DORBU V NEW ZEALAND LAW SOCIETY HC AK CIV-2011-404-6219

DORBU V NEW ZEALAND LAW SOCIETY HC AK CIV-2011-404-6219 [2 April 2012]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2011-404-6219[2012] NZHC 564IN THE MATTER OF the Law Practitioners Act 1982 and theLawyers and Conveyancers Act 2006BETWEEN JOHN EVANS DORBUAppellantAND NEW ZEALAND LAW SOCIETYRespondentHearing: 20 March 2012Court: Miller, Andrews and Peters JJCounsel: J E Dorbu (In person) AppellantH Keyte QC and M Treleaven for RespondentJudgment: 2 April 2012JUDGMENT OF THE COURT[1] On 30 September 2010 the New Zealand Lawyers and ConveyancersDisciplinary Tribunal struck John Dorbu's name from the roll of barristers andsolicitors, having earlier found him guilty of professional misconduct.1[2] He brings this appeal against the penalty decision, saying that the Tribunal was wrong to impose any penalty on 10 charges before rehearing an eleventh which1 The liability decision was dated 8 June 2010. Eight charges were brought under transitional provisions of the Lawyers and Conveyancers Act 2006 as if the former Law Practitioners Act 1982 had not been repealed, and the remaining two were brought under the 2006 Act. For our purposes there is no material difference between the two statutes.Brewer J, on judicial review, had remitted to the Tribunal for reconsideration.2 He also contends that the penalty was excessive.3The allegations[3] The charges fell into three groups. The first seven were called "the Barge litigation charges". Counts 8 to 10 were the "G and KA charges", while counts 11 and 12 were "the judiciary charges". Charge 9 was dismissed for duplicating charge8, but on all the others Mr Dorbu was found guilty of professional misconduct.The Barge litigation charges[4] The Barge litigation charges concerned a complex scheme to defeat Mr Barge's interest as purchaser of a property at Anzac Avenue, Auckland. Nosooner had the ink dried on the contract in March 2002 than the vendor, Freeport Development Ltd, changed its mind because a Ms Jiao approached it offering a materially higher price. Mr Barge refused an invitation to cancel the contract and lodged a caveat against the title to protect his equitable interest in the property.[5] Freeport was undeterred. Representing it, Mr Dorbu claimed in a letter of 29 May 2002 to Mr Barge's solicitors that the shares in Freeport, which were owned bya Mrs Chen and interests associated with her, had been sold to a Mr Huang in 2001. Mr Dorbu appears to have held the view that this alleged transaction ruled out any possibility of completing the agreement for sale and purchase, since the property wasFreeport's only real asset. He coupled that with a claim that the agent who had signed the agreement for sale and purchase to Mr Barge acted without authority.[6] Some weeks after writing this letter, Mr Dorbu drafted a trust deed for the Harsono Family Trust, and at the same time an agreement for the sale of the Freeport2 Dorbu v Lawyers and Conveyances Disciplinary Tribunal HC Auckland CIV-2009-404-7381, 11 May 2011.3 In his notice of appeal Mr Dorbu also contended that the Tribunal took irrelevant matters into account while overlooking relevant ones, and that it misdirected itself in law, but these grounds add nothing to the others and were not developed on appeal, so we say no more about them.shares to that trust was executed. The vendor was described as Freeport itself, but it appears that the shares affected were those still owned by Mrs Chen and her associates.4 When the trust was formed, the appointed trustees were Mr Huang, Ms Jiao and a Mr Chiao. Ms Jiao and Mr Chiao are brother and sister, and Ms Jiao and Mr Huang are married to one another.[7] In the meantime, Mr Chiao acquired by assignment an existing registered mortgage that Freeport had granted to the Bank of New Zealand. Mr Dorbu conducted the negotiations with the Bank, demanding that it assign the mortgage rather than execute a discharge. Mr Chiao issued a default notice under the mortgage before it was transferred from BNZ, before he had advanced any money under it, and while there was no existing default to BNZ. He then agreed before the default notice expired to sell the property to Ms Jiao. The transfer pursuant to the mortgage was eventually made by Mr Chiao as mortgagee to the trustees of the Harsono Family Trust. The purpose of this transaction was that of defeating Mr Barge's caveat. Mr Dorbu claims to have served the default notice on Mr Barge(as the Property Law Act 1952 required) by courier, and he signed the conveyancing documents correct.