HAINES V WAIKATO DISTRICT LAW SOCIETY HC HAM CIV-2006-419-426

HAINES V WAIKATO DISTRICT LAW SOCIETY HC HAM CIV-2006-419-426 23 August 2006IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY CIV-2006-419-426IN THE MATTER OF the Law Practitioners Act 1982 and its amendments and the rules and regulations thereunder AND IN THE MATTER OF an application by Quentin Stobart Haines, law graduate, a candidate for admission as a barrister and solicitor BETWEEN QUENTIN STOBART HAINES Applicant AND WAIKATO DISTRICT LAW SOCIETY Respondent Hearing: 23 August 2006 Appearances: Mr M J Hammond for applicant No appearance for respondent Judgment: 23 August 2006(ORAL) JUDGMENT OF LANG JSolicitors: Tompkins Wake, P O Box 258, Hamilton[1] Mr Haines has applied to this Court for an order under s 46 of the Law Practitioners Act 1982 admitting him as a barrister and solicitor of the High Court of New Zealand. Before the Court can make such an order, it must be satisfied that Mr Haines is of good character and is a fit and proper person to be so admitted. [2] Rule 6(2) of the Law Practitioners Admission Rules 1987 provides that the evidence to be provided in support of any application for admission must include a certificate signed by the President or Secretary of the applicant's local District Law Society. The certificate must confirm that the Council of the Society has made full enquiry as to the applicant's character, it is satisfied that the applicant is a person of good character and that it does not know of any objection to the application for admission being granted. That requirement is mandatory unless a Judge otherwise directs. [3] In the present case, the Waikato/Bay of Plenty District Law Society ("the Society") has declined to provide Mr Haines with a certificate under r 6(2). It has done so on the basis that he has a previous conviction for dishonesty. As a result, Mr Haines has applied to this Court for an order directing that his application may proceed and be determined on the basis of evidence that does not include the Society's certificate. [4] Given the importance of the previous conviction, to the Society's stance and to the outcome of the present application, it is appropriate to refer at the outset to the circumstances in which the conviction was entered.The previous conviction[5] Between 1993 and 1997 Mr Haines worked for a company called New Zealand Diagnostics Limited. His father, Mr Cavan Haines, was the principal of that company. At the time that he began working for the company Mr Haines was just 18 years of age. It was his first job. [6] Mr Haines' employment by his father's company required him to act as a travelling sales representative dealing with doctors and nurses in general practice.His job specifically involved the sale of both items that were subsidised by the Government, and items that were not the subject of any Government subsidy. The subsidised items were paid for by the Government and the doctors ordered those particular items on a prescribed form. The non-subsidised items were to be paid for by the doctors themselves, with the cost of those items being passed on to their patients. [7] The company developed a system whereby non-subsidised items were ordered on the prescribed forms that should only have been used for subsidised items. As a result, the items were supplied to doctors on a subsidised basis when they should not have been. The practice appears to have been widespread and accepted by the doctors who participated in the system and it appears to have been openly promoted by the company. [8] Ultimately, however, the scheme resulted in a private prosecution being brought by Health Benefits Limited against Mr Haines, his father and several other employees of the company. They were duly tried before a jury in the District Court at Wellington between 12 February and 3 April 2001. Mr Haines along with the other accused were ultimately convicted on a charge of conspiracy to defraud. Mr Haines was subsequently sentenced to 18 months imprisonment, with that sentence being suspended for two years. He was also sentenced to undergo nine months periodic detention. [9] The sentencing notes describe Mr Haines' role in the offending in the following terms:I turn to deal with the other accused. I think it is plain that distinctions can and should be made between Cavan Haines and the others. They did not conceive of the scheme nor drive it, but equally each played a part. Dealing first with your position, Mr Quentin Haines. You were a part-time salesman who, initially anyway, became involved in selling, if that is the correct term, principally to appease your father. Your real interests remained elsewhere, and over time you developed other business interests as well, and became increasingly detached from the company's business. Nevertheless for periods you were significantly involved in operating the swap scheme and in introducing other sales representatives to it. There is evidence also that you knew about the maximising of forms, although in your case I do not put very much weight upon that.As the jury obviously did, I find it impossible to accept that you did not understand that these activities were patently dishonest. At what point you might have or should have realised that, and what point you did realise that is uncertain, but plainly you must have. That was the jury's view. I