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HAINES V WAIKATO DISTRICT LAW SOCIETY HC HAM CIV-2006-419-426 [2006] NZHC 963 (23 August 2006)

IN THE HIGH COURT OF NEW ZEALAND
HAMILTON REGISTRY
                                                                 CIV-2006-419-426


               IN THE MATTER OF          the Law Practitioners Act 1982 and its
                                         amendments
and the rules and regulations
                                         thereunder

               AND

               IN THE MATTER
OF          an application by Quentin Stobart Haines,
                                         law graduate, a candidate for admission
as
                                         a barrister and solicitor

               BETWEEN                   QUENTIN STOBART HAINES
                                         Applicant

               AND                       WAIKATO DISTRICT LAW SOCIETY
      
                                  Respondent


Hearing:       23 August 2006

Appearances: Mr M J Hammond for applicant
        
    No appearance for respondent

Judgment:      23 August 2006


                        (ORAL) JUDGMENT OF LANG J




Solicitors:
Tompkins Wake, P O Box 258, Hamilton




HAINES V WAIKATO DISTRICT LAW SOCIETY HC HAM CIV-2006-419-426 23 August 2006

[1]     
  Mr Haines has applied to this Court for an order under s 46 of the Law
Practitioners Act 1982 admitting him as a barrister and
solicitor of the High Court of
New Zealand. Before the Court can make such an order, it must be satisfied that Mr
Haines is of good
character and is a fit and proper person to be so admitted.


[2]        Rule 6(2) of the Law Practitioners Admission Rules 1987
provides that the
evidence to be provided in support of any application for admission must include a
certificate signed by the President
or Secretary of the applicant's local District Law
Society. The certificate must confirm that the Council of the Society has made
full
enquiry as to the applicant's character, it is satisfied that the applicant is a person of
good character and that it does not
know of any objection to the application for
admission being granted. That requirement is mandatory unless a Judge otherwise
directs.


[3]        In the present case, the Waikato/Bay of Plenty District Law Society ("the
Society") has declined to provide Mr Haines
with a certificate under r 6(2). It has
done so on the basis that he has a previous conviction for dishonesty. As a result,
Mr Haines
has applied to this Court for an order directing that his application may
proceed and be determined on the basis of evidence that
does not include the
Society's certificate.


[4]        Given the importance of the previous conviction, to the Society's stance
and
to the outcome of the present application, it is appropriate to refer at the outset to the
circumstances in which the conviction
was entered.


The previous conviction


[5]        Between 1993 and 1997 Mr Haines worked for a company called New
Zealand Diagnostics
Limited.       His father, Mr Cavan Haines, was the principal of
that company. At the time that he began working for the company
Mr Haines was
just 18 years of age. It was his first job.


[6]        Mr Haines' employment by his father's company required him
to act as a
travelling sales representative dealing with doctors and nurses in general practice.

His job specifically involved
the sale of both items that were subsidised by the
Government, and items that were not the subject of any Government subsidy. The
subsidised items were paid for by the Government and the doctors ordered those
particular items on a prescribed form. The non-subsidised
items were to be paid for
by the doctors themselves, with the cost of those items being passed on to their
patients.


[7]      The
company developed a system whereby non-subsidised items were
ordered on the prescribed forms that should only have been used for
subsidised
items.      As a result, the items were supplied to doctors on a subsidised basis when
they should not have been.    
     The practice appears to have been widespread and
accepted by the doctors who participated in the system and it appears to have been
openly promoted by the company.


[8] 
    Ultimately, however, the scheme resulted in a private prosecution being
brought by Health Benefits Limited against Mr Haines,
his father and several other
employees of the company. They were duly tried before a jury in the District Court
at Wellington between
12 February and 3 April 2001.               Mr Haines along with the
other accused were ultimately convicted on a charge of conspiracy
to defraud. Mr
Haines was subsequently sentenced to 18 months imprisonment, with that sentence
being suspended for two years.   
      He was also sentenced to undergo nine months
periodic detention.


