BEZUIDENHOUDT v NEW ZEALAND INSTITUTE OF CHARTERED ACCOUNTANTS [2015] NZHC 2376

BEZUIDENHOUDT v NEW ZEALAND INSTITUTE OF CHARTERED ACCOUNTANTS [2015] NZHC 2376 [30 September 2015]IN THE HIGH COURT OF NEW ZEALANDWHANGAREI REGISTRYCIV-2015-488-000045[2015] NZHC 2376BETWEEN MICHIEL DAVID BEZUIDENHOUDTAppellantAND NEW ZEALAND INSTITUTE OFCHARTERED ACCOUNTANTSRespondentHearing: 12 August 2015Appearances: Appellant in personD McKenzie for RespondentJudgment: 30 September 2015JUDGMENT OF HINTON JThis judgment is delivered by me on 30 September 2015 at 5.30 pmpursuant to r 11.5 of the High Court Rules......................................................Registrar / Deputy RegistrarIntroduction[1] Mr Bezuidenhoudt appeals against a decision of Judge de Ridder dated 1 April 2015 that entered judgment against him on an $8,000 debt enforcement proceeding brought by the New Zealand Institute of Chartered Accountants ("the New Zealand Institute") and struck out Mr Bezuidenhoudt's counterclaim, which was for $1 million.Background[2] In around 2003, Mr Bezuidenhoudt was granted provisional membership of the New Zealand Institute on a reciprocal basis, i.e. relying on his membership of the South African Institute of Chartered Accountants ("the South African Institute"). The provisional membership required Mr Bezuidenhoudt to complete two papers before he could then apply for full membership. Mr Bezuidenhoudt apparently completed the papers in 2004.[3] In 2005, Mr Bezuidenhoudt did not renew his membership of the South African Institute. He advised the New Zealand Institute in February 2005 that he had completed the two papers but was reluctant to convert to a full membership as he was not in practice and did not want to incur the cost of membership fees.[4] In about November 2009, Mr Bezuidenhoudt applied for full membership of the New Zealand Institute as a reciprocal member. That application was declined as Mr Bezuidenhoudt was no longer a member of the South African Institute.[5] No appeal or formal challenge was brought against the New ZealandInstitute's 2009 decision.[6] Notwithstanding the 2009 decision, Mr Bezuidenhoudt apparently then practised as if he were a full member of the New Zealand Institute. He advised in submissions before me that he did this because he took the view that the New Zealand Institute was wrong. He confirmed that he was not paying the membership fees that he confirmed would have been required had he been a full member.[7] In a decision dated 14 May 2013, the Disciplinary Tribunal of the New Zealand Institute ("Disciplinary Tribunal") found Mr Bezuidenhoudt guilty of threecharges of breaching the Institute's rules and Code of Ethics. The breaches related to:(a) Mr Bezuidenhoudt holding himself out as a chartered accountant on his website and/or in a letter dated 30 April 2012 when he was only a provisional chartered accountant;(b) Mr Bezuidenhoudt offering accounting services to the public when he was only a provisional chartered accountant; and(c) Mr Bezuidenhoudt undertaking an assurance engagement when he was only a provisional chartered accountant.[8] Under the relevant rules, there is a total prohibition on a provisional member offering accounting services to the public or conducting an assurance agreement.[9] In its decision of 14 May 2013, the Disciplinary Tribunal imposed a penalty of suspension of Mr Bezuidenhoudt's provisional membership of the New Zealand Institute for two years and made an order that Mr Bezuidenhoudt pay the New Zealand Institute $8,000 in respect of the costs and expenses of the hearing before the Disciplinary Tribunal.[10] No appeal was filed against the Disciplinary Tribunal's May 2013 decision. In its decision the Tribunal had expressly informed Mr Bezuidenhoudt of his right to appeal within 14 days to the Appeals Council. Mr Bezuidenhoudt filed a claim against the New Zealand Institute for $300,000. (I come back to the correspondence in May 2013.)[11] The New Zealand Institute issued an invoice to Mr Bezuidenhoudt for the $8,000, which he failed to pay.[12] In June 2014 the solicitors for the New Zealand Institute made formal demand for the $8,000 debt.[13] The New Zealand Institute then filed proceedings to enforce the debt of $8,000. On receipt, Mr Bezuidenhoudt filed a counterclaim for $1 million.District Court decision[14] The New Zealand Institute sought summary judgment in the District Court against Mr Bezuidenhoudt in the sum of $8,000 and applied to strike out Mr Bezuidenhoudt's counterclaim for $1 million.[15] Judge de Ridder recorded that Mr Bezuidenhoudt's statement of defence wasat times nonsensical and that it challenged the May 2013 decision of the Tribunal. The Judge said any issue that Mr Bezuidenhoudt had with the decision of the Tribunal had to be dealt with by his exercising his appeal rights against that decision (and this would be, as the Tribunal advised Mr Bezuidenhoudt in its May 2013 decision, by appealing to the Appeals Council of the Institute). The Judge said that as he failed to appeal, the decision of the Tribunal stands. The Judge found the simple enforcement action to be clearly within s 13(2) of the New Zealand Institute of Chartered Accountants Act 1996 and that Mr Bezuidenhoudt therefore had no defence to the claim.