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High Court of New Zealand Decisions |
Last Updated: 19 December 2018
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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
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CIV-2018-404-001150
CIV-2018-404-001141 [2018] NZHC 3047
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UNDER
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the Lawyers and Conveyancers Act 2006
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IN THE MATTER OF
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an appeal against a decision of the Lawyers and Conveyancers Disciplinary
Tribunal
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BETWEEN
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JINYUE YOUNG
Appellant
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AND
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NATIONAL STANDARDS COMMITTEE
Respondent
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Hearing:
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6 September 2018
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Appearances:
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M H Donovan for Appellant C P Paterson for Respondent
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Judgment:
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23 November 2018
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JUDGMENT OF COURTNEY J
This judgment was delivered by Justice Courtney on 23 November 2018 at 3.45 pm
pursuant to R 11.5 of the High Court Rules Registrar / Deputy Registrar Date...........................
YOUNG v NATIONAL STANDARDS COMMITTEE [2018] NZHC 3047 [23 November 2018]
Introduction
[1] In a decision dated 22 December 2017 (the “liability” decision), the Lawyers and Conveyancers Disciplinary Tribunal found Mr Young guilty of three charges of misconduct pursuant to s 7(1)(a)(ii) of the Lawyers and Conveyancers Act 2006 (the Act) and one of negligence under s 241(c).1 The charges arose from Mr Young’s involvement in litigation arising from a sale and purchase agreement in which a company controlled by Mr Young’s wife was the vendor. In its subsequent penalty decision dated 15 May 2018, the Tribunal suspended Mr Young from practice for 15 months.
[2] Mr Young wishes to appeal both decisions. He filed his appeal against penalty within time but his appeal against the liability decision was filed four months out of time. Mr Young has applied for special leave under r 20.4 of the High Court Rules to extend the time for filing that appeal.
[3] Granting an extension of time is an indulgence.2 The principles that apply to such an application are well settled. The over-arching test is whether granting leave would meet the overall interests of justice. The factors to be considered include the reason for the delay, the length of the delay, the conduct of the parties and the extent of any prejudice caused by the delay.3 Lack of merit may be a decisive consideration if there is an obvious problem with the proposed appeal such as a jurisdictional difficulty or abuse of process.4 The Supreme Court noted that it has been said that an extension of time will not be granted where “the appeal has no legs”, however, it has also been recognised that there may be “insufficient material before the Court to exclude the possibility that there is merit”.5 The Supreme Court stated that “the fact that an appeal appears to be weak does not justify refusing leave.6
1 National Standards Committee v Young [2017] NZLCD T41.
2 See Almond v Read [2017] NZSC 80, [2017] 1 NZLR 801 at [37] and [38](a).
4 Almond v Read, above n 2, at [30]–[31].
5 At [32], citing Robertson v Gilbert []2010] NZCA 429 at [24].
[4] The ground on which leave is sought is essentially that Mr Young was confused as to his appeal rights and believed that he was required to wait until the penalty had been determined before appealing the liability decision. This ground plainly called for evidence from Mr Young, a point made by the respondent in its written submission opposing leave. But the application for leave to appeal was filed without a supporting affidavit.
[5] At the hearing of the leave application, Ms Donovan, for Mr Young, sought to adduce affidavit evidence in support of the application. It appeared from her submission that the lack of an affidavit in support was due to error by counsel (not Ms Donovan). Ms Paterson, for the respondent, opposed the filing of the affidavit. She pointed out that the timing and content of the application had the appearance of having been prepared specifically in response to this aspect of the respondent’s submissions. It did not, however, appear that the respondent was prejudiced by the late filing. I am unwilling to penalise Mr Young for error on his counsel’s part and therefore grant leave for the filing of the affidavit.
Background
[6] In April 2013, King David Investments Ltd (KDL), which was controlled by Mr Young’s wife, Ms Ying, executed a binding sale and purchase agreement in respect of a property it owned in Hoteo Ave, Papatoetoe. Subsequently, it sought to extract itself from the contract and when it could not do that, it refused to settle the sale. The purchaser, Ms Zhang, sued KDL. She also sued Mr Young, alleging tortious interference with contractual relations.
[7] Mr Young made an affidavit of documents which omitted emails and faxes unhelpful to KDL’s position. The affidavit formed the basis for the first charge against him, namely, that he engaged in misconduct contrary to s 7 of the Act by breaching r 13.1 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (the Rules).7
[8] The matter came to trial on 4 July 2016 before Duffy J. KDL was represented by Mr Duckworth. Mr Young conducted his own defence; he had been admitted as a barrister and solicitor of the High Court in September 2013 and by 2016 was working as an employed solicitor in a law firm.
