Auckland Standards Committee 1 v Fendall
[2012] NZHC 1825
•2 August 2012
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV 2012-404-001059 [2012] NZHC 1825
UNDER the Lawyers and Conveyancers Act 2006 and the Law Practitioners Act 1982
BETWEEN AUCKLAND STANDARDS COMMITTEE 1
Appellant
ANDROBYN PHILIPPA JOY FENDALL Respondent
Hearing: 17 July 2012
Counsel: G M Illingworth QC for the Appellant
D Jones QC for the Respondent
Judgment: 2 August 2012
[RESERVED] JUDGMENT OF WYLIE J
This judgment was delivered by Justice Wylie
On 2 August 2012 at 3.00 pm
Pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Date:
Distribution:
GM Illingworth QC: [email protected]
M A Treleaven: [email protected]
D Jones QC: [email protected]
M Dew: [email protected]
AUCKLAND STANDARDS COMMITTEE 1 V FENDALL HC AK CIV 2012-404-001059 [2 August 2012]
Introduction
[1] The Auckland Standards Committee 1 (“the Committee”), appeals against a decision of the New Zealand Lawyers and Conveyancers Disciplinary Tribunal (“the Tribunal”) dated 14 February 2012. The respondent had pleaded guilty to a charge of misconduct in her professional capacity, and in its decision, the Tribunal censured the respondent, and ordered her to pay the costs of the appellant and to make a contribution towards its costs.
[2] The Committee in its notice of appeal asserted that the penalty imposed on the respondent was manifestly inadequate given the seriousness of her misconduct and further, that the order for costs was manifestly appropriate in all the circumstances. The appeal is opposed by the respondent. It was asserted on her behalf that there is no compelling reason to find that the censure imposed was manifestly inadequate, or that the Tribunal improperly exercised its discretion in limiting the respondent’s contribution to its costs.
Background
[3] The respondent is in her early fifties. She has practised law since 1983, initially as a solicitor, and since 1996, as a barrister. She practised principally in the criminal area, as a youth advocate, in the mental health area as a mental health advocate, and as counsel for the child in Family Court matters. Most, if not all, of her work was undertaken at the behest and cost of either the Legal Services Agency or the Ministry of Justice.
[4] On 28 August 2009, the Legal Services Agency wrote to the New Zealand Law Society, Auckland Branch, advising that the respondent’s listing approvals to provide services under the legal aid and duty solicitor schemes had been cancelled as from September 2009. The cancellation came to the attention of the media and it was reported by the New Zealand Herald, under a somewhat sensational heading, on
26 September 2009.
[5] The matter was referred to the Committee, and the Committee considered it at a meeting on 30 October 2009. The Committee resolved to commence an own motion investigation pursuant to s 130(c) of the Lawyers and Conveyancers Act
2006.
[6] Inter alia, the Committee obtained a copy of the decision made by the Suspension Consideration Panel of the Legal Services Agency cancelling the respondent’s listing approvals. That decision was dated 24 August 2009. It referred to three audits of the respondent’s invoicing to the Agency. During the period
24 February 2005 to 22 June 2006, there had been 31 dates of concern, and the respondent had over-billed the Agency for duty solicitor and legal aid work in the sum of $8,325. In the period 1 September 2006 to 1 September 2007, there had been
13 dates of concern, and there had been over-billing in the sum of $742.50. In the period 1 September 2006 to 30 September 2007, there had been 31 dates of concern, and over-billing had occurred in the sum of $4,176. During this latter period, the respondent had also over-billed the Ministry of Justice $4,123 on 12 separate days. All sums over-billed had been repaid.
[7] The respondent sought to review the Suspension Consideration Panel’s decision to cancel her listing approvals. This review was conducted by a body known as the Suspension Review Panel. In a decision dated 19 January 2010, it upheld the decision of the Suspension Consideration Panel.
[8] The Ministry of Justice did not terminate its provider arrangements with the respondent.
[9] On 1 February 2010, the Legal Services Agency laid a complaint against the respondent with the New Zealand Law Society. The complaint was referred to the Committee.
[10] The respondent was given the opportunity to comment on both complaints. She took that opportunity, and correspondence was sent and submissions were made on her behalf.
[11] On 18 June 2010, the Committee considered both the own motion complaint and the complaint by the Legal Services Agency on the papers. It considered that they should be determined by the Tribunal. As a result, charges were laid by the Committee against the respondent. There was some delay in laying the charges because relevant papers could not be found. In the event, the charges were only filed with the Tribunal on 15 July 2011.
