Keene v Legal Complaints Review Officer
[2021] NZCA 338
•26 July 2021 at 10.30 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA541/2020 [2021] NZCA 338 |
| BETWEEN | GREGORY ALEXANDER KEENE |
| AND | LEGAL COMPLAINTS REVIEW OFFICER |
| Court: | Clifford, Thomas and Muir JJ |
Counsel: | Appellant in person |
Judgment: | 26 July 2021 at 10.30 am |
JUDGMENT OF THE COURT
The appeal is dismissed.
____________________________________________________________________
REASONS OF THE COURT
(Given by Thomas J)
Introduction
Gregory Keene and the second respondents have been involved in protracted litigation concerning not only Mr Keene’s attempts to recover legal fees from them, but also their complaints to the New Zealand Law Society (NZLS) and Legal Complaints Review Officer (LCRO) about Mr Keene’s alleged professional misconduct. The latter resulted in judicial review proceedings which were finally resolved in this Court.[1]
[1]Keene v Legal Complaints Review Officer [2019] NZCA 559.
Mr Keene is now appealing a decision of Downs J in the High Court declining his application for a costs order against the second respondents which he made following his success in this Court.[2] The first and third respondents abide.
Background
Factual background
[2]Keene v Legal Complaints Review Officer [2020] NZHC 2261 [Costs decision].
We need to go back to 2005, when Jesse Liu, the son of Mr Lau and Ms Qiu, was badly assaulted at his school. All three of them are the second respondents. They sought legal advice from a solicitor, Derek Cutting, who in 2007 briefed Mr Keene as counsel.
Mr Keene prepared an opinion, engaged in correspondence and discussions in an attempt to settle, and then filed proceedings in the District Court against the school. Mr Cutting and Mr Keene sought to persuade the second respondents to accept the school’s $20,000 settlement offer.
In December 2008, the second respondents wrote to Mr Keene terminating their instructions, indicating that they considered his performance unsatisfactory and fees unreasonable. By that that point, they owed fees of $15,125.82 to Mr Cutting for Mr Keene’s services.
On 24 March 2009, Mr Cutting and Mr Keene filed proceedings in the District Court seeking the balance of Mr Keene’s unpaid fee. Mr Keene acted as counsel in those proceedings.
The second respondents complained to the NZLS about a number of aspects of Mr Keene’s services (primarily at that stage the reasonableness of Mr Keene’s fees). The NZLS held that Mr Keene's fees were reasonable. The second respondents then applied to the LCRO for a review. That application was dismissed in October 2010.
In late 2010, Mr Cutting obtained judgment by default in the District Court for Mr Keene’s outstanding fees, which the second respondents unsuccessfully applied to set aside. They appealed to the High Court. In July 2011, Williams J set aside the default judgment, and observed that Mr Keene should not have appeared either before him or in the District Court,[3] and had breached r 13.5.3 of the Rules of Conduct and Client Care in doing so.[4]
[3]Liu v Cutting HC Auckland CIV-2011-404-695, 14 July 2011 at [16]–[23]. The claim for Mr Keene’s fees later succeeded in the District Court but the fee was reduced from $15,125.82 to $10,500. Mr Lau unsuccessfully appealed to the High Court.
[4]Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008.
In May 2012, the second respondents complained again about Mr Keene to the NZLS, contending that Mr Keene should not have acted as counsel in the claim for his fee. In August 2013, the Standards Committee of NZLS found Mr Keene’s conduct unsatisfactory and concluded that Mr Keene had breached both rr 13.5 and 13.5.3 of the Rules of Conduct and Client Care by appearing as counsel in the District and High Courts to recover his fee. For convenience, we set out rr 13.5 and 13.5.3 at this point:
13.5A lawyer engaged in litigation for a client must maintain his or her independence at all times.
…
13.5.3A lawyer must not act in a proceeding if the conduct or advice of the lawyer or of another member of the lawyer’s practice is in issue in the matter before the court. This rule does not apply where the lawyer is acting for himself or herself, or for the member of the practice whose actions are in issue.
