A v Auckland Standards Committee 1 of the New Zealand Law Society

[2024] NZHC 465

APPELLANT’S NAME, EMPLOYER’S NAME, NAMES OF THE CLIENT, LAWYERS ACTING FOR A PARTY TO OTHER PROCEEDINGS, FIRM NAME AND OTHER ASSOCIATED NAMES ARE PERMANENTLY

SUPPRESSED PURSUANT TO S 240 OF THE LAWYERS AND CONVEYANCERS ACT 2006.

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-000297

[2024] NZHC 465

BETWEEN

A

Appellant

AND

AUCKLAND STANDARDS COMMITTEE 1 OF THE NEW ZEALAND LAW SOCIETY

Respondent

Hearing:	2 August 2023
Appearances:	I M Brookie and R A van Boheemen for Appellant P N Collins for Respondent
Judgment:	6 March 2024

JUDGMENT OF VAN BOHEMEN J

This judgment was delivered by me on 6 March 2024 at 2:30 pm pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

……………………………..

Counsel/Solicitors:

I M Brookie and R A van Boheemen, Auckland P N Collins, Auckland

New Zealand Law Society, Auckland

A v AUCKLAND STANDARDS COMMITTEE 1 OF THE NEW ZEALAND LAW SOCIETY [2024] NZHC 465 [6 March 2024]

[1] Ms A appeals a decision of the New Zealand Lawyers and Conveyancers Disciplinary Tribunal (the Tribunal) finding her guilty of misconduct under s 7(1)(a)(i) of the Lawyers and Conveyancers Act 2006 (the Act).1 Under Charge 2 of three charges faced by Ms A, the Tribunal found that Ms A had engaged in misconduct by making a threat for an improper purpose while acting in a relationship property dispute, in breach of r 2.7 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (the Rules).2

[2]    Ms A says that the Tribunal erred in finding that aspects of her conduct were disgraceful or dishonourable under s 7(1)(a)(i) of the Act because the Tribunal:

(a)failed to have regard to all the circumstances of the case; particularly her inexperience and the failure of her employer to provide oversight and supervision;

(b)erred in finding that the immigration threat made in her email of 6 July 2020 was unconnected to her client’s relationship property dispute; and

(c)erred in finding that she was ignorant of r 2.7, when her actual ignorance was of the fact that her conduct breached the rule.

[3]    In the event her appeal against liability is successful, Ms A also appeals the Tribunal penalty decision in which the Tribunal ordered that:3

(a)Ms A not practise on her own account until 31 October 2024 or such earlier date that she persuades it or the Practice Approval Committee that she is ready to practise on her own account; and

1      Auckland Standards Committee 1 v A [2022] NZLCDT 51 [Liability decision].

2      Ms A also faced charges of breaching the conditions of a closed book Trust Account Supervisor (TAS) qualification exam by placing prohibited materials on her desk when she sat the TAS exam (Charge 1); and threatening to use the New Zealand Law Society’s complaints process for an improper purpose (Charge 3). Ms A admitted Charge 1, as amended at the hearing, as unsatisfactory conduct under s 12(c) of the Act and the Tribunal dismissed Charge 3. Ms A appeals only the Tribunal’s finding on Charge 2 (making a threat for an improper purpose) and, if that appeal succeeds, the penalty imposed in relation to that charge.

3      Auckland Standards Committee 1 v A [2023] NZLCDT 11 [Penalty decision].

(b)Ms A must advise any future employer up to October 2024 of her disciplinary history.

Background

[4]    The following summary is drawn principally from an affidavit affirmed by Ms A on 12 October 2022 and findings made by the Tribunal in the Liability decision.4

[5]    Ms A came to New Zealand from China in 2001 when she was 20 years’ old. She has a 14-year-old child. Ms A has no relationship with the father of her child. She has no family in New Zealand other than her child.

[6]    Before her legal studies, Ms A worked as an early childhood teacher in Wellington, after obtaining a Bachelor of Education in Early Childhood from the Open Polytechnic in Lower Hutt. Ms A studied law at Victoria University of Wellington from 2013 to 2017. After completing her studies, Ms A moved to Auckland.

[7]    Ms A was admitted as a barrister and solicitor of the High Court on 24 August 2018. In September 2018, Ms A joined a law firm and undertook conveyancing work. Her employment with that firm ended in mid-2020.

[8]    Also in mid-2020, Ms A obtained a position as a solicitor with another law firm, [XY] Law Ltd (XYLL). Mr Y, the principal in XYLL, gave Ms A conveyancing files to manage and she took on new work as time progressed. This work included separation agreements in the context of relationship property disputes. Ms A says  Mr Y provided her with no training in relation to separation agreements and left her to get on with her work. Mr Y did not require Ms A to consult him when corresponding with other parties or to copy him in on such correspondence.

[9]    Shortly after joining XYLL, Ms A started acting for Mr C, who was involved in a relationship property dispute. Mr C alleged that his wife, Ms L, had taken

$130,000 of his money without his permission and had used him to get married and to

4 The names of Ms A and her employer, and the names of clients and other lawyers were permanently suppressed by the Tribunal in the Liability decision, above n 1, at [31].

obtain residency in New Zealand. Mr C said that the relationship was not a proper marriage.

