December 2017 (no. 17032) in accordance with ouragreement. Accordingly, you are in breach of our agreement and also of yourobligation under cl.10.7 of the Lawyers Conduct and Client Care Rules 2008to pay my account.[23] Mr McGuire replied on the morning of 5 February 2018. The unredacted partof his email reads:I assume you photocopied the file. You could have sent me a different opinionif you wished but you didn't. It is too late now.You can take this further if you wish but, on principle, I do not think this largeinvoice of yours is justified.However I am prepared to consider your response to this email which I willthen refer to my client for his instructions.[24] Mr Twist's final email communication to Mr McGuire was on 12 February2018:1. I considered your memorandum of 17 November 2017 to me andresponded by e-mailed letter on 21 November 2017 (copy attached)setting out the six questions needing to be answered.2. I did not receive any response from you as to those six questions.3. Your client deposited $3,600 in your trust account on or about11 December 2017 for payment of my fee.4. In my opinion to you dated 22 December 2017, I answered all of thosesix questions and others, and so completed my opinion.5. Accordingly, I provided you with a completed opinion as I was bound to,but in not paying me you have not met your side of the agreement. Theagreement to pay me was not conditional on your view of the merits ofthe opinion.6. Payment of my two invoices is overdue.[25] Mr McGuire responded within five minutes:Peter, I disagree.[26] On 11 April 2018, Mr Twist complained to the Lawyers ComplaintsService (LCS) that McGuire had breached r 10.7 of the Rules by failing to pay:(a) his invoice of 22 December 2017 ($3,474.26 including GST); and(b) the balance of the invoice dated 24 January 2018 ($6.50).[27] On 19 June 2018, Mr McGuire formally objected to the Standards Committeeconsidering the complaint against him on the basis the Standards Committee had madetwo determinations adverse to Mr McGuire both of which were being challenged incourt proceedings.[28] On 20 September 2018, the Standards Committee rejected Mr McGuire'sobjection and upheld the complaint. The Standards Committee determinedMr McGuire's breach amounted to unsatisfactory conduct pursuant to s 12(b) and (c)of the Lawyers and Conveyancers Act 2006.[29] On 25 March 2019, the Standards Committee censured Mr McGuire who wasordered to apologise to Mr Twist, to pay a fine of $5,000 and costs of $2,000, and topay Mr Twist's fees immediately.Standards Committee decision[30] On the preliminary issue of Mr McGuire's objection to the StandardsCommittee's consideration of the complaint on the basis he had "issued legalproceedings against the NZLS in the District Court because of recent decisions madeby it", the Standards Committee determined there were insufficient grounds to warrantdisqualifying itself. On the basis of the material before it, and applying Saxmere CoLtd v Wool Board Disestablishment Co Ltd (No 2), the Standards Committee wassatisfied:2 a fair-minded lay observer would not reasonably apprehend that theCommittee might not bring an impartial mind to the resolution of thecomplaint before [it].2 Saxmere Co Ltd v Wool Board Disestablishment Co Ltd (No 2) [2009] NZSC 122, [2010]1 NZLR 76.[31] The Standards Committee noted it was not a party to the proceedingscommenced by Mr McGuire and that it is not uncommon for a standards committeeor other decision-making body to be subject to appeal or other form of challenge:If such a body was required to disqualify itself on every occasion that sucha challenge was made, then the administration of justice could becomefrustrated.[32] In relation to the substantive issue, the Standards Committee acceptedMr McGuire's contention he could not release funds held on trust without authorityfrom his client. But the Standards Committee considered that, having instructedMr Twist on behalf of his client, Mr McGuire was personally responsible for thepayment of Mr Twist's fee in accordance with r 12.2 of the Rules.[33] If Mr McGuire was critical of the quality of Mr Twist's opinion and contestedtherefore that Mr Twist's fee was payable, it was incumbent upon Mr McGuire todispute Mr Twist's fees through the "proper professional channels" such as throughan appropriate disputes resolution process or through the LCS, as required by r 10.7:It was unacceptable for Mr McGuire to simply refuse to pay Mr Twist's feeon the sole basis of his/his client's criticism of the work undertaken byMr Twist. This is especially the case as Mr Twist is a barrister and thereforeunable to sue for his fees.