IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE	
CIV-2020-404-441
CIV-2020-404-639 [2020] NZHC 2613	

UNDER	the Lawyers and Conveyancers Act 2006	
IN THE MATTER	of an appeal against a decision of the Lawyers and conveyancers Disciplinary Tribunal	
BETWEEN	BOON GUNN HONG
Appellant	
AND	AUCKLAND STANDARDS COMMITTEE NO. 5
Respondent	

Hearing:	On the papers	
Appearances:	Appellant on own behalf
P Collins for the Respondent	
Judgment:	7 October 2020	

JUDGMENT OF GORDON J
[Leave to Appeal]

This judgment was delivered by me on 7 October 2020 at 11 am, pursuant to
r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors:	B G Hong Law Firm, Auckland
New Zealand Law Society, Auckland
Counsel:	P Collins, Auckland

HONG v AUCKLAND STANDARDS COMMITTEE NO. 5 [2020] NZHC 2613 [7 October 2020]

Introduction

[1]	Mr Hong applies for leave to appeal against my judgment of 17 June 20201 dismissing his appeal against two decisions of the New Zealand Lawyers and Conveyancers Disciplinary Tribunal (the Tribunal). One was the Tribunal’s decision finding him guilty of professional misconduct on three charges and the other was the Tribunal’s decision striking him off the roll of barristers and solicitors. Mr Hong also applies for leave to produce his affidavit in other proceedings on the appeal.

[2]	At Mr Hong’s request, and with the consent of the respondent, Auckland Standards Committee No 5 (Standards Committee), this application for leave is determined on the papers.

Leave to appeal

[3]	Leave to appeal to the Court of Appeal is required under s 254 of the Lawyers and Conveyancers Act 2006 (the Act). Section 254 provides:

254	Appeal to Court of Appeal on question of law

(1)	Any party to an appeal under section 253(1) who is dissatisfied with any determination of the High Court in the proceedings as being erroneous in point of law may, with the leave of that court, or, if the High Court refuses leave, with the leave of the Court of Appeal, appeal to the Court of Appeal against the determination; and section 56 of the Senior Courts Act 2016 applies to any such appeal.

(2)	In determining whether to grant leave to appeal under this section, the Court of Appeal must have regard to whether the question of law involved in the appeal is one that, by reason of its general or public importance or for any other reason, ought to be submitted to the Court of Appeal for its decision.

[4]	Although s 254(2) refers to the Court of Appeal, this Court follows the same approach.2

[5]	The principles which apply on an application for leave to bring a second appeal are well established. Leave may only be granted where:3

1	Hong v Auckland Standards Committee No 5 [2020] NZHC 1599.
2	Morahan v Wellington Standards Committee 2 [2018] NZHC 1583 at [3]-[4].
3	Waller v Hider [1998] 1 NZLR 412 (CA) at 413; Snee v Snee (1999) 13 PRNZ 609 (CA) at [22].

(1)	the appeal raises some question of law or fact capable of bona fide and serious argument; and

(2)	the case involves some interest, public or private, of sufficient importance to outweigh the cost and delay of the further appeal.

[6]	The “threshold for leave to bring a second appeal is high” and there must be a question “sufficiently important to justify a court going into the matter for the third time, with the delays and further expense that inevitably result”.4

[7]	Ultimately the question is whether a second appeal is in the interests of justice.5

Questions of law

[8]	Mr Hong identifies eight questions of law. I address each in turn.

Question 1: Is the High Court and the Tribunal required to assess then deliberate and providing [sic] their reasons as to why they have found me not to be [a] fit and proper person to practise as a barrister or solicitor as required by s 113 of the Law Practitioners Act 1982?

[9]	Mr Hong faced three charges.6 Charge 1 related to conduct that occurred before 1 August 2008. It was brought under s 351(1), the transitional provision, in the Act. The assessment of misconduct in relation to charge 1 was made under s 112(1)(a) of the Law Practitioners Act  1982.7  My finding in  relation  to charge 1  was that  Mr Hong’s conduct involved such serious negligence as to portray indifference and an abuse of the privileges which accompany registration as a law practitioner. It was dishonourable conduct in that his acts were disgraceful, unprincipled and wrongful, comprising blatant breaches of duties owed by him as a lawyer to his clients.8

4	S v W [2014] NZCA 199 at [6].
5	Deliu v National Standards Committee [2015] NZHC 67 at [18]; Deliu v National Standards Committee of the New Zealand Law Society [2015] NZCA 399 at [18](c); and Morahan v Wellington Standards Committee 2 [2018] NZHC 1583 at [10].
6	Hong v Auckland Standards Committee No 5, above n 1, at [20].
7	At [140].
8	At [157].

