McGuire v Wellington Standards Committee (no.1) [2014] NZHC 3042 (2 December 2014)

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UNDER	the Judicature Amendment Act 1972
AND	Part 30 of the High Court Rules
BETWEEN	JEREMY JAMES McGUIRE Applicant
AND	WELLINGTON STANDARDS COMMITTEE (No 1) First Respondent THE LAWYERS AND CONVEYANCERS DISCIPLINARY TRIBUNAL _{Second Respondent}

Hearing:	30 July 2014
Appearances:	J McGuire appearing in person T Mackenzie for the First Respondent No appearance for the Second Respondent (abides)
_Judgment:	_{2 December 2014}

Introduction ....................................................................................................................................... [1] The legislation .................................................................................................................................... [2] The facts ........................................................................................................................................... [14] Procedural matters.......................................................................................................................... [50] Delegation .................................................................................................................................... [50] Bias............................................................................................................................................... [60] Procedural irregularities .............................................................................................................. [65] Charges in error ........................................................................................................................... [72] The decision ..................................................................................................................................... [77] Unreasonable/legitimate expectation ........................................................................................... [77] Remedy............................................................................................................................................. [91]
_{Result
................................................................................................................................................
[92]}

McGUIRE v WELLINGTON STANDARDS COMMITTEE (No 1) [2014] NZHC 3042 [2 December 2014]

[1] Mr McGuire is a barrister and solicitor. He seeks judicial review of disciplinary proceedings brought against him. He challenges matters leading to the decision of the Lawyers and Conveyancers Disciplinary Tribunal (the Tribunal) to censure him and order him to pay costs, and the decision itself.

receiving complaints about lawyers is established by regulations (the Regulations).¹

The Regulations set out how a complaint is to be made.²They set out the procedure the complaints service is to follow on receiving a complaint.³Under that procedure the complaints service is to refer the complaint to a Standards Committee as soon as is reasonably practicable.⁴The complaints service is also to notify the person to whom the complaint relates, provide them with a copy of the complaint, and advise them of their right to make a written submission to the Standards Committee.⁵

[3] The Regulations establish regionally based Standards Committees.⁶For present purposes the relevant ones are the Wellington Standards Committee (No 1) (WSC1) and the Wellington Standards Committee (No 2) (WSC2). The procedures of a Standards Committee must comply with the rules of natural justice.⁷A Standards Committee’s decision is by majority vote.⁸

[4] The functions of a Standards Committee are set out in the Lawyers and Conveyancers Act 2006 (“the Act”). They include investigating a complaint, investigating of its own motion any matter that “appears to indicate that there may

_{have been misconduct or unsatisfactory conduct on the part of
a practitioner”,}

making “final determinations in relation to complaints”, and prosecuting charges

[5] On receiving a complaint, the Standards Committee must advise the complainant and the practitioner “as soon as practicable” whether it proposes to inquire into the complaint, to make directions for resolving the complaint, or to take no further action.¹⁰If it decides to inquire into a complaint, it must do so “as soon as practicable.”¹¹It must perform its functions in accordance with the rules of natural justice.¹²The Standards Committee’s hearing is to be on the papers unless it directs

_otherwise.¹³_{It may determine that the matter
should be considered by the Tribunal,}

determine there has been “unsatisfactory conduct”,¹⁴and/or determine to take no further action.¹⁵

[6] If the Standards Committee determines to refer the matter to the Tribunal, the Standards Committee must frame an appropriate charge and lay it before the Tribunal.¹⁶It must give notice of that determination and a copy of the charge to the

lawyer to whom it relates.¹⁷There are regulations that relate to the proceedings

before the Tribunal (“the Tribunal Regulations”).¹⁸These include the following in relation to the laying and service of a charge:

(2) The Standards Committee laying the charge must ensure that the person charged and the complainant (if any) are, without delay, served with—

(a) written notice of the Committee’s determination that the complaint or matter should be determined by the Disciplinary Tribunal; and

[7] If the Standards Committee determines that there has been unsatisfactory conduct it may make various orders, including censuring or reprimanding the lawyer, requiring the lawyer to apologise to the complainant, reducing the lawyer’s fee, requiring the lawyer to pay a fine, and requiring the lawyer to take advice about his or her practice.¹⁹

[8] Where the complaint relates to the amount of a bill of costs, “no proceedings for the recovery of the amount of the bill may be commenced or proceeded with until after the complaint has been finally disposed of.”²⁰When the Standards Committee makes its final determination on the complaint it must certify the amount that it finds is due to or from the lawyer.²¹

[9] The Standards Committee has a power to appoint committees.²²The power is exercisable “from time to time.”²³The committee may comprise two or more members of the Standards Committee and “such other persons (if any) as the Standards Committee thinks fit”.²⁴Such a committee may be appointed to inquire into and report to the Standards Committee on matters within the Standards Committee’s functions or powers.²⁵Or it may be appointed “to exercise on behalf of the Standards Committee any of its functions or powers.”²⁶

[10] A Standards Committee may delegate “any of its functions and powers” to any such committee that it has appointed pursuant to its power of appointment.²⁷It can also delegate its functions and powers to “any of its members” or “to any other person.”²⁸This power of delegation extends to the power of delegation itself. It

complaint (under s 152) or to make orders in respect of such a determination (under s

[11] The Act establishes the Tribunal.³¹Its functions include hearing and determining charges brought against a lawyer.³²In performing its functions and powers it must observe the rules of natural justice.³³A charge brought by the Standards Committee is to be prosecuted by it and it may be represented by counsel.³⁴The person to whom the charge relates is entitled to appear and be heard and to be represented by counsel.³⁵At the hearing the Tribunal may receive information which it considers may assist it in dealing effectively with the matters

before it, whether or not that information would be admissible in a court of law.