[12] The respondent faced two charges. First, she was charged with misconduct in her professional capacity. In the accompanying particulars, it was asserted as follows:
(a) That at all material times, the respondent held a practising certificate as a barrister sole;
(b)That in the period between February 2005 and September 2007, the respondent claimed from the Legal Services Agency and the Ministry of Justice various payments for professional attendances to which she was not entitled;
(c) That at the time the excessive claims were submitted, the respondent had a duty to ascertain her entitlement to the amounts in question and that she failed to comply with that duty;
(d)As a result of making the excessive claims, the practitioner was paid a total of approximately $13,343.50 by the Legal Services Agency, and
$4,123 by the Ministry of Justice to which she was not entitled.
There was a second and alternative charge, alleging negligence or incompetence by the respondent in her professional capacity, of such a degree or so frequent as to reflect on her fitness to practice.
[13] The respondent responded to the charges on 17 August 2011. Essentially, the first charge was admitted and the second charge was denied. On 5 October 2011, a joint memorandum was signed by counsel for the Committee and counsel for the
respondent. The respondent pleaded guilty to the first charge, misconduct, on the basis that she made excessive claims, but that she did so in error, rather than with any deliberate knowledge. She agreed to provide a written statement personally acknowledging both the seriousness of her offending and the fact that her accounting practices had been grossly negligent. She also agreed to pay the New Zealand Law Society costs of $5,000 plus GST (if any), and to pay the costs of the Tribunal as might be ordered by it. The Society for its part, agreed that it would not seek an order that the respondent be struck off. It was to be free to make such other submissions as it saw fit concerning the appropriate period of any suspension, penalty, publication or otherwise. Similarly, the respondent was to be free to respond to those submissions and to adduce evidence, without limitation, except in respect of the points that had been expressly agreed.
The New Zealand Lawyers and Conveyancers Disciplinary Tribunal decision
[14] The Tribunal heard the matter on 31 January 2012. It issued its decision on
14 February 2012.
[15] The Tribunal commenced its decision by noting the respondent’s plea. It referred to the transitional provisions in the Lawyers and Conveyancers Act and then discussed the background to the charges. It noted the decisions made by the Panels set up by the Legal Services Agency. It observed that they had concluded that there was no dishonesty — rather there had been a failure to take proper care when recording time and subsequently invoicing charges based on those incorrect records. It referred to the joint memorandum, and the basis on which the respondent had pleaded guilty to the misconduct charge. It noted the amounts involved, and recorded that the Legal Services Agency’s investigation had found that the overcharging had arisen principally because the respondent failed to sign off the duty solicitor attendance sheet when she switched roles during the course of the day, and made appearances providing either legal aid services or services as a youth advocate. It also noted an acknowledgement by the Committee that there was no evidence that the respondent knew she was not entitled to the amounts in question at the time she claimed payment. The Tribunal recorded that in its view, there had been negligence rather than dishonesty.
[16] The Tribunal recorded that the Committee sought that the respondent should be suspended from practice for a period of two years. It noted that the respondent for her part submitted that suspension was neither warranted nor necessary, and that censure and costs would be adequate given the context of the overcharging and the respondent’s “otherwise exemplary conduct”.
[17] The Tribunal then went on to discuss whether suspension was the appropriate penalty. It considered the objectives of the professional disciplinary regime. It recorded that the respondent’s negligence was properly in the realm of misconduct, but went on to record its view that the respondent’s misconduct — essentially her failure to ascertain whether she was properly entitled to bill the amounts claimed — was not such as to require that she be removed from practice. The Tribunal considered that suspension would be an unnecessary and excessive regulatory response. Further, it considered that the public interest did not require such a response. Rather, the respondent was censured. The Tribunal did not consider that a fine was appropriate, but by consent, ordered that the Committee’s costs of $5,000 be paid by the respondent. It also ordered the respondent to reimburse the New Zealand Law Society in the sum of $5,000 towards the costs of $9,450 the Society was required to pay under s 257 of the Lawyers and Conveyancers Act. Particulars of the respondent’s health and personal financial position were permanently suppressed. Her name, however, was not suppressed.
Submissions
[18] Mr Illingworth QC, on behalf of the Committee, submitted that the Tribunal erred in three respects:
(a) first, it failed to place appropriate emphasis on the gravity of the
respondent’s offending;
(b) secondly, it placed too much emphasis on the respondent’s personal
circumstances; and
(c) thirdly, it placed inadequate emphasis on the requirement that it should uphold the standing of the legal profession.
He noted that the respondent had been expressly notified on a number of occasions by the Legal Services Agency of the need to ensure that her charging practices complied with the appropriate policies, and that despite these warnings, she repeatedly failed to ensure that her claims for payment were within permissible limits. He submitted that the amount involved was not insignificant, and noted that the respondent’s misconduct had been regarded by the Legal Services Agency as a serious dereliction of duty, such as to warrant cancellation of her contract and approvals. He argued that her misconduct brought the profession into disrepute.
