ZHAO v THE NEW ZEALAND LAW SOCIETY HC AK CIV 2012-404-2777

ZHAO v THE NEW ZEALAND LAW SOCIETY HC AK CIV 2012-404-2777 [24 August 2012]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV 2012-404-2777[2012] NZHC 2169UNDER the Judicature Amendment Act 1972IN THE MATTER OF an application for judicial reviewBETWEEN RICHARD ZHAOPlaintiffAND THE NEW ZEALAND LAW SOCIETYDefendantHearing: 25 July 2012Counsel: F C Deliu for PlaintiffP N Collins for DefendantJudgment: 24 August 2012JUDGMENT OF THE HON JUSTICE KÓSIntroduction[1] A barrister applies to the Law Society to practise as a solicitor, on his own account. He attends an interview arranged by the Society. He answers questions on trust accounting and related matters poorly. The interviewers also take account of a number of complaints against him, although these have been resolved by standards committees on the basis that no further action is required. The interviewers recommend against approval of the application. As is normal, the application is thenreferred to the Society's Fitness for Practice Committee. The applicant asks to see the interviewers' reasons for recommending against him. And to be able to address the Committee. Someone from the Law Society apparently agrees to those requests. But nothing is done. The Committee is set to convene without prior reasons being given, and without an invitation to attend being extended.[2] The day the Committee is due to convene, the applicant issues these proceedings. He says the adverse recommendation by the interviewers, and the convening of the Committee without prior reasons or an invitation to appear, are unlawful administrative acts. A wide array of grounds for judicial review are advanced. Natural justice and legitimate expectation are at the vanguard.[3] The Society says the application is premature. No final decision has been made. And in any case, the statute provides a parallel process. The applicant may, ifdissatisfied with the Society's approach, apply direct to the Court for approval topractice on his own account.[4] The issues arising in this case are listed at [64]. A summary of my conclusions is at [102]. But, first, the facts in more detail.Facts[5] Mr Zhao was admitted to the bar on 13 February 2009. Prior to admission he had worked for a year as a tax accountant at Deloitte. Then he became a law clerk at Equity Chambers. He was employed then by Mr Frank Deliu, his counsel in the present proceedings. He moved with Mr Deliu to a new set, Amicus Chambers, in March 2009. Mr Zhao's affidavit annexes a printout from the Amicus Chamberswebsite. It states:Richard is one of the founding members of the firm and leads the firm'sAsian department. He previously worked for the litigation department of a top law firm in New Zealand as well as working as a tax specialist in one of the big four accounting firms.The reference to "the firm" is apparently a reference to Amicus Chambers. It is an incorporated law firm for the purposes of the Lawyers and Conveyancers Act 2006(Act). As for his work for the litigation department of a "top law firm", Mr Deliutold me that was not in fact as a lawyer. The website text suggests otherwise. It is misleading.[6] In preparation for practice on his own account Mr Zhao successfullycompleted the "Stepping Up" course run by the Society in July 2011. He passed theTrust Account Supervisor training programme in February 2012. At that point he had been admitted for three years.Application[7] On 27 February 2012 Mr Zhao sought approval to practise on his own account. That is governed by s 30 of the Act.1 He filed an application in the form prescribed by the Society. After setting out his background, the application states that his intention is to practice in areas of immigration, family, and taxation, criminal and civil litigation. He also stated his intention to practise as Richard Zhao Lawyers Limited, an incorporated law firm of which he was sole shareholder and director.[8] The Society's form was somewhat out of date. It required the applicant to declare whether he had completed the "Flying Start" programme. That was the predecessor to the "Stepping Up" programme which Mr Zhao had passed in July2011. There being no reference to the "Stepping Up" programme, Mr Zhao tickedthat he had completed the "Flying Start" programme. He also ticked that he hadcompleted the Trust Account Supervisor training programme.[9] The form also contained a series of questions relating to whether the applicant was a fit and proper person. Some of the questions were equally applicable to New Zealand and overseas. Others, were strictly confined to overseas jurisdictions. So, for instance, one question asked:Are you the subject of current disciplinary action in another profession or occupation in New Zealand or a foreign country ...Exactly what "disciplinary action" means is unclear. But the question applies both toNew Zealand and foreign jurisdictions. Then another question asked:Have you been or are you the subject to an unresolved complaint under a corresponding foreign law or a current investigation charge or order by a regulatory or disciplinary body for persons engaged in a legal practice under a corresponding foreign law?1 See [44] below.So that question appears confined to foreign jurisdictions. The form, it may be noted, does not actually address complaints in the New Zealand legal profession at all. Presumably the Society would look to its own records for that information.[10] There were 13 such questions in all. The form says that if the applicant hasanswered "yes" to any question, he or she has to provide detailed information on a separate sheet. Mr Zhao ticked all 13 questions "no".[11] On 2 March 2012 the Society acknowledged receipt of Mr Zhao's application. The acknowledgment noted that he had ticked the "Flying Start" box ashaving been attended and asked for a copy of his certificate. It went on to say:The "Flying Start" course has now been replaced by the "Stepping Up" course which includes an exam. The "Flying Start" course unfortunately didnot. Therefore, please find attached the exam paper you are required to answer. The exam is compulsory even if, as in your case, the "Trust Account Supervisor" course was attended.Mr Zhao was required to return the exam by 30 March 2012. The Society alsoadvised Mr Zhao that he was scheduled for an "interview" on 13 April 2012.[12] The interview process is not referred to in the Society's website page thatdiscusses such applications. Rather, that website says:Applications to practise on your own account are initially processed by branch offices. Send the completed application form, the original referee form/s, and the payment to your nearest branch office. After processing your application, the branch will make a recommendation to the national office in each case. Applications will be dealt with administratively by the Society. If any issues arise, they will be referred to the Fitness for Practice Committee.The website also states:If your application is declined, you may apply to the High Court for leave to practise on your own account.[13] Three days later, on Monday 5 March 2012 Mr Zhao replied to the Society. As he had in fact completed the "Stepping Up" course, he did not think he needed tocomplete the exam. He attached an email sent to him advising of his enrolment inthe "Stepping Up" course. But he did not send the certificate of completion. He hadlost it. He asked if the Society could obtain a copy itself. It should be noted that theguidance notes annexed to the application form state clearly that an incomplete application will not be considered until all the required information and documentation has been received.[14] Mr Zhao took no issue with the proposed interview. He simply asked if it might be arranged earlier than 13 April. Otherwise he would attend that day. He had some further questions. First, when he could expect to receive approval? Secondly, what was the quickest time in which he could set up his own practice? Thirdly, he asked some questions about practical procedures in relation to setting up his trust account, and who he needed to contact from the Law Society about that. It follows from that that it appeared he intended to operate such an account.2[15] On 12 March 2012 the Society responded. It confirmed that Mr Zhao did notneed to undertake an exam because he had attended the "Stepping Up" course. Itexplained who he should contact at the Society to obtain a replacement "Stepping Up" certificate. It was for him to obtain it. The Society said it required it as proofthat the exam had been passed. It answered as best it could the questions that Mr Zhao had about starting his practice. It explained that the practical procedures for opening a trust account could be discussed with any standard trading bank. Butthe Society's representative went on to say, "I have spoken with our inspectors and itis possible to provide you with a practice check-list at the time of your interview".[16] A month later the Society still had not received Mr Zhao's "Stepping Up"certificate. On Tuesday 10 April 2012, just three days before the intended interview, the Society emailed Mr Zhao. It said:Without proof that you have attended the course and passed the exam, your application is incomplete and without a completed application, your interview cannot go ahead.The following day, Wednesday 11 April 2012, still not having heard from Mr Zhao, the Society emailed again saying it urgently needed a reply. It also said that he had now been allocated a new interview date, 27 April 2012. That was to enable him to2 The application form was unclear on this. Mr Zhao had left the "sole practice" section blank.obtain proof of attendance at the "Stepping Up" course. The Society was alsoseeking a reference from his former employer, Equity Chambers.[17] Overnight Mr Zhao responded to the Society's email. He finally attached a scanned copy of the "Stepping Up" course certificate. He said that he "did not agree" to his interview date being pushed back, and asked if it could proceed on Friday 13 April as planned. It might be thought that that was a somewhat ill- considered demand. The long delay in completing the application form was entirelydue to Mr Zhao's failure to provide the certificate.[18] All of the foregoing was known to Mr Zhao. But the next event was not.