Hong v Deliu
| Jurisdiction | New Zealand |
| Judge | Kós J) |
| Judgment Date | 16 March 2016 |
| Neutral Citation | [2016] NZCA 75 |
| Docket Number | CA425/2015 |
| Court | Court of Appeal |
| Date | 16 March 2016 |
[2016] NZCA 75
Kós, Keane and Dobson JJ
CA425/2015
IN THE COURT OF APPEAL OF NEW ZEALAND
Appeal against a decision awarding costs against a defendant who had abided the decision of the High Court (HC) — the respondent had successfully sought review of the Lawyers and Conveyancers Disciplinary Tribunal decision to a dismiss charges against the appellant — the HC had awarded costs against the appellant — the appellant costs should not have been awarded as he had abided the outcome and was “not at fault in any way” in respect of errors made by the Lawyers and Conveyancers Disciplinary Tribunal in its decision to a dismiss charges — the HC held that the tribunal had erred by accepting the appellant's statement that no client had ever complained in respect of him, and failing to consider two lesser disciplinary alternatives — in fact there had been several complaints by fellow practitioners (four resulting in adverse findings) and one complaint laid by client but later withdrawn — HC said that the statement was, on the face of the evidence incorrect but did not find that H misled the Tribunal — the HC considered the errors relating to the failure to consider lesser charges were more significant than the mistake about the disciplinary history — whether costs were not payable where a party abided by the lower Court's decision and had not committed any perversion of justice offences — whether the appellant's mistake had contributed to the costs — whether the HC had failed to consider the allocation of liability between the defendants.
Appellant in person
Respondent in person
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A The appeal is allowed and the costs order made in the High Court is quashed.
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B The appellant is instead to pay costs in the substantive judicial review of 50 per cent of both category 2 band B costs and the disbursements fixed by the Registrar.
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C No costs order in this Court is made.
(Given by Kós J)
The question in this appeal is when and to what extent costs may be ordered on a judicial review against a defendant who abides the decision of the High Court.
Mr Deliu and Mr Hong are both solicitors practising in Auckland. There is some animosity between them. This resulted in Mr Deliu issuing legal proceedings in defamation against Mr Hong. 1 Mr Hong then wrote a letter to Mr Deliu's counsel threatening to complain about them to the Law Society. Mr Deliu objected to the terms of that letter. The complaint to the Law Society ended up being made by Mr Deliu.
The circumstances are laid out in the substantive judgment of Andrews J underlying this appeal. 2 After a tortuous process, the Lawyers and Conveyancers Disciplinary Tribunal concluded that Mr Hong had used a threat to complain to the Law Society for an improper purpose. But it did not amount to obstructing, preventing or defeating the course of justice for the purposes of r 2.2 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008. It concluded also that Mr Hong had acted unprofessionally in respect of some correspondence. But it did not find that the breaches had sufficient seriousness to amount to misconduct for the purpose of s 7(1)(b)(ii) of the Lawyers and Conveyancers Act 2006. It dismissed the charges.
Mr Deliu then applied for judicial review of the Tribunal's decision to dismiss the charges. The Tribunal was first defendant; Mr Hong the second. Both defendants abided the High Court's decision. Neither appeared.
Mr Deliu's first ground was that the Tribunal had proceeded on a mistake of fact because Mr Hong had misled it as to his previous disciplinary history. Alternatively, that the Tribunal had failed to take his previous disciplinary history into account. It is convenient to set out [17] of Andrews J's substantive judgment:
This submission was based on a statement made by Mr Hong in his affidavit in response to the charges against him, sworn 22 January 2013, and repeated in his written and oral submissions to the Tribunal:
Since 1992 when I started in sole practice I have never had a single complaint filed by a client against me. The Law Society can bear testimony to that.
The Tribunal referred to this statement in its decision. It said:
His evidence also noted that in his many years of practice this was his sole indiscretion resulting in disciplinary charges.
In fact:
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(a) a complaint by a client of Mr Hong had been filed with the Law Society in February 2005 (although that complaint was later withdrawn);
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(b) two clients of other solicitors had filed complaints against him in 1998 and 2001 (but no disciplinary findings against Mr Hong resulted); and
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(c) 18 other complaints had been filed by other practitioners (four of which resulted in adverse disciplinary findings against Mr Hong).