[9]      The sentencing notes describe Mr Haines' role in
the offending in the
following terms:

         I turn to deal with the other accused. I think it is plain that distinctions can
         and should be made between Cavan Haines and the others. They did not
         conceive of the scheme nor drive it, but equally
each played a part. Dealing
         first with your position, Mr Quentin Haines. You were a part-time salesman
         who, initially
anyway, became involved in selling, if that is the correct term,
         principally to appease your father. Your real interests
remained elsewhere,
         and over time you developed other business interests as well, and became
         increasingly detached
from the company's business.            Nevertheless for
         periods you were significantly involved in operating the swap scheme
and in
         introducing other sales representatives to it. There is evidence also that you
         knew about the maximising
of forms, although in your case I do not put very
         much weight upon that.

       As the jury obviously did, I find it impossible
to accept that you did not
       understand that these activities were patently dishonest. At what point you
       might have or
should have realised that, and what point you did realise that
       is uncertain, but plainly you must have. That was the jury's
view. I accept
       that you personally made little enough income from the schemes. There
       was obviously some sharing in
general family prosperity, but in personal
       terms your income remain reasonably modest.

The approach to be taken


[10]  
This is by no means the first case of its type to come before the Court. The
approach when an applicant for admission has previous
convictions has been the
subject of discussion in several recently decided cases. Most of these are decisions
of a Full Court of
this Court.


[11]   The first of these is Re M  [2005] 2 NZLR 546, a case decided in 1998 but not
reported until 2005.   In that case a Full Court comprising Panckhurst and Chisholm
JJ relief on
the following principles as providing guidance to the assessment of
whether or not an applicant in such circumstances is a fit and
proper person to be
admitted as a barrister and solicitor:


       1.      The focus is necessarily forward looking. The function
of the Court
               is not to punish the applicant for past conduct.


       2.      The onus lies on the applicant to demonstrate
that he or she has the
               qualities and attributes necessary to qualify for admission.


       3.      Due recognition
must be given to the circumstances of youth where
               errors of conduct occurred when the applicant was immature.


 
     4.      It is important to look at the facts of the case in the round and not just
               to pay regard to the fact
of a previous conviction or convictions.


[12]   In Re M the Court ultimately decided that the applicant was a fit and proper
person
to be admitted as a barrister and solicitor. It did so after receiving extensive
affidavit evidence and hearing Ms M under cross-examination.
          The conduct that
was the focus of the Court's attention occurred when the applicant was a teenager

and an immature young
woman, and before she had attained her university
qualification.    Although the Court was mindful of the need to maintain the
reputation
of the legal profession, nevertheless it was satisfied that there was
sufficient evidence of the applicant's change of character
to enable a favourable view
to be taken of her application.


[13]   In Re Owen  [2005] 2 NZLR 536 Panckhurst and Fogarty JJ considered a case
in which the applicant had been convicted of numerous offences, including two
convictions
for burglary that had been entered when he was aged 25 and 27 years.
He had also been convicted of being in possession of and cultivating
cannabis, and
had a number of driving convictions including convictions for driving whilst
disqualified.


[14]   The Court applied
the principles referred to in Re M. It was satisfied that the
frailties and defects of the applicant's character were entirely spent,
and that he had
undergone a complete turnaround in his character and personality. For that reason
the convictions were of historical
significance only.


[15]   The Court also placed emphasis on the applicant's positive achievements
since the convictions had been
entered. He had obtained a law degree and he also
had the support of mentors and referees, including the dean of his law school.
He
also had testimonials as to his character and reliability as an employee.