[19] On 12 April 2012 an internal email was sent within the Society. The role of some of the recipients is not known to me. One of them, however, was one of the people assigned to interview Mr Zhao a little over a week later. It came from theSociety representative handling Mr Zhao's application:I had several lengthy discussions with Wellington [the Registry Manager]regarding Mr Zhao's application to practice on his own account (in earlyMarch and again this week).It appears to me that Mr Zhao's considerable complaints file is a seriousconcern and so are other aspects regarding his practice.[The Registry Manager] has now left me a message asking that we speak to her before (!) Mr Zhao is being interviewed. There are quite a number of questions that were identified as necessary to be asked at the interview and she would like to fully brief the inspector before the interview takes place. She is however only back in the office on Monday, 16th April. She also informed me that his application will go to the FFP committee.Early this week it was agreed to defer Mr Zhao's interview to give him timeto provide us with proof that he has passed the Stepping Up course exam (his course certificate was received by us this morning) and to provide us with afurther reference (from Equity Barrister's Chambers). His interview space(tomorrow 10:00am) has now been passed on to another candidate.Mr Zhao is now insisting on being interviewed tomorrow. Mr Zhao explained this morning that his first referee, Mr Frank Deliu, was also hissupervisor at Equity Barrister's Chambers and that Mr Deliu's referencesupposedly covers both his time spend at Amicus Chambers and Equity Chambers.This does however not satisfy the grounds on which the request for a further reference was made, ie. the fact that Mr Zhao proposes to practice amongstother areas in taxation law and none of this referees confirms his experience in this area. Mr Zhao worked for Deloitte NZ from 7/2007 to 7/2008 as a tax consultant (before he was admitted in Feb 2009), so a reference from them would not be acceptable (outside the 3-year period of NZ legal experience).[The Registry Manager] is adamant that he be interviewed next week (20thApril, we have space for him) to give him time to provide us with updated references and give her time to brief the inspector. Mr Deliu has now sent me an e-mail requesting that I ring him at his office (supposedly to also insist on Mr Zhao being interview tomorrow) but I have not done so, yet.I propose to write back to Mr Zhao – copy to Mr Deliu – to explain further (1) why the request for a further reference was made, (2) why we now need at least updated references as to his tax background and that (3) we will interview him on the 20th April, next week Friday (not 27th as envisaged earlier).Do you agree? Please let me know urgently (also any advice as to how to proceed is much appreciated).[20] The Society's affidavit evidence does not clarify whether there actually was apre-interview "briefing" of the interviewers. Nor, if so, what was said to them. Itmay be assumed however that if something was said, it went beyond the writtenterms of the standards committees' complaints decisions. These the interviewerscould read for themselves.[21] The 12 April email was not known to Mr Zhao. Obviously, he was aware complaints had been made against him. There had been seven such complaints. The first six (between May and September 2011) had all been resolved on the basis that no further action was required.3 The seventh had only been made on 8 February 2012 and had not yet been resolved.4 In the course of argument Mr Deliu acceptedthat in considering suitability for practice on one's own account, the Society will ofcourse consider complaints. The fact that it did so without prior notification would not be a breach of natural justice. But, he said, where the complaint had been resolved on the basis that no further action was required, it was effectively a relevant consideration of little weight. And certainly, he said, no adverse weight.[22] Next on 12 April 2012, and as anticipated in the email just canvassed, Mr Zhao's employer, Mr Deliu, spoke to the Society representative acting in the3 See s 138(2) of the Act.4 A supplementary memorandum filed by Mr Zhao's counsel informed me that on 27 July 2012the Auckland Standards Committee resolved that complaint also on the basis that no furtheraction was required.matter. She emailed Mr Deliu later in the day, noting that she now had Mr Zhao'scertificate. So his application was at last complete. Although not essential to the application, she asked for a brief email from Mr Deliu setting out some aspects of the tax work carried out by Mr Zhao. Mr Deliu provided that the same day.[23] The Society agreed to conduct an interview on 20 April 2012. In my viewMr Zhao cannot reasonably complain about the timeliness of the Society's responseto his own untimely actions in completing the application form. Mr Zhao was minded to attribute improper motives to the Society for the delay. These complaints were nonsense. Sensibly Mr Deliu withdrew them at the hearing.Interview[24] On 20 April 2012 Mr Zhao presented himself for interview. There were two interview panel members appointed by the Society. The first was Mr Anthony Segedin. He is a very experienced practitioner, a consultant with the firm Minter Ellison Rudd Watts in Auckland. The other was Mr Mark Anderson. He is an accountant and trust accountant audit inspector for the Society. He had in fact beenone of Mr Zhao's tutors at the Trust Account Supervisor programme he had passed inFebruary 2012.[25] Mr Zhao says in his affidavit that the interview lasted about 30 to 40 minutes. He says Mr Anderson asked most the questions. He recalled about 10 to 15 questions on trust account management. He said he had not expected to be asked about these matters, or in that detailed manner. Mr Zhao says, revealingly:As I was mostly working as a barrister in my legal career I do not encounter these questions on a daily basis, if at all.He says that he believed he got a few questions wrong "but Mr Anderson assured me that was okay". Mr Zhao complains that neither Mr Anderson or Mr Segedin put him on notice that he was "failing the interview" or otherwise in peril of having his application not recommended by the panel.[26] Neither Mr Segedin nor Mr Anderson provided an affidavit.[27] However each panel member provided detailed notes of their assessment ofMr Zhao's suitability to practise on his own account. These have been disclosed bythe Society. It is apparent that Mr Segedin was not satisfied with Mr Zhao's interview. The form he completed was marked "not approved". Mr Segedin provided the following notes for guidance to the Society in the exercise of its discretion under s 30:1. Richard has seven complaints against him. One not yet resolved. When asked, he blamed his employer i.e. he had no say in fee setting and wasdelayed on the delay complaints. I don't accept this: eg does not explainrudeness complaint. If he cannot practise without complaint under supervision the chances of his practising satisfactorily unsupervised are remote.2. Richard does not adequately understand the trust account regs. He talked a lot to questions and usually got to the answer by intuition but not by understanding ie. could not directly answer with confidence. Fairto say that some questions concern areas where he doesn't practice buthe did not exclude extending his practice in the future.In particular he was vague on:1) Borrowing from client question – real concern.2) Confused over engagement letter and esp nature of fidelity fund purpose.3) Confusion over need to write receipt with funds back I.B.D.4) Not certain about cancelling trust cheque.I have the sense that Richard is not ready yet for unsupervised practice as a sole practitioner. I would suggest that he reapply after a period (at least 1 year of no-complaint) and better familiarity with regs (before another panel of fresh minds).[28] Mr Anderson certified that he had examined Mr Zhao on the duties of asolicitor under the Act and relevant subordinate legislation relating to solicitors' trustaccounts and the receipt of money. He also certified that Mr Zhao had not satisfied him that he had sufficient knowledge of these matters to commence practice on his own account. His guidance notes state that he concurred with Mr Segedin'srecommendation not to approve Mr Zhao. They go on to say:...3. Although having passed the Stepping-Up Course and the Trust Account Supervisor Course Mr Zhao (Richard) was not able to answer thequestions put to him at interview directly and with confidence. I had to give him a lot of prompting to get him to the answers. For example:...4. Richard did not bring any reference materials with him to the interview even though he would have received written notification about the content of the interview and that he was allowed to bring reference materials with him.5. As regards Question 6, to help him I introduced the question by saying that it was not about money laundering so he was not required to discuss Verification of Identity and Financial Transactions Reporting Act matters. After having been given this help he proceeded to start talking about Identity Verification and subsequently required a lot of prompting in order to get him on the right track. He literally had to be led to the answers.6. In response to Question 11 about Residual Client Balances Richard said that large balances (not defined) would be paid to the client but he thought that small balances (undefined) could be dealt with differently. I told him that if he were to ask the lawyer for the Fidelity Fund he would be told that the taking of client balances no matter how small is theft.7. In response to Question 13 – Can a Lawyer borrow money from a client– Richard was not able to give a direct and confident answer discussing the matters set out in Clause 7, Lawyers and Conveyances Act (Trust Account) Regulations 2008.8. Towards the end of the interview I asked Richard how did he intend to handle engagement and client care matters when in sole practice, i.e. the information required by Clause 3.4(a) – (d), Lawyers and Conveyancers Act (Lawyers : Conduct and Client Care) Rule 2008 to be given to clients at the outset of an engagement. Richard talked a lot about fees but was at sea when asked for three more matters Clause 3.4 requires. He said that others handled engagement letters, etc for him so he was not familiar with the Rules. He promised to study the Rules diligently in order to know the requirements. During this conversation I asked Richard what is the minimum level of PI cover recommended by NZLS for a sole practitioner. He correctly answered $1,000,000.00 but then went on to say that he tells clients that the fidelity Fund is also there to cover any shortfall in a payout for negligence under a PI Policy. I told Richard that this is not the purpose of the fidelity Fund and that he should not be saying this to clients.9. Three other people all of whom like Richard passed the Stepping-Up Course were interviewed on the same day. One is going out as a sole practitioner, the other two are going into existing firms. By comparison with Richard the other three were all well prepared and answered the interview questions confidently and correctly.