TY v HG [2019] NZLCRO 142 (29 November 2019)

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	LCRO 68/2018
CONCERNING	an application for review pursuant to section 193 of the Lawyers and Conveyancers Act 2006
AND
CONCERNING	a determination of the [Area] Standards Committee [X]
BETWEEN	TY Applicant
AND	HG _Respondent

[1] Mr TY has applied to review a decision by the [Area] Standards Committee [X]

[2] The complaint arises from the course of proceedings before the Commerce Commission following up on a 26 June 2016 application by [Company A] and associated interests and [Company B] for a merger clearance.

Commission that the acquisition involved would not have, or would not be likely to

have, the effect of substantially lessening competition in the market in question.1

[6] The Commerce Commission conducted two public consultations, the first on preliminary issues it had identified and the second on issues it saw as unresolved.

[7] During proceedings of this kind, parties will make submissions that may in some degree be confidential. The legal representatives of other parties may seek access to that confidential material which may be agreed to on terms including that only a party’s counsel and experts will see it.

[8] On terms involving the signing of confidentiality undertakings, [EEE] and KL (for their respective clients) gave such access to the legal representatives of other parties including Mr HG.

[9] The confidential information included “counterfactual” material that conveyed a description of [Company B]’s view of the likely range of consequences of the rejection of the application.

[10] That material included descriptions of structural options [Company B] would likely consider, ranging from an alternative merger or acquisition to carrying on as a standalone. Wholesaling possibilities were also canvassed.

[11] The public material, it is said, did not go beyond wholesaling possibilities.

_{received several “robust” submissions, but where, as will
emerge, Mr TY has sought to}

1 Company B sought clearance to acquire 100% of the shares in [Company A], and [Company

draw the acceptable line rests on his contention that Mr HG made submissions amounting to accusations of illegality.

[14] On 21 December 2016, Mr TY, on behalf of [EEE], lodged with the New Zealand Law Society Lawyers Complaints Service (the Complaints Service) what he identified as a confidential report under r 2.9 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (the Rules) of unsatisfactory conduct by Mr HG. The Complaints Service invited him to agree to that report being treated as a complaint, which he did.

[15] At the core of what was now a complaint was the claim that Mr HG had effectively asserted that [Company B], [EEE] and [ENT] Limited [ENT]2 had:

(a) breached s 103(2) of the Commerce Act 1986;3 and (b) breached the Fair Trading Act 1986 (the FTA); and (a) made misrepresentations to the public;

and that in doing so, he had asserted, with no basis in fact, that [Company B], [ENT]

[16] That Mr HG had effectively alleged the commission of such offences was said to be apparent from submissions he made to the Commerce Commission on 11 and 21

“submitters have a misleading understanding of the actual position ... there may well be Fair Trading Act concerns for the regulator to ensure are fixed”

“the applicants have a duty to the Commission ... to correct errors in statements and ensure fulsome enough disclosure. There are a number of examples above where this has not happened”

“the statements in the public material are made in trade, and, it is submitted,

_{contrary to the FTA’s requirements as to misleading and deceptive
conduct”}

2 [ENT] had been engaged to provide EEE and its client with economic advice and assistance.

3 Section 103(2) is an offence provision that reads: “No person shall attempt to deceive or knowingly mislead the Commission in relation to any matter before it.”

“having referred to ‘the offence under s103 of the Act where a person attempts to deceive or knowingly mislead the Commission in relation to any matter before it’, [Mr HG’s statement states] that ‘requiring applicants to supply fulsome and accurate information is a critical part of the clearance process ... the applicants’ approach is well short of the mark”.

“[the applicants have made] misrepresentations to the public including opposing submitters (and therefore in breach of the FTA as well, a situation which it is suggested the FTA regulator cannot countenance or be seen to countenance”

“the applicants have a duty to inform the Commission, accurately, of relevant information for and against the application. It is submitted the Commission should review and the applicants’ Commerce Act and FTA duties”

having quoted the offence in s 103 of the Commerce Act in the following paragraph, [stating] “the applicants should be required to remedy an approach that is well short of the mark”

“the public statements are in trade and breach the misleading and deceptive conduct provisions of the FTA”, and that ‘the Fair Trading Act regulator cannot countenance that or be seen to countenance that’”

[19] The complaint was that Mr HG had alleged or implied statutory breaches amounting to offences under the Commerce Act 1986 and the FTA.

(b) it was particularly important that the person making them ensured their justification;

(d) to fail to do that would be a failure to meet professional and ethical obligations.

