Burgess v Tait
[2014] NZHC 2408
•2 October 2014
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
CIV-2013-409-001385 [2014] NZHC 2408
BETWEEN GARY OWEN BURGESS
Plaintiff
AND
ERNEST JOHN TAIT First Defendant
AND
MALLEY & CO Second Defendant
AND
DISTRICT COURT, CHRISTCHURCH Third Defendant
AND
LEGAL COMPLAINTS REVIEW OFFICER
Fourth Defendant
AND
NEW ZEALAND LAW SOCIETY Intervenor
Hearing: 1-2 September 2014 Appearances:
G O Burgess (In Person)
M Parker for Respondent, Second and Third Defendants
HDP van Schreven for Intervenor (excused)Judgment:
2 October 2014
JUDGMENT OF DUNNINGHAM J
BURGESS v TAIT AND ORS [2014] NZHC 2408 [2 October 2014]
Table of Contents
Introduction ..........................................................................................................[1]
What are the issues on judicial review? .............................................................[9] Issues arising out of District Court proceedings [12] Issues arising out of the first LCRO decision [13] Issues arising out of the second LCRO decision [14]
The History of the District Court Proceedings ................................................[15]
The District Court Rules [26]
Issues arising out of the decision to refuse default judgment.........................[34] Was there a decision declining entry of default judgment? [34] Did the decision to refuse default judgment breach natural justice or otherwise constitute a reviewable error, including because there was a failure to give reasons? [38] Was the decision not to enter default judgment unlawful under the District
Court Rules 2009? [41]
Should I grant relief in the exercise of my discretion? [47]
Issues arising out of the decision(s) to stay the counterclaim.........................[49] Did the District Court’s decision to stay the counterclaim breach natural justice or otherwise constitute a reviewable error including because no hearing was conducted, no reasons were given and it caused unreasonable delay? [49] Was the District Court’s decision to stay the counterclaim unlawful, because Malley & Co had “no live claim before the Court”? [54] Did the District Court act unlawfully in refusing a copy of the record requested pursuant to s 60 of the District Courts Act? [55]
Issues arising out of the first LCRO decision ..................................................[59] Did the LCRO err in law in his understanding of the duty to give advice including, in particular, in relation to a relationship property agreement? [59] Did the LCRO fail to adequately inquire into the extent of the advice given by Malley & Co? [72] Did the LCRO err in law in his understanding of the duties of lawyers when deducting fees from the trust account, and was the finding that no sanction should be imposed for this action unreasonable? [77] Did the LCRO act unlawfully in issuing a section 161 certificate? [86]
Issue arising out of the second LCRO decision ...............................................[98] Did the LCRO err in law when she decided that Mr Burgess’s lawyer was not acting in a conflict of interest when he certified the s 42 notice of claim in the name of Ms Beaven? [98]
Conclusion.........................................................................................................[120]
Introduction
[1] Mr Burgess has been in a long running dispute with his lawyers, Malley & Co, over their advice (or alleged lack of it) during the period they were engaged to act for him in relationship property proceedings.
[2] Malley & Co began acting for Mr Burgess in February 2008. At that point he had received a judgment from the Family Court awarding him only about a third of the relationship property that he and his former wife, Ms Beaven, had owned, which he had appealed, with some modest success, to the High Court. Malley & Co represented him in the second hearing before the Family Court (where he fared only slightly better), and also on the appeal of that decision to the High Court and the Court of Appeal.
[3] The retainer ended in late 2009, but the litigation continued, with further decisions from the High Court, Court of Appeal and then the Supreme Court. In the meantime, a property which had been transferred into Mr Burgess’s name was sold by the mortgagee, and Mr Burgess was left without any of the fruits of his litigation. He blamed his lawyers for this outcome.
[4] Mr Burgess took his complaints to the Lawyers Complaints Service. In two separate decisions, one on the standard of the advice given and the level of fees charged, the other in relation to his lawyer certifying as correct a notice of claim lodged in Ms Beaven’s name, the Standards Committees hearing the complaints largely exonerated his lawyers. He sought a review of both decisions from the Legal Complaints Review Officer (LCRO).1 The decisions of the respective Standards Committees were upheld in two separate decisions by the LCRO which
issued on 9 March 20122 and 9 April 20133 respectively.
1 I use the term LCRO to refer both to the statutory position of the Legal Complaints Review
Officer and to the individual officers who heard the two reviews.
2 LCRO 203/2010.
3 LCRO 143/2012.
[5] In September 2010, Mr Burgess’s lawyers commenced proceedings in the District Court suing for their unpaid fees. Mr Burgess filed a defence and counterclaim seeking damages totalling just over $1,000,000. His lawyers had, however, jumped the gun because the quantum of fees was still the subject of the first complaint being dealt with by the Lawyers Complaints Service. The proceedings were required to be stayed under provisions of s 161 of the Lawyers and Conveyancers Act 2006, until the relevant LCRO decision issued.
[6] When the first LCRO decision did issue in March 2012, Mr Burgess tried to press his counterclaim forward with no success. He made an application for default judgment and Malley & Co filed fresh proceedings on the certificate issued by the LCRO under s 161 for that firm’s fees. The District Court refused default judgment on the counterclaim.
[7] Mr Burgess’s counterclaim is still to be determined, having been consolidated with the fresh proceedings issued by Malley & Co for their unpaid fees and transferred to this Court at Mr Burgess’s request.4
[8] This application for judicial review relates to the two LCRO decisions and to various steps taken, and decisions made, in the District Court proceedings relating to Malley & Co’s unpaid fees and Mr Burgess’s counterclaim against that firm.
What are the issues on judicial review?
[9] A joint memorandum summarising the issues for judicial review was prepared on 11 June 2014.
[10] Leaving aside the paragraphs which were inserted to provide background, that still left around 20 separately numbered issues (some of which contained sub-points or sub-questions) to be determined on review. These included general issues that apply to more than one of the decisions and issues which were specific to a particular decision. However, helpfully, the parties were able to refine the issues
during oral argument and I summarise them in [12] to [14] below.
4 Order of Judge Neave dated 26 September 2013.
[11] The general issues raised in the joint memorandum can be disposed of briefly. The defendants accept that decisions of the LCRO, and of the District Court are, prima facie, amenable to review. Whether or not, in the circumstances of this case, the applications are substantive appeals dressed up as reviews, or whether other reasons exist for denying relief, will be addressed as I deal with the following specific issues.
Issues arising out of District Court proceedings
[12] The issues relating to the District Court proceedings can be summarised as follows:
(a) Was the District Court’s decision of 21 September 2011 (if there was such a decision) to refuse to enter default judgment on Mr Burgess’s counterclaim;
(i)procedurally unfair, including because no proper hearing was conducted, no reasons were given, and because it was in breach of natural justice?
