Sorensen v New Zealand Law Society (Auckland Standards Committee Number 2)

• Jurisdiction: New Zealand
• Judge: Peters J
• Judgment Date: 01 July 2013
• Neutral Citation: [2013] NZHC 1630
• Docket Number: CIV-2012-404-5634
• Court: High Court
• Date: 01 July 2013

UNDER the Lawyers and Conveyancers Act 2006

IN THE MATTER OF an appeal pursuant to Part 20 Subpart 3 High Court Rules 2008

BETWEEN

Hans Timothy Sorensen

Appellant

and

New Zealand Law Society (Auckland Standards Committee Number 2)

Respondent

[2013] NZHC 1630

CIV-2012-404-5634

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

Appeal of against order striking lawyer off the roll on the ground that the penalty was disproportionate — moderation of cost awards payable to Law Society sought — lawyer drafted will naming testatrix_s brothers as executors — after probate, brothers were unsatisfied with their shares — despite advising executors that it would be illegal not to distribute in accordance with the will, the lawyer distributed four legacies instead to the executors on their instruction — Tribunal found lawyer guilty of professional misconduct — lawyer did not personally benefit from transaction, later acknowledged error, had no prior disciplinary history, and provided numerous reference letters — whether lawyer a fit and proper person to practice — whether a lesser penalty would suffice to protect the public.

Counsel:

R J Katz QC for Appellant

M J McCartney SC for Respondent

JUDGMENT OF Peters J

Introduction

1 This is an appeal against orders made by the New Zealand Lawyers and Conveyancers Disciplinary Tribunal (“Tribunal”) on 24 August 2012 (“decision”), including an order striking off the Appellant's name from the roll of barristers and solicitors.

2 The Appellant's case on appeal is that an order striking off the Appellant's name was disproportionate and that the Tribunal ought instead to have made an order suspending the Appellant from practise for a period. 1

3 The proceedings before the Tribunal were conducted under the provisions of the Lawyers and Conveyancers Act 2006 (“Act”). In May 2011 the Tribunal found a charge of misconduct had been proved. The Appellant appealed that decision to the High Court but was unsuccessful. 2

4 Following the appeal, the Tribunal heard submissions as to penalty. In addition to the order striking off the Appellant's name, the Tribunal ordered the Appellant: 3

• (a) to pay $35,000 (in total) to several people who suffered loss by reason of the Appellant's acts or omissions, such sum to be paid by 31 December 2012 or such later date as might be allowed by each recipient. This order was made pursuant to s 156(1)(d) of the Act and reflected arrangements that the Appellant had made previously with the persons concerned; 4 and

• (b) to pay costs of $8,212 to the New Zealand Law Society (Auckland Standards Committee Number 2) (“Standards Committee”); and

• (c) to reimburse the New Zealand Law Society (“Society”) the sum of $17,200, being the sum the Society was required to pay the Crown pursuant to s 257 of the Act.

5 The Appellant now appeals against the order striking his name off the roll and the costs orders referred to in [4](b) and [4](c) above.

Approach to appeal

6 This is a general appeal by way of rehearing pursuant to s 253 of the Act. It proceeds on the basis set out in Austin, Nichols & Co Inc v Stichting Lodestar. 5 A fuller account of the Court's approach is at [12] of Hart v Auckland Standards Committee 1 of New Zealand Law Society. 6 On hearing an appeal, the High Court may confirm, reverse or modify the order appealed against. 7

Background

7 The Appellant was a sole practitioner in Auckland of some 25 years' standing. The Appellant prepared a will for a client testatrix which she executed in February 2008. The testatrix died in July 2009 and the High Court granted probate of the will in August 2009. The testatrix appointed two of her brothers as her executors.

8 The estate available for distribution was approximately $265,000. The will provided for the payment of seven legacies totalling $210,000, with the residue of the estate to be paid to the testatrix's three brothers (including the executors) in equal shares.

9 The brothers were dissatisfied with the share of the estate that they were to receive. The executors resolved that they would not pay four legacies totalling $120,000 and they instructed the Appellant accordingly. The Appellant's evidence was that he advised the executors they would be acting unlawfully if they failed to execute the terms of the will and pay the legacies.

