Orlov v New Zealand Law Society (Auckland Branch)

[2012] NZHC 173

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2010-404-2868 [2012] NZHC 173

BETWEEN  EVGENY ORLOV Plaintiff

ANDNEW ZEALAND LAW SOCIETY (AUCKLAND BRANCH)

First Defendant

ANDAUCKLAND STANDARDS COMMITTEE NO 1

Second Defendant

ANDNATIONAL STANDARDS COMMITTEE Third Defendant

ANDTHE NEW ZEALAND LAW SOCIETY DISCIPLINARY TRIBUNAL

Fourth Defendant

Hearing:         10 February 2012 (by telephone) Counsel:      E Orlov, Applicant, in person

P J Morgan QC for Respondents

Judgment:      17 February 2012

JUDGMENT (NO. 6) OF HEATH J

This judgment was delivered by me on 17 February 2012 at 10.30am pursuant to Rule 11.5 of the

High Court Rules

Registrar/Deputy Registrar

Solicitors:
Glaister Ennor, PO Box 63, Auckland
Counsel:
E Orlov, PO Box 8333, Auckland

P J Morgan QC, PO Box 19021, Hamilton

ORLOV V NEW ZEALAND LAW SOCIETY (AUCKLAND BRANCH) HC AK CIV 2010-404-2868 17

February 2012

Introduction

[1]      Mr Orlov seeks:

(a)      Judicial review of decisions made by the New Zealand Law Society, Auckland Lawyers’ Standards’ Committee, Auckland Lawyers’ Standards’ Committee No 1 and National Standards Committee (collectively, the Law Society) to bring disciplinary charges against him.

(b)      Damages for misfeasance in public office.

(c)       Declarations and damages, for alleged breaches of the New Zealand

Bill of Rights Act 1990 (Bill of Rights).

[2]      On 7 December 2011, I made a decision severing the judicial review claims from those based on misfeasance in public office and breach of the Bill of Rights.[1]

That was done at a time when the proceeding had been set down for a hearing of eight days, commencing on Monday 27 February 2012.   I was satisfied that the judicial  review  proceeding  required  prompt  disposition  because  charges  were awaiting determination by the New Zealand Lawyers’ and Conveyancers’ Disciplinary Tribunal and, if all claims proceeded together, the proceeding could not be completed within the eight days allocated.

Mr Orlov’s applications

[1] Orlov v New Zealand Law Society (Auckland Branch) (No. 5) HC Aucklad CIV 2010-404-2868,

7 December 2011 at para [41].

[3]      On 31 January 2012, Mr Orlov filed a memorandum seeking a direction that the hearing of the judicial review proceeding be limited to (what he termed) the “second set of charges brought and initiated by the National Standards Committee”.

Mr Orlov’s reasons for seeking that direction were:

(a)       The court has indicated that the issue of breach of Bill of Rights must be conducted separately.   The court had also intimated and directed correctly that issues of bad faith must be the subject of cross examination.  Since the first set of charges involve a series of bad faith   actions   by  Mr   Laubscher   and   others   and  will   involve necessarily detailed cross examination of Mr Laubscher, it is impractical for these matters to continue without such cross examination as no findings related to actual bias and bad faith can be made without such cross examination, bar order for formal proof.

(b)      The discovery for the second set of charges has been provided on the

23 December.  Counsel has spent the best part of the last three weeks preparing the bundles and submissions concerning the second set of

charges and after having perused the discovery, realised that hearing the Judicial Review will concern the analysis of National Standards

proceedings concerning no less than about 16 cases.

(c)       If the court finds that the second set of charges must be set aside, it will  automatically  mean  that  the  first  set  must  be  also  on  strict judicial review grounds alone.   The issues as far as the Judicial Review grounds are concerned are similar except that the first set of charges deals with more detailed circumstances of actual bias and bad faith and therefore it would be in the interests of justice that the first set at least is determined later..

(d)       Counsel   has   been   “stressed”   by   proceedings   urgently   made involving the Zion Wildlife and this has taken his time on an urgent and unplanned basis.  This combined with the fact that discovery on the second set of charges has been given late has meant that plaintiff has been prejudiced.