[34] In support of its conclusion the Standards Committee drew support fromAtkinson v Pengelly3 and Ethics, Professional Responsibility and the Lawyer.4[35] The Standards Committee concluded Mr McGuire's non-payment ofMr Twist's invoice amounted to a breach of r 10.7 of the Rules. The StandardsCommittee was satisfied:(a) there was no agreement between Mr McGuire and Mr Twist to bringMr McGuire within the exception to r 10.7; and3 Atkinson v Pengelly [1995] 3 NZLR 104 (HC).4 Duncan Webb and others Ethics, Professional Responsibility and the Lawyer (3rd ed, LexisNexis,Wellington, 2016) at [15.10.2].(b) "there was no agreement between the parties that Mr McGuire's clientwas to be solely responsible for paying Mr Twist's account".5(Standards Committee's emphasis)Grounds of review[36] Mr McGuire seeks judicial review of the Standards Committee decision onthree principal grounds:(a) The Standards Committee erred in finding there was no agreementbetween the parties that Mr McGuire's client would be solelyresponsible for the payment of Mr Twist's fee.(b) The Standards Committee erred in fact and law in holding that Mr Twistwas entitled to be paid his fees despite Mr McGuire's dissatisfactionwith the opinion.(c) The Standards Committee's determination was "bad for bias", inbreach of natural justice and resulted in a miscarriage of justice.[37] I deal first with Mr McGuire's third ground of review.Bias[38] Mr McGuire submitted he did not want to dwell too much on this issue as heregarded it as comparatively minor. As Mr McGuire framed it, the question is whethertwo recent determinations about him by the Standards Committee, in addition to thelegal proceedings he has commenced largely because of those determinations,constitute a sufficient basis for Mr Twist's complaint to be considered by a differentcommittee because of "apparent bias, predisposition or other general impropriety thatsuffices to be unfair or unreasonable (or both)".[39] For the reasons that follow, I have concluded Mr McGuire advances no tenablebasis for arguing the Standards Committee was biased or exhibited bias towards him.5 At [25].[40] During the hearing I asked Mr McGuire whether he had been the subject ofany complaints that were investigated by this same Standards Committee that had notbeen upheld. Mr McGuire replied he had not been.[41] The day after the hearing, counsel for the respondent, Mr Collins, filed amemorandum in order to place before the court correct information responding to myquery.[42] Mr McGuire had been the subject of two decisions by Central StandardsCommittee 3, the committee responsible for the determination that is the subject ofthis judicial review proceeding. Both complaints were dismissed, one in 2016 and onein 2017. It is unnecessary that I recite here the particular decisions. Mr Collinsprovided the details in his memorandum and Mr McGuire has taken no issue with thecontents of that memorandum.[43] That being the case, the factual underpinning of this ground of review fallsaway.[44] As to Mr McGuire's District Court proceeding against the Law Societyconcerning Central Standards Committee 3, I note it was filed in June 2018 some twomonths after Mr Twist's complaint, not, as Mr McGuire submitted in oral argument,well before the complaint. It appears Mr McGuire formally objected to the StandardsCommittee hearing the complaint against him four days after he filed his statement ofclaim in the District Court.[45] In oral submissions, Mr McGuire said he knew for a fact there was a degree offluidity in relation to the committees allocated to hear complaints and that for thisStandards Committee to have heard the complaint against him indicated a lack ofjudgement. Mr McGuire maintained he did not get a fair hearing and he would havebeen far more comfortable with a decision from a different body.