(ii) unlawful, particularly having regard to relevant rules of the
District Court?
(b)If there are grounds to review the decision, should the Court in its discretion grant relief having regard to the utility of any such relief, and the failure by Mr Burgess to exercise his rights to appeal that decision?
(c) Was the District Court’s decision on 6 December 2011, and extended on 10 February 2012, to stay the counterclaim:
(i)procedurally unfair, including because no proper hearing was conducted, no reasons were given and it caused delay in breach of natural justice?
(ii) unlawful, when Malley & Co had “no live claim before the
Court”?
(d)Did the District Court act unlawfully in refusing a copy of the record requested pursuant to s 60 of the District Courts Act?
Issues arising out of the first LCRO decision
[13] In relation to the first LCRO decision (203/2010), dealing with complaints of negligence and overcharging, the relevant issues are:
(a) Did the LCRO err in law in his understanding of the duty of a lawyer to give advice to his client including in relation to a relationship property agreement?
(b)Did the LCRO commit a reviewable error by failing to adequately inquire into the extent of the advice given by Malley & Co, including by failing to obtain evidence using his powers under s 151(2) or s 207(2) of the Lawyers and Conveyancers Act 2006?
(c) Did the LCRO err in law in his understanding of the duties of lawyers when deducting fees from the trust account, and was the finding that no sanction should be imposed for this action unreasonable?
(d) Did the LCRO act unlawfully in issuing a section 161 certificate?
Issues arising out of the second LCRO decision
[14] In relation to the second LCRO decision (143/2012), dealing with Mr Tait’s actions in certifying and lodging a notice of claim for Ms Beaven, the relevant issue is;
(a) Did the LCRO err in law when she decided that Mr Burgess’s lawyer was not fraudulent or acting in a conflict of interest when he certified and lodged the s 42 notice of claim in the name of Susan Beaven, and did not tell his client?
The History of the District Court Proceedings
[15] It is now necessary to outline, in a little more detail, the history of the
District Court proceedings, as Mr Burgess’s complaints allege:
... the District Court has breached the rules of natural justice, the New Zealand Bill of Rights Act, and the District Court Rules, in respect of the process followed in determining the Plaintiffs [sic] counterclaim against Malley & Co, including the excess delay in processing the counterclaim and the Plaintiffs [sic] application for default judgement [sic], and in the failure of the Court to promptly and timely seal the order for default judgement [sic] and/or in failing to provide reasons for not sealing the judgement [sic] and for staying the counter-claim, or has acted contrary to principle in it’s [sic] handling of the counterclaim and stay.
[16] Malley & Co issued its claim for unpaid legal fees in late September 2010 (the 2010 proceedings), shortly after the Standards Committee decision came out confirming the fees were “not excessive but fair and reasonable in all the circumstances”.5 After the 2010 proceedings were filed Mr Burgess applied to the LCRO for a review of the Standards Committee decision and, on 17 December 2010, he lodged his defence and a counterclaim to Malley and Co’s claim.
[17] Both the defence and the counterclaim were supported by documents setting out 79 “Facts” which Mr Burgess relied on to defend Malley & Co’s claim for payment, and to support his counterclaim for losses he said he had suffered. The losses claimed included $894,000 of losses which were described as “estimated figures [which] cannot be fully finalised until legal proceedings currently underway in the Family, District, High Courts and Court of Appeal, and LCRO review are finalised”, as well as general damages of $75,000 and exemplary damages of
$50,000.
[18] Early in 2011, and shortly before the 22 February earthquake, Malley & Co filed and served its information capsule on Mr Burgess. Importantly, the information capsule responded to the 79 “Facts” relied on by Mr Burgess to support his defence and his counterclaim. While most of the “Facts” pleaded by Mr Burgess were responded to by simply referring to findings in the Standards Committee decision of
2 September 2010 which dismissed Mr Burgess’s complaints about his lawyer, some
5 Standards Committee Decision on complaint 2157/10, dated 2 September 2010 at [33](h).
were responded to with a more specific comment. It was clear, however, that the law firm did not consider it had been negligent or let Mr Burgess down and it considered he was largely the author of the misfortunes he had suffered.
[19] On 7 June 2011, the 2010 proceedings (including an application to strike-out the plaintiff’s claim), were adjourned sine die for call in the civil list in August 2011. Because of Mr Burgess’s other legal commitments at the time, the next call was deferred until 21 September 2011. At that hearing, the Court record shows that the Judge spent over half an hour discussing the issues arising with Mr Burgess and Malley & Co’s counsel. The law firm explained it was having difficulties accessing its files because its offices were in the central city red zone, and the Judge refused to enter judgment by default on the counterclaim and adjourned the 2010 proceedings for review after two months.
[20] The 2010 proceedings were next called on 6 December 2011. By that stage, Malley & Co had filed a pro forma defence to the counterclaim denying the claim and cross-referencing to the more detailed response contained in its original information capsule. Mr Burgess again pressed to have Malley & Co’s claim struck out and his counterclaim proceed by way of formal proof. Judge Kellar instead stayed the 2010 proceedings and directed a telephone conference to be convened “two weeks after 29 February 2012”.
[21] On 21 January 2012, Mr Burgess applied to have the 2010 proceedings transferred to the High Court and, on 10 February 2012 Judge Kellar issued a further direction staying the proceedings, pending the determination of the LCRO.
[22] On 9 March 2012 the LCRO issued a decision upholding the decision of the Standards Committee, and subsequently issued a certificate for Malley & Co’s fees on 4 April 2012.
[23] On receipt of the LCRO decision, Mr Burgess filed a memorandum in Court pressing for “formal proof judgment” on his counterclaim and withdrawing the notice to transfer the 2010 proceedings to the High Court so that the formal proof hearing could proceed. Regrettably, nothing appears to have happened on the file
until Mr Burgess wrote to the District Court on 8 October 2012 chasing up his counterclaim and advising that the LCRO had issued a certificate of fees. Directions issued from the Court on 17 October 2012 seeking updating memoranda from the parties on the current position.
[24] Despite various memoranda being filed by both parties, nothing further appears to have happened on the 2010 proceedings. However, on 18 March 2013
Malley & Co filed new proceedings for the unpaid fees (the 2013 proceedings), this time relying on the LCRO certificate in respect of their fees. The firm subsequently filed an application for summary judgment and Mr Burgess opposed that. On
24 June 2013, he made an application to consolidate the 2010 and the
2013 proceedings.
[25] Both proceedings came before Judge Neave in August of that year and, on
26 September 2013, he issued a decision consolidating the counterclaim in the
2010 proceedings with the claim for fees in the 2013 proceedings and dismissing the application for summary judgment. There is a live appeal of this decision, although it awaits the outcome of these proceedings. For convenience, all matters have now been transferred to the High Court, including the substantive claim in the
2013 proceedings.
