J v AUCKLAND STANDARDS COMMITTEE 1 [2019] NZCA 614

J v AUCKLAND STANDARDS COMMITTEE 1 [2019] NZCA 614 [4 December 2019]NOTE: INTERIM ORDER IN [2018] NZLCDT 15 SUPPRESSING THENAME OF THE APPELLANT REMAINS IN FORCE.IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA201/2019[2019] NZCA 614BETWEEN JAppellantAND AUCKLAND STANDARDSCOMMITTEE 1RespondentHearing: 19 November 2019Court: Gilbert, Dobson and Whata JJCounsel: J R Billington QC and J K Grimmer for AppellantM J Hodge for RespondentJudgment: 4 December 2019 at 2 pmJUDGMENT OF THE COURTA The answer to the question of law set out at [3] of this judgment is "no".B The appeal is dismissed.C The appellant must pay costs to the respondent for a standard appeal ona band A basis and usual disbursements.____________________________________________________________________REASONS OF THE COURT(Given by Gilbert J)Introduction[1] J, a legal practitioner, faced three charges brought before the New ZealandLawyers and Conveyancers Disciplinary Tribunal (the Tribunal) under the Lawyersand Conveyancers Act 2006 (the Act). These charges all arose out of the same conductand were pursued in the alternative. The charges alleged that the practitioner'sconduct amounted to: misconduct (s 241(a)); negligence or incompetence in hisprofessional capacity of such a degree as to reflect on his fitness to practise or as tobring his profession into disrepute (s 241(c)); or unsatisfactory conduct that is not sogross, wilful, or reckless as to amount to misconduct (s 241(b)). The Tribunal foundthe charge of misconduct proved and therefore did not consider the two alternativecharges.1[2] J appealed against the Tribunal decision to the High Court. One ofthe arguments presented for J on appeal was that, taken at their worst, the factualfindings of the Tribunal would support a finding of unsatisfactory conduct (s 241(b))or, possibly, negligence of the magnitude covered by s 241(c) (the alternative charges)but not misconduct under s 241(a). Jagose J dismissed the appeal, finding thatthe misconduct charge was proved.2[3] The High Court subsequently granted leave under s 254(1) of the Act fora further appeal on the following question of law:3Was the High Court correct to find the charge of misconduct under s 7(1)(a)(i)of the Act proved against the practitioner, as opposed to the alternative chargeof negligence or incompetence in has professional capacity of such a degreeas to reflect on his fitness to practise or as to bring his profession into disreputeunder s 241(c)?By way of clarification, the Judge added that the question of law:4may be articulated as whether, in confirming the Tribunal's decision the chargeof misconduct against Mr J was proved, I erred in law by not having regardfor the applicability of s 241(c).1 Auckland Standards Committee 1 v J [2018] NZLCDT 15 [Tribunal decision]. The Tribunal madean interim order for non-publication of J's name pending a hearing to consider penalty. That ordercontinues in effect and this is why we have anonymised the appellant's name in this judgment.2 J v Auckland Standards Committee 1 [2018] NZHC 2706 [High Court judgment] at [44].3 J v Auckland Standards Committee 1 [2018] NZHC 789 [Leave judgment].4 At [4].For the sake of clarity, we have adopted the Judge's articulation of the question of lawquoted immediately above for the purposes of this judgment.The facts[4] J represented a client in an employment dispute. A full and final settlement ofall matters relating to the client's employment was reached at a mediation conductedon 20 December 2013. The settlement agreement signed at the mediation requiredthe employer to make two payments: payment of an invoice from J's firm for legalservices provided to the client in the sum of $50,000 plus GST; and a payment of$50,000 to settle the personal grievance claims. Both payments were to be made bythe employer to J's firm by 20 January 2014.[5] On 23 December 2013, J wrote to the employer's solicitors enclosingan invoice for the agreed amount of $50,000 plus GST ($57,500) and a statement forthe additional $50,000 payable in terms of the settlement agreement. On the same day,J sent the client an invoice and a statement showing total outstanding legal costs inthe sum of $129,955.21 and an expected balance payable by the client of $22,455.21following receipt of the settlement payments together totalling $107,500.[6] On 16 January 2014, the agreed amount of $107,500 was duly paid into J'sfirm's trust account by direct credit from the employer's account.However, the employer mistakenly made a further payment of $50,000 to J's trustaccount later that same day. On becoming aware of this unexpected payment,J telephoned the client on 29 January 2014. J's file note of this conversation reads:Adv we received 107,500 as per agmnt applied to fees. Received furtherpymnt of $50k. Not sure what this is for. He entitled to sabbatical otherpayments so he cd treat it as this. He stated & confirmed his entitlement topayments. As on sabbatical incurring costs these payments were to coverthese costs entitled to money. Instrted to apply to fees. Furth discn abt his wk& costs. He clear as to his entitlement and costs on sabbatical repeats hisinstrns to apply fees bal to be held in trust for him.