[12] The Tribunal has power to impose orders if it is satisfied that it has been proved on the balance of probabilities that the lawyer:³⁶

(b) has been guilty of unsatisfactory conduct that is not so gross, wilful, or reckless as to amount to misconduct; or

(c) has been guilty of negligence or incompetence in his or her professional capacity of such a degree or frequency as to reflect on his or her fitness to practise or as to bring the profession into disrepute; or

(d) has been convicted of an offence punishable by imprisonment which reflects on his or her fitness to practise, or tends to bring the

[13] The orders that the Tribunal can impose include the same powers available to the Standards Committee,³⁷an order suspending the lawyer from practice, an order prohibiting the lawyer from practising on his or her own account, an order that the lawyer be struck off the roll, and a penalty not exceeding $30,000.³⁸The Tribunal may make any such order as to costs as it thinks fit.³⁹

[14] The background to this matter begins with Mr McGuire’s retainer with a client, Ms Sheridan, in respect of a claim on an estate. Ms Sheridan was granted legal aid for this matter. Mr McGuire and Ms Sheridan also entered into a contingency agreement. The agreement provided as follows:

1. The client is guaranteed a minimum net payment of $50,000.00 if the case is won in the Wellington High Court and payment of at least

2. Current legal aid of $5,695.00 that is granted and paid shall be repaid to the legal services agency by the lawyer if judgment up to

4. Any settlement shall be assessed on the same basis but on condition that the Client shall not settle against the reasonable advice of the Lawyer.

November 2008, pursuant to the contingency agreement, Mr McGuire invoiced Ms Sheridan for a fee of $29,771 (inclusive of GST). He also informed the Legal Services Agency of the arrangement and sought its consent to it if it was required. On 25 November 2008 the Legal Services Agency informed Mr McGuire that this

arrangement required its consent pursuant to s 66 of the Legal Services Act 2000⁴⁰

_{and that it would not be providing its consent. This was because a
grant of legal aid}

⁴⁰This section provides that no listed provider may take payments from or in respect of persons to whom services are provided unless the payments are authorised by the Legal Services Act 2000, the Legal Services Agency acting under the authority of that Act, or any regulations made under that Act.

had already been paid and the Agency regarded any additional payment as a “top up”

[16] A few days later Ms Sheridan contacted the complaints service of the Wellington branch of the Law Society to complain about the fee. She spoke with Ms Wilson, a complaints and standards officer, and a meeting was arranged to formalise the complaint. She also emailed Ms Wilson on 28 November 2008 to notify her of the complaint. Ms Wilson wrote to Mr McGuire by letter dated 28 November 2008 advising of the complaint. The letter drew Mr McGuire’s attention to s 161 of the Act and noted that it provided that “no proceedings for the recovery of the amount of the bill may be commenced or proceeded with until after the complaint has been finally disposed of.” The letter asked for Mr McGuire’s written submission in response to the complaint by 15 December 2008.

[17] Ms Sheridan’s complaint was formalised on 3 December 2008 when she completed a complaint form at the Law Society’s offices. The complaint related to the amount of the fee, and alleged that Mr McGuire had forced her to sign the contingency agreement and failed to tell her that he was not entitled to charge anything above the legal aid grant. The complaints service (Ms Brewer, a complaints and standards officer) advised Mr McGuire of the completed claim form by letter dated 4 December 2008. The letter enclosed the complaint form and some documentation supplied by Ms Sheridan and again noted the date of 15 December

[18] Mr McGuire provided a response on 5 December 2008. He noted that he was unaware of s 66 of the Legal Services Act 2000 until it was brought to his attention when the claim settled.⁴¹He said that under the agreement he assumed a personal debt to repay the legal aid grant if a settlement figure above a certain amount was not reached. He said that he was intending to file an application for summary judgment if Ms Sheridan did not accept his offer to settle the matter. By letter of the same date

_{he wrote to Ms Sheridan proposing that she pay $15,026 in full and final
settlement.}

⁴¹This occurred in the context of the judicial settlement conference at which the settlement of

He also informed her that he was intending to file a summary judgment application and that his view was that s 66 did not apply.

[19] By letter dated 8 December 2008 the complaints service (Ms Brewer) wrote to Mr McGuire reminding him of s 161 of the Act. The letter said that “[i]t is expected that you will not file your summary judgment proceedings until the Standards Committee has considered and decided upon the complaint made against you.” The letter also advised Mr McGuire that the complaint had been referred to the WSC2.

[20] Mr McGuire responded by letter dated 9 December 2008. He said that the contingency agreement predated the Act. He also said that the fee was crucial to his financial well-being and he would therefore be proceeding with his summary judgment application. He said that Ms Sheridan would be able to oppose it. He also expressed concerns about Ms Sheridan’s credibility.

[21] On about 12 December 2008 Mr McGuire filed his summary judgment application. The claim was for his fee of $29,771 (inclusive of GST).

[22] On 18 December 2008 the complaints service (Ms Wilson) wrote to the District Court. Ms Wilson referred to Mr McGuire’s proceeding, the complaint from Ms Sheridan, and s 161 of the Act. She said that she understood the matter would be referred to a Judge in Chambers. She asked that the proceedings be deferred until the complaint had been determined which was likely to take at least three months.

[23] There was then communications between Ms Wilson and Mr McGuire in which she said that the contingency arrangement was a top up payment and Mr McGuire disagreed with that. Mr McGuire wrote to the Law Society by letter dated

19 December 2008. He set out his view that s 161 did not apply. He requested that the complaint be managed by someone other than Ms Wilson and that a letter be sent to the District Court reversing the letter of 18 December 2008.

[24] On 20 January 2009 Mr McGuire was advised that the matter would be heard on the papers by the WSC2 on 29 January 2009. He was invited to make

submissions by 26 January 2009. He was advised that the complaint was Ms Sheridan’s complaint “received on 28 November 2008”.⁴²Mr McGuire took up the opportunity to provide submissions. In that response he said that he was “still not quite sure what the basis of the complaint” was. Amongst other things his response explained that under the contingency agreement he accepted responsibility for the legal aid debt if Ms Sheridan received less than the specified amount. He said that

[25] On 4 February 2009 the complaints service (Ms Wilson) advised Mr McGuire that the WSC2 would continue its hearing of the matter on 26 February 2009 and that Mr McGuire could attend in person. It had resolved that it had reasonable cause to suspect that Mr McGuire had been guilty of conduct of the kind specified in s

130(c) of the Act (that is, misconduct or unsatisfactory conduct). This was for filing the summary judgment application after being made aware of s 161 of the Act. Mr McGuire was advised that both this matter and Ms Sheridan’s complaint would be considered at the hearing.