[19] Mr Illingworth submitted that the Tribunal spent some time discussing the respondent’s personal circumstances. He argued that it had placed too much emphasis on those circumstances and that it should have placed more emphasis on the need to uphold the standing of the profession. He argued that the starting point for serious and repeated breaches of a practitioner’s obligations in relation to financial matters should have been suspension. He accepted that the respondent had no record of previous misconduct, and that she had a very good record of service as an advocate, which she was entitled to call in aid in mitigation of penalty. However, he submitted that a record of good service does not excuse serious misconduct in relation to the misappropriation of public funds, and that the extent to which an otherwise appropriate penalty can be reduced for good conduct must necessarily be limited.
[20] It was further argued that the failure of the Tribunal to impose a penalty of suspension created a significant problem for the Society in respect of its regulatory functions, because there are a relatively large number of complaints in which overcharging to the Legal Services Agency or the Ministry of Justice is alleged. It was submitted that a message needs to be sent out to the legal profession that negligent overcharging is serious, and that it will not be condoned. It was submitted that the decision in the present case sends out the opposite message, and that it sets an unfortunate precedent for future cases of its kind.
[21] In relation to costs, Mr Illingworth noted that the parties had reached agreement on the quantum of costs payable in respect of the Society’s expenses. He argued that the order made by the Tribunal defeated the arrangement made between the parties, because, although the order for the Committee’s expenses was made as agreed, the Tribunal required the practitioner to pay only half of its costs. The balance of the Tribunal’s costs was payable by the Society. The effect was that the costs order made in respect of the Tribunal’s costs cancelled out the benefit of the costs order made in respect of the Committee’s costs.
[22] For the respondent, Mr Jones QC noted that the appeal is brought pursuant to s 253 of the Lawyers and Conveyancers Act 2006. He submitted that the appropriate approach to an appeal against a penalty decision is that established in cases such as May v May1 — namely that the Court should only allow an appeal if the Tribunal errs in law, fails to take into account relevant considerations, takes into account irrelevant considerations, or makes a decision that is plainly wrong. He argued that
as long as the Tribunal’s decision was within the range available to it, it should not be overturned. Mr Jones pointed out that the Tribunal is a specialist body, specifically constituted and tasked with carrying out disciplinary functions in respect of legal practitioners. He noted that it is empowered to exercise its judgment in relation to the penalties and costs to be imposed on aberrant practitioners, and that the Court, on appeal, should not lightly interfere with the exercise of this discretion.
[23] Turning to the merits of the matter, Mr Jones submitted that the respondent had been forthright in accepting responsibility for her overbilling, and that she had co-operated fully with the Legal Services Agency and the Ministry of Justice. He noted that the Ministry of Justice has not suspended the respondent and that she continues to carry out work to its account. He noted that the respondent has accepted unreservedly that the overbilling amounted to professional misconduct, and that she apologised to the Tribunal, the Society, the Legal Services Agency and the Ministry of Justice. Mr Jones argued that the overbilling occurred as a combination
of two factors:
1 May v May [1982] 1 NZFLR 165 (CA).
(a) The respondent’s extremely busy practice, which resulted in her regularly carrying out different assignments on the same day, and dealing with unscheduled, urgent assignments and appearances on a regular basis; and
(b) The respondent’s failure to have adequate time recording and billing
practices in place.
He submitted that the overbilling was as a result of genuine error and that, in percentage terms, it was but a fraction of the respondent’s overall billing. Mr Jones noted that there have been no further or subsequent complaints of overbilling. He argued that the respondent had always provided an excellent service to her clients and to the Court and that this was a significant factor available in mitigation. In particular, he submitted that the respondent had carried out her core function as an advocate in an exemplary fashion. Her failing was, he submitted, in the administrative side of her practice. Mr Jones noted the views of the three District Court Judges who sat regularly at the Waitakere District Court where the respondent practised, each of whom considered that the respondent operated at the highest level of competence and efficiency in carrying out her core legal services.
[24] Mr Jones also submitted that the respondent has already paid a heavy penalty for her actions, including the following:
(a) She was suspended from all Legal Services Agency work as from
September 2009;
(b) Her income as a barrister has reduced substantially;
(c) She has faced both public and professional humiliation as a result of being suspended from the legal aid work that she loved, and the negative media publicity that resulted;
(d) As a direct result, she has suffered ill health and depression; and
(e) She has incurred considerable legal fees.
