H v WAIKATO BAY OF PLENTY STANDARDS COMMITTEE 1 OF THE NEW ZEALAND LAW SOCIETY [2013] NZHC 2090

H v WAIKATO BAY OF PLENTY STANDARDS COMMITTEE 1 OF THE NEW ZEALAND LAW SOCIETY [2013] NZHC 2090 [16 August 2013]ORDER PROHIBITING PUBLICATION OF THE PRACTITIONER ANDTHE FIRM AND OF ANY PARTICULARS LIKELY TO LEAD TO THEIRIDENTIFICATION PURSUANT TO S 240(1)(C) OF THE LAWYERS ANDCONVEYANCERS ACT 2006IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2013-404-001953[2013] NZHC 2090BETWEEN HFirst AppellantFSecond AppellantAND WAIKATO BAY OF PLENTYSTANDARDS COMMITTEE 1 OF THENEW ZEALAND LAW SOCIETYRespondentHearing: 8 August 2013Counsel: P Hunt for AppellantsNo appearance for RespondentRMA McCoubrey for New Zealand Law SocietyJudgment: 16 August 2013JUDGMENT OF RODNEY HANSEN JThis judgment was delivered by me on 16 August 2013 at 3.00 p.m.,pursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDate: .Solicitors: McElroys, AucklandMeredith Connell, AucklandIntroduction[1] The first appellant (the practitioner) was a practising barrister and solicitor and a partner in the second appellant (the firm). He admitted four charges brought by the respondent (the Standards Committee) of negligence or incompetence in his professional capacity of such a degree or so frequent as to reflect on his fitness to practise as a barrister or solicitor or as to bring the profession into disrepute.[2] The New Zealand Lawyers and Conveyancers Disciplinary Tribunal (the Tribunal) censured the practitioner, ordered him to pay a penalty of $10,000, compensation of $50,000 to the complainant and costs. The Tribunal refused an application to prohibit the publication of the practitioner's name and the name of the firm.[3] The appellant's appeal against the refusal to grant name suppression. The Standards Committee abides the decision of the Court. However, the New Zealand Law Society (NZLS), as the regulator of the legal profession under the Lawyers and Conveyancers Act 2006 (the Act), advised that, if so directed by the Court, it would file submissions and appear at the hearing. In a minute of 31 July 2013, Venning J recorded that the Court would be assisted by hearing from the NZLS. He directed that the NZLS submissions need not address the factual matters raised by the appeal but the Court would be assisted by submissions directed at matters of law. He suggested that these should include but not be limited to, the appellate approach, the principles applying in relation to practitioners and their firms and whether there is or should be a difference between the approach to suppression in penalty and substantive cases and the relevance of public interest in such cases. In response, Mr McCoubrey filed very helpful submissions which he amplified at the hearing.The Tribunal's decisionBackground[4] The complainant is an elderly widow, now in her late seventies. In 2000, the practitioner acted for her on the purchase of a house in a new subdivision. He also acted for the vendor, a developer who built on average 10 – 15 houses per year, forwhom the practitioner had acted for some 15 years. The house developed weathertightness problems. In 2004, the practitioner was approached by the purchaser regarding the issue of a Code Compliance Certificate and, in 2005, he was asked to advise on the weathertightness issues. The practitioner attempted to negotiate with the vendor while advising the complainant that the appropriate course of action was to apply for a determination from the Department of Building and Housing. The practitioner did not progress that application in a timely manner and when that determination was ultimately issued in 2010, it recommended that the territorial authority issue a notice to fix. The owner faces remedial work estimated to cost $180,000. She has lost the right to pursue claims against the builder and/or to bring a claim in the Weathertight Homes Tribunal.[5] It was not until 2008 that the practitioner disclosed that he also acted for the vendor. He did not advise his client to seek independent advice until the determination of the Department of Building and Housing was received in 2010.[6] The Tribunal described the consequences of the practitioner's negligence as "extremely serious". It noted that the conflict of interest lasted for some six years.During that time it appears the firm had no processes for detecting the conflict, absent disclosure by the practitioner.