Burgess v Beaven
[2015] NZHC 790
•21 April 2015
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
CIV2014-409-000622 [2015] NZHC 790
BETWEEN GARY OWEN BURGESS
Applicant
AND
SUSAN NATALIE BEAVEN Respondent
Hearing: 11 March 2015 Appearances:
Plaintiff in person
A Corry for RespondentJudgment:
21 April 2015
JUDGMENT OF NATION J
Introduction
[1] On 5 August 2014, Judge Somerville in the Family Court at Christchurch issued a decision striking out an application which Mr Burgess had filed with the Family Court on 9 September 2011.1 He also ordered that Mr Burgess must pay full solicitor and client costs to the respondent in relation to those proceedings.
[2] Mr Burgess filed a notice of appeal on 2 September 2014. In a memorandum for the first case management conference on 22 October 2014, Mr Burgess asked that security for costs be dispensed with. The Court was also advised that Mr Burgess had applied to the Family Court for a rehearing of the application which had been struck out.
[3] After the initial conference, Mander J adjourned the appeal proceedings to await the outcome of the application for rehearing.2
1 Burgess v Beaven [2014] NZFC 6378.
2 Burgess v Beaven HC Christchurch CIV-2014-409-622, 23 October 2014 (Minute No 1)
BURGESS v BEAVEN [2015] NZHC 789 [21 April 2015]
[4] There was a further conference with Mander J on 3 December 2014. Because there had been no progress in the Family Court on the rehearing application, Mr Burgess wished to proceed with his appeal. In order for the appeal to proceed to a hearing, his application to dispense with security for costs on the appeal had to be dealt with.
[5] The application for waiver of security for costs was accordingly set down for hearing on 11 March 2015. Mr Burgess represented himself. Ms Corry appeared for the respondent. Mr Burgess filed lengthy written submissions in relation to his application.
[6] Mr Burgess argued that security for costs should be dispensed with because:
(a) there was considerable merit in his appeal because he had not been put on notice in the proceedings that there was any risk of strike-out; (b)
there was merit in the application he was seeking to pursue in the
Family Court;
(c)
he was not financially able to provide security for costs; and
(d)
this impecuniosity was the result of wrongs he had suffered in the
relationship property proceedings, wrongs which he was seeking to rectify through the proceedings which had been struck out. [7]
Ms
Corry did not file submissions in opposition. However, in a
memorandum for the first case management conference, Ms Corry contended that the proceedings were struck out on the grounds that they were vexatious and an abuse of the Court’s process, that there was little merit in Mr Burgess proceeding with his appeal when he was endeavouring to obtain a rehearing in the Family Court, and that the appeal should be struck out. In oral submissions she said that the application for waiver had to be considered against the background of all the previous litigation in which the parties and the Courts had been involved. Against that background, the respondent would not consent to a waiver of costs.
[8] As a result of the discussions I had with Mr Burgess and Ms Corry, I deal with the current application on the basis that this appeal would be categorised as a category 2 proceeding, the hearing of which would take one day. In terms of r 20.13 the amount that would be payable as security, unless I direct otherwise, will be
$1990.
The legal principles
[9] The way in which the Court should consider whether or not security for costs should be required on an appeal has been considered comprehensively by the Supreme Court in Reekie v Attorney-General.3 The Supreme Court was concerned with an appeal to the Court of Appeal from the High Court. Its judgment is relevant here, as this Court is concerned with an appeal that can be brought from an inferior Court without leave.
[10] The following particular statements from the Court’s judgment are relevant:
[31] As we have indicated, the Registrar should dispense with security if of the view that it is right to require the respondent to defend the judgment under challenge without the usual protection as to costs provided by security.
…
[33] Although an order dispensing with security is therefore, in itself, of limited economic significance, the costs regime, including the usual requirement for appellants to provide security for costs, imposes some discipline on litigants. The liability to pay costs if unsuccessful is a disincentive to the commencement of frivolous proceedings. As well, most litigants will not commence proceedings if the costs of the exercise, including those they must pay if unsuccessful, exceed the likely benefits. So the costs system discourages litigation which is disproportionate to the occasion. Increased costs may be ordered where proceedings have been conducted vexatiously, and this serves as a disincentive to vexatious conduct. An appellant who will not be able to meet a subsequent order for costs is free of constraints that affect other litigants and this freedom carries with it the potential for injustice to the respondent.