[8] Mr Dorbu acted for all of the parties to this scheme. He conceded before the Tribunal that it was his idea to transfer the mortgage; his clients, who appear to becitizens of Taiwan, "wouldn't have a clue."[9] In litigation between Mr Barge and Mr Dorbu's clients, Priestley J found thatthe parties for whom Mr Dorbu acted had entered an unlawful means conspiracy. Mr Dorbu did not give evidence. An appeal to the Court of Appeal was dismissed.[10] Priestley J was concerned about Mr Dorbu's role in the conspiracy. Hedirected that his judgment be referred to the Law Society. The Society investigated and eventually laid the present charges. Charge 1 alleged that Mr Dorbu was party to the unlawful means conspiracy. It is this charge which was remitted to the4 To the extent necessary to understand the narrative given in the Tribunal decisions, we have referred to the judgment of Priestley J in the Barge litigation, in which this point is made at [106]:Barge v Freeport Development (2005) 7 NZCPR 361 (HC).Tribunal for rehearing. Brewer J accepted that there was ample evidence to supportthe Tribunal's conclusion that charge 1 was proved, but he found that the Tribunalerred in law by placing a burden on Mr Dorbu to prove the previous findings of this Court and the Court of Appeal wrong, and he was not prepared to exercise hisdiscretion to deny relief. We return to Brewer J's decision below.[11] Charge 2 alleged that Mr Dorbu, a barrister sole, acted as a solicitor by signing correct the transfer of the BNZ mortgage so that it could be registered. He also had a settlement statement for the sale prepared by a firm of accountants. It stated that he also acted for the mortgagee. He then certified correct a transfer of the property to the ultimate purchaser. The Tribunal found that only a solicitor can perform these services.[12] Charge 3 alleged that Mr Dorbu acted for all defendants without their prior informed consent. The Tribunal found the conflicts of interest irreconcilable, notingthat the purchasers' title would always be defective because of the way in which it had been acquired.[13] Charge 4 alleged that Mr Dorbu knowingly failed to discover documents in the proceedings brought by Mr Barge. They were the memoranda of transfer,documents relating to Mr Dorbu's dealings with BNZ about the transfer, and the Harsono Family Trust deed. A non-party discovery order was made against Mr Dorbu. The Tribunal rejected Mr Dorbu's claim that he thought it unnecessary tomention these documents because he had sent his papers to lawyers who were now acting for his clients. He knew the documents existed and were covered by the discovery orders. He failed to honour his obligations to the Court.[14] Charge 5 alleged that on 21 June 2002 Mr Dorbu wrote to Mr Barge, whom he knew to be represented by a firm of solicitors. That firm had refused to correspond with Mr Dorbu until he supplied them with the name of his instructing solicitor. In his letter to Mr Barge, Mr Dorbu did explain that he was writingbecause Mr Barge's solicitors refused to communicate with Mr Dorbu. But he also advised incorrectly that the agreement for sale and purchase was ineffective because the shares in Freeport had been sold to Mr Huang in 2001, and he invited Mr Bargeto change lawyers. The Tribunal found that he had blatantly breached Rule 6.02 of the Rules of Professional Conduct by communicating with the client of another practitioner.[15] Charge 6 alleged that Mr Dorbu failed to maintain proper standards of professionalism in relation to other lawyers, citing the letter to Mr Barge and a letterto the Auckland District Law Society in which he accused one of Mr Barge'slawyers of lacking good faith and suggesting that his accusers were stupid. The Tribunal described the latter as particularly insulting.