2009 the WSC2 resolved to transfer the matters to the WSC1. This was at the request of Mr McGuire who regarded the WSC2 as biased. Also on that day Ms Sheridan filed a notice of opposition to the summary judgment application. There was a call over in the District Court that day. Ms Sheridan’s counsel sought a stay of the proceeding. Mr McGuire understood the Judge to indicate that he agreed with him that s 161 of the Act did not apply. Ms Sheridan’s counsel had a different view about whether any such indication was given. In any event the proceeding was adjourned to a list date in May by which time the Law Society process was expected to have taken its course.

[27] On 4 March 2009 the WSC1 resolved to inquire into the matters transferred to it. Mr McGuire was informed that there would be a hearing on the papers on 1

⁴²Mr McGuire took issue with this saying that the formalised complaint was dated 3 December

2008. This inaccuracy is irrelevant. Mr McGuire was aware that Ms Sheridan first complained on 28 November 2008 and that the complaint was formalised on 1 December 2008 (see [16] and [17] above.

April 2009. He requested that he appear in person. That request was declined. That was conveyed by letter dated 18 March 2009 from the complaints service (Ms Rice). Mr McGuire provided written submissions to the WSC1 on 23 March 2009.

[28] The WSC1 met on 1 April 2009. Ms Rice and Ms Wilson were in attendance. At that meeting the WSC1 determined that both matters (Ms Sheridan’s complaint and the WSC1 own motion complaint) should be considered by the Tribunal. It also authorised the WSC1 “to arrange counsel to prepare and file charges, prepare any Affidavit as to Process and any other matters incidental to prosecution.” It further directed that “[d]raft Decision to be referred to Convenor for formal determination; draft charges also to Convenor for approval before signing.”

2009 and was signed on behalf of the Convenor by Ms Rice. The affidavit as to process was sworn by Ms Rice on 16 July 2009. At this stage the charges had not been prepared.

judgment application was stayed by operation of s 161 of the Act.⁴³On 9 October

2009 counsel for Mr McGuire wrote to Ms Rice expressing a number of concerns, including that the charges were not in writing and that Mr McGuire had also not been given written notice of the determination as required by the Act.

[31] The charges were signed by the Convenor on 20 November 2009. There were two charges:

he rendered an invoice to Ms Sheridan for $29,771 for legal services in respect of which Ms Sheridan had received a grant of legal aid; and

⁴⁴This charge erroneously refers to the Legal Services Act 2008. There is no such enactment. The correct reference should have been to the Legal Services Act 2000. This mistake is not repeated elsewhere in the 20 November 2009 charges which correctly refer to the Legal Services Act

(b) misconduct in that, in breach of s 161 of the Act, he commenced proceedings to recover the bill of costs notwithstanding that he had been notified by a Standards Committee that it had received a complaint about the bill of costs.

[32] Mr McGuire was notified of this by letter dated 3 December 2009. The letter advised that the charges were laid with the Tribunal on 30 November 2009 and that the WSC1 was required to serve him without delay with a copy of the charge, the affidavit in support and a copy of the WSC1’s decision.

[33] On 4 March 2010 the High Court allowed Mr McGuire’s appeal from the District Court decision which stayed his summary judgment application.⁴⁵The High Court noted that Ms Sheridan denied liability for any fee. It noted that s 161 operated as a stay in relation to quantum but not liability. It held that Mr McGuire was entitled to have a court determine whether his contingency fee was caught by s 66 of the Legal Services Act 2000. He was not entitled to pursue his proceeding so

as to seek “recovery of the amount of the bill” while s 161 continued to apply.

[34] The District Court proceeding was transferred to the High Court. In the High Court Mr McGuire abandoned his claim that s 66 did not apply and sought payment on a quantum merit basis. In a decision delivered on 15 April 2010 the High Court entered judgment in Ms Sheridan’s favour.⁴⁶An appeal to the Court of Appeal was dismissed in a decision delivered on 17 February 2011.⁴⁷Leave to appeal to the Supreme Court was declined in April 2011.⁴⁸

[35] The disciplinary charges were then reactivated. Mr Sainsbury was counsel instructed for the WSC1. There were communications between Mr Sainsbury and Mr McGuire. Mr McGuire proposed that the disciplinary proceedings be discontinued with no issue as to costs. This proposal was rejected. The disciplinary hearing before the Tribunal commenced on 19 October 2011. Mr McGuire was

[36] When the hearing commenced counsel for the WSC1 sought to amend the first charge. That charge related to “render[ing] an invoice” in breach of s 66. It was proposed that this be amended to “rendering an invoice and seeking payment of that invoice” in breach of s 66. The Tribunal disallowed the application to amend on the grounds that it had been made late, it would change the focus of the charge in a significant way such that Mr McGuire would be prejudiced, and it was not appropriate to further delay the hearing of the charges.

[37] After counsel for the WSC1 outlined its position on the second charge, counsel for Mr McGuire intimated that there may be an outcome which could result in an early disposition of the charges. This would involve Mr McGuire accepting some aspects of the allegations and committing to a supervision programme. The Tribunal indicated it would consider an agreed resolution but the overriding issue would be whether it accorded with the public interest. The hearing was adjourned to enable counsel to confer overnight.

October 2011) counsel informed the Tribunal of the agreement that had been reached. A practitioner of appropriate standing had agreed to mentor and supervise Mr McGuire. The WSC1 indicated agreement to the proposal subject only to the detail being mutually agreed for submission to the Tribunal. As part of these arrangements the WSC1 would withdraw the first charge and amend the second charge to allege unsatisfactory conduct rather than misconduct.

[39] The first charge was then withdrawn and Mr McGuire pleaded guilty to the following charge:

The Wellington Standards Committee (No. 1) HEREBY CHARGES JEREMY JAMES McGUIRE of Wellington, Barrister and Solicitor with unsatisfactory conduct in the provision of regulated services in that, in breach of section 161 of the Lawyers and Conveyancers Act 2006 he commenced proceedings to recover the amount of the bill of costs referred to herein notwithstanding that he had been notified that the Standards Committee had received a complaint that included complaint about the amount of a bill of costs.

