Burgess v Monk

[2017] NZHC 2618

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

I TE KŌTI MATUA O AOTEAROA TE ROTORUA-NUI-Ā-KAHU ROHE

CIV 2013-463-187

[2017] NZHC 2618

BETWEEN

WARWICK JAMES BURGESS

First Plaintiff

CTE BURGESS LTD
Second Plaintiff

AND

PHILLIP CHARLES MONK

First Defendant

NEW ZEALAND GUARDIAN TRUST COMPANY LTD
Second Defendant

Other defendants continued overleaf

Hearing:

25, 26, 27, 28, 29 September, 2, 3, 4, 5, 10, 11, 12, 13, 16, 17,

18, 19, 20, 24 October 2017 (at Hamilton)

Counsel:

On application for leave to withdraw:

M A Corlett QC for D G Chesterman and E McGill G Brittain QC for W J Burgess and CTE Burgess Ltd For trial:

D G Chesterman and E McGill for Plaintiffs

R J Latton, H Ford and G Schumacher for First and Second Defendants

No appearance by, or on behalf of Third Defendant

A S Ross QC and G Beresford for Fourth and Sixth Defendants C T Walker QC and A Lenard for Fifth, Seventh and Eighth Defendants

Judgment:

25 October 2017

JUDGMENT (NO. 4) OF HEATH J

This judgment was delivered by me on 25 October 2017 at 5.00pm pursuant to

BURGESS v MONK [2017] NZHC 2618 [25 October 2017]

Rule 11.5 of the High Court Rules Registrar/Deputy Registrar

AND              DAVID TROUNSON

Third Defendant

AND              ALISDAIR HUGH MORRISON

Fourth Defendant

AND              ARMER FARMS (N.I.) LTD

Fifth Defendant

AND              OʼSULLIVAN CLEMENS

Sixth Defendant

ANDGRAEME WILLIAM ELVIN AND SHARLENE DARRAGH

Seventh Defendants

AND              TIHOI HOLDINGS LIMITED

Eighth Defendant

CONTENTS

The application  [1]
Context  [3]
Framework for analysis  [11]
Analysis

(a)Competing contentions  [29]

(b)Relevant authorities  [39]

(c)Should leave to withdraw be granted?  [44]

Result  [63]

The application

[1]    Counsel for plaintiffs, in the midst of a trial which has already spanned 19 sitting days, apply for an order granting leave for them to withdraw as counsel. The circumstances in which the application is made are unusual. While counsel contend that the “relationship of trust and confidence between counsel and client has broken down irretrievably”, the clients oppose the application because they say that they retain trust and confidence in counsel, and wish to proceed. In such circumstances, ought the Court to refuse leave to withdraw? The researches of all counsel (including counsel for the defendants who wish to proceed with the trial) have not unearthed any authority directly on point.

[2] While the circumstances in which a solicitor on the record for a party may seek leave to withdraw are enshrined in the High Court Rules,1 there is no legislative instrument that deals squarely with the position of counsel. There seems little doubt that the question is to be determined under the inherent jurisdiction of the High Court. Its jurisdiction over barristers and solicitors, as officers of the High Court, is expressly preserved by ss 268 and 270 of the Lawyers and Conveyancers Act 2006 (the Act).

Context

[3]    Mr Warwick Burgess and CTE Burgess Ltd (to whom, unless the context requires otherwise, I shall refer as Mr Burgess) are suing the executors and trustees of the estates of Mr Burgess’ late mother and father (collectively the Trustees), the solicitors who acted for the Trustees at various times (the Solicitors) and entities associated with the purchaser of a farm property at Tihoi, on the western side of Lake

1      High Court Rules, rr 5.40–5.42.

Taupo, Armer Farms (NI) Ltd (the Armer interests). The claim is put on the basis that, at the time of the sale of the farm property and associated assets, the Trustees held the farm as a constructive trustee for Mr Burgess, under a trust of the type recognised by the Court of Appeal in Lankow v Rose,2 or as a constructive trustee for CTE Burgess Ltd, on the basis recognised in Lake v Baylis.3

[4]    The Solicitors and the Armer interests are sued, primarily, on the basis that they either knowingly assisted a breach of trust or, in the case of the Armer interests, received the property purchased with knowledge that it was sold in breach of one or other of those constructive trusts. Mr Burgess alleges that the Armer interests purchased the farm at an under value.

[5]    The trial began on 25 September 2017. From an early stage, discussions were taking place about the possibility of settling some aspects of the claim or, at least, narrowing issues. In an endeavour to facilitate arrangements of that type, the trial was adjourned briefly on 19 October 2017 so that a judicial settlement conference could take place before Woodhouse J. At that stage, as trial counsel, Mr Chesterman and Ms McGill were advising Mr Burgess. At the conclusion of that conference, arrangements were made for Mr Burgess to consult with Mr Brittain QC to obtain independent advice on questions raised in the conference. As the trial Judge, I do not know anything about the nature or content of the discussions that took place at the settlement conference or between Mr Burgess and Mr Brittain.

[6]    At the conclusion of evidence on 20 October 2017, Mr Chesterman informed me that, as a result of a meeting that he and Ms McGill had attended with Mr Burgess earlier that day, his position as counsel had been compromised to an extent that he was considering whether to seek leave to withdraw. 20 October was the eighteenth day of the trial. On present indications, there are two witnesses to be called before the plaintiffs’ case is closed, one of whom will be interposed while evidence is being given on behalf of the defendants due to an illness under which she is currently labouring. While originally estimated to take between five and seven weeks to complete, if the

2      Lankow v Rose [1995] 1 NZLR 277 (CA).

3      Lake v Baylis [1974] 1 WLR 1073 (ChD).

trial were to proceed, it is unlikely that it will conclude before the end of November 2017.