The District Court Rules
[26] The 2010 and 2013 proceedings were implemented at a time when the District Court Rules 2009 were in force. The objective of those rules, set out in r 1.3, provides as follows:
1.3 Objective
1.3.1The objective of these rules is to secure the just, speedy, and inexpensive determination of any proceeding or interlocutory application.
1.3.2The objective of these rules includes, so far as is practicable,- (a) ensuring that all parties are treated equally; and
(b) saving expense; and
(c) dealing with the case in ways that are proportionate to-
(i) the importance of the case; and (ii) the complexity of the issues; and (iii) the amount of money involved; and
(iv) the financial position of each party; and
(d) ensuring that the case is dealt with speedily and fairly; and
(e) allotting to it an appropriate share of the court's resources, while taking into account the need to allot resources to other cases.
[27] Rule 1.4 requires the District Court to achieve that objective, saying:
1.4 Courts to give effect to objective
The courts must give effect to the objective of these rules when they- (a) do any act under these rules; or
(b) interpret these rules.
[28] Importantly, too, r 1.10 specifies that:
1.10.1 The fact that these rules have not been fully complied with at any stage of a proceeding does not of itself invalidate-
(a) the proceeding; or
(b) any step taken in the proceeding; or
(c) any document, judgment, or order in the proceeding.
[29] Rule 1.10 goes on to give the Court wide powers to deal with issues in the case of non-compliance, including to make an order on its own initiative, whether or not the party has made an interlocutory application for the purpose.6 It is clear that rule 1.10 is consistent with the objective of the rule in 1.3 by giving the Court a discretion as to how any irregularity with the rules is treated. As the commentary in Brookers records, “This rule is designed to avoid injustice as a result of technicalities, and in most cases of non-compliance it will be possible to achieve
regularity with a suitable order”.
6 Rule 1.10.5.
[30] The District Court Rules provide important context in which to consider the application for review because:7
The requirements of natural justice must depend upon the circumstances of the case, the nature of the enquiry, the rules under which the tribunal is acting, the subject matter that is being dealt with and so forth.
[31] As will become apparent, Mr Burgess is highly critical of Malley & Co for alleged breaches of the District Court Rules, and considers the District Court’s pragmatic approach to those non-compliances constitutes a reviewable error, whereas irregularities in his own documents, do not, in his mind, appear to warrant such scrutiny.
[32] It should also be borne in mind that the District Court proceedings were initiated shortly before the February 2011 Canterbury earthquake. There is ample evidence in the documentation before me that this affected both the Court’s, and Malley and Co’s, ability to deal with the proceedings. For example, Malley & Co’s staff did not have access to their files because their offices were cordoned off in the central city red zone and Mr Burgess’s request for discovery was obviously unable to be complied with as a consequence.
[33] Given that context, I now turn to the specific issues for determination.
Issues arising out of the decision to refuse default judgment
Was there a decision declining entry of default judgment?
[34] This issue must be resolved first because Mr Burgess has submitted that:
The decision, striking out my application for default judgement [sic], of Judge McAskil [sic] relied on by the respondents, simply does not exist, there is no record it was ever made, nor any record that such a decision was ever communicated to the parties.
[35] When the 2010 proceedings were called over on 21 September 2011 before
Judge MacAskill, he refused to enter default judgment on the counterclaim. Among other directions made, he recorded:
7 Russell v Duke of Norfolk [1949] 1 ALL ER 109 at 118 per Tucker LJ (CA).
Counterclaim adjourned to a further directions conference on a date to be fixed by a Registrar not less than 60 days after today.
...
Judgment by defendant on counterclaim is refused.
[36] On 13 November 2011, Mr Burgess was sent both the advice of a further conference scheduled for 6 December 2011 and written confirmation of the directions made on 21 September 2011, including the refusal to enter default judgment on the counterclaim.
[37] It is clear, therefore, there was a decision to refuse entry of default judgment on Mr Burgess’s counterclaim on 21 September 2011, and that he was notified of that both orally and in writing. This dispenses with Mr Burgess’s suggestion that there is no record that such a decision was ever made or communicated to the parties.
Did the decision to refuse default judgment breach natural justice or otherwise constitute a reviewable error, including because there was a failure to give reasons?
[38] Natural justice requires that those who are affected by a decision have an opportunity to be heard before a final decision is reached, but the same principles do not apply with such rigour to preliminary, or procedural, decisions.8 While that is not an inviolable rule (as sometimes preliminary decisions can have substantive effect), in the present case the decision to refuse default judgment on the counterclaim was not a: 9
decision determining the rights of the parties and bringing the proceeding or claim to an end, in whole or in part ...
[39] Mr Burgess’s counterclaim is still to be determined, having been consolidated
with the 2013 proceedings by order of Judge Neave on 26 September 2013, and so no decision has been made which ends or determines his counterclaim.
8 Furnell v Whangarei High Schools Board [1973] 2 NZLR 705 (PC) and Meadowvale Stud Farm
Ltd v Stratford County Council [1979] 1 NZLR 342 (SC).
9 Waterhouse v Contractors Bonding Ltd NZCA [2013] NZCA 151, [2013] 3 NZLR 361 at [16].
[40] The same considerations apply to the assertions that there was no notice to the parties that this question would be heard, no opportunity to be heard on it and no reasons given. In the context of what was essentially a procedural decision, with all Mr Burgess’s substantive rights to pursue his claim unaffected, it is debatable whether the tenets of natural justice were in fact engaged. However, as the decision was made in open Court, where Mr Burgess was in attendance, and where there was clearly a lengthy exchange between the Judge and the parties before orders were made, I consider that the principles of natural justice were sufficiently observed given the nature of the decision made, and that this ground of review must fail. This finding is reinforced by my conclusions on whether default judgment was available in any event, as I discuss next.
Was the decision not to enter default judgment unlawful under the District Court
Rules 2009?
[41] Mr Burgess made much of the fact he had complied with the requirements of the District Court Rules in force at the time, in order to say he was entitled to, and should have been granted, default judgment on his counterclaim.
[42] In simple terms, Mr Burgess argued that he had filed the relevant form in respect of his counterclaim, but Malley & Co had failed to file a statement of defence to the counterclaim on the appropriate form in the required timeframe. Mr Burgess was therefore entitled to default judgment.
[43] That argument overlooks the fact that Mr Burgess applied for default judgment under r 12.24 which relates to claims for “the payment of a liquidated demand in money”, that is, a sum that is clear, plain, settled or determined, usually by the terms of a contract.10 None of his claims fall into this category. They are all for losses which are “estimates” only, or are for amounts which need to be fixed by the Court, such as a sum for general damages. He therefore, had no entitlement to
default judgment under r 12.24.
