Quentin Stobart Haines; ; and; National Standards Committee (No 1)
[2023] NZHC 3039
•30 October 2023
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV 2022-485-000294
[2023] NZHC 3039
UNDER The Lawyers and Conveyancers Act 2006 IN THE MATTER
of an appeal against a decision of the
Lawyers and Conveyancers Disciplinary Tribunal
BETWEEN
QUENTIN STOBART HAINES
Appellant
AND
NATIONAL STANDARDS COMMITTEE (NO 1)
Respondent
Hearing: 27 & 28 June 2023 Appearances:
C R Carruthers KC for the Appellant R B Moon for the Respondent
Judgment:
30 October 2023
JUDGMENT OF TAHANA J
This judgment was delivered by me on 30 October 2023 at 4.00pm Pursuant to Rule 11.5 of the High Court Rules
…………………………
Registrar/Deputy Registrar
Solicitors:
Aspire Legal, Wellington
R B Moon, Barrister, Wellington
HAINES v NATIONAL STANDARDS COMMITTEE (NO 1) [2023] NZHC 3039 [30 October 2023]
Introduction
[1] The appellant, Quentin Haines, appeals a decision of the New Zealand Lawyers and Conveyancers Disciplinary Tribunal (the Tribunal).
[2] The Tribunal found Mr Haines guilty of seven charges of misconduct and two charges of unsatisfactory conduct under ss 7 and 12 of the Lawyers and Conveyancers Act 2006 (the Act). The charges relate to Mr Haines’ conduct in providing services to three clients: M, R and C.
[3] Mr Haines was admitted in late 2006. He then travelled overseas and worked outside of the legal industry. In 2011, having returned to New Zealand, Mr Haines commenced work at Simpson & Co, initially as an unpaid law clerk and then as an employed solicitor from June 2012 to March 2017.
[4] Mr Haines then practised on his own account at QH Law from April 2017 until 23 August 2018 when he exited legal practice for unrelated reasons. Mr Haines had practised in insolvency law.
[5] The charges concern Mr Haines’ conduct both as an employed solicitor at Simpson & Co and then when he practised on his own account at QH Law. The relevant factual background is set out when considering the charges in relation to each of M, R and C.
Approach on appeal
[6] Appeals proceed by way of rehearing1 and the Court may confirm, reverse or modify the decision appealed against.2
[7] To allow an appeal, the appellate court must be persuaded that the decision under appeal is wrong,3 but the weight it gives to the decision under appeal is a matter for the appellate court’s assessment.4
1 Lawyers and Conveyancers Act 2006, s 253(3)(a).
2 Lawyers and Conveyancers Act 2006, s 253(4).
3 Austin, Nichols & Co v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [13].
4 K v B [2010] NZSC 112, [2011] 2 NZLR 1 at [31].
Instructions from M
Background
[8] In late 2015, Mr Haines began acting for M and associated entities, initially on a pro bono basis. M formally engaged Simpson & Co in October 2016.
[9] M and associated entities continued to instruct Mr Haines after he moved to QH Law in April 2017.
[10] On 9 April 2017, Mr Haines sent an engagement letter to M attaching client information and QH Law’s standard terms. The engagement letter acknowledged that M had instructed Mr Haines for various litigation matters for M and associated entities. Mr Haines’ hourly rate was specified as $1,000 per hour plus GST. The engagement letter records that fees reflect the time spent on a matter, charged at the current hourly rate, and adjusted where appropriate to reflect other factors. The attached standard terms record that interim invoices would be sent to the client “usually monthly and on completion of the matter, or termination of [the] engagement.”
[11] Mr Haines says he was working approximately 20 hours per week for M and associated entities. No invoices were sent to M until 23 August 2018 when Mr Haines prepared a creditors’ proposal for M (which included QH Law’s invoice) and exited practice.
[12] Between December 2016 and April 2017, Mr Haines took out three personal loans from finance companies which were guaranteed by M and/or M’s trust, the L No.1 Trust (the Guarantees) as follows:
(a)$75,000 from Fico Finance Ltd (Fico) in December 2016;
(b)$250,000 from Bright Enterprises in February 2017; and
(c)$250,000 from Fico in April 2017.
[13]M received independent legal advice on the Guarantees.
[14] Mr Haines says he agreed with M that if he was unable to service the loans, M would do so (the Servicing Term). Mr Haines also advanced some of the monies from the loans to M (the Advances). The Servicing Term and Advances were not documented.
[15] In 2018, Mr Haines defaulted on the loans and received Property Law Act 2007 (PLA) notices demanding payment.
[16] On 3 April 2018, Mr Haines wrote to M advising M to obtain independent advice on the PLA notices and the associated obligations contained within the associated guarantee, given the PLA notices from Fico. Mr Haines indicated that he had arranged for Mr Langford to act as supervisor of M’s files until the PLA notices were settled and that this would be done at Mr Haines’ expense. If M was unhappy with that arrangement, he was able to instruct new counsel.
[17] Mr Langford confirmed that Mr Haines had spoken to him about supervising the files but says that he did not receive any files.
[18] In June 2018, Mr Haines proposed to M that he purchase a property from him with a financing agreement in order to resolve their joint financial difficulties (the Cuba Street Proposal). The Cuba Street Proposal did not proceed and Mr Haines continued to act for M.
[19] On 3 August 2018, Mr Haines wrote to M about his legal fees stating, “I have expended over 4,000 hours (my rate is $1,000 per hour) on your work and provided you with considerable credit over the last two years.” Mr Haines noted that he was one of M’s largest creditors and the current financial position was untenable. M responded indicating total disagreement with Mr Haines and referring to the Guarantees and the agreement that Mr Haines get his costs out of winning the case. Mr Haines responded indicating he had a plan to resolve M’s issues and that he did not intend on issuing an invoice, but that he was in a position where he could not meet his mortgage payments.
[20] On 21 August 2018, Mr Haines met with M and the trustees of M’s trust (L No.1 Trust) to discuss a creditors’ proposal to be submitted to the Court. Mr Haines recorded the discussion in a letter, as follows:5
[46] In this letter, Mr Haines referred again to his unbilled fees, and notes that he has “…raised with you on several occasions…”. He went on to say “As part of this process a fair fee is going to need to be agreed even if it is not paid at this point in time (I will prepare a summary of the time spent for you on all matters). You will need my fees for voting purposes as set out below.” Later in the letter Mr Haines stated: “The creditors that support you will need a total combined debt of 2.1 million in order to have a 75% majority. To achieve this number legitimately I will invoice my legal fees at an agreed rate. This will act as a new debt since the Court of Appeal (so no one accuses anyone of misleading the Court) and will bring the numbers into line.”