[9] By the end of the first day of the trial, Mr Duckworth had concerns about KDL’s position. Ms Ying gave him instructions as to the terms on which KDL was prepared to settle the case. Negotiations the next day resulted in a handwritten settlement agreement prepared by Ms Zhang’s lawyer, Mr Deliu. Ms Ying and Mr Young both signed the agreement. The agreement required KDL to settle the sale of the property. At the request of the parties, Duffy J made consent orders.
[10] On 9 July 2016, Mr Young wrote to the High Court seeking to withdraw his and his wife’s signatures from the settlement agreement. The matter was referred to the Chief High Court Judge, Venning J. He responded that it was not a matter on which he could assist and advised Mr Young to obtain legal advice. Mr Young then attempted, unsuccessfully, to file an application seeking to set aside the consent orders, alleging (among other things) deception by the plaintiff’s counsel during the hearing. Because the application was not filed properly, the Court did not act on it.
[11] At this stage, the Hoteo Ave property was still subject to a caveat lodged by Ms Zhang. KDL applied for an order that the caveat lapse. Ultimately, Ms Zhang did not oppose the application and the caveat lapsed. However, Mr Young’s communications with Ms Zhang’s lawyer, Mr Zhao, about the caveat formed the basis for the second charge alleging misconduct under s 7 of the Act by using the complaints process for an improper purpose contrary to rr 2.10 and 10 of the Rules.8
[12] Mr Young and KDL then filed a notice of appeal in the Court of Appeal in respect of the consent orders. The appeal was dismissed for lack of jurisdiction.9 Mr Young’s efforts to have the consent orders set aside formed the basis of the third charge pursuant to s 241 of the Act. It alleged that his incompetence or negligence
9 King David Investments Ltd v Zhang [2016] NZCA 421.
was to such a degree or so frequent so as to reflect on his fitness to practice or as to bring his profession into disrepute.
[13] The day after the Court of Appeal dismissed its appeal, KDL sold the property to a bona fide purchaser for value without notice.
[14] Ms Zhang subsequently served a sealed copy of the consent orders that Duffy J had made and also applied for an order holding Ms Ying in contempt. Mr Young prepared and sought to file a memorandum for the court. The memorandum was not accepted but assertions in it about Ms Zhang and her lawyer and similar assertions made at other times during the proceeding led to the fourth charge of alleging misconduct pursuant to s 7 of the Act through making serious allegations without a clear evidential foundation, thereby wilfully or recklessly breaching s 4(a) of the Act and rr 2.10, 10.1, 13.2 and 13.8.1 of the Rules.10
The Disciplinary Tribunal’s decision
[15] The Tribunal first considered whether the charges fell within s 7(1)(a) or 7(1)(b), which, relevantly, provide:
(1) In this Act, misconduct, in relation to a lawyer or an incorporated law firm –
(a) means conduct of the lawyer or incorporated law firm that occurs at a time when he or she or it is providing regulated services and is conduct –
10 Rule 2 requires a lawyer to uphold the rule of law and to facilitate the administration of justice. Rule 10 provides that a lawyer must promote and maintain proper standards of professionalism in the lawyer’s dealings. Rule 10.1 provides that a lawyer must treat other lawyers with respect and courtesy. Rule 13.2 provides that a lawyer must not act in a way that undermines the processes of the court or the dignity of the judiciary. Rule 13.8 and 13.8.1 provide that a lawyer engaged in litigation must not attack a person’s reputation without good cause in court or in documents filed in court proceedings, and must not be a party to the filing of any document in court alleging fraud, dishonesty, undue influence, duress, or other reprehensible conduct, unless the lawyer has taken appropriate steps to ensure that reasonable grounds for making the allegation exist.
...
(b) includes –
...
ii. conduct of the lawyer or incorporated law firm which is unconnected with the provision of regulated services by the lawyer or incorporated law firm but which would justify a finding that the lawyer or incorporated law firm is not a fit and proper person or is otherwise unsuited to engage in practice as a lawyer or an incorporated law firm.
...