[34] … a litigant whose opponent is legally aided is usually unable to obtain an order for costs if successful. … But a grant of legal aid is subject to independent merits and cost/benefit assessments of the proceedings for which legal aid is sought and legal aid can be withdrawn
3 Reekie v Attorney-General [2014] NZSC 63, [2014] 1 NZLR 737. See also Howard v Accident
Compensation Corporation [2015] NZSC 25.
if the legally aided person acts unreasonably. … These mechanisms … in the case of the legal aid system, still provide – substitutes for the discipline usually provided by the costs regime.
[35] Against that background, we consider that the discretion to dispense with security should be exercised so as to:
(a) preserve access to the Court of Appeal by an impecunious appellant in the case of an appeal which a solvent appellant would reasonably wish to prosecute; and
(b) prevent the use of impecuniosity to secure the advantage of being able to prosecute an appeal which would not be sensibly pursued by a solvent litigant.
A reasonable and solvent litigant would not proceed with an appeal which is hopeless. Nor would a reasonable and solvent litigant proceed with an appeal where the benefits (economic or otherwise) to be obtained are outweighed by the costs (economic and otherwise) of the exercise (including the potential liability to contribute to the respondent’s costs if unsuccessful). As should be apparent from what we have just said, analysis of costs and benefits should not be confined to those which can be measured in money.
[37] … Providing the case is of the kind which would be appropriate for a grant of legal aid, an impecunious litigant who is privately represented should be able to obtain a dispensation from the requirement to provide security.
…
[39] Protecting respondents from vexatious appeals is a legitimate purpose of the security for costs regime. This is consistent with the approaches (a) taken in relation to legal aid and (b) formerly taken in respect of appeals in forma pauperis. It is also consistent with Australian authority as to first instance proceedings.4 An appeal, or its conduct, may be vexatious even though it raises some issues which are arguable. Vexatiousness might be manifested, for instance, by the unreasonable and tendentious conduct of litigation, extreme claims made against other people involved in the case or perhaps a history of unsuccessful proceedings and unmet costs orders.5
[40] A litigant in person does not incur the expense of legal representation and, if impecunious, will obtain a fee waiver and will not be in a position to pay costs if unsuccessful. All costs associated with litigation so prosecuted fall on other parties. This means that litigants in person may be more prepared to engage in litigation which, when viewed in light of the costs that others must incur, is disproportionate to the occasion and which therefore would not be prosecuted by a solvent litigant. In such circumstances, the Registrar or reviewing judge may conclude that it is
4 See, for instance, the comments of Heydon J in Jeffrey & Katauskas Pty Ltd v SST Consulting Pty Ltd [2009] HCA 43, (2009) 239 CLR 75 at [91] and Applegarth J in Mbuzi v Hall [2010] QSC 359 at [70].
5 See, for instance, the remarks of Applegarth J in Mbuzi v Hall, above, n 4, at [70].
unjust to require the respondent to defend the judgment without the protection of security.
[41] As we have made clear, cost and benefit are not to be assessed in purely financial terms. An appeal may raise issues of public interest which are not measurable in economic terms. As well, considerations which are personal to an appellant (for instance, considerations affecting reputation) may legitimately fall to be considered as part of the cost/benefit assessment. Proceedings relating to the vindication of rights under the New Zealand Bill of Rights Act 1990 may have both personal and public non-financial benefits. In the end, what is called for is an exercise of judgment.
[11] In the Court of Appeal where the Registrar has the discretion to dispense with security, the Supreme Court stated:
[21] The Registrar should only dispense with security if of the view that it is right to require the respondent to defend the judgment under challenge without the usual protection as to costs provided by security. …
[12] The Supreme Court also noted that in cases where Judges of the Court of
Appeal have reviewed dispensation decisions:
[28] In the vast majority of cases security is either not required (because the appellant is legally aided) or, alternatively and more commonly, provided. For this reason, cases where security is dispensed with are necessarily exceptional. But this does not mean that an impecunious appellant must show an exceptionally strong case – or anything of that sort – to warrant dispensation. …
[13] The Court noted that its approach to the assessment of this issue “is not substantially inconsistent with the principles which have hitherto have been applied” subject perhaps to the above comment about “exceptional circumstances”.6
[14] The Supreme Court then considered whether or not security should have been required in respect of two appeals to the Court of Appeal. In respect of one appeal the Supreme Court considered that the appellant wished to re-litigate the entire case in the Court of Appeal after a trial that had taken eight days. The Supreme Court considered that his appeal was “not hopeless” but considered there was “little of