[7]    After seeking independent advice over Labour Weekend, Mr Chesterman filed an application seeking leave for him and Ms McGill to withdraw as counsel for Mr Burgess. The application stated:

2.The grounds on which the orders are sought are that as a result of a meeting between counsel (Mr Chesterman and Ms McGill) and [Mr Burgess] (and others) on Friday 20 October 2007:

a.Serious professional conduct issues have now arisen;

b.There is a potential conflict between Mr Chesterman’s personal/professional interests, and the interests of his clients that adversely impact on his ability to represent his clients with the objectivity required of counsel; and

c.The relationship of trust and confidence between counsel and client has broken down irretrievably.

[8]    In a memorandum in support of the application on behalf of himself  and    Ms McGill, Mr Chesterman stated:

8.Counsel for the plaintiffs is no longer able to comply with his duties to the Court because of circumstances which have arisen which create a real risk that the client will not be represented with objectivity and which create the risk of or give rise to a conflict of interest.

9.Serious professional conduct issues have now arisen between counsel and the plaintiffs as a result of a meeting between counsel (Mr Chesterman and Ms McGill) and the [Mr Burgess] (and others) on Friday 20 October 2017.

10.In particular:

a.[Mr Burgess]:

i.made allegations which create a factual foundation for a claim in negligence;

ii.(at least) implicitly threatened counsel with a claim in negligence;

b.When asked directly whether he would pursue a claim in negligence against counsel, [Mr Burgess] did not deny that he would do so;

c.Counsels’ perception from what was said and the context of the meeting is that there is a real risk that the plaintiffs will pursue such a claim.

11.As a result of the meeting on Friday and other matters, counsel considers that there is a potential conflict between his personal/professional interests, and the interests of his clients that adversely impact on his ability to represent his clients with the objectivity required of counsel.

12.In particular:

a.All defendants have, either directly or through counsel or both threatened to make complaints against counsel to the Law Society;

b.As of Friday, [Mr Burgess] has now raised the prospect of a claim in negligence against counsel; and

c.Counsel has been personally funding disbursements on behalf of the clients and faces the prospect of having to continue to fund disbursements until the conclusion of the trial.

13.As a result of the meeting on Friday, counsel considers that the relationship of trust and confidence between counsel and client has broken down irretrievably.

[9]    I heard argument on the application on the afternoon of 24 October 2017. During the course of the hearing, Mr Brittain told me that Mr Burgess had agreed to waive privilege in respect of the meeting to which Mr Chesterman referred, but only to the extent necessary to respond to allegations made in para 10 of Mr Chesterman’s memorandum.4 Expressly, I record that:

(a)There is no implied waiver beyond that indicated by Mr Brittain; and

(b)Both Mr Chesterman’s memorandum and the information imparted by Mr Brittain have been provided for the sole purpose of the present application, and neither may be used for any other purpose.

[10]Mr Brittain’s instructions, conveyed to me in Court, are that:

(a)Mr Burgess did not make any allegations of negligence against either Mr Chesterman or Ms McGill.

4      Set out at para [8] above.

(b)If Mr Chesterman and/or Ms McGill took from what was said at that meeting that such allegations were made, there has been a misunderstanding which Mr Burgess regrets.

(c)Mr Burgess continues to  repose sufficient trust  and confidence in  Mr Chesterman and Ms McGill to continue the trial with them acting as counsel.

(d)As at the present time, neither Mr Burgess nor CTE Burgess Ltd makes any allegation of negligence in respect of the performance of professional duties by Mr Chesterman and Ms McGill.

Framework for analysis

[11]   In the absence of direct authority on the question I must determine, a first principles analysis is required. To undertake that analysis it is necessary to identify uncontroversial aspects of the relationship that exists between counsel and a client, the role and duties of counsel in prosecuting or defending Court proceedings on behalf of a client, and the extent to which counsel may be at risk of civil proceedings.

[12]   All lawyers, whether acting as a solicitor or as counsel, owe enforceable duties both to the High Court, as one of its officers, and to their client. The fundamental aspects of those obligations are set out in s 4 of the Act:

4        Fundamental obligations of lawyers

Every lawyer who provides regulated services must, in the course of his or her practice, comply with the following fundamental obligations:

(a)the obligation to uphold the rule of law and to facilitate the administration of justice in New Zealand:

(b)the obligation to be independent in providing regulated services to his or her clients:

(c)the obligation to act in accordance with all fiduciary duties and duties of care owed by lawyers to their clients:

(d)the obligation to protect, subject to his or her overriding duties as an officer of the High Court and to his or her duties under any enactment, the interests of his or her clients.

[13] The nature of a lawyer’s obligations to a client are reinforced by the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (the Conduct and Client Care Rules). As the name suggests, the Conduct and Client Care Rules are designed to identify standards of conduct expected from lawyers and the way in which that conduct must meet the needs of a client.

[14]   The Conduct and Client Care Rules are made under statutory authority. Sections 94(e) and 95 of the Act relevantly provide:

94Practice rules

The New Zealand Law Society … must … have rules that include or provide for—

…

(e)standards of professional conduct and client care:

….

95Code of professional conduct and client care

The New Zealand Law Society …, in exercising the powers conferred by section 94(e), must each have rules that include or provide for a code of professional conduct and client care, which will be a reference point for discipline and which will focus on, but need not be limited to,—

(a)in the case of lawyers, the duties of lawyers as officers of the High Court and the duties of lawyers to their clients:

…

(c) in the case of both lawyers …, the duties imposed on them by their fundamental obligation to be independent in providing regulated services to their clients.

[15]   The Conduct and Client Care Rules emphasise the independence required from any lawyer and specify the extent to which he or she may refuse to accept instructions or decline to complete a retainer in circumstances where it has not been terminated by the client. Relevantly, r 4 of the Conduct and Client Care Rules provides:

Availability of lawyers to public and retainers

4A lawyer as a professional person must be available to the public and must not, without good cause, refuse to accept instructions from any client or prospective client for services within the reserved areas of work that are within the lawyer’s fields of practice.