[7] The suggestion that the unexpected second $50,000 payment was to coverthe costs the client was incurring while on sabbatical is not supported by the clearterms of the settlement agreement signed on the day of the mediation. This relevantlyreads:1. [Client] resigns today.Resignation to be effective on 20/12/15 or earlier date if [client] getsanother job earlier.2. Notice period to be observed as follows:From 23/12/13 [client] to be on annual leave. Sabbatical leavecommencing on 1/2/14 and ending 31/1/15. All outstanding annualleave to be utilised within this period so that as at 31/1/15 there is a nilleave balance.From 1/2/15 – 20/12/15 [client] to be on special leave – including anyannual leave that may accrue in that period.If [client] chooses to leave earlier than 20/12/15 payment will cease.Salary [amount] pa to end of employment.4. [Employer] to pay invoice of [J's firm] in the sum of $50,000 + GSTby 20/1/14.5. [Employer] to pay total of $50,000 under s 123(1)(c)(i) being $10,000for each of 5 personal grievance claims. Payment to [J's firm] by20/1/14.10. This [is] to be in full & final settlement of all matters relating to[client's] employment. This includes but is not limited to(i) claims before ERA(ii) claims raised with Privacy Commissioner or under PrivacyAct(iii) any claims raised with Human Rights Commissioner or underHRA(iv) any other claims[8] Following the telephone discussion, J sent an email to the client on 30 January2014 seeking confirmation of his instructions. The client's instructions regardingthe second payment of $50,000 were now recorded by J as being "payment of yoursabbatical and other entitlement" and "also for arrears". This was an elaboration onJ's file note although he again noted that the client was "incurring costs being onsabbatical":I would be grateful if you would confirm my record of our telephonediscussion yesterday. I phoned to discuss the receipt of funds from[the employer]. We had received 2 payments, one of $107,000 which weapplied to fees as had earlier been discussed and agreed. We also receiveda second payment of $50,000 from [the employer]. We received noinformation about the 2 payments. I asked for your instructions concerningthe second payment. We had some discussion about you being on sabbaticaland you mentioned that you were entitled to this payment and also for arrears.This payment therefore you regarded as a payment of your sabbatical andother entitlement. You were incurring costs being on sabbatical.Accordingly you regarded the payment as currently made to you.You specifically instructed that the fee balance ($33,000 approx.) was to bepaid from the funds received for you from [the employer] as outlined above.The balance was to be retained in our trust account in respect of future andanticipated work.Please confirm by return email my record of our telephone discussion.[9] The client responded one hour later referring to advice given by J in the initialtelephone conversation about the applicability of the "doctrine of legitimateexpectation":Hi [J] that's correct you advised the doctrine of legitimate expectation wouldapply. Keep bal in trust ac so we can record it all.[10] Part of the monies were then applied by J in payment of the outstanding balanceowing for legal fees. That was on Friday 31 January 2014.[11] Over the weekend, the client had misgivings about the course taken. At about6.50 pm on Sunday 2 February 2014, he sent a text to J expressing his concern andinstructing him to reverse the fee payment:[J] urgent I have come across information this weekend that suggests[the employer] payment a set up. My instructions are to return the credit toyour firm and hold the transactions on trust for the benefit of [the employer].I believe a police complaint needs to be made. I will put this in writing onMonday.[12] J's response to these instructions, sent later that evening by text message,weighed heavily with the Tribunal and the High Court:Noted talk tomorrow already done can't be reversed rumours just upset youthink carefully don't react.(Emphasis added).[13] J accepted in cross-examination that his advice to the client — "can't bereversed" — was incorrect. This concession was inevitable. The transfer of the moneyfrom the trust account to the firm's account in payment of the fees could be reversedpromptly and without any difficulty.