[29] I note that Mr Anderson's fourth point – that Mr Zhao would have had prior written confirmation as to the intended content of the interview – does not seem tobe borne out by the evidence. Mr Zhao by implication denies receiving suchmaterial. The Society's affidavit does not suggest he had. But of course he couldhave asked when he asked the other practical questions discussed in [14].[30] Some days after the interview Mr Anderson made a further file note of a conversation he had with Mr Segedin. This was on 27 April 2012. The file note by Mr Anderson says:Re: Richard Zhao s 30 applicationSpoke to Anthony Segedin (phone call) about the complaints and advised him of the reasons why they had been closed with NFA. He said he had not changed his mind but in light of what I had said had softened his stance. He said it was not only the complaints but there was also the lack of knowledge as regards the rules and regulations and that Richard should be invited to reapply in say six months time.Post-interview events[31] After the interview Mr Zhao did not hear from the Society for a while. In early May he spoke to the Society staff member he had been dealing with. She told him the file had been referred to Wellington, but gave him no further information.[32] On 11 May 2012 the Registry Manager at the Society sent a memorandum tothe Society's Senior Solicitor Regulatory. The memorandum noted that the Auckland Branch had recommended that Mr Zhao's application not be approved. Italso noted that Mr Zhao met the requirements of regulation 12(1)(a) and (b) of the Lawyers and Conveyancers Act (Lawyers: Practice Rules) Regulations 2008.5Without further analysis it recommended that the application be assessed. The Senior Solicitor Regulatory disagreed and referred the application to the Fitness for Practice Committee (Committee), noting:Inspectors have not approved this application.[33] By 15 May 2012 Mr Zhao had not heard anything. That day he and Mr Deliu called the Registry Manager. She then told them that the application was to be5 See [46] below.placed before the Committee on 22 May 2012. That was, of course, just one week away. Mr Zhao deposes:When asked if I would have an opportunity to be heard before any further steps were taken she very clearly promised that before then I would receive a letter explaining what the problem(s) was/were and that I would have a chance to address the Committee.So Mr Zhao waited.[34] On 18 May 2012 Mr Deliu emailed the Registry Manager, noting that MrZhao and he "still have not received the letter you indicated would arrive". Mr Deliusaid that Mr Zhao's due process rights were being affected. He concluded:If the Board makes its decision in these circumstances, and it is adverse, then I am instructed that judicial review will be sought.I will take it that such a letter had been promised by the Society. Were that not the case I would have expected the Society to refute the claim – either in the correspondence immediately following or in its affidavit evidence. This it does not do.[35] Later on 18 May 2012, yet another Society representative emailed Mr Deliu. The email noted the application had been referred to the Committee. It continued:The Committee meets next Tuesday 22 May 2012. The Committee makes its own inquiries. At the end of that process makes a recommendation to the NZLS Board. The Board makes the final decision.[36] On Sunday afternoon, 20 May 2012, Mr Deliu rejoined:That is not what [the Registry Manager] promised me and with due respect no natural justice has been afforded Mr Zhao thus far. Accordingly, can proceedings be served upon you and would you prefer we deal with Glaistor (sic) Ennor directly?[37] On Tuesday 22 May 2012 these proceedings were filed and served. The initial statement of claim is a compact document, but pleads a variety of bases for review. First, it alleges the decision not to recommend the application for approval (at the Auckland branch level) breached natural justice because (1) Mr Zhao was not given proper notice of concerns the defendant had with his application prior to theinterview; (2) no reasoned decision for the adverse recommendation was given; and(3) the decision to refer the matter to the Committee breached natural justice "in thatthe plaintiff was not given an opportunity to comment, no reasons for this decision was provided and the whole process was unpublished (generally) and undocumented(specifically)". Secondly, it alleges there was a breach of legitimate expectation innot providing Mr Zhao the letter explaining the Branch reasons for the intervewers'recommendation and the opportunity to address such concerns before the Committee. Thirdly, it was alleged that the taking into account at the interview of previous complaints to the Society involved the consideration of irrelevant factors because none of the complaints had resulted in a finding of unsatisfactory conduct or misconduct. Finally, it alleged that the Branch decision to refuse to recommend the application for approval was unreasonable.[38] Of course the question then arose as to what to do with Mr Zhao's application. On 29 May 2012 the Society's General Manager Regulatory wrote toMr Zhao acknowledging his application for review. I set out her letter in full:Your application for judicial review is acknowledged. The Society does not accept that the processes associated with your s 30 application disclose any reviewable error or that judicial review is appropriate in any event, since you are entitled to apply directly to the High Court for approval under s 30(3). The Society will respond to the judicial review proceeding in due course, if it is necessary to do so in light of the matters raised in this letter.Apart from anything else, your judicial review proceeding is premature. No decision had been made about your application at the time it was filed. The status of the application at that time was (and presently is) as follows:(a) Your application was received by the Society at its Auckland branch on 1 March 2012;(b) On 23 April 2012 you attended an interview with the Society's s 30panel, which was convened for the purpose of considering yourapplication. The panel comprised a member of the Society'sinspectorate, Mr Anderson and a senior Auckland lawyer, Mr Segedin. The interview was conducted consistently with theSociety's regulatory responsibilities in this area, in which it isobliged to be satisfied that applicants are suitable persons to practise on their own account having regard to the matters set out in Regulation 12(1)(b) & (c) of the Lawyers and Conveyancers Act (Lawyers: Practice Rules) Regulations 2008;(c) The s 30 panel members were not satisfied with the quality of many of the responses you gave to the questions put to you at theinterview. As a result, they did not recommend your approval to practise on your own account.(d) Rather than reject an application outright in those circumstances, it isthe Society's routine practice to refer such an application to itsspecialist Fitness for Practice (FFP) Committee. That is what happened in your case. Your application was received by the national office on 10 May 2012. It was intended that the FFP Committee would consider your application and would most likely decide either to:recommend to the Board to grant the application notwithstanding the concerns of the s 30 panel; orgive you further time to make submissions about specified matters and/or to provide further information, for the purpose of then considering the application with those matters being taken into account and then to make a recommendation to the Board;Alternatively the Committee could have recommended to the Board, with reasons, that the application be declined.(e) The Fitness for Practice Committee was due to meet on 22 May and your application was on the agenda for that meeting. That was the same day that a copy of the judicial review proceeding was received by the Society. In those circumstances, the FFP Committee wasunwilling to consider your application further, pending the Society'slegal advice about the status and effect of the proceeding so far as the then pending s 30 application was concerned.This explains the current status of your application. Since the Society's s 30procedures are incomplete in relation to your application, it wishes to provide you with the opportunity to continue in the manner described in point (d) above. If you do want to continue in that way, the FFP Committee is willing to consider your application when it next convenes in June 2012.It is a condition of your acceptance of this offer that you discontinue the judicial review proceeding since it is inappropriate for the Society to be continuing a parallel process. Please let me know how you want to proceed, as soon as possible.In the event that you do not accept the offer to re-commence your s 30 application, please ensure that a copy of this letter is provided to the Court in the event that you elect to apply for interim relief, as has been suggested.[39] This was the first explanation Mr Zhao actually had of the problems that had cropped up at this interview. Even then the explanation was sparse. The panel wassimply "not satisfied with the quality of many of the responses you gave to the questions put to you at the interview". Mr Zhao had not at that time seen the reportsby Messrs Segedin and Anderson quoted earlier. Nor even a summary. The letter did not refer to the communications between Mr Deliu and the Society relating to thealleged promise to provide a letter explaining what the problems were with the application. The allegation that it had certainly had been ventilated in correspondence prior to 29 May 2012, as well as in the statement of claim.