Deliu v National Standards Committee 1 of the New Zealand Law Society
[2021] NZHC 1177
•25 May 2021
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2020-404-1438
[2021] NZHC 1177
BETWEEN FRANCISC CATALIN DELIU
Applicant
AND
NATIONAL STANDARDS COMMITTEE 1 OF THE NEW ZEALAND LAW SOCIETY
Respondent
Hearing: 10 March 2021 Appearances:
Applicant in person (via VMR)
M J Hodge and A-R C Davies for Respondent
Judgment:
25 May 2021
JUDGMENT OF BREWER J
This judgment was delivered by me on 25 May 2021 at 4 pm pursuant to Rule 11.5 High Court Rules.
Registrar/Deputy Registrar
Solicitors:
Meredith Connell (Auckland) for Respondent
DELIU v NATIONAL STANDARDS COMMITTEE 1 OF THE NEW ZEALAND LAW SOCIETY [2021] NZHC 1177 [25 May 2021]
Introduction
[1] Mr Deliu is a former lawyer who practised in New Zealand as a barrister and solicitor of this Court. Mr Deliu is no longer resident in New Zealand.
[2] The Lawyers and Conveyancers Act 2006 (“the Act”) provides a regulatory regime for lawyers. The respondent is a Lawyers Standards Committee established by the New Zealand Law Society as part of its complaint service as required by the Act.1
[3]One of the respondent’s functions under the Act is:2
… to investigate of its own motion any act, omission, allegation, practice, or other matter that appears to indicate that there may have been misconduct or unsatisfactory conduct on the part of a practitioner or any other person who belongs to any of the classes of persons described in section 121:
[4] On 9 November 2017, the respondent resolved to commence an own motion investigation of Mr Deliu. The investigation continues. Procedurally, it is still in its earliest phase.
[5] Mr Deliu contends that the investigation has been going on for too long. He applies for judicial review of the respondent’s decision to continue the investigation, pleading that the investigation breaches his right to natural justice (in five respects),3 that there is no jurisdiction for the investigation in one of the areas investigated, that there has been a failure to take into account relevant considerations (privilege), and that no practical purpose can be achieved by the investigation.
[6]The remedies sought by Mr Deliu (who represents himself) are:
i.A judgment for the plaintiff;
ii.An order in the form of certiorari quashing the defendant’s investigation;
1 The Lawyers and Conveyancers Act 2006, s 126(1).
2 Section 130(c).
3 Section 142(1) of the Act requires a Standards Committee to exercise its duties, powers and functions in a way that is consistent with the rules of natural justice.
iii.A declaration (in accordance with the opinion of this Honourable Court) that the defendant breached the plaintiff’s human right to due process;
iv.A direction that the defendant enter a § 138 no further action determination in the file in question;
v.A permanent injunction enjoining the defendant from further action against the plaintiff over any matters;
vi.Costs; and/or
vii.Such other relief as deemed fit.
[7] The respondent abides the Court’s decision. The New Zealand Law Society has been appointed to act as contradictor.
[8] At the hearing before me it was accepted by Mr Deliu and by Mr Hodge for the contradictor that the two key grounds for judicial review are breach of natural justice through delay and lack of jurisdiction. I will consider them first.
Delay (the first cause of action)
[9] Excessive delay by a regulatory body in carrying out an investigation can result in a court staying the investigation or otherwise bringing it to an end. The focus of the inquiry is usually the degree of prejudice the delay has caused to the person being investigated. At some point, prejudice can be presumed from the length of the delay.
[10] The regime of the Act is relevant. First, the contradictor accepts the respondent has an obligation to carry out own motion investigations expeditiously. There is no statutory requirement to do so, but s 140 of the Act, which applies to complaints by others, provides:
140 Inquiry by Standards Committee
If a Standards Committee decides to inquire into a complaint, it must inquire into it as soon as practicable.
[11] Mr Hodge accepts that no lesser standard can apply to own motion investigations.
[12] I agree. I think it relevant also that the first two purposes of the Act will be best served by expeditious investigations:
3 Purposes
(1)The purposes of this Act are—
(a)to maintain public confidence in the provision of legal services and conveyancing services:
(b)to protect the consumers of legal services and conveyancing services:
…
[13] I note that in Chow v The Canterbury District Law Society,4 the Court of Appeal reached a similar view when considering s 101 of the Law Practitioners Act 1982. That section required a complaint against a lawyer to be inquired into “as soon as practicable”. Mr Chow’s case was that after an inquiry into a complaint against him there was excessive delay in bringing a charge against him. There was no statutory requirement for a charge to be brought in a timely way. Nevertheless, the Court was satisfied that there was a statutory obligation to proceed promptly, “perhaps better captured in the notion ‘as soon as practicable’.”5
The history of the investigation
[14] The respondent decided to commence its own motion investigation on 9 November 2017 having received and considered two documents emanating from a Ms S. The first document was a statement Ms S provided to the New Zealand Police dated 17 October 2017. The second was her affidavit of 1 November 2017 filed in a disciplinary proceeding brought against Ms S by the respondent.
[15] At the same time, the respondent commenced an own motion investigation into Mr Richard Zhao and Richard Zhao Lawyers Ltd (which traded as Amicus Law).
[16] The allegations by Ms S against Mr Deliu overlapped her allegations against Mr Zhao and the company.
4 Chow v The Canterbury District Law Society and The New Zealand Law Practitioners Disciplinary Tribunal [2006] NZAR 160 (CA).
5 At [28].
[17] On 15 November 2017 the respondent appointed Ms McMahon as investigator.
