Shi aka Shiel v A Professional Conduct Committee of the Physiotherapy Board of New Zealand
[2021] NZHC 1550
•25 June 2021
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2020-485-000401
[2021] NZHC 1550
IN THE MATTER OF an appeal pursuant to s 106(3) of the Health Practitioners Competence Assurance Act 2003 BETWEEN
YAN SHI
(also known as KEVIN YAN SHI SHIEL) Appellant
AND
A PROFESSIONAL CONDUCT
COMMITTEE OF THE PHYSIOTHERAPY BOARD OF NEW ZEALAND
Respondent
Hearing: 29 March 2021 Counsel:
P Hamlin for Appellant J Coates for Respondent
Judgment:
25 June 2021
JUDGMENT OF GRICE J
Contents
Para
Background[3]
Factual background[3]
Procedural history[7]
Decision of the Tribunal[12]
Penalty[12]
Costs[16]
Law on appeals[22]
Issue One: appeal against the penalties imposed[30]
Relevant law[30]
Issue Two: cross-appeal on costs[85]
Analysis[97]
Result[134]
Costs in this appeal[136]
YAN SHI v A PROFESSIONAL CONDUCT COMMITTEE OF THE PHYSIOTHERAPY BOARD OF NEW ZEALAND [2021] NZHC 1550 [25 June 2021]
[1] This is an appeal against a decision by the Health Practitioners Disciplinary Tribunal (the Tribunal), which censured the appellant, suspended his physiotherapist registration for nine months and imposed conditions if he is to resume practice (the Penalties).1 The charge was laid by the respondent, a Professional Conduct Committee (PCC) appointed by the Physiotherapy Board of New Zealand (PBNZ), with the Tribunal,2 following the appellant’s conviction on three charges of forgery3 and three charges of dishonestly using a document.4
[2] The respondent cross-appeals against the Tribunal declining to make an order for costs against the appellant. The appellant was in receipt of legal aid.
Background
Factual background
[3] On 7 March 2013 and 26 May 2015, Mr Shi (also referred to as Mr Shiel during the District Court hearing) supplied falsified, untrue and misleading documentation to HSBC Bank (HSBC) in relation to three sets of mortgage applications. In the first application, Mr Shi attached a bank statement that had been altered to remove any reference to his loans from two different financial institutions.
[4] In the second application, Mr Shi provided financial statements for his company, Care Physio Ltd, which had been altered to overstate the amount of fees the company had received to falsify the salary Mr Shi had received from the company. These applications resulted in two separate loans being approved by HSBC, totalling
$1,508,400. Mr Shi intended to use these funds for property investments.
[5] On 22 May 2015, Mr Shi made a mortgage application for $948,000 to the Southland Building Society (SBS) and supplied fraudulent bank account statements. These had been altered to overstate the balance of the accounts. He also attached financial statements for the company, Care Physio Ltd, which had been altered to
1 Professional Conduct Committee v Shi Health Practitioners Disciplinary Tribunal 1099/Phys20/477P, 16 July 2020 [“Penalty Decision”].
2 Pursuant to s 100(1)(c) of the Health Practitioners Competence Assurance Act 2003.
3 Crimes Act 1961, s 256(1); maximum penalty of 10 years’ imprisonment.
4 Section 228(1)(b); maximum penalty of seven years’ imprisonment.
overstate the fees received and to falsify the salary Mr Shi received. This mortgage application was declined.
[6] Mr Shi repaid the loans, which HSBC had foreclosed when the frauds were discovered.
Procedural history
[7]On 9 April 2018, Mr Shi accepted the summary of facts and admitted liability.
[8] On 18 April 2018, six charges of forgery and dishonestly using a document were laid against Mr Shi.
[9] On 26 April 2019, Judge Paul in the District Court sentenced Mr Shi to 11 months’ home detention.5
[10] On 26 December 2019, the PCC made a determination to lay a charge before the Tribunal against Mr Shi under s 100(1)(c) of the Health Practitioners Competence Assurance Act 2003 (HPCA).
[11]On 16 July 2020, the Tribunal issued its decision and imposed the penalties.
Decision of the Tribunal
Penalty
[12] The Tribunal noted the aggravating factors included that the offending was deliberate and orchestrated and that it involved significant sums of money although there was no loss to the banks. A further aggravating factor was that, when speaking to the pre-sentence report writer, Mr Shi had said he was only assisting his father to get the loans, and that he did not suspect anything was wrong until he was arrested. This assertion was inconsistent with Mr Shi’s guilty plea and was designed to minimise his offending. The sentencing Judge took a similar view.6
5 R v Shi [2019] NZDC 13298 [“Sentencing Decision”].
6 Penalty Decision, above n 1, at [46]. See Sentencing Decision, above n 5, at [10].
[13] The Tribunal did note that the offending did not directly relate to Mr Shi’s practice as a physiotherapist except insofar as it went to the honesty and integrity expected of a health professional. Information directly relating to Mr Shi’s professional practice – that is, his earnings as a physiotherapist – was falsified. Although the funding being sought from the bank was for private transactions, the Tribunal found “there is a significant overlap with professional responsibility”.7 It also noted that physiotherapists rely on public funding, including the Accident Compensation regime, which is a funding scheme that “relies heavily on the honesty and integrity of the physiotherapist seeking funding”.8 The Tribunal concluded that such reliance could not now be placed on Mr Shi.
[14] Nevertheless, the Tribunal was of the view that this was not a case that called for cancellation of registration, but a suspension would be appropriate. The Tribunal acknowledged Mr Shi had paid a penalty by virtue of the sentence imposed in the District Court. The purpose of the suspension would be to:9
… allow time for Mr Shi to reflect on his professional obligations highlighted by this case as to the need for honesty and integrity in his dealings in all aspects of his life including his professional work.
[15] The Tribunal also made an order for censure to reflect its “disquiet with the activity”. It ordered the following conditions be imposed when Mr Shi resumes practice:10
a)That he be supervised in terms of the HPCA Act by a supervisor approved by the PBNZ for 18 months from resumption of practice at his expense with a focus on financial and legal compliance aspects of his practice. The supervisor is to report to the PBNZ at least 3 monthly or more often if so directed by the PBNZ. The supervisor could require a physiotherapy practice certification against an ACC Defined Minimum Scope Certificate or the comprehensive achievement of the Quality Standards and Certification Certificate with Allied Health Standards.
b)That within 12 months of resumption from practice Mr Shi demonstrate to the satisfaction of the PBNZ that he has competence in law and ethics involved in the running of his practice, including having attended at his cost such course or training on ethics and
7 Penalty Decision, above n 1, at [52].
8 At [53].
9 At [57].
10 At [96].
professional conduct as is fixed by the PBNZ. This may be a physiotherapy practice certification against an ACC Defined Minimum Scope Certificate or comprehensive achievement of the Quality Standards and Certification Certificate with Allied Health Standards referred to above.
Costs
[16] Under s 101 of the HPCA the PCC sought at least 50 per cent of the costs and expenses of the PCC and resourcing of the Tribunal. It noted that the PCC’s “expected costs” were $33,000, with Tribunal resourcing estimated at $8,215, so totalling $41,215.11
[17] Mr Shi said he was in receipt of legal aid and that no exceptional circumstances arose, which would allow a costs order to be made against a legally aided person. The Tribunal accepted that Mr Shi had been granted legal aid regarding legal costs for representation before the Tribunal.12
[18] The first issue raised by the PCC in relation to legal aid was that the disciplinary proceedings did not constitute “civil proceedings”, so the prohibition on awarding costs against a legally aided person did not apply. The Tribunal referred to the definition under s 4 of the Legal Services Act 2011 (LSA). It noted s 4 set out a non-exhaustive list and did not specifically mention proceedings before the Tribunal. However, it concluded the Tribunal was an “administrative Tribunal” or “judicial authority” under s 7(1)(e)(v) of the LSA. The Tribunal concluded that it fitted under either definition.13 The Tribunal went on to reject the submission that a costs order under s 101 of the HPCA was different to a costs order against a litigant in court.