[40] The Society's position was that it would only continue to consider theapplication if the review proceedings were withdrawn. In that case, any of the three potential outcomes at the Fitness for Practice Committee might arise – including a recommendation to the Board that the application be declined. The Society did not offer to provide more information about what was being put in front of the Committee. Nor did it offer Mr Zhao an opportunity to be heard by the Committee. That was one of the three possible outcomes, but only if the Committee decided it wanted to hear from him.[41] Later that night, Mr Deliu wrote to the Society and its counsel. Despite the fact that the review proceedings were on foot, he insisted that the Society proceedwith Mr Zhao's application. He asked for the legal basis for the decision not to progress Mr Zhao's application. He also suggested it was improper for the Societyto seek to compel him to withdraw his "lawful claims" as a condition of progressingthe application.[42] And there for present purposes the correspondence ends.Statutory scheme[43] It is proper to start with reference to the overriding purpose of the Act, as set out in s 3. So far as relevant they are to "maintain public confidence in the provision of legal services" and to "protect the consumers of legal services".[44] Section 30 of the Act provides, relevantly as follows:30 Practice by lawyer on his or her own account(1) No lawyer may commence practice on his or her own account, whetherin partnership or otherwise, unless—(a) he or she—(i) meets the requirements with regard to both practical legalexperience and suitability that are imposed by rules madeunder this Act; and(ii) meets any other criteria that are prescribed by rules madeunder this Act; or(b) he or she is granted by the High Court, on grounds set out inrules made under this Act, leave to practise on his or her ownaccount.(2) A lawyer who is a director or shareholder of an incorporated law firmis deemed to be practising on his or her own account.(3) A lawyer may apply to the High Court for leave to practise on his orher own account.(4) The High Court, in deciding whether to grant an application for leave,must have regard to the matters that are specified in rules made underthis Act in relation to such an application.(5) The High Court may grant leave subject to such conditions (if any) asit thinks proper.(6) A lawyer commits an offence who, in contravention of this section,commences practice on his or her own account.[45] Sections 65 and 67 of the Act provide the regulatory functions and powers of the Society. The former include controlling and regulating the practice in New Zealand by barristers and solicitors of the profession of the law. The latter includes all such powers, rights and authorities necessary, expedient or conducive to the performance of its regulatory functions. Section 30(1)(a) plainly anticipates rules being made governing the requirements and criteria for practice by a lawyer on his or her own account. There is no argument in this case that the regulations –Regulations 12–14 of the Lawyers and Conveyancers Act (Lawyers: Practice Rules) Regulations 2008 – are valid. The challenge rather is to the process adopted under those regulations.[46] Regulation 12(1) provides as follows:12 Criteria for eligibility to practise on own account(1) For the purposes of section 30(1)(a) of the Act, the requirements and other criteria that must be met before a lawyer may commence practice on his or her own account as a barrister and solicitor are—(a) that during the 5 years immediately before the date ofcommencing practice on his or her own account, the lawyerhas had not less than 3 years' legal experience in New Zealand;and(b) that the lawyer has received, during the 3 years immediatelybefore the date of commencing practice on his or her ownaccount, adequate (in the view of the Law Society) instructionand examination on the duties of lawyers under the Act, andany regulations and rules made under it, that relate to thereceipt and handling of client money and the operation oflawyers' trust accounts; and(c) that the lawyer has satisfied the Law Society that he or she is asuitable person to practise on his or her own account as abarrister and solicitor, having regard to—(i) the lawyer's legal experience; and(ii) how the lawyer intends to practise on his or her ownaccount (for instance, in sole practice, as a partner in afirm, or otherwise); and(iii) the fields of law in which the lawyer intends topractise; and(iv) any other matters that the Law Society considers arerelevant.[47] This case concerns Regulation 12(1)(c). As we have already seen, theSociety's internal memorandum of 11 May 20126 recorded that Mr Zhao had satisfied Regulation 12(1)(a) and (b). So the question was whether he had:... satisfied the ... Society that he ... is a suitable person to practise on his ... own account as a barrister and solicitorhaving regard to the four sub-criteria set out in that provision. Those were his relevant legal experience, how he intended to practise, the fields of law in which he intended to practise, and "any other matters that the Law Society considers relevant".6 See [32] above.[48] The Society is entitled to devise a process to satisfy itself as to suitability. Plainly the question goes beyond good character. Such assessment necessarily will have a measure of subjectivity. The process must be transparent and reasonably consistent, and must address relevant considerations. It is accepted by Mr Zhao, as it must be, that his complaints history in New Zealand is relevant – notwithstanding the fact that it is not directly referred to in the application form. The Society has that information already, and it may use it so far as is relevant. It is the extent of relevance of the making of seven complaints, none of which were found to require further action, which is in issue here. Likewise the existence and content of theadditional "briefing" of the interviewers. Mr Zhao also accepts that his competencywith regard to the establishment and operation of a trust account is a relevant consideration, as also would be his competency in dealing with client money. Here his objections relate to the degree of emphasis on this topic, especially inasmuch as he had passed the Trust Account Supervisor programme.[49] The practical process adopted by the Society for the processing of a s 30(1) application is, it must be said, somewhat delphic. I have commented already, on the Society website.7 That website does not refer to the conduct of an interview. However, Mr Zhao and Mr Deliu properly accept that such an interview is appropriate and they take no issue with it being conducted in principle. The websitestates that the Branch will "process" the application and "make a recommendation"to the national office of the Society in each case. It says that if issues arise, they will be referred to the Committee. What might happen then is not indicated.[50] In her affidavit the General Manager Regulatory for the Society, Ms Mary Ollivier, explains in more detail what occurs in practise:2.4 The procedure followed is that the application is examined by a senior officer of the Law Society at the particular branch office where it was submitted. Subject to satisfactory compliance with the Regulation 12(1)(a) & (b) matters, applicants are required to attend an interview with a member of the Law Society's Inspectorate and asenior lawyer appointed from a list of suitable lawyers in the locality of the branch.2.5 The interview panel has available to it the full file relevant to the application, including any trust account examination paper and any7 See [12] above.relevant records concerning complaints and discipline. Following the interview, the panel is required to make a recommendation whether or not to approve the application. This is a recommendation to National office staff under my supervision, for a final decision in all straight forward cases.2.6 In some cases the interview panel may decide not to recommend the approval of the application and, in those circumstances, theapplication will be referred to the Law Society's Fitness for PracticeCommittee ("the FFP Committee").2.7 The FFP Committee is a specialist advisory committee appointed by the board under Rule 158 of the Lawyers and Conveyancers Act (Lawyers) Constitution 2008. It is comprised of senior lawyers from around the country and its purpose is to ensure:(a) A higher level of scrutiny in non standard case; and(b) Uniformity in the analysis of the non standard cases andtherefore uniformity in the Law Society's decision-making, bearing in mind its status as the national regulator.2.8 In considering an application, the FFP Committee may proceed as follows:(a) It may decide to recommend to the Board (which is the decision maker in non standard cases) that the application should be granted, notwithstanding the concerns that had prompted the referral of the application to it; or(b) It may enter into a process in which it makes further enquiry including seeking further evidence and/or submissions from the applicant, possibly directed at specified areas of concern, following which a recommendation would be made to the Board, one way or the other; or(c) It might decide to recommend to the Board to decline the application.2.9 In any case where the application is declined by the Board, the applicant is notified in writing with reasons and advised of their statutory right to apply to the High Court....[51] Mr Paul Collins, counsel for the Society, explained the practical situation in a little more detail. The focus of a s 30 assessment is the suitability of the practitioner to work unsupervised as a barrister and solicitor. To that extent, therefore, it differs from the earlier assessments made on admission, and thereafter upon the issue of a practising certificate (s 39 and 40 of the Act). There are about 160 s 30 applications8 Presumably in fact a reference to Rule 14.annually. Most are resolved at Branch level. Everyone is interviewed. The interviewers report to the Branch Manager. If the interviewers signify approval, the Branch Manager would normally approve the application and inform the national office of the Society accordingly. That explanation diverges a little from that given by Ms Ollivier.