UC v OX

• Jurisdiction: New Zealand
• Judgment Date: 11 March 2013
• Neutral Citation: [2013] NZLCRO 9
• Date: 11 March 2013
• Docket Number: LCRO 179/2011
• Court: Legal Complaints Review Officer

Concerning an application for review pursuant to section 193 of the Lawyers and Conveyancers Act 2006

and

Concerning a determination of the Auckland Standards Committee 3

BETWEEN

UC

Applicant

and

OX

Respondent

[2013] NZLCRO 9

LCRO 179/2011

LCRO 180/2011

Application for review of two Auckland Standards Committee determinations to take no further action in respect of two complaints about practitioner — predominant submission on review was that, because a lawyer had a duty not to mislead the Court (r13.1 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008), the Courts did not therefore apply a rigorous (or any) standard of proof to statements made by a lawyer to the Court and abdicated the role of assessing the veracity of those statements to the New Zealand Law Society disciplinary process — applicant submitted that therefore it was the role of the disciplinary process to examine and investigate the veracity of the statements made by lawyers to the Court — whether the Standards Committee erred in considering the conduct complained of did not warrant disciplinary proceedings and no professional standards issues arose.

Counsel:

UC as the Applicant

OX as the Respondent

The Auckland Standards Committee 3

The New Zealand Law Society

DECISION

Introduction

1 UC applied for a review of the two determinations of Auckland Standards Committee 3 to take no further action in respect of two complaints about OX. The complaints arise firstly from events relating to the role that OX played in promoting new animal welfare legislation and subsequently establishing an approved organisation in terms of the legislation, and secondly in respect of OX's conduct in relation to the various proceedings between the parties.

Background

2 The history of events arising between the parties was recounted by Allan J in UC v OX & Ors. 1 I have incorporated a substantial extract here from that decision by way of background information: 2

• [17] [UC] and [OX] were formerly colleagues in a voluntary organisation known as the [CCP] Trust. Regrettably, differences emerged between them and there was a falling out. [UC] made inquiries into a trust with which [OX] was involved. He had been instrumental in securing the passage of the Animal Welfare Act 1999. The trust was an approved organisation under the Act, and in that capacity had an arrangement with the [location] City Council for animal

  welfare purposes. [UC] considered that [OX] had been using the trust to advance his own interests.

• [18] She in turn formed a competitor Trust. It maintained a website upon which [UC] published certain statements defamatory of [OX]. There were other defamatory comments in e-mails sent to a wide variety of recipients, including those involved in local government, board members of the [CCP] Trust (of which [UC] had formerly been a trustee), and the staff of the animal welfare section of the [location] City Council.

• [19] [OX] issued proceedings in the District Court at Auckland. He alleged that certain statements in [UC's] communications or those of her company (the second plaintiff in this proceeding), were to the effect that [OX]:

  • a) was dishonest and had taken charitable funds for himself;

  • b) had deliberately misled a Minister of the Crown in seeking to have his own trust accepted as an approved organisation;

  • c) had misappropriated funds from his own trust;

  • d) was corrupt, untruthful and untrustworthy.

• [20] There were also allegations of passing off, and of breach of the Fair Trading Act 1996.

• [21] The present plaintiffs filed a counterclaim in the District Court. They alleged five causes of action including defamation. The counterclaim ran to 55 pages. Damages of $250,000 were sought.

• [22] In a judgment given on 7 February 2007, Judge Sharp struck out the counterclaim on the basis that none of the causes of action could be sustained.

• [23] On 19 March 2007, Judge Sharp delivered a further decision in which an application filed by the present plaintiffs against the present defendants to strike out the District Court defamation proceeding was dismissed. In each judgment, Judge Sharp urged [UC] to obtain legal assistance.

• [24] Also on 19 March 2007, Judge Sharp ordered [UC] personally to pay indemnity costs of $6,806.72 to the counterclaim defendant, the [CCP] Trust, and further directed the present plaintiffs, jointly and severally, to pay the costs of the present defendants, amounting to $9,000 (a sum in excess of scale).

• [25] On 10 May 2007, in a further judgment, Judge Sharp directed the present plaintiffs to pay scale costs of $3,200 in relation to the unsuccessful application to strike out the statement of claim.