[10]   In early June 2020, Ms A wrote to Ms L and then  to Mr Q, a solicitor at  [123 Law], which had been instructed by Ms L, about Ms L’s withdrawal of $130,000. Ms A proposed that Ms L return one third of that sum to Mr C so he might settle a business debt.

[11]   Ten days later, on 22 June 2020, and before Mr Q had delivered a substantive response to this proposal, Ms A sent Mr Q a draft separation agreement. No response was received. Ms A says the absence of a response resulted in pressure from Mr C about the lack of progress.

[12]At 1:13am on 6 July 2020, Ms A emailed Mr Q saying:

Please see the below my client’s proposed letter to Immigration NZ. I will suggest your client to negotiate with our client to resolve the matter in an amicable way. If we do not hear from your client by the end of the week, I will have no choice to help our client to prepare an affidavit for the next steps.

[13]   At the bottom of the email, Ms A included an extract from an email sent to her by Mr C. The extract comprised a statement that Mr C might make to Immigration New Zealand. The extract was in Mandarin, but was translated as follows:

[Ms L] and I got married on December 20, 2018, about half a year after we met the first time. I started to support her application for PR in June 2018. She stated in the application that we started living together in June. In fact, we only start to live together in December. After the marriage, she was not the same as before and was very indifferent to me. She often stayed out all night refusing to sleep with me or communicate with me. She never showed me her immigration materials such as letters, chat records, photos, etc just asking my mother and I sign on the application form. We did since we trusted her at that time. However, her attitude towards me and my family members changed totally after the application was filed and this hurt us a lot.

On March 25 this year, she took advantage of our absence and moved out. Moreover, she transferred the deposit of more than 130,000 dollars in our co- bank account. After that we haven’t heard from her anymore. Only after I sent a letter to the Immigration officer did i find out that her application was approved. The Immigration officer sent me her application materials. I can tell that I have not seen 90% of the materials. Due to the drastic change in her attitude since the application started, and the fact that she didn’t inform me anything about the approval and moved out immediately after getting the PR, I have reason to suspect her for cheating. Please recheck her case. Thank you!

[14]   On 9 July 2020, Mr R of [123 Law] replied to Ms A’s email by email sent at 7:04 pm. Mr R stated that the $130,000 was the property of Ms L’s parents and that Ms L was merely holding it for them. For that reason, Mr C’s demand of one third of the funds was meritless. Mr R referred to Ms A’s stated intention to help Mr C prepare an affidavit to Immigration New Zealand and reminded Ms A of r 2.7 of the Rules. He also invited Ms A and Mr C to have regard to s 237 of the Crimes Act 1961 and said that Mr C was purporting to commit blackmail by threatening to make an accusation against Ms L with the intention of causing her to “act in accordance with the will of your client and to obtain a benefit from our client.”

[15]   There was further correspondence between Ms A and Mr R which  led to [123 Law] making a complaint to the New Zealand Law Society and a decision by the Auckland Standards Committee 1 to commence an investigation. The later correspondence was the subject of Charge 3, which the Tribunal eventually dismissed.

Tribunal’s liability decision

[16]   The Tribunal issued its Liability decision on 22 December 2022, after a hearing on 7 and 8 December 2022 at which Ms A gave evidence.

[17]   With respect to Charge 2, the Tribunal noted that Ms A now accepted that her email of 6 July 2020 breached r 2.7 of the Rules and found that Ms A’s email was “essentially, blackmail, a threat to disclose material to Immigration New Zealand for the improper purpose of thereby pressuring [Ms L] to settle.”5 The Tribunal said it would expect a qualified lawyer, however, junior, to have understood that what she did was wrong but that it seemed Ms A “had no idea” about r 2.7. The Tribunal observed:6

[Ms A’s] level of ignorance is surprising. At the time, she was nearing 40 years of age; she had previous experience as an early childhood educator; she is a solo mother of a teenager. It is alarming that she completed a law degree and Professional Standards training without gaining an appreciation that blackmail is not only criminal but unethical, even if she was unaware of the letter of r 2.7.

5 Liability decision, above n 1, at [26].

6 At [27].

[18]   The Tribunal considered the submissions of Mr Brookie, counsel for Ms A, that the Tribunal should find Charge 2 established as unsatisfactory conduct rather than misconduct. It acknowledged that previous decisions of the Legal Complaints Review Officer had treated breaches of r 2.7 as unsatisfactory conduct as opposed to misconduct, albeit without discussing the latter.7 However, it also noted that a breach of r 2.7 arising out of a threat to issue proceedings was upheld by the High Court as misconduct.8 Because of this, the Tribunal concluded that a breach of r 2.7 could be treated as either unsatisfactory conduct or misconduct, and said that categorising it as either was an exercise of judgement.9

[19]   As to whether the immigration threat contained in Ms A’s email of 6 July 2020 was connected to the relationship property dispute for which she was acting, the Tribunal said it could not discern a connection which justified introducing the threat into the relationship property dispute, and that there was no proper basis for doing so.10

[20]   The Tribunal also did not accept Mr Brookie’s submissions that the categories of misconduct in s 7(1) of the Act should be read as a hierarchy, such that:11

(a)the earlier listed items are graver and should be read as incorporating characteristics from the later listed items; and

(b)on this basis, s 7(1)(a)(i) “should be read to require mens rea aspects that figure on the face of s 7(1)(a)(ii).”