Both parties reviewed this decision to the LCRO, who, in November 2017, upheld the r 13.5 determination, but quashed the 13.5.3 finding.
Both parties then applied to the High Court for judicial review of the LCRO’s decision. In July 2018, Downs J set aside the LCRO’s finding of unsatisfactory conduct in respect of r 13.5, but accepted Mr Lau’s argument that there had been a contravention of r 13.5.3.[5] Therefore, the High Court restored the Standards Committee’s finding of unsatisfactory conduct based on a breach of r 13.5.3.
[5]Keene v Legal Complaints Review Officer [2018] NZHC 1869, [2018] NZAR 1361 [Substantive decision].
Mr Keene then appealed. In November 2019, this Court allowed Mr Keene’s appeal, concluding that the High Court erred both in setting aside the LCRO determination in relation to r 13.5.3 and in restoring the Standards Committee finding of unsatisfactory conduct based on a breach of that rule.[6] Thus, Mr Keene was found not to have breached either rule.
[6]Keene v Legal Complaints Review Officer, above n 1.
Importantly for the purposes of this case, this Court declined to make any order as to costs, stating that an order for costs was not appropriate, as Mr Keene represented himself.[7]
[7]At [95].
Following this Court’s decision, Mr Keene filed a memorandum raising the question of costs. In a minute dated 24 April 2020, Goddard J said:
[2] The question of costs in this Court or in the High Court could only be revisited by this Court following the delivery of our judgment if the Court were to recall that judgment. It would be open to Mr Keene to apply for a recall of the Court’s judgment on the basis that the judgment did not address a claim by him for costs from the second respondents. However the difficulty that any such application would face is that Mr Keene did not seek any orders in relation to costs in this Court or in the High Court in his notice of appeal; he did not seek costs against the second respondents (or any other party) in his written submissions; and when the President raised the question of costs at the conclusion of the oral hearing Mr Keene did not seek an award of costs against the second respondents. So this is not an issue that Mr Keene raised but the Court failed to address: rather, the issue of an award of costs against the second respondents was never raised by Mr Keene in this Court. Before making any application for recall Mr Keene should give careful consideration to whether that would be warranted in terms of the criteria set out in Horowhenua County v Nash (No 2).
[3] We observe that our judgment does not preclude Mr Keene from seeking costs in the High Court in light of our judgment.
(Footnote omitted.)
Following this, Mr Keene applied to the High Court for costs. On 1 September 2020, Downs J dismissed the application in a short, pithy decision, relevantly saying:[8]
[1] Mr Keene successfully appealed a decision I made 27 July 2018. Mr Keene now seeks costs.
[2] There were two aspects to my decision. I found for Mr Keene in relation to one, and against him in relation to the other. I said this about costs at the end of the decision:
Mr Keene wished to be heard on costs. I invite his memorandum of not more than five pages by 5 pm, Monday 13 August 2018. Mr Lau may reply with a memorandum of not more than five pages by 5 pm, Monday 20 August 2018. Each is to be served by the same dates.
For completeness, my preliminary view is costs should lie where they fall. The position is very much like it was below — the adverse determinations have been swapped.
[3] Mr Keene was then represented by Mr Illingworth QC. Neither responded.
…
[6] Mr Keene contends he should now have costs because of his success in the Court of Appeal. I acknowledge this could favour belated costs in this Court. However, I exercise my discretion to decline costs. Mr Keene made a considered decision not to seek costs in this Court two years ago, despite an available timetable. The lay litigants on the other side of the case would have assumed — quite reasonably — the issue of costs was no longer live, especially as they did not participate in the Court of Appeal hearing.
[8]Costs decision, above n 2 (footnotes omitted).
Mr Keene has now appealed that decision as of right.[9]
Submissions
The appellant
[9]Senior Courts Act 2016, s 56(1)(a).
Mr Keene’s submissions essentially consisted of three arguments.