[10]	The test for striking off under s 113 of the Law Practitioners Act 1982 is not materially different from the test under s 244 of the Act. Both require an assessment of the lawyer’s conduct and whether, by reason of that conduct, the lawyer is not a fit and proper person to be a lawyer. That assessment was made in relation to the three charges overall by the Tribunal and on appeal.9

[11]	This proposed question suggests that the Tribunal and the High Court were required to assess the penalty of striking off by reference to the former legislation in s 113 of the Law Practitioners Act 1982 (presumably only in relation to charge 1). I do not consider this is a genuinely arguable point for a second appeal. As noted, the test for striking off in the former and current legislation is materially the same. Both the Tribunal and this Court provided reasons as to why Mr Hong is not a fit and proper person to practise as a barrister and solicitor.

[12]	Accordingly the threshold required for the granting of leave is not met.

Question 2: Is the misconduct finding against me valid when the factual particulars supporting each of the charges that there was the alleged JV [joint venture] as proposed by me with the [clients] had been false, both the Tribunal and the High Court had not determined that there had been such?

Is the misconduct finding against me valid as being dishonourable and disgraceful under LCA, s 7(1)(a)(i) and can be supported by mere insinuations that I had an eye to profit going against the evidence and without the evidence thereon to support its conviction against me or that the property was to be assigned to me as agreed so I could control the sale by auction and recover my funds if the [clients] failed to either sell it or redeem the property by raising a mortgage?

[13]	This question raises the factual issues of whether Mr Hong’s loan to his clients was in the context of a joint venture (they say it was; he says it was not) and whether Mr Hong sought to profit from the lending to his clients (he says he did not).

[14]	In my judgment I said:

[72]	… he persisted in his view that the rules did not apply to him. That argument cannot be sustained as a matter of principle. He was acting for a client on a transaction that involved the purchase of a property. Mr Hong provided funds to enable the purchase to be completed. He acted for both

9	At [162]-[175] and [183]-[199].

himself and the client. There can be no doubt that the rules applied. And they applied regardless of whether there was to be joint ownership or an absence of any profit motive on the part of Mr Hong. …

[73]	The Tribunal made only a limited number of factual findings. It considered that it was not necessary to address in detail all the particulars of the charges given the facts that Mr Hong did admit and “the resolute stand he has taken to these proceedings”. In my view that was an appropriate approach.

[74]	The limited factual findings that were made in the liability decision were not inconsistent with Mr Hong’s evidence. The Tribunal did not make a finding on whether the arrangement was a “joint venture” or a loan. It simply noted the respective positions of Mr K and Mr Hong. And it was not necessary for the Tribunal to make a finding on this issue for the purpose of considering whether or not the charges were proven.

[75]	Similarly, in the liability decision the Tribunal did not make a finding as to whether Mr Hong entered into the arrangement with a profit motive in mind. Again it was not necessary to determine that issue in order to decide if the charges were proven. …

(citations omitted)

[15]	It should be made clear that I did go on to consider these two factual issues: joint venture and profit motive in the context of penalty.10

[16]	But to return to the issue of misconduct, the charges turned on Mr Hong’s participation in a transaction involving his clients by lending money to them. Mr Hong accepted that he had made the loan.

[17]	The proposed question(s) are not questions of law. They raise questions as to findings of fact for which there was available evidence. But in any event those factual findings were not necessary for the finding of misconduct.

[18]	The threshold for leave is not met for question 2.

Question 3: In the deliberation and finding on facts, should the test as enunciated in Z v Complaints Committee be applied when the penalty being sought against me is the

10	At [72], [75]-[93].

most restrictive, such that deprives me of making a living, such humiliating and stressful?

Question 4: If the test in Z v Complaints Committee is to be applied and had been applied to the undisputed facts and circumstances, would I still be found guilty of misconduct?

[19]	It is convenient to consider these two proposed questions together.

[20]	Mr Hong submits that this Court erred in law when “it failed to consider and applied [sic] a higher threshold to the determination and finding of the said crucial factual particulars when the penalty was as serious as striking off …”.

