Hong v Auckland Standards Committee No 5

[2020] NZHC 1572

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-2236 CIV-2020-404-11

[2020] NZHC 1572

UNDER

the Lawyers and Conveyancers Act 2006

IN THE MATTER

of an appeal against a Misconduct Liability decision of the Lawyers and Conveyancers Disciplinary Tribunal

BETWEEN

BOON GUNN HONG

Appellant

AND

AUCKLAND STANDARDS COMMITTEE NO. 5

Respondent

Hearing:

On the papers

Appearances:

Appellant in person

P Collins for the Respondent

Judgment:

3 July 2020

JUDGMENT OF GAULT J

(Leave to appeal)

This judgment was delivered by me on 3 July 2020 at 4:00 pm pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

……………………………………

Parties / Solicitors:

The Appellant

Mr P Collins, Barrister, Auckland

Mr J Kleinbaum (respondent’s instructing solicitor), New Zealand Law Society, Auckland

HONG v AUCKLAND STANDARDS COMMITTEE NO. 5 [2020] NZHC 1572 [3 July 2020]

[1]    Mr Hong seeks leave to appeal against my judgment dated 16 April 2020,1 dismissing his appeal against the liability and penalty decisions of the New Zealand Lawyers and Conveyancers Disciplinary Tribunal (the Tribunal).2 The respondent opposes leave. The parties consented to the application for leave being determined on the papers.

Leave to appeal

[2] Leave to appeal to the Court of Appeal is required under s 254 of the Lawyers and Conveyancers Act 2006 (the Act), which provides:

254     Appeal to Court of Appeal on question of law

(1)Any party to an appeal under section 253(1) who is dissatisfied with any determination of the High Court in the proceedings as being erroneous in point of law may, with the leave of that court, or, if the High Court refuses leave, with the leave of the Court of Appeal, appeal to the Court of Appeal against the determination; and section 56 of the Senior Courts Act 2016 applies to any such appeal.

(2)In determining whether to grant leave to appeal under this section, the Court of Appeal must have regard to whether the question of law involved in the appeal is one that, by reason of its general or public importance or for any other reason, ought to be submitted to the Court of Appeal for its decision.

…

[3]    Although s 254(2) is directed to the Court of Appeal, the approach of this Court is essentially the same, applying the well established principles relating to the granting of leave to bring a second appeal,3 namely:4

The appeal must raise some question of law or fact capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of the further appeal.

1      Hong v Auckland Standards Committee No. 5 [2020] NZHC 744.

2      Auckland Standards Committee 5 v Hong [2019] NZLCDT 28 and [2019] NZLCDT 40.

3      Sisson v Standards Committee (2) of the Canterbury Westland Branch of the New Zealand Law Society Complaints Service Standards Committee [2014] NZHC 223 at [11]; Deliu v National Standards Committee [2015] NZHC 67 at [17]; Deliu v National Standards Committee of the New Zealand Law Society [2015] NZCA 399 at [18]; Morahan v Wellington Standards Committee 2 [2018] NZHC 1583 at [13]-[14]; Deliu v National Standards Committee and Auckland Standards Committee 1 of New Zealand Law Society [2018] NZHC 2873 at [11]; and J v Auckland Standards Committee 1 [2018] NZHC 789 at [2]-[3].

4      Waller v Hider [1998] 1 NZLR 412 (CA) at 413; Snee v Snee (1999) 13 PRNZ 609 (CA) at [22]; and Downer Construction (New Zealand) Ltd v Silverfield Developments Ltd [2007] NZCA 355, [2008] 2 NZLR 591 at [30]-[31].

[4]Ultimately, the question is whether granting leave is in the interests of justice.5

[5]    Mr Hong submitted this Court is functus officio and should not deliberate on the question of whether the judgment is erroneous. But I must assess whether the alleged errors are capable of bona fide and serious argument and of sufficient importance in the sense outlined. In doing so, I am conscious that, if I decline leave and leave is sought from the Court of Appeal, that Court may wish to have my reasons for considering whether a further appeal is warranted.

Questions of law

[6]Mr Hong’s application claims the following errors/questions of law arise:

(a)In the course of a general trust account audit review, is the inspectorate empowered by the Act and the Lawyers and Conveyancers Act (Trust Account) Regulations 2008 (the Regulations) to require production of non-trust account records or documents of clients from a lawyer when the clients have refused to grant consent and had instructed the appellant not to release their files (other than trust account records)?

(b)Is it lawfully correct for the lawyer who had relied on the literal meaning of the Regulations in his decision to abide by his clients’ instructions not to release the files, undertaken a thorough search of judicial decisions affecting the interpretation of the Regulations and found none that is relevant, and not finding any, had decided that he must abide by his clients’ instructions due to the strict duty of confidence owed to his clients as their lawyer and had decided best to seek a judicial determination for a clear ruling thereon, to be held as having misconducted himself pursuant to s 7 of the Act?