[16] Charge 7 alleged that Mr Dorbu misled the Court by swearing a falseaffidavit in Mr Barge's litigation stating that he caused a copy of the mortgagedefault notice to be served on Mr Barge as caveator. This allegation he supported by reference to a courier record which, the Tribunal found, related to a different document. We say more about this charge below.The G and KA charges[17] The G charges, numbers 8 and 9, arose out of litigation in which Mr G, a barrister, represented Mr and Mrs R in civil proceedings in the District Court. They sought damages from W Properties Ltd, whose director was Mr S. As the litigationwent on the defendant's solicitor withdrew and Mr S approached Mr G indicating that he wanted to settle. A meeting was eventually held at Mr G's chambersbetween Mr G and Mr S. It resulted in a settlement a term of which was that if payment was not made judgment could be entered for $4,000 more than the settlement sum. Payment was not made, and judgment was obtained on admission.[18] Mr Dorbu then became involved in an attempt to have the judgment set aside. Mr S swore an affidavit imputing improper conduct to Mr G, who stood aside and swore an affidavit making it clear, as the Tribunal found, that he had acted properly. But Mr Dorbu persisted, only to be roundly criticised by the District Court. Undeterred, he filed an appeal in which he pursued the same grounds, with equal lack of success.[19] As noted above, the Tribunal dismissed charge 9 but found charge 8 proved. That charge alleged that he had attacked Mr G, a fellow practitioner, without good cause.[20] The KA charge, number 10, concerned an answer to interrogatories given by Mr Dorbu in defamation proceedings that he brought personally against a finance company. Asked whether he had ever been the subject of disciplinary complaints, he answered in the affirmative. He also responded in the affirmative to a follow-up question which asked whether any such complaints had been made by or on behalf of any member of the judiciary, but added that the Auckland District Law Society"reviewed and dismissed the complaint". It is common ground that Mr Dorbu washere referring to an older complaint made by Chambers J. It had nothing to do with the Barge litigation.[21] The Tribunal found charge 10 proved, in two particulars. First, Mr Dorbu had claimed that the complaint by Chambers J had been dismissed. It had not. Although it resulted in no disciplinary action, the complaint did lead the Law Society to express the opinion that it had been justified and to seek submissions as to costs which Mr Dorbu might be ordered to pay. Second, there was more than one complaint. Priestley J had directed that his judgment in the Barge litigation be referred to the Law Society. This was in substance a complaint, notwithstanding that the Law Society then assumed responsibility for it and did not designate the Judge a complainant. Mr Dorbu himself had characterised it as a complaint, and it was sophistry to suggest otherwise. For these reasons, his answer to the interrogatory did not sit comfortably with a lawyer's duty of honesty to the Court.The judiciary charges[22] Counts 11 and 12 followed an interim decision in the disciplinary proceedings before the Tribunal. Mr Dorbu sought to have Priestley J called to give evidence. The Tribunal refused. On the same day Mr Dorbu emailed the then case manager of the Tribunal, accusing the Judge of racism and bigotry. He copied this email to the Auckland branch of the New Zealand Law Society, and followed it up amonth later by repeating his slurs against the Judge and accusing the Law Society itself of racism.[23] Mr Dorbu subsequently withdrew his allegations and apologised to the Judge, as the Tribunal recognised. The allegations were wholly without substance. The Tribunal nonetheless found his conduct serious, holding that it affected professional standards designed to maintain the integrity of the court system. Mr Dorbu offeredno plausible explanation, claiming that he was upset by the Judge's decision in theBarge litigation although it had been delivered years earlier and upheld on appeal.The penalty[24] Mr Dorbu represented himself at the liability hearing and gave evidence, but he chose not to appear at the penalty hearing or make submissions in mitigation. He explained before us that he took that course because he considered that Brewer J'sdecision rendered the hearing a nullity.[25] The Tribunal noted that the Law Society sought striking-off, and directed itself that it should inquire into any elements of dishonesty, whether reoffending was likely, whether the profession would be brought into disrepute should Mr Dorbu be allowed to continue in practice, and whether questions of public protection arose.