Morahan v Wellington Standards Committee 2
[2018] NZHC 1583
•29 June 2018
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-Ā-TARA ROHE
CIV-2017-485-981
[2018] NZHC 1583
IN THE MATTER of an appeal under s 253 of the Lawyers and Conveyancers Act 2006 BETWEEN
PETER JAMES MORAHAN
Applicant
AND
WELLINGTON STANDARDS COMMITTEE 2
Respondent
Hearing: 20 June 2018 Counsel
A C Beck for Applicant
D R La Hood and R M A Kos for Respondent
Judgment:
29 June 2018
JUDGMENT OF CHURCHMAN J
[1] Mr Morahan applies for leave to appeal the decision of the Court dated 29 May 2018.
[2] That decision dismissed appeals against two decisions of the NZ Lawyers and Conveyancers Disciplinary Tribunal. The decisions related to findings of professional misconduct, the imposition of penalties, and costs.
Preliminary issue
[3] The first question to be resolved is what the test is under s 254 of the Lawyers and Conveyancers Act 2006 (the Act). That section provides:
MORAHAN v WELLINGTON STANDARDS COMMITTEE 2 [2018] NZHC 1583 [29 June 2018]
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.
[4] It is immediately obvious that, while s 254(2) sets the standard to be met where the application for leave is being considered by the Court of Appeal—namely that there is a question of law involved that by reason of its general or public importance, or for any other reason, ought to be submitted to the Court of Appeal—it is silent as to whether that same standard also applies when the application is to the High Court.
[5]In his written submissions, counsel for Mr Morahan, Mr Beck, submitted:
It appears that the High Court’s powers to grant leave are not circumscribed in any way …. The only statutory requirement is that the appeal involves a question of law.
[6] If that submission were correct, it would mean that in respect of an application for leave to appeal, the applicant had to meet entirely different tests in the High Court and the Court of Appeal.
[7] There is nothing in Hansard that would suggest that this was Parliament’s intention. Indeed, it seems extremely unlikely that the drafting of the section in this manner was anything other than an oversight.
[8] The approach advanced on behalf of Mr Morahan also conflicts with the approach taken by both the High Court and the Court of Appeal in the case of Deliu v The National Standards Committee.1
1 Deliu v The National Standards Committee [2015] NZHC 67 and Deliu v The National Standards Committee of the New Zealand Law Society [2015] NZCA 399.
[9] In that case, Thomas J, in the High Court, said that leave may only be granted in certain cases namely where:2
(a)the appeal raises some question of law capable of bona fide and serious arguments; and
(b)the case involves some interest, public or private, of sufficient importance to outweigh the cost and delay of the further appeal.
[10] Although the Court of Appeal in Deliu did not examine this issue in great detail, it acknowledged the reference by Thomas J to what it described as the “well- established principles relating to the granting of leave” and noted that ultimately, the question was whether granting leave was in the interests of justice.3
[11] This approach is consistent with that taken by the High Court in Sisson v The Standards Committee (2) of the Canterbury Westland Branch of the New Zealand Law Society Complaints Service Standards Committee where the Court said:4
Like second appeals under ss 66 and 67 Judicature Act 1908, the applicant must demonstrate that the error of law is of sufficient importance “to justify the pursuit of litigation already twice considered and ruled upon by a Court”.
[12] The Court also noted that even if a bona fide question of law was raised, where the underlying facts were largely idiosyncratic and concerned a practitioner’s specific misconduct, they would raise no issue of general importance.5
[13] I conclude that, at the very least, in order for an application to the High Court for leave to appeal to the Court of Appeal under s 254 of the Act to be successful, Mr Morahan has to show that there is some question of law capable of serious argument of sufficient importance to justify the pursuit of litigation already twice considered and ruled upon by a court or tribunal. Even if such a question is established, if the underlying facts merely relate to the specific misconduct, the test will not be meet.