[18] Events thereafter are summarised from the respondent’s point of view by Mr Hodge in his submissions:
2.8Progress during the initial stage of the investigation was slowed by difficulties arising from the fact there were extant criminal and disciplinary proceedings against [Ms S].6 The Committee reasonably considered that it needed to obtain a statement from [Ms S] that was provided for the express purpose of the Committee’s own motion inquiries rather than relying solely on (or disclosing at that stage) evidence provided by [Ms S] in criminal proceedings and separate disciplinary proceedings.
2.9[Ms S’s] focus, perhaps understandably, was on her criminal and disciplinary proceedings rather than on the Committee’s own motion inquiry in relation to the applicant. Following the disposal of [Ms S’s] criminal and disciplinary proceedings, Ms McMahon was finally able to obtain a statement from [Ms S] provided for the purpose of the Committee’s own motion inquiries. This was on 10 August 2018.
2.10The applicant had made objections to Ms McMahon’s appointment as investigator. These objections were rejected by the Committee. However, on 24 August 2018 Ms McMahon’s appointment was revoked. The Committee considered it was necessary to do so because Ms McMahon had been appointed as a member of the Lawyers and Conveyancers Disciplinary Tribunal.
2.11The need to revoke Ms McMahon’s appointment, and its timing, was unfortunate. Ms McMahon’s investigation was underway. She had previously provided an interim report and had just been able to obtain a statement from [Ms S] for the purpose of the Committee’s own motion inquiries. It was at this point, when the investigation could move forward with a statement obtained from [Ms S], that the Committee lost the benefit of Ms McMahon’s services and her knowledge of the matter and had to appoint a new investigator.
2.12A Law Society employee, Philip Strang, was appointed as the new investigator on 24 August 2018.
2.13Mr Strang commenced his investigation and provided an interim report to the Committee on 25 March 2019. This report addressed a number of matters as required in the Committee’s instrument of appointment, including:
(a)Allegations in relation to:
(i)unauthorised billing;
6 [Ms S] was convicted and discharged on 26 January 2018. The District Court made a name suppression order in [Ms S’s] favour. The Lawyers and Conveyancers Tribunal released its penalty decision in respect of [Ms S] on 8 May 2018.
(ii)taking fees by deduction;
(iii)failing to account to clients.
(b)The applicant’s association with Amicus Law.
(c)Administration and management of Amicus Law.
(d)Inquiries made of the Registrar-General of Land.
2.14Mr Strang’s interim report also noted areas he was having difficulty with or had otherwise not been able to substantially progress.
2.15On 6 March 2019 the applicant raised what he termed “ultra vires” issues with the “whole enquiry”. Correspondence between the applicant and the Complaints Service on behalf of the Committee followed on that and other issues raised by the applicant in April and June 2019.
2.16In August and September 2019 the Committee decided that it was necessary to appoint another investigator to work together with Mr Strang to address outstanding matters in the investigation and that the scope of the investigation could be narrowed down to three areas in light of the matters already reported on by Mr Strang to that point.
2.17The first area for further investigation was the applicant’s association with Amicus Law between March 2012 and June 2017 and in particular whether they had breached rules prohibiting the applicant, as a barrister sole, from:
(a)practising in partnership or in an incorporated firm;
(b)inducing other persons to suppose there was a connection between the applicant and any other legal practice;
(c)having an arrangement that restricts the freedom of a solicitor to select such counsel as the solicitor or their client selects.
2.18The second area for further investigation focused on the applicant’s representation of employees/staff members between August 2016 and June 2017 ([Ms S] and Orison Wu in particular). The third area related to whether the applicant had practised while suspended between 1 February 2017 and 30 June 2017.
2.19Jack Cheng was appointed by the Committee to work with Mr Strang to complete the investigation on the three areas referred to in paragraphs 2.17 and 2.18 above. Instruments of appointment were issued to Mr Cheng and Mr Strang reflecting this narrower scope of inquiry.
2.20The Committee advised the applicant of Mr Cheng’s appointment as investigator on 9 April 2020.
2.21On 20 June 2020, the applicant raised an objection to the appointment of Mr Cheng.
2.22The Committee sought a response from Mr Cheng, which was received by the Committee on 6 August 2020. The Committee sought the applicant’s response to Mr Cheng’s response on 14 September 2020.
2.23On 19 November 2020, taking into account all the information provided by Mr Cheng and the applicant, the Committee decided to revoke the appointment of Mr Cheng.
2.24Ms Robertson QC agreed to be appointed as investigator in place of Mr Cheng and has been appointed accordingly. The scope of the investigation for Ms Robertson and Mr Strang remains the three areas referred to in paragraphs 2.17 and 2.18 above. The Court will note that the letter sent on behalf of the Committee to Ms Robertson dated 19 November 2020 states as follows:
This file has been open for some time and so your timely attention to this matter would be greatly appreciated. The Standards Committee has signalled to the parties that it expects to receive the investigators’ final report within a matter of months.
2.25It is to be expected that Ms Robertson understands this imperative and will proceed accordingly.
[19] At the hearing before me, Mr Hodge was not able to say whether Ms Robertson has made any progress with the investigation, nor what her intentions are. There is no affidavit from Ms Robertson.
