IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY
CIV-2014-404-3006
[2015] NZHC 2521
BETWEEN BOON GUNN HONG
Plaintiff
AND AUCKLAND STANDARDS
COMMITTEE NO 3
First Defendant
LAWYERS AND CONVEYANCERS
DISCIPLINARY TRIBUNAL
Second Defendant
Hearing: 6 August 2015
Counsel: Plaintiff in person
P N Collins for First Defendant
No appearance for Second Defendant (abides outcome)
Judgment: 14 October 2015
JUDGMENT OF THE HON JUSTICE KÓS
[1] The Ocean Star was an Auckland restaurant. For many years it was
successful. In 2005 its owner, a Mr Bill Chan, renewed the lease for eight years.
But times changed. Financial difficulties developed. The rent ended up in arrears.
Notice of cancellation of the lease was given. In February 2009 the landlord made
the first of four attempts to re-enter the premises and evict Mr Chan. Mr Chan was
advised by his solicitor, the plaintiff, Mr Hong. The fourth attempt was successful.
During it Mr Chan assaulted two of the landlord’s agents.
[2] In convicting Mr Chan the District Court Judge criticised advice given by
Mr Hong. He referred Mr Hong’s conduct to the Law Society. Its Auckland
Standards Committee No. 3 found the conduct unsatisfactory. It said Mr Hong’s
conduct with Mr Chan was “imprudent” and “incited or could have the potential to
incite his clients into criminal actions”.
[3] Mr Hong now seeks judicial review of the Committee’s determination. Was
that determination lawful?
Background
[4] Mr Hong has practised property and commercial law in New Zealand since
1990, and on his own account since 1992. He has acted for Mr Chan since 1996. He
did not act on the criminal charges brought against Mr Chan.
[5] On 19 January 2009 the landlord served a notice of intention to cancel the
lease, requiring payment of the arrears within 10 days. The arrears were not met.
[6] According to the response to the complaint he filed with the Committee,
Mr Hong received a call from Mr Chan on 4 February 2009. Mr Chan said the
landlord was at the restaurant premises with a locksmith, seeking to evict him. An
employee had prevented the locks being changed. That was the first attempt at
eviction.
[7] Mr Chan told Mr Hong that some customers owed the restaurant substantial
sums. Given time to collect outstanding sums, he could clear the arrears and stave
off eviction.
[8] At first Mr Hong advised that Mr Chan could allow the landlord to re-enter
and subsequently apply for relief against termination of the lease. Mr Chan was not
attracted to this course of action. Any discontinuity would destroy his business. So
Mr Hong devised some alternative advice.
[9] He advised Mr Chan that the landlord could not forcibly re-enter the premises
if Mr Chan would not peaceably give them up. The landlord would need a
possession order from this Court to re-enter in those circumstances.1
He told
Mr Chan to secure the premises to prevent the landlord entering it. This would,
Mr Hong thought, avoid physical confrontation and any altercation. Mr Hong knew
1
Property Law Act 2007, s 244(1).
that Mr Chan had a fiery temper. He said he was concerned to avoid a physical
confrontation that might lead to an altercation.2
[10] The same day Mr Hong received a copy of a notice of termination of the
lease from the landlord’s solicitors. He replied immediately, advising that his client:
(a) would shortly be able to meet the arrears;
(b) was “not prepared to give up the premises peacefully” in the
meantime; and
(c) would secure the premises by posting “manpower to be on the
premises twenty four hours, 7 days a week, to repel any attempts to
re-enter.”
The letter was explicit that this strategy was to “buy [his] client the few days it
needed to be put in funds”.
[11] Mr Hong says he met Mr Chan that evening and advised that violence had to
be avoided. Such behaviour could lead to criminal charges. Mr Hong’s strategy
required that someone remain on the premises at all hours. Because a landlord may
not use force to evict a tenant, and because the tenants would not acquiesce to nonforcible
attempts to get them out, the landlord would be compelled to seek an order
for possession.
