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High Court of New Zealand Decisions |
Last Updated: 6 March 2019
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IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
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CIV-2018-404-134
[2018] NZHC 3363 |
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IN THE MATTER OF
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an Application for Judicial Review
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BETWEEN
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MARTIN JAMES MAILLEY
Applicant
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AND
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LEGAL COMPLAINTS REVIEW OFFICER
First Respondent
ANTONY SHAW
Second Respondent
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Hearing:
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3 August 2018
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Appearances:
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G E Minchin for Applicant
F E Geiringer for Second Respondent
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Judgment:
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18 December 2018
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JUDGMENT OF CLARK J
[1] This judgment determines the second respondent’s application to stay Mr Mailley’s application for judicial review.
Background and issues
[2] Mr Mailley was extradited in 2016 to Australia to face fraud charges. Following his arrest in 2008 pursuant to the bench warrant issued from the relevant District Court in Queensland, Mr Mailley took legal proceedings to challenge various
MAILLEY v LEGAL COMPLAINTS REVIEW OFFICER [2018] NZHC 3363 [18 December 2018]
aspects of the process.1 Mr Mailley was represented at various stages of the extradition proceedings by Messrs Ellis and Shaw.2 When Mr Shaw sought and was granted leave to withdraw in 2009, Mr Minchin took over as counsel for Mr Mailley.3
[3] In 2012 and 2013 Mr Mailley made separate complaints to the Wellington District Law Society, alleging misconduct on the part of Mr Shaw. Respectively, these were Case Nos 337/2012 and 304/2013. The Standards Committees determined Mr Mailley’s complaints about Mr Shaw in November 2012 and September 2013. Thereafter, the events which are relevant to the present interlocutory application are the following:
(a) In December 2012 and October 2013 applications to review the Standards Committees’ determinations in Case Nos 337/2012 and 304/2013 were lodged with the Legal Complaints Review Officer (LCRO).
(b) In June 2015, Mr Mailley and Sabrina Nutarelli commenced proceedings in the High Court.4 The statement of claim runs to 251 paragraphs and pleads wide-ranging allegations, including allegations of fraud, against three defendants: Mr Shaw, Mr Ellis and the New Zealand Law Society (NZLS). The statement of claim is founded on:
(i) the alleged acts underpinning Mr Mailley’s complaints to the Standards Committees; and
(ii) asserted failures in the processes of the Standards Committees leading to their dismissal of Mr Mailley’s complaints.
2 Mailley v District Court at North Shore [2013] NZCA 6 at [4].
3 At [4].
4 For convenience, I refer to this claim as CIV-2015-1185.
(c) The defendants raised a number of concerns about the pleadings. They also challenged the role of Martin Lyttelton who had filed memoranda and was purporting to act on behalf of the plaintiffs pursuant to a power of attorney. Following a conference on 1 December 2015 Associate Judge Doogue ruled that Mr Lyttelton was able to assist the plaintiff as a McKenzie friend but was not entitled to prepare and file pleadings, submissions and the like on their behalf. Nor was he entitled to address the Court on their behalf.5 The Associate Judge timetabled future steps and directed the allocation of a further case management conference.
(d) On 18 March 2016, the LCRO directed the applications for review6 to be stayed until the High Court proceedings were concluded.
(e) On 19 May 2016 Associate Judge Doogue ordered CIV-2015-1185 to be stayed until further order of the Court. The plaintiffs had been inactive in the prosecution of their claim. Mr Mailley had failed to attend case management events without providing reliable, corroborative evidence as to his inability to attend. At that point there were extant, unopposed applications for strike-out and security of costs. The Associate Judge was concerned to avoid the parties incurring greater cost and expenditure of further Court time on considering applications which might never need to be resolved in light of the uncertainty over Mr Mailley’s continued residence in New Zealand.7
(f) The LCRO wrote to Mr Lyttelton on 15 August 2016. In addition to the fact:
(i) the LCRO had stayed (on 18 March 2016) Mr Mailley’s applications for review;
(ii) Mr Mailley had now been extradited to Australia to face fraud and attempted fraud charges; and
5 Mailley v Shaw HC Auckland CIV-2015-404-1185, 1 December 2015 at [1].
6 See [3](a) above.
7 Mailley v Shaw HC Auckland CIV-2015-404-1185, 19 May 2016.
(iii) the Associate Judge had ruled that Mr Lyttelton could not progress CIV-2015-1185 on Mr Mailley’s behalf —
the LCRO had a concern about the purported power of attorney pursuant to which Mr Lyttelton had lodged Mr Mailley’s applications for review. The LCRO had formed the preliminary view those applications had not been validly lodged and that he had no jurisdiction to entertain them. The LCRO sought comment by 29 August 2016.