[22] The Committee determined, pursuant to s 138(2) of the Lawyers and Conveyancers Act 2006 (the Act) that no further action on the complaint was necessary or appropriate.

[23] The Committee had focused its consideration on the following – in its view, the key – issues:

(a) what duties, if any, did Mr HG owe to Mr TY, [EEE] and their clients; (b) did Mr HG breach any of those duties?

[24] The Committee was satisfied that in the circumstances Mr HG’s duty was to his clients and that he had no duty to protect or promote the interests of [EEE] or its clients.

[25] However, it considered that the obligation all lawyers owe to the Court not to mislead or deceive it,4 should extend to quasi-judicial processes such as those of the Commerce Commission.

[26] It then identified Mr TY’s complaint as one that Mr HG’s submissions to the Commerce Commission had been sufficiently intemperate as to call for disciplinary intervention because they included “explicit statements that certain parties had committed serious statutory breaches”.

(a) many parties had strong views on the merger proposal that they were entitled to have put before the Commerce Commission;

(c) Mr HG was acting on the instructions of his clients and fulfilling his duty to them “by putting forward their views as forthrightly as they wished”; and

(d) while his submissions were “robust” they did not “constitute a breach of

[28] Mr TY filed an application for review on 2 May 2018. He, as I summarise, seeks the return of the complaint to the Committee with directions to reconsider the same:

4 See r 13.1 of the Rules: “A lawyer has an absolute duty of honesty to the court and must not mislead or deceive the court.”.

(b) disregarding whether Mr HG was acting on instructions, as given adherence to confidentiality undertakings that could not be the case.

[29] However, he says that were an apology to all parties named in the complaint forthcoming it would be withdrawn.6

(a) Mr HG had alleged breaches (in the form of misleading and deceptive conduct) of the FTA and of the Commerce Act by [Company B] and its advisers; those allegations being based on the claim that:

(b) the counterfactuals that [Company B], [ENT] and [EEE] put forward respectively in their public and confidential versions were different; in that

(c) the confidential version discussed the possibility of alternative transactions as well as [Company B]’s likely approach to wholesaling; but

(d) the public version did not mention the possibility of alternative transactions.

(b) stating that “it is highly likely that the applicants have modelled a range of other scenarios and selected what it has given the Commission for particular purposes”;

6 Of course, the fate of a complaint (once made) rests with the Standards Committee and its exercise of discretion as to whether the complaint process should continue: see section 138(1) of the Act.

(d) in Mr HG’s 21 September 2016 submission,8 tying that last observation into s 103(2) of the Commerce Act 1986 in terms “clearly making an allegation of committing an offence” of attempting to deceive or knowingly mislead the Commerce Commission without any basis, “(despite) his awareness of the fact that that he would not have seen all of the information that our client had disclosed to the Commission”.9

(a) the Committee failed to address the complaint in terms of whether Mr HG had a sufficient basis to make “allegations of wilful and malicious conduct by [Company B] and its economic advisors in a public context without any basis for such allegations”; despite

Mr HG was acting on the instructions of his clients and was fulfilling his duties to them by putting forward their views as forthrightly as they wished.

(a) in what he characterised as a highly technical legal context, it is “highly unlikely that Mr HG’s clients themselves formed this view in order to instruct Mr HG to make such allegations”;

(b) “... confidentiality undertakings did not permit Mr HG to share the information that was the subject of the allegations with his clients”; so

(c) he could not have been acting on the instructions of his clients when he alleged that our client had committed offences under the Fair Trading Act and under the Commerce Act ...”

9 This statement is difficult to follow and the purpose it is intended to serve similarly unclear. What matters is the content and quality of the information in the possession of the person making the allegation at the time it is made. See footnote 10 following.

10 Above n 5. The head note to the reported case accurately records that the Court held that every counsel has a duty to his client fearlessly to raise every issue, advance every argument and ask every question which he thinks will aid his client's case. But, as an officer of the court concerned in the administration of justice, he has an overriding duty to the court, to the standards of his profession, and to the public. He must not mislead the court nor cast aspersions for which there is no sufficient basis in the information in his possession.

[35] And finally, he says that he focuses on Mr HG’s conduct, as opposed to that of those representing other parties, because while they made robust submissions, they did not allege statutory breaches amounting to offences.