[21]	In Z v Dental Complaints Assessment Committee, which involved disciplinary proceedings against a dentist, the Supreme Court considered the standard of proof applicable under the Dental Act. The point on appeal was whether a standard of proof higher than the balance of probabilities is necessary in cases of professional standards under the Act in order to reflect the seriousness of disciplinary enforcement for professionals such as dentists, medical practitioners and lawyers. The majority considered the civil standard of proof applied to professional disciplinary proceedings,11 and that there were no grounds to make “an exception to the flexible application of the civil standard to cover disciplinary proceedings, such as those under the Act”.12 That flexibility goes to the nature and quality of the evidence required to meet the standard, which depends on the seriousness of the facts which must be proved in a particular case and the consequences of proving them.13 There was, however, a single standard which applied to civil proceedings.

[22]	In finding misconduct, both the Tribunal and this Court relied on Mr Hong’s acknowledged conduct. In determining there was a profit motive (and relatedly a joint venture) this Court stated:

[78] In the absence of any documentation at the time the arrangement was entered into, the best evidence is in communications by Mr Hong prior to any issues about his conduct arising.

11 Z v Dental Complaints Assessment Committee [2008] NZSC 55, [2009] 1 NZLR 1 at [112].
12 At [116], [118]. Anderson J, in a separate judgment, agreed with the majority on this point, at  [146]; Elias CJ considered where disciplinary charges are serious the standard of proof should be beyond reasonable doubt, at [55].
13 At [101], [105], [112].

[23]	I concluded that those emails indicated there was to be joint ownership of the property as between the client and Mr Hong and that Mr Hong was seeking to profit from the arrangement.14 The Court relied on Mr Hong’s own statements. The approach was consistent with the principles in Z.

[24]	Accordingly, I do not consider questions 3 and 4 meet the threshold for the granting of leave.

Question 5: Is it proper for statements of facts in the BOTCF Proceedings to be merely used as proper findings of facts without an inquiry in the manner as I have illustrated above, in breach of s 50 of the Evidence Act 2006?

[25]	This question is a reference to Mr Hong’s tax litigation which was concerned with his unsuccessful attempt to claim unpaid loans as tax deductible losses for his legal practice. Aspects of the findings in that litigation were put to Mr Hong in cross- examination by Mr Collins, for the  Standards  Committee,  before  the  Tribunal.  Mr Hong admitted under cross-examination that the loan to his clients – the subject of the charges – was in the same category as his BOTCF fund (Benevolence on the Conscience Fund) which included being paid “not just interest but also a bonus”. The litigation, and Mr Hong’s evidence before the Tribunal, in this case were properly referred to in this context in my judgment.15

[26]	This does not raise any question of law warranting a second appeal.

Question 6: Had the misconduct finding against me been properly determined in accordance with the law, legal principles and precedents as I have noted as errors of law above when (a) I had not breached our fundamental [obligations]; (b) the [clients] had not and could not have suffered any financial harm of loss as at all times when I dealt with the property the appraised sale value would not realise enough to have repaid my advances to the [clients]; (c) I had not gained anything; (d) none of the adverse perverse finding [sic] of facts as relied upon could be relied upon since incorrect?

[27]	This question in substance asserts that Mr Hong had not breached his obligations as a lawyer, the clients had not suffered any financial harm or loss and he had not gained anything from the transaction. This is an argument about the facts; it

14	Hong v Auckland Standards Committee No. 5, above n 1 at [79]-[82].
15	At [68], [83]-[84].

does not raise a question of law. It does not meet the threshold required for the granting of leave.

Question 7: Had the misconduct finding against me been properly determined in accordance with the Keene’s case when on my interpretation of the applicability of the Rules that such did not apply under the indisputable facts and circumstances once (a) the fact that there had not been the alleged JV against me (b) the [clients] did not suffer any financial harm (c) I had nothing to gain, did not gain anything from the [clients] and could not have had an eye to profit when the property would be sold at a loss (d) even interest if the [clients] could not pay rather than could but refused to I would not have an issue and (e) my loan as with anyone’s must be re-paid and if the [clients] could do so they would have been able to redeem the property from me, were taken into consideration, at worse, (sic) that I should only be found to have erred in my judgment [sic], lack of hind-sight, such should not be taken against me to the extent of striking me off or even suspending me?

