Ram v New Zealand Lawyers and Conveyancers Disciplinary Tribunal

[2016] NZHC 2780

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-003366

CIV-2015-404-000584 [2016] NZHC 2780

IN THE MATTER

of an appeal under s 253 of the Lawyers

and Conveyancers Act 2006

AND

IN THE MATTER

of an application for judicial review under the Judicature Amendment Act 1972

BETWEEN

ANTHONY VINCENT RAM Appellant/Plaintiff

AND

NEW ZEALAND LAWYERS AND CONVEYANCERS DISCIPLINARY TRIBUNAL

First Defendant

cont…/2

On the papers
Counsel:	F C Deliu for Appellant/Plaintiff M J Hodge and J Simpson for Second Defendant and Respondent/Third Defendant
Judgment:	23 November 2016

COSTS JUDGMENT OF GILBERT J

This judgment is delivered by me on 23 November 2016 at 1 pm pursuant to r 11.5 of the High Court Rules.

..................................................... Registrar / Deputy Registrar

Counsel/Solicitors:

F C Deliu, Barrister, Auckland

Meredith Connell, Auckland

RAM v NEW ZEALAND LAWYERS AND CONVEYANCERS DISCIPLINARY TRIBUNAL & Ors

[2016] NZHC 2780 [23 November 2016]

LAWYERS COMPLAINTS SERVICE Second Defendant

AUCKLAND STANDARDS COMMITTEE 5

Respondent/Third Defendant

[1]     On 26 November 2014, the New Zealand Lawyers and Conveyancers Disciplinary Tribunal (the Tribunal) found the appellant, Mr Ram, guilty of three charges  of  professional  misconduct:  misappropriating  client  funds;  practising contrary to his practising certificate; and failing to respond to a notice requiring him to produce files and other records to the Standards Committee.1    He was struck off the roll of barristers and solicitors and ordered to pay compensation and costs.

[2]      Mr Ram did not attend the substantive hearing before the Tribunal which led to  these orders being  made.   A short  time prior  to  the hearing,  he  made what Mr Deliu  describes  as  a  “de  facto”  adjournment  application.     However,  this application was declined and the hearing proceeded in Mr Ram’s absence.

[3]      Mr Ram appealed against the Tribunal’s decision and sought judicial review of it.  These proceedings were dealt with together.  The hearing, which was presided over by Faire J, commenced on 21 March 2016.  On the third day of the hearing, Mr Deliu advised the Court of the terms on which Mr Ram was prepared to resolve the proceedings.   This proposal was supported by the defendants and the Judge considered it had merit.  The proposed outcome was subject to Mr Ram performing certain conditions by a specified date.

[4]      The Judge recorded the terms of the proposal in a minute dated 12 April

2016.  The Judge also set out his tentative views on the merits so that these could form the basis of his reasons for judgment in the event that Mr Ram performed the conditions:2

[1]       This minute records the position reached on the third day of the hearing of an application for judicial review and a civil appeal.

[2]       Counsel for the plaintiff/appellant set out the plaintiff’s/appellant’s

position if a rehearing before the Tribunal was ordered, namely, that:

(a)       The practitioner/plaintiff/appellant will engage on the merits on rehearing;

(b)       He has instructed counsel who has instructions to appear on the rehearing:

(c)       He promises to pay into a nominated trust account, no later than 23 September 2016, the sum of $154,835.89; and

1      Auckland Standards Committee 5 v Ram [2014] NZLCDT 76.

2      Minute of Faire J dated 26 September 2016.

(d)      Confirms that, should he breach the promise to pay by

23 September 2016, he will discontinue his application for judicial review and will formally abandon the appeal.

[3]       This is a significant development having regard to the fact that the orders made by the Tribunal followed a formal proof hearing in the absence of the plaintiff/appellant. Mr Hodge supported the position advanced.

[4]       I now set out my reasons for the view that I have reached and which may form the basis of the final judgment in the matter at the appropriate time.

[5]      On the issue as to whether the Tribunal should have granted an adjournment, the Judge said this:

[69]    The matter, however, is finely balanced.   That position was acknowledged by Mr Hodge.  I do not criticise the Tribunal for the decision reached at the time.  However, I am satisfied that if the funds are paid, and in light  of  Mr  Ram’s  counsel’s  assurance  that  he  will  fully  engage  in  the process, then the charges should be the subject of a fully defended hearing on the merits before the Tribunal.   I have been advised that if the matter proceeds, evidence will not be lead in support of charges 2 and 3, and application will be made to withdraw same.

[6]       The  Judge  also  recorded  the  process  that  would  be  followed  for  finally disposing of the appeal and application for judicial review:

[70]      I am grateful to Mr Deliu for his confirmation that if the funds are not paid, he is authorised to inform the court that the judicial review proceedings could be deemed discontinued and struck out and the appeal can be  deemed  abandoned.    That  position  makes  it  unnecessary  for  me  to consider the other grounds advanced in support of the judicial review and appeal.

[71]      Accordingly, I adjourn the judicial review and appeal proceedings for a conference before me at 9 am on 26 September 2016.  Its purpose is to make orders as are appropriate having regard to the matters referred to in this minute.

[72]     This  minute  necessarily  gives  my  reasons  for  coming  to  the conclusion I have although, at this stage, I have not finally endorsed them as a judgment until the position in relation to the funds is known. …

[7]      On 26 September 2016, Faire J issued a minute confirming that the funds had not been paid.  Accordingly, he struck out the appeal and the application for judicial review and invited memoranda on costs.   The Judge noted that these memoranda would need to be referred to another judge because of his impending retirement.