[46] The nature of Mr McGuire's objection is similar to that dismissed by ToogoodJ in Stiassny v Siemer:6[12] Mr Siemer's reference to having appeared before me in otherproceedings contained the implication that, because on at least one otheroccasion I had found against him and that on another I had an outstandingjudgment, in some way I was biased against him. I pointed out to Mr Siemerthat the judgment on the interlocutory application involving theOfficial Assignee in other proceedings was due to be delivered later that dayor the following day. I considered that the proposition that a Judge must beincapable of giving a litigant a fair hearing, or being seen to do so, becausethe Judge has ruled against the litigant on a prior occasion or occasions ignoresthe force and significance of the Judicial Oath and without more could notpossibly meet the Saxmere test.[47] Finally, Mr McGuire submitted the position was exacerbated by the fact thisapplication for judicial review was filed on the 25 March 2019 and the StandardsCommittee released its penalty decision later that same day. This, he submitted, couldsuggest retaliation, and bias towards him can be inferred.[48] The short point is that the determination presently challenged by Mr McGuirewas issued 10 months before Mr McGuire filed his proceeding in the District Court.The suggestion that the penalty decision was in retaliation is far-fetched and improper.Mr McGuire has not established the Standards Committee was biased and hisarguments do not come close to meeting the test for apparent bias authoritatively statedby the Supreme Court in Saxmere Co Ltd v Wool Board Disestablishment Co Ltd(No 2).7Was there an agreement that the client would be solely responsible for paymentof Mr Twist's fee?[49] Mr McGuire's position is that "there was absolutely clear agreement betweenthe parties in [the] email correspondence that the client was solely responsible forpaying Mr Twist's account". Mr McGuire deposed to "never agree[ing] to payMr Twist's legal fees and that it was never even discussed between [them]".6 Stiassny v Siemer [2013] NZHC 154 (footnote omitted).7 Saxmere Company Ltd v Wool Board Disestablishment Company Ltd, above n 2, at [3] perBlanchard J and [127] per Anderson J.Rule 10.7[50] Before turning to the evidence, it is necessary to understand the nature of theobligation that an instructing lawyer bears under the Rules. The Rules are based onthe fundamental obligations of lawyers set out in s 4 of the Lawyers and ConveyancersAct. They set minimum standards that lawyers must observe and are a reference pointfor discipline. A charge of misconduct or unsatisfactory conduct may be brought anda conviction may be obtained despite the charge not being based on a breach of anyspecific rule, nor on a breach of some other rule or regulation made under the Act.[51] Rule 10.7 is located in chapter 10, "Professional dealings". By r 10, "a lawyermust promote and maintain proper standards of professionalism in the lawyer'sdealings."[52] Rules 10.7 and 10.7.1 provide:Fees of other lawyers10.7 A lawyer who, acting in a professional capacity, instructs anotherlawyer, must pay the other lawyer's account promptly and in fullunless agreement to the contrary is reached, or the fee is promptlydisputed through proper professional channels. This rule applies to theaccounts of barristers sole and foreign lawyers.10.7.1 Where the instructing lawyer and the lawyer undertaking thework have agreed that the instructing lawyer's client is to besolely responsible for paying the lawyer's account then(unless agreed otherwise) the instructing lawyer must use allreasonable endeavours to ensure the client pays the account.The instructing lawyer must promptly inform the instructedlawyer if it appears that the client will be unable or unwillingto pay the account.(Emphasis added)[53] Rule 12.2 provides:12.2 Where a lawyer instructs a third party on behalf of a client to renderservices in the absence of an arrangement to the contrary, the lawyeris personally responsible for payment of the third party's fees, costs,and expenses.[54] Unless Mr McGuire is able to show he reached "agreement to the contrary"and thereby brought himself within the exception to the application of r 10.7, he wasobliged by r 10.7 to pay the fee of the barrister he had instructed. Rule 10.7 reflectswhat is a long-established obligation. As the Standards Committee highlighted, theimportance of the obligation arises from the nature of the relationship betweensolicitor and barrister, namely that a barrister cannot sue for her or his fees and mustrely on the instructing solicitor for payment.