New Zealand Law Society v Burton [2014] NZHC 2737 (4 November 2014)

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BETWEEN	THE NEW ZEALAND LAW SOCIETY Plaintiff
AND	SHANE PETER BURTON Defendant

Hearing:	29 October 2014
Appearances:	Zannah Johnston for the Plaintiff No appearance for the Defendant
_Judgment:	_{4 November 2014}

This judgment was delivered by on 4 November 2014 at 4:00pm pursuant to Rule 11.5 of the High Court Rules.

2012 pleaded guilty to four charges of obtaining by deception. He was sentenced in the Auckland District Court to six months’ home detention and ordered to pay reparation totalling $105,812.

[2] The plaintiff, the New Zealand Law Society (“NZLS”), seeks an order under s 266 of the Lawyers and Conveyancers Act 2006 (“the LCA”) that Mr Burton’s name be struck off the roll of barristers and solicitors on the grounds:

(a) his convictions show that he is not a fit and proper person to remain on the roll;

(b) the order is necessary to maintain proper standards of the legal profession, protect the administration of justice and protect the public;

(c) the professional disciplinary procedure set out in Part 7 of the LCA is unsuitable as there is no jurisdiction to consider the conduct of admitted barristers and solicitors at a time when they did not hold a current practising certificate.

[3] The procedure for determining an application of this kind is set out in s 267 of the LCA.

(1) This rule applies if, or to the extent that, the defendant does not file a statement of defence within the number of working days required by the notice of proceeding, and the plaintiff seeks judgment by default for other than a liquidated demand.

(2) The proceeding must be listed for formal proof [[and no notice is required to be given to the defendant]].

(4) The plaintiff must, before or at the formal proof hearing, file affidavit evidence establishing, to a Judge's satisfaction, each cause of action relied on and, if damages are sought, providing sufficient information to enable the Judge to calculate and fix the damages.

[5] Personal service was effected on Mr Burton on 12 March 2014. At that time he was served with a copy of the statement of claim, notice of proceeding and a bundle of initial disclosure under r 8.4 of the High Court Rules.

[6] Mr Burton has taken no steps to defend these proceedings. He has not filed a statement of defence and the NZLS seeks judgment by default.

[7] Ms Johnston for the plaintiff properly draws my attention to the amendment to r 15.9(2) which added the words “... and no notice is required to be given to the defendant”. This addition was inserted with effect from 3 June 2014 by the High Court Amendment Rules 2014. Christiansen AJ set this matter down for formal proof on 15 July 2014 by which time the amendment had been in force for some weeks. The amendment, being one of a procedural kind, operates with effect to matters listed for formal proof after the date the amended rule came into force. Ms Johnston candidly accepted that Mr Burton has not been given formal notice of the formal proof hearing. However, I am satisfied that the amendment to r 15.9(2) cures any deficiency in the giving of notice. In any event Mr Burton is aware of this hearing. On 15 October 2014 the Court copied Mr Burton into an email to the solicitors for the NZLS advising of the date. Two days later Mr Burton advised Ms Johnston he would not be contesting the NZLS’s application to have him struck off the roll. He said he did not hold a current practising certificate, had not practised for a number of years and advised he had no intention of applying for one in the future. The Court was copied into this correspondence.

[8] The plaintiff has filed an affidavit made by Ms Ollivier who is the NZLS’s

(a) Mr Burton was admitted as a barrister and solicitor of the High Court on 11 October 2002. He has been on the roll since that date.

(e) The NZLS wrote to Mr Burton following his sentencing in the District Court to advise him that the plaintiff was considering applying to the High Court to have his name struck off the roll and inviting him to respond before a final decision was made by the Board of the NZLS. No response has been received.

[9] Under s 266 of the LCA an enrolled lawyer may be struck off the roll “for reasonable cause, whenever and wherever it arises”.

[10] Section 267 of the LCA outlines the procedure for an application of this nature. It is set out in full below:

(1) When an application is made to the High Court for an order that the name of a person enrolled as a barrister and solicitor of the High Court under or by virtue of this Act be struck off the roll,—

(b) if the High Court is of the opinion that the application ought to be granted, or that it is doubtful whether the application ought to be dismissed or granted, the High Court must reserve the case for the consideration of the Court of Appeal.

(a) must cause the application and all affidavits made in support of the application, and all other proceedings, to be sent forthwith to the Registrar of the Court of Appeal; and

(b) may order that the person enrolled be suspended from practice as a barrister or as a solicitor or as

(a) must, as soon as practicable, consider the application and grant or dismiss it; and

[11] Section 267 thus provides this Court with three options after hearing the application:

(b) if the Court is doubtful whether the application ought to be dismissed or granted, it must reserve the case for the consideration of the Court of Appeal (s 267(1)(b));

(c) if the Court is of the opinion that the application ought to be granted, it must reserve the case for the consideration of the Court of Appeal (s 267(1)(b)).