accept that you personally made little enough income from the schemes. There was obviously some sharing in general family prosperity, but in personal terms your income remain reasonably modest.The approach to be taken[10] This is by no means the first case of its type to come before the Court. The approach when an applicant for admission has previous convictions has been the subject of discussion in several recently decided cases. Most of these are decisions of a Full Court of this Court. [11] The first of these is Re M [2005] 2 NZLR 546, a case decided in 1998 but not reported until 2005. In that case a Full Court comprising Panckhurst and Chisholm JJ relief on the following principles as providing guidance to the assessment of whether or not an applicant in such circumstances is a fit and proper person to be admitted as a barrister and solicitor: 1. The focus is necessarily forward looking. The function of the Court is not to punish the applicant for past conduct. 2. The onus lies on the applicant to demonstrate that he or she has the qualities and attributes necessary to qualify for admission. 3. Due recognition must be given to the circumstances of youth where errors of conduct occurred when the applicant was immature. 4. It is important to look at the facts of the case in the round and not just to pay regard to the fact of a previous conviction or convictions. [12] In Re M the Court ultimately decided that the applicant was a fit and proper person to be admitted as a barrister and solicitor. It did so after receiving extensive affidavit evidence and hearing Ms M under cross-examination. The conduct that was the focus of the Court's attention occurred when the applicant was a teenagerand an immature young woman, and before she had attained her university qualification. Although the Court was mindful of the need to maintain the reputation of the legal profession, nevertheless it was satisfied that there was sufficient evidence of the applicant's change of character to enable a favourable view to be taken of her application. [13] In Re Owen [2005] 2 NZLR 536 Panckhurst and Fogarty JJ considered a case in which the applicant had been convicted of numerous offences, including two convictions for burglary that had been entered when he was aged 25 and 27 years. He had also been convicted of being in possession of and cultivating cannabis, and had a number of driving convictions including convictions for driving whilst disqualified. [14] The Court applied the principles referred to in Re M. It was satisfied that the frailties and defects of the applicant's character were entirely spent, and that he had undergone a complete turnaround in his character and personality. For that reason the convictions were of historical significance only. [15] The Court also placed emphasis on the applicant's positive achievements since the convictions had been entered. He had obtained a law degree and he also had the support of mentors and referees, including the dean of his law school. He also had testimonials as to his character and reliability as an employee. [16] In reaching its ultimate conclusion the Court said at [38]:But the more difficult question is whether the public generally and members of the profession would share the view that Mr Owen is now a person of such integrity, probity and trustworthiness as to be fit to be admitted as a barrister and solicitor. Faced with the evidence of his criminal record alone the answer would undoubtedly be No. But with the benefits which we enjoy, in having before us the positive evidence of recent years and with the advantage of hearing Mr Owen being cross-examined by experienced counsel, we are satisfied that both the public and responsible members of the profession would, if similarly placed, share our view that Mr Owen is a suitable candidate for admission.[17] By way of contrast, in Singh v Auckland District Law Society [2002] 3 NZLR 292 Harrison J held that the applicant had failed by a substantial margin to satisfy the Court of his good character. In that case the Auckland District Law Society haddeclined to issue a certificate of good character to the applicant on the basis that, when acting as an advocate before the Refugee Status Appeals Authority, he had assisted appellants in the manufacture of evidence and had acted in a grossly incompetent manner. [18] Harrison J noted that an applicant for admission who cannot produce a certificate from the Society is "absolutely obliged to produce evidence to satisfy the Court that, first, he or she is of good character and, secondly, that he or she is a fit and proper person to be admitted". The absence of the Society's certificate is relevant and weight must be given to it. Admission in those circumstances occurs only in exceptional circumstances. [19] In the recent case of Pou v Waikato/Bay of Plenty Law Society HC ROT CIV- 2004-463-0511 10 May 2005 a Full Court comprising Baragwanath and Courtney JJ considered a situation in which the applicant had been found guilty of misconduct under the University of Waikato's Student Discipline Regulations. The applicant had admitted using the computer system account of a supervisor, and charging his use of the computer to that account without authority. The sum involved was between $2 and $5. He had also allowed others to use his account to access adult material. A further complicating