Leave to withdraw as counsel: lessons from the decision in Burgess v Monk
Late last year I was involved in a long civil trial where counsel for the plaintiff applied for permission to the trial judge to withdraw as counsel. I represented one of the defendants. During part of the trial I was assisted by fellow barrister Honor Ford, who wrote this piece below for the New Zealand Bar Association.
—Rob Latton, Barrister, FortyEight Shortland.
Should counsel be able to withdraw when a client indicates they may sue them for negligence, but the client nevertheless maintains they want to be represented by counsel? How do such allegations impact on counsel’s obligation to act without any conflict of interest? Is the relationship of trust and confidence mutual, meaning that counsel must be able to have a degree of trust and confidence in his or her client in order to act? These questions were recently grappled with in Heath J’s decision in Burgess v Monk (judgment no. 4) [2017] NZHC 2618.
Burgess v Monk involved a claim against executors of two estates, solicitors to the estates and a purchaser of estate assets for inter alia breach of constructive trust, knowing assistance and receipt, conversion and breach of contract. All claims were unsuccessful. The trial lasted 32 sitting days in the Hamilton High Court. The author is second counsel for the first and second defendants, and wishes to be clear that nothing in this article is intended in any way as a criticism of counsel for the plaintiffs, who clearly encountered very difficult circumstances during the trial.
Nineteen sitting days into the trial, near the end of the plaintiffs’ case, counsel for the plaintiffs sought leave to withdraw. As Heath J (the trial judge) described, the circumstances were “unusual” (at [1]). Counsels’ position was that during a meeting, the plaintiff made allegations that created “a factual foundation for a claim in negligence” against counsel, implicitly threatened such a claim and would not deny that such a claim may be pursued. Counsel considered this gave rise to a potential conflict of interest and amounted to a complete breakdown in the relationship of trust and confidence. Accordingly, both counsel sought leave to withdraw. The client, along with all defendants, opposed the application. The client’s position was that he retained trust and confidence in his counsel and wished to proceed with the trial. He denied any such allegations were made during the meeting, and put it down to a misunderstanding. The defendants opposed the application principally because they did not wish to see the trial aborted.
Such a situation had never been addressed before in case law, nor (as the author realised in preparing for the hearing) did the Conduct and Client Care Rules (“Rules”) or commentary to those Rules offer any clear guidance. As Heath J held, in the absence of any authority, “a first principles analysis” was required (at [11]).
The starting point is that the High Court relies on its inherent jurisdiction to determine whether counsel should be granted leave to withdraw, or conversely to restrain counsel from acting. In exercising its inherent jurisdiction, the Court will be guided by the Lawyers and Conveyancers Act 2006 (“Act”) and the Rules. Section 4 of the Act sets out a lawyer’s core obligations (at [59]). Under the Rules, a lawyer has a duty to complete a retainer (r 4.2), unless good cause exists to terminate it. Rule 4.2.1 provides a non-exhaustive list of what amounts to good cause. Here, his Honour held that “the Court is dealing with one of its officers who owes duties to the Court to complete a retainer, unless good grounds exist to allow counsel to withdraw, or render it necessary for counsel to be removed” (at [20]).
His Honour considered r 4.2.1, but none of the circumstances listed as giving rise to “good cause” to terminate a retainer applied here (at [50]). His honour did not refer to the fact that given r 4.2.1 is not exhaustive, the Rules clearly envisage that good cause to terminate a retainer may arise outside of the circumstances listed in that sub-rule.
Rule 5.1 provides “the relationship between lawyer and client is one of confidence and trust that must never be abused.” His Honour Justice Heath declined to interpret that rule as requiring mutual trust and confidence for the duration of the retainer: the Rules are focused on protecting the interests of clients, not lawyers. It is therefore not necessary for a lawyer to have trust and confidence in their client, nor could the loss of such trust and confidence in the client justify counsel’s withdrawal.
That finding will be difficult for some to swallow, but it is consistent with fiduciary law. As the Supreme Court held in Fay v Chirnside [2007] 3 NZLR 433, at [80]:
“[A]ll fiduciary relationships, whether inherent or particular, are marked by the entitlement … of one party to place trust and confidence in the other. That party is entitled to rely on the other party not to act in a way which is contrary to the first party’s interests.”
