Haines v National Standards Committee (no 1)
[2022] NZHC 2403
•19 September 2022
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2022-485-294
[2022] NZHC 2403
BETWEEN QUENTIN STOBART HAINES
Applicant
AND
NATIONAL STANDARDS COMMITTEE (NO 1)
Respondent
Hearing: 9 September 2022 Appearances:
C R Carruthers KC for the Applicant R B Moon for the Respondent
Judgment:
19 September 2022
JUDGMENT OF COOKE J
(Declining application to adduce new evidence on appeal)
[1] By application dated 5 August 2022 the applicant seeks leave to adduce further evidence on his appeal pursuant to r 20.16 of the High Court Rules 2016. The application is opposed by the respondent.
[2] The applicant has appealed from a decision of the New Zealand Lawyers and Conveyancers Disciplinary Tribunal (the Tribunal) dated 8 April 2022. The Tribunal upheld two charges of unsatisfactory conduct and six charges of misconduct. It dismissed one other charge. By minute dated 30 May 2022 this Court stayed any penalty hearing pending the determination of this appeal. The basis of the appeal is set out in an amended notice of appeal dated 5 July 2022 and broadly involves a number of criticisms of the Tribunal in relation to evidential matters.
[3] The applicant has sworn an affidavit identifying four items of evidence that are the subject of his application to adduce further evidence namely:
HAINES v NATIONAL STANDARDS COMMITTEE (NO 1) [2022] NZHC 2403 [19 September 2022]
(a)an affidavit of proposed expert evidence from Mr Andrew Davie dated 1 August 2022;
(b)a report of court appointed receivers of a trust dated 11 July 2022;
(c)an email from the applicant to one of the complainants dated 3 August 2016; and
(d)ASB bank statements.
Approach to the application for leave
[4] In B v A Wylie J summarised the principles to be applied in relation to an application for leave to introduce further evidence on appeal under r 20.16 in the following terms:1
(a)the Court can receive further evidence if it thinks that the interests of justice require it to do so;
(b)it is wrong to allow an appellant to bolster his or her case with additional evidence that was available at the lower Court hearing, but not adduced because of the particular view of the case being taken at the time;
(c)admitting further evidence on appeal is exceptional rather than routine. A change of heart about how a case should have been run will not suffice. The prospect of further evidence triggering a substantial re-litigation before the appellate Court of the substantive case will count against admitting the further evidence;
(d)generally, the further evidence must be fresh, credible and cogent;
(e)evidence will not be regarded as fresh if it could, with reasonable diligence, have been produced at the trial;
(f)the absence of freshness is not an absolute disqualification. When the further evidence is not fresh, it will not generally be admitted unless the circumstances are exceptional and the grounds compelling. In addition, the further evidence needs to pass the tests of credibility and cogency;
(g)the interests of justice require the parties to put their best case forward at trial, in order to avoid wasting the Court’s limited time and resources. A high value is placed on finality when the parties have been afforded the opportunity and failed to take it; and
1 B v A [2020] NZHC 580 at [25].
(h)the standard to be met is “rightly high”.
[5] The applicant relies on the observations of Duffy J in A v National Standards Committee when dealing with such an application in relation to an appeal from a decision of the Tribunal.2 Her Honour said:3
Ultimately, in determining whether leave ought to be granted, the Court is to be guided by the interests of justice. This does not relax the test under the High Court Rules, but simply requires that the test be applied in the particular statutory context of each case. In this case, part of the relevant context includes the nature of the proceeding, namely that it involves a disciplinary matter. In the case of disciplinary proceedings, such as those involving misconduct by a lawyer, the Supreme Court has noted that the civil standard of proof applies with flexibility, this means that the balance of probabilities is required to be proved to the highest possible standard. Such an approach is adopted in order to give appropriate recognition to the impact that adverse findings can have on an individual. Where this is the case, there is greater room for special circumstances to justify the granting of leave.
[6] I accept Mr Moon’s submission, however that there are also factors in such a case that count against the idea that there is greater room for such special circumstances. The Tribunal follows careful processes for its hearings. In many situations they will have involved evidence from complainants. The Tribunal here comprised five members, and it had the responsibility of making the findings based on the evidence before it. The statutory provisions contemplate that charges are to be heard and determined expeditiously.4 Whilst each case will turn on its own facts and circumstances, an appeal before this Court is not the appropriate place for the substantial re-litigation of the issues of fact addressed by the Tribunal at its hearings. It will generally be necessary to show that any new evidence is fresh, credible and cogent and that there is otherwise good reason to admit it notwithstanding it was not before the Tribunal as the fact-finding body.
[7] I approach the application on that basis and deal with each category of evidence in turn.