[26] The Tribunal then found that there were elements of dishonesty in charges 4, 7 and 10. For charges 4 and 7, the dishonesty was wilful, advertent and calculated.For charge 10, the Tribunal was "not so strongly persuaded" that Mr Dorbu wasdeliberately dishonest, but his behavior exhibited sophistry which did not fit comfortably with the duties of an officer of the Court. It lacked candour and honesty.[27] Turning to the likelihood of reoffending, the Tribunal noted a previous Tribunal finding of unsatisfactory conduct in separate disciplinary proceedings, the first judicial complaint (paragraph [20] above), Mr Dorbu's unsatisfactory conduct of bankruptcy proceedings against him, and Brewer J's findings, when considering costs on the judicial review, that much of Mr Dorbu's case was muddled, irrelevantor plain wrong. Further, Mr Dorbu continues to deny wrongdoing, and he has done nothing by way of rehabilitation or further education in professional standards. Only in the judiciary charges had there been any acknowledgement of responsibility or expression of remorse.[28] The Tribunal next took an overall view of Mr Dorbu's conduct andconsidered the risk that he presents to the public. It noted that he had (in 2009) applied to practise in Queensland, referring to the present disciplinary proceedings in the past tense and saying that he knew of no other matter that might bear on his fitness to practise there. Mr Dorbu's conduct demonstrated that he did notunderstand the rules of professional conduct and his obligations to the Court, and was ignorant of his own lack of competence. The Tribunal referred to the number and frequency of breaches, and found that Mr Dorbu presents an unacceptable risk to the public.[29] The Tribunal considered suspension but found it inappropriate having regard to the number and seriousness of the charges, the lack of remorse, and the absence of evidence in mitigation. Mr Dorbu was struck off and ordered to pay costs of $30,000 to the Law Society and $2993 to the Tribunal.Was the Tribunal wrong to impose penalty before rehearing charge 1?[30] Mr Dorbu's first ground of appeal rests on the decision of Brewer J. He contends that that decision gave the Tribunal two options: to abandon charge 1, or to defer penalty on any charge until charge 1 had been reheard.[31] There is nothing in this point. Having found that the Tribunal had erred in law, Brewer J took the orthodox course of setting its decision aside in part and remitting that part for reconsideration. He was plainly aware, however, that the Law Society might not wish to pursue count 1 in the circumstances. On one view of it, the other counts dealing with the Barge litigation might adequately encompass Mr Dorbu's wrongdoing. He accordingly specified that the Tribunal need notreconsider charge 1 and left that decision to the Tribunal. (We record that thatremains the position following this appeal.) Brewer J did not prohibit the Tribunal from sentencing Mr Dorbu on the remaining charges in the meantime.[32] Mr Dorbu next complained that he was prejudiced by the Tribunal's decisionto continue with both charge 1 and the sentencing. It is difficult to follow his submissions on this point. The end result should be the same, for the Tribunal would have to consider the totality of his misconduct if it sentenced him separately on charge 1. His strongest point is that he will face a second liability hearing and a renewed risk of striking off should he succeed on this appeal. That is inconvenient, but it is difficult to see any appeal point in it. It is not, as Mr Dorbu would have it, a matter of double jeopardy. As Mr Keyte pointed out, there is also a countervailing consideration in that the Tribunal as originally constituted should impose penalty on the surviving charges, while a newly constituted Tribunal is to reconsider charge 1.Was the penalty excessive?[33] Having decided to stay away from the penalty hearing, Mr Dorbu cannot easily show on appeal that the Tribunal was wrong. He presented it with nothing that might point, for example, to remorse or rehabilitation. Further, the appeal is confined to penalty, an earlier attempt to appeal the Tribunal's liability findingshaving been dismissed as out of time.5[34] We nonetheless approached the appeal on the basis that it might be allowed could Mr Dorbu point to anything in the record that justified a lesser penalty. To some extent this inevitably meant revisiting some of the Tribunal's findings in itsliability decision. We did not allow Mr Dorbu to read some parts of a much longer"supplementary" submission which he presented at the hearing before us, withouthaving previously filed or served it. Those parts amounted to unsworn evidence, almost none of which was referenced to the record.