practical moment in the appeal”.7 They noted:8
6 Reekie v Attorney-General, above n 3, at [30].
7 At [64]-[65].
8 At [67].
Whatever limited merits there might be in some individual aspects of the appellant’s case, the exercise on which he wishes to embark – the re- litigation of the entire case – is one in which no reasonable and solvent litigant would engage.
[15] It followed that to allow the appellant to proceed without security for costs would be to allow him to use his impecuniosity to obtain advantage.
[16] In relation to the other proceedings, the Supreme Court considered that “while some of the challenges are not completely hopeless, none appear to be particularly cogent and the prospects of the appellant achieving substantial success are remote”.9 They also noted that:10
The effect of the decisions in question is spent and the proposed appeal is of little or no practical moment for the appellant and of no public significance in terms of a vindication of rights.
[17] In relation to the two situations where security had been required the
Supreme Court concluded:
[78] For the reasons just given, we are of the view that a reasonable and solvent litigant would not wish to appeal on the basis of the appellant’s notice of appeal and would not conduct the appeal in the manner foreshadowed in that notice. It follows that it would not be just to require the respondents to defend the judgment without security for costs and his application for leave to appeal is accordingly dismissed.
The litigation background
[18] Although it may not be complete, the background appears to include:
(a) May 2002 to May 2003 – Mr Burgess and Ms Beaven were married and living together.
(b)16 May 2007 – Family Court (Judge Strettell) determines relationship property worth $374,110.79. Apportions it 65 per cent to Ms Beaven
and 35 per cent to Mr Burgess.11
9 At [77](b).
10 At [77](d).
11 Burgess & Beaven FC Christchurch FAM-2005-009-3126, 16 May 2007 at [80].
(c) 27 November 2007 – judgment on appeal from the High Court, Christchurch (John Hansen J).12 Appeal partially successful. Limited rehearing required.
(d) 30 June 2008 – decision of the Family Court (Judge Strettell)
apportionment changes to 62:38 per cent.13
(e) July 2008 – Mr Burgess appeals decision to the High Court.
(f) 9 September 2008 – both parties’ counsel sign memorandum by which Ms Beaven transfers ownership of farm property (Medbury) into Mr Burgess’ name so he can refinance debt secured over the property, but on the basis that $36,250 will be held in Mr Burgess’ solicitor’s trust account pending outcome of the appeal and Ms Beaven is entitled to register notice of claim against the title to Medbury securing her entitlement under the litigation and $9,000 in costs.
Orders not sealed but title changes accordingly.14
(g) 15 December 2008 – Mr Burgess’ appeal dismissed by High Court
(Fogarty J).15
(h)11 February 2009 – High Court (Chisholm J) refuses leave to appeal the judgment of Fogarty J.16
(i)3 June 2009 – Court of Appeal grants leave to Mr Burgess to bring appeal in respect of the judgment of John Hansen J, but declines leave in relation to the judgment of Fogarty J.17
(j)August 2009 – Mr Burgess applies to the Family Court for an order that Ms Beaven remove the notice of claim.
12 Burgess & Beaven HC Christchurch CIV-2007-409-1361, 27 November 2007.
13 Burgess & Beaven FC Christchurch FAM-2005-009-3126, 30 June 2008 at [33].
14 Burgess & Beaven HC Christchurch CIV-2010-409-876, 4 October 2010 at [20].
15 Burgess & Beaven HC Christchurch CIV-2007-409-1361, 15 December 2008.
16 Burgess & Beaven HC Christchurch CIV-2007-409-1361, 11 February 2009.
17 Burgess & Beaven [2009] NZCA 229.
(k)23 April 2010 – Judge Somerville rejects application to set aside notice of claim.18
(l) May 2010 – Mr Burgess files appeal against Judge Somerville’s
decision.