[7] The Tribunal noted that the vendor was a particularly valuable client to the firm and continued:1While we do not consider that this is a situation where there was a deliberate decision by the practitioner to prefer the more valuable client over the complainant, we must assume that unconsciously at least, the practitioner will have been influenced by his desire to retain the valuable business provided by the developer client to his firm. Certainly we consider there was a woeful lack of focus in respect of the dealings which the practitioner had with both parties to this dispute, which underlines the need for the Rules on conflict set out in the current Client Care Rules (Rule 5) and their predecessor Rules.1 Waikato Bay of Plenty Standards Committee No 1 v H [2013] NZLCDT 7 at [13].Personal circumstances[8] The practitioner had practised as a barrister and solicitor for 35 years. He was a partner of the firm for 32 years. This was the first complaint he had faced. He had been active in the local community. He had had a long involvement withsporting organisations. He was described by the Tribunal as "a man who wasgenuinely conscientious and generous of his time and energy both in respect of hisclients and the local community".2 The Tribunal commented that it was "most unfortunate" that the disciplinary proceedings blemished the end of his career.[9] Since 2011, the practitioner had experienced serious health problems. Following a brain haemorrhage and seizures, he has had ongoing neurological health problems requiring multiple brain surgeries. His brain function has been compromised. Ongoing symptoms include memory loss, speech difficulties, inability to concentrate, tiredness and lack of physical coordination. His general practitioner confirmed his diminished mental ability. He said that, in addition, the practitioner suffers from anxiety and increased emotional lability. He said that he"decompensates" when he is under additional stress and that publication of his name, and that of his firm, would lead to decompensation and severely affect his rehabilitation and any recovery.[10] The practitioner deposed that as a result of these health issues, he had retired from practice in 2012. However, he said in evidence that he continued to visit the practice and was assisting with client handover, some two days per week. The Tribunal accordingly sought, and was given, an undertaking by the practitioner to hand in his practising certificate and not to seek a further practising certificate.Name suppression[11] In applying for name suppression, the practitioner relied on his long and hitherto unblemished legal career and the adverse effect on his health if publication occurred. As he had practised in a small community, he would be readily identified, as would his firm, one of only two law firms in the locality. On behalf of the firm it2 At [18].was submitted that the punitive consequences of publication would be borne by those who are not a party to the impugned conduct.[12] The Tribunal rejected the latter submission, commenting that the firm clearly had inadequate systems in place to detect a serious conflict of interest which had adversely affected one of their clients for many years. The Tribunal said, in thecircumstances, the firm was not entitled to dissociate itself from the practitioner'soffending.[13] In considering the position of the practitioner, the Tribunal distinguished Re ABC3 on the grounds that the offending in that case was much less serious, involving a one-off inadvertent error which was immediately acknowledged by the practitioner with no negative consequences for any other person. After discussing the principle that public interest and open justice considerations generally favour the publication of the names of practitioners facing disciplinary charges,4 the Tribunal said:5While the Tribunal has considerable sympathy for Mr H's medical condition,it has to be remembered that personal circumstances "... cannot predominate in the exercise of a protective jurisdiction".6[14] The Tribunal concluded:7The practitioner's negligence touched at the very heart of the relationship oftrust between lawyer and client. The Tribunal considers Conflict of Interest, which leads to charges in a significant proportion of cases in the disciplinary jurisdiction, is an area to which the profession must pay particular attention. We consider that the public perception of the profession would not be enhanced or maintained, were the type of conflict such as occurred here not able to be fully aired because of the suppression of the name of the practitioner and firm. On balance, we consider the public interest in openness of these proceedings outweighs the practitioner's private interest.3 Re ABC [2012] NZLCDT 14.4 As articulated in X v Standards Committee (No 1) of the New Zealand Law Society CIV-2011- 404-7750 HC Auckland, 13 December 2011, affirmed on appeal in [2011] NZCA 676.5 At [33].6 Sisson v Standards Committee of Canterbury Westland Branch NZLS [2013] NZAR 416 (HC) at [57].7 At [34].The appealStatutory provisions[15] The relevant provisions of the Act governing the conduct of the hearing and prohibitions on publication are ss 238 and 240 of the Act. They relevantly provide as follows:238 Hearings to be in public(1) Except as provided in subsections (2) and (3) and section 240, every hearing of the Disciplinary Tribunal must be held in public.