[35] The principles to be applied were not in issue before us, so we can briefly state some settled propositions. The question posed by the legislation is whether, by5 Dorbu v New Zealand Law Society [2011] NZAR 174 (HC).reason of his or her conduct, the person accused is not a fit and proper person to be a practitioner.6 Professional misconduct having been established, the overall questionis whether the practitioner's conduct, viewed overall, warranted striking off.7 The Tribunal must consider both the risk of reoffending and the need to maintain the reputation and standards of the legal profession.8 It must also consider whether a lesser penalty will suffice. The Court recognises that the Tribunal is normally bestplaced to assess the seriousness of the practitioner's offending.9 Wilful and calculated dishonesty normally justifies striking off.10 So too does a practitioner'sdecision to knowingly swear a false affidavit.11 Finally, personal mitigating factors may play a less significant role than they do in sentencing.12[36] We turn to the Tribunal's conclusions about dishonesty. In its penaltydecision the Tribunal noted that there were elements of dishonesty in charges 4, 7 and 10. All three charges involved false affidavits. Before dealing with them, wenote Mr Dorbu's submission that the Tribunal first made the findings of dishonestyin the penalty decision. That is not correct. Charges 4, 7 and 10 all alleged that he knowingly swore false affidavits. In its liability decision the Tribunal found charges4 and 7 proved. It had found in relation to charge 10 that Mr Dorbu's answer to theinterrogatory was not candid and honest.[37] Charge 4 is significant, for two reasons. First, the specific documents concerned were central to the scheme designed to defeat Mr Barge's interest in theproperty. Their disclosure would reveal not only what had happened but also Mr Dorbu's central role in it. Second, Mr Dorbu cannot have failed to appreciatetheir significance. He swore three discovery affidavits as a non-party in Mr Barge's litigation, having withdrawn as Freeport's counsel after Mr Barge pleaded aconspiracy and Harrison J queried in an interlocutory hearing (on 25 February 2003)6 Law Practitioners Act 1982, s 113 and Lawyers and Conveyancers Act 2006, s 244.7 Wellington District Law Society v Cummins [1998] 3 NZLR 363.8 Bolton v Law Society [1994] 2 All ER 486 at 492 and Complaints Committee of Waikato Bay of Plenty District Law Society v Osmond [2003] NZAR 162 at 14.9 Bolton v Law Society at 492.10 Webb Ethics, Professional Responsibility and the Layer (2nd ed, LexisNexis, Wellington 2006) at 140.11 Bolton v Law Society at 491; Coe v NSW Bar Association [2000] NSWCA 13CF at [10]-[11]; Re a Practitioner: ex Parte Legal Practitioners Disciplinary Tribunal [2004] WASCA 115 at [13] and [19]; and Barristers' Board v Young [2001] QCA 556 at [15]-[17].12 Ibid.whether Mr Dorbu could continue to act. When giving Mr Dorbu leave to withdraw Harrison J referred to the memorandum of transfer of the mortgage to Mr Chiao, noting that Mr Dorbu had signed it correct. The orders for non-party discovery were then made. The second and third affidavits asserted that Mr Dorbu had no other relevant documents that were not confidential and stated that he had returned documents to solicitors and counsel now acting for his clients. He failed to identify the specific documents concerned as non-privileged documents which had formerly been in his possession. As the Tribunal noted, he had created or certified these documents only months earlier.[38] Charge 7 is also important. It concerns the mortgage default notice that was allegedly served on Mr Barge. The Law Society's case was that this notice was never served, for it would have alerted Mr Barge to the mortgagee's sale. Mr Dorbuswore an affidavit in the Barge litigation in which he stated that he caused a copy of the notice to be served on Mr Barge by track and trace courier, at Mr Barge's thenknown private address in Ponsonby. That was not the address for service given on the caveat. Mr Dorbu had also deposed that the notice was returned by the courier firm, which advised that Mr Barge had moved. The Law Society alleged that the courier pack actually contained the letter of 21 June 2002 in which Mr Dorbu sought inappropriately to advise Mr Barge. That letter made no reference to a default notice, as it surely would have done had the notice accompanied it. The Tribunalaccepted the Society's case on this point.