[21]   The Tribunal noted that this submission was unsupported by authority. It concluded that s 7 should not be read with such a limiting gloss and said it would not be purposive to do so.12

7      At [29]–[31] citing QZ v UJ LCRO 171/2018, 19 December 2018 and HTO v AG LCRO 8/2014, 16 October 2017.

8      At [33], citing Mr A v Canterbury Westlands Standards Committee No 2 of the New Zealand Law Society [2015] NZHC 1896.

9 At [34].

10     At [35]–[36].

11 At [41].

12 At [41].

[22]   Finally, the  Tribunal  considered  whether  the  threshold  of  misconduct  in s 7(1)(a)(i) should be adjusted in light of extenuating factors such as a practitioner’s inexperience or lack of adequate supervision.13 The Tribunal noted that s 7(1)(a)(i) addressed the conduct, as distinct from the lawyer who had produced such conduct. The Tribunal said:14

Should an inexperienced lawyer’s blackmail be regarded as less disgraceful or dishonourable than the identical behaviour of an experienced lawyer? We have difficulty accepting that this should be so where the conduct falls so short of that expected from a competent practitioner. Fitness to practice is brought into question where the practitioner fails to observe ordinary duties because they were unaware that there were such duties. The public is entitled to expect any lawyer to observe minimum standards of professional behaviour.

[23]   Given that it was ultimately a discretionary determination as to how Ms A’s breach of r 2.7 was categorised, the Tribunal said it was important not to conflate gravity of liability with penalty. It noted that unsatisfactory conduct could result in being struck off the roll while misconduct could be treated leniently. The Tribunal noted, however, that, for the purposes of liability, it was important that Ms A’s conduct was correctly categorised.15

[24]   In that light, and focusing on Ms A’s actions specifically, the Tribunal considered that Ms A’s actions amounted to pernicious conduct. Even supposing that Ms A was unaware of r 2.7, the Tribunal said she should have been aware that her actions were both unethical and criminal.16 The Tribunal found that Ms A’s email of July 2020 was misconduct under s 7(1)(a)(i), notwithstanding her evidence that made it plain that she did not understand r 2.7 and that she was following her client’s instructions. The Tribunal considered that Ms A’s actions amounted to misconduct and constituted a threat because she chose to accept her client’s instructions to forward the draft letter to Immigration New Zealand and referred to the letter in her email.17

[25]   The Tribunal accepted that Ms A was “relatively inexperienced, was out of her depth, and was unsupported professionally in her work.” It also noted that Mr Y had

13 At [42].

14 At [43].

15     At [44] and [46].

16 At [45].

17     At [47]–[48].

been found by a Standards Committee to have failed to supervise Ms A adequately and had been fined $4,000.18

[26]   Given its findings on r 2.7, the Tribunal refrained from making findings on alleged breaches of rr 2.3 and 2.4 concerning misuse of legal processes and knowingly assisting a client to commit a crime, respectively. The Tribunal considered Ms A’s central wrongdoing was sufficiently captured by a finding of misconduct arising from her breach of r 2.7.19 Accordingly, it found Charge 2, a breach of r 2.7, proved as misconduct under s 7(1)(a)(i) of the Act.

Tribunal’s penalty decision

[27]   The Tribunal’s penalty decision was made on 27 April 2023, following a hearing on 17 April 2023.

[28]   The Tribunal recorded that, although it had described Ms A’s conduct as “pernicious” and had expected that Ms A’s ethical sense should have alerted her to the impropriety of doing what her client wanted, it recognised that Ms A was relatively inexperienced, out of her depth and unsupported professionally at work. With reference to the purposes of the Act, the Tribunal said its task was to hold Ms A to account for her conduct, even though it was done in ignorance and in circumstances where she was not properly supervised. It also had to protect the public interest by ensuring that Ms A worked in safely guided conditions while she consolidated good practice. It said it had to achieve these outcomes in a balanced manner and that a rehabilitative approach was appropriate.20

[29]   The Tribunal considered that Ms A was at risk in a number of respects: inadequate understanding of ethical rules; a tendency to react rather than reflect and a tendency to comply with inappropriate demands from her clients rather than observing the boundaries congruent with a lawyer’s role. The Tribunal also expressed concern with Ms A’s lack of experience. It also noted that her written expression in English

18 At [49]. The Tribunal noted that the Standards Committee might have been surprised, as it was, to learn that Ms A subsequently paid Mr Y to cover his fine.

19 At [50].

20     Penalty decision, above n 3, at [2]–[5].

needed improvement and said Ms A might be assisted by better work/life balance and considered that Ms A could develop more wisdom in managing her role. It also recorded its concern that Ms A was eager to start practice on her own account, despite these matters.21

[30]   The Tribunal was pleased to note two developments: Ms A’s present employer appeared to supervise her work appropriately and Ms A had commenced mentoring with a Mandarin-speaking lawyer of high repute. The Tribunal regarded this combination of supervision as “an excellent package, well-tailored for [Ms A]”.22

[31]   Despite Mr Brookie’s submission that the Tribunal should not “ban” Ms A from practising on her own account, the Tribunal considered it was appropriate to make an order under s 242(1)(g) of the Act preventing Ms A from practising on her own account because, in its view, Ms A was “not nearly ready to undertake practise on her own account.”23

[32]   The Tribunal considered that it was not constrained in making an order under s 242(1)(g) only in the open-ended terms of the subsection. It said it had framed a lesser range to provide the least restrictive term it considered appropriate. It said the outer limit of October 2024 approximated the time when Ms A would have had the advantage of three years of appropriate supervision but did not restrict Ms A from attempting to persuade the Practice Approval Committee that she was ready to practise on her own account earlier.24

[33]   The Tribunal also imposed an order requiring Ms A to advise future employers up until October 2024 of her disciplinary history, in order to protect both her employers and the public while receiving her supervision. The Tribunal considered it had the jurisdiction to make such an order under s 242(1)(h)(iii) of the Act.

