Ray v Auckland Standards Committee 3 of the New Zealand Law Society

[2013] NZHC 2444

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-2875 [2013] NZHC 2444

UNDER THE	Judicature Amendment Act 1972
IN THE MATTER	of an application for judicial review
BETWEEN	JOHN DEVEREUX RAY Applicant
AND	AUCKLAND STANDARDS COMMITTEE 3 OF THE NEW ZEALAND LAW SOCIETY Respondent

Hearing:	18 September 2013
Appearances:	R Latton for the Applicant P Collins for the Second Respondent (to assist)
Judgment:	18 September 2013

ORAL JUDGMENT OF PRIESTLEY J

Solicitors/Counsel:

R Latton, Kennedys, Auckland

P Collins, Barrister, Auckland

RAY v AUCKLAND STANDARDS COMMITTEE 3 OF THE NEW ZEALAND LAW SOCIETY [2013] NZHC 2444 [18 September 2013]

[1]      This brief oral judgment is given against the backdrop of counsel having re- assessed the matter and having on an outcome.

[2]      The applicant is a solicitor of long standing and is currently the senior partner of a firm called Wadsworth Ray.

[3]      On 7 March 2013 the Auckland Standards Committee 3 of the New Zealand Law Society made a finding against the applicant of unsatisfactory conduct.   That finding involved a very narrow scope of professional behaviour and related to two payments authorised by Mr Ray, as a partner of the firm, from the firm’s trust account.

[4]      Unbeknown to Mr Ray the funds from which those two payments were made were subject to an undertaking given by a former employee of the firm who is now dead.  At the relevant time Mr Ray had no supervision responsibilities for that employee.

[5]      I note that there was a dispute between clients of the firm and clients of another firm (arising out of what was essentially a commercial dispute between two companies now struck off the register), over entitlement to the funds.   Just over

$25,000 was involved.

[6]      Well before the disciplinary hearing it was accepted by Wadsworth Ray that a written undertaking had been given.  The disbursed sum has now been paid into the firm’s trust account and awaits a final resolution of this somewhat ancient dispute.

[7]      In accordance with normal practice the Standards Committee’s deliberations were on the papers, but with the benefit of full written submissions.  What in my judgment  (and  I  have  not  had  the  benefit  of  full  submissions)  was  a  critical oversight, was that the complaint, as originally formulated was against the firm rather than Mr Ray personally.  Furthermore a letter from the Standards Committee dated 11 January 2013 to solicitors acting for the complainant noted that, although the  complaint  was  against  the  firm,  because  the  firm  in  question  was  an

unincorporated body,  “in this instance ... we opened a complaint in the name of the

Management Partner of the firm or the partner in charge of the matter in question”.

[8]      Mr Ray and his solicitors acting for him, were unaware of that letter which changed significantly, in my view, the course of the investigation.  Had Mr Ray been aware that he personally, rather than the firm, was at risk of disciplinary action, his submissions would undoubtedly have been more focused.  He would also have taken steps, I suspect, to put before the Committee expert evidence as to the relevant duties imposed on the principal of the firm when making distributions from a trust account. Significantly in this proceeding, there has been affidavit evidence which, if accepted, would have the effect of exonerating Mr Ray, from Mr T Jones, a distinguished and experienced practitioner.

[9]      Mr Collins has filed submissions dealing with these matters.   But despite those submissions, which I read in advance of the hearing, the procedural problem which I have just outlined struck me as being central.  The consequence of the way the Committee proceeded (in good faith I am sure) was that Mr Ray was effectively blind-sided and was unable to answer and provide relevant evidence in respect of a charge where he was now the disciplinary target rather than the firm. This strikes me on the facts as being particularly important since Mr Ray at no stage had any knowledge about the monies which had been paid into the firm’s trust account.  Nor did he have any familiarity with the clients in question.   Nor was he aware of the undertaking.

[10]     Mr  Collins’  submissions  also  raise  the  interesting  issue  of  whether  the applicant, in a judicial review context, had exhausted all available remedies.  In that regard counsel was referring to the very wide statutory powers which can be exercised by the Legal Complaints Review Officer.  I express no concluded view on that, although it is arguable whether the Officer, as a creature of statute, can exercise powers as wide as this Court exercises in its supervisory judicial review role.

[11]     Against that background, counsel have conferred.  I compliment Mr Collins on the very realistic and indeed fair approach which he has taken.

[12]     By  consent  therefore  I  make  the  following  orders  which  dispose  of  the

Judicial Review application.

(a)      There is an order quashing the decision and consequential penalties made by the Auckland Standards Committee 3 on 7 March 2013.

(b)There is a further order directing the same Committee to rehear the complaint, such order being on the basis that Mr Ray will have the opportunity to file further submissions and evidence.

[13]     There is no order for costs in respect of this High Court application.

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Priestley J