How is conduct treated that took place before the Lawyers and Conveyancers Act 2006 came into force?

In the recent Court of Appeal decision of Peter James Morahan v Wellington Standards Committee 2 [2019] NZCA 221, the Court of Appeal considered the status of conduct that occurred before the Lawyers and Conveyancers Act 2006 came into force. The Court of Appeal confirmed the role such conduct can play when establishing context and confirming the penalty.

For a variety of reasons, complaints against lawyers are often made some time after the relevant conduct took place. The rules governing complaints made in respect of conduct that took place before the Act came into force are set out in section 351 of the Act.

While s 351 allows for a complaint to be made in respect of conduct that took place before the Act came into force, it does create a limitation period for complaints and consequently for disciplinary proceedings. Relevantly, section 351 states:

351 Complaints about conduct before commencement of section

( 1 ) If a lawyer or former lawyer or employee or former employee of a lawyer is alleged to have been guilty, before the commencement of this section, of conduct in respect of which proceedings of a disciplinary nature could have been commenced under the Law Practitioners Act 1982, a complaint about that conduct may be made, after the commencement of this section, to the complaints service established under section 121(1) by the New Zealand Law Society.

( 2 ) Despite subsection (1), no person is entitled to make under this Act—

1. a complaint that has been disposed of under the Law Practitioners Act 1982; or
2. a complaint in respect of—
   1. conduct that occurred more than 6 years before the commencement of this section; or
   2. regulated services that were delivered more than 6 years before the commencement of this section; or
   3. a bill of costs that was rendered more than 6 years before the commencement of this section.

In effect, a complaint cannot relate to conduct that took place before 1 August 2002.

Mr Morahan had been found liable by the New Zealand Lawyers and Conveyancers Disciplinary Tribunal in relation to two disciplinary charges brought by the Wellington Standards Committee 2. Mr Morahan appealed to the High Court which dismissed the appeal in its entirety. Mr Morahan then sought and was granted leave to appeal to the Court of Appeal.

The first charge related to Mr Morahan’s conduct between 1 August 2002 and 1 August 2008, when he was acting for Ms B, Mr J and a trust in relation to several property transactions. The charge alleged that Mr Morahan had breached the professional duties he owed Ms B by acting for Mr J and the trust in a way that disadvantaged Ms B.

The second charge alleged that Mr Morahan breached his professional duties to Ms B by taking steps that were contrary to her interests following the breakup of the marriage between Ms B and Mr J and in relation to proceedings between them in the Family Court. This offending was alleged to have occurred after 1 August 2008, and so section 351 of the Act was not relevant.

In relation to the first charge, the particulars referred to steps taken by Mr Morahan before 1 August 2002. The Tribunal, in finding the first charge proved, stated “that the charge [could] be proved only on findings made in respect of conduct alleged to have occurred after 1 August 2002” and that it was making “no finding against [Mr Morahan] in respect to any of his conduct prior to 1 August 2002”. However, even though the Tribunal expressly confined its findings as to liability to matters that took place between 1 August 2002 and 1 August 2008, it did, in fact, make findings in relation to matters which took place before 1 August 2002. The Tribunal stated that those findings were “relevant in establishing context” and that Mr Morahan’s conduct which took place before 1 August 2002 “had ongoing implications for what was to follow”.

The Tribunal also found that Mr Morahan’s conduct prior to 1 August 2002 was relevant when determining penalty. It referred to Daniels v Complaints Committee 2 of the Wellington District Law Society [2011] 3 NZLR 850 (HC), a decision of a full court of the High Court which held “in considering sanctions to be imposed upon an errant practitioner, a disciplinary tribunal is required to view in total the fitness of a practitioner to practice, whether in the short or long term”.

On appeal in the High Court, Churchman J did not consider that the allegations relating to conduct prior to 1 August 2002 should have been included in the particulars of the charge. However, he rejected the submission that that inclusion invalidated the charge itself. Further, he held that the Tribunal was entitled to take into account Mr Morahan’s conduct prior to 1 August 2002 when determining penalty. Churchman J stated that there were many relevant factors in determining whether a practitioner was fit to practice. These included:

1. Whether the conduct was a one-off event in an otherwise blameless career;
2. Whether the practitioner had insight into the consequence of his or her actions;
3. Whether the practitioner had expressed remorse or apologised for their actions;
4. Whether the conduct in question was part of a consistent pattern of behaviour extending over a long period of time (including in this case, prior to 1 August 2002); and
5. Any prior disciplinary sanctions that may have been imposed on the practitioner.

Mr Morahan appealed to the Court of Appeal. There were two limbs to the issue on appeal relating to s 351. Firstly, counsel for Mr Morahan argued that the Tribunal had erred in law in making adverse findings against him in relation to his conduct prior to 1 August 2002. He argued that those findings “fatally impugned the Tribunal’s findings in relation to Mr Morahan’s conduct between 1 August 2002 and 1 August 2008”.

Secondly, he argued that by expressly taking into account Mr Morahan’s conduct prior to 1 August 2002 when determining penalties, the Tribunal breached s 351. He argued that effectively, the limitation provisions in s 351 were invalidated when the Tribunal took Mr Morahan’s conduct prior to 1 August 2002 into account. It followed then that the High Court had erred in upholding the Tribunal decision.

The Standards Committee acknowledged that there had been an error in the way the particulars of the charge had been drafted. However, it was submitted that the evidence concerning Mr Morahan’s conduct prior to 1 August 2002 was relevant and admissible as propensity evidence.

In respect of the issue of liability, the Court of Appeal accepted that propensity evidence could be adduced at disciplinary proceedings but stated that it had no need to explore that point further. It considered that the Tribunal had not treated Mr Morahan’s conduct as propensity evidence. It stated that “the Tribunal made it abundantly clear that it confined its findings as to liability in relation to Charge 1 to Mr Morahan’s conduct between 1 August 2002 and 1 August 2008. The findings made in relation to the events that occurred before 1 August 2002 were merely contextual.”

Accordingly, the Court of Appeal saw no basis for interfering with the Tribunal’s and High Court’s findings on liability. It stated that it was “satisfied the Tribunal and the High Court complied with s 351 of the [Act] when finding and confirming Mr Morahan was guilty of Charge 1”.

In respect of penalty, the Court of Appeal examined the purpose that underpins penalties imposed by professional disciplinary bodies. It summarised them as follows:

1. The responsibility to protect the public;
2. The maintenance of public confidence in the profession through the setting of standards;
3. Any rehabilitative function to assist the practitioner to be reintegrated into the professions; and
4. Any punitive function.

The Court of Appeal stated that the multifaceted role of the Tribunal when determining a penalty supported the submission that the Tribunal must be entitled to take into account a wide range of matters when determining what penalty was appropriate for each, fact specific, case.

Ultimately, it determined the issue by examining the text and purpose of s 351. It found that while that section created a limitation period for complaints and disciplinary charges against a lawyer, the text of s 351 did not attempt to limit in any way the matters which the Tribunal could consider when determining a penalty. Accordingly, it found that the Tribunal had not breached s 351 by taking into account Mr Morahan’s conduct prior to 1 August 2002 when determining penalty. Further, it found that the High Court also complied with s 351 when upholding the Tribunal’s decision.

This case provides some clarity about how to deal with conduct that took place before 1 August 2002 when considering complaints against practitioners. It also reinforces the established view that the Tribunal is entitled to consider a wide range of matters when determining whether a practitioner is fit to practice.