[21]On 22 August 2018, at 9.26 pm Mr Haines sent an email stating:
I will invoice you for ALL legal work done on an agreed fee basis. This will allow QH Law to vote in favour of the proposal with a siz[e]able debt that will guarantee the vote in your favour.
[22] The trustee responded at 12.26 am on 23 August 2018, asking if this made the trust or M liable to pay the invoice “even though it is not at present supported by an agreed fee structure or invoices?”
[23] At 3.28 am that same morning, Mr Haines emailed his invoice in the amount of $1,000,000 (plus GST). Later that day Mr Haines met with M at Court and M swore an affidavit before a Deputy Registrar. The schedule of unsecured creditors attached to the affidavit included QH Law for $1,150,000 (including GST) and Mr Haines for
$93,425.59.
[24] The Court was not prepared to endorse the creditors’ proposal and on 28 August 2018 M was adjudicated bankrupt.
[25] On 24 May 2023, pursuant to s 252 of the Insolvency Act 2006 the Court directed the Official Assignee to accept Mr Haines’ proof of debt in M’s bankruptcy for an amount of $525,000 (plus GST) and the disbursements for which Mr Haines could produce GST invoices.6
5 National Standards Committee v Haines [2022] NZLCDT 10 at [46].
6 [Redacted].
Charge one – terms of engagement
[26] The Tribunal found that Mr Haines had failed to update the April 2017 engagement letter to reflect his agreement with M that fees would only be payable on achievement of milestones, windfalls, or when M had funds. The Tribunal held that this conduct contravened r 1.6 and/or 3.4 and 3.6 and constituted unsatisfactory conduct under s 12(b) and (c) of the Act.
[27] Solicitors are required to, in advance, provide in writing, information on the principal aspects of client service7 and if that information becomes inaccurate in a material respect, ensure that the information is updated with due expedition.8
[28] Any information provided to a client under the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (the Rules) is required to be clear and not misleading given the identity and capabilities of the client and the nature of the information.9
[29]Section 12(b) and (c) defines unsatisfactory conduct as:10
In this Act, unsatisfactory conduct, in relation to a lawyer or an incorporated law firm, means—
…
(b)conduct of the lawyer or incorporated law firm that occurs at a time when he or she or it is providing regulated services and is conduct that would be regarded by lawyers of good standing as being unacceptable, including—
(i)conduct unbecoming a lawyer or an incorporated law firm; or
(ii)unprofessional conduct; or
(c)conduct consisting of a contravention of this Act, or of any regulations or practice rules made under this Act that apply to the lawyer or incorporated law firm, or of any other Act relating to the provision of regulated services (not being a contravention that amounts to misconduct under section 7);
…
7 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, r 3.4.
8 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, r 3.6.
9 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, r 1.6.
10 Lawyers and Conveyancers Act 2006.
[30] The standard terms of engagement attached to the April 2017 engagement letter provided that:
2.4Invoices: We will send interim invoices to you, usually monthly and on completion of the matter, or termination of our engagement. We may also send you an invoice when we incur a significant expense.
[31] Mr Haines says there was no need to update the engagement letter because the arrangement was that no invoice would be issued until the end of the retainer. In those circumstances, there was no material change to the engagement terms.
[32] Mr Haines gave evidence that he had agreed with M that he would not invoice until there were funds to pay or “milestones, windfalls, [or] when [M] had money.” He accepted that it was an “agreement to agree.” He also accepted that the engagement letter did not capture the fact he would not invoice and would extend credit.
[33] The Tribunal found that there was no evidence any milestones were ever agreed or that the varied fee arrangements were ever properly recorded, certainly not in a manner that would have allowed M to provide his agreement.
[34] The Tribunal rejected M’s contention that he and Mr Haines agreed that he would only pay if he obtained a successful costs award.
[35] The standard terms attached to the engagement letter refer to QH Law sending interim invoices “usually” monthly and on completion or termination of the engagement. The agreement to invoice monthly was therefore inaccurate in a material respect as Mr Haines was not entitled to invoice monthly under his arrangement with
M. In those circumstances, Mr Haines should have updated the engagement letter to reflect the actual fee agreement. That was a breach of r 3.6.
[36] I do not consider that policy or practical considerations support finding in favour of Mr Haines because the agreement here was not simply an ongoing offer to provide credit. If that was the agreement then Mr Haines would have continued to be entitled to invoice monthly, but he clearly was not under the terms of the agreement Mr Haines accepted with M.
[37] I agree that Mr Haines’ failure to update the engagement letter constitutes unsatisfactory conduct under s 12 of the Act in that it is conduct that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer. It was also conduct that would be regarded by lawyers of good standing as being unacceptable and unprofessional.
[38]The appeal against this charge is therefore dismissed.
Charge two – overcharging
[39] Mr Haines was charged with charging a fee that exceeded a fair and reasonable amount in breach of r 9.11
[40] A lawyer must not charge a client more than a fee that is fair and reasonable for the services provided, having regard to the interests of both the client and lawyer, and having regard to the factors set out in r 9.1.12 Those factors are:13
(a)the time and labour expended:
(b)the skill, specialised knowledge, and responsibility required to perform the services properly:
(c)the importance of the matter to the client and the results achieved:
(d)the urgency and circumstances in which the matter is undertaken and any time limitations imposed, including those imposed by the client:
(e)the degree of risk assumed by the lawyer in undertaking the services, including the amount or value of any property involved:
(f)the complexity of the matter and the difficulty or novelty of the questions involved:
(g)the experience, reputation, and ability of the lawyer:
(h)the possibility that the acceptance of the particular retainer will preclude engagement of the lawyer by other clients:
(i)whether the fee is fixed or conditional (whether in litigation or otherwise):
(j)any quote or estimate of fees given by the lawyer:
11 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008.
12 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008.
13 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, r 9.1.
(k)any fee agreement (including a conditional fee agreement) entered into between the lawyer and client:
(l)the reasonable costs of running a practice:
(m)the fee customarily charged in the market and locality for similar legal services.