The nature of the allegations
[20] It is necessary to consider the nature of the allegations against Mr Deliu. At the risk of over-simplifying the law, serious and complex allegations will justify a longer investigation than minor and simple allegations. For example, Kós J (as he then was), in Bates v Valuers Registration Board,7 stayed a charge because of undue delay partly on his assessment that the complaint “was not a difficult complaint to evaluate”8 and it “concerned a relatively minor conduct matter”.9
[21] Ms S was employed by Amicus Law in 2014 at a time when, she says, Mr Richard Zhao and Mr Deliu were partners in the firm. Her statement of 17 October
7 Bates v Valuers Registration Board [2015] NZHC 1312, [2015] NZAR 1080.
8 At [84].
9 At [86].
2017 and affidavit of 1 November 2017 made allegations which caused the respondent to require Ms McMahon to inquire into and report upon the following issues:
Client care
5.In respect of the professional duties owed to clients by Mr Zhao, Amicus Law and Mr Deliu, whether there is any evidence of any conduct and/or client care issues concerning whether they may have:
a.Any practice (past or present) of acting for clients in conflict of interest situations10, including but not necessarily limited to in respect of criminal, civil, property conveyancing, employment, family and immigration matters.
b.Any practice (past or present) of charging clients more than a fair and reasonable fee for the services provided11.
c.Inappropriately invoiced clients in relation to monies held on trust.
d.Failed to account properly for money or other valuable property to the person on whose behalf the money or other valuable property is held12.
e.Threatened or exerted undue pressure on clients:
i.to pay unpaid fees which are disputed by such clients;
ii.not to terminate a retainer or to reengage them after termination of the retainer13; and/or
iii.not to complain to the New Zealand Law Society in relation to conduct and/or client care issues raised by such clients.
f.Failed to respond appropriately to any written request (by a former client) to uplift documents without undue delay subject only to any lien that they may claim14.
g.Entered into, or attempted to enter into, any inappropriate settlement agreements with clients in relation to conduct and/or client care issues raised by such clients.
10 Rules 5, 5.4 and 6.1 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (“the Rules”).
11 Rules 9 and 9.1 of the Rules.
12 Section 111 of the Act.
13 Rule 4.4 of the Rules.
14 Rule 4.4.1 of the Rules.
Administration and management of Amicus Law
6.In respect of the administration and management of Amicus Law, whether there is any evidence of any conduct and/or client care issues concerning whether Mr Zhao, Amicus Law and/or, if applicable, Mr Deliu may have:
a.Failed to ensure that the conduct of the Amicus Law practice and the conduct of employees is at all times competently supervised and managed15.
b.Threatened or exerted undue pressure on employees and/or fellow business partners/directors, including whether;
i.Mr Zhao and/or Mr Deliu may have threatened any such persons in relation to their intended cooperation with the New Zealand Police, the New Zealand Law Society and/or other such investigative/regulatory authorities.
ii.Mr Zhao and/or Mr Deliu may have interfered with the administration of justice by, for example, interfering with witnesses to matters being investigated by the New Zealand Police, the New Zealand Law Society and/or other such investigative/regulatory bodies.
c.Required staff or business partners to sign and send external correspondence which has not been authored by the signatory.
d.Acted unprofessionally or inappropriately in relation to the nature and manner in which they have employed staff (employees from overseas in particular) to work at Amicus Law.
e.Failed to comply with the Lawyers and Conveyancers Act (Trust Account) Regulations 2008 and associated statutory provisions in relation to the administration of the Amicus Law trust account, including in relation to the firm’s invoicing practices.
Mr Deliu’s association with Amicus Law
7.The NSC also requires you to inquire into and report upon any conduct and/or client care issues concerning whether there is any evidence of Mr Deliu having effectively acted as a director or principal of Amicus Law despite his professional status as a barrister sole16.
a.Is there any evidence of Mr Deliu having exercised control over the Amicus Law practice, including in relation to the conduct of client work, firm business decisions, and staff movements, control and supervision?
15 Rule 11.3 of the Rules.
16 Rules 14.2, 14.13 and 14.14 of the Rules. See too rr 11 and 11.1 of the Rules.
b.The NSC requires you to inquire into Mr Deliu’s financial/business connection with Amicus Law. In particular, does Amicus Law pay to Mr Deliu barrister’s fees in the usual manner that can be expected between a barrister sole and a firm of instructing solicitors or, rather, is there a financial/business connection between Amicus Law and Mr Deliu which is inconsistent with Mr Deliu’s professional status and obligations as a barrister sole?
c.Your inquiry into the issue outlined at paragraph 7.b. above may require you to access and review the Amicus Law trust account as well as Mr Deliu’s private account(s).17
Representation of [Ms S] and Xiaozhao Wu
8.With regard to the representation of [Ms S]18 and Xiaozhao (Orison) Wu19 in relation to:
a.the respective criminal charges faced by them20;
b.associated civil proceedings involving [Ms S]21; and
c.related professional conduct inquiries by the NSC22,
did Mr Zhao and/or Mr Deliu obtain and follow [Ms S’s] and/or Mr Wu’s instructions (as clients) on significant decisions in respect of the conduct of litigation and were any such instructions taken after Ms S and/or Mr Wu were informed by them of the nature of the decisions to be made and the consequences of them23?
9.Is there any evidence of acting in circumstances where there may have been a conflict of interest as a result of Mr Zhao, Amicus Law and Mr Deliu having acting for24:
a.[Ms S] and Mr Wu in the criminal proceedings New Zealand Police v [S] & Wu25; and/or
b.any of the three plaintiffs (including Mr Deliu) in the related civil proceedings A Solicitor, a Company and a Barrister v New Zealand Police26 (which appears to arise from the execution by the New Zealand Police in August 2016 of the search warrant at the premises of Amicus Law and Mr Deliu’s chambers).
17 Section 147(2)(vi) of the Act.
18 [Ms S] is a former director of Amicus Law.