[16]   In reaching its ultimate conclusion the Court
said at [38]:

       But the more difficult question is whether the public generally and members
       of the profession would
share the view that Mr Owen is now a person of
       such integrity, probity and trustworthiness as to be fit to be admitted as
a
       barrister and solicitor. Faced with the evidence of his criminal record alone
       the answer would undoubtedly be No.
But with the benefits which we
       enjoy, in having before us the positive evidence of recent years and with the
       advantage
of hearing Mr Owen being cross-examined by experienced
       counsel, we are satisfied that both the public and responsible members
of the
       profession would, if similarly placed, share our view that Mr Owen is a
       suitable candidate for admission.

[17]
  By way of contrast, in Singh v Auckland District Law Society  [2002] 3 NZLR
292 Harrison J held that the applicant had failed by a substantial margin to satisfy the
Court of his good character.      In that case
the Auckland District Law Society had

declined to issue a certificate of good character to the applicant on the basis that,
when
acting as an advocate before the Refugee Status Appeals Authority, he had
assisted appellants in the manufacture of evidence and
had acted in a grossly
incompetent manner.


[18]   Harrison J noted that an applicant for admission who cannot produce a
certificate
from the Society is "absolutely obliged to produce evidence to satisfy the
Court that, first, he or she is of good character and,
secondly, that he or she is a fit
and proper person to be admitted".         The absence of the Society's certificate is
relevant
and weight must be given to it. Admission in those circumstances occurs
only in exceptional circumstances.


[19]   In the recent
case of Pou v Waikato/Bay of Plenty Law Society HC ROT CIV-
2004-463-0511 10 May 2005 a Full Court comprising Baragwanath and Courtney
JJ
considered a situation in which the applicant had been found guilty of misconduct
under the University of Waikato's Student Discipline
Regulations.            The applicant
had admitted using the computer system account of a supervisor, and charging his
use of the
computer to that account without authority.            The sum involved was
between $2 and $5. He had also allowed others to use
his account to access adult
material. A further complicating feature was that the applicant had failed to refer to
the incident in
the declaration filed in support of his application for admission.
Again, the Society had declined to issue a character certificate.


[20]   The importance of the need for integrity on the part of legal practitioners was
described by the Court in the following
terms:

       [42]     A legal practitioner is accorded great privileges not in any personal
       right but on behalf of the members
of the community in need of legal advice
       and assistance. The protection of legal advice privilege (Three Rivers DC v
    
  Bank of England (No 6) [2004] UKHL 48;  [2004] 3 WLR 1274 (HL)) and litigation privilege
       (B v Auckland District Law Society [2004] 1 NZLR 326 (Privy Council))
       illustrate the
point. With great privilege comes great responsibility. A
       solicitor with access to trust account funds of clients and responsibility
for
       ensuring that discovery obligations are compiled with; the barrister who
       must make candid disclosure to the Court
of authority running counter to the
       client's interests; the practitioner owing a single minded duty of fidelity to
      
an unpopular client and to stand up to one who is dishonest: each must have
       the moral courage and integrity without which
public confidence in the

       profession will collapse. Lord Bingham in Bolton at p 492 described why
       the Court imposes
standards that might otherwise seem harsh:

               ... to maintain the reputation of the ... profession as one in
      
        which every member, of whatever standing, may be trusted
               to the ends of the earth.

[21]   In Pou the Court
had regard to affidavits of witnesses attesting to the
applicant's good character. These included affidavits from persons of high
standing
in his community.       Moreover, he had been employed by a law firm that had full
knowledge of his conviction.


[22] 
 Ultimately, however, the Court was satisfied that the affidavit evidence
established that the applicant was now of good character
and a fit and proper person
to be admitted, having overcome the flaw that led to his "serious aberration" whilst
attending university.


[23]   Against that background I now turn to consider the factors that I consider to
be relevant to the present application.


Relevant factors


[24]   I consider that there are three broad factors that must be taken into account
and accorded weight in the
circumstances of the present case. They are the attitude
taken by the respondent society, the circumstances in which the offending
occurred
and Mr Haines' present circumstances as disclosed by the evidence filed in support
of the application.