(emphasis added)
[16] The Tribunal concluded that all the charges fell within clause 7(1)(a). This finding included charge 1, which related to the affidavit that Mr Young swore on his own account. The Tribunal considered that, although Mr Young was conducting his own defence, the conduct was incidental to the provision of regulated services.11 However, in relation to charge 1, the Tribunal was also mindful of Mr Young’s lack of experience and limited understanding of English. It considered the conduct reflected negligence or incompetence rather than wilfulness or recklessness. It therefore concluded that the conduct was unsatisfactory under s 12(a)12 rather than misconduct under s 7(1)(a).
[17] The Tribunal added that if it had been wrong to find that the conduct relating to charge 1 fell within s 7(1)(a), it would not have considered that the omission of documents by a very inexperienced lawyer reached the threshold required by s 7(1)(b)(ii). That is, such conduct would not justify a finding that Mr Young was not a fit and proper person or otherwise unsuited to engage in practice as a lawyer.
[18] The second charge alleged that Mr Young used the complaints process for an improper purpose. The charge was based on an email Mr Young sent to Mr Zhao, the solicitor acting for Ms Zhang. It requested Mr Zhao to “assist your client to remove
11 Applying Orlov v New Zealand Lawyers and Conveyancers Disciplinary Tribunal [2014] NZHC 1987, [2015] 2 NZLR 606 at [96]–[111] and Deliu v National Standards Committee [2017] NZHC 2318.
12 It is the equivalent of s 7(1)(a) insofar as it relates to unsatisfactory conduct of a lawyer or incorporated law firm when he or she or it is providing regulated services.
the caveat by 4.00 pm today ... otherwise I will complain to the Law Society tonight and you and [Ms Zhang] will be liable for the penalty of $555 a day”. The Tribunal found this to be a breach of rr 2.10 and 10 of the Rules, and amounted to misconduct under s 7(1)(a)(ii) of the Act.
[19] Charge 3 alleged Mr Young was incompetent or negligent under s 241(c) of the Act, by acting in a misconceived effort to have a consent order set aside. His incompetence or negligence was alleged to be to such a degree that it reflected on his fitness to practice. This charge arose from the events that followed the settlement agreement reached between the parties on the second day of trial. The Tribunal described the picture that emerged in relation to Mr Young’s conduct during that period as “one of incoherence, confusion and lack of understanding by Mr Young of proper process”. It considered that his conduct “would be regarded as entirely unacceptable by members of the public, who are entitled to expect competence in a practitioner.” It saw no relevance in the fact that Mr Young was acting for both himself and his wife and concluded that the charge of negligence under s 241(c) had been made out.
[20] The fourth charge alleged that Mr Young had engaged in misconduct by making serious allegations against the plaintiff and her counsel without a clear evidential foundation. The conduct was said to have breached s 4 of the Act, and rr 2.10 and 13 of the Rules.
[21] Section 4 requires every lawyer who provides regulated services to comply with certain fundamental obligations, including:
(a) the obligation to uphold the rule of law and to facilitate the administration of justice in New Zealand:
[22] Rule 2 requires:
[23] Rule 10 requires that:
...
10.1 A lawyer must treat other lawyers with respect and courtesy.
[24] And Rule 13:
13.2.1 A lawyer must treat others involved in the Court processes with respect.
...
13.8 A lawyer engaged in litigation must not attack a person’s reputation without good cause in Court or in documents filed in Court proceedings.
13.8.1 A lawyer must not be party to the filing of any document in Court alleging fraud, dishonesty, undue influence, duress, or other reprehensible conduct unless the lawyer has taken appropriate steps to ensure that reasonable grounds for making the allegation exist.13
[25] The Tribunal was concerned with three documents prepared by Mr Young. The first was his application to set aside the consent orders dated 25 July 2016. In that document, he referred to the plaintiff’s counsel, Mr Duckworth, having made a “false allegation, produced “fake evidence”, lying and misleading the Court.
[26] The second document was Mr Young’s complaint to the New Zealand Law Society Lawyers Complaints Service about Mr Duckworth, dated 16 August 2016, where he maintained his assertion that Mr Duckworth had acted in a misleading manner.
[27] The third document was Mr Young’s own memorandum filed in this Court dated 26 September 2016 in which he asserted that Mr Duckworth had fabricated evidence and colluded with Ms Zhang’s counsel against the interests of Mr Young and his wife.