21     At [6]–[7].

22     At [8]–[9].

23 At [10].

24 At [11].

[34]   Because it had taken steps to protect the public, the Tribunal considered it was freer to consider name suppression for Ms A.25 Given that Mr Y had been given name suppression, the Tribunal considered it would be grossly unfair if Ms A’s name was not also suppressed. It observed that publication of her name could be ruinous of her career in a way that was out of proportion with what she did and the unsupported circumstances in which it occurred. It was satisfied that the public interest was met by the other protective orders it made.26

[35] Accordingly, the Tribunal made the orders at [3] above and permanently suppressed Ms A’s name.27

Approach on appeal

[36]   The approach on appeal under s 253 of the Act is well-established. As a Full Court of this Court said in National Standards Committee (No 1) of New Zealand Law Society v Gardner-Hopkins,28 the appropriate approach is that set out by Gordon J in Hong v Auckland Standards Committee No 5:29

[54]      An appeal to this Court under s 253 of the Act from a decision of the Tribunal must be by way of rehearing. Whether the appeal is against a finding of misconduct or against penalty (with the exception of costs) the appeal is a general appeal.

[55]      The appellate court considers the merits of the case afresh. It must be persuaded that the decision under appeal is wrong but the weight the appellate court gives to the reasoning of the court or tribunal below is a matter for the appellate court's assessment. The appellate court may consider it appropriate to give due regard to a specialist tribunal's assessment.

[56]      The parties to the appeal are entitled to judgment in accordance with the opinion of the appellate court, even where that opinion is an assessment of fact and degree and entails a value judgment. If the appellate court's opinion is different from the conclusion of the court or tribunal below, then the decision under appeal is wrong in the only sense that matters, even if it was a conclusion on which minds might reasonably differ.

(footnotes omitted)

25 At [12].

26     At [26]–[29].

27     The Tribunal made a number of other orders, including with respect to mentoring arrangements, which are not challenged by Ms A

28     National Standards Committee (No 1) of New Zealand Law Society v Gardner-Hopkins [2022] NZHC 1709, [2022] 3 NZLR 452 at [30]–[31].

29     Hong v Auckland Standards Committee No 5 [2020] NZHC 1599.

Misconduct and unsatisfactory conduct under Lawyers and Conveyancers Act

[37]   Sections 7 and 12 of the Act define misconduct and unsatisfactory conduct respectively.

[38]   Section 7 relevantly provides that misconduct, in relation to a lawyer or an incorporated law firm:

(a)means conduct of the lawyer or incorporated law firm that occurs at a time when he or she or it is providing regulated services and is conduct—

(i)that would reasonably be regarded by lawyers of good standing as disgraceful or dishonourable; or

(ii)that consists of a wilful or reckless contravention of any provision of this Act or of any regulations or practice rules made under this Act that apply to the lawyer or incorporated law firm or of any other Act relating to the provision of regulated services; or

(iii)that consists of a wilful or reckless failure on the part of the lawyer, or, in the case of an incorporated law firm, on the part of a lawyer who is actively involved in the provision by the incorporated law firm of regulated services, to comply with a condition or restriction to which a practising certificate held by the lawyer, or the lawyer so actively involved, is subject; or

(iv)that consists of the charging of grossly excessive costs for legal work carried out by the lawyer or incorporated law firm; and

…

[39]   Section 12 provides that unsatisfactory conduct, in relation to a lawyer or incorporated law firm, means:

(a)conduct of the lawyer or incorporated law firm that occurs at a time when he or she or it is providing regulated services and is conduct that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer; or

(b)conduct of the lawyer or incorporated law firm that occurs at a time when he or she or it is providing regulated services and is conduct that would be regarded by lawyers of good standing as being unacceptable, including—

(i)conduct unbecoming a lawyer or an incorporated law firm; or

(ii)unprofessional conduct; or

(c)conduct consisting of a contravention of this Act, or of any regulations or practice rules made under this Act that apply to the lawyer or incorporated law firm, or of any other Act relating to the provision of regulated services (not being a contravention that amounts to misconduct under section 7); or

(d)conduct consisting of a failure on the part of the lawyer, or, in the case of an incorporated law firm, on the part of a lawyer who is actively involved in the provision by the incorporated law firm of regulated services, to comply with a condition or restriction to which a practising certificate held by the lawyer, or the lawyer so actively involved, is subject (not being a failure that amounts to misconduct under section 7).

[40]   Section 241 sets out the charges that may be brought before the Tribunal. It provides:

If the Disciplinary Tribunal, after hearing any charge against a person who is a practitioner or former practitioner or an employee or former employee of a practitioner or incorporated firm, is satisfied that it has been proved on the balance of probabilities that the person—

(a)has been guilty of misconduct; or

(b)has been guilty of unsatisfactory conduct that is not so gross, wilful, or reckless as to amount to misconduct; or

(c)has been guilty of negligence or incompetence in his or her professional capacity, and that the negligence or incompetence has been of such a degree or so frequent as to reflect on his or her fitness to practise or as to bring his or her profession into disrepute; or

(d)has been convicted of an offence punishable by imprisonment and the conviction reflects on his or her fitness to practise, or tends to bring his or her profession into disrepute,—

it may, if it thinks fit, make any 1 or more of the orders authorised by section 242.