[36] Before turning to Mr HG’s response to the review grounds raised by Mr TY, I first summarise Mr HG’s 30 August 2017 response to the original complaint. As noted earlier, that in essence was that Mr HG had:

[37] Mr HG responded to the original complaint by filing submissions accompanied by two supporting evidential briefs: one his own, and the other from CR, a [CVF] (CV) partner who acted for [Company D] and [Company C] on the subject Commerce Commission application. The submissions themselves were from Mr HG’s counsel, AE.

[38] Mr Johnston contended that the complaint was misconceived and ill-founded. He submitted that:

13.8 A lawyer engaged in litigation must not attack a person’s reputation without good cause

13.8.1 A lawyer 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.

13.8.2 Allegations should not be made against persons not involved in the proceeding unless they are necessary to the conduct of the litigation and reasonable steps are taken to ensure the accuracy of the allegations and, where appropriate, the protection of the privacy of those persons.

Rule 1.2 provides that court means a court or tribunal before which a lawyer may appear.

(b) however, the allegations made by Mr HG did not fall within its scope of “fraud, dishonesty, undue influence, duress, or other reprehensible conduct”;

(c) Mr HG had submitted to the Commerce Commission that the applicants’ case was misleading because it did not accurately reflect the counterfactual;

(d) to submit that was at most to assert a civil wrong as might be the subject of dispute in virtually every civil claim;

(e) Mr HG had taken appropriate steps to ensure that reasonable grounds existed for the submission he made; because

(f) like the representatives of all respondents to the application he had analysed the material to which he was given access;

(g) he had then fairly concluded that the counterfactual (which described three possible scenarios should the application be declined) was not accurately reflected in later filed submissions;

(h) it was noteworthy that CR had reached the same conclusion as, in its final decision, did the Commerce Commission; and

(i) regardless of whether Mr HG’s conclusions were right or wrong, they resulted from reasonable steps taken by him to ensure that his submissions had a proper foundation.

(a) the submissions called into question by Mr TY were confidential, being seen only by the Commerce Commission, the applicants, and a small number of external opposing lawyers and economists who had signed

13 Mr HG goes on to refer to what he says was wrongful criticism of him and his firm by [EEE] in the public arena and the steps he took to quell that. However, any issues thus arising are outside the compass of this review proceeding.

(b) [Company B]’s claimed counterfactual and Mr HG’s submissions (those encompassing the concerns of Mr TY) were all redacted from the material seen by Mr HG’s clients and the public;

(c) before access was gained to the counterfactual, the applicants’ focus had been on the status quo predicating what would happen in the future should the application fail whereas when, finally, access was achieved despite “robust pushback by [Company B] over some months”, it turned out that they were solely focused on the future;

(d) this was “new information” (being such that was inconsistent with the applicants’ earlier approach) which Mr HG judged was important; and of which he added that

(e) a consequence of the vast scale of the application was that different opposing parties focused on matters in the purview of their particular expertise and concern rather than raising overlapping cases;

(f) fundamentally, clearance of the merger pivoted on whether it would or might substantially lessen competition;14

(g) the main tool to determine that question was the counterfactual, so from the respondents’ point of view it called for close scrutiny;

(h) in the then-given circumstances, those opposing argued that without a merger [Company B] would have to expand its wholesaling footprint by competitively reducing its retail-minus calculated margins but, without a merger, the size of [Company A]’s customer base would avoid or ameliorate the pressure to do that;

(i) only when the counterfactual was fully accessible was the likelihood of increased competition were the merger declined, as ultimately it was, revealed;

(j) in this area Mr HG and Mr TY parted company as to the role and relevance and/or degree of significance of wholesale pricing;

(c) particularly focused on [Company B]’s certification of compliance with its disclosure obligations to the Commerce Commission;

(d) referred to s 103(2) of the Commerce Act 1986 simply as a contextual reinforcement of the disclosure obligation; and

... Mr HG alleges that the applicants have intentionally misled the public, in bad

Likewise, he denies alleging that [Company B], [ENT] and [EEE] had deliberately set out to break the law and to act dishonestly.

[42] He noted a concern on his part that [EEE]’s public submissions included:15

HG + Company makes very serious allegations that the applicants and their advisers have set out to mislead the Commission.

[43] In his complaint Mr TY speaks of “blatant allegations of illegality” as marking

out Mr HG’s response to the merger application from the responses of other parties.

[44] To that, Mr HG responds that [Company E] publicly submitted that certain of the applicants’ submissions were:

“Deliberately disingenuous”, “deliberately misleading”, and “incorrect,

[45] Mr HG then submits that [Company E] appeared to make substantially more serious allegations in the public arena than he for his clients had made in what were confidential submissions to the Commerce Commission.