Refusing instructions

4.1Good cause to refuse to accept instructions includes a lack of available time, the instructions falling outside the lawyer’s normal field of practice, instructions that could require the lawyer to breach any professional obligation, and the unwillingness or inability of the prospective client to pay the normal fee of the lawyer concerned for the relevant work.

4.1.1The following are not good cause to refuse to accept instructions:

(a)any grounds of discrimination prohibited by law including those set out in section 21 of the Human Rights Act 1993:

(b)any personal attributes of the prospective client:

(c)the merits of the matter upon which the lawyer is consulted.

4.1.2A lawyer who has a retainer under which he or she is to remain available to receive instructions from the client concerned is entitled to decline instructions from others that would be inconsistent with the lawyer’s obligations under the retainer.

4.1.3A lawyer who declines instructions must give reasonable assistance to the person concerned to find another lawyer.

Duty to complete retainer

4.2A lawyer who has been retained by a client must complete the regulated services required by the client under the retainer unless—

(a)the lawyer is discharged from the engagement by the client; or

(b)the lawyer and the client have agreed that the lawyer is no longer to act for the client; or

(c)the lawyer terminates the retainer for good cause and after giving reasonable notice to the client specifying the grounds for termination.

4.2.1Good cause includes—

(a)instructions that require the lawyer to breach any professional obligation:

(b)the inability or failure of the client to pay a fee on the agreed basis or, in the absence of an agreed basis, a reasonable fee at the appropriate time:

(c)the client misleading or deceiving the lawyer in a material respect:

(d)the client failing to provide instructions to the lawyer in a sufficiently timely way:

(e)except in litigation matters, the adoption by the client against the advice of the lawyer of a course of action that the lawyer believes is highly imprudent and may be inconsistent with the lawyer’s fundamental obligations.

4.2.2None of the matters set out in rule 4.1.1 is good cause to terminate a retainer.

4.2.3A lawyer must not terminate a retainer or withdraw from proceedings on the ground that the client has failed to make arrangements satisfactory to the lawyer for payment of the lawyer’s costs, unless the lawyer has—

(a)had due regard to his or her fiduciary duties to the client concerned; and

(b)given the client reasonable notice to enable the client to make alternative arrangements for representation.

4.2.4A lawyer who terminates a retainer must give reasonable assistance to the client to find another lawyer.

[16]   Rule 5 of the Conduct and Client Care Rules emphasises the need for independence. Relevantly, it provides:

Independence

5A lawyer must be independent and free from compromising influences or loyalties when providing services to his or her clients.

Independent judgement and advice

5.1The relationship between lawyer and client is one of confidence and trust that must never be abused.

5.2The professional judgement of a lawyer must at all times be exercised within the bounds of the law and the professional obligations of the lawyer solely for the benefit of the client.

5.3A lawyer must at all times exercise independent professional judgement on a client’s behalf. A lawyer must give objective advice to the client based on the lawyer’s understanding of the law.

…

Claims against lawyer

5.11When a lawyer becomes aware that a client has or may have a claim against him or her, the lawyer must immediately—

(a)advise the client to seek independent advice; and

(b)inform the client that he or she may no longer act unless the client, after receiving independent advice, gives informed consent.

5.12A lawyer may resume acting for a former client where the matter in dispute has been resolved.

[17]   As part of its inherent jurisdiction over barristers and solicitors, the High Court has power to make an order restraining a counsel from acting for a particular client. The nature of that jurisdiction was considered by the Court of Appeal in Black v Taylor.5 The Court was unanimous in its view that a barrister does not have an absolute and independent right to determine whether he or she will act in any proceedings, and that the Court’s power to restrain a barrister from acting should be exercised whenever the interests of justice so require.6

[18]   For the purposes of the present application, Cooke P’s observation, in Black v Taylor, that “decisions relating to solicitors, although to some extent analogous, are not automatically or easily to be applied in New Zealand to a practitioner acting in a particular case as counsel only, nor to a practitioner who acts in all his or her practice as a barrister sole” is apposite.7 The President added:8

If anything, higher standards may be required, as counsel’s conduct of a case may have, and may be seen to have, much influence on the decision of the Court.

[19]   I accept that the circumstances in which the High Court may intervene to restrain counsel from acting do not necessarily raise the same type of considerations as must be considered on an application for leave to withdraw. By their nature, questions of removal will generally (but not always) arise before trial, while leave to withdraw will usually be sought while a proceeding is before the Court and a hearing is imminent9 or underway.

[20]   The common feature is that the Court is dealing with one of its officers who owes duties to the Court to complete a retainer, unless good grounds exist to allow

5      Black v Taylor [1993] 3 NZLR 403 (CA).

6 Ibid, at 405 (Cooke P), 407 and 409 (Richardson J) and 417–418 (McKay J).

7 Ibid, at 405–406.

8 Ibid, at 406.

9      For example, see Bron v Attorney-General (2009) 20 PRNZ 460 (HC), discussed at paras [42] and

[43] below

counsel to withdraw, or render it necessary for counsel to be removed. Viewed in the present context, when an application is made on the nineteenth day of a trial which may last at least another three to four weeks, the consequences that withdrawal may have for other parties, as well as the client, are significant. If the threshold for making an order is driven by considerations relating to the administration of justice, those consequences are factors to be weighed heavily in the balance.