[52] To that limited extent, the panel members can be the effective decision makers. In any other case, the application will be referred to the Committee. TheSociety's website reinforces that.9 It is "if issues arise" that reference is made to theCommittee. Mr Collins confirmed the explanation given by Ms Ollivier as to whatthen occurs. The matter is dealt with administratively, as the Society's websitestates.10 An applicant does not necessarily get a hearing before the Committee. Such a hearing is but one of the three potential outcomes upon reference to the Committee. The Committee makes a recommendation to the Board. The Board makes the final decision.Pleadings and submissionsPlaintiff[53] The plaintiff challenges three aspects of the Society's processes:(a) the "decision of the Society not to recommend the application for approval";(b) the decision to refer his application to the Committee; and(c) the decision not to progress his application after the proceedings wereissued, which is said to be a "decision to decline" the application.These challenges are made in Mr Zhao's amended statement of claim, which I treatas definitive of the issues the Society is required to answer. I say this because Mr9 See [12] above.10 Idem.Deliu's written submissions ranged somewhat further. On that additional journey Idecline to venture.[54] Decision not to recommend: The "decision" not to recommend Mr Zhao forapproval was effectively made by the two interview panel members, Messrs Segedin and Anderson. But it was not, as Ms Ollivier makes clear, more than a provisional decision, as there were further processes to be completed before a final decision was made – and that by the Board.[55] Mr Deliu (for Mr Zhao) submits that the decision breaches natural justice because Mr Zhao was not given proper notice of what concerns the Society had withthis application prior to the interview "nor even told what the interview would be about" and was "thereby denied a reasonable opportunity to respond". The Society did not explain the processes to be adopted. It did not give a reasoned decision for its adverse recommendation. Secondly, the decision not to recommend is said to be unreasonable in having taken into account irrelevant considerations. Specifically, the previous Law Society complaints (none of which had resulted in a finding ofunsatisfactory conduct, misconduct "or anything that could be deemed to be adverse to the plaintiff"). Thirdly, it is submitted that the decision not to recommend isflawed in not taking into account relevant considerations. Specifically, Mr Zhao held a practising certificate, (meaning he was of good character) and concerns as to his knowledge of the operation of a trust account could have been met by approval as a principal operating a solicitor's practice without a trust account.11[56] Decision to refer: The decision to refer the application to the Committee is said to have breached natural justice because Mr Zhao was not given reasons for the adverse recommendation, and not given an opportunity to comment on the decision or address the Committee. The decision is said also to breach his legitimate expectations inasmuch as the Society had given a promise to Mr Zhao that before referral he would be given a letter explaining the concerns of the Auckland Branch and an opportunity to address those concerns.11 Section 317.[57] Decision not to progress: The Society decision not to further progress Mr Zhao's application is said to be a "decision to decline" and was said also tobreach statutory duties owed by the Society.[58] Remedy: The remedy sought by Mr Zhao differed in submissions from that pleaded. What he now seeks is as follows:(a) reconsideration of his application by a new s 30 interview panel;(b) that the complaints (resolved on the basis that no further action be taken) be declared to be matters the panel not consider; and(c) a declaration that in the event the new panel again issues an adverse recommendation, that Mr Zhao be advised promptly of the reasons for that adverse recommendation.Defendant[59] For the Society, Mr Collins submits that there was no reviewable error,because "nothing that occurred up to the time of commencement of theseproceedings constituted an actual or proposed exercise of a statutory power ofdecision". Consequently, Mr Collins submits, the review applications are premature. Further, the plaintiff has an alternative to judicial review because he is entitled to apply directly to the Court for approval to practise on his own account. That is said to be the course that Mr Zhao should follow if dissatisfied with the Society'sprocesses, rather than seeking judicial review.[60] As to the merits of the arguments advanced, Mr Collins submits that the "not recommended" report from the panel was "simply part of the defendant's internalanalysis". But no decision had been made. The Committee was yet to consider thematter. It might have granted the application outright, or it might have given Mr Zhao an opportunity to respond to the panel's concerns. Mr Collinsacknowledged, however, that a third potential outcome of the Committee would be a recommendation to the Board that the application be declined without furtheropportunity for submission. In that case, Mr Collins said, the applicant had his alternative remedy by application directly to the High Court.[61] As to the consideration of past complaints, the defendant's regulatoryfunction required it to inquire as to his suitability to practise alone, given the statutory purposes in s 3 of the Act. The Society has a wide-ranging mandate under regulation 12 to inquire into any matter it considers relevant. Resolved complaints (even where recommending no further action) remained relevant simply by the fact that the applicant had garnered so many such complaints. They remained relevant to his maturity as a practitioner and his ability to practise on an unsupervised basis. The finding that no further action need be taken on a complaint did not mean thecomplaint necessarily lacked substance. The conduct might still be "unsatisfactoryconduct" for the purposes of s 12. Section 138(1) sets out a variety of circumstancesin which a standards committee may resolve to take no further action on complaints. The Society in making a s 30(1) decision was entitled to look beyond the mere surface conclusion of the standard committees' decisions.[62] As to failure to take into account relevant considerations, in particular theplaintiff's possession of a practising certificate, the inquiry under s 30 is not purely aquestion of character. Regulation 12 routinely requires consideration of the suitability of a practitioner of good character to practise on his or her own account. The application was not made on the basis of Mr Zhao practising without a trust account. By passing the Trust Account Supervisor training programme Mr Zhao was always permitted to operate on a trust account basis (and would then be subject to inspection and levies). He could seek exemption by electing not to run a trust account (and not receiving client money or property). But that was not the basis on which the application had been made. To the contrary, Mr Zhao had earlier been inquiring of the Society about how to go about opening a trust account.12Issues[63] This case gives rise to five issues:12 At [14] above.(a) Issue 1: Is the application for review premature?(b) Issue 2: Was the interviewers' decision not to recommend approvalinvalid?(c) Issue 3: Was the decision to refer Mr Zhao's application to the Fitnessfor Practice Committee invalid?(d) Issue 4: Was the decision not to progress Mr Zhao's application after proceedings were issued invalid?(e) Issue 5: What remedy (if any) is appropriate?Issue 1: Is the application for review premature?[64] There are two aspects to this submission by the Society. First, the absence of a decision (or at least, a concluded decision). The second is the existence of the alternative option to apply directly to the Court for approval to practise on his own account, under s 30(3).[65] I have summarised the Society's submissions at [59] above. The Societyplaced particular reliance on the decision of Ronald Young J in Marlborough Aquaculture Limited v Chief Executive, Ministry of Fisheries.13 But that decision made clear that review might yet occur in the case of a preliminary decision where,inter alia, it is "a step in the process where the step is capable of altering rights,interests or liabilities".14 There is ample other authority to the same effect. Young J relied on the High Court of Australia decision in Hot Holdings Pty Limited v Creasy.15 That was a case where a preliminary assessment and recommendation by amining warden would have a discernible effect upon the Minister's subsequent exercise of discretion to grant a mining licence. While the warden's report wasrecommendatory and did not bind the Minister, it was either as a matter of statute or13 Marlborough Aquaculture Limited v Chief Executive, Ministry of Fisheries [2003] NZAR 362(HC).14 At [15].15 Hot Holdings Pty Limited v Creasy (1996) 185 CLR 149 (HCA).good administrative practice a relevant consideration that the Minister was bound to have regard to (although not bound to follow).16[66] In this case I am satisfied that the exercise by interviewers (and by members of the Committee) of the power devolved to them to recommend (or withholdrecommendation) the right to practise on one's own account is a reviewable action. First, it is clear that the interviewers' investigative, and their and the Committee'srecommendatory, powers involve the exercise of a statutory power. It forms a part of the whole power vested in the Society.17 Secondly, where the interviewers issue a positive recommendation, that is given considerable weight by the Society (whether it be at Branch or national level) in exercising the s 30(1) statutory power of decision. Thirdly, the report given by the interviewers on a negative recommendation will be influential in any determination by the Committee, following reference to it. The Committee may indeed make no further inquiries, and exercise the third option of recommending refusal of the application without further reference to the applicant. Fourthly, as Young J observed in the course of theMarlborough Aquaculture decision, even at a preliminary stage a power toinvestigate and recommend may "go off the rails", such that it is necessary that acourt quash the decision.18 An example given by the Judge was bias. If established at a preliminary stage, that would likely be fatal to all subsequent decision making. It is not necessary in such a case that the applicant for judicial review stay his or her hand until the process plays out to its likely adverse outcome.