McGUIRE v NEW ZEALAND LAW SOCIETY [2020] NZHC 3053

McGUIRE v NEW ZEALAND LAW SOCIETY [2020] NZHC 3053 [18 November 2020]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV 2020-485-410[2020] NZHC 3053UNDER the Judicial Review Procedure Act 2016BETWEEN JEREMY JAMES McGUIREAppellantAND NEW ZEALAND LAW SOCIETYRespondentHearing: 23 October 2020Counsel: Mr McGuire appearing in personP N Collins for RespondentJudgment: 18 November 2020JUDGMENT OF MALLON J[1] Mr McGuire is a lawyer. He has had professional difficulties beginning in2010. His understanding was that all matters were resolved in September 2016.However, since then, various determinations of Standards Committees, appointed bythe New Zealand Law Society, have censured him for unsatisfactory conduct, imposedfines and ordered him to pay damages. Mr McGuire says those determinations arewrong. He says that they have ruined his reputation, have caused him hugeprofessional and personal disruption, and affected his ability to make an income.Reluctantly, he says, he issued legal proceedings against the Law Society in theDistrict Court seeking damages.[2] Mr McGuire applied to strike out parts of the Law Society's statement ofdefence to that proceeding. The Law Society filed an application to strike outMr McGuire's claim. In a decision delivered on 27 September 2019, the District Courtdetermined that the Law Society's application to strike out the claim should be heardfirst.1[3] In a decision delivered on 7 April 2020, the District Court determined thatMr McGuire's claim should be struck out in its entirety.2 The Judge's reasons were:(a) the claim appeared to be one for tortious acts or omissions of theStandards Committees or their members and the Law Society was notvicariously liable for those act or omissions;(b) the claims were an abuse of process in that they amounted to collateralattacks on the determinations of standards committees; and(c) the pleaded cause of action for breach of statutory duties was clearlyuntenable and the difficulties in the claim were fundamental and couldnot be remedied by amendment.[4] On 14 April 2020 Mr McGuire applied to recall the Court's judgment dated7 April 2020. The grounds on which he sought to recall the Court's judgment were:(a) there are authorities involving the Plaintiff and Standards Committeesas defendant where the New Zealand Law Society as solicitor on therecord instructed counsel to represent Standards Committees;(b) the Plaintiff never corresponded with any member of any StandardsCommittees during this litigation;(c) the Plaintiff has been awarded costs against Standards Committeedefendants which were paid by the New Zealand Law Society and hehas paid costs awarded to Standards Committee defendants to theNew Zealand Law Society;(d) Standards Committee defendants cannot be separate and independentto the New Zealand Law Society on these authorities.[5] In a decision delivered on 7 July 2020, the Judge declined Mr McGuire's recallapplication.3 His reasons were:1 McGuire v New Zealand Law Society [2019] NZDC 17164.2 McGuire v New Zealand Law Society [2020] NZDC 3011.3 McGuire v New Zealand Law Society [2020] NZDC 12925.(a) Mr McGuire relied on two authorities in support of his stated grounds:McGuire v Manawatu Standards Committee and McGuire v WellingtonStandards Committee (No 1).4 There was nothing in either of thosejudgments which supported the proposition that the Law Society isvicariously liable for the acts or omissions of Standards Committees.(b) The fact that the Law Society might pay the legal costs incurred inlitigation involving a Standards Committee is immaterial to whether ornot they were vicariously liable. The fact that the Law Society maydecide to stand behind members of the Standards Committee does notmake them legally responsible in damages for them.(c) There was no basis for recall of the judgment under the well-establishedprinciples. If Mr McGuire had a remedy, that remedy was an appeal.However, an appeal would appear to be academic if limited to only oneof the bases on which the claim was struck out.[6] Mr McGuire then filed a notice of appeal in the High Court against the DistrictCourt's 7 April 2020 and 7 July 2020 decisions. The appeal from the 7 April 2020decision was said to be out of time and required special leave. The appeal against the7 July 2020 decision did not require leave. Mr McGuire then decided to amend hisappeal so that it was confined to an appeal against the 7 July 2020 decision.[7] Rule 11.9 of the District Court Rules 2014 empowers a judge to recall ajudgment at any time before a formal record of it is drawn up and sealed. The samerule appears in r 11.9 of the High Court Rules 2016. It is established authority thatrecall is available where:5(a) since the hearing, there has been amendment to a relevant statute orregulation, or a new judicial decision of relevance and high authority;4 McGuire v Manawatu Standards Committee [2015] NZHC 2100 and McGuire v WellingtonStandards Committee (No 1) [2016] NZSC 6.5 Horowhenua County v Nash (No 2) [1968] NZLR 632 at 633; applied in Saxmere Co Ltd v WoolBoard Disestablishment Co Ltd [2009] NZSC 122, [2010] 1 NZLR 76.(b) counsel failed to direct the court's attention to a legislative provision orauthoritative source of plain relevance; or(c) for some other very special reason, justice requires that the judgmentbe recalled.