19 Mr Wu is a Legal Executive at Amicus Law.
20 CRl-2016-004-8810: New Zealand Police v [Ms S] & Xiaozhao Wu.
21 CIV-2016-404-2150: A Solicitor, a Company, and a Barrister v New Zealand Police.
22 Presently comprising complaint file 15031 (So v [S]); own motion investigation file 15009 ([S]); and own motion investigation file 16737 (Wu).
23 Rule 13.3 of the Rules.
24 Letter from Meredith Connell to Mr Deliu dated 20 October 2016.
25 CRI-2016-004-8810.
26 CIV-2016-404-2150.
Conduct during terms of suspension from practice
10.Is there any evidence of Mr Zhao and/or Mr Deliu practising as lawyers during the terms of their respective suspensions from practice?
[22] The respondent instructed Ms McMahon to interview Ms S and other relevant current or former staff members at Amicus Law.
[23] On 22 February 2018, Ms McMahon filed an interim investigation report with the respondent. It recorded a meeting she had with Ms S on 18 December 2017 which lasted about two hours. Ms McMahon expressed the “Interim Concerns” arising out of this meeting as follows:
Overcharging
[Ms S] refers to overcharging in paragraphs 3.10 to 3.16 of her statement. [Ms S] specifically refers to a process of providing high fees on simple title enquiries and Companies Office searches. [Ms S] attached to her statement a WeChat screen shot of a dialogue with a client about this (attachment “A”).
Recommended Action
A copy of the client’s file, terms of engagement, a copy of fee rendered and trust account printout for the client’s trust be sought from Amicus Law.
Stale balances in the trust account & payment arrangements for initial consultations
[Ms S] refers in paragraphs 3.15 and 3.16 to stale balances in the trust account. She says that she was under pressure to bill them which she refused to do. [Ms S] also says that initial consultations were charged on a flat fee basis without terms of engagement and invoices were not rendered with payments being made into a separate bank account using a separate eft-pos system
Recommended Action
The Inspectorate is advised of the allegations along with a request to conduct an audit.
Practising while Suspended
[Ms S] refers in paragraph 3.24 to Richard and Frank continuing to practice during periods of suspension. [Ms S] says that Frank would go into the office each day and discuss the cases with the junior litigators.
Recommended Action
That I am provided by the Law Society of the names of the junior litigators at that time and I arrange to contact them to discuss this allegation. I propose to
discuss this with Orison Wu as according to [Ms S], he has access to the diaries of Frank and Richard.
LINZ
[Ms S] refers to LINZ and edealings in clause 7.8 of her statement.
[Ms S] says that the firm does not retain original copies of A&I forms or a register of such forms.
Recommended Action
LINZ be advised of the alleged failure to keep original A&I forms and be requested to conduct an audit on the way in which LINZ is being managed by the firm and in particular to investigate whether original A&I forms are kept by the firm in a separate register as required.
Threats
[Ms S] refers to an incident involving Ms Eva Ho in clause 11.3. [Ms S] provided further information relating to an alleged agreement reached with Ms Ho.
Recommended Action
I contact Ms Eva Ho to find out further details of the settlement agreement.
[24] On 24 August 2018, the respondent terminated Ms McMahon’s appointment as investigator because of her appointment to the Disciplinary Tribunal. On the same day it appointed Mr Philip Strang as investigator.
[25] Mr Strang’s terms of appointment were conveyed to him by the respondent in a letter dated 19 September 2018. He was required to inquire into and report upon the same issues as was Ms McMahon. His requirements are in the same words as Ms McMahon’s.
[26]Mr Strang’s instructions differed from Ms McMahon’s in that he was to:
a.Report to the NSC on:
i.the ‘2 EFTPOS systems’ allegations, outlined at paragraph
2.16 of [Ms S’s] written statement to the NSC dated 10 August 2018;
ii.the overcharging of client allegations, and related non- complaint agreements with clients allegations, outlined at paragraphs 2.5 to 2.11 of [Ms S’s] written statement;
iii.the billing dormant balances held in the Amicus Law trust account allegations, outlined at paragraphs 2.5 to 2.11 of [Ms S’s] written statement;
iv.the conflict of interest allegations, outlined at paragraphs 2.12 to 2.15 of [Ms S’s] written statement;
v.the ‘Mr Deliu was the boss and ran Amicus Law’ (even though Mr Deliu was a barrister sole) allegations, outlined in [Ms S’s] written statement; and
vi.the practising while suspended allegations, outlined at paragraphs 2.16 to 2.19 of [Ms S’s] written statement.
b.Make contact with and seek to interview current or former staff members at Amicus law, such as Orison Wu, Ein Lai (Jeremy) Khoo and Yiqi (Peter) Liu, in relation to the matters outlined at paragraphs
2. to 11. above.
c.Facilitate signed written statements (ideally in the form of sworn affidavits) from all interviewees.
d.Report to the NSC in writing once the above has been carried out and await further instructions from the NSC.
[27] Mr Strang filed his interim investigation report on 25 March 2019. In it he set out the work he had performed:
I have visited the premises of Amicus Law twice. Amicus Law has cooperated and provided indirect access to its trust account records. Mr Zhao has declined to meet with me and Mr Deliu is not resident in New Zealand so they have not had any opportunity to answer the issues I traverse.
I have also been assisted by another Inspector, Jessie Lowe. Ms Lowe completed a number of file reviews from a sample selected by me. I have extracted the relevant bank accounts operated by these persons and related entities and completed analysis of those. I have met with and interviewed a number of persons whilst in Auckland.
[28] The interim investigation report identified concerns about Mr Deliu’s role as a barrister and his relationship with Amicus Law:
It appears that there was no effective separation between the roles of Justitia [Mr Deliu’s Chambers] and Amicus Law in a large number of files.