[19] The Tribunal held that there were no “exceptional circumstances” as are required under s 45(3) before a costs order can be made against a person in receipt of legal aid. So, no costs order was made in favour of the PCC or for the Tribunal’s cost and expenses.
11 Penalty Decision, above n 1, at [63].
12 At [68].
13 At [74].
[20] On quantum the Tribunal noted that the PCC could seek relief under s 46, which provides that a successful litigant who was not awarded costs against a legally aided party may apply to the Legal Services Commissioner, based on an order that the Court (or administrative Tribunal/judicial authority) would have ordered.
[21] The Tribunal noted the starting point in these types of cases was a 50 per cent contribution to costs. Given the means of Mr Shi and applying a credit for his having facilitated the hearing of this charge and his cooperation which resulted in cost savings, the Tribunal concluded that a sum of 30 per cent of the $41,215, being
$12,364, would have been ordered if Mr Shi had not been a legally aided party.
Law on appeals
[22] A party may appeal a decision of the Tribunal against any finding made under s 100 and any order made under s 101 of the HCPA.14
[23] An appeal is by way of rehearing. The appellate Court may confirm, reverse, or modify the decision or order. It may also make any other decision or order that the Tribunal could have made and may refer the matter back for reconsideration.15 The appellate Court must not review any (or any part) of a decision or order not under appeal. Section 109 of the HCPA governs the procedure on appeal:
109 Procedure on appeal
(1)An appeal under this Part must be heard as soon as is reasonably practicable after it is lodged.
(2)An appeal under this Part is by way of rehearing.
(3)On hearing the appeal, the appropriate court—
(a)may confirm, reverse, or modify the decision or order appealed against; and
(b)may make any other decision or order that the person or body that made the decision or order appealed against could have made.
14 Health Practitioners Competence Assurance Act 2003, s 106(2)(a) and (b).
15 Section 111.
(4)The court must not review—
(a)any part of a decision or order not appealed against; or
(b)any decision or order not appealed against at all.
[24] The appellate Court’s decision is final but subject to an appeal on question of law,16 for which s 113 provides:
113 Appeal on question of law
(1)A party to an appeal under this Part may appeal against any determination of law arising in the appeal.
(2)If the appeal is—
(a)from the District Court, it must be made to the High Court:
(b)from the High Court, it must be made to the Court of Appeal.
(3)The appeal must be heard and determined in accordance with the appropriate rules of court.
(4)Part 6 of the Criminal Procedure Act 2011 applies to the appeal—
(a)so far as it is applicable and with all necessary modifications; but
(b)only so far as it relates to appeals on questions of law.
(5)Subsection (4) overrides subsection (3).
[25] There is presently some debate about which standard of appeal applies: whether it is an appeal against discretion (and so the more limited appeal approach set out in May v May),17 or a merit-based Austin, Nichols & Co Inc v Stichting Lodestar (Austin)18 approach. The former approach was supported by Collins J in the High Court decision of Roberts v Professional Conduct Committee of the Nursing Council of New Zealand,19 which the respondent noted is the leading decision in relation to the issue of penalties under s 101. The latter Austin approach was adopted by a full bench of the High Court in Sisson v Standards Committee (2) of the
16 Health Practitioners Competence Assurance Act 2003, s 110.
17 May v May (1982) 1 NZFLR 165 (CA).
18 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 [“Austin”].
19 Roberts v Professional Conduct Committee of the Nursing Council of New Zealand [2012] NZHC 3354 [“Roberts”].
Canterbury-Westland Branch of the New Zealand Law Society.20 That approach had found favour in recent times.
[26] The Austin approach requires that the appeal be conducted by way of rehearing. If an appellate Court comes to a different view on the evidence, the tribunal necessarily will have erred and the appeal must be allowed. However, it is for the appellant to show that an error has been made. In assessing whether an error has been made the appellate Court must take into account any advantages the tribunal may have had, such as assessing credibility on contested oral evidence. The appellate Court should exercise “customary caution” in that case.21
[27] The PCC submits the May v May approach is the proper approach but conceded the Austin approach is a reasonable one to take in view of the divergence of High Court authority and until the matter is determined by the Court of Appeal on an appropriate case.
[28] A pragmatic course adopting the Austin approach was agreed to by counsel here in the spirit of the comments by Downs J in Emmerson:22
[96] As against all this, the authorities since Hart have consistently held penalty appeals are general appeals. To now hold otherwise would introduce the uncertainty warned of in Rabih and TSM. With considerable reluctance, I conclude penalty appeals are to be approached as general appeals; it would be unhelpful to swim against the tide. Consequently, it is not necessary for Dr Emmerson to identify reversible error in the sense described by May v May and its progeny. Rather, it is sufficient if Dr Emmerson persuades me a different penalty should have been imposed.
[97] Mr Muston approached this task by identifying alleged errors in the Tribunal’s approach. Given the discussion above, that was unnecessary, albeit not wrong either: for all the conceptual differences between general appeals and appeals against discretion, doubt attaches to whether practical differences are that great. The following analysis track’s Mr Muston’s approach, and then approaches the issue on an Austin Nichols basis.
20 Sisson v Standards Committee (2) of the Canterbury-Westland Branch of the New Zealand Law Society [2013] NZHC 349, [2013] NZAR 416.
21 Austin, above n 18, at [13].
22 Emmerson v A Professional Conduct Committee of the Medical Council of New Zealand [2017] NZHC 2847; citing Hart v Auckland Standards Committee (1) of New Zealand Law Society [2013] NZHC 83, [2013] 3 NZLR 103; Rabih v A Professional Conduct Committee of the Dental Council [2015] NZHC 1110; and TSM v Professional Conduct Committee [2015] NZHC 306.
[29] I now turn to consider the issues on appeal. The first is as to penalty and in particular whether suspension was appropriate. The second is as to costs.
Issue One: appeal against the penalties imposed
Relevant law
[30]The charge was brought under s 100(1)(c) of the HPCA, which provides:23
100 Grounds on which health practitioner may be disciplined
(1)The Tribunal may make any 1 or more of the orders authorised by section 101 if, after conducting a hearing on a charge laid under section 91 against a health practitioner, it makes 1 or more findings that—
…
(c)the practitioner has been convicted of an offence that reflects adversely on his or her fitness to practise;
[31]Where s 100 applies, the Tribunal may make any of the following orders:24
(a)order that the registration of the health practitioner be cancelled:
(b)order that the registration of the health practitioner be suspended for a period not exceeding 3 years:
(c)order that the health practitioner may, after commencing practice following the date of the order, for a period not exceeding 3 years, practise his or her profession only in accordance with any conditions as to employment, supervision, or otherwise that are specified in the order:
(d)order that the health practitioner be censured:
…
[32] The appellant says that the Tribunal erred in its determination of the penalty. The appellant accepts his conduct fell short of the requirements set out in Physiotherapy Code of Ethics and Professional Conduct. However, he says the conduct was not connected to his practice and did not affect the safety of his patients.
23 Under s 100(2) of the Health Practitioners Competence Assurance Act 2003, the Tribunal may make a finding under s 100(1)(c) only if the conviction has been entered by any court for an offence punishable by imprisonment for a term of three months of longer.
24 Health Practitioners Competence Assurance Act 2003, s 101(1).
Mr Shi also says the case is unusual, as the forgery offences were not committed in the course of his practice.
[33] The PCC pointed to cases that had elements similar to this case, in which the Tribunal cancelled the registration of health professionals based on convictions for dishonesty.