[16] Section 13(2) of the New Zealand Institute of Chartered Accountants Act 1996 provides:13 Enforcement of orders(2) Where the Professional Conduct Committee or disciplinary body, acting in accordance with this Act or the rules, orders any person who is or was a member of the Institute to pay a penalty, expenses, or other monetary amount to the Institute, that amount is recoverable by the Institute from that person as a debt due to the Institute, whether or not that person remains a member of the Institute.[17] Turning to the counterclaim, the Judge noted that the bulk of it was for alleged loss of earnings and compensation for malicious prosecution and further lump sum claims against the Disciplinary Tribunal for making the orders. The Judge accepted the submission on behalf of the New Zealand Institute that there was noproper basis upon which the counterclaim could be brought against the New Zealand Institute. The New Zealand Institute was enforcing the rules that it was required by law to enforce.[18] The Judge said this was not a case where the counterclaim was capable of amendment. Therefore, the counterclaim was struck out and judgment entered for the Institute in the sum of $8,000 together with interest and solicitor-client costs.The appellant's case[19] While the gist of Mr Bezuidenhoudt's appeal is very difficult to followbecause he is self-represented, his point seems to be that he should be given the right still to appeal the May 2013 decision of the Disciplinary Tribunal within a reasonable time and that he was not given that right at the time.[20] In her minute of 9 June 2015, following a case management conference in respect of this appeal, Thomas J recorded that Mr Bezuidenhoudt's notice of appealfocussed on the decision of the Tribunal rather than the District Court judgment. She ordered security for costs to be paid and that Mr Bezuidenhoudt file and serve points on appeal that clearly state the issues on appeal.[21] In the points on appeal, Mr Bezuidenhoudt pleads:The appeal is against the District Court decision in so far as this court erroneously stated that the appellant did not appeal against the decision ofthe Disciplinary Tribunal The appellant did appeal against this decision within the 14 day window allowed, but the appeal was rejected and no reason was given for this. Moreover, the respondent gave the appellant only about four hours by email to state whether the appellant would like to continue with an appeal regardless. So, the respondent allowed the appellant the right to appeal afresh, but the time-frame was hopelessly unfair and/or unreasonable. By the time the appellant read the email message, the four hour deadline in which to respond was forgone. The appellant should be given the right to appeal to the decision of the Disciplinary Tribunal within a reasonable time.[22] The same point was made by Mr Bezuidenhoudt before me.[23] So it seems fairly clear that Mr Bezuidenhoudt is asking this Court, on appeal from the District Court, to allow him to appeal against the Disciplinary Tribunal'sdecision or to remedy an administrative failure or procedural unfairness on the part of the Disciplinary Tribunal/New Zealand Institute. He also seeks a refund of the $2,500 paid as security for costs.Respondent's submissions[24] The New Zealand Institute submits that this is a simple case and the appeal must be dismissed. It submits that the notice of appeal and the points on appeal do not challenge the District Court's finding of liability for the outstanding debt owed, nor has any challenge been made by Mr Bezuidenhoudt in relation to the DistrictCourt Judge's decision to strike out the counterclaim.[25] Mr Bezuidenhoudt had failed to exercise his appeal rights and the debt was due. The New Zealand Institute says that is the end of the matter in terms of the jurisdiction of this Court on an appeal from the District Court decision.[26] The Institute also seeks costs on the appeal, to be awarded on a solicitor- client basis pursuant to r 22.10 of the Institute's rules.[27] The New Zealand Institute says, in effect, this Court does not have jurisdiction on an appeal from the District Court judgment to look beyond whether the New Zealand Institute had met the criteria under s 13(2) of the New Zealand Institute of Chartered Accountants Act, which it clearly had, or whether the District Court Judge was right to strike out the counterclaim. Neither of these is even challenged. This is not an appeal from the Disciplinary Tribunal and it would completely pervert the system it if were to be treated as one.[28] Purely out of completeness, the New Zealand Institute points out that Mr Bezuidenhoudt in fact had every opportunity to appeal and simply failed to take it or abused that opportunity. The New Zealand Institute points out that it advised Mr Bezuidenhoudt in its May 2013 decision of his right to appeal within 14 days (by 28 May 2013) and that no appeal was brought. Rather, on 26 May 2013, Mr Bezuidenhoudt forwarded to the Institute a document that set out various sums totalling over $300,000 that he claimed the Institute owed to him. On 27 May 2013, Janene Hick of the New Zealand Institute replied and said:Under Rule 21.41 when lodging an appeal you must state, in writing, the grounds on which you are appealing. Can you please provide me with your grounds for appealing. Once I have received your notice of appeal, including the grounds for your appeal, the matter will be referred to the Chairman of the Appeal Council.