It is apparent from the public record that the Applicants are telling two different stories – one to [Company B] shareholders and the other to the Commission

... concluded on multiple issues that that [Company B] stated positions and facts to the Commission that were contrary to positions and facts in other material including internal documents and statements to [Company B] shareholders ...

[48] He acknowledged that the Commerce Commission did not accept the opposing parties’ submissions on wholesale pricing but said that, had the case gone to a High Court appeal hearing,16 their argument on that score could have attracted positive attention from a judge sitting with two assessors. He added that rejection of a submission (a litigation commonplace) did not mean it ought not to have been made.

[49] Mr CR heads [CV’s] competition and economic regulation practice. He is recognised by Chambers South Pacific17 as a Senior Statesman in [Redacted]. He was [Redacted] Commissioner and a member of the Commerce Commission between

2007 and 2012. He has acted in a number of major cases of the kind in question here.

[50] He acted for [Company D] and [Company C] in opposition to the merger application. As counsel fulfilling that role he cannot in this instance be recognised as (and does not profess to give evidence as) an expert witness in terms of the High Court Rules.18 But he can speak of the application and the issues from the standpoint of his familiarity with the whole matter, bringing to attention matters he sees as relevant and on which he is well-informed by reason of his experience.

[51] He signed a brief of evidence for the Committee commenting on the matters then in issue: particularly the circumstances in which Mr HG made the complained-of submissions.

[52] In that brief of evidence, he confirms Mr HG’s statement, that every element of the submissions complained of appeared in confidential submissions only – every now-

(it) is a tool of analysis used by competition lawyers and regulators in order to compare the likely future in the event of merger (the factual) with the likely future without the merger. It is an area of great legal and economic complexity and was the subject of many pages of economic reports and opinions from opponents to the merger during the Commerce Commission process. All submissions and expert reports filed by opponents to the merger, raised similar points to those raised by (Mr HG) about which Mr TY now complains.

Counterfactual analysis is an area where highly skilled professionals are often in significant disagreement, as they were in this case.

[54] Mr CR notes that Mr HG was not alone in expressing concerns about the case presented by the applicants, pointing out that:

(a) [Company E] had submitted that its concerns go unanswered and unaddressed, other than by way of glib, unsubstantiated and generic statements of principle; and

(d) [Company D] had submitted that it is apparent from the public record that the applicants are telling two different stories – one to Company B shareholders and the other to the Commission; and that

(e) their submissions on the future state of the world must be disregarded and given no weight.

[55] Mr CR then opined that for the Committee to properly consider the question of adequacy of foundation, the Committee would need to review thousands of pages of material (including expert economic reports) that Mr HG would have considered before making his confidential submissions, potentially requiring expert guidance to usefully navigate the material.

[56] That response included an appendix setting out what I take to be a complete

_{(from Mr TY’s point of view) compendium of those parts of Mr
HG’s submissions to the}

Commerce Commission of 11 and 21 November 2016 that are alleged to demonstrate the justification for the overall complaint.

[57] However, in my view the examples he set out in paragraph 18 of his complaint and which are found above,20 suffice to illustrate the nature of the complaint and so I do not burden this decision with a recitation of the entire catalogue.

[58] Mr TY essentially rehearsed and expanded upon his original contentions that what Mr HG had submitted to the Commerce Commission left open but one conclusion: that offences against s 103(2) of the Commerce Act 1986 and the FTA were alleged.

[59] In doing so he revisited his original claim that part of the problem was that Mr HG, demonstrating a lack of competence, had failed to understand the structural counterfactual in that whichever alternative “took place”, wholesaling would be included.

[60] He added that the reason why an alternative transaction was not discussed in Company B’s public submissions was that those had responded to wholesaling issues that would not change regardless of any alternative transaction.

[61] He concluded by submitting that (beyond being an exhibition of incompetence) Mr HG’s conduct had been unsatisfactory because it was:

(a) in breach of s 12(b) of the Act – unbecoming and unprofessional conduct; and

(b) in breach of r 10.1 of the Rules – treating other lawyers with respect and courtesy – contrary to s 12(c) of the Act.

[62] Coming now to Mr HG’s response to the review application, I reset the scene by repeating what Mr TY seeks through the review process.

[63] What, as I repeat, he seeks is the return of the complaint to the Committee with directions to reconsider the same:

(b) disregarding whether Mr HG was acting on instructions, as given adherence to confidentiality undertakings that could not be the case.