Rule 2.7 of Conduct and Client Care Rules

[41]Rule 2.7 of the Rules provides:

A lawyer must not threaten, expressly or by implication, to make any accusation against a person or to disclose something about any person for any improper purpose.

Ms A’s appeal against liability

Submissions for Ms A

[42]Mr Brookie, assisted by Ms van Boheemen, appeared on Ms A’s appeals.30

[43]   By way of a preliminary point, Mr Brookie submitted that the Tribunal erred in finding that Ms A was ignorant of r 2.7. He said Ms A’s ignorance was not of the rule but of the fact that she had breached the rule by sending the 6 July 2020 email. While acknowledging that ignorance of the rules was no excuse, he submitted that a lack of experience or judgement about whether such rules were engaged was a different matter that should necessarily result in a lower degree of culpability.

[44]   Secondly and more fundamentally, Mr Brookie submitted that the Tribunal erred by failing to take into account all relevant factual matters that bore on the Ms A’s culpability. He submitted that, if the Tribunal had considered all those matters, it could only have concluded that Ms A’s conduct was unsatisfactory conduct. In particular, and by reference to the decisions in Lagolago v Wellington Standards Committee 2 and Auckland Standards Committee 4 v O’Boyle,31 Mr Brookie submitted that Ms A’s relative lack of experience in practice, her lack of any experience in litigation and the lack of oversight and supervision by Mr Y were all mitigating factors that a lawyer of good standing would necessarily consider when determining whether a practitioner’s actions reasonably amounted to misconduct.

[45]   Mr Brookie took issue with the Tribunal’s position that there was a threshold at which conduct became misconduct rather than unsatisfactory conduct. He said there was no threshold as such but rather a sliding scale of culpability, although he accepted that wilfulness/recklessness would usually amount to misconduct.

[46]   Mr Brookie submitted that Ms A did not act wilfully or recklessly, and instead was genuinely trying to do her best for her client without bad faith, despite being

30 As our names suggest, Ms van Boheemen and I are related, although somewhat distantly. We have had limited interaction before these appeals and all parties were comfortable with my hearing the appeals.

31 Lagolago v Wellington Standards Committee 2 [2016] NZHC 2867 and Auckland Standards Committee 4 v O’Boyle [2021] NZLCDT 15.

effectively left to her own devices. In those circumstances, and in light of the decisions of the Legal Complaints Review Officer in QZ v UJ and HTO v AG,32 Mr Brookie submitted that Ms A’s actions could be viewed as amounting only to unsatisfactory conduct, regardless of the fact that the 6 July 2020 email was sent at a time when Mr Y could not reasonably have provided supervision.

[47]   Finally, Mr Brookie submitted that the Tribunal erred in finding that Mr C’s immigration allegation against his wife was unconnected from their relationship property dispute. Mr Brookie submitted that because Ms L’s credibility was already put into issue given the nature of the dispute, the immigration allegation was admissible veracity or propensity evidence which could have been referred to in correspondence seeking to resolve the dispute. However, as somewhat of a fallback option, Mr Brookie submitted that even if the immigration allegation was unconnected, it was a predictable error for Ms A to have considered that these issues were related given she was an inexperienced and unsupervised practitioner at the time.

Submissions for the Standards Committee

[48]   Mr Collins, counsel for the Standards Committee, submitted that the Tribunal adopted the correct approach: it focused on the conduct relied upon to support the charge against Ms A and determined whether it fell within the category of misconduct under s 7(1)(a)(i), as stated by the Court of Appeal in J v Auckland Standards Committee 1.33 Mr Collins submitted that Ms A’s conduct was not inadvertent and well-meaning. Rather, as the Tribunal found, Ms A was ignorant of r 2.7. She had no legitimate excuse for that ignorance or her failure to recognise an obvious professional issue when it confronted her, given she was a qualified lawyer whose training included the completion of legal ethics. Furthermore, Ms A’s own evidence was that she recalled the contents of her legal ethics studies while at Law School, which included study of the Rules.

[49]   Mr Collins further submitted that mitigating factors such as Ms A’s inexperience or lack of supervision were matters to be considered in imposing the

32     QZ v UJ, above n 7; and HTO v AG, above n 7.

33     J v Auckland Standards Committee 1, [2019] NZCA 614, [2020] NZAR 140 at [38].

appropriate penalty rather than establishing liability. Even so, Mr Collins submitted that Ms A’s lack of supervision had to be balanced against the undisputed fact that her 6 July 2020 email was sent when she was working at home, on her own, at 1:13am. He submitted that the reasonable conclusion to be drawn from Ms A’s evidence was that she simply responded to Mr C’s instructions and sent the email without reference to her employer or first  considering  that  her  actions  may  have  engaged  r 2.7.  Mr Collins submitted that it was this ignorance of simple and basic professional conduct rules that would be reasonably seen as disgraceful or dishonourable conduct by lawyers of good standing.