(g) On 31 August 2016, the LCRO determined he had no jurisdiction to consider the applications for review and declined to do so. The LCRO tendered his apologies to the parties for not having considered and decided that issue sooner.
(h) On 24 January 2018, this present application for judicial review was filed. An amended claim was filed on 15 March 2018 adding Mr Shaw as the second respondent.8
[4] In his interlocutory application dated 10 May 2018 Mr Shaw applies for orders:
(a) staying CIV-2018-134 as an abuse of process until disposition of CIV-2015-1185;
(b) requiring the applicant to pay security for costs;
(c) debarring Graeme Minchin from acting in the proceedings; and
(d) costs.
[5] I address each in turn.
8 For convenience, I refer to this proceeding as CIV-2018-134.
Application to stay the proceeding
[6] Mr Shaw asks the Court to stay CIV-2018-134 on the grounds that CIV-2015- 1185 relates to the same complaints by Mr Mailley that underlie CIV-2018-134. CIV- 2015-1185 has not been prosecuted. In fact, following the filing of CIV-2018-134 the three defendants to CIV-2015-1185 (Mr Shaw, Mr Ellis and the NZLS) have sought final disposition of that proceeding including costs. The defendants’ applications were set down to be heard on 20 July 2018 but Mr Mailley successfully applied, so I was advised, to have the hearing adjourned.
[7] Mr Mailley opposes the application for a stay. His counsel, Mr Minchin distinguishes CIV-2015-1185, a civil claim, from CIV-2018-134 which is an application for judicial review. Each proceeding engages different issues. Mr Minchin referred to the LCRO’s inordinate delay in processing the applications for review of the decisions of the Standards Committees and argued an inference could be drawn that the delay led Mr Mailley to initiate civil proceedings. Relying on s 201(7) of the Lawyers and Conveyancers Act 2006, Mr Minchin submitted the Act envisages parallel civil proceedings; that “there is no requirement for election of jurisdiction” and it was not an abuse of process for Mr Mailley to have both sought reviews by the LCRO and commenced civil proceedings. The application for judicial review cannot be an abuse of process as the issues it raises are wholly distinct from those raised in the civil proceeding.
Assessment
[8] Mr Minchin is perfectly correct in his observation that the two proceedings are different in character. CIV-2015-1185 alleges fraudulent billing, breaches of counsels’ duty of care, negligence and fraudulent misrepresentation, breaches of trust, confidence and fiduciary duty, conflicts of interest, breaches of contract, failure to account, misconduct by overcharging, legal incompetence, unconscionable dealing, making misleading statements in court and abuse of process. The NZLS is said to have breached its duty of care by failing to properly investigate the plaintiffs’ complaints. It wrongly accepted the submissions of Mr Shaw and Mr Ellis without any proper evidential foundation and:
elements of legal corruption and failures of proper due process appear to have entered into the investigation process of the Wellington District Law Society in this case.
[9] The plaintiffs in CIV-2015-1185 seek refund of all monies paid to Messrs Ellis and Shaw and damages for the consequential losses suffered by them due to the “prejudiced decisions” of the District Court and abuses of proper process by the NZLS and that the Court consider bringing criminal charges against Messrs Shaw and Ellis for their alleged actions.