[12] Mr Hong told the Committee that he counselled Mr Chan against
confrontation or violence:
46. As I was worried physical confrontation and altercations would take
place, I advised him that landlords will usually attempt at re-entries
at odd hours during twilight when the place is quiet. I wanted him to
secure the Premises so as to prevent the landlord and its security
agents entering the Premises as then the parties would meet
physically and altercations could ensue.
2 Whether that advice was correct or not is addressed at [46]–[50] below.
47. Bill instructed he will post man-power to secure the premises 7 days
24 hours to prevent the landlord re-entering and to repel any forcible
re-entry attempts by the landlord.
…
51. Later that evening Bill came up with Lee, his manager, to my office
and in our meeting, I again advised them:-
a. Of the requirement to avoid any physical violence;
b. Either party who commits such violence could be charged;
c. The need to secure the Premises particularly twilight so the
two parties do not meet (to prevent physical altercations) and
as such either Bill or Lee, must be present at all times. Bill
and Lee will take turns;
d. To contact me if there were any such attempts during
business hours;
e. If they were forcibly evicted, such as being carried away,
they must repel that by shrugging off such attempts and
hanging on to whatever they could to prevent being carried
away and under no circumstances must they hit anyone
unless physically hurt (with proof of bruises) in which case
they can use similar force in self-defence to prevent such
assault on them.
[13] Passing over an intermediate and inconclusive exchange of correspondence,
the next day, 5 February 2009, Mr Hong received a call from Mr Chan informing
him that the landlord was again at the premises. Again the landlord sought to evict
Mr Chan, but this time with the aid of the police. Mr Hong had Mr Chan hand the
phone over to a member of the police in attendance. He warned them off from
assisting the landlord.
[14] He then sent the following fax to the restaurant, which was handed to the
attending officers:
To NEW ZEAALAND (sic) POLICE
On-site at 201 Victoria Street
Auckland
RE: VICTORIA 2033 LIMITED – SKY OCEAN CHINESE
RESTAURANT LIMITED
1. I refer to my telephone conversation with the Police Constable.
2. This is to confirm my advice that the Landlord’s attempt to forcibly
re-enter yesterday is illegal and did nto (sic) succeed as my client
tenant is still in possession.
3. In order to gain re-possession of the premises the Landlord must
seek an order from the High Court.
4. The New Zealand Police does not have the authority and power to
assist the Landlord unless it is served with such an order from the
High Court.
5. I have been instructed that the Landlord is now attempting to change
the locks with the assistance of the Police’s presence.
6. This too is illegal. Locks could not be changed whilst my client
remains in possession. These locks will be removed if changed.
7. I trust the Police will not intervene in this civil matter.
Yours faithfully
B.G. HONG
[15] The landlord and police left without evicting Mr Chan.
[16] That afternoon Mr Hong wrote again to the landlord’s solicitors:
RE: VICTORIA 2003 LIMITED-SKY OCEAN CHINESE RESTAURANT
LIMITED
1. I refer to your earlier fax.
2. I do not accept your views at all.
3. My client has remained in possession of the premises at all times. As
advised earlier, there will be manpower on the premises 24 hours 7
days a week from hereon until this lease termination issue has been
resolved.
4. The locks will be reverted in due course.
5. You ought to be totally aware, the High Court will, on application
reinstate the lease if your client refuses to rescind its termination.
…
11. I have written to the Police and served notice on them that they do
not have the authority to evict my client other than pursuant to an
order to do so from the High Court. They have left the premises with
my client still in possession of the Premises.
[17] The next day Mr Hong received another call about another eviction attempt.
Someone had knocked on the door of the premises at 3am. Mr Chan’s own entry
was prevented at 7am by a group of people. Possibly the same group which visited
at 3am. The police arrived, summoned by a passerby. Police were shown the fax of
5 February. The visitors and the police left.
[18] Some months then passed peacefully. This was the calm before the ensuing
storm. Taking a leaf from Sun Tzu, the landlord appreciated that the supreme art of
war is to defeat the enemy without fighting.
