Waikato Bay of Plenty 356 Standards Committee v Charles Fletcher

 
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[2013] NZLCDT 16

NEW ZEALAND LAWYERS AND CONVEYANCERS DISCIPLINARY TRIBUNAL

CHAIR

Judge D F Clarkson,

Members of Tribunal

Mr W Chapman, Ms S Hughes QC, Ms C Rowe, Mr W Smith,

LCDT 020/12

In the Matter of the Lawyers and Conveyancers Act 2006 and the Law Practitioners Act 1982

BETWEEN
Waikato Bay of Plenty 356 Standards Committee
Applicant
and
Charles Fletcher, of Hamilton, Barrister and Solicitor
Respondent
APPEARANCES:

Mr B Brown QC and Mr M Treleaven for the Standards Committee

Mr G Illingworth QC Mr D Wood for the Practitioner

Penalty decision following a guilty plea by law practitioner to a charge of professional misconduct — transitional provisions of the Lawyers and Conveyancers Act 2006 applied — High Court found practitioner had facilitated a sole trustee of trust in misappropriating over $250,000 of trust property — upheld by Court of Appeal — practitioner had to meet liability ofapproximately $1.3 million as a result of his actions — at all times practitioner denied any intentionto behave, or assist a client to behave, in an intentionally dishonest manner — whether practitioner's conduct, occurring over 10 years ago, was so serious as to require strike off because it rendered him unfit to practice, or whether some less restrictive intervention would properly reflect the seriousness of this matter.

At issue was whether F's conduct, over 10 years ago, was so serious as to require strike off because it rendered him unfit to practise, or whether some less restrictive intervention would properly reflect the seriousness of this matter.

Held: Counsel agreed that the New Zealand Lawyers and Conveyancers Disciplinary Tribunal (“Tribunal”) was entitled to rely on the findings of the HC and CA because the findings of fact had been pleaded as part of the charge and accepted as such by F's plea of guilty to the Tribunal (distinguishing this case from that of Dorbu v Lawyers and Conveyancers Disciplinary Tribunal where it was held that the Tribunal was prevented from accepting the civil judgment of another court as evidence of facts and that the Tribunal had an independent obligation to determine the facts).

Having regard to the Courts' findings, and F's statements, the appropriate penalty had to be assessed on the basis of a solicitor who had behaved dishonestly, in relation to the events in question at least, in the course of a 37 year career. It was proper for regard to be had to the disciplinary history of F over the full 37 years during which he had practiced which included a finding of misconduct in 1988 and a finding of negligence such as to bring the profession into disrepute in 2004.

The most relevant authority in this case was the decision in Dorbu v New Zealand Law Society which was the appeal from the penalty decision of the Tribunal, heard before a full Court of three HC Judges. The distinguishing feature in this case was that the Higher Courts had stopped short of categorising F's dishonesty as “wilful and calculated” and there was no evidence of false affidavits or misleading the court.

The Tribunal was required to reach a unanimous view that strike off was necessary to achieve the purposes of the LCA, and despite the very serious nature of the misconduct in this matter, such a unanimous view was not reached. While it was accepted that F was required to meet the financial burden imposed by the Court as a consequence of its findings against him, the fact that he had paid $1.3 million to ensure no person was now out of pocket as a result of his misconduct meant he ought to be seen in a different light from a lawyer who had not put the consequences of misconduct right in this way.

However, the misconduct was so serious that the response could not be less than a lengthy period of suspension and there were concerns about F's attempts to minimise his “error” and his lack of insight making it appropriate that a condition be imposed on his resumption of practice that he made reports on his practice and took advice in relation to the management of his practice for a period of at least two years.

Practitioner: suspended for a period of two years with reporting conditions imposed on resumption of practice; censured; ordered to pay costs to the NZLS.

DECISION OF NEW ZEALAND LAWYERS AND CONVEYANCERS DISCIPLINARY TRIBUNAL
Charge
1

The practitioner, Mr Fletcher, has pleaded guilty to one (amended) charge of professional misconduct as follows:

“The Waikato Bay of Plenty Section 356 Standards Committee of the New Zealand Law Society HEREBY CHARGES CHARLES FLETCHER of Hamilton, Barrister and Solicitor, with misconduct in his professional capacity in which the misconduct took place as specified in the judgment of the High Court in Eden Refuge Trust v Hohepa, 1 and the judgment of the Court of Appeal in that case.