[40] The Tribunal’s record of the hearing recorded the following as to what was

25. The Tribunal provided some indication of content it would expect to see in any agreement between Mr McGuire and the Standards Committee arising from his acceptance that he was guilty of unsatisfactory conduct as set out in the amended second charge. Matters such as a minimum term of

18 months of supervision and mentoring, regular reporting by Mr McGuire and his supervising practitioner to the Law Society, appropriate continuing education commitments by Mr McGuire (particularly around matters such as the Rules of Conduct and Client Care), and provision for replacing the practitioner undertaking the mentoring and supervising should that practitioner become unavailable for some reason during the term of the agreement, were noted. While costs are finally a matter for the Tribunal, counsel were advised that if costs as between the Standards Committee and Mr McGuire relating to the investigation and charges can be agreed then that could be a matter included in the agreement to be submitted to the Tribunal for its approval.

26. In respect of the Tribunal’s costs under Section 257 Lawyers and Conveyancers Act 2006, the Tribunal will certify a final figure after it has received and considered any agreement and made any order it considers appropriate in respect of that agreement. As at the date of this record of pleadings and determination, the Tribunal’s costs are approximately $13,500.

27. Counsel indicated that a form of agreement incorporating various provisions to assist Mr McGuire in acting properly and professionally in his practise of the law, and to meet the public interest issues arising, should be able to be submitted to the Tribunal by 1 November 2011. The Tribunal will consider the agreement and its terms, and if satisfied it meets the purposes of the Lawyers and Conveyancers Act 2006 (and in particular the maintenance of public confidence and the protection of the public), it proposes to formally endorse the agreement by an order under Section 156(1)(a) Lawyers and Conveyancers Act made pursuant to section 242(1)(a) of that Act.

28. The Tribunal will be seeking some surety that the agreement will meet the public interest purposes of the disciplinary regime, and has indicated to counsel the matters it considers would be of value in such an agreement. If costs cannot be agreed they should be left aside, and separate submissions on costs lodged at the same time as the proposed agreement, and the Tribunal will make the orders it considers appropriate taking into account submissions received.

29. The Tribunal intends to convene via telephone conference pursuant to R.33 Lawyers and Conveyancers Act (Disciplinary Tribunal) Regulations

which arise, including costs (if not agreed between counsel), and will make orders accordingly following that hearing.

1 November 2011 Mr McGuire’s counsel made submissions on costs, submitting that if costs were to be ordered against him then they should be at the low end. Mr McGuire also sought name suppression. The submissions attached a draft agreement noting that further discussion was necessary about whether what Mr McGuire was required to undertake was to be specified.

[42] The WSC1 provided its submissions on 18 November 2011. It was prepared not to seek costs in recognition of Mr McGuire’s difficult financial position but proposed that he be ordered to pay half of the Tribunal’s costs. It opposed name suppression. It noted that the agreement relating to supervision was substantially agreed and it was hoped that a draft acceptable to all would be placed before the Tribunal soon.

[43] It seems that a finalised agreement was not signed soon afterwards as envisaged. The reasons for this are not clear on the evidence before me. Notwithstanding the absence of a signed agreement, the supervision arrangement commenced. Mr Winter, who was supervising Mr McGuire, provided a report on 22

December 2011. That report largely set out the areas on which Mr Winter would be focussing with Mr McGuire.

[44] Mr Winter provided an updated supervision report on 16 March 2012. In that report Mr Winter noted that he understood he would be carrying out his task pursuant to some form of written contract setting out the parameters for the supervision. While that had not been forthcoming he had “continued on an interim basis on the understanding that some oversight is required of Mr McGuire’s general client care and exercise of his judgment with respect to professional issues.”

[45] It appears that an agreement with the date “March 2012” was prepared but that it was not signed by Mr McGuire at that stage. It is not clear on the evidence before me why that was. In May 2012 the Tribunal issued a minute asking what had happened. This led to the agreement being signed in August 2012. The content of the agreement included the matters indicated by the Tribunal as appropriate.⁵⁰

McGuire sought a discharge without conviction and substantial costs against the WSC1. In his submissions he criticised the disciplinary process. The WSC1 sought costs and a censure or reprimand. The Tribunal determined to hold a hearing to consider the submissions. That hearing did not take place until 3 September 2013.

[46] By the time of the hearing Mr McGuire had completed the 18 month period of supervision. At the hearing counsel for the WSC1 accepted that Mr McGuire had carried out what was required of him pursuant to the agreement, that Mr Winter had reported positively, and that the delay in signing the agreement had not affected the rehabilitative outcome. Counsel for the WSC1 explained that it was now seeking costs, and a censure or reprimand. This was because the WSC1 was concerned that Mr McGuire’s submissions seeking a discharge without conviction and costs raised alarm bells as to whether he had taken on board what had gone wrong and why he had been brought before the Disciplinary Tribunal.

[47] The submissions for Mr McGuire at the hearing did not contend that, having completed the rehabilitation programme as agreed, it was not open to the Tribunal to impose any additional sanction. Instead they concentrated on the unfairness of the legal aid system in the context of why Mr McGuire had thought he could charge Ms Sheridan what he did, and that he was correct that he could commence proceedings for his fee, albeit only for liability. The submissions noted that Mr McGuire understood that he was lucky to have had Mr Winter’s input and he would continue this connection no matter what happened.

[48] The Tribunal gave its decision on 3 October 2013.⁵¹The Tribunal noted that Mr Winter reported that Mr McGuire felt he had not been treated fairly in the disciplinary process and that he did not expect that to change. It said:

[21] This position he has adopted does leave the Tribunal with a residual concern. It indicates to the Tribunal that Mr McGuire has not fully accepted that it was his unsatisfactory conduct that resulted in a breach of the professional obligations placed on him as a barrister and solicitor. Mr McGuire suggests that it is in fact the Standards Committee that has got it wrong, and implies improper activity by the Standards Committee in the way it dealt with his conduct. In these circumstances we consider that a sanction of censure is appropriate, to mark his conduct as unacceptable and reinforce

with Mr McGuire that there can be no on-going risk around his interactions with the public.

[22] The value of Mr McGuire’s participation in the mentoring and supervision programme, and benefit from the psychological assistance he obtained, are at risk of being lost if he does not recognise that he was at fault, not the Standards Committee. His continuing attack on those involved in disciplinary regulation, and on the processes of the disciplinary regime, does not assist in providing us with confidence that he accepts his conduct for what it was and that there is no on-going risk of a similar incident.

