Case No. DMC/PI/01/01
Raylee Harley (a Barrister) & Glasgow Harley (a solicitors' firm) v
Robert McDonald
English Privy Council, on appeal from the Court of Appeal in
New Zealand: 2001 Unreported:
Summary:
This case examined the question, which up to this point had been open under
New Zealand law, whether the New Zealand High Court had the power, in appropriate cases, to make
barristers, as well as solicitors, personally liable for costs. The PC decided
that the NZ High Court did have that power.
In deciding the case, the PC
applied principles which had been applicable in England and Wales prior to the
introduction of Wasted Costs Orders, pursuant to S.51 of the Supreme Courts Act
1981.
The PC kept open the question whether, under New Zealand law, barristers
should still enjoy immunity from suit from their lay clients. After the decision
of the Court of Appeal in New Zealand but before the appeal to the PC was heard,
the House of Lords held, in the case of Arthur J S Hall & Co v. Simons, that
public interest in the administration of justice no longer required the
continuation of the immunity rule in England and Wales.
DMC Rating: Developed
FOR MORE DETAIL, READ ON:
- The High Court of New Zealand has an inherent jurisdiction to make an order for costs against barristers as well as solicitors practising before the court. As New Zealand has a unified legal profession, both barristers and solicitors are officers of the court.
- The jurisdiction can be invoked only
- where here has been a serious dereliction of the practitioner’s duty to the court
- while the costs remain a live issue before the court that conducted the proceedings
- The jurisdiction is compensatory, in that the courts directs its attention to costs that would not been incurred but for the failure in duty; it is also punitive, in that the order is directed against the practitioner personally. The jurisdiction is normally exercised by requiring the practitioner to compensate the opposing litigant against costs incurred as a result of the breach of duty which would otherwise not be recoverable
- Allegations of breach of duty relating to the practitioner’s conduct
of the case in relation to the making of a costs order should, as a general
rule, be confined strictly to questions which are apt for summary disposal by
the court. The factual basis for the exercise of the jurisdiction is likely to
be
found in facts which are within judicial knowledge, since the relevant events
either took place in court or can be easily verified. - Although circumstances which involve serious breaches of a practitioner’s duty to the court may raise questions of professional misconduct in his relationship to the client - including the possibility of liability in damages for negligence – it is not appropriate to rule upon these issues when considering whether or not to make a costs order. In exercising this jurisdiction, it is not the function of the court to adjudicate on the position between the client and his practitioner.
- The test for the exercise of the jurisdiction is the same as that which applied in England before the wasted costs jurisdiction under s.51 of the Supreme Courts Act of 1981 came into effect. A simple mistake or oversight or a mere error of judgment do not amount to a ‘serious breach of duty to the court’. Serious incompetence resulting in a failure to appreciate that a claim is untenable can amount to a serious dereliction of duty to the court, but it will almost always be unwise of the court to treat the pursuit of hopeless cases as a demonstration of incompetence. As a general rule, litigants have a right to have their case presented to the court and to instruct legal practitioners to present them on their behalf.
- In the circumstances of this case, neither the barrister nor solicitor
concerned had committed a serious dereliction of duty
to the court. In
addition,
both the New Zealand court of first instance and the New Zealand court of appeal
had acted improperly in taking account of issues that lay outside the scope of
judicial knowledge as set out in 4 above. - Orders as to costs made against the practitioners in this case by the NZ court of first instance and upheld by the NZ court of appeal would be overturned.