[67] Of course, where processes leading to a final decision are not completed, review remains discretionary and will be exceptional. In Board of Airline Representatives NZ Incorporated v Attorney General19 Gallen J said:In the vast majority of cases to which reference was made, the Courts have considered the procedure which was adopted to determine whether or not a decision made in consequence of or following upon that procedure, was a decision which could properly stand, or in some cases whether it amounted to a decision at all. In the vast majority of cases, the procedures have been completed and could therefore be considered in their entirety. I accept that16 At [56] per Brennan CJ, Gaudron & Gummow JJ.17 See Polynesian Spa Limited v Osborne [2005] NZAR 408 (HC) at [54].18 At [15].19 Board of Airline Representatives NZ Incorporated v Attorney General HC Wellington,CP 391/98, 8 December 1998.conceptually the Courts could become involved in an assessment of procedure where a formal decision had not in fact been arrived at, but in my view that has to be a wholly exceptional case and I consider could only occur whether procedure could in some sense be seen as a part of the decision itself. [Emphasis added].[68] These matters are also canvassed in the Court of Appeal in Attorney General v Zaoui.20 Glazebrook J noted there should be no blanket acceptance of the"ripeness" doctrine in New Zealand, that being excluded by the JudicatureAmendment Act 1972.21 William Young J, while accepting that prematurity may provide a discretionary ground for declining review, noted that such an argument would have been of little merit in that case. There the Inspector General intended to conduct this review on a basis the High Court had held was not going to comply with the rules of natural justice. It would not therefore have been premature for Mr Zaoui to seek relief in relation to the Inspector General's proposed course of action.22[69] The Society's other argument - the existence of the "parallel process" for judicial approval of applications to practise on one's own account under s 30(3) – is relevant both to the preliminary prematurity point, and to the question of remedy at the end. This parallel process is problematic. As the provision makes clear, in considering such an application the High Court is to consider the matters specified in the rules made under the Act.23 The relevant rule is reg 13(1). For present purposes it is sufficient to say that the matters the High Court must have regard to under reg 13 are essentially the same matters the Society is to have regard to under reg 12. Mr Collins suggested that in assessing the lawyer's relevant legal experience, intendedmode of practice and other matters the Court considered relevant, the Court itself might interview the lawyer. The suggestion that a High Court Judge might interview a prospective candidate on the complexities of solicitors' trust accounting, matters aHigh Court Judge is unlikely to have had recent (or perhaps any) experience of, is not especially satisfactory. It appears there is no authority in relation to the application of reg 13.20 Attorney General v Zaoui [2005] 1 NZLR 690 (CA).21 At [106]–[107].22 At [183]–[184].23 Section 30(4).[70] The following points arise. First, the procedure for direct application to the High Court under s 30(3) is a secondary rather than primary procedure. An applicant will be expected, therefore, to make application to the Society under s 30(1) in the first instance.24 Secondly, while the issues for consideration by a Court under a s 30(3) and the Society under s 30(1) are effectively identical, the processes for the determination are not the same. Those in the Court are less satisfactory than those of the Society, which has far more relevant experience in such matters and a body of comparative cases to consider in exercising that power of decision in a consistent fashion. Thirdly, it may be appropriate to make the application to the High Court direct under s 30(3) in exceptional cases, such as where there are reasonable grounds for believing the Society would not now exercise its power in accordance with law (that is, independently and reasonably). By definition such cases would be exceptional. This case is certainly not yet one of them. Fourthly, applicants who proceed under the primary s 30(1) route to the Society, are entitled to have their application considered properly and lawfully in accordance with due process. It is not an answer to a challenge to the Society's process, submitting that it has not doneright by the applicant, to say that there is an alternative course of action open. The applicant is reasonably entitled to due process by the primary decision maker.Conclusion[71] The application for review is not premature.Issue 2: Was the interviewers' decision not to recommend approval invalid?Conduct of interview[72] As has been noted already25 Mr Zhao takes no issue with the fact that an interview was conducted. Nor does he take any issue with the composition of the interview panel. I dismiss his complaints that he was not given due notice of the subject matter of the interview, or the processes to be adopted in the interview. The short answer to this point is that Mr Zhao made no inquiry as to content. He24 Compare Borick v Otago District Law Society [1991] 2 NZLR 169 (CA) at 170–171.25 At [14] above.inquired about other matters, and received answers. But not about the interview. When the interview was postponed from 13 to 27 April, he sought retention of the original date. He appears to have had a high degree of confidence as to his ability to fly through the interview. It is not clear what he thought its subject matter would be. Certainly, he cannot have been surprised that it would cover trust accounting and the handling of client money. He should have been in a very good position to answer those questions. He had passed the Trust Account Supervisor programme just two months before. In his affidavit he says that:I thought that the point of interview would be to discuss my character, how I intended to practise in the future and things of this nature and not really require much, if any, advance preparation. I specifically inquired about the trust account setting up procedures but the response was that an inspector would help me at [a] later stage.[73] Three points should be made about this. The first is that that impression was not based on anything the Society had told him. Secondly, although Mr Anderson thought the Society had sent a syllabus to Mr Zhao, it had not done so.26 The third is that the inquiry he had made of the Society on 5 March 2012 in relation to setting up his trust account27 was concerned with "practical procedures" – in particular whether he was to set it up through the Law Society or a trading bank. He was told that trading banks had procedures for that purpose, and that the interviewers could provide him with a practice checklist at the time of his interview. That might, perhaps, have suggested that trust accounting procedures would be part of that interview. But it does not require much reflection to appreciate that trust accounting procedures would be a relevant consideration at an interview concerning the suitability of a person to practise on his or her own account as a solicitor. I note that the application form indicated that Mr Zhao would be practising on his own behalf,in an incorporated firm called "Richard Zhao Lawyers Limited".Natural justice - panel "briefing"[74] Exercise of a statutory power is vested by s 30(1) in the Society. The Society can adopt whatever procedure it considers appropriate to discharge that power.26 See [29] above.27 See [14] above.Logic and experience, if not statutory words, compel the conduct of an interview. There is no need, however, for those interviewers to be hermetically sealed from therest of the "Society". The Society may talk to itself.[75] As a matter of law, a decision-maker is free to undertake such inquiries as it thinks fit, and to obtain the views of relevant persons, in particular those it already employs.28[76] It follows that the undertaking (if it occurred) of the briefing of the interviewers by the Society officer was not unlawful. Rather, however, the question is whether Mr Zhao had a right to know of that briefing, and more particularly its content. Secondly, when?[77] As to the former point it is clear that natural justice requires that prejudicial material must be disclosed before an adverse decision is made, so that the applicant has an opportunity to correct that information.29 That obligation is subject to two important qualifications. The first is there is nothing in the statute contrary to such an obligation. Here there is not. Secondly, the decision maker is under no obligation to disclose material the applicant is already aware of and would expect the decision maker to pay regard to.30[78] In this case, of course, Mr Zhao was aware of the previous complaints. He accepts they would be before the interviewers. So the issue is whether information received in any briefing was prejudicial and should have been put to Mr Zhao for comment, and whether, also, there was any surprise in the information (and therefore unfairness) in it not being put to him. Only if that was the case need Mr Zhao have been afforded an opportunity to respond to it.28 See Daganysi v Minister of Immigration [1980] 2 NZLR 130 (CA); Harris v Department ofEmployment and Work Place Relations [2007] FCA 404.29 See for example Smith New Zealand Judicial Review Handbook (Brookers, Wellington, 2011) at[57.5.5]; Taylor Judicial Review: The New Zealand Perspective (2 ed, Lexis Nexis Wellington,2010) at 522 and Woolf, Jowell & Le Sueur De Smith's Judicial Review (6 ed, Sweet &Maxwell, London, 2007) at 389 - 391.30 Talukder v Removal Review Authority [2000] NZAR 194 (CA) at 198.