[21]   Until 2005, barristers were immune from a claim for negligence, as a result of the Court of Appeal’s decision in Rees v Sinclair.10 That position continued until the decisions of the Court of Appeal and Supreme Court in Lai v Chamberlains.11 The pre-existing immunity was for services rendered that were attached to Court representation and work “intimately connected” with it.12 One of the public policy concerns identified by McCarthy P, in Rees v Sinclair, was the need for a barrister to undertake litigation on behalf of any client who pays a proper fee; absent immunity, McCarthy P said, the barrister could not be expected to prune the case of irrelevancies which would result in unnecessary prolongation of proceedings, contrary to the public interest.13

[22]   In Rees v Sinclair, the Court of Appeal drew heavily on a decision of the House of Lords in Rondel v Worsley,14 which had continued the immunity in England and Wales. McCarthy P referred to observations made by Lord Reid in Rondel v Worsley that provided the context for the decision upholding immunity. Lord Reid had said:15

Every counsel has a duty to his client fearlessly to raise every issue, advance every argument, and ask every question, however distasteful, which he thinks will help his client's case. But, as an officer of the court concerned in the administration of justice, he has an overriding duty to the court, to the standards of his profession, and to the public, which may and often does lead to a conflict with his client's wishes or with what the client thinks are his personal interests. Counsel must not mislead the court, he must not lend himself to casting aspersions on the other party or witnesses for which there is no sufficient basis in the information in his possession, he must not withhold authorities or documents which may tell against his clients but which the law or the standards of his profession require him to produce. And by so acting he

10     Rees v Sinclair [1974] 1 NZLR 180 (CA).

11     Lai v Chamberlains [2005] 3 NZLR 291 (CA) and [2006] NZSC 70, [2007] 2 NZLR 7.

12     Rees v Sinclair [1974] 1 NZLR 180 (CA) at 187 (McCarthy P) and 190 (Macarthur J); 191 (Beattie J appeared to agree with both of those observations).

13 Ibid, at 185.

14     Rondel v Worsley [1969] 1 AC 191 (HL).

15 Ibid, at 227.

may well incur the displeasure or worse of his client so that if the case is lost, his client would or might seek legal redress if that were open to him.

…

… So the issue appears to me to be whether the abolition of the rule would probably be attended by such disadvantage to the public interest as to make its retention clearly justifiable. I would not expect any counsel to be influenced by the possibility of an action being raised against him to such an extent that he would knowingly depart from his duty to the court or to his profession. …

[23]   That rationale for the immunity did not find favour with the Supreme Court in Lai v Chamberlains. Delivering a plurality judgment on behalf of herself, Gault and Keith JJ, Elias CJ took the view that an immunity could not be justified “on the basis of the special role of the advocate”.16 She observed that the “cab-rank principle is an important ethical obligation imposed on legal practitioners, but its practical importance in the administration of justice in New Zealand should not be exaggerated”.17 The Chief Justice added that the “obligation to provide services to all is an ethic shared with other professions, which enjoy no immunity”.18

[24]   In dealing with the risk of unmeritorious claims, the Chief Justice said it “would be wrong to assume that advocates are more at risk of baseless claims from vindictive or unscrupulous clients than other professions or callings”.19  Referring to a decision of the House of Lords in Moy v Pettman Smith (A Firm),20 Elias CJ continued:21

[78] … There, the House of Lords was careful to recognise  that  the standard of care to be expected of any professional who works in an environment where judgment calls have to be made under time constraints and in difficult circumstances must not be set at a level which is unrealistic and must be assessed in context. The application of liability “should not stifle advocates’ independence of mind and action in the manner in which they conduct litigation and advise their clients”. Nor should the standard of care imposed be such as to force advocates into defensive lawyering which is contrary to the public interest in the fair and efficient operation of the criminal justice system. And establishing that negligence is causative of loss will not be easy in circumstances where the direct cause of loss is the imposition of an independent judgment.

16     Lai v Chamberlains [2006] NZSC 70, [2007] 2 NZLR 7 at para [53].

17 Ibid, at para [54].

18 Ibid, at para [54].

19 Ibid, at para [77].

20     Moy v Pettman Smith (A Firm) [2005] UKHL 7, [2005] 1 WLR 581.

21     Lai v Chamberlains [2006] NZSC 70, [2007] 2 NZLR 7 at para [78].

(Footnotes omitted)

[25]   The extent of counsel’s authority is also important. These are issues that have been addressed more frequently in the criminal law context, when appellate courts have considered whether a miscarriage of justice may have arisen out of errors made by trial counsel. In my view, the principles are equally applicable in the context of civil proceedings, though some adaptation may be required to reflect the circumstances of particular cases.

[26]   In Hall v R22 a Full Court of the Court of Appeal considered some of the wider issues. The judgment of the Court makes the following points:

(a)Trial counsel is obliged to present the case that an accused person wants to run. In my view, this follows from the need for counsel to follow instructions. That point applies equally to counsel for a party in a civil proceeding.

(b)Whatever the type of proceeding may be, the client is entitled to have his or her case presented in terms of instructions given, after receiving adequate advice on the advantages and pitfalls of a proposed approach.23 Although the Court referred to its earlier decision in R v McLoughlin,24 to support a proposition that, if a client declined to act on counsel’s advice, “counsel’s duty was either to act on the instructions received or to withdraw”,25 it may have expressed the point too starkly; at least for my present purposes. Delivering the judgment of the Court of Appeal in McLoughlin, Hardie Boys J had said:26

It does happen from time to time that a barrister will find himself unable or unwilling to act in accordance with his client’s wishes. They may, for example, be incompatible with his duty to the Court or with his professional obligations; or he may consider that compliance would be prejudicial to his client’s best interests. Should such a circumstance arise, then

22     Hall v R [2015] NZCA 403.

23 Ibid, at paras [66]–[68] citing, in particular, R v Condon [2006] NZSC 62, [2007] 1 NZLR 300 at para [28].

24     R v McLoughlin [1985] 1 NZLR 106 (CA).

25     Hall v R [2015] NZCA 403 at para [67].

26     R v McLoughlin [1985] 1 NZLR 106 (CA) at 107.

he must inform the client that unless the instructions are changed he will be unable to act further. If the difficulty arises during a trial he should immediately inform the Judge and seek leave to withdraw. It will then be the Judge’s responsibility to determine what should be done, whether in terms of arranging for an adjournment or otherwise. But certainly counsel may not take it upon himself to disregard his instructions and to then conduct the case as he himself thinks best.

