EA v Rennie Cox Lawyers - [2017] NZHC 770

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2016-404-1122 [2017] NZHC 770

BETWEEN
EA

Applicant

AND

RENNIE COX LAWYERS Respondent

Hearing: On the papers

Appearances:

R J Hollyman for Applicant
E J Werry for Respondent

Judgment:

26 April 2017

JUDGMENT OF LANG J

[on application for leave to appeal to Court of Appeal]

This judgment was delivered by me on 26 April 2017 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

EA v RENNIE COX LAWYERS [2017] NZHC 770 [26 April 2017]

[1] On 13 January 2017, I delivered a judgment in which I dismissed an appeal by EA against a refusal by Judge Gibson to set aside a default judgment that Rennie Cox had irregularly obtained in the District Court.1 EA now seeks leave to appeal to the Court of Appeal against aspects of my judgment.

[2] Rennie Cox abides the Court’s decision, and has not made submissions in relation to the application for leave.

Relevant principles

[3] The principles to be applied in considering an application for leave to appeal to the Court of Appeal are well established.

[4] Although the Senior Courts Act 2016 came into force on 1 March 2017, the present application is still governed by s 67 of the Judicature Act 1908. Section 67 provides as follows:

67 No appeal on appeals from inferior Courts without leave

The determination of the [High Court] on appeals from inferior Courts shall be final unless leave to appeal from the same to the Court of Appeal is given [by the High Court or, where such leave is refused by that Court, then by the Court of Appeal].”

[5] In applying s 67 the Court is bound to take into account a series of well- established principles. These were considered in detail by the Court of Appeal in Waller v Hider and Snee v Snee.2

[6] In Waller v Hider the Court confirmed that the proposed appeal must raise a question of law or fact that is capable of bona fide and serious argument and that the case must involve some interest, public or private, of sufficient importance to outweigh the cost and delay of a further appeal.3 Blanchard J, who delivered the
decision of the Court in Waller v Hider, also made reference to the earlier decision of

1      EA v Rennie Cox [2017] NZHC 5.
2      Waller v Hider [1998] 1 NZLR 412; Snee v Snee (1999) 13 PRNZ 609.
3      At 412.

the Court in Cuff v Broadlands Finance Ltd,4 where the Court had remarked that, in the end, the guiding principle must be the requirements of justice.5

[7] Blanchard J described the function of the Court of Appeal in determining a second appeal as follows:6

“Upon a second appeal this Court is not engaged in the general correction of error. Its primary function is then to clarify the law and to determine whether it has been properly construed and applied by…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2017] NZHC 770
Decision Date: 26 April 2017

CaseChat Overview and Summary

In this case, EA, the applicant, sought leave to appeal to the Court of Appeal against a decision of the High Court dismissing an appeal against a default judgment obtained by Rennie Cox Lawyers. The appeal pertained to the circumstances under which a default judgment can be set aside when it has been irregularly obtained. The High Court had determined that Rennie Cox Lawyers had irregularly obtained a default judgment by providing incomplete and misleading information to the District Court. However, the High Court exercised its discretion not to set the judgment aside, finding that the issue of the reasonableness of the fees had already been sufficiently examined and that no miscarriage of justice would result if the judgment remained.

The legal issues before the Court of Appeal involved the principles governing irregularly obtained default judgments, including the effect of improperly obtained extensions of time on such judgments, the general rule that irregularly obtained judgments should be set aside, the extent of the discretion to uphold such judgments, and the correctness of the High Court's reconciliation of conflicting decisions. Additionally, the applicant questioned whether the Court of Appeal could properly exercise discretion in favour of lawyers who obtain ex parte judgments for their fees by misinforming the Court and omitting to inform it of the client's position. The applicant also sought clarification on whether invoices rendered under a lawyer's fee agreement specifying work to be billed on a discretionary basis should be considered "liquidated damages."

The Court of Appeal granted leave to appeal on certain issues, specifically those concerning the general rule that irregularly obtained default judgments should be set aside, the extent of the discretion to uphold such judgments, and the reconciliation of conflicting High Court decisions. The Court found these issues to be of significant public interest and worthy of consideration by the Court of Appeal, as they had not been addressed by the Court of Appeal since 1983. The remaining issues, however, were deemed to be of lesser importance and not warranting appeal.

As a result, the Court of Appeal granted EA leave to appeal on the questions outlined in points (b), (c), and (d) of the grounds of appeal.

Orders