[29] The New Zealand Institute submits that Mr Bezuidenhoudt then failed to provide a notice of appeal.[30] Mr Bezuidenhoudt was then informed that the 14 day appeal period had passed. Mr Bezuidenhoudt wrote on 9 June 2013 that the document he sent on 26 May 2013 was in writing and should be accepted as an appeal.[31] I would interpose here that a document claiming $300,000 damages against a professional body is clearly not an appeal against a disciplinary decision to suspend a person from practice.[32] Ms Hicks responded:I will provide your communication of 26 May 2013 to the Chairman of the Appeals council and he will consider whether or not you have provided sufficient information regarding your grounds for an appeal.[33] Next on 18 June 2013, Mr Bezuidenhoudt responded and said "submissions (to the appeals counsil [sic]) are now superfluous" and further on 21 June 2013, "please advise how one can appeal against something that has been revoked".Ms Hicks replied on 21 June 2013 advising that she understood that Mr Bezuidenhoudt was no longer proceeding with an appeal: "I am treating youremails on 18 and 21 June as advice that you are not proceeding with your appeal. Unless you advise otherwise by 5pm today, your appeal will be regarded as havingbeen withdrawn". The New Zealand Institute says that no response was received from Mr Bezuidenhoudt to this email.[34] The New Zealand Institute sums up this chronology with the observation thatMr Bezuidenhoudt's document dated 26 May 2013 was not an appeal from theTribunal's decision. It was a frivolous "bill" that was sent to the Institute. (I havealready observed that it clearly was not an appeal.) The New Zealand Institute points out that when given the opportunity to state the grounds on which he wishedto appeal, Mr Bezuidenhoudt repeatedly refused to do so. Further, at no time (until the enforcement proceedings), has any issue been taken with the New ZealandInstitute's advice that it would be treating the 26 May 2013 document as beingwithdrawn.Discussion[35] I have set out the submissions for the New Zealand Institute in some detail because I agree with and adopt them in their entirety.[36] In short:(a) Once the appeal period had expired, the certificate (or similar) of the Disciplinary Tribunal's decision had to be taken at face value for purposes of enforcement. No challenge could be made to the Disciplinary Tribunal decision itself on an enforcement action by the New Zealand Institute.(b) It is very clear that even if Mr Bezuidenhoudt could mount achallenge against the Tribunal's decision or in respect of an extensionof time to appeal or similar, that would be utterly hopeless as Mr Bezuidenhoudt did not actually file an appeal against the May 2013 Disciplinary Tribunal decision, nor anything that could nowsomehow be classified as an "appeal", nor actually pursue any extension of time point at the relevant time (but rather let it go).(c) Most importantly Mr Bezuidenhoudt had no apparent grounds of appeal from the 2013 Disciplinary Tribunal decision which explains why he did not record any in May 2013, other than a claim against the Disciplinary Tribunal for $300,000. If he had really wanted to appeal any decision it would have to have been the 2009 decision of the New Zealand Institute refusing him full membership on a reciprocal basis. He made no attempt to appeal that decision but rather, practised in contravention of it and without payment of practising fees. The die was cast way back then.[37] I spent quite some time ensuring that I understood Mr Bezuidenhoudt'sposition as well as possible, that no point was being misread and that he was not being unfairly treated or disadvantaged as a result of being self-represented. I am quite satisfied he is being fairly treated and that he is well capable of understanding the issues here. I urge upon Mr Bezuidenhoudt to pay the amount now outstanding or come to some arrangement to pay it over time and bring this matter to an end now. I did canvass with him early on, the desirability of sitting down with a lawyer, but he may consider the money would be better spent on settlement with the New Zealand Institute.Conclusion[38] For the reasons recorded above, there is no arguable basis to appeal against the District Court decision, which is the matter before this Court.[39] The appeal is therefore dismissed.[40] Costs are ordered against the appellant on a solicitor-client basis under r 22.10 of the Rules of the New Zealand Institute which provides that costs are payable on that basis. The same approach was adopted by the District Court Judge and it is clearly reasonable in the circumstances. The New Zealand Institute takes the view, which is understandable, that it must uphold the rules and be seen to do so, particularly in the case of flagrant breaches.___________________________Hinton J