[10] In stark contrast to that wide-ranging claim, CIV-2018-134 is an orthodox application to judicially review a public regulatory body, the LCRO, which, it is pleaded:
(a) breached natural justice by not allowing Mr Mailley an opportunity to address and rectify deficiencies in the power of attorney;
(b) failed to consider a mandatory relevant consideration namely, whether Mr Mailley wished to proceed with his applications for review after deciding the power of attorney was insufficient and took into account irrelevant considerations namely CIV-2015-1185 and his incarceration in Australia; and
(c) breached Mr Mailley’s legitimate expectation that the LCRO, having accepted the power of attorney, would either provide a reasonable opportunity to rectify any deficiency, or reopen the matter having established Mr Mailley’s intention.
[11] The two proceedings are manifestly different from each other, in terms of the factual basis for the relief claimed in each and in terms of the relief actually sought. Nevertheless, I am persuaded to stay CIV-2018-134 on the grounds of abuse of process. While the pleaded causes of action in CIV-2015-1185 and the pleaded grounds of review in CIV-2018-134 are distinct, underlying the two proceedings is a fundamental commonality.
[12] The relief sought in CIV-2015-1185 is based upon Mr Mailley’s complaints against Mr Shaw and Mr Ellis, and upon Mr Mailley’s criticisms of the way the NZLS investigated his complaints. The causes of action are pleaded in the statement of claim at [188] and [191] under two headings: “Law Society Case File: 5474 Re Mr Antony Shaw [LCRO 337/2012]”; and “Law Society Case File: 7302 Re Mr Antony Shaw [LCRO 304/2013]”.
[13] The applications to the LCRO for review of the Standards Committees’ decisions are in respect of Case Nos 337/2012 and 304/2013. In other words, what Mr Mailley seeks in CIV-2018-134 is what he seeks, albeit differently articulated, from the High Court in CIV-2015-1185. The application for judicial review of the LCRO, in substance and effect, is to require the LCRO to investigate the very matters which Mr Mailley has put before the High Court in CIV-2015-1185. Yet Mr Mailley appears to have walked away from CIV-2015-1185 without taking steps towards its resolution or discontinuing it. If CIV-2015-1185 is determined in Mr Mailley’s favour, he would achieve what he seeks by that proceeding namely, a review of counsels’ conduct and costs charges. If Mr Mailley is unsuccessful there is no utility in this Court ordering the LCRO to review the Standards Committees’ determinations of Mr Mailley’s complaints. In any event there is a real question over the LCRO’s jurisdiction to entertain Mr Mailley’s application for review. That issue is discussed in the next section of this judgment when assessing the merits and likely prospects of CIV-2018- 134 succeeding.
[14] I am satisfied that the manner by which Mr Mailley seeks to engage the judicial processes results in such unfairness to Mr Shaw that CIV-2018-134 should be stayed as an abuse of process. Mr Geiringer makes a fair point. Having effectively “defended” himself before the Standards Committees, and engaged in CIV-2015-1185 by filing a statement of defence, an interlocutory application, successive memoranda of counsel, and attended case management conferences, Mr Shaw should not now have to give answer to the complaints before the High Court arising out of the application for judicial review when Mr Mailley has neither discontinued nor sought to resolve his 2015 proceedings.
Security for costs
[15] Mr Shaw seeks an order requiring Mr Mailley to pay into Court, or give security to the satisfaction of the Registrar for, $26,500 and staying the proceeding unless and until such security is provided. The grounds upon which the order is sought are that:
(a) The application is weak and unlikely to succeed.
(b) The applicant was approached in relation to CIV-2015-1185 and asked for details about his ability to pay costs if they were awarded but he did not provide any such detail.
(c) Mr Shaw applied for security of costs in CIV-2015-1185 but Mr Mailley gave no response to that application.
(d) Mr Mailley will inevitably need to pay significant costs in relation to CIV-2015-1185.
(e) Mr Mailley is a convicted fraudster and spent time incarcerated in Australia in 2016 and 2017.
(f) Mr Mailley failed to pay all of Mr Shaw’s invoices for legal services provided to Mr Mailley because he claimed an inability to pay.
[16] Mr Minchin submits access to justice prevails over costs concerns particularly where the impecuniosity of the plaintiff is alleged to have been caused by the actions of the defendants. To maintain public confidence in the bar, it is critical that practitioners are not seen to be favoured by the courts. In any event CIV-2018-134 entails a narrow-focused inquiry and the security sought is excessive.