(Emphasis added)

(c)The term “instructions” in this context means “a clear direction as to how the trial or an aspect of it is to be run”. A distinction should be drawn between “an expression of the client’s views on a particular matter” and “directions to be observed and implemented by counsel”.27

(d)Within the constraints of informed instructions, trial counsel has a discretion to conduct a case as he or she thinks proper. That “position reflects both the practicalities of running a trial and the nature of counsel’s obligations”.28 In delivering the judgment of the Court of Appeal in Hall, Ellen France P and Randerson J observed:29

[75] As this Court said in R v Pointon, “[t]he effective conduct of a client’s case would be impossible if he had to be consulted at every turn during preparation and at the trial itself”. And, the authorities are clear, counsel have to exercise some judgment on matters such as the approach to cross- examination. Both of the cases on appeal illustrate this point. Mr Hall, for example, on one aspect submits trial counsel’s cross-examination could have been “stronger” although there is no suggestion the defence was not put. That is not a proper basis for challenging counsel conduct.

(Footnotes omitted)

[27]   Further insight into the circumstances in which trial counsel may exercise discretion in relation to the conduct of a case can be found in a judgment of the Court of Criminal Appeal of England and Wales, in R v Ulcay.30 Delivering the judgment of

27     Hall v R [2015] NZCA 403, at para [69] citing, in particular, R v S [1998] 3 NZLR 392 (CA) at 394.

28 Ibid, at para [74].

29 Ibid, at para [75].

30     R v Ulcay [2007] EWCA Crim 2379, [2008] 1 WLR 1209.

the Court, Sir Igor Judge P provided a nuanced discussion of the obligation of counsel to follow instructions. His Lordship’s observations are worth repeating in full:

[27]       The correct meaning of the phrase “acting on instructions”, as it applies to the professional responsibility of the advocate in any criminal court, is sometimes misunderstood, even by counsel. Neither the client nor, if the advocate is a barrister, his instructing solicitor, is entitled to direct counsel how the case should be conducted. The advocate is not a tinkling echo, or mouthpiece, spouting whatever his client “instructs” him to say. In the forensic process the client’s “instructions” encompass whatever the client facing a criminal charge asserts to be the truth about the facts which bring him or her before the court. Those instructions represent the client’s case, and that is the case which the advocate should advance. In practical terms, that will often mean that prosecution witnesses will be cross-examined on the basis that they are lying or mistaken, or have misunderstand or misinterpreted something said or done by the defendant; however there is almost always some evidence advanced by the prosecution which, on the basis of the client’s instructions, is not in truth in issue at all, either directly, or indirectly. Some decisions, of course, must be made not by the advocate but by the defendant personally, for example, and pre-eminently, the plea itself and, in the course of the trial, the decision whether or not to give evidence. The advocate must give his best professional advice, leaving the ultimate decision to the client. It is, however, always improper for the advocate to seek to challenge evidence which is accepted to be true on the basis of the facts agreed or described by the client, merely because the lay client, or the professional client, wishes him to do so. He may not accept nor act on such instructions.

(Original emphasis)

[28]     In my view, counsel is permitted to use his or her judgment in determining how best, as an advocate, to present the client’s case, on the basis of the instructions given. In many cases that will entail making decisions about the number of witnesses to be called and the nature and extent of cross-examination. An advocate will not be criticised if he or she were to follow instructions, yet present the case in a succinct and persuasive way.31 It is difficult to conceive of a case in which a Court would find counsel negligent if instructions were followed but the discretion as to presentation exercised in the manner I have indicated.

31     Generally, see Lai v Chamberlains [2006] NZSC 70, [2007] 2 NZLR 7 at para [78], set out at para

[24] above.

Analysis

(a)Competing contentions

[29]     Mr Corlett QC, for Mr Chesterman and Ms McGill, submitted that, although concerns had previously been expressed by trial counsel about availability of funding32 and instructions received, the application for leave to withdraw was squarely put on the grounds of a breakdown in the relationship of trust and confidence between counsel and the client.

[30]     Drawing on r 5 of the Conduct and Client Care Rules, Mr Corlett submitted that the relationship identified in r 5.1 was mutual in nature. As a result, if the relationship were to breakdown irreconcilably as a result of loss of confidence and trust in the client  by  counsel, leave  to withdraw must be  granted.33  In  addition,  Mr Corlett contended that, in circumstances where rr 5.11 and 5.12 come into play, counsel has no obligation to continue to act even if the client, after receiving independent  advice,  gives informed consent  for him or her to do  so.34  In  short,  Mr Corlett’s position was that it was sufficient to support an application for leave to withdraw if counsel held a genuine and objectively reasonable belief that the client regarded them as “potential targets” in the event that the client did not achieve the desired result.

[31]     Mr Brittain took a different approach. While accepting that there were differences  between  the  perceptions  of  Mr  Burgess  (on  the  one   hand)  and   Mr Chesterman and Ms McGill (on the other) in relation to what was said at the 20 October 2017 meeting,35 the discretion whether to permit withdrawal was, fundamentally, about protecting the interests of the client, rather than counsel. He submitted that the questions are whether the barrister can perform functions free of a conflict of interest and whether the client’s interests can be adequately protected.   Mr Brittain contended that the answer to both of those questions was “yes”.