[41] The terms of any fee agreement between a lawyer and client must be fair and reasonable, having regard to the interests of both client and lawyer.14
[42] The Tribunal found that in rendering the 23 August 2018 invoice, and in the manner that he did, Mr Haines had engaged in conduct that was “disgraceful and dishonourable” so as to constitute misconduct pursuant to s 7(1)(a)(i) of the Act.
[43] Section 7 defines misconduct and includes conduct that would reasonably be regarded by lawyers of good standing as disgraceful or dishonourable.15
[44] Mr Haines relies on the report of Mr McMenamin to argue that the level of fees was reasonable. Mr McMenamin was appointed to investigate the complaints against Mr Haines. The Tribunal noted that Mr McMenamin concluded that the time spent on litigation matters could be assessed at 1,419.5 hours at a rate of $500 per hour (amounting to $709,750 (plus GST)) and added to that was non-court time which Mr Haines had said was 531 hours at $500 per hour ($265,500 (plus GST)). The total of those two invoices was $975,250 (plus GST).
[45] Mr McMenamin’s report was reliant on Mr Haines’ reconstruction of the time he spent on the files and not on contemporaneous time records. The total amount is not consistent with Mr Haines’ contemporaneous email in June 2018 indicating that the invoice as at that date would be $500,000. Further, the transcript of the meeting on 22 August 2018 (set out below) indicates that Mr Haines likely inflated the invoice for the purpose of increasing his share of the overall creditors’ pool.
[46] The Tribunal considered that the $500 hourly rate was a significant inflation of a “fair and reasonable” charge-out rate for a lawyer at Mr Haines’ level and referred
14 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, r 9.2.
15 Lawyers and Conveyancers Act 2006, s 7(1)(a)(i).
to evidence as to the average provincial charge-out rates which were significantly lower. The Tribunal also referred to Mr Haines’ records that in June 2018, he could have expected to render invoices totalling $500,000. That was only two months prior to the invoice which would require that $500,000 of legal work had been undertaken in two months. That is not plausible.
[47]The Tribunal relied on the transcript of the meeting on 22 August 2018:
Mr Haines: Because when you look at what this collection of debts is going to look like to give the majorities and everybody else, there’s going to be a pool of $2.5 million, say, of paper debt sitting there, okay?
Because you’re suddenly counting every single bit of paper, okay, to make sure you’ve got the voting rights there, so all of [A’s] debts, all of [R’s] debt…
To make the number as big as bad a number as possible.
So you have a majority, okay. That’s why as part of it I’ll be filing the
$100,000 monies, I’ll be putting in an invoice enough to cover to make sure we get the ratios right, okay? Don’t expect it to be jumped on or paid or anything like that, its there for the voting purposes because you need more votes in your favour, okay?
And that’s what this is about, this is about making sure the deck’s stacked in your favour and the downside is minimised.
[M]: So you are going to put invoices in as well?
Mr Haines: Yeah, you need me to get the numbers there. Everybody needs to…
Mr Haines: Okay, which is why I said you don’t start paying everybody, you bank the money and save it as it comes in and then when you go to that meeting you can say “hey, new proposal everybody, I’m floating it today, the trustee will float it today”.
[M]: Mind you with your debt in there it knocks the value of the – knocks the value of Bay –
Mr Haines: Of what they’re getting out. [M]: Yeah, and also the 120,000 to –
Mr Haines: It works, this is the sensible thing to do, just trust me. [M]: I see what you mean.
Ms F: So the only thing he has to pay is the levy to keep up?
[M]: No, I’m not talking about that, I’m talking about (inaudible) by Quentin putting his fee in there now –
Mr Haines: Exactly….
Mr Haines: …and I just need to jig the numbers to make sure that we have got that…three quarter majority, to tip it across the line.
[M]: Yeah.
Ms F: So this invoice that you’re putting into the pool Mr Haines: Yeah
Ms F: Does [M] have to honour that, or is that some other arrangement you’ve got for fees or –
Mr Haines: No, that gets treated – that gets treated like everything else, okay? So what will happen is under the official trustee thing, like everybody else you’re going to get X number of cents in the dollar; great, wonderful. That money’s going to go straight back around, it will go around the merry-go- round back into FICO or (inaudible) on the other side…
Mr Haines: I’ve never worried about billing fees and I don’t sit there, you know, recording time every 5 seconds etc.
Ms F: Because a lawyer would get that hourly rate plus costs awards against
–
[M]: Hundreds of hours the body corp, hundreds of hours.
Mr Haines: The technical – okay, technically there’s way back in beyond (inaudible) a letter of engagement. That doesn’t matter, okay, lawyers can bill on a whole range of different processes, time spent, results.
[M]: Agreements.
Mr Haines: Whatever they want to do, okay? Ms F: Cases is won, yeah.
Mr Haines: The important aspect for the purpose of this exercise is that we’re going to be filing an invoice by agreement for work done. What I’ll do is on the invoice we’ll just list all the cases we’ve done and nobody’s going to be able to dispute that.
Ms F: And the trustee can’t dispute it and neither can – Mr Haines: Because its agreed.
[48] The above indicates that it is likely that Mr Haines manipulated the amount of the invoice to achieve the necessary voting structure to support the creditors’ proposal. There would have been no need to refer to “putting in an invoice enough to cover to make sure we get the ratios right” if Mr Haines was simply invoicing what was owed.
It would also be unnecessary to indicate that he would “need to jig the numbers to make sure that we have got that… three quarter majority.”
[49]I agree with the Tribunal’s observation as to the transcript:16
[95] Reading the transcript as a whole, the overwhelming impression is of a fee being set, not with regard to the requirements of Rule 9 and the factors referred to at Rule 9.1, or in the context, as Mr Moon put it, of a “genuine fee setting exercise at the end of a long engagement”, but rather with the primary motivation of setting a fee that could be presented in the context of a creditors proposal, and which had the effect of inflating the level of support that proposal would gain.
[96] That impression is also supported by the fact that, as the transcript reflects, Mr Haines clearly told [M] that he would not have to pay the invoice.
[50] Counsel for Mr Haines says that the primary purpose of the creditors’ proposal was to put all creditors’ claims before the independent trustee and that the level of the invoice simply reflects that process. It would ultimately be for the independent trustee to determine whether to accept that invoice. This submission, however, does not explain the content of the transcript of the meeting. Even if the independent trustee was to ultimately decide whether to accept the invoice, that does not justify a lawyer inflating an invoice to increase the pool of “friendly creditors” and to enable a lawyer to have a greater share of the creditor vote.