2 At [17].
3 At [18].
4 Sisson v The Standards Committee (2) of the Canterbury Westland Branch of the New Zealand Law Society Complaints Service Standards Committee [2014] NZHC 223 at [11].
5 At [15].
[14] There is also a strong argument in favour of concluding that Parliament cannot have intended the High Court to approach the question of leave on a different basis to the Court of Appeal.
Grounds for appeal
Section 351
[15] Mr Morahan argued that s 351 of the Act had been breached. Section 351 provides that a complaint cannot be made in respect of conduct that occurred more than six years prior to the commencement of that section. The relevant date is 1 August 2002.
[16] Although the Tribunal made it clear that it did not base its finding of misconduct on any conduct prior to 1 August 2002, it did refer to that conduct. The Court found that the references were inappropriate although, because the Tribunal had specifically acknowledged that it could not rely on pre-1 August 2002 conduct in relation to finding misconduct, the Court held that the reference had not invalidated the finding.
[17] Mr Morahan argued that even the reference to the pre-1 August 2002 conduct in the charging document invalidated the charge and required Charge 1 to be dismissed.
[18] The respondent referred to the history behind the reframing of the charges and the fact that the Tribunal had directed the Standards Committee to file charges that particularised a rule or standard of conduct allegedly breached. It also noted that in accordance with the schedule of the Lawyers and Conveyancers Act (Disciplinary Tribunal) Regulations 2008 and the general practice of Standards Committees, the “Notice of Charge” for Charge 1 contained the charge itself at the start of the notice followed by the particulars of the charge.
[19]Counsel emphasised the specific finding of the Committee in its decision that:
… the Committee accepts it is only the particulars relating to the post 1 August 2002 conduct that should found the charge.
[20]The respondent submitted that:
… regardless of any infelicities of framing, there were sufficient matters established to justify the Tribunal’s finding that the applicant was negligent or incompetent.
[21] The Court did make such a finding. Essentially that is a finding of fact. It does not meet the test for a grant of leave.
Duplicity
[22] The Court had found that Mr Morahan’s attacks on the grounds of duplicity were in effect a challenge to the principles established in the Court of Appeal decision of Duncan v Medical Practitioners Disciplinary Committee.6 Counsel for Mr Morahan submitted that, in that decision, the Committee had looked at the question of duplicity in a very specific context and:
… that the Court in Duncan was discussing a particular type of situation where the professional body’s concern was with the “practitioner’s whole attitude to practice”.
[23] The respondent pointed out that there has been a well-established pattern of charging a course of conduct that cumulatively amounts to negligence or incompetence following Duncan v Medical Practitioners Disciplinary Committee, which established that such an approach is permissible. It submitted:
… given the consistent application of these principles in this country and the United Kingdom for decades without controversy, there is no question of law that requires further guidance from the Court of Appeal.
[24] The applicant’s submissions unrealistically try to confine the principles established by Duncan.
[25]The submission of the applicant was:
The High Court considered the current law to be settled by Duncan. If that is in fact the case (which is not accepted) only the Court of Appeal can address the matter.
6 Duncan v Medical Practitioners Disciplinary Committee [1986] 1 NZLR 513 from 537.
[26] This submission misses the point. Before the Court of Appeal can consider the issue, the appeal must give rise to some seriously arguable legal question of sufficient importance to outweigh the cost and delay of the further appeal. The application of the settled principles derived from Duncan to the facts of this case does not meet that test.
Approach on appeal
[27] The applicant submitted that appeals from the Tribunal are governed by the approach in Austin Nichols and Co Inc v Stichting Lodestar and that the High Court was required to reach its own conclusion on matters in dispute.7
[28] There was no dispute that this was the approach the Court was required to take on the appeal. Indeed, the fact that the appeal was by way of rehearing, was expressly acknowledged at [2] of the judgment.8
[29] The applicant argued that there were a number of findings that could support the inference that the Court had approached the matter as if it was simply an appeal on questions of law. Examples were given in relation to conclusions that certain findings were “open to the Tribunal” or that there was no error by the Tribunal.