First, that Downs J attached too much importance to the fact that Mr Keene had decided not to seek costs in 2018. According to Mr Keene, this was an irrelevant and incorrect consideration as the starting point is that the winning party should be awarded costs. In this case, the fact that there was no clear winner from the 2018 High Court decision meant that Mr Keene chose not to seek costs at that time. It was his success in this Court which influenced Mr Keene’s decision to apply for costs.
Mr Keene says Downs J incorrectly assumed that, because he did not apply for costs at the conclusion of the hearing in the High Court, the second respondents would have had an expectation that there would not be a later application following the hearing in this Court. Furthermore, Downs J erred when he said the second respondents “would have assumed — quite reasonably — the issue of costs was no longer live, especially as they did not participate in the Court of Appeal hearing”,[10] because they did in fact file written submissions in this Court, one day prior to hearing.
[10]Costs decision, above n 2, at [6].
Therefore, according to Mr Keene, Downs J had elevated his opinion as to what the expectations of the second respondents would have been in relation to their exposure to costs, as a factor to be considered above all other important factors.
Secondly, Mr Keene submitted that Downs J erred in considering other important factors when making his decision. These included:
(a)The principle that the successful party in litigation will normally receive an award of costs against the unsuccessful party.
(b)The conduct of the parties can generally be taken into account when assessing the liability for and quantum of costs. The actions of the second respondents (by taking part in the High Court case when they could have abided, as the first and third respondents did, and repeating accusations of dishonesty to the Judge) should result in costs consequences against them.
(c)The second respondents continued to play an active role in the High Court proceedings to the point that they were effectively cross‑applying to have one of the decisions of the LCRO (concerning r 13.5.3) reversed, and that, but for their actions, Mr Keene’s application for judicial review would have been completely successful, rather than leading to him having to appeal to this Court. The second respondents should not have been permitted to interfere with the process to the extent that they did, free of costs consequences.
Thirdly, Mr Keene submitted that throughout the proceedings, the second respondents levelled a number of allegations of dishonesty against him (such as that he had lied to the NZLS Standards Committee, and gave false information to the NZLS costs assessor). According to Mr Keene, these unfounded allegations should justify an award of costs in the High Court against the second respondents. While ordinarily a court might make greater allowances for lay litigants, Mr Keene submitted that the large number of allegations, many of which attacked his integrity but were rejected by the District Court, should have caused Downs J to award costs in his favour.
Following the filing of the respondents’ submissions, Mr Keene filed submissions in reply. He focused on two points:
(a)Mr Lau had downplayed his role in the High Court proceedings before Downs J and that, while his oral submissions were brief, he filed substantial written material to the point where Downs J treated the situation as one where Mr Lau was cross-applying for judicial review of the LCRO’s decision finding that r 13.5.3 was not breached; and
(b)Mr Lau has continued to make attacks on Mr Keene’s integrity, suggesting that he broke undertakings and lied to the Court, which Mr Keene suggests may have influenced Downs J’s decision-making in determining the judicial review, which in turn may have influenced the subsequent application for costs.
The second respondents
The second respondents’ submissions can be broken down into seven arguments:
(a)They played an inactive or limited role: Mr Lau did not file an application for judicial review in the High Court, and did not request that Court treat his submissions on r 13.5.3 as a cross-application. He filed submissions as directed by the Court, and made very brief oral submissions. It was likely that, even if Mr Lau had not raised the issue, the High Court would have addressed r 13.5.3, because Williams J had previously considered it. They did not take an active role in the hearing in this Court and were excused from participating.
(b)Mr Keene had chosen not to claim costs in the High Court.
(c)Ordinary members of the public should not suffer an order for costs as a result of exercising their rights: by appealing the LCRO decision to the High Court and this Court, Mr Keene was essentially challenging the decisions of the disciplinary bodies. The second respondents say, as ordinary members of the public exercising their rights of complaint to the NZLS, it would be unjust for them to suffer an award of costs because the High Court in part, and ultimately this Court in full, quashed the disciplinary body’s decision.
