NZ High Court Hints At Removal Of Barristers Immunity

LAWFUEL – The NZ Law Jobs & Newswire – The High Court has hinted that the removal of barristerial immunity should lead to a review of the prohibition on barristers suing for their fees.

The Supreme Court in the 2006 case of Lai v Chamberlains upheld the removal of barristerial immunity by the Court of Appeal. A Wellington barrister this year brought proceedings in relation to fees for work performed by him on behalf of a barrister and solicitor.

In Ellis v Moodie & ors (High Court, Wellington, Associate Judge Gendall, 26 July 2007, CIV 2007-485-598) the plaintiff, Anthony Ellis, was a barrister who acted for the first defendant – a barrister and solicitor – in contempt proceedings against him.

The proceedings arose out of Dr Moodie’s work as counsel for the Berrymans and his publication of an army engineer’s report provided to him on an undertaking of confidence.

As a result, the Solicitor-General brought proceedings against Dr Moodie alleging contempt of court. Dr Moodie retained Mr Ellis to represent him as counsel in the contempt proceedings. Mr Ellis was formally instructed by a solicitor, Mr Key of Fielding.

In reality, Dr Moodie dealt with Mr Ellis directly, with matters pertaining to fees to be determined by Mr Ellis and Dr Moodie between themselves. The statement of claim alleged that Mr Ellis and Dr Moodie had agreed that Mr Ellis would be paid a reasonable fee on the contempt proceedings but that part of the fee would be deferred until Dr Moodie received his fee in the settlement on the Berryman litigation.

Mr Ellis said that he agreed to this arrangement because of Dr Moodie’s representations to the effect that his practice was conducted chiefly on a pro bono basis and accordingly was not in a position to pay fees. Mr Ellis alleged that he later discovered that Dr Moodie had received substantial fees in connection with the successful conclusion of some employment litigation. He also obtained copies of the accounts for Dr Moodie’s legal practice which he said recorded the receipt of substantial sums.

Mr Ellis brought proceedings claiming breach of the Fair Trading Act and tortious deceit, as well as unlawful trading and fraud on the part of the second, third and fourth defendants. The defendants applied to strike out the claim and the application was granted.

Associate Judge Gendall held that, while practitioners acting as both barristers and solicitors were entitled to sue for fees, barristers sole were not so entitled. The first reason for this was that the relationship between the barrister sole and the instructing solicitor was a unique relationship of honour and agreements as to fees did not give rise to obligations of debt. Secondly, there was no contractual relationship between a barrister sole and a lay client.

Mr Ellis had submitted that Lai v Chamberlains, which abolished barristerial immunity in New Zealand, meant that the rule against barristerial suit for fees was no longer good law. He described it as anachronistic, and said that certain passages in the judgments of Chief Justice Dame Sian Elias and Justice Tipping suggested that the rule against barristerial suit for fees was the corollary of barristerial immunity, and when one fell so did the other.

He also submitted that section 61 of the Law Practitioners Act 1982, which established the position of barristers in New Zealand law, did not freeze that position as at the date of enactment and it was accordingly open to the courts to reconsider the rule against barristerial suit for fees.

Associate Judge Gendall rejected those arguments, holding that the removal of barristerial immunity by Lai v Chamberlains did not necessitate the ability of barristers to sue for fees. However, he suggested that the time might be right for a review of the law.

“Albeit that the rule may be anachronistic and worthy of reconsideration, at present it remains the law in New Zealand.”

ADLS President Andrew Gilchrist said that there was some justification for the view that the removal of barristerial immunity should be accompanied by a law change enabling barristers to sue for their fees. However, he said this was not strictly necessary in the current regime.

The position would be different if the intervention rule were to be abolished, as has been proposed in draft Rules of Conduct and Client Care for practitioners that have been drawn up in the run-up to the enforcement of the Lawyers and Conveyancers Act 2006 projected for July 2008.

Mr Gilchrist said that abolition of the intervention rule would make it essential that barristers should be able to sue for their fees. He went on to say that he could see an innate injustice in the position if a barrister, who claimed to have done good work for a client, was sued in negligence for losses of $100,000 but was not able to raise the fact that $50,000 was owed in fees as a defence or set-off in the same action.

Queen’s Counsel and New Zealand Bar Association President, James Farmer, said that the association had not considered the matter. However, his personal view was that there was no necessary link between the abolition of barristers’ immunity and the inability of barristers to sue for their fees.

“At one time it was thought that barristers’ immunity was the consequence of the traditional inability of barristers to sue, but the House of Lords put that to rest in Rondel v Worsley in 1967 and/or later cases, and placed the immunity squarely on public policy grounds to do with the efficient administration of justice.”

Dr Farmer noted that the inability to sue for fees was not raised as a justification for the immunity in Chamberlain v Lai. He said that he agreed with the decision of Associate Judge Gendall. However, Wellington Queen’s Counsel George Barton said that a major plank in the reasoning in Lai v Chamberlains applied mutatis mutandi to the notion that a barrister was not entitled to sue for the recovery of fees.

“Can you imagine the outcry if the situation had been reversed! If the final court had held that a barrister could sue to recover his fees, what would be said about an argument that, nevertheless. the barrister was still entitled to the benefit of immunity in negligence? In a strict logical sense, the ability of a barrister to sue for recovery of fees is not a consequence of, or related to, barristerial immunity. The reasoning for abolishing one applies equally for abolishing the other.”

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