• [26] On 28 June 2007 there was a judicial telephone conference in the course of which the Judge made timetabling directions. The first direction was as follows:

  “Within 14 days the defendants [the present plaintiffs], or one of them shall pay in full all outstanding Costs awards payable to the plaintiffs failing which the defendants will be debarred from further defending the claims against them and statement of defence will be struck out.”

• [27] The unless order was not the subject of a prior written application; neither was there any reference to it in a memorandum filed by counsel for the plaintiffs for the purpose of the conference. But it is not in dispute that [UC] participated in the telephone conference.

• [28] The costs remained unpaid. On 19 July 2007 Judge Sharp made an order (without further argument or appearance) striking out the statement of defence in the defamation proceeding of the present plaintiffs. The minute of Judge Sharp, distributed to the parties by e-mail, read as follows:

  “The directions that I made on 29.06.07 were clear: by 13 June 2007 the defendants were to have paid in full the outstanding awards of costs against them in favour of the plaintiffs or their statement of defence would be struck out. The defendants offer no adequate excuse for their failure to comply with that direction. The plaintiffs now seek an order in terms of the direction made.

  I can see no reasonable ground not to make one as the defendants' failure to meet the costs awarded by the due date constitutes an abuse of the process of the Courts.

  Accordingly under r 209(c) I strike out the defendants' statement of defence.”

• [29] On 13 March 2008, Judge Joyce QC presided over the trial of the defamation proceeding. It was conducted as a formal proof hearing. The present plaintiffs were entitled to participate in the hearing in respect of quantum and in relation to mitigation, despite the striking out of their statement of defence. In practice, they were permitted substantial latitude and were able to place before the Court a great deal of material. I return to this point below.

• [30] Written submissions followed the hearing. They were complete by 16 April 2008.

3 UC applied for a stay of execution of the various costs awards against her, and for a review of the costs awards themselves. This action had been prompted by the fact that OX had commenced bankruptcy proceedings against her for the unpaid costs.

4 In his judgment, Judge Joyce dismissed the application at the same time as issuing his substantive defamation judgment in which he awarded general damages of $50,000 against each of UC and her company (CCQ Ltd), and a further $7,500 in exemplary damages against UC. He also granted injunctive relief restraining UC from publishing material defamatory of OX.

5 It is not necessary for the purposes of this review to detail the various Court proceedings by way of appeal and judicial review which ensued but it is to be noted that in each instance UC has been unsuccessful.

The complaints

6 UC's first complaint against OX started as a complaint to the Serious Fraud Office (SFO) which forwarded it to the New Zealand Law Society Complaints Service after it had come to the conclusion that the information in the complaint did not disclose serious or complex fraud.

7 In her letter to the SFO UC accused OX of corruption by misuse or abuse of public office for private gain. She alleged that OX had a conflict of interest in that he promoted the animal welfare legislation, was a consultant to the Ministry of Agriculture and Fisheries (MAF) and an independent advisor to the Select Committee which considered the legislation.

8 She also alleged that the Trust which he established known as CCR was nothing more than a personal trading name for OX who used the income of that Trust for personal purposes. Throughout her complaints, UC frequently referred to the fact that when OX applied for approval of CCR as an approved organisation, the Trust Deed had not been fully executed and that therefore the Trust did not exist or was a fictitious Trust.

9 UC also complained that OX was responsible for alleged intimidation of her once she had incorporated her own Trust with the same name as that formed by OX.

10 In January 2011 UC lodged a complaint directly with the New Zealand Law Society Complaints Service about OX and five other lawyers. These complaints related to the Court proceedings in which she and the other lawyers had been involved and she alleged breaches of the Conduct and Client Care Rules. 3

11 She alleged the following: 4

• 1. Misleading the court;

• 2. Being a party to an attempt to pervert/defeat justice;

• 3. Using the proceedings for an improper purpose;

• 4. Assisting in the concealment of fraud;

• 5. Failing to make a disclosure as required by s 8.4(d) of the rules;

• 6. Failing to prevent fraud or crime;

• 7. Failing to treat a self represented person with integrity, respect, and courtesy;

• 8. Failing to provide an overriding duty to the court;

• 9. Misleading and deceiving the court;

• 10. Undermining the process of the court and abusing the court process;

• 11. Attacking the reputation of another without good cause in...