[30] However, these submissions overlook the fact that while the Supreme Court said that an appellate court has the responsibility of arriving at its own assessment of the merits of the case,9 a fundamental part of the appeal process is for the appellate court to be satisfied that the decision appealed from was wrong. The Court said:10
… the appellant bears an onus of satisfying the appeal court that it should differ from the decision under appeal. It is only if the appellate court considers that the appealed decision is wrong that it is justified in interfering with it.
[31] The respondent submits that when the decision is looked at as a whole, the various findings complained about by the applicant are no more than the Court
7 Austin Nichols and Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.
8 Morahan v Wellington Standards Committee 2 [2018] NZHC 1229 at [2].
9 Austin Nichols, above n 7, at [5].
10 At [4].
addressing the necessary question of whether or not aspects of the appealed decision were wrong.
[32]The respondent submitted that the Court:
… clearly had in mind the advantage of the Tribunal in seeing and hearing the witness (in particular, the applicant himself) when making crucial factual findings. His wording indicates he was not persuaded to reach a different conclusion, as required by the Austin Nichols approach.
[33] The respondent also referred to specific factual findings the Court had made in relation to Charge 2.
[34] The respondent’s submissions on this point concluded by referring to the finding that even if there was an error in relation to Charge 1, an appeal on Charge 1 would have no effect on the outcome as the Court had concluded that Charge 2 in and of itself justified the suspension imposed.
[35] The interpretation advanced by the respondent is the more realistic one. The Court was clearly aware of the nature of the appeal but also aware of the need for the applicant to demonstrate error before the Court could intervene. That involved determining whether or not there were errors in any of the many findings that were challenged by the applicant.
[36] Given the Court’s finding that even without Charge 1, Charge 2 in and of itself justified suspension, no issue of general importance or of particular importance to Mr Morahan arises so as outweigh the cost and delay of a further appeal.
Interpretation and application of law
[37] The applicant claims that the High Court looked at r 1.07 out of context and submitted:
The point here is that the facts as alleged by the Committee were not found to be proved either in the Tribunal or in the High Court.
[38] Neither the Tribunal nor the Court found that r 1.04 had been breached. The Court noted that the Tribunal had found a breach of r 1.07 proved and said that this was a finding of conflict of interest.11
[39] The issue here involves a mixed question of fact and law. The fact that it involves reconsidering questions of fact militates against the grant of leave.12
Acting in litigation
[40] The applicant submitted that the evidence that had been given by Mr Morahan had to be of a contentious nature in order to engage the relevant rule and that it was not sufficient that there was a dispute between the parties on which the evidence was called. The applicant repeats the arguments advanced in the High Court that who the proper contracting parties were could only be determined on the basis of the documentary evidence.
[41] However, this ignores the fact that the issue was whether the parties had purchased the property in their own names or as the trustees. It also ignores the fact that, until Mr Morahan produced his relevant conveyancing file after the hearing had started, his position on this point was that the property had been purchased by the parties as trustees.
[42]The respondent submits:
In circumstances where the applicant failed to provide the documentary evidence that would prove who purchased the property in breach of his discovery obligations, to suggest that evidence on the point was expected to be entirely documentary is untenable.
[43]That submission is correct.
[44] However, the more important point is that this issue is heavily factually dependent, and not a matter meeting the criteria for a grant of leave to appeal.
11 Morahan v Wellington Standards Committee 2 [2018] NZHC 1229 at [72].
12 NH3 Refrigeration Ltd v Refrigeration Engineering Co Ltd [2018] NZHC 316 at [29], Rua v Mamaku Highlands Ltd [2012] NZHC 1848 at [25].
Meaning of pleaded allegations
[45] The applicant challenges the Court’s finding that a practitioner misleads the Court by filing a pleading containing allegations that he or she knows or ought to know are false. It is submitted that: “… it is seriously arguable that it is not correct statement of the law.”