(e)       Essentially the judicial review grounds and considerations involved in the first set of charges are very similar to those in the second set. The courts time would be unnecessarily taken up in the factual position if each of the two sets of charges were heard.

(f)       Further the cost of bundling and the volume of documents is simply astronomical.

(g)       Counsel’s primary concern is to avoid discussions or submissions surrounding bad faith.  Counsel does not wish the Courts rulings on these issues to set the shape for the Bill of Rights proceedings where subpoena and cross examination will be allowed as of right.  In order to preserve this position counsel will not be arguing bad faith in the review of the second set of charges but will confine his submission to the classical heads of judicial review (ie nature justice, irrelevant considerations, ultra vires, procedural impropriety (breaches of statute) and apparent bias.

(h)       The second set of charges are further more amenable to a traditional judicial review analysis without further evidence whereas the first set of charges involves necessarily detailed cross examination of Mr Laubscher and others on the issues of bad faith.  No court can or is able to find bad faith without cross examination as was intimated by

your honour and further Mr Laubscher would have to be given the opportunity to refute such allegations.

(i)        There is no prejudice to either the plaintiff or the defendant from this course as the trial has in any event effectively been split.   Further since the tribunal has never agreed to stay proceedings and the first set of charges is already extremely stale there is no further prejudice occasioned by this approach to either the plaintiff, the public or the defendant.  In any event a stay has never been applied for and if it is, that something can occur on the merits.

(j)        The  plaintiff  seeks  an  urgent  conference  at  the  courts  earlier convenience.

[4]      I directed that the memorandum be served on counsel for the Law Society, Mr Morgan QC, and that any memorandum in response be filed and served on or before  9  February  2012,  with  the  intention  that  I would  hear  from  counsel  by telephone  on  10  February  2012.    A  memorandum  was  subsequently  filed  by Mr Morgan who opposed the directions sought because:

(a)       It is not accept that the issue of bad faith “will involve necessarily detailed cross examination of Mr Laubscher”, nor is it impractical for  all  of  the  decisions  the  subject  of  Applications  for  Judicial Review by the Second and Third Respondents to continue without cross examination.  This is merely the Plaintiff seeking to revisit the decision of this Court on 7 December 2011 severing the Bills of Rights and misfeasance causes of action from the Judicial Review causes of action.

(b)       The discovery for the National Standards Committee decisions was delayed because the Plaintiff would not provide an undertaking as heralded in the materials filed on behalf of the Respondents on 15

November 2011. The Court had to intervene by way of its Minute of

16 December 2011 which recorded the Plaintiff’s then absence overseas and continuing absence until 10 January 2012.   Judicial Review of the National Standards Committee decision will not “concern the analysis of National Standards proceedings concerning no less than about 16 cases”.

(c)       It could not possibly be the case that were the Court to find the National Standards Committee decision should be set aside it will automatically mean that the decisions of the Second and Third Respondents must also be set aside.  The parties are different.  The cases are different.  The issues are different.  It could not possibly be in  the  interests  of justice that  the  first  set  of  charges,  laid  as  a consequence of the decisions under review of the Second and Third Respondents are determined at a later date.

(d)       The Plaintiff has made the decision to undertake other work for other clients.   Discovery was not given late.   The Plaintiff has not been prejudiced.   He has managed to find the time to file and proceed

with an appeal against the decision of this Court of 7 December

2011.

(e)       This  ground  is  really  the  justification  for  the  Applications  for Judicial Review to be heard together.  The grounds for Judicial Review are similar.   The factual position for each of the series of charges laid as a consequence of the decisions under review of the three Standards Committees differ, but the extent of the differences does not justify separate hearings.

(f)       The cost of bundling and the volume of documents arises because of the Plaintiff’s tactic of bundling all the materials he receives by way of discovery and inspection into volumes and then filing them in the Court  without  regard  to  relevance.    If  the  documents  that  the Plaintiff needed for his applications were confined to that which were truly relevant this impediment would be avoided altogether.

(g)       This ground is immaterial.  The Plaintiff has not pleaded bad faith in his pleadings against the National Standards Committee.  He could not argue bad faith in the review of the decisions of the National Standards Committee.