[34] In particular, Mr Coates referred to Aldworth,25 a decision of the Health Practitioners Disciplinary Tribunal in relation to a registered nurse. Ms Aldworth was convicted of money laundering. The offending had occurred when her husband was in jail and she was assisting him with the transfer of money apparently obtained as a result of her husband’s methamphetamine dealings.26 Ms Aldworth was convicted of the offences and charged before the Disciplinary Tribunal on the basis that her conviction reflected adversely on her fitness to practice as a registered health practitioner. The Tribunal considered whether, despite the serious nature of the conviction, it might have been possible to consider a penalty short of cancellation. The practitioner had an unblemished career in nursing before this offending.27 However, the practitioner’s offending was so serious and sustained that the Tribunal determined that it was untenable to permit her to retain her registration. The Tribunal indicated this was not so much to punish the practitioner but rather to ensure the protection of the public and to maintain professional standards for the profession of nursing. The practitioner’s registration was cancelled, and she was censured.28 The offending occurred over 2013 and 2014 and involved Ms Aldworth receiving funds in the vicinity of $341,000.
[35] The PCC also pointed to Condon,29 a decision of the Disciplinary Tribunal in relation to an enrolled nurse. Ms Condon had taken a colleague’s credit card. It was not clear whether the card had been taken from their mutual place of work. Ms Condon had been found guilty of dishonesty using the card for a total of $1,222.47.
25 A Professional Conduct Committee v Aldworth 979/NUR17/407P [“Aldworth”].
26 At [6].
27 At [38].
28 At [39] and [40].
29 A Professional Conduct Committee v Condon 23/NUR05/13P [“Condon”].
[36] The Tribunal accepted Ms Condon had already been punished in the District Court. She was sentenced to 300 hours of community work in respect of each of the matters to be served concurrently and ordered to pay reparation of $1,222.47. The Judge noted he would have imposed imprisonment had Ms Condon continued to maintain her plea of not guilty in the face of compelling evidence. The Judge had regard to the fact Ms Condon was prepared to make amends and reparation was to be made.
[37] The Tribunal noted that the conduct was serious but it paid special regard to the fact Ms Condon was a first time offender.30 It noted that “both honesty and trustworthiness are an integral part of the practice of any nurse” and Ms Condon’s actions brought discredit on the nursing profession.31 Her colleague, the victim, was a registered nurse as well. The Tribunal noted that even if Ms Condon’s actions had not occurred within the workplace, it would have fallen within the definition of “professional misconduct”.32
[38] The Tribunal came to the unanimous view that Ms Condon’s registration as an enrolled nurse had to be cancelled. It had considered imposing a penalty less severe than cancellation, including the option of suspension or conditions on registration. However, it concluded the offending was so serious the Tribunal was bound to impose the maximum penalty available under it.33
[39] Mr Coates noted that Condon could be regarded as the “high water” case when it came to penalties for dishonesty imposed by the Tribunal.
[40] Mr Shi placed reliance on Keshvara,34 another decision of the Disciplinary Tribunal. In that case Dr Keshvara had forged the signature of another practitioner on a prescription form to enable him to obtain drugs for his own use from a pharmacy.
30 Condon, above n 29, at [33].
31 At [33].
32 At [28].
33 At [35].
34 A Professional Conduct Committee v Keshvara 53/MED06/29P [“Keshvara”].
[41] Dr Keshvara had a drug addiction. He had a longstanding history of opioid and alcohol dependence.35 His addictions had first come to the Medical Council’s attention nine years earlier when he was suspended from practice as a doctor for four months. He voluntarily restricted himself from prescribing controlled drugs on his return to practice.36 In 1999, he had a significant relapse of his narcotic dependency and was convicted of charges under the Misuse of Drugs Act 1975 for forging prescriptions. He had also been convicted of a drink driving offence in 2000.
[42] As a result of his various convictions, he was censured, required to pay costs and practice only subject to a series of conditions put in place for three years. His progress was then monitored by the Medical Council’s Health Committee until 2003. Under his present conditions of practice, he was required to receive extensive therapy and treatment from an experienced alcohol and drug counsellor.37
[43] The Tribunal in that case concluded that the penalties should be designed to protect the public, maintain professional standards, and provide Dr Keshvara with a final opportunity to practice medicine.38 It considered removing Dr Keshvara’s name from the register. However, it concluded that because it had not been suggested that patient safety had been compromised that he should be suspended for 12 months with various conditions related to rehabilitation and the maintenance of appropriate professional standards. The Tribunal urged the Medical Council to put in place arrangements to ensure that if Dr Keshvara did return to practice he would be carefully monitored and assessed for the balance of his career.39
[44] In Winefield,40 the High Court dealt with an appeal from a decision of the Disciplinary Tribunal. Mr Winefield was a registered pharmacist and had been convicted of three charges of using a document with intent to defraud for the purpose of obtaining a pecuniary advantage. He was also convicted of dishonestly using a document with intent to obtain a pecuniary advantage, six charges of forgery of a
35 Keshvara, above n 34, at [32].
36 At [32].
37 At [43].
38 At [57].
39 At [56]–[59].
40 Winefield v Professional Conduct Committee HC Wellington CIV-2006-485-2225, 18 December 2007 [“Winefield”].
document (medical prescriptions) and 12 charges of making a false document (medical prescriptions).41
[45] Mr Winefield had fraudulently obtained some $10,800 from the government funder, Healthpac, in a variety of ways, but principally by misrepresenting that he had dispensed a subsidised medicine when in fact he had dispensed a non-subsidised medicine. Mr Winefield also claimed dispensing fees for other drugs when he was not so entitled.42 Mr Winefield was sentenced to perform 200 hours of community work and pay $20,000 costs. He paid reparation in full to Manatū Hauora, the Ministry of Health, before being sentenced.
[46] The Tribunal suspended Mr Winefield’s registration for nine months, censured him and required him to pay 30 per cent of each of the costs of the enquiry and the hearing by the tribunal, a total payment of $10,927.54.43
[47]The Tribunal took into account:44
a) the offending occurred as part of Mr Winefield’s professional duties as a pharmacist;
b) it involved repeat offending over a prolonged period;
c) the actions were in breach of his professional and ethical obligation;
d) the offending involved dishonesty;
e) the offending had the potential to adversely affect public confidence in the profession of pharmacy;
f) Mr Winefield involved his staff in offending by giving them instructions to make false claims (a matter which weighed heavily with the tribunal); and
g) his offending represented a breach of the trust and confidence placed in him by the community.
41 Winefield, above n 40, at [2].
42 At [3].
43 At [7].
44 At [15].
[48]The mitigating factors referred to by the Tribunal in that case were:
(a)that he had been motivated by the needs of his patients, not personal gain;
(b)that he had already suffered considerable personal and financial costs as a result of his offending; and
(c)that he otherwise had an exemplary record as a practising pharmacist. He provided a large number of references at the time of sentencing confirming the extremely high regard in which he was held personally and professionally.
[49] The High Court there noted the Tribunal had not referred in any detail to the mitigating factors. The Court said at least in part the offending was occasioned by Mr Winefield’s concern for his patients.45 Nevertheless, the Court did not consider that the failure to refer to those factors could be seen as failing to take account of relevant factors as to make the decision wrong.46
[50] The Court saw some difficulty in reconciling penalties from earlier decisions. This included a three-month suspension in Young,47 which involved a higher sum than in Winefield and dispensing prescription medicines to overseas consumers without prescriptions for commercial gain. However, the Court did note the underlying conduct in Young was of unlawful dispensing and not of fraud and dishonesty.48 Notwithstanding the scale of Ms Young’s commercial venture, she was only prosecuted on the basis she had been involved in the unlawful dispensing of medicines on five occasions.49
[51] The Court noted the decisions50 that had involved dishonesty associated with obtaining substantial payments from Health Benefits Ltd (the funder) and stealing
45 Winefield, above n 40, at [33] and [34].
46 At [43].
47 Young v Professional Conduct Committee HC Wellington CIV-2006-485-1002, 1 June 2007.
48 Winefield, above n 40, at [49].
49 At [49].
50 At [52]–[53].
from an employer pharmacy were comparators.51 The Tribunal concluded that a nine-month suspension was appropriate.