[19] On 14 May 2009, the landlord again sought to re-enter the premises. This
time it prevailed. Mr Chan was not present. Security guards employed by the
landlord persuaded the remaining staff to quit the premises.3 Mr Chan then arrived.
An altercation took place. The Judge found Mr Chan punched a security guard while
trying to get past him, and he hit another with a neon light tube. His conduct was
very much in excess of the peaceable occupation Mr Hong says he counselled.
[20] Mr Chan was convicted by the Judge on two counts of assault.
The District Court judgment
[21] A detailed treatment of the District Court Judge’s decision is unnecessary.
The Judge acknowledged that Mr Hong’s conduct was not a matter for that Court:
[34] It is unnecessary, and therefore inappropriate for the purposes of the
present case, to come to any concluded view as to Mr Hong’s conduct, but
the fax that he sent to be given to the Police was obviously intended to be
accepted by them as a correct statement of the law, and indeed of the facts,
which it was not. Serious issues are raised as to Mr Hong’s competence and
integrity. Those are not for this Court to determine by may need to be
considered by the appropriate body.
[22] Despite that, and despite the fact that (1) Mr Hong was not before the Court,
and (2) the Court had no evidence before it as to the advice Mr Hong had given
Mr Chan,4
the judgment contains serious criticism of Mr Hong’s advice. For
instance:
3 There were allegations that Mr Chan’s staff were assaulted by the landlord’s.
4 The Judge did not have the information set out in [6]–[9] and [11]–[12] above.
[21] … The lawyer who cynically advises a client, who cannot
realistically assert any claim of right, to respond to a notice of termination of
the lease and associated statement of an intention to re-enter, to act in in a
manner which breaches s 91(2) risks being prosecuted as well, particularly
where that lawyer is so incompetent and unwise as to be the vehicle by
which a landlord is advised that any attempt at lawful re-entry would be
resisted in ways which would constitute a breach of the peace.
…
[32] … Lawyers giving the patently bad advice that Mr Hong obviously
gave here would, particularly if they trumpeted their advice to the other side,
be at risk of prosecution.
[23] The Judge directed the Registrar to forward the judgment to the Law Society
for it to decide what if any action should be taken about the advice.
Standards Committee process and determination
[24] The Committee resolved in February 2012 to conduct an own-motion
investigation into whether there had been misconduct or unsatisfactory conduct by
Mr Hong. The subject matter of the complaint was worded somewhat curiously:
Your communications with NZ Police with statements of law and fact that
were inaccurate.
Reference was also made to the District Court judgment.
[25] Mr Hong was notified of that investigation. He was invited to file a written
response. This he did. It included the passages quoted above.
[26] The matter then came back before the Committee on 2 November 2012. It
resolved to set it down for an on-the-papers hearing under s 153(1) of the Lawyers
and Conveyancers Act 2006. Mr Hong was advised he could file further
submissions. He did not take up that invitation.
[27] The hearing was postponed until February 2013. The Committee’s
determination was issued on 14 February 2013.
[28] The deputy convenor of the Committee gave affidavit evidence as to the
Committee’s reasoning process. Apparently “the hearing focussed on the terms of
the [District Court] judgment itself and the response the plaintiff had given after the
judgment was referred to him for comment”. The deputy convener proceeds to
recount several points made by the District Court Judge. Strangely he does not refer
to the plaintiff’s response beyond the passing reference just noted. He concludes:
On the basis of the plaintiff’s correspondence disclosed in the [District
Court] judgment, to the lessor’s solicitor and to the Police, which the
plaintiff did not deny, the Standards Committee formed the view that His
Honour’s description of the irresponsible lawyer, advising a client to resist a
lawful re-entry, accurately described the plaintiff in his actions on behalf of
his lessee client. The Standards Committee considered that the plaintiff’s
correspondence with the Police had promoted an unnecessarily and
irresponsibly provocative and confrontational situation and amounted to
unsatisfactory conduct.