In so advising he has said that were an apology to all parties named in the complaint be forthcoming, the complaint would be withdrawn.22

(a) the fact that his clients could not be shown the confidential material did not mean that his retainer obligation excluded a responsibility to respond to the material as necessary and as far as was practicable;

[65] The parties attended a review hearing in Wellington on 8 October 2019. [66] Mr HG was represented by Mr XC.

[67] The nature and scope of a review have been discussed by the High Court, which said of the process of review under the Act:23

... the power of review conferred upon Review Officers is not appropriately equated with a general appeal. The obligations and powers of the Review Officer as described in the Act create a very particular statutory process.

The Review Officer has broad powers to conduct his or her own investigations including the power to exercise for that purpose all the powers of a Standards Committee or an investigator and seek and receive evidence. These powers extend to “any review” ...

... the power of review is much broader than an appeal. It gives the Review Officer discretion as to the approach to be taken on any particular review as to the extent of the investigations necessary to conduct that review, and therefore clearly contemplates the Review Officer reaching his or her own view on the evidence before her. Nevertheless, as the Guidelines properly recognise, where the review is of the exercise of a discretion, it is appropriate for the

22 Again, the fate of a complaint (once made) rests with the Standards Committee and its exercise of discretion as to whether the complaint process should continue.

Review Officer to exercise some particular caution before substituting his or her own judgment without good reason.

[68] More recently, the High Court has described a review by this Office in the following way:24

A review by the LCRO is neither a judicial review nor an appeal. Those seeking a review of a Committee determination are entitled to a review based on the LCRO’s own opinion rather than on deference to the view of the Committee. A review by the LCRO is informal, inquisitorial and robust. It involves the LCRO coming to his or her own view of the fairness of the substance and process of a Committee’s determination.

[69] Given those directions, the approach on this review, based on my own view of the fairness of the substance and process of the Committee’s determination, has been to:

[70] Mr TY submitted that the Committee had misdirected its inquiry through an error in identifying the appropriate legal test.

[71] It was his view that the Committee had mistakenly measured Mr HG’s conduct by reference to the limited duties he had owed to Mr TY and his clients, when the proper focus of the inquiry should have been on the question as to whether Mr HG had breached his duty as an officer of the court in presenting submissions to the Commerce Commission in a way which improperly impugned the reputations of others.

[72] In particular, Mr TY was critical of the Committee’s failure to specifically address complaint that Mr HG had, in the manner he had framed reference in his submissions to s 103(2) of the Commerce Act 1986, directly accused his clients of breaking the law.

[73] I accept that the Committee concluded in paragraph 16 of its decision that Mr HG owed limited duties to Mr TY and his clients and that what followed in its decision was a discussion as to whether Mr HG had breached any of those duties; but the scope of that conclusion must be viewed in the context of what had gone before.

[74] At paragraph 14 of its decision, the Committee observed that all lawyers have an overriding duty to the court, including obligations not to mislead or deceive the court, and to treat others with respect.

[75] It is abundantly clear that the Committee’s collective mind was attuned to the question as to whether the manner in which Mr HG had couched aspects of his submissions crossed the line from robust advocacy to improper allegation. That inquiry was not fettered by a single-minded focus on the duties owed to Mr TY and his clients, but clearly considered the broader reach of Mr HG’s obligations.

[76] Mr TY advocates for the return of the complaint to the Committee with directions that:

(b) disregard whether Mr HG was acting on instructions as given adherence to confidentiality undertakings that could not be the case.

[77] Subject to recognition of the importance of the glosses more recently added by Medcalf v Weatherill,26 it seems to me that Gazley (which is also referred to in the notes to r 13.8.1 of the Rules) is still good law in the terms summarised in its headnote:

1 Every counsel has a duty to his client fearlessly to raise every issue, advance every argument and ask every question which he thinks will aid his client's case. But, as an officer of the court concerned in the administration of justice, he has an overriding duty to the court, to the standards of his profession, and to the public. He must not mislead the court nor cast aspersions for which there is no sufficient basis in the information in his possession (see p 453 line 45).

2 The same duty applies when drawing pleadings or conducting subsequent stages in a case as applies to counsel's conduct during the trial (see p 454 line 2).

3 The privilege and immunity conferred on members of the profession in connection with a case bring with them a professional responsibility not to make allegations "without a sufficient basis" or "without reasonable grounds" (see p

[78] I do not find the Committee’s decision to be at odds with those principles.