[55] Except in the context of disputes about costs, r 10.7 does not appear to havebeen the subject of discussion in the senior courts. Helpfully, the commentary inEthics, Professional Responsibility and the Lawyer, cited by the Standards Committee,outlines the nature of a solicitor's obligation in relation to barristers' fees:8When a solicitor instructs a barrister, the solicitor is prima facie bound by therules to meet the barrister's fee regardless of whether the solicitor has beenput in funds by the client for that purpose.The rule is displaced if the solicitor and barrister agree that the payment of thebarrister's fee depends on some other eventuality (such as payment by theclient).In the absence of such factors, it is unsatisfactory conduct or misconduct for asolicitor to fail to pay the professional fees of a barrister whom he or she hasinstructed.[56] The leading Australian text on legal professional responsibility, Lawyers'Professional Responsibility, explains that (unless otherwise agreed) a lawyer contractswith a third party as a principal, not as an agent for the client. The same generalprinciple applies when instructing a barrister although in this context a barrister looksto the instructing solicitor for payment but cannot in general force a claim in contract.The instructing solicitor's obligation is seen as one of honour, not debt. It is for thisreason that a solicitor's refusal to pay a barrister's fee has always entailed professionalconsequences.9 The approach is the same in New Zealand.10 That a barrister cannotsue for her or his fees is the rationale for r 10.7, as the footnote to r 10.7 makes clear.[57] If solicitors wish to effectively contract out of the responsibility to pay abarrister's fees, they must do so explicitly and with the barrister's consent. Merely8 Webb and others, above n 4, at 418 (footnotes omitted).9 Dal Pont Lawyers' Professional Responsibility (Lawbook Co, Sydney, 2017) at [21.95] (footnotesomitted).10 Atkinson v Pengelly, above n 3, at 110.communicating that the client will be paying the fee (whether directly or indirectly),as Mr McGuire did here, is insufficient to constitute an "agreement to the contrary"for the purposes of r 10.7.[58] Mr Collins cited numerous authorities from various Australian jurisdictions inwhich solicitors have been found professionally culpable for failing to pay fees tobarristers or third parties. The case law suggests it will be particularly egregious for asolicitor to receive funds into a trust account for the purpose of paying a barrister orthird party but fail to do so.11 For instance, in Legal Practitioners Conduct Board vWharff, the Supreme Court of South Australia upheld a disciplinary decisionconcerning a solicitor who engaged a barrister to appear in the Family Court but failedto pay that barrister's fee when it was invoiced.12 The Court held:[18] A solicitor who engages a barrister or solicitor agent undertakes apersonal liability, either in honour or in contract as the case may be, to pay thebarrister's or agent's fees, unless otherwise agreed. Where a legal practitionerundertakes such a personal liability, it is unethical to ignore his or herobligation, and hence a wilful or persistent refusal or failure to pay fees canamount to unprofessional conduct.[59] The Australian position, which differs slightly from the New Zealand position,is described in Halsbury's Laws of Australia:13A lawyer who deals with a third party on behalf of a client for the purpose ofobtaining a service in respect of the client's business must inform the thirdparty, when the service is requested, that the lawyer will accept personalliability for payment of the fees to be charged for the service. Alternatively, ifthis is not the case, the lawyer must inform the third party of the arrangementsintended to be made for the payment of the fees. A failure to pay third party'sfees for which personal liability has not been disclaimed can generate liabilityin contract as well as attract disciplinary sanction.As historically no contract existed between counsel and his or her instructingsolicitor, counsel was precluded from recovering those fees from theinstructing solicitor in contract, although a failure to pay counsel's fees couldsound in disciplinary proceedings. The statutory removal of counsel'shistorical incapacity to contract, either with the instructing solicitor or theclient, in several jurisdictions means that the person who is liable to meetcounsel's fees is determined according to who, under the terms of the retainer,has undertaken responsibility for this purpose.11 See, for instance, Law Society of New South Wales v McCarthy [2002] NSWADT 58.12 Legal Practitioners Conduct Board v Wharff [2012] SASCFC 116.13 Halsbury's Laws of Australia (2018, online ed) vol 250 Legal Practitioners at [250-6040].