[29] The Committee’s notice of its determination, the formal record of its reasons,
is brief. It summarised the incident and quoted the District Court Judge’s opinion on
the possible criminality of the advice:
8. The alleged conduct of Mr Hong took place in the context of
property leasing transactions and ensuing criminal litigation
proceedings. The charges considered by the Court arose from events
on 14 May 2009, when the landlord re-entered premises occupied by
a friend of Mr Hong. The rent was in arrears. Mr Hong sent a fax to
the NZ Police and another to the landlord’s solicitors; in both faxes
he asserted that the landlord required a High Court order to enable
re-entry. [The Judge] stated in paragraph 33 of his judgment:
“…the only basis on which Mr Hong’s written statement to
the Police …. could be correct was that Mr Hong’s client
intended to act unlawfully to force that result, indeed the
threats by Mr Hong may well have constituted a completed
offence. It is difficult to understand how legal advice to
breach the law, and with it the peace of the community, can be
within the scope of proper professional conduct.”
[30] It then touched very briefly on Mr Hong’s written response:
9. … In his response he canvassed the authorities on forfeiture of leases
and indicated that he was trying to assist the Police by providing the
advice that he gave to which the learned Judge objected. He pointed
out that he was trying to provide assistance to someone who could
not afford legal advice and his motives were altruistic.
[31] The Committee’s evaluative reasoning is found in one paragraph:
13. The Committee considered Mr Hong’s submissions about the law of
forcible entry and his letter to the police. The Committee considered
that his advice was robust in that he warned the landlord’s solicitor
regarding re-entry and disputed the landlord’s solicitor’s right to reenter.
The Committee however noted the comments of the learned
Judge and considered that Mr Hong’s conduct with his own client
was imprudent and incited or could have the potential to incite his
clients into criminal actions (which eventuated). The Committee
considered that a prudent and responsible practitioner would have
acted differently by questioning the client and calming the situation
in more moderate terms.
[32] What is important to note is that although the complaint – set out at [24]
above – focused on Mr Hong’s communications with the police only, the
determination focused on his communications with his client.
[33] The Committee concluded that Mr Hong’s conduct was unsatisfactory in
terms of s 6 of the Lawyers and Conveyancers Act 2006, reprimanded him, fined
him $1,000, imposed costs of $1,000 and required him to at his own expense attend a
seminar on equitable remedies.
Subsequent events
[34] Mr Hong applied for review from the Legal Complaints Review Officer,
under s 194 of the Act. But not in time. The Officer declined jurisdiction.
[35] Perhaps misguidedly, Mr Hong did not comply with the Committee’s
decision. He says he did not receive a copy of the decision until after the requisite
seminar had taken place. He declined an invitation to an alternative seminar. The
Committee resolved on 2 August 2013 to refer his non-compliance to the Lawyers
and Conveyancers Disciplinary Tribunal.
[36] The Tribunal conducted a hearing and rejected Mr Hong’s claim that he had
not received the decision until it was too late to attend the seminar. This was
disgraceful and dishonourable and amounted to misconduct. The Tribunal
suspended Mr Hong from practice for 10 months.
[37] Mr Hong appealed the penalty to Gilbert J in this Court, under s 253 of the
Act. Gilbert J allowed the appeal, substituting a suspension of four months. A very
substantial costs order of $26,121 against Mr Hong was left intact. Gilbert J
accepted the costs were large in part because of the sheer volume of material
Mr Hong submitted.
[38] On 11 November 2014 Mr Hong filed his statement of claim in these
proceedings. It includes separate judicial review claims against both the Committee
and the Tribunal, and a tortuous misfeasance claim for damages against the
Committee.
[39] Two further events should be noted here:
(a) the Committee applied unsuccessfully to strike out Mr Hong’s claims
before Woolford J;
5
and
(b) in April 2015 Ellis J directed that only the judicial review claims be
set down for hearing at this juncture.
Application for judicial review against the Committee
[40] Mr Hong’s statement of claim is an overpacked Cook’s Tour of judicial
review. Its sheer breadth, and absence of coherent discrimination, made it entirely
unhelpful. At the hearing I had to tell Mr Hong that his pleading was hopeless. I
told him I would instead focus on his best evident point. If that was unavailing, I
would look at his next best point. And so forth.