Analysis – liability appeal

[50]The essential questions on appeal are:

(a)Was the Tribunal correct to hold that Ms A’s breach of r 2.7 amounted to misconduct, and, in that regard, was the Tribunal correct to hold that:

(i)Ms A’s personal circumstances, in particular her lack of experience and lack of oversight, did not alter its assessment that Ms A’s breach of r 2.7 amounted to misconduct?

(ii)The immigration threat in Ms A’s email of 6 July 2020 was unconnected to her client’s relationship property dispute?

(b)Having regard to Mr Brookie’s preliminary question, what relevance, if any, is the fact that the Tribunal held that Ms A was unaware of r 2.7 whereas Mr Brookie says Ms A was aware of the rule but was not aware that her conduct breached the rule?

Was the Tribunal correct to hold that Ms A’s breach of r 2.7 amounted to misconduct?

[51]   Although Mr Brookie placed particular reliance on this Court’s decision in Lagolago and the Tribunal’s decision in O’Boyle in his submissions concerning the relevance of Ms A’s personal circumstances, the starting point must be the Court of

Appeal’s decision in J v Auckland Standards Committee 1.34 In that case the appellant, like Ms A, argued that they should have been found guilty of unsatisfactory conduct rather than misconduct. The question of law before the Court of Appeal was whether Jagose J in the High Court had erred when confirming the Tribunal’s decision that the charge of misconduct was proved, without having regard to the applicability of        s 241(c).35

[52]   In discussing s 241 of the Act, the Court of Appeal observed that, while conduct that amounts to misconduct will also amount to unsatisfactory conduct, the reverse is not necessarily true. The Court noted that, for the purposes of charges that may be brought under s 241, the misconduct and unsatisfactory conduct categories are mutually exclusive and a finding of unsatisfactory conduct on a charge brought under s 241(b) cannot be made unless the conduct is not so gross, wilful or reckless as to amount to misconduct.36 Necessarily, therefore, there is a threshold that separates misconduct from unsatisfactory conduct.

[53]   The threshold that separates misconduct and unsatisfactory conduct is recognised by the authors of Ethics, Professional Responsibility and the Lawyer, who say that misconduct marks the threshold below which a practitioner’s actions must not fall, reflecting actions that are not appropriate for a practitioner to engage in and which would be disapproved of by other right-minded practitioners.37 On the other hand, unsatisfactory conduct is conduct which is not so egregious as to amount to misconduct, but which is still deserving of being marked out as falling below the standard of conduct or behaviour that clients and the public are entitled to expect.38 At its simplest, misconduct refers to very serious professional wrongdoing while unsatisfactory conduct is often best described as a professional lapse.39

[54]   As the Court of Appeal noted in J v Auckland Standards Committee 1, there is no necessary correlation between the more serious categories of misconduct,

34     J v Auckland Standards Committee 1, above n 33.

35 At [3].

36 At [33].

37     Duncan Webb, Kathryn Dalziel and Kerry Cook Ethics, Professional Responsibility and the Lawyer (3rd ed, LexisNexis, Wellington, 2016) at 106.

38     At 103.

39     At 103 and 107.

unsatisfactory conduct and negligence or incompetence in a professional capacity, as provided for in s 241(a), (b) and (c) of the Act.40 The Court stated:

[37]      A ranking of the relative seriousness of the conduct in issue is not determinative of the most appropriate charge. For instance, conduct amounting to unsatisfactory conduct under s 241(b) in a particular case could be viewed as being more serious than conduct in another case properly treated as misconduct under s 241(a) or negligence to the degree required under s 241(c). …

[38]      The task in each case is to focus on the conduct relied on to support the charge and determine whether it falls within the specified category. …

[55]   It is apparent, therefore, that there is no sliding scale of culpability that determines, by reference to the personal circumstances of the practitioner, whether conduct amounts to misconduct or unsatisfactory conduct. As Mr Collins submitted, the conduct itself determines which category it falls within. The personal circumstances may affect the seriousness of the breach, but they do not determine whether the conduct falls within some category or another.

[56]   I accept that, in Lagolago, Clifford J acknowledged that the appellant was not an experienced litigator and took that into account when considering whether the practitioner’s negligence in the circumstances of that case would, objectively assessed, bring the profession into disrepute in the eyes of a reasonable member of the public.41 However, Clifford J was dealing with negligence in relation to the conduct of a debt recovery proceeding. Negligence does not fall within misconduct unless it is so gross, wilful or reckless as to amount to misconduct, which was the case in Lagolago. Moreover, Clifford J was considering whether the conduct in that case met the test in s 241(c) of whether the negligence had been of such a degree as to tend to bring the profession into disrepute. Clifford J considered that a reasonable member of the public would have concluded that, while the practitioner was not as experienced or as direct as they might have been, those failings would not bring the profession into disrepute.42

[57]   In other words, Lagolago was dealing with a rather different fact situation and a different charge and is not a useful parallel with Ms A’s situation.

40     J v Auckland Standards Committee 1, above n 33, at [36].

41     Lagolago v Wellington Standards Committee 2, above n 31Error! Bookmark not defined., at [124].

42 At [127].

[58]   Similarly, O’Boyle does not assist the case Mr Brookie sought to advance. While the Tribunal in O’Boyle had specific regard to the practitioner’s level of experience when assessing whether it amounted to misconduct, that was because of the nature of that breach under consideration.43 The rule against which the practitioner’s conduct was assessed was r 12 which provides that, when acting in a professional capacity, a lawyer must conduct dealings with others with integrity, respect and courtesy. The issue for the Tribunal in that case was whether the practitioner’s conduct in sending letters to various government departments and others had contravened the rule wilfully and recklessly. Necessarily, an assessment of the gravity of the practitioner’s conduct took into account her level of experience which, in that case, was considerable.