2 A v National Standards Committee [2020] NZHC 392.
3 At [13] (footnotes excluded).
4 See Lawyers and Conveyancers Act 2006, ss 3(2)(b) and 120(3).
Mr Davie’s report
[8] The Tribunal has upheld charges in relation to an invoice Mr Haines rendered to one of his clients for an amount of $1 million plus GST. Amongst the Tribunal’s findings were that Mr Haines did not keep any contemporaneous time records, and that the fee was set not in accordance with normal principles but to inflate the level of support for a creditors’ proposal for the client. The Tribunal held:
[104] Taking into account the unrecorded arrangements, the improper fee practices involved, including lack of contemporaneous recording, and standing back and assessing the fee having regard to all the factors set out above, we regard the lawyer’s conduct in rendering this invoice as “disgraceful and dishonourable”, so as to constitute misconduct pursuant to s 7(1)(a)(i) of the Act.
[9] The Tribunal had before it evidence from Mr McMenamin, an investigator for the National Standards Committee who had made an assessment of the fee using the costs schedule in the High Court Rules 2016 as a basis given the lack of contemporaneous records. He considered that the fee could be seen as close to an assessment based on those schedules.
[10] The applicant now wishes to file new expert evidence from Mr Davie who has conducted a similar exercise, albeit he has reached a conclusion that is a little more favourable to Mr Haines. Amongst the reasons why that evidence was not introduced before the Tribunal was the difficulty in getting access to the underlying documentation of the client (which Mr McMenamin had managed by taking particular steps) and the fact that Mr McMenamin’s analysis had been consistent with Mr Haines’ argument so that it was not thought necessary for Mr Haines to provide further expert evidence. Given that the Tribunal did not accept this evidence Mr Carruthers KC argued it was now appropriate, to be fair to Mr Haines, to allow him to provide such evidence. Mr Carruthers did not appear for Mr Haines before the Tribunal.
[11] For a number of reasons I do not accept that these arguments provide a basis for the grant of leave.
[12] Firstly, the fact that Mr McMenamin conducted an analysis based on the schedules to the High Court Rules, and expressed the view that Mr Haines’ fee could
be considered to be close to that calculated under the schedules, is only one aspect of the evidence before the Tribunal. The Tribunal’s findings are based on a number of factors associated with the fee. Perhaps most significantly the Tribunal found that the fee was set at a level to increase the level of support for a creditors’ proposal made in connection with a bankruptcy application before the Court. This was because Mr Haines could vote in its favour as a creditor. The new evidence does not address this, or other issues about the fee.
[13] Secondly, the fact that the Tribunal did not accept that the fee was reasonable in light of all the factors does not mean Mr Haines now has a justification to file his own expert evidence on this question on appeal. I accept there was a potential difficulty in gaining access to the underlying documentation, but Mr Haines took no steps to seek to obtain those documents through the Tribunal processes by seeking directions from the Tribunal or otherwise. There are also a number of steps he could have taken to address the issues of fact before the Tribunal. He could have instructed his own expert to view Mr McMenamin’s assessment if he had wanted to. He could also have filed his own evidence describing the work he had conducted, and then sought an expert view on that assessment. But he made the decision to rely on the evidence set out in Mr McMenamin’s report.
[14] Mr Davie’s proposed evidence is not fresh. It is seeking to address a factual issue that was alive to be determined by the Tribunal. As the above principles emphasise it is in the interests of justice for parties to put their best case forward at the hearing of the Tribunal. Parties are required to live by the decisions they have made before the fact-finding body.
[15] I also accept Mr Moon’s submission that admitting that Mr Davie’s evidence would likely require evidential procedures to be followed for the appeal, including the potential for Mr Davie being cross-examined, and potentially for the respondent to be able to rely on further expert evidence of its own in response. As the above principles indicate “the prospect of further evidence triggering a substantial re-litigation before
the appellate court of the substantive case will count against admitting the further evidence”.5
[16] I also accept Mr Moon’s further submission that Mr Davie’s expert evidence does not go to the central issues addressed by the Tribunal. The key findings were that the basis for the fee was not properly set out in a letter of engagement, there were no appropriate contemporaneous records, that the fee note was “sprung” on the client at the last moment, and that it had been formulated to allow Mr Haines to vote in favour of the creditors’ proposal so that it could be approved by the required majority of creditors. Against that background Mr Moon submitted, and I agree, that arguments on whether the fee could be justified based on the costs schedules to the High Court Rules are not central to the findings. Mr Davie is an experienced general litigator known to the Court, but his opinion ultimately does not have much cogency given the issues before the Tribunal.