(2) If the Disciplinary Tribunal is of the opinion that it is proper to do so, having regard to the interest of any person (including (without limitation) the privacy of the complainant (if any)) and to the public interest, it may hold a hearing or part of a hearing in private.(3) The Disciplinary Tribunal may, in any case, deliberate in private as to its decision or as to any question arising in the course of a hearing.240 Restrictions on publication(1) If the Disciplinary Tribunal is of the opinion that it is proper to do so, having regard to the interest of any person (including (without limitation) the privacy of the complainant (if any)) and to the public interest, it may make any 1 or more of the following orders:(a) an order prohibiting the publication of any report or account of any part of any proceedings before it, whether held in public or in private:(b) an order prohibiting the publication of the whole or any part of any books, papers, or documents produced at any hearing:(c) an order prohibiting the publication of the name or any particulars of the affairs of the person charged or any other person.[16] A decision under s 240(1)(c) involves the exercise of a discretion. In declining leave to appeal in Hart v The Standards Committee (No 1) of New Zealand Law Society,8 the Supreme Court said:9A Tribunal or Judge deciding whether to order suppression is exercising a discretion which, in a disciplinary context, must allow for any relevant statutory provisions as well as the more general need to strike a balance8 Hart v Standards Committee (No 1) of the New Zealand Law Society [2012] NZSC 4.9 At [3].between open justice considerations and the interests of the party who seeks suppression.[17] Accordingly, a practitioner who is appealing against an order refusing name suppression, must show either: (1) error of law or principle; (2) taking account of irrelevant considerations; (3) failing to take account of a relevant consideration; or (4) the decision is plainly wrong.10 On hearing the appeal, the High Court may confirm, reverse or modify the order appealed against.11Principles governing name suppression[18] The principles governing name suppression both generally and in the context of disciplinary proceedings are well established. The starting point is the principles of open justice and freedom of expression discussed in R v Liddell.12 Open justice isa "prima facie presumption" which may be displaced after a consideration of the interests, public and private, which are relevant in the particular case.13[19] Sections 238 and 240 reflect this general approach. The Tribunal may grant suppression if it is of the opinion that it is proper to do so having regard to the interest of any person and to the public interest. For this purpose, the public interest encompasses the general importance of upholding freedom of speech and open justice principles and also the particular interests served by an open and transparent disciplinary process. Full exposure of disciplinary processes enhances public confidence in the profession and helps to protect members of the public against the risk of further misconduct.14[20] In exercising its discretion to order name suppression under s 240, the Tribunal is required to decide whether the personal interests of the practitioner (or others) outweighs the public interest in full disclosure.10 Kacem v Bashir [2010] NZSC 112, [2011] 2 NZLR 1 at [32]. See also X v Standards Committee (No 1) of the New Zealand Law Society [2011] NZCA 676 and Rowley v Commissioner of Inland Revenue [2011] NZCA 160, (2011) 25 NZTC 20-051 and Rowley v Commissioner of Inland Revenue [2011] NZSC 76, (2011) 25 NZTC 20-052 at [5].11 Lawyers and Conveyancers Act 2006, s 253(4).12 R v Liddell [1995] 1 NZLR 538 (CA) at 546.13 Lewis v Wilson & Horton Ltd [2000] 3 NZLR 546 (CA) at [41] – [42].14 S v Wellington District Law Society [2001] NZAR 465 (HC) at 469 and see the discussion inDaniels v Complaints Committee 2 of the Wellington District Law Society [2011] 3 NZLR 850 (HC) at [56] – [59].[21] For the appellants, Mr Hunt argued that the Tribunal misdirected itself when considering the private interests of both the practitioner and the firm and failed also to properly weigh the countervailing public interest. It was submitted that the Tribunal failed to give any or sufficient weight to the consequences of publication to the health of the practitioner, the implications of publication for the firm and that the public interest was overstated by having regard to the protective function of publication.Discussion[22] In the passage of the Tribunal's decision quoted at [13] above, there are clear indications that the Tribunal indeed misdirected itself when considering the private interests involved. In reliance on the passage quoted from Sisson, the Tribunalappears to take the view that personal circumstances such as the practitioner'smedical issues could not outweigh public interest factors. That cannot be correct and appears to stem from a misreading of Sisson.