[59]   The question at issue in Ms A’s case was whether her conduct would reasonably be regarded by lawyers of good standing as disgraceful or dishonourable. That was the question directly considered by the Tribunal. It found that Ms A’s email of 6 July 2020 was “essentially blackmail” — a threat to disclose material to Immigration New Zealand for the improper purpose of pressuring Ms L to settle Mr C’s claim to a share of the $130,000 that was at issue.44 Inherent in that finding was that Ms A had breached r 2.7, the language of which was picked up in the Tribunal’s finding.

[60]   The Tribunal went on to hold that, focusing on the conduct itself, blackmail of the kind that had occurred was pernicious conduct. It considered that the introduction of an improper lever to gain advantage in a negotiation was unethical and constituted a crime.45 It also considered that Ms A’s conduct in sending the threatening email was misconduct and would reasonably be regarded by lawyers of good standing as disgraceful and dishonourable.46

[61]   I find no error in any of that reasoning. It is apparent that r 2.7 may cover a wide spectrum of situations. It includes any threat to make any accusation against, or to disclose “something” about, a person “for an improper purpose.” There can be little doubt, however, that conduct that amounts to blackmail and is a crime is at the more

43     Auckland Standards Committee 4 v O’Boyle, above n 31, at [25].

44 Liability decision, above n 1 at [26].

45     At [45]

46 At [47].

serious end of that spectrum. There can also be little doubt that such conduct would reasonably be regarded by lawyers of good standing as disgraceful and dishonourable. The approach taken by the Tribunal is fully consistent with that directed by the Court of Appeal in J v Auckland Standards Committee 1; namely, to focus on the conduct that gave rise to the charge.47

[62]   I also find no error in the Tribunal excluding Ms A’s personal circumstances from its consideration of whether Ms A’s conduct amounted to misconduct. In that respect its decision is also fully consistent with that directed by the Court of Appeal, in particular its direction that a ranking of the relative seriousness of the conduct in issue is not determinative of the most appropriate charge.48

[63]   However, even if Ms A’s personal circumstances were taken into consideration, as Mr Brookie submitted they should be, I do not consider the result would be any different. Regardless of the fact that Ms A had limited experience as a lawyer and none as a litigator, and regardless of the fact that Ms A was not provided with effective oversight or supervision by Mr Y, I do not accept that lawyers of good standing would conclude that Ms A’s conduct was anything other than disgraceful and dishonourable.

[64]   Regardless of the experience of the practitioner and the level of oversight and supervision provided by the practitioner’s employer, lawyers of good standing would expect that anyone who has completed a law degree and professional standards training would know that is it unacceptable, disgraceful and dishonourable to make improper and unlawful threats to another party in order to coerce them into agreeing to a settlement of a legal dispute. That is something all lawyers, regardless of experience and supervision, ought to know — as the Tribunal found.

[65]   In that respect, Ms A’s conduct is far removed from that of the practitioners in the cases to which Mr Brookie referred, where breaches of r 2.7 were treated as unsatisfactory conduct.

47     J v Auckland Standards Committee 1, above n Error! Bookmark not defined., at [38].

48 At [37].

[66]   In QZ v UJ, the practitioner acted for a client who brought a constructive dismissal claim against their former employer on the grounds of being subjected to inappropriate behaviour. The breach of r 2.7 was in correspondence sent by the practitioner which alluded to potential media interest in his client’s employment dispute, and in which he advised that he acted for an organisation who were interested in learning of the dispute and the identities of those involved. The finding of unsatisfactory conduct was hardly challenged before the Legal Complaints Review Officer, in light of the practitioner’s concession that he should not have drafted his correspondence in the way he did.49

[67]   In HTO v AG, the practitioner acted for a company that sought to protect its intellectual property rights against an internet service provider. The practitioner wrote a letter advising the internet service provider that if his client’s demands were not met, he had instructions to report the internet service provider to the police, and that his client might also commence civil proceedings against it. The Legal Complaints Review Officer considered that the threat to go to the police was threatening for an improper purpose because it overbore the internet service provider’s free will, and that it fell within the definition of unsatisfactory conduct in s 12(c).50

[68]   As the Tribunal noted, neither of those cases considered whether the breaches constituted misconduct. Furthermore, both cases involved threats that, while improper, were far more connected to the central issues in which the practitioners in those cases were acting than in Ms A’s case here.

[69]   In that respect, I do not accept Mr Brookie’s submission that the Tribunal was wrong to hold that the immigration threat in Ms A’s email of 6 July 2020 was unconnected to Mr C’s relationship property dispute. The relationship property issue was whether the $130,000 in the joint bank account of Mr C and Ms L was relationship property. The question of whether Ms L took that money without permission, as Mr Brookie framed it, was relevant only insofar as the money was relationship property. It had nothing to do with Ms L’s immigration status or whether Ms L had been honest in her dealings with Immigration New Zealand — which have no bearing on the rights

49     QZ v UJ, above n 7, at [47]–[49].

50     HTO v AG, above n 7, at [41]–[44].

of Ms L and Mr C under the Property (Relationships) Act 1976. Given that the relationship property dispute was not before the Court, I do not accept that Ms A’s improper threat could be made admissible and acceptable by reference to evidential rules on veracity and propensity.