10 It appears that most of the estate was in cash and held by the Appellant in his trust account. The executors instructed the Appellant to pay to them the sum that was due to the four legatees to whom I have referred. The Appellant did as he was instructed but in the knowledge that the executors would not pay the legatees the sum to which they were entitled under the will. The executors had agreed that each of the deprived legatees would receive $200 cash, as if it came from the family rather than from the estate, and to this end the Appellant added $800 to the payment to one of the executors. Also, on the executors' instructions, the Appellant did not communicate with the affected legatees or send them a copy of the will.

11 The Appellant's distribution of the funds in this way came to light during an audit of his trust account. Subsequently the Appellant was charged with misconduct.

12 The Appellant's case before the Tribunal was that he had believed he was obliged to act in accordance with the executors' instructions, they being his clients, and that his doing so was not dishonest. The Tribunal did not accept this account and was satisfied that the Appellant had assisted the executors knowing that they had an improper and dishonest purpose, and that his participation had an element of dishonesty. The Tribunal found the Appellant guilty of professional misconduct. 8 Winkelmann J upheld those findings on appeal. 9

13 The matter then went back to the Tribunal to determine penalties. The Tribunal determined that it should strike off the Appellant's name and make the other orders referred to in [4] above.

Grounds of appeal

14 For the reasons give below, it is only necessary for me to consider the first ground of appeal which is that the order to strike off the Appellant's name was manifestly excessive and largely punitive. Essentially this ground is that the order striking off the Appellant's name was disproportionate. For the reasons given below I am satisfied that the Appellant should succeed on this ground of appeal.

15 For the sake of completeness I note that the other grounds of appeal are as follows.

16 The second ground is that the Tribunal failed to consider adequately the extent to which the determination of an appropriate penalty is to be assessed having regard to the principles set out in English case law; The New Zealand Bill of Rights Act 1990 and principles of parity in sentencing/penalties; the approach of Australian Courts and Tribunals to similar disciplinary issues concerning legal practitioners; and that a striking off should not be punitive or largely punitive in all the circumstances.

17 The third ground is that the Tribunal failed to consider adequately or at all the correct approach to penalty, namely whether or not at the time the penalty is imposed the lawyer is permanently unfit to practise.

18 The fourth ground is that the Tribunal failed to have adequate regard to references in support of the Appellant and his service to his community and the public over a period of many years. I have taken the references into account in reaching my decision in relation to the first ground of appeal.

19 The fifth ground is that the Tribunal failed to take into account that the Appellant obtained no benefit in the matters giving rise to the finding of misconduct and that his culpability should be seen as being “at the lower end of the scale” and in that small category of cases where dishonesty did not warrant a striking off.

20 Lastly, counsel for the Appellant submitted that the Tribunal should have moderated the orders referred to in [4](b) and [4](c) above and he sought such moderation, particularly if I upheld the order to strike off.

Discussion

21 If the Tribunal determines that a charge has been proved, it may make the orders listed in s 242 of the Act. These include an order that the lawyer's name be struck off the roll of barristers and solicitors; an order that the lawyer be suspended from practise for such period as the Tribunal thinks fit, that period not to be more than three years; and an order prohibiting the lawyer from practising on his or her own account, whether in partnership or otherwise, until authorised by the Tribunal to do so.

22 The Tribunal may only make an order striking off a practitioner's name if:

• (a) it is satisfied that the practitioner “is by reason of his or her conduct, not a fit and proper person to be a practitioner”. 10 I accept the submission of counsel for the Appellant that that is an assessment to be made as at the time the order is made; and

• (b) at least five members of the Tribunal “are present and vote in favour of the order” and the said five members are the only members present and voting or they are a majority of the members present and voting. 11

23 I have proceeded on the basis of this Court's decision in Hart v Auckland Standards Committee 1 of New Zealand Law Society, which was delivered shortly before this appeal was heard and with which counsel were familiar. As the Court said in Hart, “the ultimate issue in this context is whether the practitioner is not a fit and proper person to practise as a lawyer”. 12 The Court said that, when assessing the matter of fitness to practice: 13

• (a) “The nature and gravity of those charges that have been found proved will generally be important”. These matters may point to the fitness of the...