Assessment
[17] Before making an order for security for costs the Court must be satisfied there is reason to believe that a plaintiff will be unable to pay costs of the defendant if the plaintiff is unsuccessful in the proceeding.9
[18] Mr Shaw does not have to prove Mr Mailley’s inability to pay costs in the event of an award against him. The question is whether there is credible evidence of surrounding circumstances from which it may reasonably be inferred Mr Mailley will be unable to pay costs.10
[19] Mr Mailley has provided no evidence in opposition to the application for an order that he pay security for costs. As against the lack of evidence from Mr Mailley bearing on his ability to pay costs, Mr Shaw points to an evidential basis from which Mr Mailley’s inability to pay costs may be inferred. The following evidence is before the Court:
(a) A letter from the NZLS’s solicitors in November 2015 to Mr Mailley and his co-plaintiff, Sabrina Nutarelli expresses serious concern about their ability to meet any costs award made against them in CIV-2015- 1185. Mr Mailley did not reply. Rather, Mr Lyttelton replied on his behalf “formally record[ing] that we will not be responding to your request for financial information from the plaintiffs”. The defendants’ applications for security for costs in CIV-2015-1185 were met with a complete lack of response by Mr Mailley.
(b) In his affidavit sworn in support of the interlocutory applications, Mr Shaw deposes to the fact the first invoice he rendered directly to Mr Mailley was paid from money placed on trust with Mr Shaw’s instructing solicitor. However, when it came to paying later fees, Mr Mailley refused. Mr Shaw’s evidence is that Mr Mailley claimed not to have the funds to be able to pay the fees. Mr Mailley then sought
9 High Court Rules 2016, r 5.45(1)(b).
10 Highgate on Broadway Ltd v Devine [2012] NZHC 2288, [2013] NZAR 1017 at [7].
to recover all of Mr Shaw’s fees through the NZLS complaints process and via CIV-2015-1185 “including the [invoices] that he had never paid”.
[20] There is no evidence before the Court that Mr Mailley has any source of income. Mr Mailley’s apparent inability to meet an adverse costs award is relevant if CIV-2018-134 proceeds and he is unsuccessful. This possibility requires the courts to endeavour to assess the prospects of success, as far as they are able, bearing in mind the early stage of the proceeding.11
Power of Attorney
[21] The jurisdictional issue which the LCRO identified and which caused him to decline to consider the applications for review arose out of Mr Mailley’s power of attorney.
[22] The power of attorney pursuant to which Mr Lyttelton lodged applications to review the Standards Committee’s determinations was signed by Mr Mailley in the presence of Ms Nutarelli on 9 December 2012. It was in the following terms:
BY THIS DEED
1.1 To instruct any legal counsel acting for me in regard to my appeal; [emphasis added]
To communicate on my behalf with others in regard to my legal issues.
...
(emphasis added)
[23] In his letter dated 15 August 2016 the LCRO drew Mr Lyttelton’s attention to defects which he had identified in the power of attorney:
11 Andrew Beck and others McGechan on Procedure (looseleaf ed, Brookers) at HR5.45.03(2).
(a) The Power of Attorney is given for the specific purpose of “instructing any legal counsel acting for [Mr Mailley] in regard to [his] appeal. The document does not specify what that “appeal” might be – but in any event, a review is not an appeal. Many LCRO decisions make that clear. In addition, the power given to Mr Lyttelton is only to instruct counsel – not pursue the application himself.
(b) The second purpose provided in the grant is “to communicate on...behalf [of Mr Mailley] with others in regard to [his] legal issues.” The application for review and representation of an applicant, is not the same as “communicating” with others.
(c) The document is not validly witnessed as required by s 9(7) of the Property Law Act 2007.
(d) The document is dated 9 December 2012. The Standards Committee determination was issued on 10 September 2013. Even if it is argued that a review is an appeal, the document cannot be referring to an “appeal” of a decision not issued at the time the document was signed.
(e) Any document executed by an attorney must be accompanied by a certificate of non-revocation as provided in s20 of the Property Law Act. There is no certificate provided with the application.