(h)       This ground is really a repeat of ground (a).  For the reasons above the Respondents do not accept that determining the Applications for Judicial Review of the decisions of the Second and Third Respondents will necessarily involve detailed cross examination of Mr Laubscher or anyone.

(i)        There is significant prejudice to the Respondents by the Applications for Judicial Review of the decisions of the Second and Third Respondents not being heard on 27 February.  For the reasons given previously those charges have already been enormously delayed and work already carried out for the hearing wasted.   Contrary to the Plaintiff’s assertion, he did apply for a stay of those charges in the Tribunal.  That application was heard on 15 April 2011 and refused but the proceedings in the Tribunal adjourned to 15 September 2011, those events are recorded in this Court’s judgment of 30 August

2011 at paragraph 2 where the Court quoted from the decision of the

Tribunal.

[5]      Before a hearing could be held to deal with those issues, Mr Orlov filed a further memorandum on the topic of discovery.   That has proved a vexed issue. Disputes continue over the extent of discovery provided by the Law Society.

The discovery issue

[6]      I deal briefly with the discovery memorandum.  I told Mr Orlov and counsel, at the telephone conference on 10 February 2012, that I was not prepared to deal

with Mr Orlov’s discovery application summarily.  I recorded that in a Minute issued

following the telephone conference.[2]

[2] Orlov v New Zealand Law Society (Minute No. 6) HC Auckland CIV 2010-404-2868, 10 February 2012.

[7]      The issue, if pursued, will be addressed on the first day of the substantive hearing.  Should witnesses be required, Mr Morgan has advised that Ms Olivier and Mr Heyns will be available to give evidence.

Limitation of substantive hearing to National Standards’ Committee charges

[8]      After   receiving   Mr   Orlov’s   initial   memorandum   and   referring   it   to Mr Morgan for a response, I became aware, for the first time, that Mr Orlov had appealed against my judgment of 7 December 2011.  That came to my knowledge following receipt, from the Court of Appeal, of a copy of a judgment of Arnold J (sitting alone), given on 7 February 2012, in which he declined Mr Orlov’s application to review the Acting Registrar’s decision to refuse to waive the payment

of security for costs.[3]

[3] Orlov v New Zealand Law Society [2012] NZCA 6.

[9]      When I inquired of counsel at the telephone conference, Mr Orlov confirmed my understanding that substantive the appeal challenged my decision to sever the judicial review proceeding from the balance of the causes of action.  The appeal had been heard on 8 February 2012 and given the proximity of the substantive hearing date, it was clear that a judgment would be given promptly.   After hearing from counsel, I indicated a judgment would be given on this aspect of Mr Orlov’s application after receipt of the Court of Appeal judgment, so nothing was done inconsistent with its decision.

[10]     On 15 February 2012, the Court of Appeal dismissed Mr Orlov’s appeal.[4]   In giving the Court’s judgment, Wild J made it clear that the severance order was appropriate and that Mr Orlov was not prejudiced by that and other directions I had

made.

[4] Orlov v New Zealand Law Society [2012] NZCA 12.

[11]     Counsel, at the telephone conference, were given until 5pm on the working day  following  delivery  of  the  Court  of Appeal  judgment  to  make  any  further submissions.  None have been received.

[12]     The shape of the hearing has been set for some time.   There has been no suggestion until Mr Orlov’s application to me that the judicial review proceeding could not be completed within the given time.  If anything, Mr Orlov had indicated it could be completed well within time.

[13]     Having said that, I note that the Court of Appeal recorded Mr Orlov’s belief that the whole of the eight days allocated would be required to take me “through the documentary   evidence    relating   to    his    application    for   judicial    review”.[5]

Notwithstanding the voluminous documentation, I do not accept that.   Certainly, I intend the hearing be conducted with much more efficiently than that.   While Mr Orlov will have ample opportunity to put his case, he cannot expect to use all eight days to make submissions on documentary evidence that I am capable of reading fully myself.

[5] Ibid, at para [22].