(c)As a corollary, is it proper and satisfactory for a lawyer who has come to the view that the inspectorate is not so empowered to require

5      Deliu v National Standards Committee [2015] NZHC 67 at [18]; Deliu v National Standards Committee of the New Zealand Law Society [2015] NZCA 399 at [18(c)]; and Morahan v Wellington Standards Committee 2 [2018] NZHC 1583 at [10].

production of clients’ non-trust account records as legislated, to go against the clients’ instructions notwithstanding that there is a requirement under the Regulations that requires the inspectorate to keep all such information as provided confidential but the prerogative right whether to trust them rests with the affected clients?

(d)Is the three months’ suspension and the Tribunal’s order requiring the appellant to apply for consent to practise again, under the undisputed circumstances, fair and reasonable in accordance with the objectives and purposes of the Act and judicial principles and precedents on such when it had been a clear ruling the appellant sought and will abide by?

(e)Is the costs award erroneous when, by the literal interpretation of the Act and Regulations, the inspectorate is only entitled to trust account records and as such, this challenge by the appellant is a test case?

Trust account records

[7]    Mr Hong’s primary question (a) pursues his argument that his literal interpretation of “trust account records” enables a practitioner to extract or copy those records for disclosure to a Law Society inspector and to refuse to allow inspectors access to client files even to verify the scope of the records required.

[8]    I accept this raises a question of law as to the interpretation of the Act and Regulations. However, I do not consider it is a question capable of bona fide and serious argument. For the reasons given in the judgment,6 I consider that a narrow interpretation of the meaning of “trust account records” loses sight of the purpose of the statutory regime.

[9]    In submissions seeking leave, Mr Hong also raised cultural distrust of regulatory authorities, but the statutory regime applies equally to all.

6      Hong v Auckland Standards Committee No. 5 [2020] NZHC 744 at [48]-[53].

Misconduct

[10]   Question (b) challenges the finding of reckless (not wilful) contravention.7 This was a factual assessment and I do not consider it raises a point of law that ought to be submitted to the Court of Appeal. The finding was that Mr Hong was persistent in his obstruction of the inspector’s review and failed to acquaint himself with his legal obligation to permit the inspector to carry out the review notwithstanding client confidentiality, not merely that he overlooked the legal position. Also, I consider question (b) does not raise a question of law capable of bona fide and serious argument regarding client confidentiality or privilege and reg 33, for the reasons given in the judgment.8 The corollary question (c) is no different.

[11]   Subsequent to his submission in reply, Mr Hong filed a further submission relying on Keene v Legal Complaints Review Officer.9 He submitted Keene supported his submission that a lawyer should not be found guilty of misconduct or unsatisfactory conduct where he or she has interpreted rules or regulations and the interpretation is arguable or not wholly untenable. However, in Keene the Court of Appeal was dealing with a High Court judgment that had set aside an LCRO decision and restored a Standards Committee finding of unsatisfactory conduct in circumstances where it was open to the LCRO to reach the view that a disciplinary response was not warranted.10 Moreover, the Court considered that Mr Keene’s view was reasonably open to him.11 I do not understand Keene to decide that a disciplinary response is not warranted whenever a lawyer’s conduct is based on an arguable view. In any event, as indicated, here the finding was one of reckless contravention based on Mr Hong’s persistent obstruction of the inspector’s review and failure to acquaint himself with his legal obligation.

7      Hong v Auckland Standards Committee No. 5 [2020] NZHC 744 at [64], having put aside Mr Hong’s subsequent conduct at the Tribunal hearing.

8      At [48] and [54].

9      Keene v Legal Complaints Review Officer [2019] NZCA 559.

10     At [85] and [90].

11     At [87] and [89].

Penalty and costs

[12]   Questions (d) and (e) also do not raise questions of law but rather challenge the penalty and costs on the basis of Mr Hong’s characterisation of his conduct at the time as merely seeking a clear ruling in a test case. But at the time of the audit, he refused to provide the files required or otherwise cooperate with the Law Society. Further, in his response to the inspector’s report, he expressed concern as to why the inspector wanted access to client files.12 Otherwise, these questions essentially raise the primary question again.

Importance or other reason

[13]   For the reasons given, I also do not consider the intended appeal raises a question of law that, by reason of its general or public importance or for any other reason, ought to be submitted to the Court of Appeal. If I had considered the primary question was capable of bona fide and serious argument, I would likely have accepted that it was of importance to warrant a further appeal.

[14]   Mr Hong’s submission also raised allegations of discrimination against the Lawyers Complaint Service. He filed yet another submission referring to a judicial review application and raising issues of corruption. These new factual allegations cannot be raised by way of leave to appeal.

Gault J

12     Hong v Auckland Standards Committee No. 5 [2020] NZHC 744 at [23]-[24].