[51] The Tribunal also considered the circumstances in which the invoice was rendered. At 12.26 am on the morning of 23 August 2018, Mr Haines indicated that he would “invoice [M] for ALL legal work done on an agreed fee basis. This will allow QH Law to vote in favour of the proposal with a siz[e]able debt that will guarantee the vote in [M’s] favour.” In response the trustee asked whether M (or his associated trust) would be liable to pay it, “even though it is not at present supported by an agreed fee structure or invoices.”
[52] At 3.28 am that same morning, Mr Haines sent an email attaching a copy of the invoice stating:
The attached invoice represents a substantial fee reduction on a time spent basis. I will prepare in the background a report summary of the cases and
16 National Standards Committee v Haines [2022] NZLCDT 10.
attendances that it relates to. The reality is it represents a substantial discount on the strict time spent and is a sensible solution to the outstanding unresolved fee issues. However if the invoice is not agreed with for whatever reason this [will] need to be discussed prior to [redacted] including it as an acknowledged debt in this proposal. Please can [redacted] advise if he accepts or disputes it prior to filing of the proposal.
[53] The above was the first time that M was notified of the amount of the invoice. The invoice was then attached to the affidavit sworn by M at Court that morning.
[54] Mr Haines applied under s 239 of the Insolvency Act for an order to accept his claim for the fees under the 23 August 2018 invoice. The Official Assignee asked the Court to determine the quantum of Mr Haines’ claim under s 252 of the Insolvency Act. The Court considered that Mr Haines’ time records are “for the most part, ex post-facto reconstructions and thus inherently unreliable”17 but accepted the report of Mr McMenamin as to his assessment of the likely hours spent on M’s work. The Court however, like the Tribunal, was not satisfied that $500 per hour was a fair and reasonable fee given that Mr Haines was a “relatively young and inexperienced practitioner employed by a small rural firm.”18 The Court assessed a charge-out rate of $375 as a more realistic hourly rate to apply and directed the Official Assignee to accept Mr Haines’ proof of debt for an amount of $525,000 plus GST.19
[55] I am satisfied that the invoice of $1,000,000 (plus GST) was not a fee that is fair and reasonable for the reasons set out above and was therefore in breach of r 9.20
[56] Mr Haines’ conduct in submitting the invoice in the early hours of the morning, and in circumstances where it was not fair and reasonable, amounts to conduct that would reasonably be regarded by lawyers of good standing as disgraceful or dishonourable so as to amount to misconduct under s 7 of the Act.
[57]This ground of appeal is dismissed.
17 [Redacted].
18 At [93].
19 At [93] and [99].
20 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008.
Charge three – charging for an ulterior purpose
[58] Mr Haines was charged with charging the 23 August 2018 fee knowing that to do so would enhance his voting power in relation to the creditors’ compromise being suggested by M and increase its chances of being accepted. It was alleged that this was a breach of r 2 and/or 2.1 to 2.3 and/or 13.1.21
[59]Rules 2, 2.1 and 2.2 provide:22
2A lawyer is obliged to uphold the rule of law and to facilitate the administration of justice.
2.1The overriding duty of a lawyer is as an officer of the court.
2.2A lawyer must not attempt to obstruct, prevent, pervert, or defeat the course of justice.
[60] A lawyer must use legal processes only for proper purposes.23 A lawyer has an absolute duty of honesty to the court and must not mislead or deceive the court.24
[61] The Tribunal found that by submitting the 23 August 2018 invoice with the creditors’ proposal Mr Haines misled the Court. This was considered to be “disgraceful and dishonourable” conduct so as to constitute misconduct pursuant to s 7(1)(a)(i) of the Act.
[62] Counsel for Mr Haines says that the Tribunal erred because it misunderstood bankruptcy practice and it was proper for Mr Haines to submit the invoice.
[63] The Tribunal’s finding does not turn on the fact that Mr Haines submitted an invoice as a creditor (which is acceptable bankruptcy practice), but rather on his conduct as evidenced by the transcript of the meeting, which indicates that he deliberately inflated the invoice for the purpose of increasing Mr Haines’ share of the creditors’ vote. It is that conduct which the Tribunal considered misled the Court
21 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008.
22 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008.
23 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, r 2.3.
24 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, r 13.1.
because it inferred that the quantum of the invoice was legitimate and not “jigged” to increase voting rights.
[64] The transcript of the 22 August 2018 meeting indicates that Mr Haines advised that the invoice needed to be sufficiently large to influence the outcome of creditors’ votes. There would be no purpose for those discussions, if the amount of the invoice simply reflected what was due to QH Law for work completed. A lawyer has a duty of honesty to the court and must not mislead or deceive the court. As I have found above, the quantum of the invoice was not fair and reasonable and was influenced by the improper consideration of the percentage of friendly creditors who could vote in a way that supported M’s compromise proposal. Allowing a client to provide an inflated invoice so as to increase the share of friendly creditor votes was an attempt to obstruct, prevent, pervert or defeat the course of justice in breach of r 2.2.25
[65] Mr Haines’ conduct was in breach of rr 2, 2.1 to 2.3 and 13.1,26 and amounted to misconduct being conduct that would reasonably be regarded by lawyers of good standing as “disgraceful or dishonourable”.27 This ground of appeal is dismissed.
Charge four – financial arrangements between M and Mr Haines
[66] Mr Haines was charged with breaching rr 5, 5.1, 5.4, 5.4.3 and 5.4.4 by entering into the Guarantees, the Servicing Term, and the Advances.
[67]The Rules provide as follows:28
5A lawyer must be independent and free from compromising influences or loyalties when providing services to his or her clients.
Independent judgement and advice
5.1The relationship between lawyer and client is one of confidence and trust that must never be abused.
…
Conflicting interests
25 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008.
26 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008.
27 Lawyers and Conveyancers Act 2006, s 7.
28 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008.
5.4A lawyer must not act or continue to act if there is a conflict or a risk of a conflict between the interests of the lawyer and the interests of a client for whom the lawyer is acting or proposing to act.
…
5.4.3A lawyer must not enter into any financial, business, or property transaction or relationship with a client if there is a possibility of the relationship of confidence and trust between lawyer and client being compromised.