[29] There is no allegation by Mr Strang of direct contravention by Mr Deliu of his professional obligations.
[30] On 8 April 2020, the respondent amended and replaced Mr Strang’s instrument of appointment. The accompanying letter from the respondent contained these paragraphs:
3.After NSC1 has received your next report, copies will likely be provided to Mr Zhao, Amicus Law and Mr Deliu and they will be invited to comment (see section 149 of the Lawyers and Conveyancers Act 2006).
4.Your timely attention to this matter would be appreciated. While mindful that you may not have capacity to take steps to progress this matter until May 2020, NSC1 has signalled to the parties that it expects to receive your final report within a matter of months.
[31] Mr Strang was now required to inquire into and report on the following:
a.Mr Deliu’s27 association with Richard Zhao Lawyers Ltd t/a Amicus Law28 between March 201229 and June 2017 inclusive30 and, in particular, whether the business/professional relationship between Mr Deliu/his chambers31 and Amicus Law contravened the professional rules prohibiting a lawyer who holds a practising certificate as a barrister sole (as Mr Deliu did at the relevant time), from32:
i.practising in partnership or in an incorporated law firm (unless the barrister sole is the only voting shareholder of the incorporated law firm)33; or
ii.alternatively, inducing persons to suppose that there is any connection between the barrister sole and any other legal practice34; and/or
iii.having an arrangement that restricts the complete freedom of a lawyer holding a practising certificate as a barrister and solicitor (as Mr Zhao did at the relevant time) to instruct any counsel the lawyer or the client selects35.
27 Mr Deliu does not hold a current practising certificate issued by the New Zealand Law Society. His previous status was as a barrister, and ‘Head of Chambers’, at Justitia Chambers Ltd. Refer to footnote 11.
28 Amicus Law is an incorporated law firm.
29 Richard Zhao Lawyers Ltd was incorporated on 2 March 2012.
30 See footnote 11.
31 Justitia Chambers Ltd.
32 If substantiated, NSC1 would then consider what, if any, issues of professional conduct this raises in relation to solicitor (and principal of Amicus Law) Mr Zhao. Consistent with the rules of natural justice, Mr Zhao would have the opportunity to provide submissions.
33 Rule 14.2(f) of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008.
34 Rule 14.13.
35 Rule 14.14.
b. The legal representation of employees/members of staff by Mr Deliu, Mr Zhao36 and/or Amicus Law between August 2016 and June 2017 inclusive.
c.Whether Mr Zhao and/or Mr Deliu practised as lawyers during the terms of their respective suspensions from legal practice37.
4. Further to paragraphs 2 and 3 above, your inquiries should address the matters outlined at paragraphs 5 to 8 below.
Mr Deliu’s association with Richard Zhao Lawyers Ltd t/a Amicus Law between March 2012 and June 2017 inclusive
5. NSC1 requires you to inquire into and report upon conduct and client care issues concerning whether there is any evidence of Mr Deliu having effectively acted as a director or principal of Amicus Law between March 2012 and June 2017 inclusive despite Mr Deliu’s professional status as a barrister sole38.
a.Is there any evidence of Mr Deliu having exercised control over the Amicus Law legal practice, including in relation to the conduct of client work, firm business decisions, and staff movements, control and supervision?
b.NSCl requires you to inquire into Mr Deliu’s financial/business connection with Amicus Law. In particular, has Amicus Law previously paid to Mr Deliu barrister’s fees in the usual manner that can be expected between a barrister sole and a firm of instructing solicitors or, rather, was there a financial/business connection between Amicus Law and Mr Deliu which is inconsistent with Mr Deliu’s then professional status and obligations as a barrister sole?
c.Your inquiry into the issue outlined at paragraph 5.b. above may require you to access and review the Amicus Law trust account as well as Mr Deliu’s private account(s)39.
The legal representation of employees/members of staff by Mr Deliu, Mr Zhao and/or Amicus Law between August 201640 and June 2017 inclusive
36 Mr Zhao is a solicitor and the sole director of Richard Zhao Lawyers Ltd, which trades as Amicus Law.
37 Mr Zhao was suspended from legal practice for 4 months, from 1 December 2016. Mr Deliu was suspended from legal practice for 15 months, from 1 February 2017. Mr Deliu did not obtain a practising certificate from the New Zealand Law Society for the 2017/18 practising certificate year commencing on 1 July 2017 and so your inquiry into Mr Deliu’s conduct should exclude Mr Deliu’s conduct following 1 July 2017 See Auckland Standards Committee No.2 v Burcher [2019] NZLCDT 12 at [4]-[7] (under appeal).
38 Rules 14.2, 14.13 and 14.14 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008. See too rr 11 and 11.1 of the Rules.
39 Section 147(2)(vi) of the Lawyers and Conveyancers Act 2006.
40 August or September 2016 being when NSC1 understands [Ms S] was first charged by the New Zealand Police and 31 August 2016 being the date of commencement of the related civil proceeding A Solicitor, a Company and a Barrister v New Zealand Police CIV-2016-404-2150.
6. With regard to the representation of [Ms S]41 and Xiaozhao (Orison) Wu42 in relation to:
a.the respective criminal charges faced by them43;
b.associated civil proceedings involving [Ms S] as a plaintiff44; and
c.related professional conduct inquiries by NSC145,
did Mr Deliu and/or Mr Zhao obtain and follow [Ms S’s] and/or Mr Wu’s instructions (as clients) on significant decisions in respect of the conduct of litigation; were any such instructions taken after [Ms S] and/or Mr Wu were informed by them of the nature of the decisions to be made and the consequences of them; and did Mr Deliu and/or Mr Zhao comply with their duties of disclosure and communication of information to clients46?