[23] The passage quoted from Sisson must be read in context. The practitioner in that case had been struck off. The issue on appeal was whether the striking off order should have been made or instead an order for suspension or preventing the practitioner from practising on her own account. The passage quoted by the Tribunal appeared at the end of the following paragraph:[57] The Tribunal paid due regard to these matters. Having noted "the very sad circumstances" concerning her daughter and the "very damaging effects" of the lengthy litigation, it accepted that these matters "did impactseriously on (the appellant) both personally and professionally ...".However, the Tribunal rightly observed that while personal circumstances may be taken into account they cannot predominate in the exercise of a protective jurisdiction.[24] The protective jurisdiction being referred to was the exercise of the power to strike off the practitioner. As the Court in Sisson went on to explain,15 a lesser response may have been appropriate but the seriousness of the misconduct and the response of the practitioner left no option but to order that she be struck off.15 Sisson v Standards Committee of Canterbury Westland Branch NZLS, above n 6, at [59].[25] The protective element in the public interest attached to the publication of anerrant practitioner's name is very different from the interest served by a striking off order. Publication of a practitioner's name responds to the concern that existing and prospective clients of a practitioner facing disciplinary charges should be able to make informed choices about who is to act for them. That was not a concern in the present case as the practitioner had ceased to practice. The dicta in Sisson had no application whatsoever to the circumstances of the case but appears to have led theTribunal to the view that the practitioner's personal interests could not outweigh thepublic interest.[26] While the practitioner's misconduct was rightly characterised as serious and,in the usual way, there is an important interest to be served in full disclosure, the public interest in publication was significantly lessened by the absence of any material protective element. Against that, the practitioner's personal circumstanceswere deserving of weighty consideration. A lengthy career in the law, associated with an impressive record of community service, had come to an ignominious end. While reputational concern or embarrassment associated with an adverse disciplinary finding are not in themselves a sufficient interest to warrant name suppression, in my opinion, the uncontradicted evidence of serious adverse consequences to the health of the practitioner decisively tips the balance against publication. Had the Tribunal weighed the competing interests as required by s 240(1), I have no doubt it would have concluded that an order prohibiting the publication of the name of the practitioner would have been proper.[27] This conclusion necessarily requires a reconsideration of the position of the firm. Publication of the firm name would inevitably lead to identification of thepractitioner. Mr Hunt was critical of the Tribunal's view that the firm could notdistance itself from the practitioner's actions. He pointed out that there was nocomplaint against or investigation into the conduct of any other partner or employee of the firm or allegations of inadequate systems. The partnership was not given an opportunity to be heard on such issues. He also referred to evidence before the Tribunal of a partner of the firm, who provided assurances that the firm had introduced systems which would ensure an appropriate response to actual orpotential conflicts of interest. Finally, Mr Hunt pointed to the potentially quite serious financial implications for the firm if its name is published.[28] Had the public interest required publication of the practitioner's name,publication of the firm name would have been inevitable. A suppression order wouldbe of no practical value. On the other hand, an order suppressing the practitioner's name would be rendered nugatory if publication of the firm's name were permitted.[29] Publication of the firm name should occur then only if the public interest in full disclosure were to prevail over the private interests of the firm and the practitioner. In my view, they do not. The practitioner is no longer involved in the firm and the firm has taken steps to ensure that any systemic issues, which may have contributed to the misconduct, have been addressed. The public interest inpublication of the firm's name is correspondingly reduced. On the other hand, thepersonal interests of the practitioner and the firm itself clearly favour suppression of the name of the firm.Result[30] The appeal is allowed. The Tribunal's decision refusing to prohibit thepublication of the names of the practitioner and the firm is quashed.[31] I make an order pursuant to s 240(1)(c) prohibiting the publication of the name of the practitioner and the firm and of any particulars likely to lead to their identification.