[44] Mr Burgess’s response was that the Court should have heard from him for the
purpose of assessing his entitlement to damages under r 12.28, but that Malley & Co
10 Paterson v The Wellington Free Kindergarten Association [1966] NZLR 971 at 981 (SC).
should have been “deemed to have admitted all (allegations in the counterclaim) for
the purpose of proof”. However, there is no scope for that when r 12.24 is relied on.
[45] Perhaps more importantly, Malley & Co had filed a document which set out the substance of its defence to the counterclaim. Having regard to the purpose of the District Court Rules set out earlier, and in particular, the objective of ensuring “just, speedy and inexpensive determination of any proceeding”, and of not allowing form to triumph over substance, there was a logical basis for the Court to allow the counterclaim to be argued in full, along with Malley & Co’s defence to the counterclaim.
[46] In short, the decision to refuse to enter default judgment was permitted, indeed sensible, having regard to the relevant District Court Rules, and was not unlawful nor did otherwise constitute a reviewable error.
Should I grant relief in the exercise of my discretion?
[47] The relief sought by Mr Burgess at the hearing was confined to a declaration that the District Court acted inappropriately in declining his application for default judgment. In support he cited the Supreme Court’s decision in Attorney-General v Chapman, where it was recorded that sometimes vindication11 “... may take another form, such as a declaration”.
[48] However, given my findings that there was no reviewable error in refusing to enter default judgment in Mr Burgess’s favour, there is no basis on which to make the kind of declaration sought by Mr Burgess. I therefore do not need to consider the issues raised by the third defendant such as whether such relief has any utility or
should be declined because Mr Burgess failed to first exercise his rights of appeal.
11 Attorney-General v Chapman [2011] NZSC 110, [2012] 1 NZLR 462 at [51].
Issues arising out of the decision(s) to stay the counterclaim
Did the District Court’s decision to stay the counterclaim breach natural justice or otherwise constitute a reviewable error including because no hearing was conducted, no reasons were given and it caused unreasonable delay?
[49] I have outlined the history of the 2010 proceedings above. The practical
effect, to date, is that Mr Burgess’s counterclaim against Malley & Co, filed on
17 December 2010, has still not been resolved. Mr Burgess cites excessive delay on the part of the Registry in scheduling judicial conferences and delay on the part of the District Court Judges, by staying the counterclaim in late 2011 and early 2012. He says that the District Court has breached the rules of natural justice, the New Zealand Bill of Rights Act and the District Court Rules 2009.
[50] While a delay of nearly four years is significant, much of this delay can be explained by the matter being stayed under s 161 pending the determination of Mr Burgess’s LCRO complaints and by the consequence of the Canterbury earthquakes. While Mr Burgess says his counterclaim could have been progressed notwithstanding s 161, the arguments being raised in both the claim and counterclaim proceedings were so inextricably linked, that it would have been illogical, and contrary to the objectives of the District Court Rules, to progress one ahead of the other.
[51] The fact that the District Court has not expressly given reasons for the decisions to stay the counterclaim does not advance matters. While, of course, there is growing recognition of the obligation of decision makers to give reasons for their decisions, the extent of that duty is still governed by the context in which the decision was made. As a procedural decision made in the context of a call-over of the proceedings it is not expected that the Courts would be required to give reasons. It can be fairly inferred that the decision will have been made having regard to the wide discretion afforded by the District Court Rules and by the factual circumstances of the particular case. Here that included the statutory requirement to stay the plaintiff’s claim under s 161 and the clear connection between the matters to be argued in defence of the claim and support of the counterclaim.
[52] In any event, there is nothing to suggest that the delay caused by staying the counterclaim has disadvantaged Mr Burgess such that justice can no longer be done. As Chisholm J has said:12
Of itself delay does not constitute a breach of natural justice or an abuse of process. To be actionable it must cause prejudice to the applicants.
[53] If Mr Burgess’s counterclaim is successful, then interest can be awarded on the judgment sum to reflect the time period between when the loss accrued and when payment is made. A delay of the timeframe engaged here is not uncommon in the context of civil proceedings, and there is nothing to suggest that Mr Burgess has been denied the opportunity to achieve justice because of this delay.
Was the District Court’s decision to stay the counterclaim unlawful, because
Malley & Co had “no live claim before the Court”?
[54] This was not a matter pursued in submissions. However, Mr Burgess seems to be implying that because Malley & Co had failed to take certain procedural steps under the District Court Rules, the firm’s proceedings were at an end. At that point the only live proceeding was his counterclaim so there was no basis for staying the counterclaim. However, that argument overlooks the practical realities that Malley & Co’s claim was required, by law, to be stayed while the LCRO reviewed the Standards Committee’s decision and, if there was non-compliance with any timetabling steps during that time, that is addressed by r 1.10 of the District Court Rules which expressly provides that non-compliance, of itself, does not invalidate the proceeding. The fact that Malley & Co has subsequently abandoned the
2010 proceedings and instead relies on the 2013 proceedings, is a separate matter. It
does not make the District Court’s decision to stay the counterclaim unlawful.
Did the District Court act unlawfully in refusing a copy of the record requested pursuant to s 60 of the District Courts Act?
[55] Mr Burgess, in his statement of claim said he had made a request under s 60 of the District Courts Act 1947, for the notes made at the hearings where decisions
were made affecting the 2010 proceedings, but his request was declined by email
12 Huia Resorts Ltd v Ashburton District Council [2005] NZRMA 449 (HC) at [18].
dated 15 January 2013. However, it appears that Mr Burgess and the Court Registry were at cross purposes as to what was being sought.
[56] Section 60 has consistently been applied as referring to the official Court record and not to the Judge’s personal notes made in his or her notebook. The Registry staff clearly understood the request to be for the Judge’s personal notes. Such notes do not fall within the categories specified at s 60(1), as being notes;
(a) of the facts and evidence; and
(b) of any question of law or equity raised at the hearing; and
(c) of his decision and of his determination in the proceedings.
[57] That is why the request was declined. The official Court records have since been supplied and Mr Burgess accepts that the Court records that could be made available under s 60 have now been made available and he was not seeking the Judge’s personal notes.
[58] In those circumstances, this ground of review has fallen away.
Issues arising out of the first LCRO decision
Did the LCRO err in law in his understanding of the duty to give advice including, in particular, in relation to a relationship property agreement?
[59] Mr Burgess asserted that the LCRO, in the first LCRO decision, made an error of law in his assessment of the duty of a lawyer to give advice to his client:
(a) on a memorandum of consent orders which he says constituted an agreement under s 21 of the Property (Relationships) Act 1976; and
(b)generally during the time Malley & Co was retained to advise him on the relationship property litigation.