Mr Hong’s best point: failure to take account of relevant evidence
[41] Mr Hong’s best point (in his own view, and mine) is that the Committee
failed adequately to take into account Mr Hong’s written response.
[42] Mr Hong pleaded at paragraphs 29 and 30 of his statement of claim:
29. [The Committee] had deliberately or recklessly or by negligent
omission, ignored and gone against the factual evidential statements
in the Plaintiff’s LCS Response relevant, in favour of the Plaintiff,
that went against the Unsatisfactory Advice conduct verdict and as
such had acted ultra vires. …
5 Hong v Auckland Standards Committee No. 3 [2015] NZHC 667.
30. In delivering the Unsatisfactory Advice conduct verdict, against the
Plaintiff, [the Committee] had merely taken the Judge’s comments in
the Judgment as evidence, had failed to properly inquire into and
investigate into the Plaintiff’s advice to Mr Chan, had failed to call
Mr Chan to give evidence …
Inept as this pleading is, it embraces an allegation of failure to take account of
relevant considerations. At paragraph 46 Mr Hong pleads reliance on the judgment
as a mistake of fact in a way that is an alternative framing of the relevant
considerations ground. Paragraphs 32 and 47-49 explicitly plead failure to take into
account relevant facts, in particular Mr Hong’s account of the advice he in fact had
given:
Had [the Committee] inquired into the Plaintiff’s advice as he had given to
Mr. Chan and had called Mr. Chan to give evidence thereon, it would have
elicited the true facts and evidence of the Plaintiff’s advice to Mr. Chan …
that would have rendered the Unsatisfactory Advice conduct verdict against
the Plaintiff untenable.
[43] Mr Collins resisted the allegation of failure to consider relevant
considerations. He accepted that the Committee was exercising a statutory power of
decision, was amenable to judicial review and had an explicit duty to conform to the
principles of natural justice in s 142(1) of the Act.
[44] However, he submitted, the investigation was concerned with undisputed
correspondence recorded in the District Court judgment. It was, he said, a
“compelling inference” that “the correspondence reflected the advice [Mr Hong] had
given [Mr Chan] about the lessor’s intended re-entry of the premises”, and that the
actions of Mr Chan (amounting to a barricade of the premises against re-entry) were
“encouraged by and consistent with [Mr Hong]’s advice”. The investigations
emphasis was predominantly on Mr Hong’s actions, rather than his advice.
Analysis
[45] I start by reminding myself of the sage observations of Brewer J in Dorbu v
Lawyers and Conveyancers Disciplinary Tribunal:
6
6 Dorbu v Lawyers and Conveyancers Disciplinary Tribunal HC Auckland CIV-2009-404-7381,
11 May 2011.
[5] It is important to set out clearly the Court’s jurisdiction in this
matter. In particular, it must be emphasised that the applicant’s challenge to
the [Disciplinary Tribunal’s] findings is not by way of general appeal. The
Court’s role is not to look at the charges afresh and make its own
determination of them on the merits. It is more limited than that. The
Court’s role is to ensure that the decisions challenged by the applicant were
made according to law. It has no jurisdiction to overturn a decision of [the
Disciplinary Tribunal] which was made within its power and according to
due process.
[46] Before addressing the relevance of Mr Hong’s response, it is necessary to
dwell on the content of Mr Hong’s advice, and associated communications to the
landlord’s solicitors and the police. The District Court Judge called those
communications “inaccurate”. With respect to him, it is far from clear that they
were.
[47] Mr Chan’s breach of covenant to pay rent was a breach of the lease of course.