[52] In this case, Mr Shi will have completed his nine months’ suspension by the date of this judgment. He has not been working during the period of suspension and has been in receipt of a benefit. Before that he was serving his 11 months of home detention. As a result of that he was required to work from one site only, whereas, before he was sentenced to home detention he had been operating his pharmacy from three sites.
[53] Mr Shi, to his credit, candidly accepted on the summary of facts filed with the Tribunal that the “six offences for which he was convicted, both separately and cumulatively, reflect adversely on his fitness to practice as a registered physiotherapist under s 100(1)(c) of the Act”.
[54] The District Court Judge noted during sentencing that Mr Shi had repaid the loans to the banks and no loss had occurred to the banks.52 However, the Judge noted that the PAC Report contained a disturbing explanation that had been proffered by the defendant. He said that it was his father who was the one who requested the bank documents and Mr Shi was only assisting his father but did not suspect that anything was wrong until he was arrested. He said the bank documents he provided had been tampered with.53 The Judge noted this was entirely inconsistent with his guilty plea and inconsistent with the instructions he had given his counsel.
[55] In his guilty plea and instructions to counsel, Mr Shi had accepted he was the one who fraudulently tampered with the documents and presented them in support of his application for finance. The Judge said he was concerned that Mr Shi was still minimising his role in the offending.
[56] The Judge noted this was not a situation where there had been an abuse of trust. Nevertheless, the motivation had been personal gain. While the offending took place
51 Winefield, above n 40, at [53]; Philipiah (Medical Practitioners Disciplinary Tribunal 264/03/114C) and Curtis (Pharmaceutical Society’s Disciplinary Committee, September 1993).
52 Sentencing Decision, above n 5, at [4] and [7].
53 At [10].
over a two-year period, the Judge accepted it had to be looked at in terms of three sets of transactions only.
[57] The Judge noted that Mr Shi was a first offender at age 36 years, had personal responsibilities for his children, was self-employed, and in business, and would have been willing to undertake restorative justice had it been available. An end sentence of a little over two years’ imprisonment was appropriate. The Judge adjusted that, in light of the purposes of sentencing, to a final sentence of 11 months’ home detention.54
[58] The summary of facts in the District Court provided more detail concerning the offending. Mr Shi had provided a copy of the financial statements for his company, Care Physio Limited, signed by him as director, to the SBS. Mr Shi had altered those accounts to inflate the fees he had received by $304,856. The loan was declined by the SBS. Subsequently Mr Shi submitted a further loan application to the HSBC supplying the same doctored accounts. The HSBC relied on them and advanced the requested amount to Mr Shi. Mr Shi had also altered bank statements in support of those loan applications.
[59] The Tribunal noted the available penalties were cancellation of registration, suspension for up to three years, imposition of conditions to his employment, supervision or otherwise for a period not exceeding three years, as well as censure or costs.
[60] It set out the principles applicable to assessing penalties taken from the decision of Roberts.55 The parties agreed that these were the correct principles upon which to base the consideration of penalties. The Tribunal noted it needed to bear in mind:
a) What penalty most appropriately protects the public.
b) The important role of setting professional standards.
c) A punitive function (although this is not the principal purpose behind in the order but may be a secondary consequence).
d) Rehabilitation of the health professional.
54 Sentencing Decision, above n 5, at [15]–[18].
55 Roberts, above n 19.
e) That any penalty imposed is comparable to other penalties imposed upon health professionals in similar circumstances.
f) Assessing the health practitioner’s behaviour against the spectrum of sentencing options that are available and trying to ensure that the maximum penalties are reserved for the worst offenders.
g) An endeavour to impose a penalty that is the least restrictive that can reasonably be imposed in the circumstances.
h) Whether the penalty proposed is fair, reasonable and proportionate in the circumstances presented.
[61] The Tribunal said that the primary purpose of cancelling or suspending registration was to protect the public although there was a punitive element. Cancellation was more punitive than suspension and the choice between the two turned on what was proportionate. Suspension implied a conclusion that cancellation would have been disproportionate, and suspension was apt where there was “some condition affecting the practitioner’s fitness to practise which may or may not be amenable to cure”. Finally, it said suspension ought not to be imposed “simply to punish”.56
[62] Citing Patel,57 the Tribunal noted the purpose of disciplinary proceedings was to:
… enforce a high standard of propriety and professional conduct; to ensure that no person unfitted because of his or her conduct should be allowed to practise the profession in question; to protect both the public and the profession itself against persons unfit to practise; and to enable the professional calling, as a body, to ensure that the conduct of members conforms to the standards generally expected of them …
[63] There was no dispute about the aggravating and mitigating features, which had been referred to by the Tribunal. The aggravating features included:
(a)The deliberate and orchestrated offending in the three applications.
(b)The applications were two years apart.
56 Penalty Decision, above n 1, at [42]; citing A v Professional Conduct Committee [2008] NZHC 1387 at [81].
57 Patel v Dentist Disciplinary Tribunal HC Auckland AP77/02, 8 October 2002; citing Eichelbaum CJ in Dentice v Valuers Registration Board [1992] 1 NZLR 720 at 724–725.
(c)Significant sums of money were involved in the three applications including the two that were finally approved. The Tribunal noted there was apparently no loss to the bank but that may have been fortuitous because of the appreciation of property values. It had no evidence on this point.
(d)The explanation given by Mr Shi to the Corrections officer blaming his father caused concern that Mr Shi was still minimising his role in the offending.
[64] The Tribunal noted the mitigating factors referred to by the PCC and the personal factors that had been referred to by counsel for Mr Shi. These included that it was Mr Shi’s first brush with the disciplinary process, and he had cooperated fully with the process. It also noted a period of suspension would have financial consequences for him and his dependent family. He was the solo father of four young children.
[65] The Tribunal concluded this was not a matter for cancellation of registration as that would be out of proportion to the totality of the circumstances and inconsistent with other Tribunal cases.58 However, it took the view that suspension was called for. The Tribunal acknowledged that Mr Shi had already paid the penalty under the sentence imposed by the criminal court and it did not seek to penalise him in that context. It said:59
The purpose of any suspension would, when combined with conditions ordered, allow time for Mr Shi to reflect on his professional obligations highlighted by this case as to the need for honesty and integrity in his dealings in all aspects of his life including his professional work.
[66] The Tribunal said that ACC relied heavily on the need for a physiotherapist to be trustworthy in order to ensure claims were made accurately and honestly. Mr Shi had been asked about this at the interview he had had with the Tribunal panel. He had said that ACC claims were handled by his receptionist using a proprietary computer
58 Penalty Decision, above n 1, at [42]; citing A v Professional Conduct Committee [2008] NZHC 1387 at [56].
59 At [57].
programme. A Tribunal member pointed out that nevertheless it was Mr Shi who was making the judgement call as to whether a claim was properly made against ACC or not. The delegation of administrative matters to staff did not alter the fact that the ACC claim system was one of high trust and reliance on the relevant practitioner.