[39] Mr Dorbu sought to persuade us that the letter of 21 June was in fact sent separately by ordinary post. Mr Keyte conceded that there is in the record evidence from Mr Dorbu himself to that effect. Mr Dorbu referred us to a letter of 6 November 2006 to the Law Society in which he made the same claim, adding that there was no logical reason to send the 21 June letter by courier. We allowed Mr Dorbu to develop these points, recognizing that the boundary between matters affecting liability and penalty is not easily drawn. But the Tribunal has found in its liability decision that the letter was in the courier pack, that the default notice was not, and that Mr Dorbu knew these were the facts. It is not now open to Mr Dorbu to challenge these findings, and having heard him we think that very little can be said by way of mitigation or excuse.[40] Mr Dorbu's case before us was that he acted in good faith at all times,although he made mistakes from which he has learned a painful lesson. Thesubmission that he acted honestly is incompatible with the Tribunal's liabilityfindings, which find abundant support in the record. Its liability findings on charges 4 and 7 alone compel the conclusion that the Tribunal was right to strike Mr Dorbu off. His dishonesty was wilful and calculated. It extended to not one but two attempts to mislead the Court in affidavits.[41] Having reached that conclusion, we can deal shortly with the remaining charges. They collectively evidence what can at best be described as striking ignorance of the obligations of a practitioner. As Mr Dorbu submitted, there were a few things to be said in mitigation. For example, he insulted the fellow practitioner after being accused of fraud and he apologised to Mr G and to Priestley J. But these charges cannot be considered in isolation. All of the Barge litigation charges must be considered very serious in the circumstances. Further, even if the remaining charges stood alone it would be necessary for Mr Dorbu to show that he had learned his lesson and undergone rehabilitation. He has done nothing of the sort. Far from it, he sought to mislead the Queensland Law Society when seeking registration there as recently as 2009. Further, he has a history of previous disciplinary complaints which, as the Tribunal noted, point to a failure to learn from his mistakes and a risk of reoffending.[42] We must make one point about charge 5. It is not in dispute that Mr Dorbu wrote the letter of 21 June 2002 and sent it to Mr Barge. Before the Tribunal he did not dispute that he communicated with Mr Barge. His defence was that he was justified in doing so. However, the Tribunal found that the letter was sent in the returned courier pack, so it appears that Mr Barge never received it. There was noargument before us about the meaning of "communicate" in r 6.02. We express noview about it. Whether or not he breached the letter of the rule Mr Dorbu thoroughly violated its spirit, attempting to give legal advice which was at best incompetent and improperly designed to separate Mr Barge from his legal advisors.[43] Mr Dorbu made a plea for leniency before us, referring to his dire financial position and the needs of his family. He explained that he is now a sicknessbeneficiary. But he also claimed that having come from a poor background to qualify as a lawyer, he would never mislead anyone. The record says otherwise. We recognise that he has lost his livelihood. Although there is no evidence of it, we are willing to infer that it has caused his family hardship. That is the normal consequence of striking off. Although the practitioner experiences it as a punishment, that is not its primary purpose. It is done to protect the community and maintain the standards of the profession. In this case there can be no doubt that it was the only proper course open to the Tribunal.Decision[44] The appeal is dismissed. Memoranda may be filed if the Law Society wishes to pursue costs.Miller JAndrews JPeters J