[23] We have no issue with Mr McGuire seeking costs (although for the reasons we shall give we do not consider he has a basis in law for such costs), but we are concerned by the way he has continued to demonstrate a lack of insight into his own conduct, and blames the Standards Committee for the position he has found himself in, as demonstrated by his submissions on costs.

[24] As a result of the content of what Mr McGuire has claimed in his submissions on costs, with its continuing criticisms and suggestions of inappropriate actions by the Standards Committee, and the concern arising from that which we have that Mr McGuire has not yet arrived at a point where he realises that it was his conduct that has caused what has occurred, we consider a censure is appropriate.

[25] Censure will mark the unacceptability of his conduct, and hopefully reinforce that it was Mr McGuire’s conduct which was unsatisfactory, not the Committee’s. We record that the Committee was originally prepared to seek a rehabilitative outcome and sought little in the way of a contribution to costs. That Mr McGuire will also face censure is entirely of his own making, as his attitude to his professional obligations, as demonstrated by the content of his submissions on costs, shows that he does not yet fully accept his responsibility for his conduct the subject of the charge to which he pleaded guilty. Censure is needed to reinforce that his conduct has not been acceptable. When Mr McGuire fully accepts that and moves on from any sense that he has been wronged, then the public interest will be more likely to be better protected.

[49] It therefore formally censured Mr McGuire. He was also ordered to pay costs of $14,700 to the WSC1.

[50] Mr McGuire submits that the delegation pursuant to which Ms Rice acted was invalid and that she acted outside its terms. He submits that as such the determination dated 24 April 2009 which she drafted was ultra vires and that, as a

result, the adverse decisions that later followed, including the Tribunal’s decision to censure Mr McGuire, must be set aside.

[51] Mr McGuire’s first submission on this topic is that Ms Rice is not a person to whom functions or powers can be delegated because she was not a duly appointed member of a Standards Committee or part of a subcommittee of two or more members. This submission is based on a misreading of ss 183 and 184 of the Act. Section 183 is the power to appoint committees. Section 184 is the delegation power. The s 184 power is not confined to a delegation to a committee. Under that section a Standards Committee may delegate to “any other person” any of its

[52] Mr McGuire’s next submission is that the delegation Ms Rice was given was unlawful because it was given by the Convenor rather than the WSC1. However the terms of the delegation to Ms Rice state that it “confirms your appointment by Standards Committee 1 to undertake certain delegated functions...”. The fact that it is signed by the Convenor does not detract from it as an appointment by a Standards Committee as it states. There is no requirement as to the form that the appointment

must take, other than that it must be in writing.⁵³The delegation in this case met that

[53] Mr McGuire’s next submission is that the terms of the delegation were limited to matters set out in paragraphs 2(a) to (d) of the letter confirming Ms Rice’s appointment. This submission is based on a misreading of that letter. The letter sets out the designated functions as being those set out “as follows”. What follows are the functions in paragraphs numbered 1 and 2. The function described in the paragraph numbered 1 is to receive written complaints on referral from the complaints service on behalf of the WSC1, and to make initial inquiries as Ms Rice

_{function described in the paragraph numbered 2 is to report to the WSC1
on any}

complaints or investigations Ms Rice is handling on its behalf.⁵⁵The letter goes on to provide additional functions as follows:

In addition to your investigative responsibilities, you are also required to provide secretarial services to the Standards Committee, including the preparation and circulation of agendas, the taking of minutes and the circulating of those minutes promptly after each meeting.

Your delegated responsibilities may also include any other matter reasonably required by you by way of support or assistance to the Standards Committee (which the Standards Committee may lawfully delegate) in the performance of its functions and duties.

(a) investigating the complaint including writing to Mr McGuire with her understanding of the principles of natural justice;

(d) instructing counsel, appearing to give evidence at the first Tribunal hearing, negotiating and laying the unsatisfactory conduct charge, and appearing at the second Tribunal hearing on penalty and costs.

[55] The matter at (a) is within the delegation at paragraph 1 of the letter. The letter setting out the principles of natural justice conveys the WSC1’s response to Mr McGuire’s request to appear in person before it.⁵⁶That is clear from its terms which include “[t]he Committee notes your request to appear in person” and “[t]he Committee is of the view that the circumstances of this case are not such that there is any reason to depart from the statutory preference for hearings to be conducted on the papers.” The explanation of the principles of natural justice which follows is the

WSC1’s reasons for why it is not acceding to the request to appear in person. In communicating this information on behalf of the WSC1, Ms Rice was acting within the terms of her delegation to provide secretarial services for the WSC1 and “any

_{other matter reasonably required by [Ms Rice] by way of support or
assistance.”}

[56] The matter at (b) was similarly within the terms of the delegation. Additionally it was a task specifically delegated to Ms Rice at that meeting on 1

April 2009 and the delegation of that task is recorded in writing via the minutes of the meeting. Mr McGuire is wrong to view the determination as having been made by Ms Rice. She was delegated to prepare a draft of the determination, but that did not make it her determination. The WSC1 decided at the meeting on 1 April 2009 that the matters should be referred to the Disciplinary Tribunal. Ms Rice, as part of her secretarial function, assisted the WSC1 by preparing a draft of the determination. As the minutes record, the draft she prepared was to be referred to the Convenor for formal determination. Ms Rice’s affidavit says that the draft was forwarded to the WSC1 to consider. She says that once she had the Convenor’s approval, she signed it on his behalf. This process was a proper one. The determination was made by the WSC1 at its meeting and the Convenor confirmed that the draft correctly recorded the decision that it had made.

[57] The matter at (c) concerns the giving of evidence relevant to charges. That is not a function or power of the WSC1 for which a delegation is required. For example, the complainant could give evidence in support of the charges without any delegation from the WSC1 being necessary. In any event the terms of Ms Rice’s delegation included any “matter reasonably required of [Ms Rice] by way of support or assistance”.