[25] Finally, Mr Jones reviewed a number of recent penalty decisions imposed by the Tribunal. He submitted that its approach in this case was not out of line with those decisions. He also submitted that none of the authorities suggest that the penalty imposed by the Tribunal in the present case was manifestly inadequate. He argued that the Tribunal took into account all relevant factors and that its decision in respect of the penalty imposed and the costs awarded was entirely appropriate, consistent with previous decisions and within the range available to it. It was submitted that a censure was not manifestly inadequate, and that the appeal should be dismissed.
Analysis
[26] This appeal is brought pursuant to s 253 of the Act. Section 253(2)(b) provides that a Standards Committee may appeal a decision of the Tribunal, as if the proceedings before the Tribunal were brought by the Committee. Pursuant to s 253(3)(a), every appeal must be by way of rehearing. Under s 253(4), on hearing an appeal, the High Court may confirm, reverse, or modify the order or decision appealed against.
[27] In Austin, Nichols & Co Inc v Stichting Lodestar,2 the Supreme Court discussed the approach that should be taken by the Courts when they are considering general right of appeals. Elias CJ noted as follows:
Those exercising general rights of 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 tribunal appealed from, 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. In such circumstances it is an error for the High Court to defer to the lower Court’s assessment of the acceptability and weight to be accorded to the evidence, rather than forming its own opinion.
In the present appeal there was no basis for caution in differing from the assessment of the tribunal appealed from. The case entailed no question of credibility. It turned on a judgment of fact and degree, not the exercise of discretion entrusted to the tribunal. We are of the view that the Court of Appeal was not correct to suggest that, because the decision turned on a
2 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [16]
and [17].
value judgment apparently open to the Assistant Commissioner, “the High Court Judge ought not to have embarked on a reconsideration of the issue without considering, and giving weight to, the Assistant Commissioner’s conclusion”. The High Court Judge was obliged to reconsider the issue. He was entitled to use the reasons of the Assistant Commissioner to assist him in reaching his own conclusion, but the weight he placed on them was a matter for him.
[28] This Court has considered the applicability of these observations to appeals in respect of penalties imposed by the Tribunal:
(a) In Bhanabhai v Auckland District Law Society,3 Winkelmann, Heath and Priestley JJ expressed the view that where an appeal relates to professional misconduct issues, the Court is obliged to consider afresh the issues raised and to form its own view on them, but that where the appeal relates to a penalty decision, such a decision is a discretionary decision, which should be approached by reference to the traditional and more limited principles applicable to such decisions and set out
in, inter alia, May v May.4
(b) Cooper J discussed the issue in Parlane v New Zealand Law Society (Waikato Bay of Plenty Standards Committee No 2).5 In that case, the appellant appealed a Tribunal decision striking him off the roll of barristers and solicitors. Cooper J referred to the decision of the Court of Appeal in Waikato/Bay of Plenty District Law Society v Harris,6 where the Court held that appellate Courts should adopt a deferential approach in penalty appeals and that a strong case is required to interfere with a sentence decision. Cooper J observed that that discussion had taken place in the context of the Law Practitioners Act
1982, but that there is nothing in the Lawyers and Conveyancers Act
2006 that suggests that a different approach should be taken on appeals under s 253.7 He then referred to Austin, Nichols, and noted
3 Bhanabhai v Auckland District Law Society [2009] NZAR 282.
4 Ibid, at [33]; May v May, above n 1.
5 Parlane v New Zealand Law Society (Waikato Bay of Plenty Standards Committee No 2) HC Hamilton CIV 2010-419-1209, 20 December 2010.
6 Waikato/Bay of Plenty District Law Society v Harris [2006] 3 NZLR 755.
7 Parlane v New Zealand Law Society (Waikato Bay of Plenty Standards Committee No 2), above n 5, at [86].
that it suggests that the general stance of deference may require re-evaluation. He then went on to consider whether or not a decision striking off a practitioner can be classed as truly discretionary in nature. He considered the relevant provisions contained in the Act, referring specifically to s 244(1). He noted that pursuant to that subsection, the Tribunal has to make a decision that the practitioner’s conduct means that he or she is not a fit and proper person to be a practitioner, before it can order that the practitioner’s name be struck from the roll. He considered that this is an evaluative exercise, and not one that is happily described as discretionary. As a result, he concluded that Austin, Nichols applied, and that the Court on appeal itself had to be satisfied that the conduct of the practitioner was such
that striking off was appropriate.8
[29] Although Mr Illingworth suggested that these decisions were in conflict, I do not consider that that is the case. In both cases, the Court accepted that if a decision can properly be classed as discretionary in nature, then it is not appropriate for the Court on appeal to consider the matter afresh and make the decision that it would have made had the issue been before it at first instance.
