McGuire v New Zealand Law Society [2020] NZDC 3011

Published 22 July 2020

Application for strike out statement of claim — abuse of process — re-litigation — liability of Law Society — bad faith — vicarious liability — control and regulation of lawyers — natural justice — Koyama v NZLS [2015] 3 NZLR 29 — McGuire v NZLS [2019] NZHC 2748 - McGuire v NZLS [2019] NZCA 433 — Baxendale-Walker v Middleton and Others [2011] EWHC 998 (QB) — Feary v Commissioner of Crown Lands [2001] 1 NZLR 704 — X (Minors) v Bedfordshire County Council [1995] 3 All ER 353 (HL) — Calveley v Chief Constable [1989] 1 All ER 1025 (HL) — R v Deputy Governor of Parkhurst Prison, ex parte Hague [1992] 1 AC 58 — Bulk Gas Users Group v Attorney-General [1983] NZLR 129 — Byrne v Auckland Irish Society Inc [1979] 1 NZLR 351 — Broadcasting Corporation of New Zealand v Broadcasting Tribunal [1986] 2 NZLR 620 — Delamere v Attorney-General HC Auckland CIV-2008-404-1377, 3 March 2010 — Simpson v Attorney-General (Baigent's Case) [1994] 3 NZLR 667 — Auckland Electric Power Board v Electricity Corporation of New Zealand Ltd [1994] 1 NZLR 551 — Finney v Barreau du Quebec 2004 SCC 36, [2004] 2 SCR 17 — Trapp v Mackie [1979] 1 All ER 489 — Orlov v NZLS [2013] NZLR 562 — Hart v Auckland Standards Committee 1 of New Zealand Law Society [2013] NZHC 83, [2013] 3 NZLR 103 — S v Attorney-General [2003] 3 NZLR 450 — Three Rivers DC v Bank of England (No 3) [2003] 2 AC 1 (HL) — Pacific Manufacturing Co Ltd v NZ Security Consultants and Investigations Ltd [1992] 2 NZLR (CA) — Lawyers and Conveyancers Act 2006, ss 63, 65, 67, 121, 124, 126, 129, 130, 142, 147, 152, 153, 154, 156, 158, 159, 185, 193, 198, 204, 206, 211, 272 & Part 7 — Lawyers and Conveyancers (Lawyers: Complaints Service and Standards Committees) Regulations 2008, regs 10, 14, 15, 16, 17, 18, 19, 21 & 26 — Evidence Act 2006 — Land Act 1948, s 146 — New Zealand Bill of Rights Act 1990, s 27. The New Zealand Law Society (NZLS) made an application to strike out the plaintiff's statement of claim (SOC). It was argued the SOC should be struck out as an abuse of process as it was an attempt to re-litigate decisions made by an NZLS Standards Committee. An application to strike out will be successful when the causes of action relied upon are so clearly untenable that they cannot possibly succeed. The main issues to be decided were whether NZLS could be found vicariously liable for the acts or omissions of the Standards Committee and whether a breach of the statutory duty of "natural justice" and a claim of "bad faith" were actionable. The Judge found NZLS was not vicariously liable for the actions of NZLS Standards Committee. Members of Standards Committees are not employees or under the control of NZLS, they have a quasi-judicial character that requires independence. Case law also supported this conclusion. This meant any causes of action based on an assumption of vicarious liability were untenable. Review of relevant legislation showed there was no legislative intent to create a liability for NZLS in these circumstances. This meant there was no breach of a statutory duty to observe the rules of natural justice that could give rise to an action in tort, and that the causes of actions in the plaintiff's SOC had no possibility of success. NZLS was also successful for proving that the SOC was an abuse of process. The District Court has no power to re-litigate the decisions of a Standards Committee and there are other processes for reviewing these decisions (judicial review or in the High Court). For these reasons, the strike out application was successful. Judgment Date: 7 April 2020.

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