7. Is there any evidence of Mr Deliu, Mr Zhao and/or Amicus Law acting in circumstances where there may have been a lack of independent judgement and advice and/or conflicting interests or duties as a result of Mr Deliu, Mr Zhao and Amicus Law having acting for47:
a.[Ms S] and Mr Wu in the criminal proceedings New Zealand Police v
[S] & Wu48; and/or
b.any of the three plaintiffs (including Mr Deliu) in the related civil proceedings A Solicitor, a Company and a Barrister v New Zealand Police49 (which appears to arise from the execution by the New Zealand Police in August 2016 of the search warrant at the premises of Amicus Law and Mr Deliu’s chambers).
Whether Mr Zhao and/or Mr Deliu practised as lawyers during the terms of their respective suspensions from legal practice
8.Is there any evidence of Mr Zhao and/or Mr Deliu practising as lawyers during the terms of their respective suspensions from legal practice50?
General
9. Without limiting paragraphs 2. to 8. above, NSCl requires that you, as part of your inquiries:
41 [Ms S] is a former member of staff, and director, of Amicus Law.
42 Mr Wu is a Legal Executive at Amicus Law.
43 CRI-2016-004-8810: New Zealand Police v [Ms S] & Xiaozhao Wu.
44 CIV-2016-404-2150: A Solicitor, a Company and a Barrister v New Zealand Police.
45 Including: complaint file 15031 (So v [S]); own motion investigation file 15009 ([S]).
46 Rule 13.3 and Chapter 7 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008.
47 Refer letter from Meredith Connell to Mr Deliu dated 20 October 2016. See too Chapters 5, 6 and 13 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008.
48 CRI-2016-004-8810.
49 CIV-2016-404-2150.
50 Refer footnote 11 above.
a.make contact with and seek to interview current or former staff members of Amicus Law and/or Justitia Chambers such as [Ms S], Xiaozhao (Orison) Wu, Ein Lai (Jeremy) Khoo, Siao-Yen (Yen) Taylor, Patricia Finau and Han (Daniel) Zhang in relation to the matters outlined at paragraphs 2. to 8. above;
b.facilitate signed written statements (ideally in the form of sworn affidavits) from all interviewees; and
c.report to NSCl in writing once the above has been carried out and await further instructions from NSCl.
[32] Mr Cheng was appointed as investigator to assist Mr Strang on 8 April 2020 with an identical instrument of appointment.
[33] Mr Cheng’s appointment was revoked on 19 November 2020 following Mr Deliu’s objection to his appointment.
[34] Ms Robertson’s instrument of appointment is dated 19 November 2020. It is in the same terms as Mr Strang’s amended instrument of appointment dated 8 April 2020.
[35] The letter to Ms Robertson accompanying the instrument of appointment contains the following paragraph:
5.This file has been open for some time and so your timely attention to this matter would be greatly appreciated. The Standards Committee has signalled to the parties that it expects to receive the investigators’ final report within a matter of months.
Discussion
[36] The respondent’s investigation of Mr Deliu now focuses on whether he breached his professional obligations:
(a)By having an association with Amicus Law between March 2012 and June 2017 incompatible with his status as a barrister sole.51
(b)By representing employees/staff members between August 2016 and June 2017.
51 As summarised by Mr Hodge at 2.17 of his submissions, quoted above at [18].
(c) By practising while suspended between 1 February 2017 and 30 June 2017.
[37] Mr Hodge’s main submission in opposition to the application for stay on the ground of delay is that although he acknowledges there has been lengthy and unfortunate delay in completing the investigation, this is not such an exceptional case as to justify the granting of a stay. Mr Hodge cites Orlov v New Zealand Law Society52 where the Supreme Court observed that the High Court would “not normally permit judicial review proceedings to be heard ahead of statutory proceedings other than in exceptional cases”.53
[38] Orlov was an application for leave to appeal a Court of Appeal judgment in relation to procedural decisions of Standards Committees. The passage cited by Mr Hodge was in that context. There was no issue of delay.
[39] Mr Hodge also relies on A Lawyer v New Zealand Law Society54 where Thomas J dismissed an application for judicial review, finding as follows:
[117] There is a high bar for the availability of judicial review in preliminary decisions such as these. The Court of Appeal in Singh described such cases as “exceptional”. This is not such an exceptional case. Decision-making has not “gone seriously off the rails”. In the circumstances of this case, there is an insufficient basis for this Court to invoke its jurisdiction under the Judicial Review Procedure Act at this stage in the proceedings.
(footnotes omitted)
[40] A Lawyer concerned two complaints to the New Zealand Law Society about a lawyer which remained unresolved after almost four years. The lawyer sought judicial review of the Standards Committee’s decisions to inquire into, and appoint an investigator in relation to, the complaints. The lawyer also sought judicial review of decisions of the investigator. The issue for Thomas J was whether the decisions were amenable to judicial review.
52 Orlov v New Zealand Law Society [2013] NZSC 94.
53 At [6].
54 A Lawyer v New Zealand Law Society [2019] NZHC 1961.
[41] The passage cited by Mr Hodge was in this context. Breach of natural justice on account of excessive delay was not a matter raised in A Lawyer.
[42] It follows that I consider neither Orlov nor A Lawyer to be of assistance in this case.
[43] Mr Hodge submits also that this is not a case where inexplicably nothing has happened in the investigation. He points to the interim investigation reports which have been issued and submits that significant progress has been made resulting in the narrowing of the scope of the investigation.