Andrews J concluded: 3
Mr Hong's statement was, on the face of the evidence … incorrect. … I would not be prepared to find that Mr Hong misled the Tribunal. However, it is evident that the Tribunal placed some weight on the charge before it being Mr Hong's “sole indiscretion resulting in disciplinary charges” in reaching its conclusion that the charge of misconduct was not proved. It did so under a mistake of fact.
Andrews J also held the Tribunal erred in law by not considering: 4
Other grounds advanced by Mr Deliu were dismissed by Andrews J.
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(a) amending the charge to one under s 7(1)(a)(i) of the Act; and
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(b) whether a charge of unsatisfactory conduct under s 12(c) of the Act should be considered in the alternative.
The Judge quashed the Tribunal's decision. It is clear that in doing so she considered the errors noted at [8] more significant than the mistake noted at [7]. 5 The charge against Mr Hong was remitted to the Tribunal for reconsideration. She reserved costs and invited memoranda.
As noted earlier, neither defendant had appeared. Both had abided the Court's decision. Mr Hong advises that he had “filed at the outset, a notice of appearance reserving rights (ie as to costs) together with a memorandum of undertaking to abide by the appellate Court's decision”. The reference to “appellate Court” is a reference to the High Court on review.
Mr Deliu did not seek costs against the Tribunal. He took the view that such costs would not be available in light of the decision in Coroner's Court v Newton. 6 He did however seek costs against Mr Hong. He submitted that Mr Hong was “eminently responsible for this entire train of litigation. Had he been honest with the second defendant in 2013 these proceedings would never have been necessary.”
Mr Hong filed a memorandum in response. He referred to a separate 2014 decision of Gilbert J on appeal from a penalty imposed by the Tribunal in other disciplinary proceedings against Mr Hong. 7 In the course of that judgment Gilbert J had reviewed Mr Hong's disciplinary record. In relation to the 2005 client complaint, he noted that: 8
Mr Hong appears to have made an honest mistake in stating that no client had ever complained about him. The Tribunal should not have taken this into account when fixing the penalty …
Andrews J appears to have borne that in mind in her conclusion quoted at [7] above.
Mr Hong's costs memorandum did refer to his abiding the Court decision. He said he did so because he was “unfortunately … just too tied up time wise to be able to appear for this application”. He did not raise any suggestion that the fact that he abided the result meant he was not liable for costs. Nor did he discuss the costs principles which have occupied us in this appeal.
In a short costs judgment Andrews J concluded that Mr Hong should pay costs to be Mr Deliu on a category 2 band B basis, together with disbursements fixed by the Registrar. 9 Understandably given Mr Hong's focus in his memorandum, the Judge did not consider the issue posed at [1].
The notice of appeal filed by Mr Hong defies easy summation, running as it does to several pages and advancing a number of grounds that are more in the nature of judicial review than appeal. Essentially it says that the Judge was wrong to award costs when he had abided the outcome and was “not at fault in any way” in the errors made by the Tribunal.
In a memorandum regarding timetabling of the appeal, filed on 14 September 2015, Mr Hong advised that his appeal “relates to one sole issue” :
… whether costs can be awarded when I had abided by the lower Court's decision and when I had not committed any perversion of justice offences.
As we will demonstrate shortly, the threshold for the awarding of costs against an abiding party is not and never has been as high as that posed in Mr Hong's suggested issue. 10 Accordingly, the answer to that issue must be yes.
Understandably Mr Deliu rather seized on this self-defeating proposition at the hearing of the appeal as offering him a lay down misèwre. We are satisfied, however, that the appeal should be dealt with on its real merits. That is, whether in this case costs should have been awarded against Mr Hong. Mr Deliu argued this
Mr Hong submitted that Andrews J should have taken greater account of Gilbert J's conclusion that Mr Hong had not deliberately misled the Tribunal as to the 2005 client complaint. The costs decision was unreasoned. It simply imposed the whole costs burden on Mr Hong when he had abided the outcome and any error made by him was only one of three reasons the Judge gave for quashing the Tribunal decision.
Mr Deliu submitted that Gilbert J's decision was before Andrews J; she referred to it in her substantive judgment. 11 The costs judgment was reasoned, albeit briskly. In...
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