[70]   More fundamentally, the fact that the breaches of r 2.7 in QZ v UJ and HTO v AG were considered to be unsatisfactory conduct by the Legal Complaints Review Officer does not mean that the Tribunal erred in finding that Ms A’s breach amounted to misconduct. As already noted, r 2.7 covers a wide spectrum of situations. Some may amount only to unsatisfactory conduct, as was the situation in the two cases to which Mr Brookie referred.  That does not and cannot establish that all breaches of   r 2.7 should be considered only as amounting to unsatisfactory conduct. As the Tribunal noted, in other cases the conduct in question may be more serious and warrant being found to be misconduct — as confirmed in Mr A v Canterbury Westland Standards Committee No 2, where Venning  J upheld a finding of misconduct under  s 7(1)(a)(i) of the Act for a breach of r 2.7.51

What relevance, if any,  is the fact that the Tribunal  held that Ms A was unaware of  r 2.7?

[71]   Mr Brookie says that the Tribunal was wrong to find that Ms A was unaware of r 2.7. He says the actual position was that Ms A was aware of the rule but did not appreciate that her conduct breached the rule.

[72]   I have two responses to that proposition. First, the Tribunal heard direct evidence from Ms A and was much better placed than this Court to reach a view as to Ms A’s actual knowledge and understanding of the rules. Secondly, I do not consider that there is any significant difference in culpability between not being aware of the rule on the one hand and being aware of the rule but not appreciating that one’s conduct breached the rule, particularly where, as here, the breach was direct, significant and obvious. Accordingly, I do not see anything turning on that point.

51     Mr A v Canterbury Westland Standards Committee No 2 of New Zealand Law Society, above n 8.

[73]   For all these reasons, I am satisfied that the Tribunal did not err in finding that Ms A’s conduct amounted to misconduct under s 7(1)(a)(i) of the Act.

[74]   Having made that finding, and consistently with the Court of Appeal’s decision in J v Auckland Standards Committee 1, there was no need for the Tribunal to go on to consider whether Ms A’s conduct amounted to unsatisfactory conduct. Nor is there any need for this Court to do so.

[75]Accordingly, Ms A’s appeal against the Liability decision is dismissed.

Ms A’s penalty appeal

[76]   Because Ms A’s liability appeal has failed, her appeal against the Tribunal’s penalty decision falls away. However, for completeness, I consider it briefly only to record that, even had the liability appeal succeeded, the penalty appeal would not have been unsuccessful.

[77]   As the Full Court of this Court said in Daniels v Complaint Committee 2 of the Wellington District Law Society:52

[22] It is well known that the Disciplinary Tribunal's penalty function does not have as its primary purpose punishment, although orders inevitably will have some such effect. The predominant purposes are to advance the public interest (which include “protection of the public”), to maintain professional standards, to impose sanctions on a practitioner for breach of his/her duties, and to provide scope for rehabilitation in appropriate cases. …

[78]   I am satisfied that the Tribunal’s orders were thoughtful, tailored to Ms A’s circumstances and entirely appropriate, even if Ms A’s conduct had been held not to have amounted to misconduct. The orders took into account the very matters that  Ms A said should have been taken into account in the Liability decision: her lack of experience and the absence of effective supervision. The orders were designed to ensure that Ms A would remain subject to supervision until she had developed further experience. In these respects, the orders were designed to protect the public, to assist

52     Daniels v Complaint Committee 2 of the Wellington District Law Society [2011] 3 NZLR 850, [2011] NZAR 639.

Ms A in understanding her duties as a lawyer and the professional standards she must meet and to assist in Ms A’s rehabilitation.

[79]   I do not accept the submission of Ms van Boheemen, who argued the penalty appeal, that the Tribunal’s sole practice restriction was inapt for Ms A’s conduct. That conduct showed that Ms A either did not know or did not understand that it was wrong for her to assist Mr C in threatening Ms L with exposure to Immigration New Zealand in order to achieve the improper purpose of securing money in dispute between Mr C and Ms L. Until Ms A gains some understanding of what is and is not acceptable behaviour in legal practice, she is clearly a risk to the public if she practises on her own account. Moreover, the period of restraint is relatively short and can be made even shorter if Ms A is able to persuade the Tribunal or the Practice Approval Committee that she is ready to practise on her own account.

[80]   Accordingly, even if Ms A had succeeded in her appeal against the Liability decision, her appeal against penalty would not have succeeded.

Result

[81]Ms A’s appeals are dismissed.

Costs

[82]   Mr Collins submitted that costs should be awarded if Ms A’s appeals were dismissed.

[83]   The Court has not been advised that Ms A was legally aided. It is usual for costs to follow the event. I see no reason for ordering a different result in this case.

[84]   Accordingly, I order Ms A to pay the Standards Committee’s costs on both appeals on a 2B basis, to be fixed by the Registrar, with any disputed issues referred to me.

Lateness of judgment

[85]   I record my regret that this judgment has taken longer to produce than I had expected. That was the result of a backlog of judgments and the need to prioritise judgments in appeals I heard as a member of the divisional court of the Court of Appeal.

G J van Bohemen J