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Beechnest 2014 Ltd v Marshall [2020] NZDC 27022

Published 21 April 2021

Application for counsel to continue acting — conflict of interest — administration of justice — inherent jurisdiction — sale and purchase of land — subdivision — covenant — Property Law Act 2007, s 317(1) — Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, rr 13.3.3, 13.5.1, 13.5.2 & 13.5.3 — Li v Liu [2018] NZCA 528 — Black v Taylor [1993] 3 NZLR 403 (CA) — George v Auckland Council [2012] NZEmpC 83 — Anderson v De Marco [2020] NZHC 837 — Siemer v Solicitor-General [2013] NZSC 68 — New Zealand Industrial Park Ltd v Stonehill Trustee Ltd [2019] NZCA 147. The respondents' lawyer sought an order that he be allowed to continue acting for several of the respondents. There had been a sale of lots of land in a subdivision, including to the applicant developer which intended to complete a subdivision of several more lots. It was brought to the attention of the applicant that there was a covenant over the entire subdivision preventing further subdivision. The applicant then sought orders to modify or extinguish the covenant pursuant to s 317 of the Property Law Act. The application was opposed by several owners of the other lots within the subdivision. At issue in this hearing was whether there was a conflict of interest such that allowing the lawyer to continue acting would create an appearance of injustice. The applicant's lawyers had objected to the respondents' lawyer acting on the basis that he worked for the same firm as a second lawyer, the sister of one of the respondents, who had acted in assisting her brother and another respondent purchase their properties in the subdivision. The respondents had filed an affirmation in relation to the sale from the second lawyer from the same firm. The Court of Appeal discussed the power to disqualify counsel as an inherent power of courts in the administration of justice. The Judge here noted that the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules were relevant but that the real issue was whether there was an appearance of injustice such that the lawyer should not be permitted to act further. The Judge looked to the nature of the evidence that the second lawyer would be required to give in the course of the proceedings, which was deemed to be background evidence relating to her advice as to the existence of the covenants. The Judge was satisfied in the circumstances to allow the respondents' lawyer to continue acting. Judgment Date: 24 December 2020.

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