feature was that the applicant had failed to refer to the incident in the declaration filed in support of his application for admission. Again, the Society had declined to issue a character certificate. [20] The importance of the need for integrity on the part of legal practitioners was described by the Court in the following terms:[42] A legal practitioner is accorded great privileges not in any personal right but on behalf of the members of the community in need of legal advice and assistance. The protection of legal advice privilege (Three Rivers DC v Bank of England (No 6) [2004] 3 WLR 1274 (HL)) and litigation privilege (B v Auckland District Law Society [2004] 1 NZLR 326 (Privy Council)) illustrate the point. With great privilege comes great responsibility. A solicitor with access to trust account funds of clients and responsibility for ensuring that discovery obligations are compiled with; the barrister who must make candid disclosure to the Court of authority running counter to the client's interests; the practitioner owing a single minded duty of fidelity to an unpopular client and to stand up to one who is dishonest: each must have the moral courage and integrity without which public confidence in theprofession will collapse. Lord Bingham in Bolton at p 492 described why the Court imposes standards that might otherwise seem harsh: to maintain the reputation of the profession as one in which every member, of whatever standing, may be trusted to the ends of the earth.[21] In Pou the Court had regard to affidavits of witnesses attesting to the applicant's good character. These included affidavits from persons of high standing in his community. Moreover, he had been employed by a law firm that had full knowledge of his conviction. [22] Ultimately, however, the Court was satisfied that the affidavit evidence established that the applicant was now of good character and a fit and proper person to be admitted, having overcome the flaw that led to his "serious aberration" whilst attending university. [23] Against that background I now turn to consider the factors that I consider to be relevant to the present application.Relevant factors[24] I consider that there are three broad factors that must be taken into account and accorded weight in the circumstances of the present case. They are the attitude taken by the respondent society, the circumstances in which the offending occurred and Mr Haines' present circumstances as disclosed by the evidence filed in support of the application.The approach taken by the respondent[25] Mr Haines' application was initially considered by the Admissions Committee of the Waikato/Bay of Plenty District Law Society. The minutes of that meeting record that the Committee recommended that Mr Haines' application be approved. The material before the Committee included, of course, details of Mr Haines' previous conviction and the circumstances in which it came to be entered.[26] The recommendation was not, however, followed by the Council of the Society. The Council subsequently declined to issue a certificate and advised Mr Haines of this fact in a letter dated 31 May 2006. That letter is in the following terms:Your application to be admitted as a Barrister and Solicitor has now been considered by the Admissions Committee of the Waikato Bay of Plenty District Law Society and that recommendation was that you be approved. In turn, the recommendation of the committee is then given to the Council of the Society. Unfortunately, the Council at a teleconference today, declined your application. As you are aware the option available to you is to make an application through the Court and obtain an Order from a Judge directing that the Society's certificate is not required and that you are a fit and proper person to be admitted. The Council of the Society will not oppose your application and will take a neutral stance.[27] When the present application came before Rodney Hansen J on 16 August 2006, he directed that the application be served on the respondent so that it could have an opportunity to be heard in relation to it. Although the proceedings were served upon the respondent yesterday, it has taken no steps and has not appeared today. Mr Hammond tells me from the bar that he has spoken to the respondent's Secretary and has been told that the respondent does not propose to take any steps in relation to the present application. [28] I therefore proceed on the basis that, although the respondent felt unable to issue a certificate, it does not feel sufficiently strongly about the basis upon which it made that decision to actively oppose Mr Haines' application. This is an important factor because, as Harrison J noted in Singh at [26]: (c) Essentially the legislature has appointed District Law Societies as the Courts' surrogates for the purpose of conducting inquiries into an applicant's character. It is in the best position to undertake this task. The requirement for a certificate is a measure of the importance which Parliament attaches to the critical role played by the Society in this process, (r 61A).