Liu v Cutting [2019] NZCA 228 (18 June 2019)

Last Updated: 2 July 2019

IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA

CA3/2019 [2019] NZCA 228

	BETWEEN	YICHUAN (JESSE) LIU, KIN TO (STEVEN) LAU AND DINAH QIU Applicants
	AND	DEREK EDWIN CUTTING Respondent

Court:	Brown and Gilbert JJ
Counsel:	Applicants in person D G Collecutt for Respondent
Judgment: (On the papers)	18 June 2019 at 2.30 pm

JUDGMENT OF THE COURT

1. The application for leave to appeal is declined.
2. The applicants are to pay costs to the respondent as for a standard application for leave to appeal on a band A basis together with usual disbursements.

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REASONS OF THE COURT

(Given by Gilbert J)

[1] Yichuan (Jesse) Liu, the first-named applicant, was assaulted at his secondary school on two occasions by a fellow pupil in 2005. Jesse sustained a broken jaw in the second assault. In 2007, Jesse and his parents, the second and third-named applicants, instructed the respondent, Derek Cutting, to pursue redress against the school claiming that it had failed to take adequate steps to protect Jesse. In March 2007, Mr Cutting retained a barrister, Gregory Keene, to assist with the claim. The applicants became dissatisfied with Mr Keene’s performance and they terminated his instructions in December 2008. They disputed liability to pay the balance outstanding of Mr Keene’s fees amounting to $15,125.82.
[2] Mr Cutting issued proceedings in the District Court at Auckland for recovery of the fees in March 2009. The applicants denied liability for payment of the fees and counterclaimed in negligence. They claimed special damages of $20,000 being legal costs and disbursements incurred with replacement lawyers plus general damages of $30,000. The claim and counterclaim were heard over five days, in September and December 2016 and in January 2017. In a detailed judgment delivered on 17 July 2017, Judge Hinton found the applicants liable to pay legal fees to the respondent in the sum of $10,500.^[1] The Judge dismissed the applicants’counterclaim.^[2]
[3] The applicants appealed to the High Court. The appeal was dismissed by Hinton J in a judgment delivered on 31 January 2018.^[3] The applicants then applied to the High Court for leave to bring a second appeal to this Court. That application was declined by Hinton J in a judgment delivered on 30 November 2018.^[4] The applicants now apply to this Court for leave to bring a second appeal.
[4] A decision of the High Court on appeal from the District Court is generally final.^[5] A second appeal is exceptional and requires the grant of leave. Leave will only be granted if the proposed appeal raises some question of law or fact capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of a further appeal. On a second appeal the Court is not engaged in the general correction of error. Rather, its primary function is to clarify the law and determine whether it has been properly applied by the Court below. Disputed questions of fact will seldom be of public importance and a second appeal raising factual issues will rarely be permitted. Exceptions include where the amount in issue is very substantial or where the judgment sought to be appealed reflects seriously on the character or conduct of the appellant.^[6]
[5] The applicants identify three “groups of points of principle” in their leave application. The first concerns the applicability of rr 3.4 and 3.5 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 which require lawyers to provide, in advance, various information including the basis on which fees will be charged. The courts below found that these rules did not apply in this case because the rules did not come into force until 1 August 2008 and r 3.10 expressly provides that rr 3.4 and 3.5 do not apply to a retainer entered into by a lawyer before 1 August 2008. The applicants contend “there is nothing in r 3.10 to provide that rr 3.4 and 3.5 do not apply to the respondent who continued to provide service and charge fees after 1 August 2008, with an indefinite workload and an indefinite end date”. The applicants argue that this issue raises a question of public importance because there is “a non-zero chance” that other lawyers provided services and charged fees before and after 1 August 2008.
[6] We do not consider this issue is capable of bona fide and serious argument. Rule 3.10 makes it clear that rr 3.4 and 3.5 do not apply to a retainer entered into by a lawyer before 1 August 2008. The date the retainer was entered into is the decisive date, not the date the particular services were provided. There is no dispute that Mr Cutting and Mr Keene were both retained long before 1 August 2008.
[7] The second group of points of principle raised in the leave application is described as “the fundamental concern that justice should not only be done it should manifestly and undoubtedly be seen to be done”. This group has five sub-issues.
[8] The first repeats the point already dealt with concerning the applicability of the Conduct and Client Care Rules and need not be discussed further.
[9] The second concerns whether Judge Hinton ought to have granted the applicants’ application to re-open their cross-examination of Mr Keene. They contend that if such permission had been granted, they would have been able to show that Mr Keene lied in his evidence. This issue could not possibly justify a second appeal. Mr Liu’s cross-examination of Mr Keene occupies over 150 pages of the transcript of the evidence. By any measure, this was disproportionately long given the amount at stake and the scope of the pleaded issues. Moreover, Mr Keene was cross-examined at length on the applicants’ claim that he had acted dishonestly. There is no reason to suggest that further cross-examination on the topic would have made any difference. The Judge was thoroughly satisfied that the dishonesty allegation was wholly unjustified. We see no arguable error in the way Judge Hinton conducted the hearing. Indeed, we consider he allowed the applicants considerable latitude in permitting such extensive questioning of Mr Keene.
[10] The third issue is described as “Errors in the District Court judgment”. This is based on the following statement made by Hinton J in her judgment:

[68] While there are a few errors in the District Court judgment, as is frankly inevitable in a case of this nature, none of these errors affects the correctness of the judgment. In fact, I consider the judgment to be a model of patience and thoroughness.

The applicants complain that the Judge did not reveal what these errors were, placing them at a disadvantage. They say that “it is hard to rule out that those errors might be material to the correctness of the District Court judgment”. This comes nowhere near meeting the requirements for the grant of leave for a second appeal.

[11] The fourth issue is a complaint that there was no reference to case law in the judgments below. This was a straightforward case legally and there was no need for case law to be cited. The mere omission of reference to authorities could not possibly justify the grant of leave for a second appeal.
[12] The fifth issue is a complaint that Hinton J declined leave to the applicants to file evidence regarding their alleged losses on the basis that it was too late for this. The applicants argue that it was not too late because such evidence was provided to the District Court. They contend that as a result of this error they were “denied an opportunity to claim substantial losses in the sum of approximate[ly] $20,000”. Judge Hinton recorded that there was no evidence before the Court to substantiate the special damages claim of $20,000 and, in any event, there was no causative link between the respondent’s conduct and any such losses.^[7] We see no arguable error in the Judge’s approach. This issue plainly could not justify the grant of leave for a second appeal.
[13] The third group of points of principle advanced in the leave application is described as “Mr Keene’s false evidence and its influence to Courts”. The applicants wish to re-open in a second appeal the question whether Mr Keene acted dishonestly. Judge Hinton found as a fact that Mr Keene was an honest witness and the allegations of dishonest misconduct were unjustifiable. The Judge considered that these claims were “unjustifiably made and wrong”.^[8] The Judge recorded his view that Mr Keene was “a very impressive, careful, honest and thoughtful witness” who “conducted himself with considerable poise and patience, and in a professional manner in his evidence and in particular under cross-examination when he was subjected to considerable provocation”.^[9] The Judge rejected any suggestion that Mr Keene had given false evidence as suggested by the applicants.^[10] The applicants’ challenge to these findings was rejected by the High Court on appeal. This factual issue having now been twice considered with concurrent findings being reached in the courts below, there is no justification for leave being granted to consider it a third time.
[14] The application for leave to bring a second appeal is seriously misconceived, wholly lacking in merit and must be declined. The applicants should regard themselves as fortunate that we have decided not to exercise our discretion to order them to pay indemnity costs.

Result

[15] The application for leave to appeal is declined.
[16] The applicants are to pay the respondent costs as for a standard application for leave to appeal on a band A basis together with usual disbursements.

Solicitors:
Simpson Legal, Auckland for Respondent

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^[1] Cutting v Liu [2017] NZDC 15680.

^[2] At [126]–[135].

^[3] Liu v Cutting [2018] NZHC 33.

^[4] Liu v Cutting [2018] NZHC 3130.

^[5] Senior Courts Act 2016, s 60.

^[6] Waller v Hider [1997] NZCA 221; [1998] 1 NZLR 412 (CA).

^[7] Cutting v Liu, above n 1, at [128].

^[8] At [105].

^[9] At [106].

^[10] At [107].