5.4.4A lawyer who enters into any financial, business, or property transaction or relationship with a client must advise the client of the right to receive independent advice in respect of the matter and explain to the client that should a conflict of interest arise the lawyer must cease to act for the client on the matter and, without the client’s informed consent, on any other matters. This rule 5.4.4 does not apply where—
(a)the client and the lawyer have a close personal relationship; or
(b)the transaction is a contract for the supply by the client of goods or services in the normal course of the client’s business; or
(c)a lawyer subscribes for or otherwise acquires shares in a listed company for which the lawyer’s practice acts.
[68] The Tribunal found that Mr Haines had breached the above Rules and that such breach constituted misconduct under s 7(1)(a)(ii).29
[69] Mr Haines says he did not breach the above Rules because he advised M to obtain independent legal advice.
[70] The Tribunal accepted that in relation to the Guarantees the lender insisted on independent legal advice which was provided to M by an independent solicitor, Mr McDonnell. Mr Langford acted for Mr Haines in relation to the borrowing.
[71] Mr Haines confirmed that he had not discussed with M the potential for conflict, or its consequences, in relation to the Servicing Term or the Advances. There was no independent legal advice in relation to those transactions. The fact that those transactions were not documented does not excuse a solicitor’s obligation under
29 Lawyers and Conveyancers Act 2006.
r 5.4.4. None of the exceptions in r 5.4.4(a) to (c) apply. Mr Haines’ conduct was a clear breach of that rule.
[72] Counsel for Mr Haines refers to Mr Langford’s affidavit and says that Mr Langford gave advice on how to comply with the Rules. Mr Langford’s affidavit confirms that he acted for Mr Haines in relation to the Guarantees and was requested to supervise M’s files when Mr Haines defaulted on the loans. There is no evidence that Mr Langford advised Mr Haines as to his obligations under the Rules in relation to the advances to M or in relation to his continuing to act for M and associated entities in the litigation while at the same time lending him monies and having M acting as guarantor of his personal loans.
[73] Counsel for Mr Haines refers to Mr McMenamin’s report which notes that Mr Haines had informed him that M had “pleaded” with him to continue to act. Mr McMenamin considered that Mr Haines “has acted in broad compliance with [r 5.4.4]”. Mr McMenamin went on to note that the Committee may wish to consider whether or not it was appropriate in such “dire circumstances” for Mr Haines to continue to act for M even when M wanted him to do so.
[74] The fact that M may have consented to Mr Haines acting for him does not indicate that Mr Haines had advised M of the right to obtain independent advice in respect of the Advances, the Servicing Term, or the ongoing conflict of Mr Haines acting in relation to the various litigation proceedings. While the Advances were recorded in Mr Langford’s trust account records, there is no evidence that Mr Haines advised M to obtain independent legal advice in relation to the Advances. The fact Mr Haines did not demand repayment does not absolve him of his obligation under r 5.4.
[75] Submissions for Mr Haines assert that M was directed to obtain advice from Mr McDonnell on the Advances and that he did so on three separate occasions. Mr Haines acknowledged that he had not advised M to obtain independent advice in relation to the Servicing Term and Advances so this submission is not consistent with his evidence.
[76] While Mr Haines did request Mr Langford supervise M’s litigation files when the PLA notices were sent after Mr Haines defaulted on his borrowings, Mr Langford’s evidence is that he never received any files so did not undertake any supervision of them.
[77] Mr Haines says he was aware of the Court’s decision in Sims v Craig Bell & Bond.30 In Sims the Court of Appeal held that in any financial transaction with a client (save as to costs for work done) there is a presumption that such transaction should not be upheld unless the solicitor can establish that the client’s consent was informed.
[78] Mr Haines’ failure to advise M to seek independent legal advice in relation to the Advances and the Servicing Term, and the fact that Mr Haines was continuing to act for him in bankruptcy proceedings contravened r 5.4.4. Mr Haines should not have acted for M in the bankruptcy proceedings in circumstances where he had an interest as a creditor and that interest did not correspond with M’s in all respects and was therefore in contravention of r 5.4.2.
[79] Further Mr Haines’ advice in relation to the invoice as recorded in the transcript of the meeting on 22 August 2018 indicates that he informed M that the invoice should be sufficiently large so as to ensure there was a sufficient majority of friendly creditors. That advice was inconsistent with Mr Haines’ professional obligations to charge a fair and reasonable fee in accordance with the Rules. Such conduct contravened r 5.2. Further Mr Haines was unable to exercise independent professional judgement on behalf of M when preparing the creditors’ proposal in circumstances where he himself was a creditor by reason of the Advances and by reason of his decision to inflate the invoice for legal fees. Mr Haines was not free from compromising influences or loyalties in providing advice to M in contravention of r 5.
[80] Mr Haines’ conduct would reasonably be regarded by lawyers of good standing as disgraceful or dishonourable so as to amount to misconduct under s 7. This ground of appeal is dismissed.
30 Sims v Craig Bell & Bond [1991] 3 NZLR 535.
Instructions from R
Background
[81] Mr Haines says he was introduced to R through M as they both held units in the same body corporate.
[82] In April 2017, R instructed Mr Haines to act for his company [redacted] in relation to a statutory demand.
[83] Mr Haines posted an engagement letter dated 4 April 2017 to [redacted]’s registered office at Deloitte in Wellington. R says that he never received the engagement letter and would have objected had he seen it because it referred to a
$1,000 (plus GST) hourly rate.
[84] In August 2017, R engaged Mr Haines to provide advice in relation to relationship property issues.
[85] Mr Haines sent an engagement letter dated 15 August 2017 referring to a fixed fee of $50,000 (plus GST and disbursements) with half of the fee to be paid upfront and the balance on conclusion. That same day, R responded, “I fear I [won’t] be able to employ you.” Mr Haines replied that if R was “a little short” they could come to an arrangement and that they would speak.
[86] On 19 August 2017, Mr Haines sent an invoice to R for $50,000 (plus GST and disbursements). That invoice stated:
Our fee for professional services rendered and disbursements incurred, including but not limited to:
*[redacted] Properties – Statutory demand pursuant to Letter of Engagement 4 April 2017 and other litigation and negotiation matters with BC68792
*Relationship property matters pursuant to Letter of Engagement 15 August 2017
Fee as agreed. To be paid off as you can afford.