(m)August 2010 – TSB exercises its mortgagee power of sale in respect of Medbury. Ms Beaven’s notice of claim is discharged as part of that mortgagee sale,
(n) 4 October 2010 – High Court (French J) dismisses appeal against
Judge Somerville’s decision in the Family Court.19
(o)20 December 2010 – Court of Appeal issues judgment on appeal against judgment of Hansen J. That judgment reduced the amount which Mr Burgess had to pay Ms Beaven by $22,000.20
(p) 24 May 2011 – French J declines leave to appeal her judgment to the
Court of Appeal.21
(q)29 August 2011 – Court of Appeal declines application for special leave to appeal the Judgment of French J given on 4 October 2010 in the Family Court.22
(r) 9 September 2011 – Mr Burgess files application in the Family Court seeking a declaration that the legal agreement between Mr Burgess and Ms Beaven was void for non-compliance with the requirements of Part 6 of the Property (Relationships) Act 1976, and a declaration that
the agreement is set aside.
18 Burgess & Beaven FC Christchurch FAM-2005-009-3126, 23 April 2010 at [64]-[65].
19 Burgess & Beaven, above n 14.
20 Burgess & Beaven [2010] NZCA 625, [2011] NZFLR 609.
21 Burgess & Beaven HC Christchurch CIV-2010-409-876, 24 May 2011.
22 Burgess & Beaven [2011] NZCA 422.
(s)22 September 2011 – Supreme Court grant leave to appeal and cross appeal Court of Appeal judgment of 20 December 2010.23
(t)9 August 2012 – Supreme Court issues judgment. Holds Court of Appeal was wrong to base judgment on separation date values of properties. Determines Ms Beaven must pay Mr Burgess $30,046.25 less costs due in relation to certain parts of the earlier proceedings.24
(u) 4 August 2014 – hearing in the Family Court on Mr Burgess’
application to set aside the notice of claim.
(v) 5 August 2014 – reserved judgment of Family Court
(Judge Somerville) striking out Mr Burgess’ application of
9 September 2011.25
Discussion
[19] On what I have been able to learn about the circumstances leading up to the judgment of Judge Somerville of 5 August 2014, I cannot proceed on the basis that there is absolutely no merit in the appeal. The Judge’s reasons for striking out the proceedings may well withstand the closest scrutiny. The strike-out of the proceedings also involves the exercise of a discretion with which an appellate Court may well be reluctant to interfere. There is, however, a real issue as to whether the Judge accorded Mr Burgess due process and the protection of natural justice in striking out proceedings in the way he did.
[20] As Judge Somerville notes in his decision, the proceedings before him had been set down for a substantive hearing. There seems to be common ground that it was not entirely clear as to what issues were to be dealt with at the hearing. Through no fault of the parties a directions conference scheduled for 20 June 2014 had not
taken place.
23 Burgess & Beaven [2011] NZSC 114, (2011) 28 FRNZ 736.
24 Burgess & Beaven [2012] NZSC 71, [2013] 1 NZLR 129, [2012] NZFLR 670 [The Supreme
Court decision].
25 Burgess & Beaven, above n 1.
[21] Mr Burgess said he attended the hearing on 4 August 2014 intending to present his arguments with regard to the substantive issues and with witnesses to call in support. The judgment records that both Mr Burgess and Ms Corry presented the Court with submissions. The judgment records Judge Somerville’s observation that at the commencement of the hearing he noticed there were serious interlocutory
applications which should have been dealt with earlier.26
[22] There must then have been significant discussion with Judge Somerville. The judgment refers to “lengthy discussions with the parties”.27 Both Ms Corry and Mr Burgess thought these discussions would have taken approximately one hour. Ms Corry said that most of the discussion was between the Judge and Mr Burgess. Mr Burgess said, in his submissions to me, that during those discussions the Judge said nothing to him to indicate that he was contemplating striking out the proceedings. Ms Corry, in her submissions to me, said that she could not record the Judge saying
anything of that sort. She said that the Judge’s decision in striking out the proceedings took her somewhat by surprise.
[23] On the basis of that information, there must be some prospect that on his appeal Mr Burgess will be able to persuade the Court that the striking out of the proceedings in this manner was wrong.
