Keene v Legal Complaints Review Officer

• Jurisdiction: New Zealand
• Judge: Goddard J
• Judgment Date: 14 November 2019
• Neutral Citation: [2019] NZCA 559
• Court: Court of Appeal
• Docket Number: CA494/2018
• Date: 14 November 2019

Between

Gregory Alexander Keene

Appellant

and

Legal Complaints Review Officer

First Respondent

Andsteven Lau, Jesse Liu and Dinah Qiu

Second Respondents

[2019] NZCA 559

Court:

Kós P, Miller and Goddard JJ

CA494/2018

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

Law Practitioners — barrister represented solicitor in proceedings to recover fees — whether barrister was acting for himself — Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008

Counsel:

Appellant in person

No appearance for First Respondent

No appearance for Second Respondents

M J Hodge for New Zealand Law Society as Intervener

• A The appeal is allowed.

• B The order of the High Court setting aside the determination of the Legal Complaints Review Officer in relation to r 13.5.3 is set aside.

• C There is no order as to costs.

JUDGMENT OF THE COURT

REASONS OF THE COURT

(Given by Goddard J)

Table of contents

	Para no
Introduction and summary	[1]
The legal framework for the complaints	[10]
Rules in relation to independence of lawyers	[11]
Framework for complaints	[19]
Background to these proceedings	[27]
Mr Keene's retainer	[27]
Mr Keene seeks payment of outstanding fees	[28]
The second respondents' first complaint to NZLS	[30]
Mr Keene seeks judgment by default	[32]
The second respondents appeal the default judgment to the High Court	[36]
The second respondents' second complaint to NZLS	[41]
Outcome of fee recovery proceedings	[45]
The LCRO decision	[46]
Application for judicial review of LCRO decision	[52]
High Court decision	[54]
The parties before the Court on this appeal	[58]
Mr Keene's submissions on appeal	[62]
Second respondents' submissions on appeal	[65]
NZLS submissions as intervener	[66]
Analysis	[71]
Was Mr Keene acting for himself in the fee recovery proceedings?	[71]
Was Mr Keene's conduct in issue in the matter before the Court?	[80]
Relief granted in the High Court	[84]
Result	[93]

Introduction and summary

1 Mr Keene, the appellant, is a barrister. He was instructed to represent the second respondents in connection with a civil dispute. The rules governing practice by barristers sole meant that he could not accept direct instructions from the second respondents. 1 Rather, the second respondents instructed their solicitor, Mr Derek Cutting, to act for them in connection with the dispute and Mr Cutting in turn instructed Mr Keene as their barrister.

2 The second respondents became dissatisfied with Mr Keene's performance as their barrister, and terminated his retainer. The second respondents had been paying

Mr Keene's fees by instalments. But at the date his retainer came to an end there was an amount unpaid in respect of the fees he had invoiced. The second respondents made it clear in their correspondence with Mr Keene that they were unhappy with the services he had provided and with the fees he had charged, and that they did not accept that they should have to pay the amounts invoiced by him

3 The issues before the Court on this appeal arise out of the recovery proceedings that were taken in respect of Mr Keene's outstanding fees. The orthodox view is that barristers cannot sue to recover their fees; rather, their fees can be included as a disbursement in the instructing solicitor's bill, and recovery proceedings can be brought by the solicitor as plaintiff. 2 So proceedings were issued against the second respondents by Mr Cutting, in which he claimed the outstanding fees payable to Mr Keene (fee recovery proceedings). Although Mr Cutting was the named plaintiff, he had no personal economic stake in the outcome of the fee recovery proceedings: from a practical perspective, the proceedings were brought for the benefit of (and at the expense of) Mr Keene. Mr Keene decided to act as counsel in those proceedings, to avoid the cost of paying another barrister to do the work involved.

4 The second respondents made a number of complaints about Mr Keene's conduct to the New Zealand Law Society (NZLS). A Standards Committee of the NZLS made a determination to take no further action in relation to a number of those complaints. But it found that by acting as counsel in the fee recovery proceedings Mr Keene had breached certain rules in the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (Rules) relating to the way in which lawyers conduct litigation. The Standards Committee made a determination under s 152 of the Lawyers and Conveyancers Act 2006 (Act) that this amounted to unsatisfactory conduct on the part of Mr Keene. 3 The relevant rules were: 4

• (a) Rule 13.5, which requires a lawyer engaged in litigation for a client to maintain his or her independence; and

• (b) Rule 13.5.3, which provides that a lawyer must not act in a proceeding if the conduct or advice of that lawyer is in issue in the matter before the court. Rule 13.5.3 does not apply where the lawyer is acting for themselves.

5 Mr Keene sought a review of these findings by the Legal Complaints Review Officer (LCRO). The LCRO upheld the finding of the Standards Committee in relation to r 13.5, but reversed the finding of unsatisfactory conduct based on a contravention of r 13.5.3. 5

6 Mr Keene then applied to the High Court for judicial review of the LCRO determination in relation to r 13.5. That application was successful: the LCRO finding of unsatisfactory conduct in respect of r 13.5 was set aside. But the second respondents argued, and Downs J accepted, that there had been a contravention of r 13.5.3. The High Court set aside the LCRO determination in relation to r 13.5.3, and restored the Standards Committee's finding of unsatisfactory conduct based on a breach of that rule. 6

7 Mr Keene now appeals from that High Court decision.

8 We have concluded that the High Court erred in setting aside the LCRO determination in relation to r 13.5.3, and restoring the Standards Committee finding of unsatisfactory conduct based on a breach of that rule. The appeal is allowed.

9 In order to explain why we consider that the High Court should not have set aside the LCRO determination in relation to r 13.5.3, it is necessary to set out the background to the protracted complaint process in a little more detail. Before we do so, however, we set out the legal framework under which the complaints against Mr Keene were made and determined.

The legal framework for the complaints

10 Lawyers who provide legal services to clients must comply with the obligations set out in the Act and in the Rules. The Act also establishes processes for receiving and determining complaints about the conduct of lawyers, including complaints that lawyers have breached the Rules. 7

Rules in relation to independence of lawyers

11 Section 4 of the Act provides that one of the fundamental obligations of a lawyer is to be independent in providing regulated services to clients. That fundamental obligation is reflected in a number of provisions of the Rules. Chapter 5 of the Rules is headed “Independence”. Rule 5 provides:

5 A lawyer must be independent and free from compromising influences or loyalties when providing services to his or her clients.

12 Chapter 5 goes on to deal with conflicting interests and duties, and certain other matters that compromise the independence of a lawyer acting for a client.

13 Chapter 13 is headed “Lawyers as officers of court”. The focus of the provisions of chapter 13 is on the obligations owed to the court by a lawyer acting in litigation. The Rules identify some key elements of that duty, and how it relates to the obligation of the lawyer to their client. Rule 13 provides:

13 The overriding duty of a lawyer acting in litigation is to the court concerned. Subject to this, the lawyer has a duty to act in the best interests of his or her client without regard for the personal interests of the lawyer.

14 Rule 13.5 appears under the sub-heading “Independence in litigation”. It provides:

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.

15 Rule 13.5 does not apply to a lawyer representing themselves in litigation. So for example a lawyer who practises as a barrister and solicitor can bring proceedings against a former client seeking to recover unpaid fees. That lawyer can act for themselves in those proceedings. No concern arises about independence so far as a client is concerned: there is no separate client. And the court does not expect the lawyer to be independent in the manner required by r 13.5. The court understands that the lawyer's personal interests are engaged, and adjusts its expectations accordingly.

16 However the orthodox view is that a lawyer who practises...