But it did not mean Mr Chan’s lease was at an end, or that Mr Chan lost all rights to
occupy the premises. Notice of cancellation of the lease had been given and had
expired.7
The landlord was thereupon entitled either to re-enter peaceably (without
committing the offence of forcible entry under s 91(1) of the Crimes Act 1961) or to
apply to the Court for an order for possession.8
The tenant, equally, enjoyed the right
to apply to the Court for relief against cancellation.9
[48] In the absence of agreement to quit, the more common course adopted by
landlords is to seek an order for possession. That is because s 244(1)(b) of the
Property Law Act and s 91 of the Crimes Act are rather calculated to create what
might be termed a Mexican stand-off. They read:
244 Cancellation of lease for breach of covenant or condition:
general
(1) A lessor who wishes to exercise a right to cancel a lease because of a
breach by the lessee of a covenant or condition of the lease may—
(a) apply to a court for an order for possession of the land; or
(b) re-enter the land peaceably (and without committing forcible
entry under section 91 of the Crimes Act 1961).
7
Property Law Act 2007, s 245.
8
Section 244(1).
9
Section 253.
91 Forcible entry and detainer
(1) Every one commits forcible entry when, by force or in a manner that
causes or is likely to cause a breach of the peace or reasonable
apprehension of a breach of the peace, he enters on land that is in the
actual and peaceable possession of another for the purpose of taking
possession, whether or not he is entitled to enter.
(2) Every one commits forcible detainer when, being in actual
possession of land without claim of right, he detains it, in a manner
that causes or is likely to cause a breach of the peace or reasonable
apprehension of a breach of the peace, against another who is
entitled by law to possession of the land.
(3) Whether there was actual possession, or claim of right, is a question
of fact.
(4) Every one who commits forcible entry or forcible detainer is liable
to imprisonment for a term not exceeding one year.
The landlord’s difficulty is that it may not re-enter (and risk committing an offence)
if the tenant simply refuses to leave (so that ensuing manhandling may result in a
breach of the peace). The tenant’s opportunity therefore is to simply refuse to leave,
asserting either claim of right (on the basis that relief against cancellation would be
sought) or the absence of likely breach of the peace. As Adams notes, mere refusal
to leave is not enough to offend s 91(2) and constitute unlawful forcible detainer by
the tenant.10
On the other hand, maintaining possession with sufficient persons to
constitute a show of force may be.11
Importantly for present purposes, whether Mr
Chan’s conduct in this case actually amounted to forcible detainer was never tested.
He was not charged with that offence.
[49] Plainly it was just that potential statutory stand-off that Mr Hong’s strategy
was calculated to exploit. As a strategy it was, as the Committee observed, “robust”.
Whether the Committee meant that adjective as a commendation or a condemnation
is not altogether clear. But in my view it does not deserve either. Many firm-minded
but respectable property practitioners might also have advised peaceable occupation
as a response to a threatened re-entry in these circumstances. The objective would
10 Sir Bruce Robertson (ed) Adams on Criminal Law (looseleaf ed, Brookers) at [CA91.02].
11 R v Robinson [1971] 1 QB 156 (CA) at 162. That case concerned repossession of a “squat” on
Piccadilly. The occupants had barricaded it inside and out, and assembled at least 30 persons
present to deter repossession (although not in an otherwise menacing manner).
be to force the issue into Court, buying time and (in the meantime) gathering funds
with which to negotiate resumption of the lease or secure relief against cancellation.
[50] Was Mr Hong’s assertion to the police that forcible re-entry by the landlord in
these circumstances would be “illegal” inaccurate? Not at all. Was it inaccurate to
say the landlord must seek a Court order? Not at all. Was it inaccurate to say the
landlord could not change the locks? That point was arguable at least. Was it
inaccurate to say the police lacked lawful power to assist the landlord? Again,
arguable. Was Mr Hong foolish to use the word “repel” in his email to the landlord’s
solicitor? Yes, but it does not capture the actual advice Mr Hong says he gave
Mr Chan.
[51] The District Court Judge might have thought the correspondence bad. But
Mr Hong was not before him. Neither as party nor as witness. Nor was the Judge
privy to the advice Mr Hong had given Mr Chan. The Judge said it was not his task
to reach a concluded view about Mr Hong’s conduct. I am bound to say the Judge’s
therefore unconcluded views on Mr Hong’s conduct seem both overstated and unfair.