[24] In support of his position, Mr Burgess referred to the judgment of Asher J in Ayers v Thompson, in which the High Court quashed an order for costs against the appellant where, probably through an oversight, a Judge had made an order for costs against the appellant without the appellant having the opportunity to be heard in respect of an application for costs, despite the appellant having given notice to the
Court that he wished to be heard on that issue.28 In his judgment Asher J referred to
s 27(1) of the New Zealand Bill of Rights Act 1990 and a decision of the Court of
Appeal, and stated “[it] is fundamental that parties to civil litigation must be given
adequate notice and an opportunity to be heard”.29
26 At [1].
27 At [2].
28 Ayers v Thompson [2012] NZHC 2807.29 At [47], citing Combined Beneficiaries Union Inc v Auckland City Cogs Committee [2008] NZCA
423, [2009] 2 NZLR 56 at [11].
[25] It is not inevitable that the appeal would succeed on this ground. It is noted that Judge Somerville had submissions from both Mr Burgess and Ms Corry at the commencement of the hearing. It seems likely from what I was told that Ms Corry’s position throughout the continuation of the proceedings in the Family Court was that effectively they were an abuse of process as all issues between the parties had in
substance been determined through a judgment of the Supreme Court.30 If this
appeal proceeds further the Court may need to obtain a transcript of all that was said during the 4 August 2014 hearing.
[26] In considering the application to dispense with security, this Court must be concerned not just with the issue of whether or not the appeal might succeed. It also has to consider whether or not, in the context of all the litigation the parties have been involved in, the potential benefits of the appeal are disproportionate to the burden which will be imposed on the respondent in having to deal with the appeal. Protecting respondents from vexatious appeals is a legitimate purpose of the security for costs regime. The Supreme Court noted in Reekie v Attorney-General that “an appeal, or its conduct, may be vexatious even though it raises some issues which are
arguable”.31
[27] In considering the present application I need to consider whether “it is right to require the respondent to defend the judgment under challenge without the usual protection as to costs provided by security”.32
[28] If Mr Burgess were to be successful on his appeal, one result could be that the striking out of the proceedings and associated costs order would be reversed. If that happened, the parties would then be back in the Family Court with that Court having to deal with those proceedings in whatever way the Court considered appropriate. Given the history of litigation between the parties, the attention which Judge Somerville has given to the matter, the way in which the Court and the parties were informed by the submissions which were put before the Court for the hearing on
4 August 2014, there is every prospect that the Court would give Mr Burgess notice
that it was considering striking out the proceedings for the reasons articulated in
30 The Supreme Court decision, above n 24.
31 Reekie v Attorney-General, above n 3, at [39].
32 At [31].
Judge Somerville’s decision of 5 August 2014. The parties might well be given opportunities to make submissions in relation to that possible outcome.
[29] The same scenario could follow if the Family Court were to reinstate Mr Burgess’ application of 9 September 2011 as a result of his application for a rehearing.
[30] At the hearing before me, Mr Burgess accepted that if matters were to be dealt with in that way, any procedural unfairness to him would be cured. He also accepted that if matters were dealt with in that way, it is quite possible that a Judge dealing with the proceedings would conclude again that it was appropriate to strike out the proceedings.
[31] It is also possible that, even if the appeal continues and this Court finds Mr Burgess was not given adequate notice the Family Court was considering striking out the proceedings, the High Court will decide to uphold the Family Court’s decision. On the appeal, Mr Burgess would have been given adequate notice to address the basis on which the Family Court did strike out the proceedings. After full argument, the High Court may well agree it remains appropriate for the proceedings to be struck out.
[32] On the information that is currently before this Court I consider that the prospect of such outcomes are so high that this Court needs to signal to Mr Burgess that this appeal might well be seen as part of a continuing pursuit of litigation, which in the words used by the Supreme Court in Reekie could be considered
“unreasonable and tendentious”.33
[33] Mr Burgess has had the burden of having to have judgments of the Family Court (Judge Strettell) overturned through subsequent appeals first to the High Court (John Hansen J) and then to the Court of Appeal and the Supreme Court. He is nevertheless trying to continue with Court proceedings on issues which have either been determined by the Courts, or in respect of which at the very least he has the
benefit of a range of judicial opinion. To the extent that any issues have not already
33 At [39].
been determined by the Court so as to create problems for him by reason of res judicata or issue estoppel, those opinions suggest the potential benefits to him of continuing litigation are disproportionate to the burden which the respondent and the Courts have to bear in dealing with that litigation.