[14] The client sent an email to J the next day putting on record that his intention todeal with the funds was formed only after receiving J's advice "that I could".The client was concerned about his exposure to having breached the criminal law bydealing with the money and he suggested that a second opinion be obtained fromsenior counsel:1. I have reread your email of 30 January regarding the receipt ofthe $50,000 from [the employer]. Your email is possibly not totallyclear. You rang me the day before to tell me the money had been paidand advised I could retain it on the basis of legitimate expectation.I would not wish to have the matter confused at a latter point in timethat I formed an intent to deal with the funds without your advice thatI could as this might be regarded as criminal intent.2. I think it might be wise for us to obtain a second opinion on this issue.My thoughts are possibly Mr Skelton QC.3. There are also various other matters I wish to canvass with youregarding this file.[15] J responded an hour later holding firm to his summary of the initial telephoneconversation as recorded in his original email. J advised that he had applied the moneyin accordance with those instructions and there was no need to do anything unless anduntil the employer raised the issue. J reassured his client that, in his view, there wasno wrongdoing:Thanks. I think my email summed up our telephone conversation.Accordingly we have treated the money as per your instructions.The matter only arises if we receive correspondence from [the employer].There is no wrongdoing on your part in our view.I suggest we meet next week. I am away for the rest of this week. How aboutnext Tuesday [at] 2.30 pm[16] The suggested meeting did not take place. The fees payment was not reversed.No steps were taken to obtain a second opinion. On 28 February 2014, the clientrequested that $2,000 of the funds held on trust be paid to his account. The remainderwas paid to the client in accordance with his instructions on 5 March 2014.[17] Over two years passed before the employer discovered its error. On 10 August2016, following an earlier email on 5 August 2016, the employer sent an email to Jconfirming that the second payment of $50,000 was inadvertent and demandingrepayment:Good afternoon [J]. You will recall the Settlement Agreement of20 December, 2013 (attached) between [us] and your client [name].Paragraphs 4 and 5 refer to the financial agreements, in full and finalsettlement, being [we] pay [J's firm] invoice of $50,000 + GST and makea payment to [the client] of $50,000 under section 123 of the EmploymentRelations Act 2000.Attached is [J's firm's] Trust Account history report which shows twopayments made by [us] on 16 January, 2014. One is a payment of $107,500,in satisfaction of paragraphs 4 and 5 of the Settlement Agreement. The otheris a payment of $50,000 which was made by [us] to your trust account bymistake. [Our] records confirm that these two payments were made.You did not bring the mistaken payment of $50,000 to [our] attention and youhave not returned the funds to [us]. A mistaken payment by [us] to your trustaccount is a matter between [us] and you and does not involve your client.We require you to return [our] funds on or before close of business this Friday,12 August 2016. [Our] account details are [bank account number].[18] Three days later, before J had taken instructions on the employer's demand,the client wrote to J instructing him not to correspond with the employer as the matterwas before the Law Society and the subject of a complaint to the police and the "PoliceComplaints Authority". We were advised at the hearing that the money has still notbeen repaid and is currently the subject of recovery proceedings in the District Court.The charges[19] As noted, three alternative charges were brought against J arising out of thesefacts. Shorn of the factual particulars (which we have already summarised),the charges were worded as follows:Charge one: Misconduct within the meaning of s 7(1)(a)(i) of the Lawyersand Conveyancers Act 2006 (Act).The particulars of the charges are as follows:19. The Practitioner's conduct set out above would reasonably beregarded by lawyers of good standing as disgraceful or dishonourable,in that he:(a) applied the additional payment to [the client's] outstandinglegal fees despite knowing that the additional payment wasoutside the terms of the full and final settlement and that[the client] did not appear to be lawfully entitled tothe additional payment; and/or(b) advised [the client] that there was no wrongdoing involved in[the client] keeping the additional payment despite knowingof the matters in the above paragraph (a); and/or(c) failed to query the status of the additional payment with[the employer] despite knowing of the matters in the aboveparagraph (a); and/or(d) failed to follow [the client's] instructions to obtain a secondopinion about the status of the additional payment and to holdthe total sum on trust for the benefit of [the employer], despiteknowing of the matters in the above paragraph (a); and/or(e) [not pursued].Or, alternatively:Negligence or incompetence in his professional capacity of sucha degree as to reflect on his fitness to practise or as to bring hisprofession into disrepute: s 241(1)(c) of the Act.20. The Committee repeats paragraphs 1 to [19] above.21. If the Practitioner's conduct as described at paragraph [19] above isnot disgraceful or dishonourable, it amounts to negligence orincompetence in the Practitioner's professional capacity of such adegree as to reflect on his fitness to practise or as to bring theprofession into disrepute.Or, alternatively:Unsatisfactory conduct within the meaning of s 12(b) of the Act.22. The Committee repeats paragraphs 1 to [19] above.23. If the Practitioner's conduct as described at paragraph [19] above isnot disgraceful or dishonourable or so negligent or incompetent as toreflect on his fitness to practise or bring his profession into disrepute,it amounts to unsatisfactory conduct, in that it would be regarded bylawyers of good standing as being unacceptable.Tribunal decision[20] The Tribunal set out 11 matters which it regarded as particularly relevant to itsassessment of J's conduct.5 These included six factors indicating that J must haveappreciated the payment was likely to have been made in error. These were:the additional payment of $50,000 was exactly the same as the agreed settlement sum;the additional payment was received on the same day as the agreed settlement sum;the payment exceeded the amount relating to sabbatical expenses identified inthe statement of issues prepared in advance of the mediation; as with salary, sabbaticalexpenses would normally be paid direct to the client employee, not to J's firm;J himself was not expecting the payment; and J implicitly recognised the additionalpayment could be a mistake when he wrote to the client saying "the matter only arisesif we receive correspondence from [the employer]".[21] The Tribunal was concerned that in these circumstances, J chose not to makeany further enquiry and obtained his client's instructions to apply part of the money inpayment of his fees. The Tribunal was plainly troubled that J "opted" to retainthe amount he had taken for fees contrary to his client's instructions to reversethe payment. The Tribunal noted that J's advice to his client that the payment couldnot be reversed was wrong. The Tribunal concluded that J was motivated byself-interest to protect his fees and failed to serve his client's best interests.The Tribunal also noted that J failed to give any advice to his client on the potentialconsequences of retaining a mistaken payment. Instead, J advised his client to keepthe money, remain silent and leave it for the employer to raise the issue if it discoveredits error.[22] After setting out these matters, the Tribunal concluded that J's conduct was, inall the circumstances, disgraceful and dishonourable:[26] The Tribunal finds that the respondent's failure to advise his client ofthe risks of retaining the additional payment without further enquiry and hisaction of subsequently applying the funds to his client's outstanding legalcosts was serious to the degree that [it] was disgraceful and dishonourable.5 Tribunal decision, above n 1, at [25].High Court judgment[23] The Judge commenced his analysis by stating that misconduct under s 241(a)of the Act was the most serious in the hierarchy of charges in s 241.6 Citing a line ofauthority starting with Pillai v Messiter (No 2) the Judge observed that proof ofmisconduct requires "something more" than mere negligence or incompetence.7This could include indifference to and an abuse of the privileges accompanyingregistration as a legal practitioner.[24] The Judge carried out an independent analysis of whether misconduct wasproved. His reasons for agreeing with the Tribunal's finding that this was proved arecaptured in the following three paragraphs of his judgment:[41] Applying these rules, when the legal position as to the client's receiptof the unexpected payment remained at large, it was incumbent on Mr J toaddress the issue with the client. Of particular note is the client's reference,on two occasions, to Mr J's contended advice about "legitimate expectation",which is not at any point affirmed by Mr J. To the contrary, Mr J's responseis to revert to the completeness of his 30 January 2014 email, in which thereis no mention of 'legitimate expectation'. Protection and promotion ofthe client's interests in those circumstances required clarification ofthe client's legal position on receipt of unexpected funds.[42] Mr J's hindsight concession he ought to have been more proactive inproviding the advice is not a counsel of perfection; it was the bare minimumdemanded in circumstances of a lawyer's receipt, in conjunction withan expected extraordinary compensatory payment on the client's account, ofan unexpected contended ordinary transactional payment also on the client'saccount. It was not enough to advise silence unless the institution raisedan issue: that course neither protected nor promoted the client's position. I amclear Mr J's failure to advise the client of the risks presented by receipt ofunexpected funds fell well short of the expected standard of competence anddiligence, and would be regarded by lawyers of good standing asunacceptable. Mr Billington's acknowledgement of such as 'unsatisfactoryconduct' was inevitable. The remaining question is whether Mr J's conduct is"so gross, wilful, or reckless" as to constitute 'misconduct'.