(d)Mr Keene’s conduct contributed to the unfavourable decisions in the High Court in a material way: the second respondents refer to this Court’s observations that Mr Keene’s conduct was in issue when he continued to act as counsel in the litigation concerning his fee recovery.
(e)The exceptional circumstances of this case: the second respondents noted that, before Mr Keene appealed the r 13.5.3 finding in the High Court, he had essentially failed in the High Court proceedings (as the Court ruled that he had breached that rule) and was actually the unsuccessful party. After the High Court decision was appealed, the respondents did not participate in the hearing in this Court, justifying the Court’s decision to not make any order for costs.
(f)Mr Keene had failed to comply with the timetabling orders in the High Court.
(g)Relevant legal principles and cases supported the second respondents’ position.[11]
Analysis
[11]The second respondents referred to the case of Lagolago v Wellington Standards Committee 2 [2018] NZHC 1102 where a lawyer charged with negligence successfully appealed her charges to the High Court, but was refused costs by the High Court and this Court. It was submitted that this case was analogous here.
The approach to be taken on an appeal against a costs decision is well settled. In the recent decision of this Court in Kinney v Pardington, Gilbert J explained it as follows:[12]
[1] Questions of costs are ultimately a matter of discretion. The exercise often requires assessment of a wide range of factors. The overall objective is to achieve an outcome that best meets the interests of justice in the given case in accordance with any applicable costs rules and consistent with established principles. The trial judge is uniquely placed to make this assessment. It is well-settled that an appellate court should not interfere with a costs award unless satisfied that the judge acted on a wrong principle, failed to take account of some relevant matter, factored in the irrelevant or was plainly wrong. This is why appeals against costs awards seldom succeed.
[12]Kinney v Pardington [2021] NZCA 174 (footnotes omitted). This statement was affirmed in Middeldorp v Avondale Jockey Club Inc [2021] NZCA 238 at [3].
The underlying principle in costs decisions is that costs follow the event — the party who lost should pay the costs of the party who won.[13] However, in complex or lengthy litigation, or in disputes that have carried on throughout a number of proceedings (and a number of years), it is sometimes more difficult to ascertain the “winning party”.[14]
[13]Weaver v Auckland Council [2017] NZCA 330 at [20].
[14]Matthew Casey (ed) Sim’s Court Practice (online ed, LexisNexis) at HCR14.2.5(a).
Mr Keene had partial success in the High Court but did not seek costs at the time, despite being invited to do so in accordance with a Court-ordered timetable. Had Mr Keene done so, his appeal to this Court could have included the High Court costs decision, as Goddard J observed in his minute set out at [14] above.
We reject Mr Keene’s contention that Downs J considered r 13.5.3 only at the second respondents’ instigation. While Downs J’s judgment records that Mr Lau sought judicial review of the quashed determination in relation to r 13.5.3,[15] it was in any event inevitable that the High Court would consider it, given the decision under review.
[15]Substantive decision, above n 5, at [2].
We reiterate that an award of costs is ultimately discretionary.[16] The second respondents were lay litigants caught up in an arcane discussion on the Rules of Conduct and Client Care which involved protracted litigation. Downs J was, in our view, correct to consider they deserved finality and that, in the circumstances, Mr Keene lost his opportunity to be awarded costs when he failed to apply for them when he had the chance. The Judge was well placed to determine where the interests of justice lay. Mr Keene has not shown that the Judge acted on a wrong principle, failed to take into account a relevant matter, took into account an irrelevant matter, or was plainly wrong. Indeed, we are satisfied his decision was an appropriate exercise of his discretion.
Result
[16]However, we acknowledged that this discretion is not unfettered, as it is qualified by the specific costs rules and principles set out in rr 14.2–14.10. See Manakau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109, [2013] 1 NZLR 305 at [7].
The appeal is dismissed.
Solicitors:
Crown Law Office, Wellington for First Respondent
Meredith Connell, Auckland for Third Respondent
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