Criffel Deer Ltd v ANZ Bank New Zealand Ltd

[2022] NZHC 2175

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2021-485-384

[2022] NZHC 2175

BETWEEN

CRIFFEL DEER LIMITED

First Plaintiff

PRIME COMMERCIAL LIMITED
Second Plaintiff

MICHAEL ROBERT GARNHAM
Third Plaintiff

SBF PROPERTIES LIMITED

Fourth Plaintiff

AND

ANZ BANK NEW ZEALAND LIMITED

Defendant

On the papers:
Counsel:	C M Stevens, M Robertson and T Mijatov for Plaintiffs
Judgment:	30 August 2022

JUDGMENT OF CHURCHMAN J

[Leave to withdraw]

Introduction

[1]    Counsel for the Garnham companies (the unsuccessful plaintiffs) have sought leave to withdraw. The memorandum filed by counsel records that they have terminated their retainer with the Garnham companies for failure to pay counsel’s fees or make satisfactory arrangements for payment. The instructing solicitor remains unchanged.

CRIFFEL DEER LIMITED v ANZ BANK NEW ZEALAND LIMITED [2022] NZHC 2175 [30 August 2022]

Law

[2]    The circumstances in which a solicitor on the record may seek leave to withdraw are set out in r 5.41 of the High Court Rules 2016. The rules provide three ways to withdraw:

(a)by obtaining an order that the solicitor has ceased to be the solicitor on the record for the party, serving the order on every party who has given an address for service, and filing an affidavit proving that service;1

(b)by filing and serving a notice of change of representation in accordance with r 5.40, an affidavit proving service of the notice on every other party, as well as the previous address for service;2 or

(c)by the party filing and serving a notice that the party intends to act in person, with the party’s new address for service, as well as filing an affidavit proving service on the solicitor on the record and every other party who has given an address for service.3

[3]    The rules do not set out a process or requirement for counsel to seek leave to withdraw. However, a practice has developed for counsel to seek the leave of the Court to withdraw. This was the approach taken in Burgess v Monk.4

[4]    Burgess dealt with an application by counsel for Mr Burgess to withdraw in a trustee dispute. Counsel submitted that their interlocutory application for leave to withdraw was based on the ground that serious professional conduct issues had arisen. This included a potential conflict between counsel’s interests and those of the client, and that “the relationship of trust and confidence between counsel and client [had] broken down irretrievably”.5

1      High Court Rules 2016, r 5.41(3).

2      Rules 5.40(4) and 5.41(2)(a).

3      Rule 5.41(2)(b).

4      Burgess v Monk (No 4) [2017] NZHC 2618.

5 At [7].

[5] In the absence of a legislative instrument dealing squarely with the withdrawal of counsel, Heath J considered that a first principles analysis was required, particularly considering the principles contained in the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008. The rules set out the duty to complete a retainer, and provide:

4.2A lawyer who has been retained by a client must complete the regulated services required by the client under the retainer unless—

(a)the lawyer is discharged from the engagement by the client; or

(b)the lawyer and the client have agreed that the lawyer is no longer acting for the client; or

(c)the lawyer terminates the retainer for good cause and after giving reasonable notice to the client specifying the grounds of termination.

4.2.1    Good cause includes—

…

(b) the inability or failure of the client to pay a fee on the agreed basis or, in the absence of an agreed basis, a reasonable fee at the appropriate time:

…

4.2.3A lawyer must not terminate a retainer or withdraw from proceedings on the ground that the client has failed to make arrangements satisfactory to the lawyer for payment of the lawyer’s costs, unless the lawyer has—

(a)had due regard to his or her fiduciary duties to the client concerned; and

(b)given the client reasonable notice to enable the client to make alternative arrangements for representation.

…

[6]    After setting out the relevant aspects of the Client Care Rules, the Court considered that an application to withdraw on the 19th day of trial required the administration of justice to be weighted heavily in the balance as a factor for consideration.6 Leave to withdraw was refused on the basis of this consideration – if

6 At [20].

counsel withdrew and the trial was aborted, then a new one would need to be scheduled for the following year.7 The Court also considered that none of the r 4.2.1 situations of “good cause” in the Client Care Rules applied.8

[7] This approach illustrates that the courts maintain oversight over barristers and solicitors pursuant to ss 268 and 270 of the Lawyers and Conveyancers Act 2006. Under its inherent jurisdiction, the Court may make an order restraining counsel from acting for a particular client where it is required in the interests of justice, or may allow withdrawal where good cause exists.9 As counsel are officers of the Court owing duties to the Court to complete a retainer unless good cause exists, it is appropriate for counsel to seek leave to withdraw despite there being no explicit requirement created by the rules to do so.10

Should leave to withdraw be granted?

[8]    Counsel rely on the fact that the plaintiffs have failed to pay their fees, or to make satisfactory arrangements for payment. A failure to pay fees is capable of constituting good cause for the termination of a retainer under r 4.2.1(b) of the Client Care Rules.

[9]    Counsel submit that r 4.2.3 has been complied with. Counsel say they that they have had regard to their fiduciary duties, including the fact that Mr Garnham is an experienced solicitor, that judgment has been delivered, and that costs are yet to be determined. Counsel say that they have taken reasonable steps to enable the Garnham companies to make arrangements for alternative representation, by raising payment as an issue for several months.

[10]   In Burgess, counsel filed an interlocutory application in reliance on the Court’s inherent jurisdiction and a memorandum in support of that application (no affidavit was filed).11 A question in this case is whether counsel should be required to provide

7 At [49].

8 At [51].

9      Black v Taylor [1993] 3 NZLR 403 (CA).

10     Burgess v Monk, above n 4, at [20].

11 At [8].

an affidavit setting out in more detail the steps they have taken in pursuit of compliance with r 4.2.3.

[11]   I do not think that is necessary. On the basis of the information in the memorandum received, it is clear why counsel wish to withdraw. The sole reason advanced is an appropriate one. Unlike Burgess v Monk, good cause exists, and the consideration of the administration of justice need not weigh so heavily, given that judgment has been entered, with only the issue of costs needing resolution.

Conclusion

[12]To the extent that leave is needed, I grant counsel leave to withdraw.

Churchman J

Solicitors:

Stephens Lawyers, Wellington for Plaintiffs Bell Gully, Wellington for Defendant