The approach taken
by the respondent


[25]   Mr Haines' application was initially considered by the Admissions
Committee of the Waikato/Bay of Plenty
District Law Society. The minutes of that
meeting record that the Committee recommended that Mr Haines' application be
approved.
   The material before the Committee included, of course, details of Mr
Haines' previous conviction and the circumstances in which
it came to be entered.

[26]     The recommendation was not, however, followed by the Council of the
Society.       The Council
subsequently declined to issue a certificate and advised Mr
Haines of this fact in a letter dated 31 May 2006.           That letter
is in the following
terms:

         Your application to be admitted as a Barrister and Solicitor has now been
         considered
by the Admissions Committee of the Waikato Bay of Plenty
         District Law Society and that recommendation was that you be approved.
In
         turn, the recommendation of the committee is then given to the Council of
         the Society.

         Unfortunately,
the Council at a teleconference today, declined your
         application.

         As you are aware the option available to you
is to make an application
         through the Court and obtain an Order from a Judge directing that the
         Society's certificate
is not required and that you are a fit and proper person
         to be admitted. The Council of the Society will not oppose your
application
         and will take a neutral stance.

[27]     When the present application came before Rodney Hansen J on 16 August
2006, he directed that the application be served on the respondent so that it could
have an opportunity to be heard in relation to
it.          Although the proceedings were
served upon the respondent yesterday, it has taken no steps and has not appeared
today.
Mr Hammond tells me from the bar that he has spoken to the respondent's
Secretary and has been told that the respondent does not propose to take any steps in
relation to the present
application.


[28]     I therefore proceed on the basis that, although the respondent felt unable to
issue a certificate, it does
not feel sufficiently strongly about the basis upon which it
made that decision to actively oppose Mr Haines' application. This is
an important
factor because, as Harrison J noted in Singh at [26]:

         ...

         (c)      Essentially the legislature has
appointed District Law Societies as
                  the Courts' surrogates for the purpose of conducting inquiries into
      
           an applicant's character. It is in the best position to undertake this
                  task.    The requirement for
a certificate is a measure of the
                  importance which Parliament attaches to the critical role played by
        
         the Society in this process, (r 61A).

[29]      I therefore view the Society's decision not to oppose the present application
as a factor that can be given considerable weight.


The circumstances of the offending


[30]      There can be no doubt, having
regard to the jury's verdict and the Judge's
sentencing notes, that Mr Haines must have realised at some point during his
employment
by his father's company that what he was doing was wrong. In effect
he was participating in, and encouraging others to participate
in, a scheme that was
designed to defraud a health funder of considerable sums of money.


[31]      Having said that, the Judge
expressly accepted that Mr Haines was not the
architect of the scheme. That dubious distinction belonged to his father. Moreover,
at the time of the offending Mr Haines was in the transition from youth to adulthood.
He was also living at home with his parents.
In those circumstances I am satisfied
that he must to a great extent have been subject to the influence and sway of his
father. 
    There is also the factor that, within the sphere of the company and the
doctors with whom it dealt, the offending appears to
have been carried out in a
routine and reasonably open way. In addition, this was Mr Haines' first job.        He
can be forgiven
to some extent for having a degree of commercial immaturity and
naivete at that time.


[32]      I therefore take the view that,
whilst the offending was undoubtedly serious,
Mr Haines was not a principal in it and it occurred at a time when he was relatively
young and immature.        He was also subject to considerable influence from those
around him. I do not consider that the circumstances
of the offending are such that
they demonstrate a deep seated flaw in Mr Haines' character that is likely to re-
emerge under the
pressures of legal practice: see Pou (Supra at [44]).


Mr Haines' current circumstances


[33]      Mr Haines has filed a detailed
affidavit in which he describes not only his
past history but also his current circumstances.