[79] In Mohu v Attorney-General31 Mr Mohu had applied for permanent residency.His previous wife's solicitors had written to the Department advising she was no longer willing to sponsor him and that there was no prospect of reconciliation. TheDepartment declined Mr Mohu's application. He asked for reasons. Eventually, the Department acknowledged that their decision to decline was based on the information received in confidence from Mrs Mohu's solicitors. Hardie Boys J found there was a duty of disclosure. The Judge said:32I can think of no more fundamental requirement of fairness than that the decision made should be based on all reasonably available relevant material. In particular, to receive and rely on material that is adverse or prejudicial to the applicant without giving the applicant the opportunity of answering it, especially when it comes from a source that is likely to be partisan, seems to me to cut at the very foundations of fairness. There is of course a limit to the extent which the Department must go, as is demonstrated in R v Hope, Secretary of State for the Home Department, Ex parte Mughal [1974] 1 QB313. But as that case shows, the applicant must be given "a real opportunity"of putting his case before the authorities. A failure to disclose prejudicial material that is to be taken into account denies the applicant that real opportunity.[80] And in Ali v Deportation Review Tribunal33 Elias J said:34If therefore, there is no surprise in an allegation or if, even if there is surprise, there could be no prejudice because further notice would not have assisted the person affected to meet the allegation, then there is no unfairness in the process. It perhaps goes without saying that where surprise is established and especially where the decision is of great significance for the person affected, it will not be right to infer absence of prejudice easily....whether a person affected is taken by surprise by an allegation or consideration turns on whether the substance of the allegation or consideration was known. In Rajan v Minister of Immigration [1996] 3 NZLR 543, a failure to disclose two documents known to the Immigration Service containing material prejudicial information was not a breach of natural justice where there was no doubt that the appellants were aware of the substance of the two documents in question. In those circumstances the opportunity to counter the information or to argue that it had little weight was available.There the Minister approved a deportation order. A letter had been sent to theImmigration Service by Mr Ali's wife's solicitor. Elias J was satisfied there was31 Mohu v Attorney General (1983) 4 NZAR 168 (HC).32 At 173.33 Ali v Deportation Review Tribunal [1997] NZAR 208 (HC).34 At 220.nothing in this letter of surprise to the plaintiff and to which he lacked fair opportunity to respond.[81] I also note the High Court of Australia decision in Kioa v Minister for Immigration and Ethnic Affairs35. In that case a departmental report to the Minister'sdelegate included information which was not put to Mr Kioa for comment. Brennan J said:36A person whose interests are likely to be affected does not have to be given an opportunity to comment on every adverse piece of information, irrespective of its credibility, relevance or significance. Administrative decision-making is not to be clogged with enquiries into allegations to which the repository of the power would not give credence, or which are not relevant to his decision or which are of little significance to the decision which is to be made. Administrative decisions are not necessarily to be held invalid because the procedures of adversary litigation are not fully observed...Nevertheless, in the ordinary case where no problem of confidentiality arises an opportunity should be given to deal with adverse information that is credible, relevant and significant to the decision to be made. It is not sufficient for the repository of the power to endeavour to shut information of that kind out of his mind and to reach a decision without reference to it. Information of that kind creates a real risk of prejudice, albeit subconscious, and it is unfair to deny a person whose interests are likely to be affected by the decision an opportunity to deal with the information.[82] In the present case the content of the briefing, if (1) adverse and (2) going beyond information which Mr Zhao would appreciate the Society would likely possess in connection with his complaints (which he knew or should have known were a relevant subject of inquiry), would need to be disclosed. Desirably that disclosure would occur prior to the interview. Desirably, perhaps, the briefing would not have occurred at all. But as I have said, the Society is entitled to speak to itself in these matters. If, however, the information is adverse and would be surprising, then it needs to be disclosed to the applicant before a final determination on his rights is made. Desirably that would be as early in the process as possible.35 Kioa v Minister for Immigration and Ethnic Affairs (1985) 159 CLR 550 cited with approvalmost recently in Television New Zealand Ltd v W HC Auckland CIV-2007-485-160918 December 2008. See also R (On the application of O'Leary) v Chief Constable of Merseyside[2001] EWHC Admin 57.36 At 628-629.[83] I am however satisfied that disclosure of any such information could legitimately occur prior to any consideration of the application by the Committee, rather than needing to be disclosed before the interview. That is because, as I conclude in the next part of this judgment, reference to the Committee was inevitable regardless of the significance or otherwise of the complaints. That in turn wasbecause of Mr Zhao's disastrous want of understanding of basic trust accounting andfiduciary responsibilities in relation to client funds. On that basis alone an adverse recommendation by the interviewers was inevitable.Relevant and irrelevant considerations[84] It is said on behalf of Mr Zhao, first, that the Society took into account irrelevant considerations when it considered the complaints record.[85] I do not accept that argument. Mr Zhao accepts the Society could and shouldconsider the complaints record. To Mr Zhao's credit, none of the complaintsrequired further action. But as Mr Collins submitted37 a determination that no action be taken on a complaint does not mean that the complaint necessarily lacks substance. The circumstances of the complaint may yet remain relevant to a s 30(1)decision as to suitability to practice on one's own account. In particular, with a trustaccount and the ability to handle client money. Taken on its own, without the other consideration resulting in the adverse recommendation (lack of understanding of trust accounting procedures), the complaints record might not be enough to justify an adverse recommendation. But it is by no means an irrelevant consideration. Just one requiring correct weighting.[86] Secondly, Mr Deliu submits that the decision not to recommend approval failed to take into account relevant considerations that the plaintiff held a practising certificate (meaning that he was of good character) and that he could have practised as a principal without a trust account.[87] Again, I cannot accept that argument. It misconceives the Society's roleunder reg 12(1)(c). It is there concerned with suitability for practice on one's own37 At [60].account. It is a far larger question than whether the practitioner has good character. Section 49 of the Act puts character (jointly with qualification) at the forefront of evaluation for admission as a barrister and solicitor. Essentially the requirements for admission in most cases will be a combination of qualification and good character("fit and proper persons to be admitted as barristers and solicitors of the High Court)". Similarly and secondly, issue of a practising certificate under s 39 of the Act is a combination of qualification (under the Practice Rules made under s 94(a)) and the applicant being a fit and proper person to hold a practising certificate.38Section 41(2) of the Act makes clear that that is a potentially broader inquiry than whether the person is a fit and proper person to be admitted in the first place. As Mr Collins submitted, the evaluation of fitness to hold a practising certificate is more thorough on initial application. Thereafter a practising certificate will generally be issued on acceptance by the Society of a declaration of compliance. But the inquiry to be undertaken under s 30(1) is different. It is not a question simply of character, or of fitness to practise, but of the suitability of that person to take charge of a practice. That is a different inquiry. A person who is suitable to practise under supervision is not necessarily a person suitable to practise on their own account. Particularly as a sole practitioner, operating a client trust account and handling client money.[88] As to the other aspect of Mr Zhao's complaint, Mr Collins says that it ispossible retrospectively to exempt solicitors from levies for trust account inspection, and from contribution to the fidelity fund, where they do not operate a trust account. Here Mr Zhao had authority to have a trust account, by reason of his passing the Trust Account Supervisor examination in February 2012. The Society does not have statutory authority to impose restriction areas of practice. A solicitor can only restrict his or her area of practice, or right to operate a trust account, by undertaking. Here no such undertaking had been offered by Mr Zhao. To the contrary, he had been inquiring of the Society how to go about opening up a trust account.39 The giving of such an undertaking not to practise with a trust account could of course be a matter taken up with the Committee. But the interviewers were under no obligation to raise it as an option.38 Section 41(1).39 At [14].