[46] The applicant submits that an allegation in the pleading cannot possibly mislead the Court because it is not asserting the truth of anything. However, this overlooks that fact that here the Tribunal was not dealing with the simple denial in a pleading or a putting of the plaintiff/applicant to proof. Here, Mr Morahan filed a pleading that the Tribunal found he knew or ought to have known was false. He did not just file a statement of defence denying the pleading that the property in question was purchased by the parties personally, he had filed a pleading containing a positive representation that the property was purchased by the trustees. There is no bona fide argument capable of being mounted to the effect that filing a document in the Court containing positive statements that a lawyer knows or ought to know are false cannot possibly mislead the Court.
Guilty but not charged
[47] The applicant argues that the Court erred in law by finding the applicant guilty of conduct other than that specified in the charges laid against him. This submission seems to be based on the assumption that all of the matters referred to in the charges needed to be proved before there could be an adverse finding against the practitioner. This ignores the approach taken by the Committee, which made clear in the charge and in its written submissions that it alleged an overall course of conduct in respect of the time periods covered by the charges that amounted to misconduct, and unsatisfactory conduct (or conduct unbecoming) or negligence or incompetence.
[48] The Court agreed with the Tribunal that, while not every element in each of the charges had been made out, sufficient breaches had been established to justify the finding reached by the Tribunal.
[49] In his submissions, counsel for the applicant says: “In each case the High Court went along with these findings.”
[50] A more accurate way of describing matters would be to say the High Court reached the same conclusions as the Tribunal.
[51] After referring to the Tribunal’s finding that Mr Morahan’s conduct reached the threshold of negligence or incompetence in his professional capacity, to such a degree that it reflected on his fitness to practice as a barrister and solicitor and tended to bring the profession into disrepute, the Court noted that such a conclusion was consistent with the findings that preceded it and then said:13
Here, the charges were laid in the alternative. Negligence or incompetence were the least serious of the charges. It cannot be tenably argued that a practitioner could fail to comply with a variety of rules over an extended period of time but yet not be either negligent or incompetent.
[52] While the Court reached the same conclusion as the Tribunal, it had not merely “gone along” with the Tribunal’s conclusions, rather it set out why the finding of negligence or incompetence was established.
Penalty
[53] The applicant says the Court made an error in concluding that the Tribunal could have regard to some matters that had occurred before 1 August 2002 in relation to penalty. The applicant was critical of the Court referring to a passage from Daniels v Complaints Committee 2 of the Wellington District Law Society, where the High Court had said:14
In considering sanctions to be imposed upon an errant practitioner, a Disciplinary Tribunal is required to view in total to fitness of a practitioner to practice, whether in the short or long term.
[54] The applicant referred to an earlier passage in the same judgment where the Court had said:15
13 Morahan, above n 8, at [171].
14 Daniels v Complaints Committee 2 of the Wellington District Law Society [2011] 3 NZLR 850 (HC) at [34].
15 At [32] (emphasis added).
A Tribunal, when determining ultimate fitness to remain in practise, whether limited by suspension, or by striking off, is entitled to review the entire conduct of the practitioner and transgressions the subject of the disciplinary proceedings, and the general behaviour of the practitioner.
[55] The argument was that the words in italics qualified “the entire conduct of the practitioner” and “the general behaviour of the practitioner” so that such conduct or general behaviour had to be part of “the subject of the disciplinary proceedings”.
[56] Such a submission is a challenge to the standard approach of the Courts which does not limit relevant conduct or general behaviour only to that which is the subject of the disciplinary proceedings.
[57]As was correctly noted by the respondent:16
Matters such as previous good character, or past offending, are routinely taken into account in penalty decisions. In Hart v Auckland Standards Committee 1, the Full Court of the High Court stated that earlier misconduct of a similar type may demonstrate the practitioner lacks insight into the causes and effects of such behaviour, suggesting an inability to correct it.