[79] As to the instructions issue, Mr HG’s submission as to the scope of his obligation to his clients (in a case where he would know more than they could because of confidentiality issues) makes eminent sense.

[80] For him to have viewed an inability to reference specific instructions on confidential materials as good reason to restrict the scope of his submissions would have been for him to have exposed himself to a complaint of dereliction of the duties he owed his clients to protect and promote their interests in all material respects.27

[81] Counsel provided helpful and comprehensive submissions at the review hearing.

[82] Both accepted that the issue as to whether Mr HG had breached his professional obligations in terms as argued for by Mr TY, focused narrowly on the question as to whether Mr HG had, in his references to s 103(2) of the Commerce Act

[83] An examination of that issue inevitably brought to the forefront the question of context, and specifically, whether it was possible for a Review Officer to assess the import, impact and gravity of the submission, without having a full understanding of the complexity of the proceedings that were being litigated before the Commerce Commission.

[84] It was accepted that the matters before the Commerce Commission were complicated, of a specialist nature, and multi-faceted.

27 Robert Bax & Associates v Cavenham Pty Ltd [2012] QCA 177, [2013] 1 Qd R 476 at 490, although arising in entirely different circumstances, illustrates that lawyers’ instructions may demand more of them than such might literally suggest.

[85] Mr TY was emphatic in his rejection of argument that the complexity of the case fettered a Review Officer’s ability to determine whether Mr HG’s conduct had been unsatisfactory.

[86] Reliance on that argument says Mr TY, would present as an abrogation of a Review Officer’s duty to conduct reviews, and leave it open for lawyers to escape the reach of the disciplinary regime, by simple argument that the complexity of the material before the Review Officer inhibited possibility of a fair disciplinary enquiry.

[87] Mr TY argued that a Review Officer should not step back from his or her obligation to assess the conduct complained of, from any misplaced timidity occasioned by the complexity of the factual matrix from which the complaint arose.

[88] With respect to Mr TY, I had not intended to suggest, when raising the issue of complexity, that complexity in itself was a barrier to inquiry, but rather to emphasise that in conduct complaints, context is everything.

[89] There can be no impediment to a lawyer advancing serious allegation, if he or she has a reasonable foundation for the allegation.

[90] But it is self-evident, that when Mr TY advances robust argument that his client has been unfairly maligned, that accusation must be measured against the evidence advanced to the Commerce Commission. And in this case, it is accepted that the evidence is complex, comprehensive, and specialist in its nature. Mr TY’s accusation of impropriety in the advancing of submissions is not made out simply because he says it is. The impropriety or otherwise of the comments is self-evidently measured by reference to context.

[91] Mr TY helpfully narrowed the argument, by suggestion that I need focus only on a section of Mr HG’s submission of 11 November 2016, and that recourse to examination of the wider documentation was not necessary.

[92] Having extended the invitation to confine the inquiry to the specified submission, that invitation was gratefully accepted.

[93] It was Mr TY’s submission that a proper scrutiny of those submissions could lead to no conclusion other than that Mr HG had tarred his client with the brush of allegation of dishonest conduct.

[94] Mr XC rejects Mr TY’s submission that a plain reading of the passages which

contained reference to s 103(2) of the Commerce Act 1986 can lead to no conclusion

other than that Mr TY’s client was being accused of serious misconduct. In his view, Mr TY has completely overstated the significance of the reference and attached a meaning to it that is simply not supported by a plain reading of the words.

[95] Mr XC is critical of Mr TY for making what he describes as persistent accusation that Mr HG had accused Mr TY’s clients of having committed an offence. He denies that to be the case, and argues that Mr TY has been unable to point to any instance where Mr HG had alleged that any party in the proceedings had breached s

[96] Further, he contends that the “plain reading” approach to the relevant material as advocated for by Mr TY, can lead to no conclusion other than that Mr HG had not made any improper comment such as would engage a consideration as to whether he had put himself at risk of breaching the Rules. He says that Mr HG, Mr XZ (Mr HG’s former counsel), Mr CR, and he himself have all read the material and are unanimous in their view that it gives no indication of Mr HG having accused Mr TY’s client of breaching s 103(2).

[97] Mr HG’s counsel noted that a number of other submitters had been highly critical of Mr TY’s clients, but that Mr TY had not elected to pursue complaint against those parties. It is Mr HG’s view that the complaint was being driven by Mr TY, and that Mr TY’s belief that Mr HG’s submissions had been personally discourteous to Mr TY, were motivating the complaint.