[34]   Mr Haines is now 30 years
of age. He is married and his wife is due to give
birth to twins in the near future.


[35]   Mr Haines completed his law degree
at Waikato University in 2004.            His
transcript of academic grades reveals that he achieved reasonable academic success.
In his final year at law school he was able to achieve three `A' passes. Mr Haines
completed the IPS Professional Studies Course
in 2006.


[36]   These achievements are only, however, of marginal importance in the present
context.     The focus of the present
application is not on academic prowess but on
personal integrity and character.     In particular, it is on the manner in which Mr
Haines has developed as a human being since the date of his conviction.


[37]   Mr Haines deposes that the sentence that was imposed
upon him in 2001
involved considerable financial and emotional hardship for him. At the time of his
conviction he was involved in
a business that planned to be listed on the Stock
Exchange.      The conviction meant that Mr Haines lost the support of his financial
backers, and he ended up with a very large short-term unsecured debt.
             This
difficulty was compounded by the fact that Mr Haines was unemployed at the
conclusion of the trial.


[38]   At
that time Mr Haines called a meeting of his creditors. He explained his
situation to them, and told them that it was his intention
to repay all his debts when
he had the money to do so. As a result, his creditors elected not to bankrupt him at
that time.    Their
faith in Mr Haines was subsequently repaid when he was able to
bring himself to a position where he has been able to borrow money
in order to
purchase a family home and to enter into business as a property developer.


[39]   Mr Haines' original family home in
Otaki was sold following his conviction
and the net proceeds of sale were paid to the state in part repayment of the losses that
it suffered as a result of the activities of his father's company.


[40]   After he was sentenced Mr Haines left the Waikato area
and moved to
Auckland.      He says that he carried out his sentence of periodic detention in West

Auckland at the Henderson Centre.
         He describes this as having been a very dark
period for himself personally and that it was fraught with family, marriage
and
financial difficulties.   He points out that he could have elected to declare himself
bankrupt in order to escape his debts,
and that he could also have turned to a life of
crime. Instead, however, he focussed on rebuilding his life and his reputation. He
says that he approached periodic detention with a positive attitude, and made sure
that he was involved in projects that directly
benefited the community.                     These
included the construction of nature walkways and playgrounds at schools.     
              During
this period he says that he learned a number of practical skills that have been useful
to him ever since.


[41]    Mr Haines then began working for a financial services company that was run
by a former police officer. He disclosed the fact
of his conviction to his employer
and worked in the financial sector for the next three years in order to pay off his
personal debts.


[42]    Mr Haines concludes his affidavit with the following paragraphs:

        ...

        23.     I have made mistakes in
my life and I am not proud of this. I have
                suffered from all of the temptations of human frailty. However I
    
           have learnt from these experiences and am a fuller and more realistic
                person as a result of them. I am
now aware of my strengths and
                weaknesses and this new self-awareness has provided me with great
                person
insight.     It has made me more understanding of the
                shortcomings of others.

        24.     I am aware of the
responsibilities of being a lawyer and I appreciate
                that this is not a right for any person instead it is an honour.
It is an
                honour that I take seriously and I believe that I have demonstrated
                over the last few years
since my conviction that I am worthy of such
                an honour.

        ...

[43]    Mr Haines' application is supported
by three affidavits.           The first is by Mr
Rodney Hodgins, who was a police officer for 30 years and held the rank of
Inspector
for 11 years.

[44]    Mr Haines applied to Mr Hodgins in November 2001 for a position as a sales
consultant selling financial products.
    Mr Hodgins confirmed that at his initial
interview Mr Haines freely disclosed that he had a criminal conviction for
dishonesty,
and he explained the basis of that conviction to Mr Hodgins.             Mr
Hodgins noted that Mr Haines was remorseful and did not
blame anyone for his own
wrong-doing. It was also apparent to Mr Hodgins that Mr Haines had been a young
man at the time of the offending,
and had no doubt been acting under the influence
of older people, including his own father. Mr Hodgins was sufficiently impressed
by Mr Haines' obvious qualities to offer him
employment. He did so, however, on
the basis that he would remain under close scrutiny.