[44] In Mr Hodge’s submission, Mr Deliu has not raised any specific prejudice which might assist him in his application.
[45] Mr Hodge also relies upon one of the purposes of the Act being to maintain public confidence in the provision of legal services. Mr Hodge concedes it appears unlikely Mr Deliu will return to New Zealand, but submits that cannot be said with certainty. The maintenance of public confidence in the provision of legal services calls for the inquiry to be completed.
[46] First, I note that no inference adverse to Mr Deliu can be drawn from the fact he is being investigated. All that can be said is that he is being investigated.
[47] Second, the areas of concern being investigated, while serious in terms of the professional obligations of a barrister sole, are not at the highest end of seriousness. It is not suspected, for example, that Mr Deliu defrauded a client, or anyone, of money.
[48] Third, Mr Deliu left New Zealand on 14 January 2018 and his practising certificate expired during the term of his suspension. He is not a practising lawyer seeking to end an investigation where the Act’s purposes of maintaining public conference in the provision of legal services and protecting the consumers of legal services are directly in issue.
[49] The final preliminary point, again going to the Act’s purposes of maintaining public conference in the provision of legal services and protecting the consumers of
legal services, is that this is an own motion investigation. There is no member of the public awaiting determination of their complaint.
[50] In my view, the delay in this investigation has been exceptional. Mr Deliu was entitled to have the respondent carry out its inquiry expeditiously, “perhaps better captured in the notion ‘as soon as practicable’.”55 The inquiry is now well into its fourth year. No end is yet in sight. No lawyer should be subjected to a disciplinary inquiry with such little outcome over such a period.
[51] I accept that Mr Deliu has not claimed relevant specific prejudice. He does not have hanging over him, as he would if still practising, the Sword of Damocles threatening that he might be struck off. But, he wants to get on with his life and there is stress in having to respond to and contest the investigation.
[52] In this regard, Mr Deliu, characteristically, has engaged aggressively with the respondent and repeatedly challenged aspects of the investigation. However, that has not added materially to the delay. It was for the respondent to deal with Mr Deliu’s challenges, not the investigators. One area of delay which did arise was Mr Deliu’s challenge to the appointment of Mr Cheng as an investigator. But he was successful in that.
[53] I accept that some progress has been made in the investigation and the issues have been narrowed. But, they are not complex issues. There is no suggestion they require, for example, the services of forensic accountants. All that was required was for competent people to seek out and interview those associated with Amicus Law who could report on its functioning, the role Mr Deliu played in representing employees/staff members, and his involvement with the firm from 1 February 2017 to 30 June 2017.
[54] As I have said, there is no end in sight. I have no information as to when the current investigators might produce their final report. The respondent, in its covering letter to Ms Robertson, acknowledged the need for “timely attention to this matter” and gave its expectation of receiving the investigators’ final report “within a matter of
55 See [13] above.
months”. That expectation was expressed on 19 November 2020. At the time of hearing no report had been prepared and Mr Hodge was unable to say when it might be expected.
[55] In deciding whether delay in investigation is so great as to warrant a stay there must be an evaluation of all the circumstances. To an extent, the issue is akin to the proverbial question of “how long is a piece of string?” The Court of Appeal in Chow said:
[37] … a judicial assessment of all relevant factors is required. The extent of, and the effects caused by, the non-compliance and the disciplinary context itself, are all highly relevant considerations, as is the nature and seriousness of the charges.
[56] In my assessment, the delay in this case has reached the point where a stay must be granted.
[57] I am not, however, prepared to make the stay unconditional. I am mindful of this passage in Chow:
[42] Finally, we regard the protective nature of the jurisdiction as highly significant, indeed necessarily decisive, in the circumstances of this case. In Auckland District Law Society v Leary HC AK M1471/84 12 November 1985 Hardie Boys J, after observing that a disciplinary charge was not a criminal prosecution, continued at 18 of the judgment:
(This) is a special jurisdiction having the principal protective purpose I have already discussed. That purpose requires that there should be a full investigation of allegations of misconduct, and that the Court should be slow to adopt a course which may inhibit such an investigation. The interests of justice extend far beyond the interests of the practitioner.
[58] Mr Deliu has been overseas since early 2018. He says he does not wish to return to New Zealand and he no longer has a practising certificate. Were he to return to New Zealand, and/or seek to regain a practising certificate, then the need to complete the investigation to maintain public confidence and protect consumers would be more acute. It might also be the case that the respondent might come into possession of information which materially changes the nature or seriousness of the matters being investigated. I will reserve leave to the respondent to apply to lift or vary the stay if such contingencies arise.
Lack of jurisdiction (the sixth cause of action)
[59]I will deal briefly with this ground of review.
[60] Mr Deliu was suspended from practice by order of the Disciplinary Tribunal from 1 February 2017 for 15 months. He deposited his practising certificate with the Law Society as was required by s 39(5) of the Act. Mr Deliu also says (and this is not contested) that his name was removed from the Register of Lawyers which the Law Society is required to maintain by reg 10 of the Lawyers and Conveyancers Act (Lawyers: Practice Rules) Regulations 2008.
[61] Mr Deliu’s submission is that because of the above, he was not a practising lawyer in the period 1 February 2017 to 30 June 2017 to which the investigation relates in part. He is not, therefore, subject to the disciplinary procedures in the Act for his actions during that period.