[60] The position in England and Wales concerning the obligation of solicitors topay counsels' fees is a step further removed from the Australian position. The positionis described in Cordery on Legal Services:14At one time, counsel's fees were honoraria, which prevented counsel for suingfor unpaid fees. Nowadays, the norm is for barristers to enter into contractualrelationships with the solicitors instructing them; and since the specificprofessional duty on solicitors to pay counsel's fees has gone it is prudent forbarristers to enter into contracts with their instructing solicitors to pay them.In the absence of agreed terms or an agreed fee, it appears that counsel mustresort to claiming on a quantum meruit.It has also been suggested that even if a solicitor takes the precaution ofobtaining money on account of disbursements from the client and on thestrength of this incurs counsel's fees, the client can subsequently instruct thesolicitor not to use the money to pay counsel. This would of course underminethe purpose of obtaining payment on account of disbursements and be a matterof serious consequence to the conduct of litigation. It is submitted that thepayment of money on account of disbursements gives the solicitor irrevocableauthority to use it to discharge any liability for disbursements, includingcounsel's fees, he incurs in reliance on the money in his client account.[61] Rule 10.7 represents what has always been the commonly understood positionin this country. Instructing solicitors cannot simply wash their hands of theirobligation to a barrister because the client refuses to pay. Mr McGuire was not, as hesaid in his email to the Standards Committee on 19 June 2018, "effectively aspectator".The evidence[62] Against the backdrop of the legal position, I turn to consider the evidence ofthe arrangement between Mr McGuire and Mr Twist. The following key pointsemerge from the early correspondence between Mr McGuire and Mr Twist:(a) Mr Twist was very deliberate about his fee and the timing of payment.Along with his estimate he advised Mr McGuire he would begin workonce Mr McGuire confirmed the agreed sum had been deposited intoMr McGuire's trust account.14 Cordery on Legal Services (9th ed, 2019) F General Principles at [1383].(b) Mr McGuire insists his client's authority constitutes an agreementbetween his client and Mr McGuire absolving Mr McGuire from hisobligation under r 10.7 to pay Mr Twist's account. But Mr McGuire'sinsistence is misplaced. Rule 10.7 requires a lawyer (Mr McGuire)who, acting in a professional capacity, instructs another lawyer(Mr Twist) to pay that other lawyer's account promptly and in full"unless agreement to the contrary is reached". An "agreement to thecontrary" must be between the lawyers. Rule 10.7 regulates theconduct of lawyers. The rule is concerned with the fee arrangementbetween the lawyer who instructs and the barrister who is instructed.Unless they reach a contrary agreement, the lawyer who instructs must,quite simply, pay the barrister's account promptly.(c) In this case, Mr McGuire's obligation to pay Mr Twist was not variedby an agreement to the contrary. Nor did Mr McGuire promptly disputethe fee through proper professional channels.[63] I discussed with Mr McGuire the obvious inference to be drawn from thepayment of $3,600 by W into Mr McGuire's trust account. The fact W paid $3,600into Mr McGuire's account strongly suggests W did not understand he was responsiblefor paying Mr Twist directly. It also suggests there was no agreement between W andMr McGuire to that effect.[64] Mr McGuire said he did not understand what was meant by "properprofessional channels" and that he "reached out" to the Standards Committee. Heemailed the Standards Committee on 19 June 2018 advising he was happy to pay theamount to Mr Twist, or the Standards Committee, while the matter was being decided.He asked the Standards Committee to advise what "proper professional channels"means under r 10.7. Mr McGuire concluded his email:As I have already stated, I have no direct interest in how this is determined asI am effectively a spectator.The money can be paid out of my trust account as directed. After that, I prefernot to be involved in it thank you.