[67] The Tribunal noted that this case was not as serious as the Aldworth case where cancellation was ordered. It also referred to Kong.60 Dr Kong had been convicted and sentenced on a number of charges of dishonestly using a document with intent to obtain a pecuniary advantage.61 The offences involved Dr Kong defrauding the New Zealand government by falsely representing that patients were eligible for capitation based funding when they were not. Dr Kong was sentenced in the District Court to 12 months’ home detention and 400 hours’ community work. The fraud had occurred over a period in excess of two and a half years. The offending was done regularly over days, weeks and months. The amount of the fraud was
$183,134.59.62 Dr Kong had acknowledged that the conduct set out in the agreed
statement of facts amounted to professional misconduct and admitted that the conduct reflected adversely on his fitness to practice as a medical practitioner.63
[68] In mitigation for Dr Kong it was pointed out that the offending was out of character and represented a substantial fall from grace for the practitioner. He had numerous supportive references, there was no material risk of reoffending as Dr Kong had showed insight into his problems, he was cooperative with the PCC, and the Medical Council had allowed him to continue practising following his conviction on various strict conditions including counselling, supervision and having no financial management interest in any practice in which he worked.64
[69] The Tribunal censured Dr Kong and suspended him from practice for a period of 12 months. The period of supervision under conditions was not set out in the
60 A Professional Conduct Committee v Kong 442/MED11/181P [“Kong”].
61 At [1].
62 At [4].
63 At [5].
64 At [20].
decision.65 Section 101(1)(c) says that after commencing practice the Tribunal may order the practitioner to practice only in accordance with any conditions as to employment, supervision or otherwise as specified in the order for a period not exceeding three years.
[70] The Tribunal also referred to Chiew.66 Mr Chiew was a pharmacist who forged documents to make claims for benefit subsidies in relation to uncollected prescription medicine.67 Mr Chiew accepted that the convictions reflected adversely on his fitness to practice and amounted to professional misconduct. Mr Chiew had falsified records and faced 130 charges brought by the health funder. He made reparations of $220,000 and a contribution of $50,000 toward the investigation costs prior to sentencing. He had been sentenced to home detention for one year and 300 hours of community work.
[71] The Tribunal noted Mr Chiew did not seek to minimise the facts and noted his very young age compared with other practitioners who had appeared on similar charges. He was inexperienced in terms of running a business and suffered from a lack of supervision. The Tribunal noted there was pressure on him both personally and culturally to succeed. It recognised the early admission of wrongdoing as well as the support for him from his colleagues and the public. The Tribunal noted Mr Chiew paid full reparation, had previous good character and no record of previous professional or criminal misconduct.68 The offending had occurred some years earlier and Mr Chiew had stopped of his own volition.
[72] Mr Chiew had stopped the offending, but it took nearly six years before his defalcations were detected. The Tribunal concluded that Mr Chiew’s registration should be suspended for a period of nine months, a censure and an order to pay 30 per cent of the costs of the prosecution and the Tribunal.69
65 The actual conditions do not appear to have been detailed although the Tribunal referred to the conditions being set out in the Penalty Decision, above n 1, at [60]–[65] and in Kong, above n 60, at [77].
66 A Professional Conduct Committee v Chiew 180/PHAR08/95P [“Chiew”]. See Penalty Decision, above n 1, at [58].
67 Chiew, above n 66, at [3].
68 At [88].69 At [107].
[73] The Tribunal in this case said the purpose of the suspension would, when combined with the supervision conditions ordered, allow time for Mr Shi to reflect on his professional obligations highlighted by the offending and the need for honesty and integrity in his dealings including in relation to his professional work.70
[74] Standing back, it appears that the nine-month suspension in Mr Shi’s case is within the range when viewed against similar cases. Related to his practice, Mr Shi tried to minimise the offending by blaming his father. This showed lack of insight into the problem. The Tribunal was also concerned about his attitude when they questioned him.
[75] The offending involved a considerable amount of money. The loan funds were significantly higher than the amounts in other cases.
[76] It was not a case where there was a breach of trust in that a health funder was defrauded, nevertheless, the fraud was perpetuated on a third-party bank for personal gain. It seems Mr Shi had no compunction about inflating his fees on paper for the purposes of obtaining money from the bank in order that he could make money on the Auckland house market. He accepted it was entirely due to greed that he had obtained the loans to buy the property. The loans occurred over a period of two years. Mr Shi was persistent. When he was turned down from one loan, he used the altered documents to obtain another. While it appears that the banks lost no money, that is beside the point and appears due more to luck and the Auckland house market than anything else.
[77] While the fraud was not perpetrated on a patient or a funder, it involved his practice accounts and inflating his fees. Given the high degree of trust which funders, in particular ACC, place on physiotherapists to make correct claims, Mr Shi’s dishonest behaviour is concerning and reflects badly on the profession. His lack of insight apparent to the Tribunal was also troubling.
[78] As I have noted, there are differences between Mr Shi’s offending and those in the other cases. However, given the amounts he sought to obtain, Mr Shi’s persistence,
70 Penalty Decision, above n 1, at [57].
the alteration of his own company records to inflate the figures, and his minimisation of his behaviour, I do not consider the Tribunal was in error in imposing the nine months’ suspension.
[79] In relation to the period of supervision, Mr Hamlin submitted that given the almost nine months’ suspension that Mr Shi has served, he has had plenty of time to reflect on the need for honesty and integrity in his dealings and in particular the importance of honesty and trustworthiness in his professional practice.
[80] However, during that time there is no evidence that Mr Shi has made any attempts at rehabilitation by, for instance, taking an ethics course. Mr Shi is on a benefit and also has not worked during the period. The supervision will require Mr Shi to focus on what he is doing at work and the manner in which he meets the requirements of honesty and integrity in his daily practice. He is to report every three months over the 18 months of supervision. This involves six reports in that period. The supervisor is also entitled to require a physiotherapy practice certification against an ACC Defined Minimum Scope Certificate or a Quality Standards and Certification Certificate from Allied Health Standards. These directions would appear appropriate in the circumstances.
[81] The supervision terms are aimed at Mr Shi gaining a better knowledge of the legal and accounting requirements and the ethical need for honest dealings. Training on ethics and professional conduct is to be fixed by the PBNZ within 12 months of the resumption of practice. Mr Shi takes no issue with that training and it appears appropriate.
[82] In my view, the nine-month suspension is appropriate, as are the requirements for training within 12 months, and for supervision. The Tribunal formed a view after interviewing Mr Shi that supervision and training were needed. It was better placed to form that view than this Court. I do not consider it made an error in that assessment.
[83] Accordingly, the Tribunal was not in error in setting the penalties in the circumstances.
[84] The appeal based on the grounds of error in relation to the suspension and supervision penalties is therefore dismissed.
Issue Two: cross-appeal on costs
[85] Mr Shi had been granted legal aid for the costs of his legal representation before the Tribunal and possibly for the earlier proceedings involving the enquiry by the PCC.71
[86] The Tribunal noted that under s 101 of the HPCA, it was empowered to order the payment of costs and expenses of, and incidental to, the enquiry by the PCC and of the prosecution of the charge by the PCC in the hearing of the Tribunal.72
[87] The Tribunal further noted that under s 45 of the LSA, a person who received legal aid for “civil proceedings” could not be the subject of an order for costs: “unless the Court is satisfied that there are exceptional circumstances”.
[88] The Tribunal found there were no exceptional circumstances. Neither party suggests that there were any exceptional circumstances, but the point of the appeal relates to whether the Tribunal was correct in its interpretation of the LSA’s provisions.
[89] The PCC says the Tribunal was in error when it refused to make an order for costs under s 45 of the LSA. This is because it says the disciplinary proceedings are not “civil proceedings” and for the purposes of the Legal Services Act disciplinary functions and procedures are sui generis. They are described as “civil matters” in the Act only because they are not criminal matters. But the wording of s 45 of the Act, which is the relevant bar to costs recovery, only applies in relation to aided persons in a “civil proceeding”, so it does not bar the recovery of costs from Mr Shi who was involved in a “civil matter” not a “civil proceeding”.
[90] The Tribunal rejected the submission of the PCC that costs for legal representation before an administrative tribunal or judicial authority were not of the same nature as the costs against a litigant in a general court. Rather, the Tribunal found
71 Penalty Decision, above n 1, at [68].
72 At [69].
that the nature of legal aid “is that an eligible party to civil proceedings, including before this Tribunal, is not to be the subject of an order for costs unless there are exceptional circumstances mentioned”.73
[91] The Tribunal also rejected an argument by the PCC that because provisions relating to costs orders under the HPCA were under the heading of “Penalty” in the legislation the position was altered. The Tribunal said a costs order does have a penalising affect, but it is not generally regarded as a penalty except to the extent that the cases indicate the practitioner’s liability “to contribute to the costs of a successful prosecution”.74
[92] The Tribunal noted that the costs of disciplinary proceedings fall on the members of the profession and the empowerment of a registration authority to recover monies due from a practitioner under a costs order is a different question from the jurisdiction to make the order in the first place.