[60] In support of this assertion, Mr Burgess cited well accepted authority confirming that the duty of a lawyer to give advice is a fundamental obligation of a lawyer. He therefore submitted that the finding in the first LCRO decision, that:13
... Mr Tait did not dispute that he did not provide the formal advice that
Mr Burgess suggests he should have.
and the conclusion that: 14
I do not consider that the lack of formal advice as to the strategy to be
adopted renders Mr Tait’s conduct unsatisfactory.
were contrary to the accepted legal position and demonstrated that the LCRO erred in his understanding of the duty of the lawyer to give advice. As a consequence, he says the LCRO has misdirected himself in law and come to an “irrational conclusion”.
[61] However, Mr Burgess has been selective in his reading of the decision, and therefore in his assumption that there was a finding that the requisite advice was not given. Looked at as a whole, the LCRO:
(a) understood that the essence of the complaint was that “the legal advice and services provided Mr Tait had been below professional standards”;15
(b)understood the question he had to determine was whether “the manner in which the strategy was advanced fell below the level of competence and diligence which a member of the public is entitled to expect of a reasonably competent lawyer”;16
(c) clearly distinguished “formal advice” from advice in general, including advice provided in a less formal way;
13 LCRO decision at [74].
14 LCRO decision at [78].
15 LCRO decision at [26].
16 At [77].
(d)found that advice was given. For example, he made the following findings confirming that advice was given:
(i)“Mr Tait therefore advised Mr Burgess that without supporting valuation evidence the principle that Mr Burgess held to could not be progressed”.17
(ii)“Mr Tait therefore formed the view that the best option was to endeavour to provide the required evidence at the second Family Court hearing”,18
(iii)“he also advises that he met with Mr Burgess following his return and discussed the way in which the matter was to proceed”.19
(iv)“Mr Tait’s advice was no different from what the Family Court and High Court Judges before whom this matter had been argued considered to be the law”.20
[62] It is clear the LCRO accepted that there was advice given, but that much of what Mr Tait was able to achieve was constrained by the fact that “Mr Tait was presented with a course of action which had been largely pre-determined” because of the decisions which had issued from the various Courts prior to him being instructed. The LCRO, noting those circumstances, was satisfied that the steps Mr Tait took were “those of a reasonably competent lawyer”.
[63] A subsidiary argument was that the terms of the proposed consent memorandum, which would allow Mr Burgess to obtain a transfer of some of the relationship property to himself to allow him to refinance and avoid a mortgagee sale, was a relationship property agreement as defined by s 21 of the
Property (Relationships) Act 1976. Accordingly he should have been formally
17 At [67].
18 At [68].
19 At [75].
20 At [82].
advised of the effects and implications of that agreement as required by s 21F of that
Act.
[64] I accept that a consent memorandum which determines ownership of relationship property, as this one did, is a s 21 agreement which is subject to the statutory provisions of the Property (Relationships) Act 1976, until and unless the Court orders are made confirming it. Mr Burgess’s complaint is not the non- compliance with technical formalities of s 21F, such as the requirement for certification, but with the requirement for advice to be given on its effects and implications.
[65] The circumstances which led to the signing of the consent memorandum are fully set out in paragraphs [85] to [111] of the LCRO’s decision. It is obvious from the decision that the terms of that memorandum were negotiated over a number of days and were designed to achieve an objective that Mr Burgess considered important. The LCRO records that Mr Burgess was included in the correspondence with the lawyer for Ms Beaven over how Mr Burgess’s objectives could be achieved while protecting Ms Beaven’s interests, and on the terms of the consent memorandum which was subsequently drafted. The LCRO notes that “a number of telephone discussions took place in respect of that correspondence” and that “the consent memorandum as finally sent to him incorporated all of the terms that had
been included in that correspondence”.21 He concludes:
I consider that the recommendations made by Mr Tait were logical and the terms of the consent memorandum did not include terms that would not have been agreed to by a reasonably competent lawyer.
[66] Thus the LCRO, understanding that the complaint was that Mr Burgess was not properly advised as to the implications of the agreement, has concluded that he was so advised, it was drafted to achieve Mr Burgess’s objectives and that Mr Tait’s actions did not fall below those of a reasonably competent lawyer.
[67] Mr Burgess submitted that the advice was incomplete as an option which was available, but which was not canvassed by his lawyer, was to seek a vesting order
21 At [98].
from the Court to vest the Medbury property in him, rather than to achieve this by the agreement in the consent memorandum. However, I accept the defendants’ submissions that it is unrealistic to expect the LCRO to explore every hypothetical piece of advice that might have been given in the circumstances. Whether this was a realistic option would depend on the factual circumstances faced by Mr Burgess. That is not an aspect of the decision which is amenable to review.
[68] Indeed, I consider that the real substance of all the complaints raised by Mr Burgess about the first LCRO’s decision relates to the LCRO’s findings of fact, but such challenges are not properly the subject of judicial review. Despite recent developments in the scope of judicial review, the Courts still make it clear that there is a distinction between scrutiny of the decision-making process on judicial review and an appeal on the merits of the decision reached. The conventional expression of
that distinction is, as stated by Richardson J, that: 22
Judicial review is concerned not with the decision but with the decision- making process.
That distinction has been reiterated by the Courts on numerous occasions since. For example, French J said recently:23
... contrary to popular belief, judicial review is not an appeal. It is not about the Court considering information afresh and coming to its own views.
[69] Both in respect of the advice given on the consent memorandum itself, and during the wider retainer, I am satisfied that Mr Burgess is really seeking to review the merits of the decision reached by the LCRO. He is not able to establish that it was reached based on a misunderstanding of the applicable legal test as to a lawyer ’s obligation to give advice.
[70] My views are reinforced by the fact that the LCRO is a body with specialist expertise in that area. In such cases the Courts have noted that:24
22 Fraser v State Services Commission [1984] 1 NZLR 116 (CA) at 127.
23 Aorangi School Board of Trustees v Ministry of Education [2010] NZAR 132 (HC) at [8].
24 Beavan v Institute of Chartered Accountants of New Zealand HC Wellington CP 270/00,
27 September 2001 at [41] per Fisher J.
Great weight is to be accorded to the expert opinions of professional disciplinary bodies.
[71] I am satisfied the LCRO proceeded on a correct understanding of the lawyer’s duty to advise. He considered that advice in the factual context in which the advice was given, including that Mr Burgess’s entitlement to the relationship property had largely been determined by the previous Court decisions. The lawyer was therefore limited to advising on, and pursuing appeals (some of which were pursued on Mr Burgess’s instructions and in contradiction to Mr Tait’s advice), and to interim arrangements to stave off an imminent mortgagee sale. Such judgments are squarely within the LCRO’s area of expertise and I see no basis for the Court to intervene in his decision on that issue.