His Honour’s finding is also consistent with the view of commentators that a client’s only real duties are to “give the lawyer instructions so they can work, to pay the lawyer’s fees and to be truthful in instructing their solicitor” (Professional Responsibility in New Zealand, LexisNexis, online ed, at [250,105]). Those requirements are reflected in what amounts to good cause to withdraw under r 4.2.1. There is no requirement on a client to otherwise ensure their lawyer maintains trust and confidence in them.
As to a conflict of interest – the more interesting point – senior counsel representing the applicants argued it was no longer possible for them to act in an objective manner given the threats that had been made, notwithstanding the client wished them to continue. His Honour determined no such conflict arose, principally because the client resiled from any threatened claim, and wanted them to continue to act: he retained confidence in them (at [58]). Moreover, the threat alone was not sufficient: “[i]t is not enough to say that because of a threat of legal proceedings they cannot be independent” (at [61]). Counsel must be made of stauncher stuff than that (at [57]):
“In my view, whatever their misgivings may be and whether they have good or bad reasons for holding those views, they have a professional obligation to continue to act for their clients. Having reflected on the issues raised on the present application, I have concluded that the interests of justice will not be served by finding a ready route by which counsel may seek to extricate themselves from what they perceive to be a difficult client and an unwieldly case. The statutory obligations case on all lawyers reflect that approach. As Sir Thomas Bingham MR said: they must ‘soldier’ on.” (footnotes omitted)
While the Act and Rules provide guidance by analogy, and his Honour held they did not support the application; ultimately, he concluded the matter was to be determined with reference to “broad administration of justice concerns” (at [49]), taking into account:
- Counsel’s position
- The effect on the client if counsel withdrew
- The fact the trial would be aborted after 19 days, with a subsequent delay and waste of costs for the defendants
- The interests of the public in the finality of litigation
- The need for justice to be seen to be done
The fact the application was made during trial, strongly factored against leave to withdraw being granted. If the application was granted and trial aborted, the effect on the defendants (and client) would be “devastating” (at [62]). That was particularly so given the trial had been aborted on one previous occasion. Accordingly, and logically, the interests of other parties will be given less weight if leave to withdraw is sought at a time when it does not risk a fixture date, or prejudice other parties.
Issues of privilege
Inevitably, client-solicitor privilege will complicate the presentation and determination of such an application. Counsel will be required to provide some evidential foundation for their application, without breaching privilege.
The difficulties this gives rise to are clear, particularly in circumstances such as occurred in this case where there is essentially a dispute as to what was said and privilege was only partially waived. In my view, it is somewhat problematic for a client to assert counsel is mistaken (or has no reason to perceive a conflict), yet refuse to waive privilege to determine that issue.
In this case, Heath J declined to resolve the factual conflict (at [45]-[47]). Instead, he proceeded on the basis that counsel had a genuine belief the client intended to bring proceedings against them. However, that had to be balanced against the fact the client had no retracted this suggestion.
Procedural advice for counsel
While the High Court Rules at r 5.41 set out a procedure by which a solicitor on the record may apply for leave to withdraw, no similar procedure exists in respect of counsel. The present case offers guidance in this regard.
Here, counsel filed an interlocutory application relying on the court’s inherent jurisdiction and a memorandum in support of that application. No affidavit was filed. Counsel engaged independent senior counsel to represent them at the hearing. The Court also took steps to ensure the client received independent advice and was represented by senior counsel at the hearing. The defendants, as affected parties, were given the opportunity to address the application.
Even though the application was declined, his Honour made no costs award. He was not critical of counsel for making the application, indeed he determined it was appropriate for them to have done so.
Observations as to counsel’s role
Finally, his Honour surveyed various relevant domestic and overseas authorities concerning the nature of counsel’s role, and in obiter provided guidance as to the scope of counsel’s authority as follows:
[28] In my view, counsel is permitted to use his or he judgment in determining how best, as an advocate, to present the client’s case, on the basis of the instructions given. In many cases that will entail making decisions about the number of witnesses to be called and the nature and extent of cross-examination. An advocate will not be criticised if he or she were to follow instructions, yet present the case in a succinct and persuasive way. It is difficult to conceive of a case in which a Court would find counsel negligent if instructions were followed but the discretion as to presentation exercised in the manner I have indicated.
In doing so, his Honour likely sought to provide both guidance and a level of comfort to counsel representing difficult clients in complex proceedings.