[89] Thirdly, if all the above were not enough it is clear that the adverserecommendation of the interviewers was on any view justified by Mr Zhao's poorshowing on the questions relating to trust account management. It will be recalled that he sought to practise as sole director and shareholder of an incorporated law firm, had not indicated (for what it is worth) any intention to seek exemption from trust accounting supervision (by not operating such an account), had not offered an undertaking not to practise with a trust account, had in fact been asking the Society about how to set up such an account, and had as recently as just two months before the interview passed the Trust Account Supervisor programme.[90] Against that background Mr Zhao can have no legitimate objection as to the extent of focus in his interview on trust accounting and the handling of client money. He may not have prepared for such questions, but he cannot legitimately blame the Society for his approach to preparation. If the website and other information were not clear, he should have asked. His very recent passage of the Trust Account Supervisor programme meant that he should have flown through those questions. Other questions concerning borrowing from a client and the availability of thefidelity fund to cover a solicitor's insurance cover shortfall in the event of negligence40 are simply inherent to practising on one's own account. Mr Zhao had toknow the answers to most or all of these questions to be suitable to practise on his own account. He did not know the answers. Other candidates that day had prepared properly, and had an instinctive understanding of these matters. They passed. It is plain from the reports of the two interviewers and the subsequent discussion between them41 that this aspect of the interview, rather than the complaints, was the dominant consideration in the decision not to recommend Mr Zhao. On those issues alone, Mr Zhao was not yet suitable to practise on his own account.[91] In light of Mr Zhao's performance at the interview on those core issues, adecision not to recommend him was inevitable. It would, following the Society'susual processes, then be up to the Committee to decide how to respond to thatdeficiency in Mr Zhao's suitability to practise on his own account.40 It is not available for that purpose. Mr Zhao thought it was. See [27]–[28].41 See at [30].Conclusion[92] The preliminary decision of the interviewers not to recommend Mr Zhao was not invalid.Issue 3: Was the decision to refer Mr Zhao's application to the Fitness forPractice Committee invalid?[93] Although expressed as a challenge to the decision to refer the application to the Committee, that consequence was the inevitable result of Mr Zhao'sunsatisfactory interview. The conduct of that interview was not invalid. The reference to the Committee was, therefore, not invalid either. The real issue of invalidity argued under this heading concerns the process adopted by the Society in convening the Committee on 22 May 2012.[94] As we have seen,42 Mr Zhao has deposed that he was told by the Society'sRegistry Manager that before the Committee conferred on 22 May 2012, he would receive a letter explaining what the problems with his application were and have a chance to address the Committee. That sworn evidence is not responded to by the Society. I have said that I take it to be truthful.43 The consequence of that finding is clear and compelling.[95] It is clear that the assurance given by the Society, that it would provide reasons and an opportunity to be heard by the Committee, created a legitimate expectation as to process. The essential principles of legitimate expectation are summarised by Ronald Young J in Talley's Fisheries Limited v Cullen.44 In the present case the legitimate expectation arises from an express promise, and it iswithin Young J's third category of a legitimate expectation as to a fair procedure.Here the express promise given by the Registry Manager was clear and42 At [33].43 At [34].44 Talley's Fisheries Limited v Cullen HC Wellington CP 287/00, 31 January 2002 at 48.unambiguous. There was no suggestion by the Society that the Registry Manager lacked actual or ostensible authority to make the representation.45 It is evident Mr Zhao relied on the promise. He did not take other pre-emptive action, such as sending a submission to the Committee. It would in any case have been difficult for him to do so in the absence of the promised reasons. He was entitled to wait forthose. When Mr Zhao's counsel emailed the Registry Manager, noting that the promised letter had not yet arrived, the promise was neither denied nor revoked.[96] In these circumstances I am satisfied that the decision of the Society to proceed with the meeting of the Committee on 22 May 2012, without having given Mr Zhao either reasons for the adverse recommendation or the opportunity to be heard by the Committee, was in breach of that legitimate expectation.Conclusion[97] The convening of the Fitness for Practice Committee to consider Mr Zhao'sapplication, in these circumstances, was invalid.Issue 4: Was the decision not to progress Mr Zhao's application, afterproceedings were issued, invalid?[98] I can be very brief in relation to this issue.[99] I have found that each step in the Society's determinative process (interview recommendatory determination, Committee process and recommendatory determination) is potentially reviewable. The Society cannot object that the judicial review of either is premature. It must follow also, however, that faced with proceedings brought on the date the Committee was to convene, the Society wasjustified in not convening the Committee in relation to Mr Zhao's application, and innot progressing Mr Zhao's application further.45 De Smith's Judicial Review (6th ed, Sweet & Maxwell, London, 2007) at 12–034, citing SouthBuckinghamshire DC v Flanaghan [2002] EWCA CIV 690.[100] It is difficult to see what else the Society could have done. For it to haveproceeded with the Committee's determinative process in the circumstances I have found, involving as they do a breach of Mr Zhao's legitimate expectations, wouldhave been unlawful. The Society was not bound to proceed with its process when Mr Zhao was contending (as it turns out with justification) that that process was flawed and unlawful. Delay by the Society in these circumstances was entirely justifiable.Issue 5: What remedy (if any) is appropriate?[101] There being no invalidity in relation to the interview, the remedies proposed on behalf of Mr Zhao46 are not appropriate. What is necessary is a remedy thataccurately carries into effect Mr Zhao's legitimate expectation as to the furtherconsideration of his application before the Committee. This I will address belowunder "Disposition".47Conclusion[102] In this judgment I have concluded:(a) The application for judicial review brought in these proceedings wasnot premature. Both the interview process and the Committee'sintended exercise of statutory powers (as part of the entire statutorypower of decision under s 30(1)) was capable of altering Mr Zhao'srights and interests. Those actions were therefore susceptible to review.(b) The Society was bound to provide Mr Zhao with the content of any briefing of the interview panel by Society officers to the extent it was adverse and would be surprising to Mr Zhao. However, because reference to the Committee was in this case inevitable, the Society did46 See at [58].47 See at [103].not need to provide that information before the interview was conducted. It did need to do so before the Committee convened.(c) Mr Zhao's complaints record was not an irrelevant consideration, foreither the interview panel or the Committee, notwithstanding that all had been resolved on the basis that no further action was required. They remained, individually or collectively, relevant to his suitability to practise on his own account, although were unlikely to be determinative of that matter.(d) Mr Zhao's poor showing in the interview in answering questions on trust account management and the handling of client funds made an adverse recommendation by the interview panel inevitable. His application of necessity would be referred to the Committee. It would then be up to the Committee to decide how to respond to thatdeficiency in Mr Zhao's suitability to practise on his own account.(e) Before the Committee convened an officer of the Society gave Mr Zhao an assurance that he would receive a letter explaining what the problems with his application were and have a chance to address the Committee. That assurance gave rise to a legitimate expectationon Mr Zhao's part that he would be treated accordingly by the Society.The decision of the Society to convene the Committee on 22 May 2012, without having given Mr Zhao either reasons for the adverse recommendation or the opportunity to be heard by the Committee, was in breach of that legitimate expectation.(f) The Society was entitled to suspend the application process, and not reconvene the Committee, when Mr Zhao issued proceedings contending that that process was flawed and unlawful. Delay by the Society in these circumstances was entirely justifiable.Disposition[103] I declare that the Society on or about 22 May 2012 acted in breach of Mr Zhao's legitimate expectation that he be given a written summary of the reasonsfor interviewers' recommendation against approving him to practise on his ownaccount, and an opportunity to be heard by the Fitness for Practice Committee at its meeting on 22 May 2012.[104] I am satisfied that disclosure in these proceedings has now given Mr Zhao theinterviewers' reasons for making that recommendation. I do, however, order theSociety to provide Mr Zhao with an adequate summary of the contents of any briefing given to the interview panel about Mr Zhao's complaints record. For thesake of expedition I do not limit that requirement to matters which would, in terms of Ali v Deportation Review Tribunal, constitute subject matter "surprising" to MrZhao.[105] I further order that the Society reconvene the Committee, and give Mr Zhao an opportunity, in person or by counsel or both, to address the Committee in support of his application.Costs[106] Mr Zhao has succeeded, albeit somewhat modestly against the bold palette of grounds originally advanced. He is perhaps entitled to costs. If sought, I will receive memoranda.Stephen Kós JSolicitors:New Zealand Law Society, Lambton Quay, Wellington 6145Counsel:F C Deliu, PO Box 68559, Auckland for PlaintiffP N Collins, Auckland for Defendant