(f) It would have been a simple matter (even in the circumstances) for Mr Mailley to have signed the application form himself, and authorise Mr Lyttelton to represent him as provided for in part 4 of the application.
[24] It is not necessary to discuss each of the six issues raised by the LCRO. Two are decisive against Mr Mailley.
[25] First clause 1.1 authorised Mr Lyttelton to instruct counsel for Mr Mailley. As the LCRO observed, the power of attorney does not allow Mr Lyttelton to bring proceedings himself.
[26] Mr Geiringer raised a further impediment to the operation of the power of attorney. He argued the reference in 1.1 of the Deed to “my appeal” was a reference to Mr Mailley’s appeal to the Court of Appeal against the High Court’s extradition decision delivered 12 April 2011. The Court of Appeal hearing was on 26 February 2013. The Deed was dated 9 December 2012. The power of attorney pursuant to which Mr Lyttelton lodged applications to review the Standards Committee’s determinations simply did not extend to Mr Lyttelton the authority to do so. I do not decide this point. There is no evidence either way. It may be a tenable construction
based on the fact that only “reviews” not “appeals” are undertaken by the LCRO but that is as far as the point can be taken.
[27] The second point decisive against Mr Mailley is that the power of attorney was improperly executed. Section 9(7) of the Property Law Act provides:
(7) A witness—
- (a) must not be a party to the deed; and
- (b) must sign the deed; and
- (c) if signing in New Zealand, must add—
- (i) the name of the city, town, or locality where he or she ordinarily resides; and
- (ii) his or her occupation or description.
[28] In considering the formalities of the deed before him in Sexton v Titiro Trustee Co Ltd, Heath J held:12
The requirement that the address and occupation of the attesting witness be stated in the deed is imperative, rather than directory.
[29] Although Heath J’s analysis was in the context of s 4(1) of the Property Law Act 1952, there is no material difference between the requirements of that provision and s 9(7) of the Property Law Act 2007.
[30] Ms Nutarelli, the witness to the deed by which Mr Mailley purported to grant a power of attorney, provided neither her occupation or her address. Ms Nutarelli’s failure to provide these details has the consequence that the deed is invalid for lack of compliance with the statutory requirements for validity.
[31] Mr Mailley says the LCRO did not allow him a say before rejecting Mr Lyttelton’s power to act. Being aware that Mr Mailley had been extradited to Australia the LCRO had invited Mr Lyttelton to comment. The LCRO’s office was aware Mr Lyttelton was in contact with Mr Mailley. In his affidavit sworn on 29 November 2017 Mr Lyttelton describes the email communications between the LCRO case manager and Mr Lyttelton and his wife in 2013 through to 2016. The case manager was advised by Mr Lyttelton’s wife that she “didn’t think Martin Lyttelton
12 Sexton v Titiro Trustee Co Ltd [2008] NZHC 715; [2008] NZAR 312 (HC) at [34].
knows Martin Mailley’s exact whereabouts in Australia”. Concerned to progress Mr Mailley’s application the case manager asked Mr Lyttelton’s wife if Mr Lyttelton continued to be Mr Mailley’s representative and to provide an explanation as to how he could continue to effectively represent Mr Mailley if there was little contact between the two.
[32] Mr Lyttelton deposes to informing the case officer on 26 July 2016 that he continued to act on Mr Mailley’s behalf and would “be in contact with Mr Mailley shortly...” On 10 August 2016 Mr Lyttelton advised the LCRO’s office that Mr Mailley was –
...in communication with me by phone from the Prison – he has my mobile number set up and approved by the Prison. I am able to email Mr Mailley at the Prison and obviously can send mail to him by post as well.
[33] On the basis of Mr Lyttelton’s reassurance there was effective and regular communication between Mr Lyttelton and Mr Mailley it was reasonable for the LCRO to assume the transmission to Mr Mailley of the content of his letter of 15 August 2016 seeking comment on his concerns about the validity of the power of attorney. No response was received. In those circumstances I assess as low, the likely prospects of Mr Mailley succeeding in his first ground of review.13
[34] Similarly, I assess Mr Mailley’s second ground of review as unlikely to succeed.14 Once the LCRO decided the applications for review were not validly lodged and that he lacked jurisdiction to consider them, Mr Mailley had no further options available to him. By that stage any application for review would have been years out of time. By s 198 of the Lawyers and Conveyancers Act an application for review is to be lodged with the LCRO within 30 working days after receipt of the Standards Committee decision which is challenged. Mr Mailley might have raised with the LCRO the possibility of rectifying the power of attorney, or proceeding with the reviews personally, but he did not. I do not consider whether either of those options is legally tenable because neither arises on the facts.