Background
2

This is a matter which comes to be dealt with under the transitional provisions of the Lawyers and Conveyancers Act 2006 (“ LCA”) and involves events which occurred between November 2002 and March 2003.

3

Pursuant to s 358 of the LCA this Tribunal exercises the role previously exercised bythe New Zealand Law Practitioners Disciplinary Tribunal and has all of the duties and powers of that Tribunal under the LawPractitioners Act 1982.

4

The reason for the significant delay in this matter being brought before the Tribunalwas because these proceedings followed the conduct of litigation in the case referred to in the charge. The High Court decision in that matter was appealed to the Court of Appeal and that decision was not delivered until 30 March 2012. Followingthe release of that decision the charge was laid in this Tribunal in August 2012.

5

The background which led to the civil litigation is relatively complicated and we do not propose to repeat the history, which is set out in paragraphs [7] to [34] in the judgment of the Court of Appeal, reported as Fletcher v Refuge Trust. 2

6

At the beginning of the Court of Appeal judgment it is recorded that the High Court had found against the practitioner as follows:

  • “…

  • (b) Breach of fiduciary duty, knowing receipt and dishonest assistance against Charles Fletcher, a lawyer practising as Fletcher Law in Hamilton, who acted for Mr Hohepa and the PWFM Trust.”

Mr Hohepa and the PWFM Trust are former clients of the practitioner.

7

In summary it was found in the High Court, and upheld in the Court of Appeal, that MrFletcher had facilitated a sole trustee of the PWFM Trust, Mr Hohepa, in misappropriating over $250,000 of Trust property.

8

During the time that Mr Fletcher represented Mr Hohepa and the Trust, Mr Hohepa was resident in Spain and he did not subsequently return to New Zealand to face the consequences of the proceedings. Mr Hohepa and Mr Fletcher were found jointly and severally liable for a principal sum of $253,441.21 together with interest and scale costs. Taking account of his own legal costs in pursuing this matter to the Court of Appeal Mr Fletcher has in fact had to meet liability of approximately $1.3 million dollars as a result of his actions.

ISSUES
9

To a large extent the argument to the Court of Appeal, and repeated before this Tribunal, focused on the nature of the dishonesty involved on Mr Fletcher's part, specifically, whether this was ‘subjective’ or ‘objective’ dishonesty.

10

It was submitted by the Standards Committee of the Law Society that Mr Fletcher ought to be struck off even if the dishonesty in question could not be described as ‘wilful and calculated’. They submitted that:

“Striking off may still be appropriate especially where there has been a serious breach of a solicitor's fundamental duty to the solicitor's client.”

11

Counsel for the Standards Committee Mr Brown QC set out a number of areas where it was contended that Mr Fletcher's behaviour led to the conclusion that strike off was the only proper response.

12

It was accepted that Mr Fletcher held himself out as an expert in the law of Trusts. Thus this situation where his behaviour facilitated the misappropriation of Trust funds by a sole trustee, by a series oftransactions in which the practitioner acted, is inexplicable. Indeed Mr Fletcher himself contends that he has no idea how he managed to be so “wrong headed”. His counsel submitted that his behaviour represented an “enigma”, whereby in 37 years of otherwise proper practice these events occurred.

13

At all times Mr Fletcher has denied any intention to behave, or assist a client to behave, in an intentionally dishonest manner. He submits that this is a crucial distinction when considering whether the public needs to be protected from him and whether the ultimate sanction of striking off the roll of Barristers and Solicitors needs to be imposed.

14

For his part Mr Fletcher submitted that there had been “ a temporary lack of focus on his part”. In a lengthy affidavit filed only a day prior to the hearing Mr Fletcher had this to say: 3

“… Over a period of no more than a few weeks from December 2002 to February 2003, I lost my objectivity in the way I handled Mr Hohepa and his express instructions.”

15

He goes on to accept that the steps he took during that period “… have rightly been the subject of criticism.” He explains that he has had difficulty in accepting that he was taken in by Mr Hohepa and...

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