[30] There is appellate authority confirming that appeals from the exercise of a discretion are not affected by Austin, Nichols.9 In Kacem v Bashir,10 the Supreme Court noted as follows:
But, for present purposes, the important point arising from Austin, Nichols is that those exercising general rights of appeal are entitled to judgment in accordance with the opinion of the appellate court, even where that opinion involves an assessment of fact and degree and entails a value judgment. In this context a general appeal is to be distinguished from an appeal against a decision made in the exercise of a discretion. In that kind of case the criteria for a successful appeal are stricter: (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. The distinction between a general appeal and an appeal from a discretion is not altogether easy to describe in the abstract. But the fact that the case involves factual evaluation and a value judgment does not of itself mean the decision is discretionary…
8 Ibid, at [92].
9 Blackstone v Blackstone (2008) 19 PRNZ 40 (CA) at [8].
10 Kacem v Bashir [2011] 2 NZLR 1 at [32] per Tipping J, for himself, and for Blanchard and
McGrath JJ.
[31] There remains a divergence of judicial opinion as to whether a decision as to penalty is a decision made in the exercise of a discretion. As noted above, in Bhanabhai, a full bench of this Court considered that a penalty decision is a discretionary decision. The same position has been taken in other recent decisions.11
In O v Professional Conduct Committee,12 when dealing with an appeal against both
conviction and penalty, Allan J considered that an appellate Court has the responsibility of conducting its own assessment of the merits of a case. Although in his decision he examined only the appeal against conviction, Allan J did not expressly distinguish between an appeal against conviction and an appeal against penalty. In Vohara v Professional Conduct Committee,13 Whata J considered that the approach discussed in O applied to appeals against both conviction and penalty. He applied O and held expressly that Austin, Nichols applies to appeals against penalty.
He considered that a penalty decision involves a substantive assessment of the gravity or seriousness of the conduct and that such assessment is not simply a matter of discretion, but an evaluation of the facts against the statutory purpose.
[32] With respect, I prefer the approach adopted in Bhanabhai. I accept that a penalty decision requires an assessment of the conduct involved, but to my mind, that does not compel the conclusion that a decision as to the appropriate penalty is not a decision taken in the exercise of a discretion. It is difficult to think of any judicial or quasi-judicial decision that does not call for a degree of assessment, often against a statutory or regulatory background. Examples are decisions as to bail, or decisions as to costs. These are quintessential discretionary decisions.
[33] In my judgment, the Tribunal’s decision as to the appropriate penalty in the present case was a decision taken in the exercise of a discretion. The misconduct was admitted. While there was no summary of facts, there was a comprehensive affidavit filed on behalf of the Committee. There was no challenge to it. The Tribunal was not required pursuant to s 244(1) to make an evaluative determination
that the respondent, by reason of her conduct, was not fit and proper to be a
11 GS v A Professional Conduct Committee [2010] NZAR 417 (HC) at [10]–[14]; L v Professional
Conduct Committee of New Zealand Psychologists Board (2009) 20 PRNZ 92 (HC) at [30]–[32].
12 O v Professional Conduct Committee [2011] NZAR 565 (HC) at [7].
13 Vohara v Professional Conduct Committee [2012] NZHC 507, [2012] 2 NZLR 668 (HC) at
[27]–[33].
practitioner, before it imposed the penalty it considered was appropriate. The parties had already agreed that the Committee would not seek an order that the respondent be struck off. There were only two constraints on the Tribunal’s powers. First, because the misconduct occurred in 2005–2007, any penalty imposed had to be a penalty that could have been imposed in respect of the misconduct at the time when
the conduct occurred.14 Under the 1982 Act, the Tribunal could order that the
practitioner’s name be struck off the roll, order that the practitioner not practice on his or her own account, order payment of a penalty not exceeding $5,000, censure the practitioner, make any order which could have been made by the District Disciplinary Tribunal, and/or order the practitioner to pay its costs and expenses, and the costs and expenses of any inquiry by the District Council or a
complaints committee.15 This simply limited the range of penalties available under
the earlier legislation. It did not mean that the decision as to penalty is not a discretionary decision. The second constraint was procedural — the Tribunal could not make an order to strike off or suspend unless at least five members of the Tribunal were present and they voted in favour of the order.16 Again, this does not detract from the discretionary nature of the decision as to the appropriate penalty.
[34] It follows in my judgment, that the appeal must be determined by reference to the rather stricter criteria discussed in Kacem v Bashir and by the Court of Appeal in May v May. The appeal can only succeed if the Tribunal erred in law or principle, or if it took into account an irrelevant consideration, or failed to take into account a relevant consideration, or if its decision is plainly wrong.