32     As to which see Burgess v Monk [2017] NZHC 2424.

33 See Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, r 5.1, set out at para [16] above.

34     Rules 5.11 and 5.12 are set out at para [16] above.

35     As to the competing positions, see paras [8]–[10] above.

[32]     Mr Brittain submitted that measures could be put in place to manage any potential for conflict of interest between counsel and client. While he contended that their interests were, in any event, aligned, Mr Brittain recognised a divergence might arise (in the context of problems relating to funding) when considering settlement proposals, or the possible discontinuance of one or more causes of action. That, he submitted, could be addressed by his availability to advise independently on questions of settlement. I agree.

[33]     Mr Brittain submitted that Mr Chesterman was free to conduct the trial in the usual way, by giving advice in writing and taking instructions in the same way if he considered it necessary to do so.

[34]     Mr Latton, for the Trustees, submitted that the Court should approach resolution of the application by reference to broader considerations involving the interests of justice. From his own clients’ perspective, he noted that the proceeding had been on foot since 2013, and a trial was previously aborted in August 2015 through no fault of the defendants.36 One of the Trustees, Mr Monk, is now aged 78 years and wishes to have the proceeding resolved.

[35]     Mr Ross QC, for the Solicitors, and Mr Walker QC, for the Armer interests, adopted the approaches taken by both Mr Brittain and Mr Latton. While Mr Walker frankly acknowledged that, from a strategic point of view, his clients’ interests might be better served by the trial being aborted, with the ability to access security for costs, he recognised the realities of the situation. Mr Walker did signal the possibility of an application for additional security for costs being made. That question is for another day.

[36]     In responding to other counsel, Mr Corlett asserted that the circumstances that had arisen meant that Mr Chesterman may lack the independence of judgment to continue the proceeding, given the threat of a claim that he believes Mr Burgess made. This is, Mr Corlett submitted, more than a case involving the management of a difficult client. It has escalated to one where the client has overstepped the line, with the consequence that the mutual trust and confidence required has evaporated. Mr Corlett

36     Burgess v Monk [2015] NZHC 1881.

informed me that as a result of the meeting on 20 October 2017, indemnifiers have been notified.

[37]     I canvassed with counsel what options were available if leave to withdraw were granted. There are three. All are unpalatable. They are:

(a)Mr Burgess continues the trial as a litigant in person, with or without the benefit of a McKenzie Friend or amicus curiae. Leave would need to be given for Mr Burgess to represent CTE Burgess Ltd.

(b)The adjournment of the trial to allow new counsel to be instructed and to prepare cross-examination and a closing address.

(c)To abort the trial and start afresh. That would delay resolution of the proceeding considerably, and would also require consideration to be given to whether a wasted costs order should be made.

[38]     Neither the first or second option found favour with the parties. Mr Brittain contended that it was not in the interests of justice for Mr Burgess to be required to continue the trial at this advanced stage, without the benefit of counsel. The problem with an adjournment is the difficulty that Mr Burgess will face in obtaining alternative representation, due to the funding constraints to which I have alluded. Counsel for all defendants supported the view that the only practical consequence to a grant of leave to withdraw would be to abort the trial.

(b)Relevant authorities

[39]     As I have indicated, there are relatively few authorities that address the question whether leave to withdraw should be granted in a case such as this. Those that do exist are not directly on point. Nevertheless, there are three to which I wish to refer.

[40]     In R v Ulcay,37 the Court of Criminal Appeal considered whether, among other things, the trial Judge was right to allow counsel to withdraw during a criminal trial. Leave was granted on grounds of “professional embarrassment”. The concept of “professional embarrassment” does not exist in New Zealand. It is designed to deal with a situation in which, for whatever reason, the barrister considers he or she does not have adequate time and opportunity to prepare for and perform at trial.38 The Court adopted what was said by Sir Thomas Bingham MR in Ridehalgh v Horsefield; that where the brief had been accepted and difficulties arose, it was the obligation of counsel “to soldier on and do the best [he or she] could”.39

[41]     In Re White,40 a decision of the Supreme Court of New South Wales, counsel for a defendant in a criminal trial sought leave to withdraw because, despite a ruling by the trial Judge that the accused was fit to stand trial, he did not believe it was possible to obtain adequate instructions. One of the questions raised was whether leave to withdraw was required; or whether counsel was entitled to withdraw, as of right. Barr AJ, after reviewing authorities, followed a decision of the Court of Criminal Appeal in Shaw,41 in which that Court had held it was not within the province of a trial Judge to dismiss counsel or a solicitor or to order them to remain if counsel were required by the “etiquette of the Bar” to do otherwise.42

[42]     The third authority is Bron v Attorney-General.43 On 2 July 2009, the Legal Services Agency advised that legal aid was to be withdrawn. The relevant hearing was due to proceed on 28 and 29 September 2009. An adjournment was sought while an appeal against a withdrawal of legal aid was pursued. That application was refused on 17 July 2009. The application was renewed, but was declined on 3 September 2009. At that point, the solicitor for the plaintiff sought leave to withdraw as solicitor on the record. Although the authority relates to the position of solicitors on the record, that solicitor was also acting as counsel and sought to withdraw from that role also.

37     R v Ulcay [2008] 1 WLR 1209 (CA).

38     Ibid, at para 41.

39     Ridehalgh v Horsefield [1994] Ch 205 (CA) at 269.

40     Re White (1995) 77 A Crim R 531 (SC NSW).

41     Shaw v R (1980) 70 Cr App R 313 (CA).

42     Re White (1995) 77 A Crim R 531 (SC NSW) at 535.

43     Bron v Attorney-General (2009) 20 PRNZ 460 (HC).

[43]     In a judgment delivered on 23 September 2009, Dobson J declined to grant leave to withdraw but adjourned the proceeding instead. The Judge considered that an adjournment was preferable to a situation in which solicitor on the record and counsel might otherwise be lost to the proceeding. Although Bron is a case in which leave to withdraw was refused, the reasons given by Dobson J for taking that course were moulded more to the question of adjournment than the circumstances in which leave to withdraw would be granted. In that case, an adjournment obviated the need for counsel to withdraw because the proximate hearing would not proceed. Also, there was no breakdown in the professional relationship between counsel and client.