[65] Mr Collins, aptly in my view, described the communication as disingenuous.The email was written two months after the complaint was made. The email was inresponse to the Standards Committee notifying Mr McGuire of the date of the hearingand inviting Mr McGuire's submissions. Mr McGuire sent nothing further to theStandards Committee after his email of 19 June 2018.[66] In those circumstances, it is not surprising the Standards Committee proceededto complete its statutory function and determine the complaint. Where Mr McGuireseemed to be inviting the Standards Committee to enter into a bargaining process,while declining to participate further in it (having not made submissions), theStandards Committee had a role to complete.[67] Mr McGuire is an experienced lawyer and, on his own evidence, can be takento know his way around the complaints system. Besides, as I said to Mr McGuire, asa practitioner he is obliged to understand the nature of the professional obligations andresponsibilities on him. If he was really concerned to understand what is meant inr 10.7 by "disputed through proper professional channels" he might have inquired atany time in his lengthy career other than in the middle of an inquiry into a complaintagainst him. I cannot regard the inquiry in Mr McGuire's email of 19 June 2018 asgenuine.[68] In any event, Mr McGuire's response was dismissive. He cannot both say (ashe did) that his email amounted to his dispute through proper professional channelsand at the same time say he preferred not to be involved and had no direct interest inhow it was determined. As I have said, that Mr McGuire considered himself to be"effectively a spectator" demonstrated a misunderstanding of his obligations underr 10.7. It is fair to say this misunderstanding generally underpinned the dismissivetone of the email.[69] Mr Twist could not have done more to ensure the appropriate arrangement wasin place, in writing, between himself and Mr McGuire. Mr McGuire's response toMr Twist's requirement for confirmation that he be paid on provision of his opinion,was: "No problems Peter." That strikes me as an unequivocal confirmation byMr McGuire that he would perform according to the obligations on him under r 10.7.That is, as a lawyer acting in his professional capacity instructing Mr Twist, he wouldpay Mr Twist's account promptly and in full or dispute the fee promptly throughproper professional channels.[70] I am satisfied no explicit arrangement was reached between Mr McGuire andMr Twist that the client would be solely responsible for the payment of the fee. TheStandards Committee did not err in determining Mr McGuire's failure to payMr Twist's account was in breach of r 10.7.[71] I make one final observation. In this case the controlling rule is r 10.7. I donot regard r 12.2 as relevant. Rule 12.2 concerns the obligation to pay "a third party".I think it is clear that third parties are in contradistinction to lawyers whosearrangements are governed by r 10.7.Was Mr Twist entitled to payment of his fees despite Mr McGuire'sdissatisfaction?[72] Mr McGuire argued that because Mr Twist had failed to provide an opinion onthe very question he was instructed to address, his work was not "done".[73] Rule 10.7 is clear. If a solicitor disputes a barrister's fee the solicitor mustpromptly advance that dispute through "proper professional channels". It isunnecessary, and indeed inappropriate, to address Mr McGuire's criticisms ofMr Twist's work in this judgment. A judicial review of a standards committee decisiondetermining a complaint arising from a refusal to pay fee is not the proper professionalchannel. Mr McGuire was required to raise his concerns through an appropriatedisputes resolution process or through the LCS. Mr McGuire's refusal to payMr Twist's fee was, in the circumstances, in breach of r 10.7.Result[74] The application for judicial review is dismissed.[75] The respondent is accordingly entitled to 2B scale costs.15_____________________________Karen Clark JSolicitors:New Zealand Law Society, Wellington for Respondent15 The proceeding having been previously classified.