LIU v CUTTING [2019] NZCA 228

LIU v CUTTING [2019] NZCA 228 [18 June 2019]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA3/2019[2019] NZCA 228BETWEEN YICHUAN (JESSE) LIU, KIN TO(STEVEN) LAU AND DINAH QIUApplicantsAND DEREK EDWIN CUTTINGRespondentCourt: Brown and Gilbert JJCounsel: Applicants in personD G Collecutt for RespondentJudgment:(On the papers)18 June 2019 at 2.30 pmJUDGMENT OF THE COURTA The application for leave to appeal is declined.B The applicants are to pay costs to the respondent as for a standardapplication for leave to appeal on a band A basis together with usualdisbursements.____________________________________________________________________REASONS OF THE COURT(Given by Gilbert J)[1] Yichuan (Jesse) Liu, the first-named applicant, was assaulted at his secondaryschool on two occasions by a fellow pupil in 2005. Jesse sustained a broken jaw inthe second assault. In 2007, Jesse and his parents, the second and third-namedapplicants, instructed the respondent, Derek Cutting, to pursue redress againstthe school claiming that it had failed to take adequate steps to protect Jesse. In March2007, Mr Cutting retained a barrister, Gregory Keene, to assist with the claim.The applicants became dissatisfied with Mr Keene's performance and they terminatedhis instructions in December 2008. They disputed liability to pay the balanceoutstanding of Mr Keene's fees amounting to $15,125.82.[2] Mr Cutting issued proceedings in the District Court at Auckland for recoveryof the fees in March 2009. The applicants denied liability for payment of the fees andcounterclaimed in negligence. They claimed special damages of $20,000 being legalcosts and disbursements incurred with replacement lawyers plus general damages of$30,000. The claim and counterclaim were heard over five days, in September andDecember 2016 and in January 2017. In a detailed judgment delivered on 17 July2017, Judge Hinton found the applicants liable to pay legal fees to the respondent inthe sum of $10,500.1 The Judge dismissed the applicants'counterclaim.2[3] The applicants appealed to the High Court. The appeal was dismissed byHinton J in a judgment delivered on 31 January 2018.3 The applicants then applied tothe High Court for leave to bring a second appeal to this Court. That application wasdeclined by Hinton J in a judgment delivered on 30 November 2018.4 The applicantsnow apply to this Court for leave to bring a second appeal.[4] A decision of the High Court on appeal from the District Court is generallyfinal.5 A second appeal is exceptional and requires the grant of leave. Leave will onlybe granted if the proposed appeal raises some question of law or fact capable of bonafide and serious argument in a case involving some interest, public or private, ofsufficient importance to outweigh the cost and delay of a further appeal. On a secondappeal the Court is not engaged in the general correction of error. Rather, its primaryfunction is to clarify the law and determine whether it has been properly applied bythe Court below. Disputed questions of fact will seldom be of public importance anda second appeal raising factual issues will rarely be permitted. Exceptions include1 Cutting v Liu [2017] NZDC 15680.2 At [126]–[135].3 Liu v Cutting [2018] NZHC 33.4 Liu v Cutting [2018] NZHC 3130.5 Senior Courts Act 2016, s 60.where the amount in issue is very substantial or where the judgment sought to beappealed reflects seriously on the character or conduct of the appellant.6[5] The applicants identify three "groups of points of principle" in their leaveapplication. The first concerns the applicability of rr 3.4 and 3.5 of the Lawyers andConveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 which requirelawyers to provide, in advance, various information including the basis on which feeswill be charged. The courts below found that these rules did not apply in this casebecause the rules did not come into force until 1 August 2008 and r 3.10 expresslyprovides that rr 3.4 and 3.5 do not apply to a retainer entered into by a lawyer before1 August 2008. The applicants contend "there is nothing in r 3.10 to provide that rr 3.4and 3.5 do not apply to the respondent who continued to provide service and chargefees after 1 August 2008, with an indefinite workload and an indefinite end date".The applicants argue that this issue raises a question of public importance becausethere is "a non-zero chance" that other lawyers provided services and charged feesbefore and after 1 August 2008.[6] We do not consider this issue is capable of bona fide and serious argument.Rule 3.10 makes it clear that rr 3.4 and 3.5 do not apply to a retainer entered into by alawyer before 1 August 2008. The date the retainer was entered into is the decisivedate, not the date the particular services were provided. There is no dispute thatMr Cutting and Mr Keene were both retained long before 1 August 2008.