[87]R denies having received the above invoice.
[88] Between 21 August 2017 and 13 February 2018, R deposited $29,975 into Mr Haines’ personal bank account in instalments of amounts ranging from $500 to
$10,000.
[89] On 31 October 2017, the High Court delivered its decision refusing [redacted]’s application to set aside the statutory demand.
[90] On 12 March 2018, following the sale of the relationship property, $30,005 was paid from funds held in the trust account of Mr Langford to Mr Haines.
Charge one – engagement letter
[91] It was alleged that Mr Haines failed to provide [redacted] with information on the principal aspects of client service in writing before commencing work in breach of r 3.4 and/or 9.10.31
[92] Rule 3.4 provides that a lawyer must, in advance, provide in writing to a client information on the principal aspects of client service including:32
(a)the basis on which the fees will be charged, when payment of fees is to be made, and whether the fee may be deducted from funds held in trust on behalf of the client (subject to any requirement of regulation 9 or 10 of the Lawyers and Conveyancers Act (Trust Account) Regulations 2008):
(b)the professional indemnity arrangements of the lawyer’s practice. This obligation is met if it is disclosed that the practice holds indemnity insurance that meets or exceeds any minimum standards from time to time specified by the Law Society. If a lawyer or a practice is not indemnified, this must be disclosed in writing to the client:
(c)the coverage provided by the Lawyers’ Fidelity Fund and if the client’s funds are to be held or utilised for purposes not covered by the Lawyers’ Fidelity Fund, the fact that this is the case:
(d)the procedures in the lawyer’s practice for the handling of complaints by clients, and advice on the existence and availability of the Law Society’s complaints service and how the Law Society may be contacted in order to make a complaint.
31 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008.
32 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008.
[93] The Tribunal considered that Mr Haines had breached r 3.4 because he had not followed up with R to ensure he had received the [redacted] engagement letter. The Tribunal considered that given the quantum of the fee ($1,000 per hour (plus GST)) Mr Haines should have taken steps to ensure that R was aware of the terms of engagement.
[94] The Tribunal considered it was unacceptable and unprofessional conduct for Mr Haines to not have followed up with the client, thereby constituting unsatisfactory conduct under s 12(b) and (c) of the Act.
[95] Mr Haines did provide to [redacted], in advance and in writing, information on the principal aspects of client service including the basis on which the fees would be charged and when payment of fees was to be made. While I accept that it would have been prudent for Mr Haines to follow up to ensure that R had received the engagement letter, r 3.4 does not impose such an obligation. Further, the client was [redacted] and the engagement letter was sent to its registered office so it cannot be said that it was not sent to the client.
[96] Mr Haines’ conduct in sending the engagement letter to [redacted]’s registered office without following up does not constitute a breach of r 3.4 so as to amount to unsatisfactory conduct in accordance with s 12(b) or (c) of the Act. This ground of appeal is allowed.
Charge two – receipt of fees in advance
[97] Mr Haines was charged with breaching r 9.3 by receiving funds into his personal account and expending them for his own benefit without having complied with the requirements of regulations 9 and 10 of the Lawyers and Conveyancers Act (Trust Account) Regulations 2008 (the Regulations).
[98] The Tribunal found that Mr Haines had received funds in advance for work that had not yet been undertaken and that those funds were paid into his personal bank account rather than into a trust account. The Tribunal considered this amounted to misconduct under s 7(1)(a)(i) of the Act.
[99] In reaching the above conclusion, the Tribunal noted that because there was no clear evidence as to the payment of [redacted]’s work and there was no fixed fee arrangement, the Tribunal was not assisted by the invoice prepared by Mr Haines on 19 August 2017. The Tribunal considered that the funds were paid for the relationship property work and not for the [redacted] work.
[100] The Tribunal was not satisfied that the funds were paid for the [redacted] work because of the absence of contemporaneous time records and the vague narration and lack of detail in the 19 August 2017 invoice.
[101] It is difficult to maintain the Tribunal’s finding that the funds cannot have been paid for [redacted] work in circumstances where Mr Haines had provided a letter of engagement and an invoice for the [redacted] work, and the invoice was provided prior to receipt of any funds from R. There is no evidence that any other payments were made to Mr Haines for the [redacted] work. Moreover, that Mr Haines sent the 19 August 2017 invoice is further supported by an email from Mr Haines to R on 10 November 2019, in which he states:
In your situation you have paid fees for this matter, the statutory demand matter and your relationship property matter. These fees were contained in my omnibus invoice of August 2017. You paid your fees in full between 21 August 2017 and 6 April 2018.
[102] It was inappropriate for Mr Haines to combine the fees owing from each of [redacted] and R personally and to fail to identify the amount of fees payable for each matter but that does not indicate that the fees were not paid for the [redacted] matter. The letter of engagement for the relationship property matter sent four days prior, on 15 August 2017, does indicate Mr Haines had proposed a fixed fee with $25,000 payable on acceptance of instructions and the balance on the conclusion of any High Court hearing or whenever the matter was resolved. Read together with the 19 August 2017 invoice, the engagement letter for the relationship property work indicates the fee payable in August 2017 cannot have been more than $25,000. That would then leave $25,000 for the [redacted] work fee.
[103] In the absence of evidence of the [redacted] fixed fee and the intended purpose of the payments, the Tribunal considered that Mr Haines had received funds in advance
for the relationship property work. That conclusion is difficult to reconcile with the invoice for the [redacted] work and Mr Haines’ subsequent email on 10 November 2019 where he noted the “omnibus invoice” was for both matters. R did not dispute that email nor respond by asserting that the invoice was only for work done in relation to the relationship property matter.
[104] In reaching the above conclusion, the Tribunal did not consider the fact that the [redacted] work had been completed by the relevant date and no payment had been made. Nor did the Tribunal consider Mr McMenamin’s assessment that the work undertaken for [redacted] would amount to $20,600 (plus GST). By the time R made the payments to Mr Haines, the work for [redacted] had been completed.
[105] Mr Haines says that when the payments were received he had completed the [redacted] work and the relationship property work, so that he was not receiving funds in advance. Counsel for Mr Haines refers to the $20,600 assessed by Mr McMenamin as indicating that the [redacted] work had been completed and amounted to approximately $20,000. Mr Haines further says that he received $50,000 for work that was valued at $70,937. In those circumstances it cannot be said that he received funds in advance.