13 Set out above at [10](a).
14 Set out above at [10](b).
[35] Mr Mailley’s failure to take advantage of the opportunity which the LCRO afforded him (through Mr Lyttelton) is relevant also to his third ground of review.15
[36] It is difficult to understand the delay that occurred in the LCRO’s office. The LCRO apologised for the delay. He acknowledged it was unfortunate he did not have cause to consider the jurisdictional issues sooner. Without doubt, the delay was inordinate. But I do not think the delay breached any legitimate expectation on Mr Mailley’s part that he would have an opportunity to rectify deficiencies in the deed or reopen the applications for review. As I have observed, Mr Mailley did not avail himself of the opportunity he did have in August 2016.
[37] Finally, I turn to the contention that Mr Mailley’s impecuniosity has been caused by the second respondent. It may be unjust for a defendant to receive security for costs if it is the defendant’s actions, being the subject of the litigation, that have caused the plaintiff’s impecuniosity.16 In this case the argument holds little sway in light of the fact Mr Mailley’s allegations of overcharging could have been determined by now had CIV-2015-1185 been prosecuted with reasonable diligence.
[38] I am satisfied Mr Mailley should give security for costs.
[39] However, Mr Shaw has succeeded in his application for a stay making the payment of security for costs unnecessary at this time. My assessment of the merits of the application for an order that Mr Mailley pay security for costs becomes relevant only if I am wrong in granting the stay or when CIV-2015-1185 is finally determined. If I am wrong in staying CIV-2018-134 until final disposition of CIV-2015-1185, then I direct that Mr Mailley pay security although not in the amount sought. If an award of costs is made against Mr Mailley, following a dismissal of CIV-2018-134 (which I assess to be the likely outcome) he would in all likelihood be liable to pay scale costs. An award of scale costs on a 2A basis amounts to a sum in the order of $16,000. In my view security in that amount is sufficient. CIV-2018-134 is stayed until that sum is paid or security given.
15 Set out above at [10](c).
16 Bell-Booth Group Ltd v Attorney-General (1986) 1 PRNZ 457 (HC) at 461.
Should counsel be debarred?
[40] Mr Shaw applies for an order debarring Mr Minchin from acting in CIV-2018-
134. The grounds for seeking the order are set out in the interlocutory application:
(a) Mr Minchin has sworn affidavits which form part of the underlying complaints against Mr Shaw rejected by the Standards Committee.
(b) Those complaints were based in part on Mr Minchin’s correspondence and other factual assertions made by Mr Minchin.
(c) The position taken by Mr Minchin was extremely critical of Mr Shaw.
(d) Mr Shaw has good reason to be concerned that Mr Minchin’s involvement is part of a personal crusade against him rather than as independent counsel.
(e) Mr Minchin has sought to give evidence from the bar in this proceeding on controversial matters related to the underlying complaints.
(f) An order debarring Mr Minchin from acting in necessary to ensure justice is seen to be done.
[41] Mr Geiringer submitted that Mr Minchin drafted the power of attorney which is central to the decision of the LCRO challenged in CIV-2018-134 and Mr Minchin filed a memorandum in CIV-2018-134 containing allegations about the background of the proceeding which is disputed by Mr Shaw.
Grounds for opposing debarment
[42] Mr Minchin’s position is that it would be preferable to have other counsel representing Mr Mailley in CIV-2018-134. One of the factors relevant to Mr Minchin’s acceptance of the instruction was his understanding “the proceeding involved only the LCRO”. Mr Minchin submitted the simplest course would be to
appoint an amicus or short notice counsel. If the Court were not minded to incur that expense access to justice issues arise.