[29] I therefore view the Society's decision not to oppose the present application as a factor that can be given considerable weight.The circumstances of the offending[30] There can be no doubt, having regard to the jury's verdict and the Judge's sentencing notes, that Mr Haines must have realised at some point during his employment by his father's company that what he was doing was wrong. In effect he was participating in, and encouraging others to participate in, a scheme that was designed to defraud a health funder of considerable sums of money. [31] Having said that, the Judge expressly accepted that Mr Haines was not the architect of the scheme. That dubious distinction belonged to his father. Moreover, at the time of the offending Mr Haines was in the transition from youth to adulthood. He was also living at home with his parents. In those circumstances I am satisfied that he must to a great extent have been subject to the influence and sway of his father. There is also the factor that, within the sphere of the company and the doctors with whom it dealt, the offending appears to have been carried out in a routine and reasonably open way. In addition, this was Mr Haines' first job. He can be forgiven to some extent for having a degree of commercial immaturity and naivete at that time. [32] I therefore take the view that, whilst the offending was undoubtedly serious, Mr Haines was not a principal in it and it occurred at a time when he was relatively young and immature. He was also subject to considerable influence from those around him. I do not consider that the circumstances of the offending are such that they demonstrate a deep seated flaw in Mr Haines' character that is likely to re- emerge under the pressures of legal practice: see Pou (Supra at [44]).Mr Haines' current circumstances[33] Mr Haines has filed a detailed affidavit in which he describes not only his past history but also his current circumstances.[34] Mr Haines is now 30 years of age. He is married and his wife is due to give birth to twins in the near future. [35] Mr Haines completed his law degree at Waikato University in 2004. His transcript of academic grades reveals that he achieved reasonable academic success. In his final year at law school he was able to achieve three 'A' passes. Mr Haines completed the IPS Professional Studies Course in 2006. [36] These achievements are only, however, of marginal importance in the present context. The focus of the present application is not on academic prowess but on personal integrity and character. In particular, it is on the manner in which Mr Haines has developed as a human being since the date of his conviction. [37] Mr Haines deposes that the sentence that was imposed upon him in 2001 involved considerable financial and emotional hardship for him. At the time of his conviction he was involved in a business that planned to be listed on the Stock Exchange. The conviction meant that Mr Haines lost the support of his financial backers, and he ended up with a very large short-term unsecured debt. This difficulty was compounded by the fact that Mr Haines was unemployed at the conclusion of the trial. [38] At that time Mr Haines called a meeting of his creditors. He explained his situation to them, and told them that it was his intention to repay all his debts when he had the money to do so. As a result, his creditors elected not to bankrupt him at that time. Their faith in Mr Haines was subsequently repaid when he was able to bring himself to a position where he has been able to borrow money in order to purchase a family home and to enter into business as a property developer. [39] Mr Haines' original family home in Otaki was sold following his conviction and the net proceeds of sale were paid to the state in part repayment of the losses that it suffered as a result of the activities of his father's company. [40] After he was sentenced Mr Haines left the Waikato area and moved to Auckland. He says that he carried out his sentence of periodic detention in WestAuckland at the Henderson Centre. He describes this as having been a very dark period for himself personally and that it was fraught with family, marriage and financial difficulties. He points out that he could have elected to declare himself bankrupt in order to escape his debts, and that he could also have turned to a life of crime. Instead, however, he focussed on rebuilding his life and his reputation. He says that he approached periodic detention with a positive attitude, and made sure that he was involved in projects that directly benefited the community. These included the construction of nature walkways and playgrounds at schools. During this period he says that he learned a number of practical skills that have been useful to him ever since. [41] Mr Haines then began working for a financial services company that was run by a former police officer. He disclosed the fact of his conviction to his employer and worked in the financial sector for the next three years in order to pay off his personal debts. [42] Mr Haines concludes his affidavit with the following paragraphs: 23. I have made mistakes in my life and I am not proud of this. I have suffered from all of the temptations of human frailty. However I have learnt from these experiences and am a fuller and more realistic person as a result of them. I am now aware of my strengths and weaknesses and this new self-awareness has provided me with great person insight. It has made me more understanding of the shortcomings of others. 