HAINES v NATIONAL STANDARDS COMMITTEE (NO 1) [2022] NZHC 2403

HAINES v NATIONAL STANDARDS COMMITTEE (NO 1) [2022] NZHC 2403 [19 September 2022]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2022-485-294[2022] NZHC 2403BETWEEN QUENTIN STOBART HAINESApplicantAND NATIONAL STANDARDS COMMITTEE(NO 1)RespondentHearing: 9 September 2022Appearances: C R Carruthers KC for the ApplicantR B Moon for the RespondentJudgment: 19 September 2022JUDGMENT OF COOKE J(Declining application to adduce new evidence on appeal)[1] By application dated 5 August 2022 the applicant seeks leave to adduce furtherevidence on his appeal pursuant to r 20.16 of the High Court Rules 2016. Theapplication is opposed by the respondent.[2] The applicant has appealed from a decision of the New Zealand Lawyers andConveyancers Disciplinary Tribunal (the Tribunal) dated 8 April 2022. The Tribunalupheld two charges of unsatisfactory conduct and six charges of misconduct. Itdismissed one other charge. By minute dated 30 May 2022 this Court stayed anypenalty hearing pending the determination of this appeal. The basis of the appeal isset out in an amended notice of appeal dated 5 July 2022 and broadly involves anumber of criticisms of the Tribunal in relation to evidential matters.[3] The applicant has sworn an affidavit identifying four items of evidence that arethe subject of his application to adduce further evidence namely:(a) an affidavit of proposed expert evidence from Mr Andrew Davie dated1 August 2022;(b) a report of court appointed receivers of a trust dated 11 July 2022;(c) an email from the applicant to one of the complainants dated 3 August2016; and(d) ASB bank statements.Approach to the application for leave[4] In B v A Wylie J summarised the principles to be applied in relation to anapplication for leave to introduce further evidence on appeal under r 20.16 in thefollowing terms:1(a) the Court can receive further evidence if it thinks that the interests ofjustice require it to do so;(b) it is wrong to allow an appellant to bolster his or her case withadditional evidence that was available at the lower Court hearing, butnot adduced because of the particular view of the case being taken atthe time;(c) admitting further evidence on appeal is exceptional rather thanroutine. A change of heart about how a case should have been run willnot suffice. The prospect of further evidence triggering a substantialre-litigation before the appellate Court of the substantive case willcount against admitting the further evidence;(d) generally, the further evidence must be fresh, credible and cogent;(e) evidence will not be regarded as fresh if it could, with reasonablediligence, have been produced at the trial;(f) the absence of freshness is not an absolute disqualification. When thefurther evidence is not fresh, it will not generally be admitted unlessthe circumstances are exceptional and the grounds compelling. Inaddition, the further evidence needs to pass the tests of credibility andcogency;(g) the interests of justice require the parties to put their best case forwardat trial, in order to avoid wasting the Court's limited time andresources. A high value is placed on finality when the parties havebeen afforded the opportunity and failed to take it; and1 B v A [2020] NZHC 580 at [25].(h) the standard to be met is "rightly high".[5] The applicant relies on the observations of Duffy J in A v National StandardsCommittee when dealing with such an application in relation to an appeal from adecision of the Tribunal.2 Her Honour said:3Ultimately, in determining whether leave ought to be granted, the Court is tobe guided by the interests of justice. This does not relax the test under the HighCourt Rules, but simply requires that the test be applied in the particularstatutory context of each case. In this case, part of the relevant context includesthe nature of the proceeding, namely that it involves a disciplinary matter. Inthe case of disciplinary proceedings, such as those involving misconduct by alawyer, the Supreme Court has noted that the civil standard of proof applieswith flexibility, this means that the balance of probabilities is required to beproved to the highest possible standard. Such an approach is adopted in orderto give appropriate recognition to the impact that adverse findings can haveon an individual. Where this is the case, there is greater room for specialcircumstances to justify the granting of leave.[6] I accept Mr Moon's submission, however that there are also factors in such acase that count against the idea that there is greater room for such specialcircumstances. The Tribunal follows careful processes for its hearings. In manysituations they will have involved evidence from complainants. The Tribunal herecomprised five members, and it had the responsibility of making the findings basedon the evidence before it. The statutory provisions contemplate that charges are to beheard and determined expeditiously.4 Whilst each case will turn on its own facts andcircumstances, an appeal before this Court is not the appropriate place for thesubstantial re-litigation of the issues of fact addressed by the Tribunal at its hearings.It will generally be necessary to show that any new evidence is fresh, credible andcogent and that there is otherwise good reason to admit it notwithstanding it was notbefore the Tribunal as the fact-finding body.