(c)Should leave to withdraw be granted?

[44]     Notwithstanding the difficulties that have confronted Mr  Chesterman  and Ms McGill, I have reached the conclusion that leave to withdraw should be refused.

[45]     It is (in the context of a continuing trial) neither appropriate nor practicable for me to determine what truly happened at the 20 October 2017 meeting which triggered the application for leave to withdraw. I accept Mr Chesterman’s view that he believed a threat of proceedings was made against him and Ms McGill.44 Mr Chesterman’s articulation of what he understood was said is consistent with the steps he took over the weekend to instruct counsel to advise himself and Ms McGill personally, and to notify indemnifiers.

[46]     Mr Burgess, through Mr Brittain, has assured the Court that if anything was said at the meeting which Mr Chesterman and Ms McGill construed as a threat of proceedings in negligence, it was unintended and there has been an unfortunate misunderstanding that he now regrets.45 While I cannot make findings of fact, it is not hard to imagine an exchange occurring during a heated meeting at which trial strategy was being discussed, against the background of the judicial settlement conference that had been convened before Woodhouse J and the subsequent provision of independent advice by Mr Brittain to Mr Burgess, which caused a misunderstanding. That is as far as I am prepared to go in discussing that point.

44     See para [8] above.

45     See para [10](a) above.

[47]     I proceed on the assumption that words were said by Mr Burgess that gave rise to a genuine and reasonable belief on the part of Mr Chesterman and Ms McGill that Mr Burgess intended to bring proceedings against them. Balanced against that is Mr Burgess’ retraction of any such suggestion and assurance that, at this time, he has no intention to issue proceedings in respect of pre-trial work undertaken by Mr Chesterman and Ms McGill, or any aspect of their conduct of the trial itself to date. I return later to whether, in those circumstances, Mr Chesterman’s suggestion that he can no longer act for Mr Burgess is sustainable.

[48]     I do not accept Mr Corlett’s submission that the Conduct and Client Care Rules create the need for a mutual relationship of trust and confidence to remain on foot if counsel were to continue the retainer. As I said earlier,46 the Conduct and Client Care Rules are focussed on the conduct of lawyers and how they care for their clients.

[49]     I am satisfied that my approach to the application should be based on broad administration of justice concerns. That involves taking account of the position in which Mr Chesterman and Ms McGill find themselves, the predicament in which Mr Burgess would be left if leave to withdraw were granted, the consequences of withdrawal to the defendants to the proceeding given that all agree that the only option to withdrawal is to abort the present trial, the interests of the public in finality of litigation, and the need for justice to be seen to be done. If the present trial were aborted, another would need to be scheduled for next year, and is likely to take at least nine weeks to complete.

[50]     Rule 4.2.1 of the Conduct and Client Care Rules identifies the type of situations that might arise that would constitute “good cause” for a lawyer to withdraw his or her services.47 None of the circumstances identified in cl 4.2.1 apply. Further, none of the reasons why it would be appropriate for counsel to refuse to accept instructions (set out in r 4.1 of the Conduct and Client Care Rules)48 apply in relation to termination of a retainer.49 So, they are irrelevant. Once instructions are accepted, there is a

46     See para [13] above.

47     Rule 4.2 is set out at para [15] above.

48     Set out at para [15] above.

49 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, r 4.2.2, set out at para [15] above.

professional obligation to see them through to a conclusion in the absence of a good reason why the retainer should be terminated.

[51]     I do not consider that rr 5.11 and 5.12 of the Conduct and Client Care Rules require me to grant leave to withdraw.50 Rule 5.11 is directed to a situation in which the lawyer himself or herself recognises, in the course of completing a retainer, that a client has, or may have, a claim against him or her. The lawyer’s duty is then to advise the client to seek independent advice and to inform the client that the lawyer is not entitled to act further unless the client, after receiving independent advice, gives informed consent.51 The need for informed consent on the part of the client underpins rr 5.11 and 5.12. That is why a lawyer may resume acting when any issue in dispute has actually been resolved.52

[52]     The Conduct and Client Care Rules are silent on the type of situation that has arisen in this case, where there has been a perceived threat of proceedings against counsel which has subsequently been retracted, coupled with a statement in open Court to the effect that the client has confidence in the lawyer to continue to represent him for the duration of the trial.

[53]     In Black v Taylor,53 in the context of an application to disqualify a lawyer from acting as counsel for an opponent, Richardson J expressed the principle as follows:54

The due administration of justice: the principles

The High Court has an inherent jurisdiction to control its own processes except as limited by statute. As an incident of that inherent jurisdiction it determines which persons should be permitted to appear before it as advocates. In determining what categories of person may appear it does so in accordance with established usage and with what is required in the public interest for the efficient and effective administration of justice (3(1) Halsbury’s Laws of England (4th ed) para 396).

Another aspect of the inherent jurisdiction is the control of a particular proceeding in the Court. There the Court's concern is with the administration of justice in a particular case and in the generality of cases and with the associated basic need to preserve confidence in the judicial system. …

50     Rules 5.11 and 5.12 are set out at para [16] above.

51 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, r 5.11, set out at para [16] above.