[34] In the proceedings before the Family Court, Mr Burgess sought to obtain judgment determining that an agreement reached between his then counsel and his wife’s counsel (which resulted in his acquiring title to a farm property (Medbury) subject to debts secured over it) did not comply with the formal requirements of a relationship property agreement as set out in part 6 of the Property (Relationships) Act. From his submissions, it seems that Mr Burgess hopes the Court’s declaration of invalidity/non-compliance will enable him to revisit the way in which property was apportioned between the parties in earlier proceedings. He also apparently envisages that he will be able to seek compensation from Mrs Beaven for losses which he considers he suffered by reason of her actions during separation. He says that because no Court has, as between the parties, ruled on whether or not the agreement between counsel should be set aside, no Court has been able to consider the full picture with regard to relationship property and give him his rightful entitlement.
[35] Mr Burgess said to me that he wants a Court to look at the “total picture”. He accepted, however, that this is what the Supreme Court had done in expressing a view as to whether he would be entitled to compensation arising out of the mortgagee sale of Medbury.34
[36] While acknowledging that on a technical basis, it could only give judgment in the proceedings before it, the Supreme Court did deal with the total picture and endeavoured to bring the proceedings between the parties to an end in a comprehensive way.
[37] Subject to the quantification of certain costs to which Ms Beaven was
entitled, the Supreme Court stated “we would like this judgment to be as final a
resolution of this unhappy case as is possible, given the outstanding issues as to costs
34 The Supreme Court decision, above n 24, at [48]-[50].
identified in [47] above”.35 Subject to quantification of those costs, on the apportionment of property which had occurred, the Supreme Court advised that Mr Burgess was entitled to payment of $30,046.25 from Ms Beaven.36
[38] On 4 October 2010, French J gave a judgment for the High Court on appeal against a decision of the Family Court of 23 April 2010 in which Judge Somerville dismissed an application by Mr Burgess to remove a notice of claim which had been registered over the title to Medbury in favour of Ms Beaven.
[39] As recorded in the judgment of French J, the notice of claim had been registered pursuant to an agreement reached between counsel to give effect to an earlier judgment of Judge Strettell in the Family Court. That decision resulted from a rehearing of certain issues following a partially successful appeal by Mr Burgess to
the High Court. French J noted in her judgment:37
The key issues raised by the appeal are the legal status of a signed consent memorandum and whether Mr Burgess should be held to an agreement which provided when Ms Beaven would be required to withdraw the notice of claim.
[40] In her judgment, French J stated:
[39] … at one point during submissions, Mr Burgess suggested or appeared to suggest that he had never agreed to the terms of the memorandum. However, he acknowledged that he did authorise his lawyer to sign it. He is also on record as having told Judge Somerville that he had agreed to the terms. I am satisfied Mr Burgess did agree to the terms of the memorandum.
[41] The judgment also referred to the grounds on which Mr Burgess advanced his appeal. One of those grounds was:38
iv) Because the agreement did not have the status of a consent order, it was unenforceable because:
…
35 At [52].
36 At [55](E).
37 Burgess & Beaven, above n 14, at [4].
38 At [41](iv).
2. It did not comply with the procedural requirements of Part 6 of the Act in that contrary to s 21F it was not signed by the parties themselves and there was no accompanying lawyer’s certificate.
[42] French J also recorded other grounds on which Mr Burgess had claimed the agreement which had been relied upon was unenforceable. French J stated:
[42] I have carefully considered all of the submissions made by Mr
Burgess.
[43] While some of his legal arguments were inventive and interesting, I
consider that his appeal is without any substantive merit.
[44] The agreement which he now seeks to impugn was proposed by his own lawyer as a means of enabling Mr Burgess to get what he wanted at the time – which was legal title to the property as well as a stay. Ms Beaven could have refused to entertain an agreement which would have forced Mr Burgess to make a choice.
[45] The agreement was more than a bare agreement to seek consent orders. The latter was simply an agreed means of formalising an already concluded agreement as is evidenced by the fact the terms of the agreement were actioned despite there being no consent order in existence.
[46] Mr Burgess must have known what he was committing to including the provision that Ms Beaven would not be required to withdraw the notice of claim until such time as all costs had been paid.