[93] The Tribunal said otherwise it would have awarded approximately 30 per cent of the costs of the PCC and the Tribunal amounting to a total of $41,215 so the sum of the award would have been $12,364. It issued a certificate under s 45(5) to that effect.75
[94] Mr Shi supports the finding of the Tribunal. He says that the Tribunal was correct in determining that it was an administrative tribunal or a judicial authority for the purposes of the grant of civil legal aid for legal representation in proceedings before it and the “civil proceeding” versus “civil matter” distinction, for the purposes of costs, is not material.76 Therefore, costs cannot be awarded against him except in exceptional circumstances.
[95] Mr Hamlin submitted that Mr Shi did not have the means to pay the costs proposed by the respondent. He had dependent children and was a solo parent
73 Penalty Decision, above n 1, at [78].
74 At [81].
75 At [92].
76 At [73]; referring to s 7(e) of the Legal Services Act 2011 regarding proceedings for which legal aid may be granted.
responsible for his children’s upbringing. His means were already impacted by the loss of income due to COVID-19 lockdown restrictions and the penalties imposed by the Tribunal. His practice was his only source of income.
[96] Mr Hamlin indicated that he had notified the Legal Services Commissioner that this issue was to come before the Court and had anticipated the Commissioner may wish to consider it. However, at the time of the hearing Mr Hamlin had not heard back from the Commissioner.
Analysis
[97] The usual rules of statutory interpretation apply here. Interpretation commences with the text informed by the purpose and the context,77 including the statutory scheme of the relevant legislation.78
[98]Section 3 sets out the purpose of the LSA as follows:
The purpose of this Act is to promote access to justice by establishing a system that –
(a)provides legal services to people of insufficient means; and
(b)delivers those services in the most effective and efficient manner.
[99]Also relevant is the definition of civil proceedings in s 4 as follows:
civil proceedings includes –
(a)proceedings under the Marriage Act 1955, the Adoption Act 1955, the Domestic Actions Act 1975, the Property (Relationships) Act 1976, the Family Proceedings Act 1980, the Family Violence Act 2018, the Care of Children Act 2004, the Canterbury Earthquakes Insurance Tribunal Act 2019, or subparts 5, 7, 8 and 9 of Part 1 of the Weathertight Homes Resolution Services Act 2006; and
(b)proceedings under the Oranga Tamariki Act 1989, other than proceedings in respect of an offence; and
(c)despite paragraph (b), proceedings under Part 2 of the Oranga Tamariki Act 1989 on the ground specified in section 14(1)(e) of that Act.
77 Interpretation Act 1999, s 5. Commerce Commission v Fonterra Cooperative Group Ltd [2007] NZSC 36, [2007] 3 NZLR 767 at [24].
78 Westfield (NZ) Ltd v North Shore City Council [2005] NZSC 17, [2005] 2 NZLR 597 at [6].
[100] Legal services in relation to legal aid means legal advice and representation, includes assistance resolving disputes other than by legal proceedings and taking preliminary steps and incidental steps to any proceedings.79
[101] Insofar as is relevant, s 7 sets out matters for which legal aid may be granted as follows:
7 Proceedings for which legal aid may be granted: civil matters
(1)Legal aid may be granted in respect of the following civil matters:
(a)civil proceedings in the District Court or the Family Court:
(b)civil proceedings in the High Court, the Court of Appeal, or the Supreme Court:
…
(e)in any case where the Commissioner considers that the case is one that requires legal representation (having regard to the nature of the proceedings and to the applicant’s personal interest) and considers that the applicant would suffer substantial hardship if aid were not granted, proceedings in—
(i)the Māori Land Court; or
(ii)the Māori Appellate Court; or
(iii)the Employment Court; or
(iv)the Employment Relations Authority; or
(v)any administrative tribunal or judicial authority (not being a tribunal or an authority in respect of any decision from which an appeal lies to any of the bodies referred to in any of paragraphs (f) to (j)):
(f)proceedings before the Waitangi Tribunal:
(g)proceedings before the Social Security Appeal Authority:
(h)proceedings before the Tenancy Tribunal:
…
(pa)proceedings before the tribunal under the Canterbury Earthquakes Insurance Tribunal Act 2019:
(q)proceedings before the tribunal under the Weathertight Homes Resolution Services Act 2006:
79 Legal Services Act 2011, s 4.
(r)proceedings before a Tribunal under subpart 2 of Part 2 of the Prisoners’ and Victims’ Claims Act 2005 in respect of 1 or more victims’ claims under that subpart.
(2)To avoid any doubt, subsection (1)(e)(v) applies, without limitation, to the following proceedings:
(a)an inquest held by a coroner for the purposes of Part 3 of the Coroners Act 2006; and
(b)a hearing of the New Zealand Parole Board (other than one in a proceeding specified in section 6(c)(i)) that concerns an offender and is a hearing at which a victim may appear as of right or with the Board’s leave.
…
[Emphasis added]
[102] Sections 45 and 46 form subpart 5 of the Act, which is entitled “Award of costs in civil proceedings”. They say:
45Liability of aided person for costs
(1)If an aided person receives legal aid for civil proceedings, that person’s liability under an order for costs made against him or her with respect to the proceedings must not exceed an amount (if any) that is reasonable for the aided person to pay having regard to all the circumstances, including the means of all the parties and their conduct in connection with the dispute.
(2)No order for costs may be made against an aided person in a civil proceeding unless the court is satisfied that there are exceptional circumstances.
(3)In determining whether there are exceptional circumstances under subsection (2), the court may take account of, but is not limited to, the following conduct by the aided person:
(a)any conduct that causes the other party to incur unnecessary cost:
(b)any failure to comply with the procedural rules and orders of the court:
(c)any misleading or deceitful conduct:
(d)any unreasonable pursuit of 1 or more issues on which the aided person fails:
(e)any unreasonable refusal to negotiate a settlement or participate in alternative dispute resolution:
(f)any other conduct that abuses the processes of the court.
(4)Any order for costs made against the aided person must specify the amount that the person would have been ordered to pay if this section had not affected that person’s liability.
(5)If, because of this section, no order for costs is made against the aided person, an order may be made specifying what order for costs would have been made against that person with respect to the proceedings if this section had not affected that person’s liability.
(6)If an order for costs is made against a next friend or guardian ad litem of an aided person who is a minor or is mentally disordered, then—
(a)that next friend or guardian ad litem has the benefit of this section; and
(b)the means of the next friend or guardian ad litem are taken as being the means of the aided person.
46Costs of successful opponent of aided person
(1)This section applies if an order is made under section 45 that specifies that an aided person would have incurred a liability, or a greater liability, for costs if that section had not affected his or her liability.
(2)If this section applies, the party to the proceedings who is prejudiced by the operation of section 45 (in this section, the applicant) may apply to the Commissioner in the prescribed manner for payment by the Commissioner of some or all of the difference between the costs (if any) actually awarded to that party against the aided person and those to which that party would have been entitled if section 45 had not affected the aided person’s liability.
(3)In considering any such application, the Commissioner must have regard to the following matters:
(a)the conduct of the parties to the proceedings:
(b)the court’s findings under section 45(2):
(c)the hardship that would be caused to the applicant if the costs were not paid by the Commissioner.
(4)For the purposes of subsection (3)(c), the Commissioner may require any person to furnish information on the financial circumstances and needs of the applicant.