[35] In the event that I reached this point, Mr Illingworth for the Committee submitted that the Tribunal’s decision was plainly wrong. He argued that censure was the least serious penalty that could have been imposed on the respondent and that it was only really appropriate where the misconduct was trifling or the rule
breached was regulatory.17
14 Lawyers and Conveyancers Act 2006, s 352(1).
15 Law Practitioners Act 1982, s 112.
16 Lawyers and Conveyancers Act 2006, s 244(2).
17 D Webb Ethics, Professional Responsibility and the Lawyer (2nd ed, LexisNexis, Wellington, 2006) at [4.3.6].
[36] The penalty regime available to the Tribunal under the legislation does not have as its primary purpose punishment, although orders inevitably will have a punitive effect as well. The predominant purposes are to advance the public interest, which includes protection of the public, to maintain professional standards, to impose sanctions on a practitioner for breach of his or her duties, and to provide
scope for rehabilitation in appropriate cases.18 One commentator has observed that
the main purpose served by disciplinary proceedings is protective, and that disciplinary proceedings aim to protect members of the public from misconduct by lawyers.19
[37] The leading authority in this area is the decision of the Court of Appeal in the United Kingdom in Bolton v Law Society.20 Sir Thomas Bingham MR said as follows:
It is required of lawyers practising in this country that they should discharge their professional duties with integrity, probity and complete trustworthiness. That requirement applies as much to barristers as it does to solicitors…
Any solicitor who is shown to have discharged his professional duties with anything less than complete integrity, probity and trustworthiness must expect severe sanctions to be imposed upon him by the Solicitors Disciplinary Tribunal. Lapses from the required high standard may, of course, take different forms and be of varying degrees. The most serious involves proven dishonesty, whether or not leading to criminal proceedings and criminal penalties. In such cases the tribunal has almost invariably, no matter how strong the mitigation advanced for the solicitor, ordered that he be struck off the Roll of Solicitors. Only infrequently, particularly in recent years, has it been willing to order the restoration to the Roll of a solicitor against whom serious dishonesty had been established, even after a passage of years, and even where the solicitor had made every effort to re-establish himself and redeem his reputation. If a solicitor is not shown to have acted dishonestly, but is shown to have fallen below the required standards of integrity, probity and trustworthiness, his lapse is less serious but it remains very serious indeed in a member of a profession whose reputation depends upon trust. A striking-off order will not necessarily follow in such a case, but it may well. The decision whether to strike off or to suspend will often involve a fine and difficult exercise of judgment, to be made by the tribunal as an informed and expert body on all the facts of the case. Only in a very unusual and venial case of this kind would the tribunal be likely to regard as appropriate any order less severe than one of suspension.
18 Daniels v Complaints Committee No 2 of the Wellington District Law Society [2011] 3 NZLR
850 at [22]; Webb, above n 17, at [4.3.5].
19 G E Dal Pont Lawyers’ Professional Responsibility (4th ed, Lawbook Co, New South Wales,
2010) at [23.20].
20 Bolton v Law Society [1994] 2 All ER 486 at 491–492.
[38] The Committee contends that the respondent’s conduct was serious, and that suspension was the only appropriate response. It was argued that suspension was necessary to maintain the standing of the profession “as one in which every member, of whatever standing, may be trusted to the ends of the earth”.21
[39] It is clear that the Suspension Consideration Panel established by the Legal Services Agency took a markedly dim view of the respondent’s behaviour. While it accepted that there was no evidence that the respondent’s actions were intentional or deliberate, it noted that the respondent had been put on notice regarding her billing practises, both by the Legal Services Agency and by the Ministry of Justice. Despite this, she continued to over-bill on a regular basis, particularly during the third audit period. The Agency had issued instructions to all duty solicitors regarding appropriate protocols. The respondent acknowledged receipt of those instructions. She also acknowledged that she was aware of the Agency’s protocols and in November 2006, she gave the Agency an assurance that she had made significant changes to the administration of her practice to ensure that no further errors or poor practices would occur in the future. This assurance was repeated in April 2007. The Panel was concerned, and properly so, that the respondent continued to double-bill despite these assurances, and on a number of occasions, within a relatively short timeframe. It expressed the view that it was critical to the relationship between the Agency and a listed provider that the Agency can be assured that the listed provider will submit accurate invoices for the actual work carried out. The Panel considered that such reliance by the Agency is not only provided for by statute, but that it is provided for by contract, and that it is fundamental to the provider’s ethical and professional responsibility. It considered that the respondent’s repeated failure to sign off the duty solicitor attendance sheets when she appeared in the Youth Court, then sign in the duty solicitor roster for a full day after she was on notice, was of such magnitude that any trust between the Agency and the respondent was irreparably damaged. Accordingly, it cancelled all of the respondent’s approvals and listings.