Did the LCRO fail to adequately inquire into the extent of the advice given by
Malley & Co?
[72] The gist of Mr Burgess’s complaint under this heading is that the LCRO failed to obtain evidence about the advice given, and should have used his powers under s 151(2) or s 207 of the Lawyers and Conveyancers Act 2006 to require Mr Tait to provide details of the advice.
[73] This ground of review must fail at the first hurdle. It is clear, from the LCRO files, and from the decision itself, that the LCRO had before him a considerable amount of evidence and submissions.25 Furthermore, the hearing took place over two days. It began on 21 July 2011 and, because it was not completed in that time, resumed on 29 February 2012. The LCRO heard extensive evidence from both Mr Tait and Mr Burgess during those two days.
[74] While not all of Mr Tait’s files were available, that was because the files were in the Christchurch red zone, and in all likelihood they would never be available to Mr Tait.
[75] The LCRO was in the unenviable position of either delaying the hearing for an unknown timeframe in the unlikely event that in time Mr Tait’s files would be
recovered, or proceeding on the basis of the information which was available, which
25 At [55].
was clearly substantial, given the two days of hearing required to traverse it. His decision to proceed was clearly consistent with the purpose of the complaints and discipline framework in the Lawyers and Conveyancers Act 2006 to ensure complaints are “processed and resolved expeditiously”.26
[76] Furthermore, the LCRO explained why he declined to use the LCRO’s investigative powers to obtain evidence from Mr Tait’s files despite Mr Burgess’s request that he do so. Because Mr Tait’s files could not be retrieved, that would have been a futile exercise and the best evidence available was Mr Tait’s evidence. The LCRO’s view was that “Natural justice dictates that the review should proceed with the information and evidence available”. That conclusion was well within the scope of the LCRO’s discretion and, indeed, ensured compliance with the requirements of s 200 of the Lawyers and Conveyancers Act 2006. There is no reviewable error, on this count.
Did the LCRO err in law in his understanding of the duties of lawyers when deducting fees from the trust account, and was the finding that no sanction should be imposed for this action unreasonable?
[77] A further complaint by Mr Burgess was that funds were deducted from Mr Burgess’s trust account without authority. The payments concerned were to Ms Beaven of funds held in the trust account and which were required to be paid to her in terms of the consent memorandum, and the payment of two bills as invoiced by Malley & Co.
[78] The Standards Committee found that the payment of $36,250 plus interest to the lawyers for Ms Beaven was authorised by the agreement between the parties. However, it found that Mr Burgess had not given his authority for the deduction of Malley & Co’s fees from the trust account. Nevertheless, because when Mr Burgess complained about the deduction, the funds were credited back to the trust account and Mr Burgess paid the outstanding costs by cheque, the Committee decided to take
no further action on that aspect of the complaint.
26 Section 120(2)(b).
[79] On review, the LCRO confirmed the findings of the Standards Committee,27 although he noted that in relation to the deduction for fees, it was “arguable that the finding of unsatisfactory conduct against Mr Tait in this regard has been somewhat unfair”. However, he did not interfere with the Standards Committee’s view that this was unsatisfactory conduct. It is implicit therefore, that he accepted that funds should not be deducted from a trust account without prior authority so he correctly understood the law in that regard.
[80] The real nub of Mr Burgess’s complaint appears to be over the decision to take no further action on that aspect of the complaint, describing it as an “irrational conclusion”.
[81] The Lawyers and Conveyancers Act 2006 affords a wide discretion to a Standards Committee, and to the LCRO, in dealing with complaints. Under s 152, having both inquired into a complaint and conducted a hearing with regard to the complaint, the Standards Committee can make any one or more of the following determinations:
(a) it may refer the matter to the Disciplinary Tribunal;
(b)it can determine there has been unsatisfactory conduct on the part of the person complained about;
(c) it can determine to take no further action with regard to the complaint. The LCRO has the same powers by virtue of s 211(2).
[82] The ability to take no further action on a complaint can be exercised legitimately in a wide range of circumstances, including those which would justify taking no action under s 138(1) and (2). It is not confined to circumstances where
there is no basis for the complaint at all.
27 See [147].
[83] The LCRO reviewed the Standards Committee decision on both categories of deduction. He has made an observation that the finding of unsatisfactory conduct in relation to the deduction of fees was harsh in light of the fact that it appears to have been actioned by another person within the firm. Nevertheless he has noted that Mr Tait “accepted responsibility for this conduct” and has determined not to interfere with the Standards Committee’s findings. Similarly, he considered, and accepted, the Standards Committee’s finding that the deduction to Ms Beaven was authorised by the consent memorandum, and so has reviewed this aspect of the complaint as well.
[84] In making these findings it is obvious that the LCRO has proceeded on a correct understanding of the legal position, which is that funds cannot be deducted from a trust account without direct authority. He has decided not to interfere with the Standards Committee’s finding that the fees’ deduction was without authority, and has considered the appropriateness of the Committee’s decision to take no further action. Matters which both the Standards Committee and, by implication, the LCRO have taken into account, include the lawyer’s acceptance of responsibility for the conduct, his rectification of the issue promptly at the time it occurred with Mr Burgess’s co-operation, and lack of loss or disadvantage to the person complaining.
[85] Mr Burgess is therefore incorrect that the LCRO failed to make a finding on both parts of the complaint and there is no basis for saying the decision is unreasonable or irrational.
Did the LCRO act unlawfully in issuing a section 161 certificate?
[86] When the LCRO issued its decision on the 2010 complaint, it also issued a certificate certifying that five listed bills of costs rendered by Malley & Co to Mr Burgess “are owed to Malley & Co by Mr Gary Burgess”. The certificate was signed by the LCRO who had issued the decision and the certificate expressly provided that it was issued “pursuant to s 161(2) of the Lawyers and Conveyancers Act”.
[87] Mr Burgess’s argument denying the validity of the certificate was two-fold. First he asserted that the certification process provided for in s 154(1) of the Law Practitioners Act 1982 was not carried over into the 2006 Act and therefore there was “no statutory basis for a separate certificate of a sum payable since the
2006 Act came into force”.
[88] However, that flies in the face of the express language of s 161(2) which states:
Where a Standards Committee makes a final determination on a complaint made under s 132(2) it must certify the amount that is found by it to be due to or from the practitioner or former practitioner or incorporated firm or former incorporated firm in respect of the bill and under the determination.
[89] Mr Burgess’s response was that only a Standards Committee could issue a certificate and the statutory regime required a decision of the LCRO, not a certificate, because s 161(3) provides that:
The certificate of the Standards Committee or, as the case may be, the decision of the Legal Complaints Review Officer on a review is final and conclusive as to the amount due.