[58] Similarly, insofar as the matters at (d) refer to Ms Rice giving evidence, the same points apply. Insofar as they refer to her role with counsel Ms Rice was specifically tasked at the meeting on 1 April 2009 to “arrange counsel to prepare and file charges, prepare an Affidavit as to Process and any other matters incidental to the prosecution”. Insofar as they refer to Ms Rice’s role in relation to the unsatisfactory conduct charge, the affidavits of Ms Rice and Mr Crotty (the Convenor of the WSC1 at this time) confirm that it was the WSC1 that approved the proposal relating to the amended charge. In liaising with Mr Crotty about that, Ms Rice was performing any “matter reasonably required of [Ms Rice] by way of support or assistance”. Contrary to Mr McGuire’s submissions, the affidavit evidence about this is not contradictory and does not suggest that it was Ms Rice who negotiated and laid the amended charge.

[60] Mr McGuire says that the WSC2 inferred or implied that Mr McGuire was a repeat offender and the matter was transferred to the WSC1 on a perception of bias basis. He says that because the WSC1 simply took up the matters from where the WSC2 left off, the perception of bias that existed in relation to the WSC2 continued with the WSC1.

[61] This submission is not made out on the facts. The WSC2 was prepared to transfer the matter to the WSC1 following Mr McGuire’s contention that the WSC2 was biased. It did so “on the basis that no final view had been reached as to the merits of the ‘perception of bias’ argument but in the circumstances of his case, it was appropriate that the matter be transferred.” Having done so, the WSC2 met to consider what action to take. It resolved to inquire into Ms Sheridan’s complaint and to investigate of its own motion Mr McGuire’s filing of the summary judgment application. There is nothing to suggest that this was anything other than what the minutes disclose on their face; that is, that the WSC1 made its own assessment of whether to proceed with an investigation. The same is true of the decision at its meeting on 1 April 2009 to refer charges to the Tribunal.

[62] Mr McGuire also contends that Ms Wilson failed to act impartially. He says that she took a strident and critical approach towards him from the outset. He says that the WSC1 failed to take steps to ensure that Ms Wilson did not continue to be involved. He says that it is impossible to discount that Ms Wilson had at least some influence on Ms Rice, and that because the WSC1 extended decision making powers to Ms Rice, the WSC1’s decisions were tainted with bias.

[63] This submission fails because, as discussed in relation to the delegation issue, Ms Rice was not the decision maker. The same is true in relation to Ms Wilson. She had a role at the outset in initiating the inquiry but the WSC2, and in turn the WSC1, were the decision makers. Ms Wilson and Ms Rice were present at the WSC1 meeting on 1 April 2009 but their presence is an insufficient basis on which to infer

that the WSC1 did anything other than properly consider and reach a view that charges should be brought.

[64] Finally on this topic I note that bias in a decision to bring charges would not render the Tribunal’s ultimate decision on those charges (or, as in this case, an amended charge) invalid. A prosecutor’s conduct might be relevant to costs, but charges (whatever the motivations for their being brought) are either proven or they are not.⁵⁷

[65] Mr McGuire submits that there were the following procedural irregularities:

(c) he was not served with a copy of the determination, charges and supporting affidavit “without delay” as required by the Tribunal regulations.⁵⁸

[66] As to (a), as discussed above Ms Rice signed the determination on behalf of

the Convenor. The determination recorded the WSC1’s decision at the meeting on 1

April 2009, Ms Rice was tasked with preparing a draft, and the Convenor confirmed to Ms Rice that the draft determination was approved.⁵⁹There was no procedural irregularity in this respect.

[67] As to (b), it is not necessary for an affidavit to be prepared after the charges have been prepared in order for the affidavit to support the charges. At the meeting

⁵⁷See the discussion in Solicitor-General v Siemer HC Wellington CIV-2010-404-8559, 13 May

considered by the Tribunal. The affidavit from Ms Rice set out the procedural background up to the WSC1’s decision on 1 April 2009 and the notice given to Mr McGuire of that decision on 24 April 2004. That information could be put together without the precise wording of the charges having been formulated. There was no procedural irregularity in this respect.

[68] As to (c), the decision to lay charges was made on 1 April 2009, Mr McGuire received written notice of the decision on 24 April 2009, and he was served with the charges and the affidavit in support of the charges in December 2009. This delay in serving the charges and the affidavit in support did not satisfy the requirement that Mr McGuire be served “without delay”. The Tribunal Regulations may be interpreted as requiring service without delay once the decision to lay charges has been made. The contrary view is that the requirement for service without delay relates to the period between the laying of the charges and service. However if that contrary view were taken, it would still be necessary to bring charges against Mr McGuire without delay through the requirement in the Act that the Standards

[69] In Chow v Canterbury District Law Society a lawyer sought a stay or dismissal of charges brought against him on the grounds of delay.⁶¹In dismissing the application where the delay was much greater than here, the Court of Appeal said this:

[35] In this regard our attention was drawn to Australian authorities, Walton v Gardiner [1993] HCA 77; (1993) 177 CLR 378 and R v Davis [1995] FCA 1321; (1995) 57 FCR 512, in which the question whether disciplinary proceedings should be stayed on account of delay was considered. Both the High Court of Australia and the Federal Court concluded that a weighing process, similar to that undertaken in a criminal case, was required, but with account also to be taken of the protective nature of the disciplinary jurisdiction. That is, disciplinary proceedings are not punitive in nature, but essentially protective of societal interests.

[36] We accept that the issue of remedy is to be approached on the basis of an application of administrative law principles. It follows that non- compliance with the statutory requirement that charges are brought as soon

⁶⁰Refer [5] above. See Chow v Canterbury District Law Society [2005] NZCA 313; [2006] NZAR 160 (CA), at [26] considering in respect of the predecessor legislation that a charge must be filed with the Tribunal promptly because of the express obligation to inquire into complaints “as soon as practicable.”

as practicable does not bring about an automatic response. In particular, the charges are not rendered “invalid”, nor is a stay or dismissal of the charges necessarily appropriate.

[37] Rather, a judicial assessment of all relevant factors is required. The extent of, and the effects caused by, the non-compliance and the disciplinary context itself, are all highly relevant considerations, as is the nature and seriousness of the charges.