[52] As to the Committee’s task, the first point is that the Judge’s observations
must be understood as unavoidably limited by the realities just listed. Those
observations were speculative, meriting further investigation. That was the function
of the Committee. The observations of the Judge were certainly contestable. And
Mr Hong, not being a party to the prosecution, was certainly entitled to contest them.
In my view most of the points Mr Hong makes as to the legal character of the rights
of a tenant in Mr Chan’s position are sound. Mr Hong should not of course have
used the word “repel”. That could have connoted unlawful forcible detainer. But the
context, in particular the actual advice given, needed to be examined. And no charge
of unlawful forcible detainer was actually brought.
[53] Secondly, in those circumstances it was not appropriate for the Committee to
rely almost solely on the suspicions of the complainant, particularly where the
complainant has made (and could only have made) purely provisional observations.
A failure to consider evidence submitted in the process of the investigation, and to
prefer the content of the complaint without considering that evidence, is a failure to
take account of relevant considerations.
[54] Thirdly, it is difficult to understand how the Committee could conclude – as
the deputy convener deposed – that Mr Hong “had promoted an unnecessarily and
irresponsibly provocative and confrontational situation” (amounting to unsatisfactory
conduct) without examining his evidence as to the advice he had given. Likewise as
regards the Committee’s essential conclusion that Mr Hong’s conduct with Mr Chan
was “imprudent” and “incited or could have the potential to incite his clients into
criminal actions”. The correspondence with the police and the landlord’s solicitors
was less than half the story.
[55] Fourthly, if the evidence given in Mr Hong’s response was doubted, the
Committee should have convened a hearing rather than proceeding on the papers as
it did. Section 153(1) is clear that the Committee must consider whether an on the
papers hearing is appropriate. Due reflection here would have resulted in a direction
for an oral hearing. That the Committee did not so order also suggests that it had not
addressed that evidence properly.
Conclusion
[56] The Committee’s determination relied on the judgment and Mr Hong’s third
party correspondence, to the exclusion of his evidence of the advice he in fact gave
Mr Chan. In doing so the Committee failed to have regard to a very relevant
consideration.
[57] In light of that finding, the determination must be set aside.
[58] In further light of that outcome, I resist any additional examination of
Mr Hong’s pleaded case against the Committee.
Application for judicial review against the Tribunal
[59] I have set out at [35] to [36] the circumstances of the Tribunal’s hearing and
determination that Mr Hong was guilty of misconduct, resulting in his temporary
suspension from practice. As I have noted, the Tribunal found that Mr Hong’s denial
of timely receipt of the Committee’s determination was false, on the balance of
probabilities. As I have noted also, Gilbert J ultimately reduced the term of
suspension.
[60] In these circumstances it might perhaps have been open to me to sustain the
determination of the Tribunal, on the basis that it was effectively independent of the
determination of the Committee. The fact remains, however, that the foundation for
the penalty imposed by the Committee on Mr Hong has now been quashed. The
Tribunal abided my decision. In these circumstances I consider the most just
outcome is to set aside the determination of the Tribunal also.
[61] Nothing in that aspect of this decision should be seen as any commendation
of Mr Hong’s failure to comply with what remained at the time a formal
determination of the Committee. If Mr Hong was minded to challenge that
determination, he should have issued his judicial review proceedings and negotiated
or obtained a stay. His insolent disregard of the Committee’s determination was
deplorable.
Result
[62] The decisions of the Committee and the Tribunal are quashed.
[63] It is a matter for the Law Society as to whether it re-initiates its own-motion
investigation. But given that Mr Hong’s untried second cause of action sues the
Committee for damages on the basis of misfeasance, any further investigation would
need to be undertaken by a different standards committee.
[64] Nothing in this judgment is to be taken by anyone, in particular Mr Hong, as
any sort of endorsement of the merits (whatever they may be, if any) of his second
cause of action.
[65] Costs must follow the event. If not agreed, brief memoranda may be
submitted within 14 and 21 days respectively. They are not to exceed five pages.
Stephen Kós J
Solicitors:
New Zealand Law Society, Auckland Branch for First Defend
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