[43] As to the merits of the application Mr Minchin disputed he is in breach of r 13.5 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care Rules) 2008. The affidavit evidence which is relied upon as a ground for the application has no bearing on CIV-2018-134. In any event, any perceived conflict is outweighed by Mr Mailley’s right to be represented in legal proceedings.
[44] Mr Minchin said he refused instructions in CIV-2015-1185 because of a clear conflict, “factual matters being in issue which counsel had some involvement in”. Mr Minchin made further submissions relevant to CIV-2015-1185: that Mr Mailley cannot represent himself particularly given his previous brain injury and bi-polar condition and that CIV-2015-1185 remains stayed because Mr Mailley has been unable to engage other counsel.
Assessment
[45] The court has jurisdiction to debar counsel, or solicitors, from acting in a particular case whether that step is necessary for the effective and efficient administration of justice.17 The applicable principles were summarised in Clear Communications Ltd v Telecom Corporation of New Zealand Ltd.18 They are encapsulated in the following passage from the Court of Appeal’s judgment in Accent Management Ltd v Commissioner of Inland Revenue:19
[32] The Court has jurisdiction to debar counsel or solicitors from acting where that is necessary in order for justice to be done or to be seen to be done. Removal will usually be ordered where counsel will not be able to comply with his or her duties to the Court: where there is a conflict of interest, or where there is a real risk that a client will not be represented with objectivity. The threshold for removal is a high one, requiring something extraordinary. The Court should guard against allowing removal applications to be used as a tactical weapon to disadvantage the opposing party.
17 Black v Taylor [1993] 3 NZLR 403 (CA).
[46] Mr Geiringer’s submissions placed particular emphasis on the asserted breach, by Mr Minchin, of his obligation of independence. Lawyers engaged in litigation for a client are obliged to maintain their independence at all times. Rule 13.5 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care Rules) provides:
Independence in litigation
13.5 A lawyer engaged in litigation for a client must maintain his or her independence at all times.
13.5.1 A lawyer must not act in a proceeding if the lawyer may be required to give evidence of a contentious nature (whether in person or by affidavit) in the matter.
13.5.2 If, after a lawyer has commenced acting in a proceeding, it becomes apparent that the lawyer or a member of the lawyer’s practice is to give evidence of a contentious nature, the lawyer must immediately inform the court and, unless the court directs otherwise, cease acting.
13.5.3 A lawyer must not act in a proceeding if the conduct or advice of the lawyer or of another member of the lawyer’s practice is in issue in the matter before the court. This rule does not apply where the lawyer is acting for himself or herself, or for the member of the practice whose actions are in issue.
13.5.4 A lawyer must not make submissions or express views to a court on any material evidence or material issue in a case in terms that convey or appear to convey the lawyer’s personal opinion on the merits of that evidence or issue.
[47] A breach of a lawyer’s professional obligations, such as those set out in the Lawyers: Conduct and Client Care Rules, may be relevant to a court’s decision to debar counsel.20
[48] I have read the affidavits which Mr Minchin swore in 2013 and upon which Mr Shaw relies as demonstrating Mr Minchin should be debarred from acting as counsel in CIV-2018-134. There are two affidavits, both filed in the Court of Appeal. Both are sworn in support of Mr Minchin’s application for admission of evidence in the Court of Appeal in respect of Mr Mailley’s appeal against extradition. The first is sworn on 21 January 2013. The second is sworn on 5 February 2013. It is described as an “amended affidavit”. Both affidavits run to 11 paragraphs. Without analysing them line by line they appear to be virtually identical. The thrust of Mr Minchin’s evidence is to explain to the Court of Appeal:
20 Accent Management Ltd v Commissioner of Inland Revenue, above n 19, at [33].
(a) Only shortly beforehand had he taken up the lead role of counsel for Mr Mailley in the District Court extradition proceeding on 31 August 2009.
(b) He had very little time in which to synthesise submissions already filed by Mr Illingworth QC and Messrs Ellis and Shaw (who had previously acted for Mr Mailley). The adjournment Mr Minchin sought was vigorously opposed and refused.
(c) Mr Minchin deposed in the Court of Appeal to the deficiency of his advocacy for Mr Mailley in the District Court.