[28]	The reference to “Keene’s case” appears to be a reference to Keene v Legal Complaints Review Officer.16 Mr Hong made the same submission in a recent leave application which was dismissed by Gault J on 3 July 2020, where the Court said:17

[11]  Subsequent to his submission in reply, Mr Hong filed a further submission relying on Keene v Legal Complaints Review Officer. He submitted Keene supported his submission that a lawyer should not be found guilty of misconduct or unsatisfactory conduct where he or she has interpreted rules or regulations and the interpretation is arguable or not wholly untenable. However, in Keene the Court of Appeal was dealing with a High Court judgment that had set aside an LCRO decision and restored a Standards Committee finding of unsatisfactory conduct in circumstances where it was open to the LCRO to reach the view that a disciplinary response was not warranted. Moreover, the Court considered that Mr Keene’s view was reasonably open to him. I do not understand Keene to decide that a disciplinary response is not warranted whenever a lawyer’s conduct is based on an arguable view. In any event, as indicated, here the finding was one of reckless contravention based on Mr Hong’s persistent obstruction of the inspector’s review and failure to acquaint himself with his legal obligation.

(citations omitted)

[29]	In this case it appears Mr Hong is asserting that his belief in the correctness of his dealings with his client should have exonerated him from any professional consequences. On the evidence that is not an arguable point. The threshold for the granting of leave is not met in relation to this question.

16	Keene v Legal Complaints Review Officer [2019] NZCA 559.
17	Hong v Auckland Standards Committee No 5 [2020] NZHC 1572 at [11].

Question 8: Had the struck-off penalty as levied against me been determined in [sic] with the law, legal principles and precedents as I have noted as errors of law above;
(a) on the grounds as I have noted in respect of the misconduct finding (b) that there had not been any of my eyes on profit as I had been more concerned over the full recovery of my advance (c) there had been nothing in my disciplinary history that could have supported this strike-off penalty, the seriousness of the offences and fines levied had been enlarged against me in discrimination (by reference to precedents) and bad faith, such as initiated by our Lawyers Complaints Service personnel when I had stepped on their toes that I have in my judicial review proceeding in CIV-2020-404-854 taken action on such discrimination and for and inquiry on such and (d) I have never repeated any of such offences against me?

[30]	This question is again concerned with arguments as to facts relevant to the penalty of striking off. Mr Hong asserts the Tribunal and this Court were in error in finding that his conduct was a serious breach of his professional obligations. He characterises the findings as discriminatory. Both the Tribunal and this Court considered matters relevant to penalty: the seriousness of the conduct; disciplinary history; the need for deterrence and lack of insight.

[31]	It does not raise a question of law.

[32]	In summary, none of Mr Hong’s proposed questions are questions of law capable of bona fide and serious argument.

[33]	As to any important public or private interest, Mr Hong submits the interpretation of the law raised by the questions are of interest to his clients as members of the public and to legal practitioners. He submits that as a consequence of the decision striking him off the roll, he is not able to assist his clients on a conscience to conscience basis. He says he has clients who have approached him for assistance and have been most upset when advised he cannot act for them.

[34]	This does not constitute the kind of public interest that is of sufficient importance to outweigh the cost and delay of a further appeal.

Application to adduce fresh evidence

[35]	Mr Hong also seeks leave to adduce his brief of evidence of 20 October 2017 in Taxation Review Authority proceedings. He says this evidence sets out his intention

in establishing his “Benevolence on the Conscience Loan Fund” and the manner in which the fund was operated by him. Mr Hong submits it is necessary to adduce this evidence because I referred to certain statements of fact from that proceeding which are not correct. The specific error of fact Mr Hong identifies is that he required his clients to pay him a “bonus” in addition to interest.

[36]	Section 254 of the Act does not give this Court jurisdiction to consider an application to adduce fresh evidence in an appeal to the Court of Appeal. That is a matter for the Court of Appeal, under r 45 of the Court of Appeal (Civil) Rules 2005.

[37]	I have found that none of Mr Hong’s proposed questions of law meets the threshold required for the granting of leave. However, it is open to Mr Hong to apply to the Court of Appeal for leave under s 254(1) of the Act. At the same time he may make application to the Court of Appeal for leave to adduce further evidence.

Result

[38]	The applications by Mr Hong for leave to appeal to the Court of Appeal and for leave to adduce fresh evidence on appeal are refused.

Costs

[39]	My preliminary view is that costs should follow the event in the normal way. If the parties are able to agree costs, a  joint memorandum should be filed within    15 working days from the date of this judgment. If the parties are not able to agree costs, the respondent may file and serve a memorandum within five working days of the date for the joint memorandum, with Mr Hong to file and serve his memorandum within a further five working days. Memoranda should not exceed four pages, excluding any attachments. I will determine costs on the papers.

Gordon J