[7] I approach the application on that basis and deal with each category of evidencein turn.2 A v National Standards Committee [2020] NZHC 392.3 At [13] (footnotes excluded).4 See Lawyers and Conveyancers Act 2006, ss 3(2)(b) and 120(3).Mr Davie's report[8] The Tribunal has upheld charges in relation to an invoice Mr Haines renderedto one of his clients for an amount of $1 million plus GST. Amongst the Tribunal'sfindings were that Mr Haines did not keep any contemporaneous time records, andthat the fee was set not in accordance with normal principles but to inflate the level ofsupport for a creditors' proposal for the client. The Tribunal held:[104] Taking into account the unrecorded arrangements, the improper feepractices involved, including lack of contemporaneous recording, andstanding back and assessing the fee having regard to all the factors set outabove, we regard the lawyer's conduct in rendering this invoice as"disgraceful and dishonourable", so as to constitute misconduct pursuant tos 7(1)(a)(i) of the Act.[9] The Tribunal had before it evidence from Mr McMenamin, an investigator forthe National Standards Committee who had made an assessment of the fee using thecosts schedule in the High Court Rules 2016 as a basis given the lack ofcontemporaneous records. He considered that the fee could be seen as close to anassessment based on those schedules.[10] The applicant now wishes to file new expert evidence from Mr Davie who hasconducted a similar exercise, albeit he has reached a conclusion that is a little morefavourable to Mr Haines. Amongst the reasons why that evidence was not introducedbefore the Tribunal was the difficulty in getting access to the underlyingdocumentation of the client (which Mr McMenamin had managed by taking particularsteps) and the fact that Mr McMenamin's analysis had been consistent with Mr Haines'argument so that it was not thought necessary for Mr Haines to provide further expertevidence. Given that the Tribunal did not accept this evidence Mr Carruthers KCargued it was now appropriate, to be fair to Mr Haines, to allow him to provide suchevidence. Mr Carruthers did not appear for Mr Haines before the Tribunal.[11] For a number of reasons I do not accept that these arguments provide a basisfor the grant of leave.[12] Firstly, the fact that Mr McMenamin conducted an analysis based on theschedules to the High Court Rules, and expressed the view that Mr Haines' fee couldbe considered to be close to that calculated under the schedules, is only one aspect ofthe evidence before the Tribunal. The Tribunal's findings are based on a number offactors associated with the fee. Perhaps most significantly the Tribunal found that thefee was set at a level to increase the level of support for a creditors' proposal made inconnection with a bankruptcy application before the Court. This was becauseMr Haines could vote in its favour as a creditor. The new evidence does not addressthis, or other issues about the fee.[13] Secondly, the fact that the Tribunal did not accept that the fee was reasonablein light of all the factors does not mean Mr Haines now has a justification to file hisown expert evidence on this question on appeal. I accept there was a potentialdifficulty in gaining access to the underlying documentation, but Mr Haines took nosteps to seek to obtain those documents through the Tribunal processes by seekingdirections from the Tribunal or otherwise. There are also a number of steps he couldhave taken to address the issues of fact before the Tribunal. He could have instructedhis own expert to view Mr McMenamin's assessment if he had wanted to. He couldalso have filed his own evidence describing the work he had conducted, and thensought an expert view on that assessment. But he made the decision to rely on theevidence set out in Mr McMenamin's report.[14] Mr Davie's proposed evidence is not fresh. It is seeking to address a factualissue that was alive to be determined by the Tribunal. As the above principlesemphasise it is in the interests of justice for parties to put their best case forward at thehearing of the Tribunal. Parties are required to live by the decisions they have madebefore the fact-finding body.[15] I also accept Mr Moon's submission that admitting that Mr Davie's evidencewould likely require evidential procedures to be followed for the appeal, including thepotential for Mr Davie being cross-examined, and potentially for the respondent to beable to rely on further expert evidence of its own in response. As the above principlesindicate "the prospect of further evidence triggering a substantial re-litigation beforethe appellate court of the substantive case will count against admitting the furtherevidence".5[16] I also accept Mr Moon's further submission that Mr Davie's expert evidencedoes not go to the central issues addressed by the Tribunal. The key findings were thatthe basis for the fee was not properly set out in a letter of engagement, there were noappropriate contemporaneous records, that the fee note was "sprung" on the client atthe last moment, and that it had been formulated to allow Mr Haines to vote in favourof the creditors' proposal so that it could be approved by the required majority ofcreditors. Against that background Mr Moon submitted, and I agree, that argumentson whether the fee could be justified based on the costs schedules to the High CourtRules are not central to the findings. Mr Davie is an experienced general litigatorknown to the Court, but his opinion ultimately does not have much cogency given theissues before the Tribunal.[17] Accordingly the required thresholds are not met, and I decline the applicationin relation to this category of proposed evidence.The Receivers' report[18] The applicant seeks to introduce a report of the Receivers of a trust dated11 July 2022. This report relates to the affairs of the same client. It involves a reportby the receivers of a related trust.