[14]     Mr Orlov has sought to make much of the need to cross-examine to establish bad faith.  He has submitted the need to cross-examine Mr Laubscher, an officer of the Law Society, in some detail.  That may or may not be so.  But, as far as witnesses who  are  not  available  for  cross-examination  are  concerned,  Mr  Orlov  is  not prevented from making submissions on the issue of bad faith as it is an accepted principle that, in drawing inferences, all evidence must be weighed according to the proof which it was within the power of one side to have produced and in the power

of the other to have contradicted.[6]   While, ordinarily, it is necessary for a witness to

be cross-examined in order to impute bad faith against him or her, if the witness is not made available for that purpose then the Court must proceed on that basis.

[6] Blatch v Archer (1774) 1 Cowp 63 at 65, Snell v Farrell [1990] 2 SCR 311 (SCC) at 328 and Fairchild v Glen Haven Funeral Services Ltd [2003] 1 AC 32 (HL) at para [13], applied in Body Corporate 188529 v North Shore City Council [2008] 3 NZLR 479 (HC) at para [58].

[15]     Further, the Court of Appeal has also commented on my earlier indications of lack of prejudice to Mr Orlov from his inability to cross-examine decision-makers. The Court said:

[25]     We return to Mr Orlov’s contention that Heath J erred in failing to recognise that severance prejudiced his claims. This is Heath J’s assessment in his 7 December 2011 judgment of the position:

[17] If anything, the approach adopted by the Society and the Standards Committees assists Mr Orlov. In the absence of evidence (oral or documentary) contradicting primary evidence from Mr Orlov about bad faith considerations, the Society and the Standards Committees will be limited to challenging (by cross-examination or submission) his evaluation of events, and the inferences he seeks to draw from the way in which the events unfolded. The Society will not be able to put into evidence documents in its possession or control that have not been discovered. And, in the absence of witnesses who can contradict primary facts on which Mr Orlov has given evidence, they may have difficulty (in the absence of any concessions under cross-examination) in rebutting what Mr Orlov has said. However, that is the way in which the Society and the Standards Committee have chosen to run their case. It is not for the Court to second-guess that tactical decision.

Essentially,  the Judge  considered  that  Mr  Orlov  was  advantaged  by  the manner in which the respondents have chosen to meet Mr Orlov’s claims. In particular, the Judge considered Mr Orlov was not prejudiced by the inability to cross-examine the decision makers because the respondents had chosen not to file and serve affidavits from them.

[26]      Heath J has yet to give directions about cross-examination. But he has recognised that it may be necessary for Mr Orlov to question Ms Ollivier and Mr Heyns to clarify the extent of their knowledge of the way in which particular decisions were made. To the extent that the respondents intend relying on affidavits filed with the Tribunal, Mr Orlov must have an opportunity to cross-examine the makers of those affidavits. In his oral submissions Mr Morgan accepted that.

[27]     We cannot fault Heath J’s assessment of the position. We do not accept  that  the  Judge’s  severance  order  has  prejudiced  Mr  Orlov.  In particular, we do not accept Mr Orlov’s oral submission to us that it was “hopeless that I cannot cross-examine the actual decision makers when the whole issue is bad faith”. We pointed out to Mr Orlov — as had the Judge — that he would not be able to cross-examine the witnesses he had subpoenaed. He responded to us that he would call them and “declare them hostile”. This response misunderstands the position. And the utility of calling a witness in order to ask the witness whether he or she made a decision in bad faith is doubtful, to say the least. (footnotes omitted)

[16]     Other reasons why it is inappropriate to confine the hearing to the charges

laid by the National Standards’ Committee are:

(a)      Resolution of those aspects of the claim will not necessarily determine other aspects of the judicial review application.

(b)The questions of cost are largely ones brought about by the nature and volume of the documents.

(c)      If Mr Orlov’s ability to prepare for the hearing as a litigant in person has been compromised by acceptance of instructions in other cases, he has no one to blame but himself.  He has been aware for months of the proposed hearing dates.  Mr Orlov had a choice whether to accept the Zion Wildlife instructions.  I do not criticise him for doing so but his

decision cannot be a reason for altering the existing directions.

Result

[17]     Mr Orlov’s application to limit the hearing to those matters raised by the decisions of the National Standards’ Committee is dismissed.  The hearing will deal with all aspects of the judicial review proceeding.

[18]     Costs are reserved.

P R Heath J

Delivered at 10.30am on 17 February 2012.