[40] Similarly, the Suspension Review Panel took a dim view of the respondent’s
over-billing. It agreed with the Suspension Consideration Panel that the respondent’s
21 Ibid, at 492.
behaviour had destroyed the relationship of trust and integrity that was fundamental in the relationship between the Agency and the respondent as its contracted provider.
[41] Had the respondent’s conduct been dishonest, striking off would have been the almost inevitable consequence. While the respondent’s conduct was not dishonesty, it was certainly serious. Clearly, in the circumstances, suspension was a response that was very much open to the Tribunal.
[42] Suspension as a penalty is clearly punitive, but its purpose is more than simply punishment. The primary purpose of suspension is to advance the public interest. The public interest includes the interests of the community and the profession by recognising that proper professional standards must be upheld and by ensuring that there is deterrence, both specific for the practitioner and in general, for all practitioners. Suspension operates to ensure that only those who are fit to practice are given that privilege. Members of the public who entrust their personal affairs to legal practitioners are entitled to know that a professional disciplinary body will not treat lightly, serious breaches of expected standards by a member of the legal
profession.22 While suspension is a grave step, it is a penalty that can be appropriate
where the misconduct, although serious, does not show that the practitioner is irretrievably unfit to practice.23
[43] The Tribunal was aware of these various matters. It expressly considered the objectives of the professional disciplinary regime. It referred to the public interest in ensuring that proper standards and conduct are observed. It acknowledged that the respondent’s actions were properly in the realm of misconduct, that her misconduct continued after concerns had been raised, and that this indicated an indifference to ensuring that charges were accurately made. In considering the appropriate penalty, it recorded that its focus was in deciding what was necessary having regard to the public interest, particularly protection of the public and the reputation of the
profession.24
22 Daniels v Complaints Committee No 2 of the Wellington District Law Society, above n 18, at
[24].
23 Webb, above n 17, at [4.3].
24 Re Fendall [2012] NZLCDT 1 at [36]–[39].
[44] It cannot be said that the Tribunal erred in law or in principle in the way in which it approached the matter.
[45] Once it had addressed the gravity of the misconduct and the culpability of the respondent, the Tribunal was required to undertake a balancing exercise to factor in any mitigating circumstances and the particular considerations applicable to the aberrant practitioner.
[46] As was noted in Daniels, matters of good character, reputation, and absence of prior transgressions, count in favour of the practitioner. So does an acknowledgement of error, wrongdoing and expressions of remorse and contrition. Immediate acknowledgement of wrongdoing, apology to a complainant, genuine remorse, contrition and acceptance of responsibility as a proper response to a Law Society inquiry can be seen to be substantial mitigating matters and to justify
lenient penalties.25 A Tribunal, when determining ultimate fitness to remain in
practice, is entitled to review the entire conduct of the practitioner, the transgression the subject of the disciplinary proceedings, and the general behaviour of the practitioner,26 although these factors do not undermine the need to maintain among
members of the public confidence in the legal profession.27
[47] Here, the Tribunal did go on to consider mitigating features, both in relation to the offending and personal to the respondent. It considered that the negligence founding the respondent’s misconduct was that she failed in her duty to ascertain whether she was properly entitled to the amounts billed. It accepted that she was negligent in not making adequate changes to her systems and procedures, and not subsequently monitoring her invoices sufficiently closely to detect continuing errors. Nevertheless, the Tribunal expressed the view that this was not misconduct of the type that required that the respondent be removed from practice. It expressed this view for the following reasons:
(a) The billing errors were historical. They had occurred some five to seven years earlier. There have been no complaints about the
25 Daniels v Complaints Committee 2 of the Wellington District Law Society, above n 18, at [28].
26 See ibid, at [32].
27 Bolton v Law Society, above n 20, at 492.
respondent’s charging practices since that time. The Ministry of Justice continued to retain the respondent on certain matters. The Tribunal considered that the risk of the respondent failing in her duty to ensure that what she charges was correctly based on time records in the future was remote.
(b)It noted the passage of time since the misconduct had occurred. This reinforced its view, and it considered that one of the purposes for suspension — namely to ensure that a practitioner who has no opportunity to repeat the misconduct, was therefore rendered somewhat futile.
(c) It considered that the nature of the respondent’s practice, while not an excuse, did provide a context. It commented on the demands made on the respondent and the very good professional service she gave. It referred to the views of the three District Court Judges that had been placed before the Tribunal. It considered that the respondent had been an extremely busy practitioner, who was an invaluable contributor to the needs of the District Court at Waitakere, and to the needs of those she represented. Given the particular circumstances, the Tribunal saw no public policy requirement that mandated removing the respondent from practice. To the contrary, it observed that her availability to practice was considered valuable by those well placed to make that assessment.