[43] The 'something more' is contributed by Mr J's part application ofthe additional payment completely to meet the client's outstanding fees. Mr Jcontended to the client that position was irreversible, against the reality ofsuch reversal's ease; he commended uninformed silence instead of aninformed response to the unexpected receipt of funds. In those circumstances,Mr J was indifferent to and abused the privileges of his registration as a legal6 High Court judgment, above n 2, at [33].7 Pillai v Messiter (no 2) (1989) 16 NSWLR 197 (NSWCA) at 200. Applied in Re A (Barrister andSolicitor of Auckland) [2002] NZAR 452 (HC) at [49]–[50]; and Complaints Committee No 1 ofthe Auckland District Law Society v C [2008] 3 NZLR 105 (HC) at [31]–[33].practitioner, which put him in the position to receive funds on the client'saccount. Mr J's conduct in failing to apprise the client of the risks presentedby retention of unexpected payments of money was at least reckless, if notwilful, to a sufficient degree as to constitute misconduct. His advice of silencecannot be seen solely for the client's benefit, but also to maintain discharge ofthe client's liabilities to Mr J's firm. In my assessment, lawyers of goodstanding would regard his conduct as disgraceful or dishonourable.Submissions on appeal[25] In his written submissions for J, Mr Billington QC submitted that boththe Tribunal and the High Court erred in law by failing to consider which of the threealternative charges represented "a more fitting and proportionate disciplinary responsebased on the facts". He contended that the charges in s 241 are non-hierarchical.This means that when alternative charges under s 241 of the Act are brought in respectof the same particularised conduct, each charge should be considered. He submittedthis accords with standard practice where alternative charges of equal gravity are laidin criminal proceedings. He said this approach is also supported by the non-punitivenature of the disciplinary regime under the Act.[26] Mr Billington further argued that a duty of proportionality exists in relation tothe entire regime, one that focuses on the appropriate 'fit' of a charge to the facts, andthe imposition of the least restrictive outcome necessary to fulfil the purpose ofthe regime. In summary, Mr Billington contended that the Tribunal was bound toconsider each charge separately and decide which was the most apposite having regardto the public interest and the interests of the practitioner, including the need to arriveat the least restrictive outcome.[27] Mr Hodge submitted that having found J guilty of misconduct (s 241(a)), therewas no requirement to consider the alternative charges of unsatisfactory conduct(s 241(b)) or negligence coming within s 241(c). He resists Mr Billington's contentionthat the Tribunal is at liberty to choose the most "fitting" charge. On the contrary,he submits that the proper approach is to consider the primary charge. Questions ofproportionality and the least restrictive outcome arise at the penalty stage, not before.[28] Mr Billington retreated somewhat from his written submissions duringthe hearing of the appeal. He acknowledged the difficulty of reconciling his"non-hierarchical" submission with the idea that the Tribunal was obliged to identifythe charge representing the "least restrictive outcome". He also accepted that ifa charge of misconduct was properly found proved, it would not be necessary forthe Tribunal to go further and consider the alternative charges.[29] It emerged at the hearing that J's fundamental complaint is that boththe Tribunal and the High Court were too quick to find misconduct proved, wronglypre-empting consideration of the appropriateness of an alternative finding on one orother of the lesser charges. Mr Billington says J's acknowledged failure to giveadequate advice was not sufficiently serious to justify a finding of misconduct.This omission aside, he contends that J acted properly in all respects and in accordancewith his client's instructions. He says that if the proper enquiry had been undertaken,the Tribunal and the High Court would have appreciated that they had extendedthe scope of "misconduct" beyond its proper ambit and found that J's conduct wasproperly viewed as unsatisfactory conduct or, at worst, negligence within s 241(c).