[19] It was unclear from the application and the applicant's written submissionshow this report could be relevant to the appeal. But Mr Carruthers explained that itarose from the summary of the creditors of the trust. The receivers have recorded asummary of liabilities as at 31 May 2022, and this includes reference to costs of theOfficial Assignee at $665,535, as well as other substantial creditors. Mr Carrutherssubmitted that this showed that this client's affairs were very complex, and thatprofessional fees could be very high. He argued that this was significant given thecriticism of the level of Mr Haines' fees, and the associated findings of the Tribunal.5 B v A, above n 1, at [25(c)].[20] Again I do not accept these arguments. This is a recent report which indirectlysummarises the costs of a different party, involving the fees of other persons, fordifferent periods of time, and for different activities. It would provide no assistancein assessing the reasonableness, or otherwise, of the fees rendered by Mr Haines. Andeven if it were indirectly relevant, the arguments about the work that Mr Haines wasrequired to do, and the fee that would have been reasonable for that work, are allfactual matters that were properly dealt with by the Tribunal through its hearingsprocesses. It is not appropriate for the High Court to reopen such factual matters onappeal.[21] The application fails to meet the standards required to admit new evidence onappeal by a significant margin.Email and bank statements[22] I deal with the last two categories of evidence of proposed evidence together.The Tribunal also upheld charges in relation to a further client. Amongst the findingsof the Tribunal were findings that the client paid money into Mr Haines' own personalbank account in response to requests from Mr Haines, and that these payments werenot represented by any invoices and in circumstances where Mr Haines did not operatea trust account.[23] The email subject to the application is an email from Mr Haines to the client.It apparently attaches a deposit slip, although this was not provided with theapplication. As I understand it, it is provided to show that Mr Haines did ask the clientto pay monies into a solicitor's trust account and not Mr Haines' personal account. Iunderstand that the requested payment was not made however. The bank statementsare apparently an unredacted version of Mr Haines bank statements, and are directedto the same, or similar issues.[24] It is very difficult to make sense of an application to introduce a one line emailinto evidence without having any materials (even the attachment) to make sense of it,and understand the circumstance under which it was sent. That is also true of the bankstatements. I put to Mr Carruthers that any application to introduce new evidencedirected to these matters would have to involve Mr Haines (or some other person)providing evidence that explained the meaning and significance of the email and bankstatements, and how they related to the Tribunal's factual findings, and accordinglythe issues on appeal. Mr Carruthers responded to that point by suggesting that anamended application could be made in such terms.[25] The present application plainly does not meet the requirements. Even ifevidence had been provided that was more explicable in terms of the Tribunal'sfindings it is very doubtful that this evidence could meet the required thresholds. It isnot appropriate to allow r 20.16 to be used to pick off selective elements of aninterrelated set of factual findings of the body appealed from. Mr Carruthers explainedthere had been a difficulty in gaining access to the relevant documentation, includingthis email, for the purpose of the Tribunal's hearings. That might provide some basisfor an application such as this one. But a fuller explanation of the significance of thisemail would involve evidence, probably from Mr Haines, outlining the circumstancesmore fully. Mr Haines was always able to give that evidence before the Tribunal evenin the absence of this particular email. I accept that there is also an issue aboutMr Haines' right to decline to provide evidence in light of the risk of incrimination.This issue arises because of a related police investigation. But Mr Haines did giveevidence to the Tribunal, and in any event any exercise of the right before the Tribunalwould not provide a justification for changing that election in order to give evidenceon appeal.[26] Moreover as I understand it the request for payment evidenced by this emailwas not acted upon. The findings of the Tribunal are based on monies that were paidinto Mr Haines' account. So an email that was not acted upon does not appear to havesignificance for the findings of the Tribunal. It could also lead to the requirement fora more extensive evidential processes, such as cross-examination, on appeal.[27] As requested, I record the applicant's indication that he may wish to make afuller application of the kind referred to. I do so without providing anyencouragement. It may well be that such an application would not be granted for thereasons outlined above.[28] For these reasons I also decline to grant leave in relation to this category ofevidence.Conclusion[29] The application is accordingly dismissed. The respondent is awarded the costsof the application on a 2B basis which will be fixed by the Court if they cannot beagreed. Any memorandum seeking the fixing of such costs must be filed within fiveworking days and must be responded to within five working days. The memorandamust be no longer than three pages plus a schedule.Cooke JSolicitors:Aspire Law, Wellington for the ApplicantRichard Moon, Wellington for the Respondent