[12] Thus this Court may not make an order to strike the defendant from the rolls. In the event I am of the opinion that the application ought to be granted or am doubtful whether to grant the application or dismiss it, I am required to reserve the case for the consideration of the Court of Appeal. As Mallon J put it this Court must form an opinion supported by reasons even though the ultimate decision is one for

[13] If the proceeding is reserved for the Court of Appeal, that Court must consider the application (as soon as practicable) and grant or dismiss it (or make

[14] This process sits in parallel with the professional disciplinary procedure set out in Part 7 of the LCA which can result in an order striking a name from the roll on proof of charges in the Tribunal.

[15] The following principles are noted in relation to applications of this nature:

(a) Parliament has created two discrete procedures. The power to strike off in ss 266 to 267 is “one of two parallel jurisdictions co-existing with the Disciplinary Tribunal jurisdiction”.³

(b) The High Court’s jurisdiction is “available for the rare or unusual cases when, for one reason or another, the profession’s disciplinary procedure is inappropriate or unsuitable”.⁴

(c) The argument that the existence of a comprehensive disciplinary procedure in the Law Practitioners Act 1982 displaces any jurisdiction the High Court might once have exercised to remove a practitioner from the roll for offences other than those in the face of the Court, has been rejected.⁵

(d) As a general rule, serious charges against a lawyer should be dealt with by the Tribunal.⁶

(e) Where there are disputed matters of fact or issues calling for extensive inquiry, it will usually be more appropriate for the Disciplinary Tribunal process to be followed, although this is not invariably so.⁷

(f) There is no obligation to follow the professional disciplinary procedure and s 268 provides for a stand-alone process.⁸

⁴B v Canterbury District Law Society (1997) 11 PRNZ 196 at 201; New Zealand Society Society v M, above n 1 at [2].

⁵This conclusion was confirmed by the High Court in Auckland District Law Society v Neutze [2006]

2 NZLR 551 (HC) at [33]. A similar argument was rejected in New Zealand Law Society v Deliu,

(g) An order for strike off is available in rare and exceptional cases,⁹and where there is a need to protect the public and the interests of justice.¹⁰

(h) The s 268 jurisdiction is required to enable the Court to regulate the conduct of practitioners relating to the conduct of litigation.

(i) An order for the striking off has been made in cases of serious mismanagement of trust funds¹¹and other defalcations.¹²

[16] Ms Johnston submits that the Tribunal process is unavailable. She notes that Mr Burton has convictions which adversely reflect on his fitness to practice. His name is on the roll of barristers and solicitors of this Court but he does not hold a practising certificate and neither did he at the time of his offending between August

2011 and February 2012. As a consequence, Ms Johnston submits charges cannot be laid in the Tribunal because there is no jurisdiction for a Standards Committee to enquire into the issue and lay charges before the Tribunal. It is for this reason that the NZLS seeks the present orders.

[17] In order to examine this submission it is necessary to consider various provisions of the LCA and the processes by which charges can be brought before the Tribunal.

(a) Lawyer means a person who holds a current practising certificate as a barrister or as a barrister and solicitor;¹³

⁹_{Borick v Otago District Law Society above n 6;
Auckland District Law Society v Neutze, above n 5.}

¹²_{Waikato Bay of Plenty District Law Society v Osmond
HC Hamilton CP55/94, 26 September 1994.}

(b) Practitioner means a lawyer or a conveyancing practitioner as the case may be;¹⁴

(c) misconduct in relation to the conduct of a lawyer is defined in s 7 and only refers to the conduct of “a lawyer”; that is someone who holds a current practising certificate.

[19] The process by which charges can be brought before the Tribunal may be summarised in the following way:

(b)	Alternatively, a Standards Committee can commence an motion” enquiry which is provided for in s 130(c) of the LCA:	“own
	The functions of each Standards Committee are (subject to any limitations imposed on the committee by or under this Act or the rules that govern the operation of the committee)—
	...
	(c) to investigate of its own motion any act, omission,

that there may have been misconduct or unsatisfactory conduct on the part of a practitioner or any other person who belongs to any of the classes of persons described in section 121. ¹⁶

(c) A Standards Committee may decide to take no further action, determine that there has been unsatisfactory conduct¹⁷or refer the

¹⁶_{The classes of persons referred to in s 121 includes
“lawyers and former lawyers”.}

¹⁷Unsatisfactory conduct is defined in s 12 of the LCA, and relating only to conduct connected to the provision of regulated services.