52 Ibid, r 5.12, set out at para [16] above.

53     Black v Taylor [1993] 3 NZLR 403 (CA).

54 Ibid, at 408.

…

In making [an assessment as to whether a reasonable member of the community, knowing relevant background, would consider that counsel’s continuing to act would facilitate a fair trial] the Court will also give due weight to the public interest that a litigant should not be deprived of his or her choice of counsel without good cause. The right to the choice of one's counsel is an important value. But it is not an absolute. …

[54]     As a result of the argument I heard, the issue between counsel and Mr Burgess may fairly be summarised by what Mr Chesterman said in his memorandum. On behalf of himself and Ms McGill, he considers that the potential conflict between their personal and professional interests (on the one hand) and those of his clients’ (on the other) mean that they cannot represent his clients with the objectivity required of counsel.55

[55]     Mr Chesterman has also referred to the possibility of complaints being made against him to the New Zealand Law Society. He says that such threats have been made on behalf of all defendants. From what has been said in the case to date, it is likely that the concerns in issue relate to Mr Chesterman’s decision to make allegations of reprehensible conduct against the defendants, for which they take the view there is no adequate foundation. Counsel’s obligations in that regard are set out in r 13.8 of the Conduct and Client Care Rules:

Reputation of other parties

13.8A lawyer engaged in litigation must not attack a person’s reputation without good cause in court or in documents filed in court proceedings.

13.8.1A lawyer must not be a party to the filing of any document in court alleging fraud, dishonesty, undue influence, duress, or other reprehensible conduct, unless the lawyer has taken appropriate steps to ensure that reasonable grounds for making the allegation exist.21

13.8.2Allegations should not be made against persons not involved in the proceeding unless they are necessary to the conduct of the litigation and reasonable steps are taken to ensure the accuracy of the allegations and, where appropriate, the protection of the privacy of those persons.

55     See para 11 of Mr Chesterman’s memorandum, set out at para [8] above.

[56]     I mention this issue only to dismiss it as a consideration on the present application. When Mr Burgess completed his evidence, I asked Mr Chesterman to reconsider whether there was an adequate foundation for allegations of reprehensible conduct to be made against some or all of the defendants. Over the weekend, he did so. Mr Chesterman has assured me that he believes the foundation is adequate. I accept his assurance. No doubt the question whether there is an adequate foundation will be the subject of some comment in closing addresses. Whatever the outcome may be, any pressure exerted by opposing parties cannot affect determination of the question whether counsel should be allowed to withdraw from acting for a plaintiff.

[57]     That leaves  the  question  whether,  as  is  asserted,  Mr  Chesterman  and  Ms McGill cannot, in the circumstances disclosed, act in an objective manner for their client. In my view, whatever their misgivings may be and whether they have good or bad reasons for holding those views, they have a professional obligation to continue to act for their clients. Having reflected on the issues raised on the present application, I have concluded that the interests of justice will not be served by finding a ready route by which counsel may seek to extricate themselves from what they perceive to be a difficult client and an unwieldy case. The statutory obligations cast on all lawyers reflect that approach. As Sir Thomas Bingham MR said: they must “soldier” on.56

[58]     For whatever reason, Mr Burgess has now resiled from any suggestion (express or implied) that he presently intends to bring proceedings against Mr Chesterman or Ms McGill in negligence. While, as Mr Brittain rightly said, that does not prevent him from reconsidering his position in the future, I am faced with a situation in which the client wishes his counsel to continue to act. The usual position is that the client has lost confidence and wishes to terminate the retainer. Had Mr Burgess evidenced that position, leave to withdraw would likely have been granted. In those circumstances, it would be nigh on impossible for counsel to take adequate instructions from the client to progress the trial.

56     See para [40] above.

[59]     Section 4 of the Act provides the answer to the present application.57 In particular, counsel in the position of Mr Chesterman and Ms McGill have professional obligations to:

(a)Facilitate the administration of justice;58

(b)Be independent in providing services to their clients;59 and

(c)Comply with fiduciary and other duties of care owed by them to their clients.60

[60]     A lawyer in the position of Mr Chesterman and Ms McGill is required to be staunch in their performance of duties under a retainer. Whatever their personal views about the client may be, they are required to act fearlessly on his behalf.

[61]     It is not enough to say that because of a threat of legal proceedings they cannot be independent. To the extent that any perceived threats might relate to past advice or conduct in Court, what is done is done. As to the future, I have no doubt that Mr Chesterman and Ms McGill will perform their professional roles in accordance with their responsibility to exercise reasonable skill and care and to conduct the case in the best interests of the clients,61 having regard to their overriding duties to the Court.

[62]     If they undertake those tasks competently, no claim could ensue. It would be inconsistent with the fundamental obligations owed by counsel to their client and to the Court for leave to withdraw to be given in the circumstances of this case, where the client wishes them to continue to act. Also, the interests of other parties deserve considerable weight. If the application were granted, the effects on each would be devastating. In short, this is not a situation in which the lawyers can divorce themselves from their client.

57 Section 4 of the Lawyers and Conveyancers Act 2006 is set out at para [12] above.

58 Lawyers and Conveyancers Act 2006, s 4(a).

59 Ibid, s 4(b).

60 Ibid, s 4(c).

61     As to the nature of those duties, see paras [26]–[28] above.

Result

[63]For those reasons, the application for leave to withdraw is dismissed.

[64]     I am satisfied that, in the circumstances in which the problems arose, it was appropriate for the application for leave to withdraw to be made. Mr Burgess’ attitude towards Mr Chesterman and Ms McGill continuing to act was not articulated until Mr Brittain had taken instructions. There will be no order as to costs.

[65]     As a result of this ruling, the trial will continue at 10am on Thursday 26 October 2017, with the next witness to be called to give evidence at that time.

[66]     I thank counsel for their assistance. In particular, I express my appreciation to both Mr Corlett and Mr Brittain for attending at short notice and making very helpful contributions to argument on a difficult issue.

P R Heath J

Delivered at 5.00pm on 25 October 2017

Solicitors:

Bell Graham, Matamata Perpetual Guardian, Auckland Kennedys, Auckland

Gilbert Walker, Auckland Counsel:

D G Chesterman, Auckland R J Latton, Auckland

G Schumacher, Auckland A Ross QC, Auckland

C T Walker QC, Auckland M A Corlett QC, Auckland G Brittain QC, Tauranga