(d)It noted that all concerned accepted that the overcharging arose inadvertently, and that there was no deliberate systematic overcharging by the respondent.
(e) It noted that the respondent provided professional services, often at short notice, to multiple clients appearing in different jurisdictions on the same day. It was concerned to take into account the background against which the billing errors occurred, and it considered that this
background militated against any requirement for suspension to ensure public protection and confidence.
(f) It noted that the respondent was contrite about her negligence, and that she acknowledged the errors in her charging methodology. It noted that she co-operated fully with the Legal Services Agency in its audit, and with the New Zealand Law Society’s investigation, and that she had gone to some lengths to analyse the instances of overcharging and to explain how the errors had occurred. It recorded that she had apologised for those errors, and that all amounts over-billed had been repaid. It noted that the Law Society, the Legal Services Agency and the Serious Fraud Office (which also investigated the matter) had acknowledged that the overcharging was not deliberate. It recorded that the respondent had taken steps to ensure that there would be no repeat, and it considered it unlikely that she would again make such serious billing errors. Again, it considered that these factors reinforced its view that suspension was unnecessary, because a repetition was unlikely.
(g) Finally, it considered the respondent’s financial situation and health.
It noted that much of her work had been cut off as a result of the Legal Services Agency’s decision to cancel her provider contracts. It noted that her errors had exacted a heavy personal toll, which it took into account in deciding the appropriate penalty.
The Tribunal stated as follows:28
In summary, having regard to all of these matters, the purposes of the disciplinary regime, the factual circumstances of this case, the position Ms Fendall has adopted throughout the audits and investigations, and to the matters raised in submissions by both counsel, we consider that to remove Ms Fendall from practice by suspending her would be an unnecessary and excessive regulatory response. The public interest does not require that Ms Fendall be removed from practice. As to public protection, there is little risk of her repeating her mistakes. As to public confidence in the profession, Ms Fendall has been charged, and has admitted her misconduct. The particular nature of her conduct, and the circumstances applicable, do not
28 Re Fendall, above n 23, at [42].
require her removal from practice to ensure public confidence in the profession.
[48] Once again, in my judgment, it cannot be said that the Tribunal erred in law or in principle in its approach. There is nothing to suggest that it took into account irrelevant factors, or that it failed to take into account relevant factors.
[49] Nor am I persuaded that the Tribunal’s decision was plainly wrong. In my view, the respondent was singularly fortunate not to be suspended from practice. A differently constituted Tribunal may well have legitimately concluded that suspension was the correct penalty. Indeed, had I been dealing with the matter afresh, it is probable that I would have concluded that a period of suspension was appropriate, notwithstanding the mitigating factors. I say probable, because it seems to me that at some stage, the Courts may wish to reconsider whether the public interest, in the sense discussed above, and the standing of the profession, still require the rather stern approach laid down in Bolton, particularly given the new disciplinary regime put in place by the 2006 legislation, with its increased emphasis on lay participation. I briefly touched on this issue with Mr Illingworth in the course of his submissions, but it was not fully canvassed and I take it no further.
[50] Applying the Kacem v Bashir and May v May tests for appeals against discretionary decisions, I am not persuaded that the Tribunal’s decision was plainly wrong. It was a considered decision reached by a five-member Tribunal comprising lawyers and lay members. There was a breadth of input into the decision, which is not available to a Judge sitting alone.
[51] Nor can I see that the Tribunal’s decision in relation to costs was plainly wrong. While it is true that the effect of the costs decision largely negates the agreement reached between the parties, the parties did not agree on how the Tribunal’s costs should be dealt with. The Tribunal retained a discretion in that regard. It set out its reasons for limiting the respondent’s liability to reimburse the New Zealand Law Society the costs of the hearing under s 257 of the Act. It noted the respondent’s financial position; it recognised that a costs award should not be punitive; it referred to the otherwise meritorious elements of the respondent’s practice over many years; it commented on the nature and circumstances of the
misconduct and the helpful approach the respondent had taken in the various investigations and hearings. Those were all matters for the Tribunal, and I am not persuaded that it was plainly wrong in the decision it made in that regard.
[52] Accordingly, the appeal is dismissed.
Costs
[53] It is my preliminary view that costs should lie where they fall. There is considerable uncertainty as to the appropriate approach to appeals in respect of penalty decisions. Unfortunately, this judgment will not end that uncertainty. In my view, the appeal was properly brought, and the concerns raised by the Committee were raised in the interests of the profession as a whole. If, notwithstanding this preliminary view, either party wishes to apply for costs, then I direct that any application is to be filed and served within 10 working days of the date of this judgment. Any reply is to be filed and served within a further 10 working day period. I will then deal with the issue of costs on the papers, unless I require the
assistance of counsel.
Wylie J
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