[47] The terms were clear and unequivocal and they were relied upon. The agreement has been part performed, each party acting on the agreement and each taking benefit from it.
[48] In those circumstances, I do not accept that the interests of justice favour Mr Burgess. He is aggrieved by the outcome of Judge Strettell’s decisions. However, in relation to the issues that are before me, he appears to be largely the author of his own misfortune, an assessment reinforced by the fact that before the TSB mortgagee sale took place, Ms Beaven was prepared to negotiate to enable a refinancing to take place.
[43] French J considered the argument that the agreement was void due to non- compliance with the procedural requirements of s 21F on the basis that this had not been discussed by Judge Somerville nor raised in written submissions filed in the Family Court.39 On that basis she stated Mr Burgess required leave to raise this as a new ground on his appeal. She concluded “the issue about non-compliance with Part
6 is not such as would justify appellate intervention”.40 In reaching that conclusion,
she stated:
39 At [44]-[55].
40 At [62].
[60] In my view, the argument is not tenable. Even if the agreement was subject to Part 6 and hence void for non-compliance with the procedural requirements of s 21F, it would nevertheless be saved by s 21H because of the fair process which led to its creation and because of the reliance which each party has placed on it. The non-compliance has not materially prejudiced the interests of either party to the agreement
[44] As French J recorded in her judgment, by the time she came to hear the appeal, Mr Burgess had defaulted on his payments to TSB required by the mortgage over the property. In July 2010, TSB exercised its mortgagee power of sale. Associated with the sale the notice of claim was discharged. The sale had resulted in a loss.
[45] French J declined Mr Burgess leave to appeal her judgment in a further judgment of 24 May 2011.41
[46] The Court of Appeal declined his application for special leave in a judgment of 29 August 2011. The Court of Appeal held with the notice of claim having been discharged as part of the mortgagee sale:42
There was never a live issue requiring determination either in the High Court or in this Court on appeal. The interests of justice do not justify granting leave to argue a point which is now moot and which was never of any special importance.
[47] In further proceedings, TSB Bank Ltd v Burgess, Mr Burgess faced a claim by TSB Bank Limited for a judgment for $22,999.77.43 This was the balance he owed on debts secured over Medbury, plus interest and expenses.
[48] He joined Ms Beaven as a third party. He claimed, amongst other things, that Ms Beaven should compensate him for any debt he might owe to the bank relying on three causes of action: breach of equitable duties, breach of fiduciary duty and negligence.
[49] In a judgment of 28 May 2013, Associate Judge Osborne exercised his discretion to set aside the third party notice because of the prejudice that would be
41 Burgess & Beaven, above n 21.
42 Burgess & Beaven, above n 22, at [12].
43 TSB Bank Ltd v Burgess [2013] NZHC 3291.
caused to the plaintiff if the notice was sustained. The Judge stated that if the notice was sustained, there would be prejudice because “[the] High Court will become the arena for the claim for compensation which Mr Burgess has not, to date, been able to obtain in other jurisdictions”.44
[50] In those proceedings, it was argued for the bank that issues as between Mr Burgess and Ms Beaven had been determined by a Supreme Court judgment. Associate Judge Osborne did note:45
It is well arguable that there is no res judicata or issue estoppel on the subject matter of Mr Burgess’s third party claim. That is, because, by the nature of the limited appeal issues before the Supreme Court, that Court could not bring a comprehensive determination to all issues whether they were fully alive or simply lingering.
[51] Associate Judge Osborne did, however, refer to the fact that the Supreme Court “considered there had been more than enough litigation on Mr Burgess’s part of his issues with Ms Beaven”.46
[52] Mr Burgess referred to the fact that Dunningham J had found in other proceedings that the agreement which had led to title to Medbury being in Mr Burgess’s sole name had been completed in a way that did not meet the requirements of s 21F of the Property (Relationships) Act.47 The defendants in those proceedings were his former solicitors, the District Court, and the Legal Complaints Review Office. Mr Burgess sought, amongst other things, judicial review of a
District Court judgment refusing to enter judgment by default on a counterclaim he had brought against his former solicitors for $894,000 and judicial review of LCRO decisions upholding determinations of Standards Committees in which they had largely exonerated his lawyers and approved the fees they had charged.