[98] Mr TY rejected suggestion that he was fuelling the fire. He emphasised that his clients (one of whom had a significant commercial reputation to protect) had been extremely troubled by the thrust of Mr HG’s submissions. His motivation in advancing the complaint was solely to protect the reputation of his clients, and to fulfil his professional obligation to bring matters which raised serious professional conduct issues to the attention of the Complaints Service.

[99] Attention properly focuses then on a consideration of the references made by Mr HG to s 103 (2) of the Commerce Act 1986, and an assessment on a plain reading of the submissions and a consideration of the relevant conduct rules, as to whether the statements made by Mr HG require a disciplinary response.

[100] The rule primarily engaged by this case and the review application is r 13.8 of the Rules, so I record for reference these provisions:

[101] “Court” includes a tribunal before which a lawyer may appear: r 1.2 of the Rules. If it had been argued that the Commerce Commission was not operating as a court or tribunal, then I would have seen no good reason to be troubled by that, as the nature of the proceedings before it would surely attract the same kind of professional responsibilities as those in a court or tribunal context.

... counsel must not draft any originating process or pleading containing an allegation of fraud unless they have reasonably credible material which, as it stands, establishes a prima facie case of fraud – that is, material of such a character which would lead to the conclusion that serious allegations could properly be based on it.

That obligation obviously applies to any form of allegation of reprehensible conduct as falls within r 13.8.1.

[103] The italicised words can be taken to come from the House of Lords case Medcalf v Weatherill (referred to in the notes to r 13.8.1 as Medcalf v Mardell) and its focus on an English rule then controlling professional practice (the Code of Conduct at paragraph 606(c)) that proscribed allegations of dishonesty against a litigant by a barrister or solicitor without their having before them "reasonably credible material which as it stands establishes a prima facie case ...".29

[104] Speaking of the "reasonably credible material" provision, Lord Steyn said at

This particular professional duty sometimes poses difficult problems for practitioners. Making allegations of dishonesty without adequate grounds for doing so may be improper conduct. Not making allegations of dishonesty where it is proper to make such allegations may amount to dereliction of duty. The barrister must promote and protect fearlessly and by all proper and lawful means his late client's interests: para 203 of the Code of Conduct. Often the decision will depend on circumstantial evidence. It may sometimes be finely balanced. What the decision should be may be a difficult matter of judgment on which reasonable minds may differ.

... it is a highly material circumstance that the Court of Appeal accepted that the barristers believed in good faith that they had materials which justified the making of the allegations.

... the question is whether the barristers' beliefs that they had material which objectively justified the allegations unquestionably fell outside the range of views which could reasonably be entertained.

... The law reports are replete with cases which were thought to be hopeless before the investigation but were decided the other way after the court allowed the matter to be tried.

The duty of the advocate is with proper competence to represent his lay client and promote and protect fearlessly and by all proper and lawful means his lay client's best interests.

[109] Having carefully considered Mr HG’s submissions to the Commerce Commission about which Mr TY complains, I find that rather than to be characterised as allegations of the commission of offences, they should be seen as requests by Mr HG for some inquiry into whether Company B may have breached the Commerce Act

[110] Language such as “there may well be Fair Trading Act concerns” and “it is submitted the Commission should review and address the applicants’ Commerce Act and FTA duties” is, it can reasonably be said, indicative of an endeavour to have the Commerce Commission investigate and take action (prosecutorial or otherwise) if it formed the view that to do so was warranted.

[111] Such an endeavour could hardly be characterised as unsatisfactory – as unprofessional – unless (as is not the case apparent here) made without a scintilla of justification, thereby warranting the inference of an underlying improper purpose – see r 2.3 of the Rules.

[112] If, contrary to my view, it could be said that there were actual allegations of offending, then the gateway question would be whether what was conveyed could be classified as amounting to allegations of reprehensible conduct.

[113] When the available submissions are read as a whole – as should be done before any conclusion is reached on any material to this conduct question – no basis emerges for a finding of very bad and morally or wrong conduct (which is what “reprehensible” connotes).

[114] Instead, the impression left is that Mr HG approached his retainer with a high level of care and attention and, as to that in fact being so, there are the supporting observations of Mr CR. His are valuable observations not only because of the obvious wealth of experience he has in this area, but also because of his first-hand knowledge of the ins and outs of the merger application.

[115] Mr TY tends to focus on the second question of whether Mr HG had reasonable grounds to write the submissions as he did.