[8]      The second and third defendants have filed memoranda seeking costs for both sets of proceedings calculated on a category 2, band B basis.  Mr Deliu has filed a

memorandum in response opposing any costs being awarded.   In any event, he submits that the costs have not been calculated correctly.  He also seeks a hearing to argue costs.  He says this is necessary to provide context for the process adopted in the proceeding which he describes as “mildly unique”.   He contends that natural justice requires such a hearing because any judge “coming into the picture” at this “very end stage” would not be able to “fairly adjudicate costs” without knowing the background of this “complex case” and having the “procedural posture” properly explained.  The defendants are opposed to this.  They contend that the matter should be dealt with on the papers as envisaged by Faire J.

[9]      Having read  the court  file,  I am  not  persuaded  that  a further hearing  is necessary to understand what has happened or how costs should be dealt with.  There is nothing particularly complex about this case.  The competing arguments on costs are detailed in the written memoranda and are readily comprehended.

[10]     Mr Deliu submits it is at least arguable, based on the Judge’s observations in [69] of his minute (quoted above) that the Tribunal ought to have granted an adjournment and that charges 2 and 3 should not have been pursued.  He claims that Mr Ram “succeeded on those crucial points”.   Mr Deliu submits that this is “an overwhelmingly good reason” for costs to lie where they fall or for reduced costs to be awarded.

[11]     I do not accept this submission.  Justice Faire did not make even a tentative finding that the Tribunal erred in law or acted unreasonably in failing to adjourn the hearing.  Instead, Faire J recorded that “the Tribunal did apply itself to the relevant law” and “did have a basis to find that Mr Ram was wilfully not engaging with the proceeding”.  The Judge said that he did “not criticise the Tribunal for the decision reached at the time”.  I am unable to see how these statements can be interpreted as an endorsement of Mr Ram’s claim that the Tribunal improperly declined his application for an adjournment.

[12]     The Judge did not record any views on whether charges 2 and 3 had been “inappropriately pursued”.   He simply noted that he had been advised that, if the matter proceeds, those charges would be withdrawn.

[13]     Mr Ram did not succeed on any issue.  His claim and his appeal were both struck out in their entirety.  The best that can be said is that, in the context of what was essentially an agreed resolution, Mr Ram is likely to have obtained a rehearing before the Tribunal if he had complied with the conditions.  However, he did not.

[14]     Any  appellant  or  plaintiff  conceding  during  the  course  of  a  substantive hearing that their statement of claim and appeal should be struck out can expect to be ordered to pay costs to the other party on the basis that costs follow the event.  That is effectively what happened here.  Mr Ram accepted on the third day of the hearing that his appeal and application for judicial review should be struck out or dismissed in the event that he did not comply with certain conditions by 23 September 2016. There was no concession by the defendants that they would not be entitled to pursue costs in that event.  Mr Deliu does not contend otherwise.

[15]     Because Mr Ram did not comply with the agreed conditions, costs should be assessed on the same basis as if he had conceded on day 3 of the hearing that his proceedings should be dismissed.   The second and third defendants are therefore entitled to costs for both proceedings calculated on a 2B basis.

[16]     I  now  turn  to  consider  Mr  Deliu’s  criticisms  of  the  defendants’  costs

calculation.

[17]     First, Mr Deliu points out that the current daily rate provided under the Rules has been claimed for all steps, including those pre-dating the change in the rate effective from 1 July 2015.  Mr Hodge accepts this error and has provided a revised calculation correcting it.

[18]     Second, Mr Deliu claims that there is a mathematical error in the calculation of the total number of days or part days.   However, Mr Deliu is incorrect.   His addition of the numbers he sets out is wrong.

[19]     Third, Mr Deliu objects to the hearing time claimed for the third day of the hearing.  He contends that some of this time was spent negotiating resolution outside the courtroom.  Mr Hodge acknowledges this but says that no reduction should be

allowed.  I consider that no reduction should be allowed for the fact that the plaintiff chose to spend part of the hearing time negotiating a favourable resolution.

[20]     Fourth, Mr Deliu contends that costs should not be claimed for both sets of proceedings because they were heard together.  Mr Deliu submits that the defendants must claim costs on one or other basis, not a mix of both.  Otherwise, he argues that there is impermissible double counting.   He refers particularly to the defendants’ claim for three days under item 33 (preparation for hearing of a civil proceeding) and a further three days for item 56 (preparation of written submissions in appeals).

[21]     These claims do not involve double counting.  The costs of preparing written submissions are claimable for both types of proceedings.  However, the allowance in band B for preparing written submissions for the hearing of a civil proceeding under item 40 amounts to one and a half days.  This compares with the three day allowance for preparing submissions for appeals.    So, although there is no double counting, there  is  validity  in  Mr  Deliu’s  point  that  the  defendants  are  seeking  a  greater recovery by claiming preparation costs in the judicial review proceeding and preparation   of   written   submissions   for   the   appeal   proceeding.      Given   the considerable overlap between the issues raised on the appeal and the judicial review, I  consider  that  an  allowance  of  one  and  a  half  days  for  the  preparation  of submissions in terms of item 40 is sufficient and appropriate.  I accept Mr Deliu’s submission on this issue.

[22]     Finally, Mr Deliu submits that Mr Ram should not have to pay costs for those steps where he did not “fail”.  He says that the best example is the appearance before Ellis J on 7 May 2015 when consent orders and timetabling directions were made. This was a necessary step in the proceeding.  The defendants, having succeeded in the proceeding overall, are entitled to costs for this step.  The fact that Mr Ram may not have “failed” at that appearance is irrelevant.

Result

[23]     The second and third defendants are entitled to costs against the plaintiff calculated in accordance with the reply memorandum filed on their behalf and dated

3 October 2016.

M A Gilbert J