[70] It is important that complaints are dealt with as soon as practicable as the legislation requires. In this case the delay was unsatisfactory. Matters of this kind can involve anxiety for the practitioner and it is apparent that they did so here.⁶²

However in this case there was the complication that Mr McGuire was pursuing his summary judgment application. As matters transpired, the delay in serving Mr McGuire with charges was relatively minor in the context of the overall delay in the disposition of the charges. Mr McGuire’s actions in pursuing the proceedings against Ms Sheridan were part of the reason for that delay (accounting for the period between March 2010 and April 2011). There was further delay after the supervision agreement was signed and the hearing on penalty and costs.

[71] If Mr McGuire wished to raise the delay in serving the charges on him, the time to do so would have been at the hearing in October 2011. However, at that time, he elected to plead guilty to an amended charge and to undergo the supervision arrangement. In these circumstances a balancing of the relevant interests does not favour a stay or dismissal of the charges.

[72] Mr McGuire submits that the two misconduct charges were wrong in law. The first charge alleged misconduct for “rendering an invoice” in breach of s 66 of the Legal Services Act 2000.⁶³The Court of Appeal held that s 66 was not breached until the lawyer takes a payment from the person who is subject to a grant of legal aid without authority from the Legal Services Agency to do so.⁶⁴As Mr McGuire

_{had never taken payment he had not breached s 66. It was for this
reason that the}

WSC1 sought to amend the charge. Therefore Mr McGuire is correct that the misconduct charge was wrongly framed.

[73] However Mr McGuire was never convicted on the wrongly framed charge. He was also not convicted on the proposed amended charge because the amendment of that charge was not allowed. The only relevance of the wrongly framed charge is potentially as to costs. That said, Mr McGuire was wrong to sue to recover the amount provided for in the agreement. The Agency had declined to authorise the

payment.⁶⁵Because of that, as the Court of Appeal found, “Mr McGuire was not

entitled to sue Ms Sheridan or obtain a judgment, whether conditional or otherwise,

against her.”⁶⁶Therefore Mr McGuire’s conduct was wrong in this respect.

[74] The second charge alleged misconduct in commencing proceedings to recover the bill of costs notwithstanding that he had been notified by a Standards Committee that it had received a complaint about his conduct. Mr McGuire says that this charge was wrong. That is on the basis that the correct position had always been that he could commence proceedings to establish liability to pay the bill of costs, even though he could not get judgment on the quantum until the complaint had been disposed of.

[75] It is true that the distinction between the proceedings that could and could not be commenced was apparently not understood by Ms Wilson. It is not entirely clear that it was understood by Mr McGuire either until the High Court decision given in March 2010.⁶⁷That is because the High Court Judge commented that Mr McGuire’s appeal from the stay ordered by the District Court was allowed in part “though not for the reasons stated by Mr McGuire.”⁶⁸I also not that, as commenced, the proceeding sought “[j]udgment in the sum of $29,771”.

[76] In any event this charge was amended. The amended charge also referred to commencing proceedings to recover the amount of the bill in breach of s 161 of the

misconduct. Mr McGuire pleaded guilty to that charge. He says that he did so during “an intense and emotional disciplinary hearing.” Undoubtedly that was the case for Mr McGuire. However he was represented at the time by two very experienced counsel, one of whom was a Queen’s Counsel. The guilty plea was a sensible response to assist in resolving matters through the supervision proposal. Following that guilty plea the Tribunal had jurisdiction to impose orders in respect of that charge.

[77] The last issue relates to the Tribunal’s decision to censure Mr McGuire having previously indicated that, if there was compliance with an appropriate supervision agreement, that would be the end of the matter apart from any issue as to costs. Mr McGuire contends this was an unreasonable decision. Counsel for the respondent considers this claim on that basis and also on the basis of whether it breached a legitimate expectation held by Mr McGuire.

(a) The WSC1 were agreeable to the proposal to amend the charge and put in place a mentoring and supervising agreement for Mr McGuire subject only to the detail being mutually agreed between the parties for submission to the Tribunal.

November 2011. The Tribunal would then consider the terms of the agreement. If it was satisfied that it met the purposes of the Act and

“in particular the maintenance of public confidence and the protection of the public” it proposed to formally endorse the agreement by an order under s 156(1)(a), made pursuant to s 242(1)(a) of that Act.

(e) If costs were not able to be agreed the parties were to make submissions about them by 1 November 2011 and the Tribunal would make the orders it considered appropriate taking into account submissions received.

[79] Therefore at this time, it was envisaged that the agreement would be reviewed and an order made in advance of the supervision commencing. The order would be made under s 156(1)(a). That section applies when a Standards Committee makes a determination under s 152(2)(b) that there has been unsatisfactory conduct on the part of the lawyer. It empowers a Standards Committee to make an order that:

... all or some of the terms of an agreed settlement between the person to whom a complaint relates and the complainant are to have effect, by consent, as all or part of a final determination of the complaint ...

[80] The Tribunal envisaged making that order via s 242(1)(a) of the Act. That empowers the Tribunal to make “any order that a Standards Committee has power to make under section 156 on the final determination of a complaint”.

[81] As at 20 October 2011, both the WSC1 and Mr McGuire understood that, if the terms of the agreement were appropriate, the agreement would be a final determination of the complaint with the issue of costs to be considered by the Tribunal if not also resolved by agreement. The charge was amended and Mr McGuire pleaded guilty to that charge on that basis.

[82] There is no suggestion that the terms of the agreement, as signed by the WSC1 in March 2012 and by Mr McGuire in August 2012, would not have been approved by the Tribunal had it been provided to the Tribunal by 1 November 2011 as envisaged. At this time the parties did make submissions on costs. Mr McGuire did not seek costs against the WSC1. He submitted that if any costs were to be ordered against him costs should be at the low end. The WSC1 proposed only that

[83] Had matters proceeded in the way envisaged Mr McGuire would have had an order that the agreement resolved matters. He might also have been ordered to pay costs of around $7,000. When the Tribunal realised that the agreement had not come back to it for approval it was concerned that the delay was not in the public interest. It considered that “an alternative approach to sanction may be required.”⁷⁰It appears that the Tribunal was not aware at that time that the supervision was proceeding on the basis of the unsigned agreement. The Tribunal was then informed of this by a memorandum from the WSC1 dated 25 May 2012. In that memorandum the WSC1

noted that Mr McGuire was complying with the unsigned agreement and that Mr Winter’s view was that he was cooperating fully and well. This information appears to have allayed the Tribunal’s concerns because in the end it was content for the hearing on final disposition and costs not to take place until 3 September 2013.