[53] Dunningham J did consider a consent memorandum determining ownership of relationship property to be a s 21 agreement subject to the statutory provisions of
the Property (Relationships) Act “until and unless the Court orders are made
44 TSB Bank Ltd v Burgess [2013] NZHC 1228.
45 At [57].
46 At [57].
47 Burgess v Tait [2014] NZHC 2408.
confirming it”.48 However, it is apparent from her judgment that Mr Burgess’ criticisms of the way the agreement was entered had been investigated by a Standards Committee, reviewed by the LCRO including a hearing and further considered by Dunningham J.
[54] With the caveat that it was not for her Honour, in judicial proceedings, to review the merits of the decision reached by the LCRO, Dunningham J noted:
[71] I am satisfied the LCRO proceeded on a correct understanding of the lawyer’s duty to advise. He considered that advice in the factual context in which the advice was given, including that Mr Burgess’s entitlement to the relationship property had largely been determined by the previous Court decisions. The lawyer was therefore limited to advising on, and pursuing appeals (some of which were pursued on Mr Burgess’s instructions and in contradiction to Mr Tait’s advice), and to interim arrangements to stave off an imminent mortgagee sale. Such judgments are squarely within the LCRO’s area of expertise and I see no basis for the Court to intervene in his decision on that issue.
[55] Against the background of those decisions it is reasonable for this Court to proceed on the basis that with his appeal Mr Burgess is seeking to continue with a claim against Ms Beaven which has little prospect of success, and which is likely to produce no tangible benefit to him.
[56] The amount which Mr Burgess might be required to pay as security for costs is relatively modest. Mr Burgess in memoranda to the Court on this issue has referred to his impecuniosity, although there is no affidavit evidence from him as to his precise financial situation. In a memorandum to the Court of 4 March 2015, he said “the respondent ex-wife has also failed to pay any part of the balance sum awarded to me by the Supreme Court”. Pursuant to that judgment, she was required to pay him the sum of $30,046.25 less the costs that he had to pay to Ms Beaven
pursuant to judgments of the Court which had not been overturned.49 In submissions
before me, Mr Burgess accepted he had been paid approximately $23,000 but had used approximately $16,000 of this to provide security for costs on appeals he was pursuing in respect of the litigation with the Taranaki Savings Bank and his former
solicitors. He said the balance of the funds he had received had been used to pay
48 At [64].
49 The Supreme Court decision, above n 24, at [55](E).
personal debts, although not the debt to TSB Bank Ltd which it had pursued in proceedings mentioned earlier.50
[57] Given all matters referred to above, I consider it would not be just to require the respondent to defend the judgment without security for costs. Accordingly, I decline to waive the requirement for security for costs.
[58] Pursuant to r 20.13. I fix the security required at $1990 but direct that it not have to be paid until 19 July 2015. That date has been fixed on the basis that if Mr Burgess wishes to continue with his application for a rehearing of the proceedings which were struck out in the Family Court, the parties will do what they can to have that application and any reinstated proceedings disposed of before then. The Family Court should have time to consider the application for rehearing and the potential strike-out of the proceedings on a notified basis if the Family Court decides to deal with matters in that way.
[59] This appeal is adjourned for a further case management conference to take place on a date to be fixed by the Registrar after 19 July 2015. At that conference this Court will be able to issue further directions as to how any appeal should proceed if Mr Burgess still wishes to proceed with his appeal at that point.
[60] As Mr Burgess has been unsuccessful in his application for a waiver as to security for costs, the respondent is entitled to seek costs in respect of the application. My tentative view is that the respondent is entitled to costs on a 2B basis. If that is not accepted by Mr Burgess, he must file a written memorandum as to costs within ten working days. Ms Beaven must file her response within a further ten working days.
[61] If Ms Beaven does not accept that an award of costs on a 2B basis is appropriate, her counsel must file a memorandum setting out what she seeks within ten working days. Mr Burgess must file his response to such a memorandum within
a further ten working days.
50 TSB Bank Ltd v Burgess, above n 43.
[62] Any memorandum filed by either party is to be no longer than three pages. The Court will issue a Judgment as to costs once it is seen how the parties have dealt with this issue.
Solicitors:
Dawson Innes, Christchurch
11
0