[8] As to the third ground, the Court of Appeal has said:6This gives the Court the ability to recall a judgment for a very special reasonto avoid an injustice.The third category is not defined with particularity in any judgments.However, it is quite clear that the discretion to recall must be exercised withcircumspection, and it must not in any way be seen as a substitute for appeal.In particular there are some things that it can be said the power to recall doesnot extend to. It does not extend to the challenge of any substantive findingsof fact and law in the judgment. ...[9] Mr McGuire contends that the District Court failed to consider the relevantauthorities which support his argument that the Standards Committees are notindependent of the Law Society, but rather are part of the Law Society. In other words,that the principal of vicarious liability has no application. He submits that if theDistrict Court Judge had considered the relevant authorities put to him but got theapplication of them wrong, then his remedy would be to appeal. He submits recall isavailable because the authorities were not considered.[10] In support of the submission that recall is the appropriate course, Mr McGuirerelied on Routhan v PGG Wrightson Real Estate Limited.7 In that case recall wasgranted where an Associate Judge had dismissed a discovery application on anincorrect understanding of the claims alleged. The Associate Judge hearing the recallapplication relied in particular on two cases in granting the recall. One of those waswhere a Master accepted he had "blurred" two causes of action when dismissing asummary judgment application.8 The other was Munro v Gladvale Farms Ltd, whereHeath J said:96 Nottingham v The Real Estate Agents Authority [2017] NZCA 145 at [8]-[9].7 Routhan v PGG Wrightson Real Estate Limited [2020] NZHC 702.8 Works Civil Construction Ltd v Does Not Compute Corporation Ltd HC Wellington CP46/92,19 November 1992 at 6-8.9 Munro v Gladvale Farms Ltd [2017] NZHC 2692 at [14].In my view, a recall application must raise a material issue on which it wouldbe unjust for the parties to be put to the cost and trouble of appeal, when theissue is one more appropriately addressed by the first-instance Judge. Such asituation will arise in cases in which a Judge acknowledges that he or sheoverlooked a material factor in reaching a particular decision. Recall, in thatsituation, avoids the risk that an appeal might be allowed and remitted to thetrial Judge for reconsideration of the point in issue, at unnecessary further costto the parties. Such circumstances, in my judgment, constitute a "very specialreason" for exercising the recall judgment, to adopt the language by Wild CJin Horowhenua County.[11] In my view, this statement of principle does not apply here. In his 7 April 2020decision, the Judge understood Mr McGuire's submission to be that StandardsCommittees "are integral organs of the Society under its control and carrying out itsfunctions".10 The Judge considered the statutory framework and concluded that theStandards Committee were not employees of the Law Society nor under their controland their quasi-judicial function required independence. He accepted the Law Societyprovided them with ancillary services but that did not alter their status. The Judge wasof the view that the Law Society was not vicariously liable for the actions of theStandards Committee given the absence of an employment or agency relationship andthe independence required of Standards Committees.11[12] In reaching this conclusion, the Judge was not required to discuss the cases thatMr McGuire relied on. Nor was he required to specifically address all of the pointsMr McGuire made in support of his position. The Judge addressed the substance ofMr McGuire's argument and rejected it. When the Judge was asked to recall hisjudgment on the basis of those points, he remained of the same view. This was not,therefore, a case of the Judge realising he had been mistaken about something in hisoriginal judgment. Rather, Mr McGuire's challenge is to a substantive determinationmade by the Judge that Mr McGuire contends is wrong.[13] Further, the basis on which the Law Society could be liable for the actions ofthe Standards Committee was one of three reasons why the claim was struck off. Thismeans that, even if the Judge was wrong about the relationship of the StandardsCommittee to the Law Society, directing that the Judge recall his decision would not10 McGuire v New Zealand Law Society, above n 2, at [21].11 At [39]-[41].achieve a different result on the strike out application. Therefore directing a recallwould not save unnecessary further costs.[14] In these circumstances, if Mr McGuire wishes to pursue the matter, the properavenue to do so is an appeal of the Judge's 7 April 2020 decision. That will requirean application for an extension of time.12 If Mr McGuire does make that application,I suggest that the parties consent to the application for an extension being dealt withat the same time as the appeal because that may be more efficient in the long run. Ialso suggest that, if McGuire does intend to pursue an appeal, he include a draftamended statement of claim, as he will need to be able to show a reasonably arguablecause of action bearing in mind the Judge's additional reasons for granting the strike-out.Result[15] The appeal against the District Court's 7 July 2020 judgment is dismissed.Costs on a 1A basis are granted in favour of the respondent (recall applications beingstraightforward matters requiring a comparatively small amount of time).Mallon J12 High Court Rules 2016, r 20.4.