[58] The Full Court in Sisson acknowledged that the Court, in coming to the penalty decision against which leave was sought to appeal, had considered various factors other than matters that were the subject of the relevant disciplinary proceedings “… including previous matters for which Ms Sisson was disciplined, her conduct during the hearing process, her personal difficulties and her personal attributes.”17
[59] The submission by the applicant that the only matters capable of being taken into account on an assessment of penalty are matters “the subject of the disciplinary proceedings” is untenable, and incapable of serious argument.
Costs
[60] The applicant challenged the Court’s finding that costs in the Tribunal are subject to their own regime, and the rejection of the argument advanced by the
16 Referring to Hart v Auckland Standards Committee 1 of New Zealand Law Society [2013] NZHC 83, [2013] 3 NZLR 103 at [189].
17 Sisson, above n 4, at [7]-[9].
applicant in the Court that the general rules relating to costs in civil proceedings should apply.
[61] The applicant relies on the decision of Roberts v Professional Conduct Committee as authority for that proposition.18 However, that case related to costs in the High Court on an appeal from the Tribunal and does not purport to apply to costs in the Tribunal itself.
[62] In support of his argument that the principle of costs applicable in all civil cases should apply with equal force in the Tribunal, the applicant refers to the Supreme Court decision in Prebble v Awatere Huata (No 2), where the Court said an order of indemnity costs could only be justified in extraordinary circumstances.19 But that case did not involve an application for costs in the Tribunal. It did not involve a case of professional discipline at all. It is therefore irrelevant to the costs regime in the Tribunal.
[63] There are number of cases that have held that the burden of costs of disciplinary proceedings ought to fall on the practitioner found to be at fault, rather than on his or her professional body.20 A similar approach has been taken in the High Court in relation to disciplinary bodies in other professions.21 This issue was also recently addressed in the case of Lagolago v Wellington Standards Committee 2.22
[64] Counsel for the applicant acknowledges that the Court in that case held that costs in disciplinary proceedings were subject to their own regime, but says that that decision is subject to an application for leave to appeal to the Court of Appeal.
[65] Counsel for the applicant in these proceedings is also counsel for the applicant in that case.
18 Roberts v Professional Conduct Committee of the Nursing Council of New Zealand [2014] NZCA 141, (2014) 21 PRNZ 753.
19 Prebble v Awatere Huata (No 2) [2005] NZSC 18, [2005] 2 NZLR 467 at [6].
20 See, for example, Canterbury District Law Society Complaints (No 2) Committee v Iosefa [2009] NZLCDT 5 at [41].
21 See Vatsyayann v Professional Conduct Committee of the New Zealand Medical Council [2012] NZHC 1138 at [34].
22 Lagolago v Wellington Standards Committee 2 [2018] NZHC 1090.
[66] The fact that there is an application to the Court of Appeal for leave to appeal that decision does not mean that the decision is wrong.
[67]As the Court in this case noted:23
An appellate court will only interfere with a costs award made by a Disciplinary Tribunal if the Tribunal has exercised its discretion in a way that is wrong in principle or clearly unreasonable.
[68] Given the settled authority, both in relation to proceedings before the Tribunal and proceedings before other similar professional discipline bodies, that the public interest factor justifies a different approach to costs in those bodies as compared to costs in ordinary civil cases, the proposition that general civil proceedings costs principles apply with equal force in the Tribunal is simply not capable of serious argument.
Conclusion
[69] The grounds for appeal advanced by the applicant do not meet the threshold of involving some interest, public or private, of sufficient importance to outweigh the cost and delay of further appeal, and they most certainly do not meet the test of involving 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 for its decision.
[70] Accordingly, the application for leave to appeal to the Court of Appeal is dismissed.
Churchman J
Solicitors:
Luke Cunningham & Clere, Wellington
23 Morahan, above n 8, at [212].
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