[7] The second group of points of principle raised in the leave application isdescribed as "the fundamental concern that justice should not only be done it shouldmanifestly and undoubtedly be seen to be done". This group has five sub-issues.[8] The first repeats the point already dealt with concerning the applicability ofthe Conduct and Client Care Rules and need not be discussed further.[9] The second concerns whether Judge Hinton ought to have grantedthe applicants' application to re-open their cross-examination of Mr Keene.They contend that if such permission had been granted, they would have been able to6 Waller v Hider [1998] 1 NZLR 412 (CA).show that Mr Keene lied in his evidence. This issue could not possibly justify a secondappeal. Mr Liu's cross-examination of Mr Keene occupies over 150 pages ofthe transcript of the evidence. By any measure, this was disproportionately long giventhe amount at stake and the scope of the pleaded issues. Moreover, Mr Keene wascross-examined at length on the applicants' claim that he had acted dishonestly.There is no reason to suggest that further cross-examination on the topic would havemade any difference. The Judge was thoroughly satisfied that the dishonesty allegationwas wholly unjustified. We see no arguable error in the way Judge Hinton conductedthe hearing. Indeed, we consider he allowed the applicants considerable latitude inpermitting such extensive questioning of Mr Keene.[10] The third issue is described as "Errors in the District Court judgment". This isbased on the following statement made by Hinton J in her judgment:[68] While there are a few errors in the District Court judgment, as isfrankly inevitable in a case of this nature, none of these errors affectsthe correctness of the judgment. In fact, I consider the judgment to be a modelof patience and thoroughness.The applicants complain that the Judge did not reveal what these errors were, placingthem at a disadvantage. They say that "it is hard to rule out that those errors might bematerial to the correctness of the District Court judgment". This comes nowhere nearmeeting the requirements for the grant of leave for a second appeal.[11] The fourth issue is a complaint that there was no reference to case law inthe judgments below. This was a straightforward case legally and there was no needfor case law to be cited. The mere omission of reference to authorities could notpossibly justify the grant of leave for a second appeal.[12] The fifth issue is a complaint that Hinton J declined leave to the applicants tofile evidence regarding their alleged losses on the basis that it was too late for this.The applicants argue that it was not too late because such evidence was provided tothe District Court. They contend that as a result of this error they were "denied anopportunity to claim substantial losses in the sum of approximate[ly] $20,000".Judge Hinton recorded that there was no evidence before the Court to substantiatethe special damages claim of $20,000 and, in any event, there was no causative linkbetween the respondent's conduct and any such losses.7 We see no arguable error inthe Judge's approach. This issue plainly could not justify the grant of leave for asecond appeal.[13] The third group of points of principle advanced in the leave application isdescribed as "Mr Keene's false evidence and its influence to Courts". The applicantswish to re-open in a second appeal the question whether Mr Keene acted dishonestly.Judge Hinton found as a fact that Mr Keene was an honest witness and the allegationsof dishonest misconduct were unjustifiable. The Judge considered that these claimswere "unjustifiably made and wrong".8 The Judge recorded his view that Mr Keenewas "a very impressive, careful, honest and thoughtful witness" who "conductedhimself with considerable poise and patience, and in a professional manner in hisevidence and in particular under cross-examination when he was subjected toconsiderable provocation".9 The Judge rejected any suggestion that Mr Keene hadgiven false evidence as suggested by the applicants.10 The applicants' challenge tothese findings was rejected by the High Court on appeal. This factual issue havingnow been twice considered with concurrent findings being reached in the courts below,there is no justification for leave being granted to consider it a third time.[14] The application for leave to bring a second appeal is seriously misconceived,wholly lacking in merit and must be declined. The applicants should regardthemselves as fortunate that we have decided not to exercise our discretion to orderthem to pay indemnity costs.Result[15] The application for leave to appeal is declined.[16] The applicants are to pay the respondent costs as for a standard application forleave to appeal on a band A basis together with usual disbursements.7 Cutting v Liu, above n 1, at [128].8 At [105].9 At [106].10 At [107].Solicitors:Simpson Legal, Auckland for Respondent