[30] In a related submission, J complains that the finding of misconduct has notbeen adequately explained. He contends that neither the Tribunal nor the High Courtarticulated how his admitted negligence went further and amounted to misconduct.Mr Billington stressed that the consequences for J are potentially grave because ofthe serious stigma associated with a finding of misconduct. In summary, Mr Billingtonsubmits that the finding of misconduct was not available and was a disproportionateresponse to J's failings in this case.Analysis[31] Section 241 of the Act reads as follows:241 Charges that may be brought before Disciplinary TribunalIf the Disciplinary Tribunal, after hearing any charge against a personwho is a practitioner or former practitioner or an employee or formeremployee of a practitioner or incorporated firm, is satisfied that it hasbeen proved on the balance of probabilities that the person—(a) has been guilty of misconduct; or(b) has been guilty of unsatisfactory conduct that is not so gross,wilful, or reckless as to amount to misconduct; or(c) has been guilty of negligence or incompetence in his or herprofessional capacity, and that the negligence orincompetence has been of such a degree or so frequent as toreflect on his or her fitness to practise or as to bring his or herprofession into disrepute; or(d) has been convicted of an offence punishable by imprisonmentand the conviction reflects on his or her fitness to practise, ortends to bring his or her profession into disrepute,—it may, if it thinks fit, make any 1 or more of the orders authorised bysection 242.[32] Unlike the Law Practitioners Act 1982, which the current Act repealed andreplaced, there is a lengthy definition of what constitutes "misconduct" in ss 7–11 and"unsatisfactory conduct" in ss 12–14 of the Act. These definitions must be kept inmind when considering the applicability of the authorities decided under the earlierlegislation. The definition of misconduct relevantly includes (under s 7(1)(a)(i)),conduct of a lawyer when providing regulated services "that would reasonably beregarded by lawyers of good standing as disgraceful or dishonourable". Misconduct isalso defined to include certain wilful or reckless contraventions or failings(s 7(1)(a)(ii) and (iii)) and charging grossly excessive costs for legal work(s 7(1)(a)(iv)).[33] "Unsatisfactory conduct" is relevantly defined to include conduct that wouldbe regarded by lawyers of good standing as being "unacceptable", including "conductunbecoming a lawyer" or "unprofessional conduct" (s 12(b)). Misconduct qualifyingas "disgraceful or dishonourable" will be "unacceptable" (s 7(1)(a)(i)) and thereforeamount to unsatisfactory conduct, but the reverse is not necessarily true. However, forthe purposes of the charges that may be brought under s 241, the misconduct andunsatisfactory conduct categories are mutually exclusive. A finding of unsatisfactoryconduct on a charge brought under s 241(b) cannot be made unless the conduct is notso gross, wilful or reckless as to amount to misconduct. This differentiating criteriondid not feature in the former Act.8[34] Unsatisfactory conduct is broad in scope. It extends beyond unbecoming orunprofessional conduct and includes mere negligence. Section 12(a) defines8 Law Practitioners Act 1982, s 106(3).unsatisfactory conduct to include "conduct that falls short of the standard ofcompetence and diligence that a member of the public is entitled to expect ofa reasonably competent lawyer" — the negligence standard. To meet the heightenedtest under s 241(c), the negligence or incompetence must be of such a degree or sofrequent as to bring the profession into disrepute or reflect on the practitioner's fitnessto practise.[35] Thus, while unsatisfactory conduct is sufficiently broadly defined to embraceconduct qualifying as misconduct or negligence or incompetence, it is a step-downcategory for charging purposes under s 241. So, if the unsatisfactory conduct asdefined under s 12 meets the more stringent test required to establish misconduct unders 241(a), it must be dealt with as such. Mere negligence can be charged asunsatisfactory conduct but one or other of the additional limbs — conduct bringingthe profession into disrepute or reflecting on the practitioner's fitness to practise —must be established to justify a charge brought under s 241(c).[36] To this extent at least, there is a hierarchy in s 241 with unsatisfactory conductunder s 241(b) being at the bottom of that hierarchy. While unsatisfactory conductcovers conduct of a less serious kind than either misconduct under s 241(a) ornegligence/incompetence under s 241(c), there is no necessary correlation betweenthese more serious categories. The definition of misconduct in s 7 does not refer tonegligence at all. These categories are generally directed to different kinds of conductas this Court observed in W v Auckland Standards Committee 3 with reference tothe comparable categories in the former legislation:9As discussed by the Full Court in Complaints Committee No 1 of the AucklandDistrict Law Society v C, a distinction needs to be drawn between a charge ofprofessional misconduct under s 112(1)(a) and a charge of negligence orincompetence under s 112(1)(c). Both may reflect on fitness to practise,the need to maintain public confidence in the legal profession, andthe objective of protecting the public, but the former will usually requiredeliberate wrongdoing or gross negligence of the type discussed by Kirby P33in Pillai v Messiter. In contrast, a charge against a practitioner under s 112(c)may be established in the absence of deliberate wrongdoing or grossnegligence as long as the negligence or incompetence is established to such9 W v Auckland Standards Committee 3 [2012] NZCA 401, [2012] NZAR 1071 at [43].a degree as to reflect on fitness to practise or as to tend to bring the professioninto disrepute.