[28] The Tribunal noted “numerous further examples” of allegations by Mr Young without a proper foundation, concluding that he appeared not to understand the difference between disputed facts and deliberate fraud. It accepted the submission
13 Lawyers and Conveyancers (Lawyers: Conduct and Client Care) Rules 2008.
from counsel that Mr Young had taken no care to ensure that his accusations were based in evidence. It found that Mr Young had:
... absolutely no regard to his professional obligations pursuant to [rr 4, 10 and 13]. and, further, that he had recklessly breached those rules.
We regard him as having recklessly breached those rules and thus a finding of misconduct is established.
Application for leave
[29] As noted, the reason given for the delay in filing the notice of appeal against the liability decision is that Mr Young mistakenly believed that he could not file a notice of appeal until after the penalty hearing had been concluded and a decision reached. This confusion arose, he said, from the directions given by the Tribunal at the end of the liability decision which were that:
Having found against the practitioner on four charges we invite counsel for the Standards Committee to file submissions on penalty by 25 January 2018. The practitioner may file any submissions in response within a further 14 days. A penalty hearing will be set down for half a day after 12 February 2018.
[30] Mr Young had not been represented at the liability hearing and did not obtain legal advice upon receipt of the decision.
[31] On 3 January 2018, the Tribunal emailed Mr Young advising that a hard copy of the decision was being posted that day and that:
For appeal rights, please refer to s 253 of the Lawyers and Conveyancers Act 2006 and to rr 20.4, 20.5 and 20.6 of the High Court Rules. Where an appeal is filed, a copy of that notice of appeal must also be lodged with this Tribunal, in accordance with r 20.6 of the High Court Rules.
[32] Mr Young explained in his affidavit that when he received this advice he:
... was confused about how these appeal rights worked in combination with the explicit Directions contained in the Decision itself ... because the appeal rights appeared to be separate and advisory only, having been sent after the Decision whereas I saw that the Directions were part of the Decision itself.
The Directions in the final paragraph of the Decision focused on the next, penalty, stage.
I incorrectly took that to mean that the subsequently received appeal rights were linked with that stage.
[33] When Mr Young finally understood the effect of the liability decision he realised that he ought to have representation for the penalty hearing. He applied unsuccessfully for legal aid but eventually arranged for representation at the penalty hearing. Mr Young’s affidavit also contained assertions of ill-health of him and his elderly mother but they do not add much; it is clear that the real reason Mr Young did not file his appeal within the time allowed was that he did not realise that he had to do so. I accept that, for the purposes of the application to extend the time for appealing, Mr Young’s explanation appears genuine and reasonable. No prejudice has arisen from the delay, as Ms Paterson responsibly acknowledged.
[34] I turn then to the merits of the proposed appeal. Mr Young considers that the fact he was unrepresented at the liability hearing means that his arguments may not have been fully understood by the Tribunal. He states his belief in having an arguable case for the purposes of appeal, though the only aspect he specifically refers to was the fact that the appeal against the penalty decision would be hampered if he were not also permitted to challenge the grounds of the liability decision.
[35] The only proposed ground of appeal that has any merit is that the Tribunal erred in finding that all the charges fell within s 7(1)(a). Ms Paterson argued that there was no merit in this ground because the Tribunal had relied on the decisions of this court in Deliu and Orlov and, to succeed, Mr Young would have to argue that the approach taken in those cases was wrong. But the Tribunal itself does not appear to have viewed the matter as clear-cut and it is open to Mr Young to argue that the Tribunal wrongly applied the cases to the facts before it.
[36] Ms Donovan, responsibly, did not identify any other grounds on which error could be asserted against the Tribunal. The other matters raised in the notice of appeal are simply not arguable. In relation to charge 2, Mr Young merely expressed his continued belief that his threat to Mr Zhao over the caveat was not for an improper purpose, which is not an arguable ground of appeal. In relation to the other charges he asserted that the prosecutor had been confused and wrongly charged him and that he had provided sufficient and compelling evidence against Mr Deliu. Neither could ground an appeal.
[37] Although weakness of grounds of appeal does not necessarily preclude leave being granted, I am conscious in this case that Mr Young’s own incompetence has already taken up substantial time and resources of this Court and of the Tribunal. In the circumstances of this case it is not in the interests of justice to allow Mr Young to advance grounds of appeal that clearly have no merit. I consider the right course is to grant leave only in respect of charge 1.
Result
[38] The application is allowed in part. Time is extended for the bringing of an appeal against the liability decision on charge 1.
[39] Both parties seek costs. Both parties have enjoyed a measure of success. I consider that, in the circumstances, it is appropriate for costs to lie where they fall.
P Courtney J
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