[90] However, that is to overlook the provision of s 211(1)(b), which states that a Legal Complaints Review Officer is able, on review, to “exercise any of the powers that could have been exercised by the Standards Committee in the proceedings in which the decision was made or the powers were exercised or could have been exercised”.
[91] Mr Burgess argued that this was a case where the express language of s 161(3) overrides the general language of s 211(1)(b). I do not agree. Section 161(3) merely envisages that, normally, the certificate would have been issued by the Standards Committee, but where the Standards Committee’s decision was reviewed and upheld, it may be the LCRO decision which is relied on to confirm the validity of the certificate.
[92] In this case, no certificate was issued by the Standards Committee before Mr Burgess sought a review of the decision. It was expedient therefore, when the LCRO confirmed the Standards Committee decision, that it also issued a certificate
so Malley & Co had a certificate it could rely on confirming the reasonableness of the fees.
[93] The second limb of Mr Burgess’s argument was that the certificate must relate to amounts actually “owing” and, as some of the fees listed in the certificate had been paid, the certificate was erroneous in law and “invalid”.
[94] However, a Standards Committee or the Legal Complaints Review Officer can deal with any complaint about a bill of costs, whether it has been paid or not.28
It is clear from the Standards Committee’s decision and the LCRO decision, that Mr Burgess was challenging the reasonableness of all the costs he had incurred, even though some bills had already been paid. Indeed, it is clear from the District Court proceedings that Mr Burgess considers the totality of the legal expenses he incurred with Malley & Co were wasted fees which should be refunded in full.
[95] The certificate issued under s 161 confirms that the totality of the costs charged for the relationship property proceedings was reasonable, and therefore payable, subject of course to any defences raised by Mr Burgess other than the reasonableness of the fee.29 This was necessary because Mr Burgess had questioned the reasonableness of all the fees, including those he had already paid.
[96] Any risk of double recovery by Malley & Co by suing for the full amount certified by the LCRO, when some of it has been paid, is clearly precluded by the common law principle preventing double recovery.
[97] Accordingly the LCRO did not commit a reviewable error when it issued a s 161 certificate for Malley & Co’s fees.
28 Lawyers and Conveyancers Act, s 132(2).
29 Wynn Williams v Kain [2011] 3 NZLR 709 (HC).
Issue arising out of the second LCRO decision
Did the LCRO err in law when she decided that Mr Burgess’s lawyer was not acting in a conflict of interest when he certified the s 42 notice of claim in the name of Ms Beaven?
[98] The second LCRO decision related solely to Mr Burgess’s complaint that his lawyer acted in breach of his professional obligations when he certified as “correct” a notice of claim by Ms Beaven against the Medbury Road property of which Mr Burgess was to be the registered proprietor. Mr Burgess argued that this demonstrated Mr Tait was acting when an undisclosed conflict of interest existed, and this tainted all his subsequent advice to Mr Burgess.
[99] The circumstances in which the notice of claim was filed arose from terms the consent memorandum dated 9 September 2008, agreed to by Mr Burgess and Ms Beaven. It included the following proposed orders:
Pending the determination of the current appeal and full satisfaction of her entitlements regarding the property and litigation about it, Ms Beaven is entitled file [sic] a Notice of Claim or caveat against the title to
563 Medbury Road, Hawarden, provided that the TSB loan shall be registered prior to the registration of the notice of claim or caveat in favour of Susan Beaven ...
When all of Ms Beaven’s interests in the property has been satisfied by payment of the amount due under the judgment and under appeal and by payment of all awards of costs, she shall withdraw the notice of claim/caveat.
[100] As the LCRO decision records, Mr Burgess obtained the benefit of the agreement in that he was able to refinance, thus avoiding a mortgagee sale of the Medbury property proceeding at that point and Ms Beaven’s notice of claim was registered, protecting her entitlement to payment due under a judgment in her favour. However, the notice of claim was subsequently discharged because Mr Burgess was unable to service the refinanced loan and the TSB bank proceeded with a mortgagee sale of the property.
[101] Mr Tait certified the notice of claim pursuant to s 42 of the Property
(Relationships) Act 1976, at the specific request, and with the authority, of
Ms Beaven’s counsel, and for LINZ purposes only.30 Mr Tait’s position was that this was a procedural step in the interests of his client so that the property could be transferred to his sole name pursuant to the consent memorandum.
[102] Mr Burgess’s view is that, even though it was agreed that Ms Beaven could lodge a notice of claim to protect her interest, Mr Tait was not entitled to certify the document on her behalf, as to do so undermined Mr Tait’s loyalty to Mr Burgess and he was, in effect, acting for Ms Beaven.
[103] Furthermore, when he certified that he was the lawyer for Ms Beaven “he was not her lawyer and apparently had no contact with her, thereby falsely and fraudulently certified and registered the instrument”.31
[104] The LCRO reviewed the factual circumstances and came to the following conclusions:32
It is unclear on the papers why Mr Tait signed the document, rather than a representative from Ms Beaven’s solicitors. It is also unfortunate that the Malley & Co file in relation to this matter is unavailable, having not been able to retrieve it from their previous offices in the red zone.
However, it appears that Mr Tait, when he signed the form had authority to do so on behalf of Ms Beaven. It may be possible to argue that at that point, when he was signing the document, Mr Tait was acting on behalf of Ms Beaven and Mr Burgess. However, this argument faces some obstacles.
(a) Firstly, Mr Burgess has admitted in correspondence that Mr Tait had never met Ms Beaven, received any instructions from her, or issued any engagement documents. It seems unlikely therefore that Ms Beaven was ever his client.
(b) Secondly, the address for service for Ms Beaven is not recorded on the notice of claim as the offices of Dawson Innes, lawyers in Christchurch. This clearly indicates that Dawson Innes were acting on behalf of Ms Beaven.
(c) Thirdly, there is evidence that Mr Tait was acting as an agent when he signed the disputed document. Thus the LCRO concludes that Mr Tait was not acting for Ms Beaven. However, the LCRO then goes on to consider whether a conflict arises, in breach of r 6.1 of the Lawyers: Conduct and Client Care Rules 2008, if he was acting for Ms Beaven when certifying a notice of claim as correct.
30 LCRO 143/2012 decision, at [15].
31 See application for review of decision of Standards Committee dated 2 July 2012.
32 At [39]-[40].
[105] In the circumstances the LCRO concludes “that there was less than a negligible risk that Mr Tait may have been unable to discharge the obligations owed to Mr Burgess and Ms Beaven ...”, his motive for signing the document was to achieve the best result for Mr Burgess although she endorsed the Standards Committee’s view that “signing the document may not, in retrospect, have been prudent bearing in mind the contentious nature of the situation involving Mr Burgess and Ms Beaven.