(d) If charges are laid and proved before the Tribunal, an order striking the name of the lawyer from the roll is available where the Tribunal forms the unanimous opinion that “the practitioner or former practitioner is, by reason of his or her conduct, not a fit and proper person to be a practitioner”.¹⁹

[20] The types of charges which may be brought before the Tribunal are set out in s 241 of the LCA which provides as follows:

If the Disciplinary Tribunal, after hearing any charge against a person who is a practitioner or former practitioner or an employee or former employee of a practitioner or incorporated firm, is satisfied that it has been proved on the balance of probabilities that the person—

(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, and that the negligence or incompetence has been of such a degree or so frequent as to reflect on his or her fitness to practise or as to bring his or her profession into disrepute; or

(d) has been convicted of an offence punishable by imprisonment and the conviction reflects on his or her fitness to practise, or tends to bring his or her profession into disrepute,—

it may, if it thinks fit, make any 1 or more of the orders authorised by section 242.

[21] As Ms Johnston candidly accepted, at first blush it might appear that charges brought under s 241(d) would be available because they can be laid against a “practitioner or former practitioner”. However, the jurisdictional issue in this case is bringing such a charge in the Tribunal. Only a Standards Committee (or the Legal Complaints Review Officer) may bring charges before the Tribunal. Thus for a matter to come before a Standards Committee there are two possible paths:

[22] In relation to the former, there have been no complaints made in the present case. In relation to the latter, an own motion enquiry can only relate to the possibility of “misconduct or unsatisfactory conduct on the part of a practitioner or any other person”.²⁰Mr Burton’s convictions cannot constitute “misconduct” on the part of a practitioner or any other person because “misconduct”, as defined, is confined only to the conduct of a lawyer. A “lawyer” is a person who holds a current

practising certificate as a barrister or as a barrister and solicitor. Mr Burton does not meet that definition because he does not hold and did not hold at the time of his offending, a current practising certificate.

[23] There is one further mechanism available via which a person’s name may be removed from the roll. This is provided for in s 60 of the LCA which states that any person, with the prior consent of the Council of the NZLS, may request the Registrar to remove their name from the roll. Such a person may have their name restored on request to the Registrar and with the consent of the Council of the NZLS. However, in the present case, Mr Burton has not made such a request despite the NZLS’s invitation for him to respond to their indicated intention to refer the matter to this Court.

[24] I am satisfied that for the reasons set out above there is no power for the Standards Committee to act on the conviction of Mr Burton. The next question is whether this is an appropriate case for this Court to make an order that Mr Burton’s name be struck off the roll of the barristers and solicitors.

[25] The High Court’s jurisdiction is “available for the rare or unusual cases when, for one reason or another, the profession’s disciplinary procedure is inappropriate or unsuitable”.²¹The jurisdiction was exercised in New Zealand Law Society v Mitchell²²where charges could not be brought before the Tribunal due to complications in the LCA’s transitional provisions. Mallon J made orders in terms of

s 267(1)(b) in favour of the NZLS’s application that the practitioner’s name be struck off the roll be reserved for the consideration of the Court of Appeal in terms of s 267(1)(b) of the LCA.

[26] The next question is whether there is reasonable cause to strike Mr Burton’s name off. As earlier noted, orders to strike off have been made in cases involving the serious mismanagement of trust funds²³and other defalcations.²⁴A suspension order has been made in circumstances when the reasonable cause was a lawyer found to be unable to perform their task or duty in a “proper, legitimate and competent manner”.²⁵

[27] Furthermore, in Hart v Auckland Standards Committee 1, this Court observed:²⁶

[185] As the Court noted in Dorbu, the ultimate issue [when considering striking off] in this context is whether the practitioner is not a fit and proper person to practise as a lawyer. Determination of that issue will always be a matter of assessment having regard to several factors.

[186] The nature and gravity of those charges that have been found proved will generally be important. They are likely to inform the decision to a significant degree because they may point to the fitness of the practitioner to remain in practice. In some cases these factors are determinative, because they will demonstrate conclusively that the practitioner is unfit to continue to practice as a lawyer. Charges involving proven or admitted dishonesty will generally fall within this category.

[187] In cases involving lesser forms of misconduct, the manner in which the practitioner has responded to the charges may also be a significant factor.

²²New Zealand Law Society v Mitchell; [2010] NZCA 498, [2011] NZAR 81. The relevant conduct of Mr Mitchell occurred more than six years prior to the commencement of the LCA, so there was no jurisdiction for the complaints process in Part 7 of the LCA to consider it under the transitional

²⁶Hart v Auckland Standards Committee 1 of the New Zealand Law Society [2013] NZHC 83at [185]- [189].

Willingness to participate fully in the investigative process, and to acknowledge error or wrongdoing where it has been established, may demonstrate insight by the practitioner into the causes and effects of the wrongdoing. This, coupled with acceptance of responsibility for the misconduct, may indicate that a lesser penalty than striking off is sufficient to protect the public in the future.