[84] As matters transpired, although the terms of the agreement were appropriate and Mr McGuire’s compliance with its terms was satisfactory, he was censured and ordered to pay costs of $14,700 to the WSC1. That was because, in making his submissions on costs, the Tribunal took the view that Mr McGuire did not accept that his conduct had been unsatisfactory. The censure was a backtracking on the Tribunal’s earlier indication that an agreement would resolve matters. The Tribunal considered that the censure was necessary to “mark the unacceptability of his conduct, and hopefully reinforce that it was Mr McGuire’s conduct which was unsatisfactory”.

[85] Because there had never been a final determination of the charges by the Tribunal it was not functus officio at the time of the hearing on 3 September 2013. Therefore, had there not been satisfactory compliance with the agreement, it would have been open to the Tribunal to impose an alternative sanction on Mr McGuire. But that was not the position. All parties had proceeded on the basis that the unsigned agreement would resolve matters. It was no part of that agreement that Mr

_{McGuire acknowledge the unacceptability of his conduct beyond the guilty
plea that}

he had already entered and through complying with the agreement. The original proposal was that the public interest would be met if he complied with that agreement. As the Tribunal discussed with counsel for the WSC1 at the hearing on 3

September 2013, there was no material difference in the rehabilitative outcome as a result of the agreement not having been signed and approved by the Tribunal as originally envisaged.

[86] In these circumstances the decision to impose an additional sanction, by way of censure, was unfair to Mr McGuire. That unfairness can be viewed as an unreasonable decision. It was unreasonable because it imposed an additional sanction for reasons which formed no part of the original proposal in respect of which the Tribunal had indicated its approval. It seems that Mr McGuire continued to harbour grievances about the Law Society’s approach to the complaint, but that did not make him a risk to the public. Mr Winter did not raise any concerns about the conduct of the files which he reviewed. Mr McGuire had found Mr Winter’s supervision helpful and intended to continue to seek his guidance going forward. Mr McGuire’s submissions on costs were about the Law Society’s poor process (as he saw it), not about disclaiming any responsibility for his actions.

[87] Alternatively, the Tribunal’s decision could be viewed as a breach of Mr McGuire’s legitimate expectations. All parties proceeded on the basis that the guilty plea to the amended charge together with a satisfactory supervision arrangement would resolve matters, subject to the question of costs. If that was not to be the case, Mr McGuire’s plea might have been different. When the Tribunal considered that the additional sanction was to be imposed it did not offer Mr McGuire the opportunity to withdraw his guilty plea. He was censured because he remained of the view that the Law Society’s procedures had been poor.

[88] The respondent submits it was open to the Tribunal to reconsider the penalty because Mr McGuire himself sought to do so. He did that by seeking a discharge without conviction, name suppression and an award of substantial costs. However, the discharge without conviction arose because Mr McGuire had continued to be unable to get approval as a lead provider for legal aid despite the withdrawal of one charge and the amendment to the other charge. In seeking the discharge without

conviction (in fact, not technically available), Mr McGuire was not seeking to resile from his guilty plea or the supervision he was undertaking. Name suppression was not considered as part of the original proposal. It is difficult to see how that could justify departing from the legitimate expectation that arose from the agreement reached in October 2011 as to how the charges were to be disposed of. Costs were always a matter reserved for submissions.

[89] Lastly, it can be said that Mr McGuire was unwise to seek costs. It can also be said that his sense of grievance may have lacked some much needed objectivity. However the submissions he made did not raise public interest concerns which could be said to have trumped the legitimate expectations that were created. Mr McGuire’s submissions were about process. His main point was that the charges were wrongly framed and that the WSC1 had ample opportunity to amend or withdraw them before October 2011. He had tried to resolve matters but had been told that they were too serious for that. From his perspective he had incurred substantial costs from a process he viewed as poor. The points made in the submissions were forcefully made but not outrageous in their tone. The claim for significant costs undoubtedly incensed the Standards Committee and it seems the Tribunal as well. If the claim was unjustified, the proper course in light of the process that had been followed was to dismiss Mr McGuire’s claim for costs and to consider what costs might appropriately be ordered against him.

[90] For these reasons I consider the Tribunal erred in imposing a censure on Mr McGuire. Mr McGuire was entitled to an order that the satisfactory completion of the supervision agreement resolved matters. The Tribunal was not, however, in error in ordering costs of $14,000 in the WSC1’s favour. That order reflected Mr McGuire’s acceptance, through his guilty plea, that his conduct had been unsatisfactory. The order made was an appropriately modest one, in light of the history (including that the WSC1 had not proven either of the two original charges) and Mr McGuire’s poor financial position at that time.

[91] Mr McGuire sought damages. I did not receive submissions as to the particular legal basis on which damages were claimed or why they were appropriate. Mr McGuire referred only to Attorney-General v Dotcom which discussed whether a claim for damages could be combined in the same proceeding as an application for judicial review.⁷¹In any event I am satisfied that the appropriate remedy is to quash the censure. In view of the lapse of time it does not seem necessary to replace that censure with the original order envisaged (that is, an order that the agreement resolved matters). The costs order can stand on its own without any such replacement order.⁷²

[92] The application for judicial review is granted. The censure is quashed. The costs orders stand. As Mr McGuire acknowledged at the hearing, it is not necessary to deal with Mr McGuire’s application to strike out the respondent’s defence. The substantive hearing of Mr McGuire’s application for judicial review has dealt with all matters.

[93] My preliminary view is that Mr McGuire should be entitled to costs because he has succeeded in having the censure quashed. Any such costs order should be reduced to some extent (perhaps by around 25 per cent) to reflect the significant number of other issues that Mr McGuire raised, on which he did not succeed. It would be preferable if the parties reach an agreement on costs in light of this indication. If that is not possible, they may file brief submissions (no more than five pages each) confined solely to the particular aspects of costs that are in dispute. Such submissions are to be filed by 30 January 2015.

⁷¹_{Attorney-General v Dotcom [2013] NZCA 43, [2013] 2
NZLR 213 at [35] to [46].}

High Court of New Zealand Decisions

McGuire v Wellington Standards Committee (no.1) [2014] NZHC 3042 (2 December 2014)