[116] Mr TY’s fundamental case on that account is self-summarised when he says a lawyer making allegations of reprehensible conduct is obliged to ensure that there is a “concrete basis” for them and that to fail to do so (as is asserted) is a failure to meet professional and ethical obligations.

[117] However, the judicial observations to which I refer at [77]–[80] come up well short of supporting any need for a case with “concrete” underpinnings.

[118] Adjectival use of “concrete” connotes a clear and certain, not open to doubt, effectively irrefutable state of affairs.

[119] “Reasonable grounds” or, as the test has otherwise (but in my view no differently) been put, “reasonably credible material” is all that is required.

[120] Whether viewed as assertions designed to encourage the Commerce Commission to delve further, or as including allegations of actual offending, what Mr HG wrote was in my judgment no different in substance from what – judged by the excerpts from the submissions of other parties identified by him and Mr CR – was contended (through no doubt their own lawyers) by other respondents.

[121] Mr TY tackles that by saying that only Mr HG hinged his submissions around specifically identified offence provisions. That is an untenable distinction. It requires a blinkered focus on the references to the statutory offence or breach provisions that ignores what is obvious in the overall.

[122] I accept that, as I understand Mr HG to have argued, the allusions he made to them were simply designed better to identify the principles of frank disclosure by which the Commerce Commission might measure the applicants’ submissions.

[123] In any event, in what is a rather arcane area, the acceptability of the submissions in question was best to be judged by the Commerce Commission itself or, on appeal, a High Court judge sitting with two assessors.

[124] As noted at [61] above, Mr TY had submitted that Mr HG’s conduct had been

(a) in breach of s 12(b) of the Act – unbecoming and unprofessional conduct; and

(b) in breach of r 10.1 of the Rules - treating other lawyers with respect and courtesy – contrary to s 12(c) of the Act.

[125] Nothing in what has been before me in any way justifies, or calls for further inquiry into, those submissions. Nor is there any sign of incompetence in Mr HG’s handling of the whole matter.

[126] In my view there is no justification for a reference back to the Committee. As noted above, I consider that the matters that Mr TY has claimed to be of concern are such as should have been (and perhaps in some fashion they were) debated and resolved one way or another before and by the Commerce Commission.

[127] As well, Mr AE made what I find to be a valid and crucially important point when he submitted that the justification for Mr HG’s contentions to the Commerce Commission could not be determined on what was available to this jurisdiction. And that submission is positively endorsed by Mr CR.

[128] Even if, confidentiality questions notwithstanding, there was a clearable path to the entirety of what was before the Commerce Commission, problems such as these would remain:

(b) pertinent investigation and examination of the materials before it would be an overwhelming task for any Standards Committee;

(c) Committee processes are deliberately kept simple by the Lawyers and Conveyancers Act 2006 with a hearing on the papers in constrained terms being the default position;30

(e) the burden of a full-scale investigation into the facts would be overwhelming;

(f) confidentiality issues would be problematic. [129] The following also militate against a reference back:

(a) such would be a disproportionate response because the apparent reality is that the relief sought (an apology to Company B, [ENT] and EE) could not (given an adverse outcome to Mr HG) be directed to each and all because of confidentiality issues;

(b) indeed, confidentiality would appear to mean that Company B, [ENT] and [EEE] – all those beyond Mr TY’s team – could not/should not be aware of the matters raised by Mr HG and focused on by Mr TY, because they were to be found in redacted material;

(c) thus, [ENT] and all of [EEE] but for Mr TY and those working with him, who needed to know and had given all requisite confidentiality undertakings, would/should have been oblivious to what was in issue before the Committee and is now before this Office; and in any event

(d) there is no evidence apparent to me of any express or implied (or to be inferred) allegation having been made by Mr HG that [EEE] (on behalf of which Mr TY’s complaint is expressed as made) or [ENT] was complicit in any material wrongdoing;

_{Conveyancers Act 2006 have been sufficiently served by the
Committee’s attention to}

the complaint thus far and that no further action on the matter is either necessary or appropriate.

[131] Pursuant to s 206(4) of the Act I direct that this decision be published so as to be accessible to the wider profession in a form anonymising the parties and bereft of anything as might lead to their identification.

[132] Pursuant to s 211(1)(a) of the Lawyers and Conveyancers Act 2006 the decision of the Standards Committee is confirmed.

In accordance with s 213 of the Lawyers and Conveyancers Act 2006 copies of this decision are to be provided to:

New Zealand Legal Complaints Review Officer

TY v HG [2019] NZLCRO 142 (29 November 2019)