(Footnotes omitted).[37] A ranking of the relative seriousness of the conduct in issue is notdeterminative of the most appropriate charge. For instance, conduct amounting tounsatisfactory conduct under s 241(b) in a particular case could be viewed as beingmore serious than conduct in another case properly treated as misconduct unders 241(a) or negligence to the degree required under s 241(c). With one qualification,we consider the observations of the Full Court of the High Court in ComplaintsCommittee of the Canterbury District Law Society v W, which were made inthe context of s 106 of the former legislation, remain apposite:10In our view each of the paragraphs of s 106 are intended to capture differentkinds of conduct which may be more or less serious in a particular case.For example, a charge of incompetence (s 106(3(c)) may in a particular casebe a more serious charge than a charge of misconduct in professional capacity(s 106(3)(a)). A charge that concerns an offence punishable by imprisonmentthat reflects on fitness to practise (s 106(3)(d)) may in a particular case bemore serious than a charge of conduct unbecoming (s 106(3)(b)). There is nohierarchy of seriousness as between the paragraphs such that (a) is moreinherently serious than (c), and nor do each of the paragraphs have to beassessed relative to the others. Conduct is to be assessed in respect ofthe particular charge that has been brought.The one qualification is that, as already explained, unsatisfactory conduct unders 241(b) of the current Act excludes conduct that is so gross, wilful or reckless as toamount to misconduct under s 241(a).[38] The task in each case is to focus on the conduct relied on to support the chargeand determine whether it falls within the specified category. Here, the principal chargealleged misconduct on the basis the conduct was disgraceful or dishonourable. It wasentirely appropriate for the Tribunal to consider that charge first. As Mr Billingtonnow concedes, if the Tribunal was satisfied that J's conduct amounted to misconduct,because it was judged by the specialist tribunal to be disgraceful or dishonourable,there was no need for it to go further and consider the alternative charges.Indeed, the finding that such misconduct had been proved excluded the possibility of10 Complaints Committee of the Canterbury District Law Society v W [2009] 1 NZLR 514 (HC) at[80].a proper finding that it was merely unsatisfactory conduct. The finding also placedthe conduct in a different category from negligence or incompetence meetingthe requirements of s 241(c). As noted, dishonourable or disgraceful conduct isdirected to a separate category of professional failing. While someone may benegligent or incompetent to such a degree that it reflects on their fitness to practise orbrings the profession into disrepute, conduct that is dishonourable or disgraceful isgenerally of a different kind.[39] It follows that we see no error on the part of the Tribunal or the High Court inconsidering whether misconduct was proved without regard to whether the alternativecharge of unsatisfactory conduct or negligence of the degree covered by s 241(c) wasa better "fit". The answer to the question of law set out at [3] above is "no".[40] J's complaint that the facts found by the Tribunal could not amount tomisconduct is beyond the scope of this appeal, which is not an appeal on the merits.11Nevertheless, we are satisfied such a finding was open on the facts as found.J's proven failings went beyond negligence and involved breaches of his fiduciaryduty to his client. We are satisfied that neither the Tribunal nor the High Court erredin law in making the finding of misconduct.[41] For these reasons, the appeal must be dismissed.Result[42] The answer to the question of law set out at [3] of this judgment is "no".[43] The appeal is dismissed.[44] The appellant must pay costs to the respondent for a standard appeal ona band A basis and usual disbursements.11 Lawyers and Conveyancers Act 2006, s 254. This leave provision was modelled on s 116 ofthe Immigration Act 1987, which this Court described as being functionally equivalent to the casestated procedure: see Durran v North CA269/89, 31 October 1989. Moreover, unlike the similarlyframed s 214(5) of the Employment Relations Act 2000, this Court was not given the power to"confirm, modify, or reverse the decision appealed against".Solicitors:Vallant Hooker & Partners, Auckland for AppellantMeredith Connell, Auckland for Respondent