(d) He added in his affidavit that he was “stunned” by comments made by Mr Shaw who was appearing in the District Court on his own behalf, on behalf of Mr Mailley’s former lead counsel (Mr Ellis) and on behalf of the instructing solicitor. Three applications for withdrawal were before the District Court Judge. Mr Minchin exhibited to his affidavit a two-page transcript of the exchange between Mr Shaw and the bench during which time Mr Shaw expressed concern about Mr Minchin’s professionalism.
[49] It is not necessary to narrate further detail at this point. The question is whether the high threshold for debarment is reached. The transcript records what can only be described as Mr Shaw’s condemnation of Mr Minchin’s conduct of the extradition proceeding. That alone would not lead me to debar Mr Minchin. I have little idea of the merits of Mr Shaw’s complaints. There is no basis for debarring Mr Minchin from acting on the mere basis of his affidavits, which simply relate the “gist” of what happened in the District Court.
[50] Mr Geiringer refers to a memorandum filed by Mr Minchin 10 April 2018 for the purpose of a case management conference in this proceeding. It is said the memorandum breaches r 13.5.4 because Mr Minchin could not “resist giving evidence from the bar ... on matters he believed were relevant and about which he has personal
experience and his own views”. It is said the memorandum is a perfect illustration of why someone in Mr Minchin’s position must not act.
[51] Without doubt Mr Minchin’s memorandum of 10 April 2018 breaches rule
13.5.4 of the Lawyers: Conduct and Client Care Rules. In his memorandum Mr Minchin expresses a clear view to the Court on a material issue in Mr Mailley’s case (the issue of alleged overcharging) in terms that convey Mr Minchin’s personal opinion on the merits of that issue. Such content is unhelpful to the Court when it is unsupported and comprises evidence from the bar. I observe, however, that an affidavit filed by Mr Shaw contains evidence that is inadmissible. The point is that counsel frequently place before the Court documents containing inadmissible, or objectionable, or impermissible content.
[52] The real question is whether Mr Minchin is able to remain independent in the discharge of his duties to his client and the Court. I consider there is a real risk of a perception that Mr Minchin may not be freed of interests and influences which would be in conflict with, and compromise, the independence with which he is required to represent Mr Mailley.
[53] I appreciate that the overcharging issue is not directly raised in CIV-2018-134 but, as I have found, Mr Mailley’s complaints about Mr Shaw’s conduct constitutes a fundamental commonality underlying the two proceedings. It is tempting to regard the historical exchanges as reflecting hostilities between counsel but no hostility is manifested by Mr Minchin. He does, however, narrate a background to Mr Mailley’s complaints and express a view of their merits that demonstrates he is personally in Mr Mailley’s camp. I am concerned Mr Minchin is not able to be objective in that context.
[54] I have taken into consideration also Mr Minchin’s preferred position which is not to represent Mr Mailley in CIV-2018-134. Responsibly, Mr Minchin submitted “it would be preferable to have other counsel acting”. Mr Minchin’s “mistaken belief” that CIV-2018-134 involved only the LCRO was a factor in accepting instructions as was Mr Minchin’s conscientious concern that Mr Mailley might otherwise be unrepresented.
[55] For the foregoing reasons I have determined that the threshold for debarment is reached.
[56] As to representation of Mr Mailley in CIV-2015-1185, that proceeding is not before me. Any issues arising from doubts about Mr Mailley’s capacity to represent himself are for the judicial officer before whom that proceeding is placed.
Result
[57] The interlocutory application is granted.
(a) CIV-2018-134 is stayed until final disposition of CIV-2015-1185.
(b) If order CIV-2018-134 is to proceed, Mr Mailley must first pay into court, or give security for $16,000.
(c) Mr Minchin is debarred from acting as counsel in CIV-2018-134.
(d) Having succeeded in his application the second respondent is entitled to scale costs. In my view costs calculated on a 1A basis are appropriate.
Karen Clark J
Solicitors:
Thomas & Co, New Lynn West, Auckland for Applicant Ord Legal, Wellington for Second Respondent
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URL: http://www.nzlii.org/nz/cases/NZHC/2018/3363.html