[62] I disagree. The Act applies, relevantly, to lawyers. The definition of lawyer is “a person who holds a current practising certificate as a barrister or as a barrister and solicitor”. The fact that a lawyer is suspended from practice does not change the currency of their practising certificate. Suspension simply means that the lawyer cannot use their practising certificate. I respectfully agree with Whata J:56
[47] … While it is true that a person who is suspended from practice must deposit his or her current practising certificate (if any) with the Law Society that issued the certificate, a suspended practitioner is not removed from the roll of barristers and solicitors. Self-evidently, therefore, suspension does not mean that the barrister no longer holds a practising certificate. It only means that he or she cannot practise pursuant to it. This interpretation also aligns with the clear protective purpose of the Act insofar as concerns the provision of legal services.
(Footnotes omitted)
[63] Entry of a lawyer on the Register of Lawyers prescribed by reg 10 is not a prerequisite for practice. The Register is for public information. If Mr Deliu’s name was removed from it because he was suspended from practice then that was an error. Regulation 10(3)(h) provides that the Register must show:
56 Burcher v Auckland Standards Committee 5 [2020] NZHC 43.
… whether the lawyer’s practising certificate is currently suspended and, if so, when the suspension took effect and when (if known) it will be lifted.
[64] This ground of review fails.
Remaining grounds of review
[65]None of the remaining grounds of review have merit:
(a) Second cause of action: breach of natural justice
28.The plaintiff repeats and repleads paragraphs 1 – 27 supra and further says that the defendant breached the plaintiff’s natural justice rights under§ 27(1) of the New Zealand Bill of Rights Act 1990 and/or § 142(1) of the Lawyers and Conveyancers Act 2006 by having an amorphous fishing expedition with sands that have shifted more than once a year and/or the plaintiff’s legitimate expectations as to the scope of enquiry.
The respondent was within its rights to commence the investigation. It was entitled to change the scope of the investigation as interim reports were received. Apart from delay, the process adopted by the respondent and its investigators cannot be criticised.
(b) Third cause of action: Breach of natural justice
29.The plaintiff repeats and repleads paragraphs 1 – 27 supra and further says that the defendant breached the plaintiff’s natural justice rights under§ 27(1) of the New Zealand Bill of Rights Act 1990 and/or § 142( 1) of the Lawyers and Conveyancers Act 2006 by conducting an investigation for almost three years and/or its statutory duty under§ 141(a) of the Lawyers and Conveyancers Act 2006 in not providing particulars of conduct in question or alternatively in providing particulars mixed with the conduct of others or in the alternative in constantly changing the particulars.
Nothing in the conduct of the investigation sustains these criticisms. The respondent focused the investigation and kept Mr Deliu informed of the instructions to the various investigators. Mr Deliu knew what was being investigated and why. The respondent was not required to do anything further.
(c) Fourth cause of action: Breach of natural justice
30.The plaintiff repeats and repleads paragraphs 1 – 27 supra and further says that the defendant breached the plaintiff’s natural justice rights under§ 27(1) of the New Zealand Bill of Rights Act 1990 and/or § 142( 1) of the Lawyers and Conveyancers Act 2006 by conducting an investigation in circumstances where the plaintiff is not able to defend himself adequately.
The respondent adhered to the statutory processes. No charges have been laid. Mr Deliu’s formal right to influence the investigation was not breached. There was nothing to defend.
(d) Fifth cause of action: Breach of natural justice
31.The plaintiff repeats and repleads paragraphs 1 – 27 supra and further says that the defendant breached the plaintiff’s natural justice rights under§ 27(1) of the New Zealand Bill of Rights Act 1990 in being his own personal committee.
This pleading essentially amounts to an allegation of bias on the part of the respondent. Mr Deliu complains that the respondent has been involved with investigating his professional standards on other matters for years.
There is no evidence of bias. The respondent was carrying out a statutory function.
(e) Seventh cause of action: Failure to take into account relevant considerations
33.The plaintiff repeats and repleads paragraphs 1 – 27 supra and further says that the defendant has failed to take into account relevant considerations that there is no r 8.4(g) Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 waiver from either [Ms S] or Xiaoxiao “Orison” Wu such that he cannot answer any allegations in relation to his representation of them and/or that practicing while suspended and/or perverting the course of justice are criminal offences over which he has the right against self-incrimination.
This pleading has no substance given that the respondent was merely carrying out an investigation. The investigation was still proceeding. The “relevant considerations” might have come into play if the investigators had delivered their final report and the respondent had conducted a hearing pursuant to s 152 of the Act.
(f) Eighth cause of action: Wednesbury (no practical purpose)
34.The plaintiff repeats and repleads paragraphs 1 – 27 supra and further says that the defendant has acted unreasonably in pursuing a pointless investigation.
The respondent was within its right to bring the investigation and to continue it. It is only the inordinate delay that breaches Mr Deliu’s right to natural justice. The position is not so extreme that it can be said that no Committee in the respondent’s position could reasonably have decided to continue the investigation.57
Decision
[66] I find for Mr Deliu on the first cause of action (delay). I find that the respondent’s decision to continue the investigation breaches Mr Deliu’s right, in natural justice, to have the investigation completed without exceptional delay.58 I stay the investigation.
[67] Leave is reserved to the respondent and to the New Zealand Law Society to apply to lift or vary the stay if circumstances going to Mr Deliu’s conduct as a lawyer, or his future as a lawyer, change.
[68]All other causes of action are dismissed.
57 Associated Provincial Picture Houses v Wednesbury Corporation [1948] 1 KB 223 (EWCA).
58 It was not argued that there is any distinction in this area between the common law right to natural justice and the rights contained in the New Zealand Bill of Rights Act 1990. I see no need to opine on that matter.
Costs
[69] Mr Deliu represented himself. I do not know whether there are costs he can properly claim. I allow the parties 10 working days from the date of this judgment to file any memoranda going to costs.
Brewer J
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