[45]    Mr Haines worked for Mr Hodgins
for the next three years.          Mr Hodgins
says that during that time Mr Haines proved to be a "very intelligent young man,
who
is particularly quick on the uptake".          He says that Mr Haines inspired
confidence in the clients that he dealt with, and
that he succeeded in his role to a very
high standard.      Mr Haines gave Mr Hodgins no cause to doubt his honesty at any
time notwithstanding
his knowledge of Mr Haines' conviction.               Mr Hodgins
concludes his affidavit by saying that he actively encouraged Mr
Haines to pursue a
legal career, and that he believes that Mr Haines has all that it would take to add his
talents to that profession.


[46]    The next affidavit is from Mr Ronald Richardson, who has known the Haines
family for some 15 years. He, too, is aware of
Mr Haines' conviction, and says that
Mr Haines has learned a very harsh but valuable lesson from it. He believes that, to
Mr Haines'
credit, he has put his past behind him and has got on with making his
way in life.     Mr Richardson described Mr Haines as being
a very likeable person
who is an extremely good communicator and that he has an incredibly positive
attitude to life.


[47]    The
final affidavit is from Mr Dafydd Malcolm, a solicitor in practice in
Rotorua.     He has known Mr Haines for approximately ten years,
and his personal
impression has always been that Mr Haines is an honest, forthright, upstanding and
diligent person. He views Mr
Haines' criminal conviction as being completely out

of character.      He can only attribute the offending to his particular family
circumstances and to the naivety of youth.


[48]     In my view the most telling of the evidence to which I have referred is that
given by Mr Hodgins. As a former policeman he is a person who could be taken to
have had concerns about Mr Haines' character and
to have kept a very close eye on
him during the three years that Mr Haines was in his employment.        I consider that
the fact
that Mr Hodgins is prepared to stand behind Mr Haines unequivocally is of
particular importance in the context of the present application.
It suggests to me that
Mr Haines has passed a test of character prescribed by a particularly critical
examiner.


Result


[49] 
   That evidence, coupled with the other evidence that has been adduced in
support of the application, persuades me that Mr Haines
has in fact turned his life
around and that the offending that occurred whilst he was in the employment of his
father's company is
now of historical value only.      To adopt the wording used in
Owen (at [38]) I am satisfied that both the public and responsible
members of the
profession would, if appraised of the material now before the Court, also share my
view that Mr Haines is a suitable
candidate for admission.


[50]     For these reasons I am satisfied that Mr Haines is of good character and is a
fit and proper
person to be admitted as a barrister and solicitor in terms of s 46(2) of
the Law Practitioners Act 1982. Subject to his swearing
the oath of good and honest
conduct, he is entitled to have an order made admitting him as a barrister and
solicitor of this Court.


Costs


[51]     Mr Hammond points out that Mr Haines has been put to the trouble and
expense of making this application as a result
of the actions of the respondent in
declining to provide a certificate. He also points to the fact that, having adopted that

stance,
the respondent has also not sought fit to make its views known to the Court
other than in the most cursory way.


[52]     I have
some hesitation in making any award of costs in the present
circumstances.    The fact of Mr Haines' previous conviction was a serious
matter
and, in my view, justified the Society in declining to provide a certificate. I bear in
mind, however, the fact that the Court has been able to make its decision
based not
only on the material that was before the Society but, also on the basis of significant
additional material that Mr Haines
has now provided. The focus of the exercise that
the Court has undertaken has been on matters that were wider than those considered
by the Society.


[53]     For those reasons, and whilst I have some sympathy with Mr Haines'
position, I consider that this is an
appropriate case in which costs should lie where
they fall and I make an order accordingly.




Lang J