[106] In determining whether the LCRO’s conclusions were correct in law, it is necessary to go back to the provisions of the Land Transfer Ac 1952. Certification of instruments is provided for by s 164. It provides that:
No Registrar shall receive any application for bringing land under this Act, or any instrument purporting to deal with or affect any estate of interest under the provisions hereof, unless there is endorsed thereon a certificate that the same is correct for the purposes of the Act, signed by the applicant or party claiming under or in respect of the instrument, or by a practitioner employed by that applicant or party: ...
[107] Section 164A then requires that all instruments to which it applies must contain a certification that complies with subsection (3), which relevantly states that:33
Certifications must specify that-
(a) The person giving the certification has authority to act for the party specified in regulations in relation to that class of instrument and that party has legal capacity to give such authority. The Land Transfer Regulations 2002 require that in the case of a notice of claim pursuant to s 42(3) of the Property (Relationships) Act 1976, a certification must be given on behalf of the claimant.
[108] The certification must state, inter alia:34
I certify that I have authority to act for [insert description of the appropriate party from the third column of the table in regulation 11] and that the party has the legal capacity to authorise me to lodge this instrument.
[109] The purpose of certification was described by the High Court in Burmeister v
O’Brien,35 in the following terms:36
33 Land Transfer Regulations 2002, r 11.
34 Regulation 12.
Certification can be seen as a critical aspect of the indefeasibility of title created by registration. Any errors in the documents, once registered are generally beyond correction. The Registrar, who effectively guarantees the correctness of the registration, relies on the certificates. The purpose of certification is, therefore, to provide the Registrar with some assurance that the instrument has been properly completed and is valid. It is not a certification that is expressed to be to the client, and it is not for the benefit of the client. It is for the Registrar.
[110] In the Burmeister case, Asher J was faced with the situation where, among other things, a solicitor who had acted for a party which had fraudulently obtained title to the Burmeisters’ property had certified as correct the Burmeisters’ discharge of mortgage. The Burmeisters were therefore suing a number of parties, including the solicitor, for negligence, breach of fiduciary duty and conflict of interest between the Burmeisters’ interests and those of the defrauding parties.
[111] While the solicitor’s role was not limited to certifying the discharge of
mortgage document, in relation to that action, Asher J concluded that:37
It is necessary to consider first who Mr Henley-Smith was directly acting for. He was not directly acting for the Burmeisters. They had not instructed him, they had never heard of him, and although he became aware of them when he received the blank transfer, he had never spoken to them or communicated to them in any way. Thus, in no ordinary sense could he be said to have been instructed by them or to be acting for them.
[112] He then concluded:38
I conclude that the signing of the certificates in itself did not create a duty of care to the Burmeisters and while the signing of the discharge of mortgage correct, on behalf of the Burmeisters, when not acting for the Burmeisters, can be criticised on a professional conduct basis, this does not create proximity. The discharge was not signed for [sic – or ?] certified for the Burmeisters.
[113] From this, I consider there are two possible interpretations of the certification. The first is that, by certifying, the solicitor in fact “has authority to act for the party specified”, and is so acting. That would be the usual position. However, as in the Burmeister case, and as the Standards Committee and the LCRO
have concluded in this case, that is not the position, so the wording of the
35 Burmeister v O’Brien [2010] 2 NZLR 395 (HC).
36 At [209].
37 At [214].
38 At [213].
certification is incorrect. The solicitor does not have authority to act for that party and is not acting for them.
[114] Where it falls into the latter category then, as Asher J noted, the actions “can be criticised on a professional conduct basis”. This, presumably, is because the statement is false. The solicitor is not acting for the party and cannot fulfil the obligations identified in the following extract from Registrar-General of Land v Marshall:39
The certificate of correctness probably is a guarantee that the Registrar may accept an instrument at its face value, i.e. that the person signing the certificate is aware of the antecedent circumstances which culminated in the execution of the instrument ... The Registrar only sees what actually appears in the instrument, hence it would seem necessary to have the dealing vouched for. In other words, the Registrar places a trust in the solicitor or broker, and when a person certifies an instrument, only reasonably close contact with the facts which culminate in the execution of that instrument would appear to discharge that trust.
[115] Returning, then, to Mr Burgess’s complaint, it focused solely on Mr Tait being in a situation where he had an undisclosed conflict of interest because he “acted for my ex wife while under retainer for me” and that this “has had the effect of perverting the course of justice”.
[116] While the reasoning in the LCRO’s decision is somewhat opaque, there is evidence in this case which is similar to the evidence available in the Burmeister case, on which it was possible to conclude that, despite the wording of the certification, the lawyer was not acting for the party he certified for. This is a factual finding and one which is not amenable to being set aside on review.
[117] The LCRO directed herself to the relevant provisions on conflict of interest but was satisfied, on the facts, that the certification given did not reflect reality and no conflict existed.
[118] That said, from a professional conduct stand point, Mr Tait’s actions could well be criticised. He certified as to a position which, on the facts, does not appear
39 Registrar-General of Land v Marshall [1995] 2 NZLR 189, (1995) 3 NZ ConvC 192,062.
to be correct and he did not disclose to his client that he had done this. However, that issue is beyond the scope of this application for review.
[119] Accordingly, the LCRO’s finding on the allegation of conflict of interest was not a reviewable error of law.
Conclusion
[120] Mr Burgess’s application for review has been unsuccessful on all grounds.
[121] There is, however, a live appeal of the District Court decision not to enter judgment on the counterclaim. There is also the prospect that this decision could be appealed.
[122] I am loathe to make directions in respect of the substantive claim and counterclaim proceedings which have been transferred to this Court, unless there is a realistic prospect that there are no further appeals or procedural issues to deal with.
[123] Accordingly, I direct Mr Burgess to file and serve memoranda relating to these proceedings (CIV-2013-409-1385) and the appeal proceedings (CIV-2013-409-1575) by 24 October 2014 advising:
(a) whether this decision is to be appealed;
(b)whether he wishes to continue with his appeal of the decision to refuse default judgment;
(c) whether, if either of these options is to be exercised there is any utility in issues timetabling directions to progress the substantive claim and counterclaim in this Court.
[124] The defendant is to file and serve a memorandum by 31 October 2014 responding to the matters covered in the plaintiff ’s memorandum and also advising whether its cross-appeal of the decision to decline summary judgment is still being pursued.
[125] A telephone conference is to be convened in the first week of November to make appropriate directions in the appeal proceedings.
[126] Costs are reserved. My provisional view is that Malley & Co are entitled to
2B costs. If costs cannot be agreed, submissions should be filed and served in the same timeframes as directed for the exchange of memoranda. Submissions shall be no more than three pages.
Solicitors:
Parker Cowan, Queenstown
Clark Boyce, Christchurch
2
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