24. I am aware of the responsibilities of being a lawyer and I appreciate that this is not a right for any person instead it is an honour. It is an honour that I take seriously and I believe that I have demonstrated over the last few years since my conviction that I am worthy of such an honour. [43] Mr Haines' application is supported by three affidavits. The first is by Mr Rodney Hodgins, who was a police officer for 30 years and held the rank of Inspector for 11 years.[44] Mr Haines applied to Mr Hodgins in November 2001 for a position as a sales consultant selling financial products. Mr Hodgins confirmed that at his initial interview Mr Haines freely disclosed that he had a criminal conviction for dishonesty, and he explained the basis of that conviction to Mr Hodgins. Mr Hodgins noted that Mr Haines was remorseful and did not blame anyone for his own wrong-doing. It was also apparent to Mr Hodgins that Mr Haines had been a young man at the time of the offending, and had no doubt been acting under the influence of older people, including his own father. Mr Hodgins was sufficiently impressed by Mr Haines' obvious qualities to offer him employment. He did so, however, on the basis that he would remain under close scrutiny. [45] Mr Haines worked for Mr Hodgins for the next three years. Mr Hodgins says that during that time Mr Haines proved to be a "very intelligent young man, who is particularly quick on the uptake". He says that Mr Haines inspired confidence in the clients that he dealt with, and that he succeeded in his role to a very high standard. Mr Haines gave Mr Hodgins no cause to doubt his honesty at any time notwithstanding his knowledge of Mr Haines' conviction. Mr Hodgins concludes his affidavit by saying that he actively encouraged Mr Haines to pursue a legal career, and that he believes that Mr Haines has all that it would take to add his talents to that profession. [46] The next affidavit is from Mr Ronald Richardson, who has known the Haines family for some 15 years. He, too, is aware of Mr Haines' conviction, and says that Mr Haines has learned a very harsh but valuable lesson from it. He believes that, to Mr Haines' credit, he has put his past behind him and has got on with making his way in life. Mr Richardson described Mr Haines as being a very likeable person who is an extremely good communicator and that he has an incredibly positive attitude to life. [47] The final affidavit is from Mr Dafydd Malcolm, a solicitor in practice in Rotorua. He has known Mr Haines for approximately ten years, and his personal impression has always been that Mr Haines is an honest, forthright, upstanding and diligent person. He views Mr Haines' criminal conviction as being completely outof character. He can only attribute the offending to his particular family circumstances and to the naivety of youth. [48] In my view the most telling of the evidence to which I have referred is that given by Mr Hodgins. As a former policeman he is a person who could be taken to have had concerns about Mr Haines' character and to have kept a very close eye on him during the three years that Mr Haines was in his employment. I consider that the fact that Mr Hodgins is prepared to stand behind Mr Haines unequivocally is of particular importance in the context of the present application. It suggests to me that Mr Haines has passed a test of character prescribed by a particularly critical examiner.Result[49] That evidence, coupled with the other evidence that has been adduced in support of the application, persuades me that Mr Haines has in fact turned his life around and that the offending that occurred whilst he was in the employment of his father's company is now of historical value only. To adopt the wording used inOwen (at [38]) I am satisfied that both the public and responsible members of the profession would, if appraised of the material now before the Court, also share my view that Mr Haines is a suitable candidate for admission. [50] For these reasons I am satisfied that Mr Haines is of good character and is a fit and proper person to be admitted as a barrister and solicitor in terms of s 46(2) of the Law Practitioners Act 1982. Subject to his swearing the oath of good and honest conduct, he is entitled to have an order made admitting him as a barrister and solicitor of this Court.Costs[51] Mr Hammond points out that Mr Haines has been put to the trouble and expense of making this application as a result of the actions of the respondent in declining to provide a certificate. He also points to the fact that, having adopted thatstance, the respondent has also not sought fit to make its views known to the Court other than in the most cursory way. [52] I have some hesitation in making any award of costs in the present circumstances. The fact of Mr Haines' previous conviction was a serious matter and, in my view, justified the Society in declining to provide a certificate. I bear in mind, however, the fact that the Court has been able to make its decision based not only on the material that was before the Society but, also on the basis of significant additional material that Mr Haines has now provided. The focus of the exercise that the Court has undertaken has been on matters that were wider than those considered by the Society. [53] For those reasons, and whilst I have some sympathy with Mr Haines' position, I consider that this is an appropriate case in which costs should lie where they fall and I make an order accordingly. Lang J