[17] Accordingly the required thresholds are not met, and I decline the application in relation to this category of proposed evidence.
The Receivers’ report
[18] The applicant seeks to introduce a report of the Receivers of a trust dated 11 July 2022. This report relates to the affairs of the same client. It involves a report by the receivers of a related trust.
[19] It was unclear from the application and the applicant’s written submissions how this report could be relevant to the appeal. But Mr Carruthers explained that it arose from the summary of the creditors of the trust. The receivers have recorded a summary of liabilities as at 31 May 2022, and this includes reference to costs of the Official Assignee at $665,535, as well as other substantial creditors. Mr Carruthers submitted that this showed that this client’s affairs were very complex, and that professional fees could be very high. He argued that this was significant given the criticism of the level of Mr Haines’ fees, and the associated findings of the Tribunal.
5 B v A, above n 1, at [25(c)].
[20] Again I do not accept these arguments. This is a recent report which indirectly summarises the costs of a different party, involving the fees of other persons, for different periods of time, and for different activities. It would provide no assistance in assessing the reasonableness, or otherwise, of the fees rendered by Mr Haines. And even if it were indirectly relevant, the arguments about the work that Mr Haines was required to do, and the fee that would have been reasonable for that work, are all factual matters that were properly dealt with by the Tribunal through its hearings processes. It is not appropriate for the High Court to reopen such factual matters on appeal.
[21] The application fails to meet the standards required to admit new evidence on appeal by a significant margin.
Email and bank statements
[22] I deal with the last two categories of evidence of proposed evidence together. The Tribunal also upheld charges in relation to a further client. Amongst the findings of the Tribunal were findings that the client paid money into Mr Haines’ own personal bank account in response to requests from Mr Haines, and that these payments were not represented by any invoices and in circumstances where Mr Haines did not operate a trust account.
[23] The email subject to the application is an email from Mr Haines to the client. It apparently attaches a deposit slip, although this was not provided with the application. As I understand it, it is provided to show that Mr Haines did ask the client to pay monies into a solicitor’s trust account and not Mr Haines’ personal account. I understand that the requested payment was not made however. The bank statements are apparently an unredacted version of Mr Haines bank statements, and are directed to the same, or similar issues.
[24] It is very difficult to make sense of an application to introduce a one line email into evidence without having any materials (even the attachment) to make sense of it, and understand the circumstance under which it was sent. That is also true of the bank statements. I put to Mr Carruthers that any application to introduce new evidence directed to these matters would have to involve Mr Haines (or some other person)
providing evidence that explained the meaning and significance of the email and bank statements, and how they related to the Tribunal’s factual findings, and accordingly the issues on appeal. Mr Carruthers responded to that point by suggesting that an amended application could be made in such terms.
[25] The present application plainly does not meet the requirements. Even if evidence had been provided that was more explicable in terms of the Tribunal’s findings it is very doubtful that this evidence could meet the required thresholds. It is not appropriate to allow r 20.16 to be used to pick off selective elements of an interrelated set of factual findings of the body appealed from. Mr Carruthers explained there had been a difficulty in gaining access to the relevant documentation, including this email, for the purpose of the Tribunal’s hearings. That might provide some basis for an application such as this one. But a fuller explanation of the significance of this email would involve evidence, probably from Mr Haines, outlining the circumstances more fully. Mr Haines was always able to give that evidence before the Tribunal even in the absence of this particular email. I accept that there is also an issue about Mr Haines’ right to decline to provide evidence in light of the risk of incrimination. This issue arises because of a related police investigation. But Mr Haines did give evidence to the Tribunal, and in any event any exercise of the right before the Tribunal would not provide a justification for changing that election in order to give evidence on appeal.
[26] Moreover as I understand it the request for payment evidenced by this email was not acted upon. The findings of the Tribunal are based on monies that were paid into Mr Haines’ account. So an email that was not acted upon does not appear to have significance for the findings of the Tribunal. It could also lead to the requirement for a more extensive evidential processes, such as cross-examination, on appeal.
[27] As requested, I record the applicant’s indication that he may wish to make a fuller application of the kind referred to. I do so without providing any encouragement. It may well be that such an application would not be granted for the reasons outlined above.
[28] For these reasons I also decline to grant leave in relation to this category of evidence.
Conclusion
[29] The application is accordingly dismissed. The respondent is awarded the costs of the application on a 2B basis which will be fixed by the Court if they cannot be agreed. Any memorandum seeking the fixing of such costs must be filed within five working days and must be responded to within five working days. The memoranda must be no longer than three pages plus a schedule.
Cooke J
Solicitors:
Aspire Law, Wellington for the Applicant
Richard Moon, Wellington for the Respondent
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