(5)If, having regard to the matters specified in subsection (3) and to any information received under subsection (4), and to all relevant circumstances, the Commissioner considers that any payment should be made by the Commissioner to the applicant, the Commissioner may determine accordingly and must make the payment.
(6)The Commissioner may recover any payment made under this section from the aided person as a debt due to the Commissioner, unless the payment relates to an order made under section 45(5).
(7)The Commissioner may make a payment under this section to a lawyer who is not a provider under this Act.
[103] The respondent’s submission is that the LSA appears to draw a distinction between civil proceedings and civil matters. The heading in subpart 5 refers to the award of costs in civil proceedings. The costs bar in s 45 applies to an aided person who receives “legal aid for civil proceedings”.
[104] As Mr Coates pointed out s 7 sets out the types of matters for which a grant of aid may be provided for civil matters. Legal aid may be granted in respect of civil matters including civil proceedings in the District, Family, High, Court of Appeal or Supreme Court.80 However there is no reference to “civil proceedings” in relation to the provision for a grant of aid in relation to an administrative or judicial tribunal. Therefore, those proceedings are “civil matters”,81 but do not fall within the subset of “civil proceedings”.
[105] Mr Coates said that this was deliberate. Disciplinary proceedings are not civil proceedings. The Supreme Court, in Z v Dental Complaints Assessment Committee, said that disciplinary proceedings are not criminal proceedings. It was considering the standard of proof that should apply in professional disciplinary proceedings.82 The majority found the standard was the civil standard, on the balance of probabilities, but it is “applied flexibly” according to the seriousness of the matters involved.83 The Chief Justice (who dissented in relation to the standard of proof) made general observations about the nature of professional disciplinary proceedings. She commented that they were not civil proceedings nor were they criminal proceedings. The Disciplinary Tribunal (in that case the Dentists Disciplinary Tribunal) was an administrative body that conducted enquiries and was empowered by statute to impose sanctions. The Chief Justice said the function was one of statutory regulation for which an analogy with civil proceedings (which attempts to do relative justice between
80 Legal Services Act 2011, s 7(1)(a) and (b).
81 Section 7(1)(a)(e).
82 Z v Dental Complaints Assessment Committee [2008] NZSC 55, [2009] 1 NZLR 1 [“Z v Dental Complaints Assessment Committee”].
83 At [112].
litigants) “is less convincing than an analogy with criminal process, as the Full Court had suggested in Gurusinghe”.84
[106] Katz J in Orlov v National Standards Committee also commented on the “sui generis” nature of the Lawyers and Conveyancers Disciplinary Tribunal.85
[107] Mr Coates said the statutory disciplinary process was sui generis and could not be called a “civil proceeding”, although the process may be a “civil matter”.
[108] The expressed purpose of the LSA is for the promotion of access to justice by establishing a system that provides legal services to people of insufficient means and for the delivery of those services in the most effective and efficient manner. Mr Coates says legal aid was granted and Mr Shi has had access to justice by the provision of legal representation funded by legal aid. The purpose of the Act has therefore been met.
[109] The New Zealand Bill of Rights Act 1990 (NZBORA) provides some guidance on interpretation in situations where a person’s rights are curtailed. Section 6 provides that “[w]herever an enactment can be given a meaning that is consistent with the rights and freedoms contained in this Bill of Rights, that meaning shall be preferred to any other meaning”. However, first, there is no specific right to legal representation in civil proceedings under the NZBORA;86 and secondly, the interpretation for which the respondent contends does not specifically deny legal representation. Therefore, the NZBORA does not directly provide any guidance here.
[110] In addition, Mr Coates points out that the HPCA allows the Tribunal to make orders for costs and expenses relating to the actual costs to the profession incurred by both the PCC and the Tribunal. Orders can be sought to cover costs of the investigation by the Health and Disability Commissioner under the Health and Disability Commissioner Act, as well as for the enquiry by the PCC, covering the prosecution
84 Z v Dental Complaints Assessment Committee, above n 82, at [50]; citing Gurusinghe v Preliminary Proceedings Committee of The Medical Council of New Zealand [1989] 1 NZLR 139 (HC).
85 Orlov v National Standards Committee [2013] NZHC 1955 at [30].
86 The right to counsel relates to criminal proceedings: ss 23 and 24 of the New Zealand Bill of Rights Act 1990.
costs incurred by it, as well as the hearing costs of the Tribunal.87 The philosophy is of “user pays”. The profession generally funds the disciplinary machinery but a practitioner who is the subject of the disciplinary process has an obligation to contribute more to fund that machinery.88
[111] Mr Coates described the bifurcated process that might be encountered in dealing with a complaint about a health professional. The Health and Disability Commissioner may refer a complaint it receives to the responsible authority.89 That might be a reference to a PCC who prosecutes the matter. The other path that the Health and Disability Commissioner may take is to refer the matter to the Director who may bring a complaint, on behalf of the complainant, either in the Disciplinary Tribunal or in the Human Rights Tribunal. The Act contemplates that all of these procedures may attract costs, which may be payable by the practitioner if an order is made by at Disciplinary Tribunal under s 101.
[112] Mr Coates also noted that s 101 was headed “Penalties”, which further indicated that the “costs” imposed on Mr Shi were part of the machinery or substance of the disciplinary mechanism, rather than something which could be described under the legal aid provisions as costs for court proceedings.
[113]The definition of “civil proceedings” in the Legal Services Act is inclusive:
4 Interpretation
…
civil proceedings includes—
(a)proceedings under the Marriage Act 1955, the Adoption Act 1955, the Domestic Actions Act 1975, the Property (Relationships) Act 1976, the Family Proceedings Act 1980, the Family Violence Act 2018, the Care of Children Act 2004, the Canterbury Earthquakes Insurance Tribunal Act 2019, or subparts 5, 7, 8, and 9 of Part 1 of the Weathertight Homes Resolution Services Act 2006; and
87 Health and Disability Commissioner Act 1994, s 1(f).
88 Provision for disciplinary levy to be imposed on every health practitioner is set out under s 131 of the Health Practitioners Competence Assurance Act 2003.
89 Section 65.
(b)proceedings under the Oranga Tamariki Act 1989, other than proceedings in respect of an offence; and
(c)despite paragraph (b), proceedings under Part 2 of the Oranga Tamariki Act 1989 on the ground specified in section 14(1)(e) of that Act
[114] Under s 7, only the District Court, Family Court, High Court, Court of Appeal, Supreme Court and appeals to the Privy Council are specifically referred to as “civil proceedings”.
[115] Other legislation also specifically refers to proceedings in various courts as “civil proceedings”:
(a)The Māori Land Court and Māori Appellate Court are established under the Te Ture Whenua Māori Act 1993. It provides for alternative funding from a special fund as an alternative to legal aid. If that fund is used the party is ineligible for legal aid.90 There is no bar on seeking costs against a recipient of the funding from the Māori Land Court Special Aid Fund. Those Courts have power to make orders for costs.91 The Te Ture Whenua Māori Act refers to “civil proceedings” being continued or commenced in those Courts.92
(b)The Youth Court is a division of the District Court.93
(c)The Employment Court is established under the Employment Relations Act 2000. It has power to order costs and expenses.94 That Act refers to proceedings in its jurisdiction as “civil proceedings”.95
[116] However, the Waitangi Tribunal was established under the Treaty of Waitangi Act 1975 and has no power to award costs. The Tribunal has the powers of a commission of enquiry except the power to award costs.96 The Act does not refer to
90 Te Ture Whenua Māori Act 1993, s 98(5).
91 Section 79.
92 Section 98F(3).
93 District Courts Act 2016, s 3(a).
94 Schedule 3, cl 19 of the Employment Relations Act 2000.
95 Sections 222C–222F.
96 Treaty of Waitangi Act 1975, s 8(1).
matters before that Tribunal as proceedings or civil proceedings. Special provisions in relation to legal aid for parties to Waitangi Tribunal proceedings are dealt with under subpart 6 of the Legal Services Act.