[106] While I accept that the issuing of the omnibus invoice was not appropriate, the evidence does not indicate that Mr Haines received funds in advance so as to breach r 9.3. This ground of appeal is allowed.
Instructions from C
Background
[107] In July 2015, while Mr Haines was employed by Simpson & Co, C instructed the firm to provide legal advice regarding the potential annulment of his bankruptcy and the prospect of a negligence claim against his former lawyer. Mr Haines was the solicitor acting on behalf of Simpson & Co. The engagement was the subject of an engagement letter.
[108] On 7 September 2015, Simpson & Co offered to act for a fixed fee of $120,000 (50 per cent payable on acceptance and the balance payable on conclusion of the matter).
[109]By July 2016, Mr Haines was successful in having C’s bankruptcy annulled.
[110] C then engaged Mr Haines in relation to a potential negligence claim against his former lawyer. To support the claim, Simpson & Co arranged for Deloitte to provide an initial calculation of the potential quantum and a brief of evidence (the Deloitte Report). It was a term of engagement with Deloitte that $20,000 be paid into either the Deloitte or Simpson & Co trust account.
[111] On 2 August 2016 Mr Haines confirmed that C accepted Deloitte’s terms of engagement and indicated that C was in the process of depositing funds into the Simpson & Co trust account:
He is in the process of depositing funds into our trust account. I am instructed that $10,000 will be deposited in the next day or so and a further $10,000 will be deposited at the end of the month.
[112] Between 5 July 2015 and 31 March 2017 C paid approximately $90,000 to Simpson & Co based on invoices received.
[113] In addition, between 5 July 2015 and 31 March 2018, C (or persons or entities associated with C) paid various amounts to Mr Haines either in cash or directly into his personal bank account as follows:
(a)in the financial year ended 31 March 2016: approximately $60,000;
(b)in the financial year ended 31 March 2017: approximately $80,000; and
(c)in the financial year ended 31 March 2018: approximately $110,000.
[114]No invoices or receipts were issued for the above amounts.
[115] C continued to engage Mr Haines when he commenced practice on his own account at QH Law in April 2017.
[116] On 12 September 2018 there was a complaint to the New Zealand Law Society (NZLS) on behalf of the estate of Simpson & Co regarding Mr Haines’ handling of C’s funds.
[117]On 7 November 2018 C complained to the NZLS.
Charge one – direct receipt of client funds
[118] It is alleged that between July 2015 and 31 March 2017, C (or persons or entities associated with him) paid approximately $140,000 into Mr Haines’ personal bank account on account of fees (including fees in advance). No invoices or receipts were issued for those payments. It is alleged that this conduct breaches r 9.3.
[119] Rule 9.3 requires that a lawyer who wishes to receive funds to cover fees in advance must comply with regulations 9 and 10 of the Regulations. Regulations 9 and 10 state:33
9Restriction on debiting trust accounts with fees
(1)No trust account may be debited with any fees of a practice (except commission properly chargeable on the collection of money and disbursements) unless—
(a)a dated invoice has been issued in respect of those fees, and a copy of the invoice is available for inspection by the inspectorate; or
(b)an authority in writing in that behalf, signed and dated by the client, specifying the sum to be so applied and the particular purpose to which it is to be applied has been obtained and is available for inspection by the inspectorate.
(2)If fees are debited under subclause (1)(a), an invoice must be delivered or posted to the person who has a legal or beneficial interest in the trust account to be debited before or immediately after the fees are debited.
(3)For the purposes of subclause (2), a practitioner or partner in the practice is not to be treated as having a legal or beneficial interest in
33 Lawyers and Conveyancers Act (Trust Account) Regulations 2008.
the trust account to be debited, solely because the practitioner or partner issues the invoice in respect of that trust account.
10Fees and disbursements paid in advance of invoice
All money paid to a practice in respect of professional services for which an invoice has not been issued, whether described as a retainer or otherwise, must be retained in a trust account until it is—
(a)disbursed on the client’s behalf; or
(b)applied in payment of fees in accordance with regulation 9.
[120] Simpson & Co’s letter of engagement dated 2 July 2015 required funds to be held in trust until invoiced. The terms of engagement were then amended in September 2015 offering a fixed fee of $120,000 plus GST and disbursements. Fifty per cent was payable on acceptance and the balance at the conclusion of the work.
[121] The Tribunal found that funds were paid directly into Mr Haines’ personal bank account without him issuing any invoices or receipts. The Tribunal was satisfied that Mr Haines had engaged in “disgraceful or dishonourable conduct” and conduct that was in wilful or reckless disregard of the Rules.
[122] Mr Haines himself acknowledged that he received funds into his personal bank account and said that C and Mr Simpson agreed to this arrangement. The Tribunal rejected Mr Haines’ evidence and was satisfied that C was credible when he said that he simply paid the funds into the account provided by Mr Haines.
[123] Counsel for Mr Haines says C is not credible and refers to C’s previous convictions. C’s criminal history is irrelevant to whether payments were made to Mr Haines. Mr Haines’ personal account records indicate funds were received from
C. Further, the Tribunal had the benefit of hearing the evidence of C and was satisfied that he was more credible than Mr Haines:34
[218] We found that [C] presented as a balanced and truthful witness, whose evidence was not only backed up by banking records, but also by the offer, later described by Mr Haines himself as an agreement, to repay him $55,000. Where [C’s] evidence [differs] from Mr Haines’ we prefer the evidence of [C].
34 National Standards Committee v Haines [2022] NZLCDT 10.
[124] It is appropriate that I defer to the Tribunal’s findings regarding C’s credibility as I have not had the benefit of seeing or hearing either Mr Haines or C give evidence.
[125] Mr Haines relies on the right to silence and says that this explains why the files were not disclosed to the investigator. Mr Haines however, says that he had offered to make the files available to an independent solicitor for review, but the Committee did not take up that opportunity. In those circumstances, Mr Haines argues that there is an absence of evidence to support the Tribunal’s findings that Mr Haines received funds in advance or that Mr Haines borrowed money from C.
[126] There is no reason for an employed solicitor to be receiving funds directly into his own bank account. There was undisputed evidence that such transfers had been made. The review of the files would not change that evidence.