[188] For the same reason, the practitioner’s previous disciplinary history may also assume considerable importance. In some cases, the fact that a practitioner has not been guilty of wrongdoing in the past may suggest that the conduct giving rise to the present charges is unlikely to be repeated in the future. This, too, may indicate that a lesser penalty will be sufficient to protect the public.

[189] On the other hand, earlier misconduct of a similar type may demonstrate that the practitioner lacks insight into the causes and effects of such behaviour, suggesting an inability to correct it. This may indicate that striking off is the only effective means of ensuring protection of the public in the future.

[28] In my view this is test is readily met in the present case for the following reasons:

(a) Mr Burton has been convicted of criminal charges punishable by imprisonment.

(b) Mr Burton’s fraudulent conduct spanned the period of August 2011 to February 2012. During that period he was employed as a senior recruitment consultant specialising in the placement of legal candidates in local law firms. Each of the four charges relates to a successful placement which he made to a law firm but in respect of which he raised false invoices and, as a result, received over $105,000 which were placement fees properly payable to his employer. He was arrested at Auckland International Airport as he was attempting to leave the jurisdiction.

(c) As an employee he owed a duty to his employer to act in their best interests. Not only did he breach that duty of good faith but, through his actions, he caused considerable embarrassment to his employers and, no doubt, damage to their reputation within the legal community.

(d) The Judge in sentencing Mr Burton described the offending as “major, calculated and reasonably cunning”. He also described it as “... somewhat sophisticated, inevitably relying on the trust of all concerned ...”. The Judge pointed to Mr Burton’s education and intelligence, noting that he had misused these qualities to perpetrate his fraudulent conduct.

(e) While it is not apparent from his Honour’s sentencing notes what starting point was adopted, his Honour did observe that he considered imprisonment in the range of nine of 12 months’ would be appropriate. By settling on a sentence of home detention of six months it is apparent that his Honour reached the view that the offending would normally have attracted a term of imprisonment of

[29] Given the gravity of the offending and, in particular, the gross breach of trust involved, I am of the view that this is a proper case in which to make an order striking Mr Burton’s name off the roll on the grounds he is not a fit and proper person to be a practitioner.

[30] The principles applicable to such a decision, in the Tribunal context, have been summarised by a full Court of the High Court in two recent decisions. These fortify the view expressed above that admitted dishonesty will justify an order for strike off.

[31] In Dorbu v New Zealand Law Society the Court summarised the principles in the following way: ²⁷

[35] The principles to be applied were not in issue before us, so we can briefly state some settled propositions. The question posed by the legislation is whether, by reason of his or her conduct, the person accused is not a fit and proper person to be a practitioner. Professional misconduct having been established, the overall question is whether the practitioner’s conduct, viewed overall, warranted striking off. The Tribunal must consider both the risk of reoffending and the need to maintain the reputation and standards of

²⁷Dorbu v New Zealand Law Society [2014] NZHC 564; [2012] NZAR 481 (HC), approved by a differently constituted full Court in Hart v Auckland Standards Committee 1 of the New Zealand Law Society, above n 26.

the legal profession. It must also consider whether a lesser penalty will suffice. The Court recognises that the Tribunal is normally best placed to assess the seriousness of the practitioner’s offending. Wilful and calculated dishonesty normally justifies striking off. So too does a practitioner’s decision to knowingly swear a false affidavit. Finally, personal mitigating factors may play a less significant role than they do in sentencing.

[32] For the reasons set out above I am satisfied that this is an appropriate case to strike off Mr Burton’s name from the roll of barristers and solicitors.

[33] Under s 267(2)(b) of the LCA I may order that Mr Burton be suspended from practice as a barrister or solicitor or both until the decision of the Court of Appeal is given. Mr Burton has not held a practising certificate for some years and, given his recent correspondence on the subject it seems most unlikely that he would apply to the Law Society for one to be issued in the interim. Ms Johnston does not seek an order of suspension and I do not make one, although I reserve leave for the applicant to do so if it believes that such a course is justified.

[34] I have also considered the question of whether Mr Burton’s name should be suppressed on an interim basis pending the Court of Appeal’s decision. I have decided that in the circumstances of this case it is not only unnecessary but, futile and inappropriate. The public interest operates in favour of open justice and publication.

[35] Ms Johnston seeks costs on the application. I have considered whether costs should be reserved until the Court of Appeal’s determination. However, I am of the view that it is preferable that costs are fixed at this stage of the proceedings and, accordingly, I award costs to the applicant on a 2B basis with disbursements as fixed by the Registrar.

[36] I am of the opinion that the NZLS’s application ought to be granted. Accordingly, the application that Mr Burton’s name be struck off the roll of barristers

and solicitors is reserved for the consideration of the Court of Appeal pursuant to

High Court of New Zealand Decisions

New Zealand Law Society v Burton [2014] NZHC 2737 (4 November 2014)