[117] While “civil matter” is not capable of precise definition it is arguable that it has a wider meaning than “civil proceeding” and on a literal meaning civil proceedings under s 7 are a subset of civil matters. However, a number of provisions in the Act do not support that meaning.
[118] A notice requirement under s 24, requires that in a “civil proceeding”, when legal aid is granted, the provider of legal aid “must at once give notice of that fact” to every other party to the proceeding. In practice, this would mean that legal aid providers in proceedings other than civil proceedings would have no obligation to give such notice. It may be this can be justified by the fact that the notice requirement is intended to alert the other party to the fact there is a statutory bar to costs awards. Once that peril is removed there is no need to put the other side on notice.
[119]“Civil proceedings” are also referred to in s 11(1), which provides that:
To avoid doubt, legal aid in respect of civil proceedings is not available to any body of persons, whether corporate or unincorporate, except as provided in sections 10(1) and 47.
[120] Applying the PCC’s interpretation of “civil proceedings” has the effect that, apart from in “civil proceedings”, bodies corporate would be entitled to legal aid.97 That interpretation would allow legal aid to be claimed by those bodies (who do not fall under the ss 10(1) and 47 exceptions), in “civil matters” that are not “civil proceedings”. This seems an odd situation. This could be dealt with in the case of proceedings in a disciplinary tribunal and other listed courts and bodies under s 7(1)(c) of the LSA, as the Commissioner has a discretion as to the grant of aid and may take into account the applicant’s personal interests in the proceedings.98 However, that approach does not bar bodies, including corporates, from obtaining legal aid.
97 There are exceptions: Section 10(1) allows “a natural person” and a “trustee corporation … in a representative, fiduciary or official capacity” to apply for legal aid.
98 Legal Services Act 2011, s 7(1)(c).
[121] If legal aid was granted under the previous Legal Services Act 1991 in respect of civil proceedings but the proceedings were not completed, then the Commissioner is able to require a further contribution under the present Act from the applicant as if the applicant were a request for contribution under the 1991 Act.99 Therefore, the Commissioner could not require such a contribution in respect of other civil matters that were not civil proceedings. This outcome would support a more expansive meaning of the words “civil proceedings”.
[122] Both the High Court Rules and the District Court Rules define “civil proceedings” in relation to the Crown by reference to the Crown Proceedings Act 1950 which defines civil proceedings as:100
… any proceedings in any court other than criminal proceedings; but does not include proceedings in relation to habeas corpus, mandamus, prohibition or certiorari or proceedings by way of an application for review under the Judicial Review Procedure Act 2016 to the extent that any relief sought in the application is in the nature of mandamus, prohibition, or certiorari
[123] “Civil” in the High Court Rules means “not criminal”. “Proceeding” under the High Court Rules means “any application to the court for the exercise of the civil jurisdiction of the court other than on interlocutory applications”.101 Proceeding has the same meaning in the District Court Rules.
[124] The words of s 7 and s 45 on their face support an argument that there should be a difference between “civil proceedings” and “civil matters”. Additionally, in disciplinary proceedings there may be some justification for requiring a practitioner or former practitioner to make a contribution toward the disciplinary machinery. The Tribunal is best placed to assess how to take into account matters such as appropriate levels of contribution based on the personal circumstances of the practitioner. It is not constrained by the costs rules and schedules provided in the relevant District Court Rules 2014, High Court Rules 2016, or those relating to the Court of Appeal and Supreme Court.
99 Legal Services Act 1991, s 137.
100 Crown Proceedings Act 1950, s 2 (Interpretation).
101 High Court Rules 2016, r 1.3 (Interpretation).
[125] Counsel were unable to point to any assistance in interpreting the words in the notes to the Bill’s introduction or to any debate on the issue at the time the LSA was passed or otherwise.
[126] The Legislation Act 2019 says: “The meaning of the legislation must be ascertained from its text in the light of its purpose and context”.102 Generally speaking, the Courts are unwilling to treat words in an Act as being surplusage.103
[127] The question is whether the use of the words “civil proceedings”, as opposed to the word “proceedings” in s 7 of the Legal Services Act, is as significant as Mr Coates says it is. If so, this results in a legally aided party in a civil matter (not a civil proceeding) losing the protection of the barrier to costs under s 45 of the Act, as well as the other consequences outlined above.104
[128] In Laverty v Para Furnishing Ltd,105 the rationale for the immunity under s 45(2) was explained by McGrath J. He said it was to reduce the risk that a legally aided person, if unsuccessful in the litigation, may be required to pay substantial costs despite having limited means. The protection prevents legally aided persons being deterred from exercising their right of access to the courts. His Honour noted that for circumstances to qualify as exceptional under s 45(2) and (3), they must be “quite out of the ordinary”.106 The rationale so articulated would apply equally to disciplinary proceedings. Often the legally aided person’s livelihood is in jeopardy.
[129] In my view the only distinction intended is between civil and criminal proceedings. In the High Court Rules and the District Court Rules that distinction is made. If that were not made clear in the Legal Services Act, then it would be possible to interpret s 7 as defining all proceedings in the general courts as “civil matters” because of the chapeau containing the words “civil matters” in s 7(1). That explains the use of the words “civil proceedings” with reference to the
102 Legislation Act 2019, s 10(1).
103 Ross Carter Burrows and Carter Statute Law in New Zealand (6th ed, LexisNexis, Wellington 2021) at 424.
104 See above at [113].
105 Laverty v Para Furnishing Ltd [2006] 1 NZLR 650 (CA) [“Laverty v Para Furnishing Ltd”] at
[19] and [20].
106 At [31]; citing Awa v Independent News Auckland Ltd (No 2) [1996] 2 NZLR 184 (HC) at 186.
general courts. It is difficult otherwise to discern the reason for difference in the context between “civil proceedings” and “proceedings” in general terms for “civil matters”.
[130] The issue then becomes whether or not the “proceedings” in an “administrative tribunal or judicial authority”107 are “civil proceedings” for the purposes of the Legal Services Act.
[131] The Supreme Court has firmly rejected the argument that disciplinary proceedings are criminal proceedings. As Mr Coates pointed out, disciplinary proceedings are regarded as sui generis. However, that is largely based on the requirement for the response required of a flexible civil standard of proof in cases involving serious allegations.108
[132] However, disciplinary proceedings are under the s 7(1) chapeau of “civil matters” in the Legal Services Act and so are deemed civil and therefore are civil proceedings for the purposes of s 45 of the Legal Services Act given my earlier conclusion that for the purposes of the Act, proceedings that are civil matters are civil proceedings.
[133] I do not propose to cover every point raised by the PCC. However, in relation to the argument, rejected by the Tribunal, that the heading of s 101 of the HPCA under which costs are awarded, as well as the provision of a range of penalties, is headed “Penalties”. I note that section headings at best are summaries of the contents of the section. They are, of necessity, brief and cannot even be regarded as reliable summaries.109 I do not consider that heading provides guidance in this case.
Result
[134] The Tribunal made no error in its interpretation of s 7 or s 45. The wording of the legislation supports the Tribunal’s interpretation.
107 Legal Services Act 2011, s 7(1)(e)(v).
108 Z v Dental Complaints Assessment Committee, above n 82, at [97], [107], [112] and [118].
109 Burrows and Carter Statute Law in New Zealand (6th ed, LexisNexis, Wellington 2021) at 332.
[135]The appeal is dismissed. The cross-appeal is dismissed.
Costs in this appeal
[136] Counsel agreed that in the ordinary course, costs of this appeal should go to the successful party in each appeal on a 2B basis. Therefore, costs are awarded accordingly.
[137] If any other issues arise counsel should file memoranda/um within five days of the date of this judgment. Any response should be filed within a further three days.
Grice J
Solicitors:
Legal Services Commissioner, Auckland for the Appellant. Claro Law, Wellington for the Respondent.
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