[127] I do not consider that the Tribunal erred in finding that Mr Haines had breached his obligations by receiving monies from a client directly into his personal account and not providing any receipts for those funds. Mr Haines’ conduct amounted to misconduct in terms of s 7(1) of the Act. This ground of appeal is dismissed.
Charge two – the Deloitte Report
[128] Mr Haines was charged with contravening r 9.3 and/or 11.1 by receiving funds into his personal account for the Deloitte Report and not remitting the funds to Simpson & Co or Deloitte.
[129]Rule 11.1 provides that:
A lawyer practising on their own account must take all reasonable steps to ensure that—
(a)the operation of the law practice (including separate places of business) is at all times competently supervised and managed by a lawyer who is practising on their own account; and
(b)the conduct of all persons engaged or employed by the law practice is at all times competently supervised and managed by a lawyer who is practising on their own account.
[130] At the time of the Deloitte Report, Mr Haines was employed by Simpson & Co so r 11.1 is not relevant. The issue is then whether Mr Haines’ conduct contravened r 9.3 which requires compliance with Regulations 9 and 10.
[131] Mr Haines confirmed that C completed a letter of engagement on 29 July 2016 and Mr Haines sent an email to Deloitte on 2 August 2016 stating:
He [C] is in the process of depositing funds into our trust account. I am instructed that the $10,000 will be deposited in the next day or so and a further
$10,000 will be deposited at the end of the month.
[132] Between 16 August and 17 October 2016, $24,000 was paid to Mr Haines either directly to his bank account or in cash in amounts ranging from $1,000 to
$5,000.
[133] Counsel for Mr Haines argues that because C did not specify “Deloitte” in the bank transfer narration, there is no evidence that he paid funds for that purpose. Further, it is argued that because C transferred $24,000 and not $20,000, C’s claim that he paid Mr Haines directly for the Deloitte Report cannot be reconciled with the evidence.
[134] Mr Haines received funds directly from C shortly after informing Deloitte that C was in the process of paying the funds. I am satisfied that, on the balance of probabilities, the funds C transferred to Mr Haines’ personal bank account were for the purpose of paying Deloitte. Despite this, Mr Haines did not pay Deloitte or Simpson & Co and retained the funds for his own use.
[135] It is wrong for an employed solicitor to receive funds directly into their personal bank account and then fail to transfer those funds to either the expert or the firm’s trust account. It is also not believable for Mr Haines to assert that he was unaware that Simpson & Co had not received the funds for the Deloitte Report in circumstances where he had received client funds into his own personal bank account.
[136]The conduct of Mr Haines is unacceptable and clearly in breach of r 9.3.
[137] Mr Haines’ conduct in accepting payment into his personal account and taking no steps to transfer those funds to Simpson & Co and/or Deloitte is reprehensible and amounts to conduct that is disgraceful, dishonourable and in wilful and reckless contravention of s 7(1)(a)(i) of the Act. This ground of appeal is dismissed.
Charge three – misuse of client funds
[138] It is alleged that between July 2016 and August 2018 Mr Haines received approximately $190,000 from C (or persons and entities associated with him) directly into his personal bank account as fees in advance and without authority, and expended those funds for his personal benefit.
[139] By reason of the above conduct, it is alleged that Mr Haines had engaged in conduct in contravention of r 9.3 being misconduct in accordance with s 7(1)(a)(i) of the Act.
[140] There is no dispute that C made payments into Mr Haines’ personal bank account. Mr Haines on his own evidence, acknowledged that he received funds and needed to repay $55,000 to C (which he never did and refers to C receiving a payment from Simpson & Co’s insurer to justify his non-payment). Mr Haines submits that the payments were made for work done. That however, does not explain the $55,000 still owing to C.
[141] Mr Haines says that C knew that he was paying funds to Mr Haines’ bank account. This was rejected by the Tribunal who preferred C’s evidence that he paid the funds into the account provided by Mr Haines. C was not aware that the account was not for the relevant law firms. Further, even if C had such knowledge this does not excuse Mr Haines’ conduct in receiving funds directly into his personal bank account.
[142] Mr Haines then disputes that there was a loan from C and refers to the various narrations when funds were transferred and says they indicate that the payments relate to legal fees and not any loan.
[143] The records of the transactions show that on 5 March 2018, $45,000 was deposited into Mr Haines’ account with the narration “Funds Manager Haines Lega[l]”. The $45,000 was paid by way of nine payments of $5,000. C’s evidence was that Mr Haines was in financial difficulty and had asked for a loan. The use of the words “Funds Manager Haines Lega[l]” can be contrasted with other payments having the narration “Quentin Haines Legal Fee” or “Q Haines Legal On A/c”. There is one payment with the narration “Loan (KH [C] Legal Fees)”. The narrations, and the fact that Mr Haines acknowledged he needed to repay $55,000, indicate that it is likely that C lent funds to Mr Haines and that the funds were not for the payment of legal fees (and if they were, they should not have been paid into a personal bank account). The fact that the accountant, Mr Rohloff, made payments on behalf of C is irrelevant and does not support Mr Haines’ contention that C knew he was paying Mr Haines directly.
[144] Mr Haines’ conduct was clearly in breach of r 9.3 and was misconduct under s 7(1) of the Act. This ground of appeal is dismissed.
General submissions
[145] Counsel for Mr Haines submits that there was collusion between the complainants and that this is relevant when assessing their credibility. I do not consider that the findings as to Mr Haines’ unsatisfactory conduct or misconduct depend on a conspiracy between the complainants as they are made out on evidence that is not dependent on each complainant’s credibility. Further, I accept the Tribunal’s finding as to the credibility of C as the Tribunal had the benefit of hearing the evidence of Mr Haines and C and determined that C was more credible.
Result
[146]For the reasons set out above:
(a)The appeal against each of the Tribunal’s findings on the four charges in relation to M is dismissed;
(b)The appeal against each of the Tribunal’s findings on the two charges in relation to R is allowed; and
(c)The appeal against each of the Tribunal’s findings on the three charges in relation to C are dismissed.
Costs
[147] If the parties are able to agree costs, a joint memorandum should be filed within 20 working days from the date of this judgment. If the parties are unable to agree costs, the appellant may file and serve a memorandum within five working days from the date for the joint memorandum, with the respondent to file and serve a memorandum within a further five working days. Memoranda should not exceed five pages, excluding attachments. I will determine costs on the papers.
Tahana J
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