Equity Law Barristers Limited v Haden
[2015] NZHC 877
•30 April 2015
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV2014-404-001848 [2015] NZHC 877
IN THE MATTER OF the Insolvency Act 2006 and in the matter
of the bankruptcy (or proposal, as the case may be) of Grace Haden
BETWEEN
EQUITY LAW BARRISTERS LIMITED Judgment Creditor/Respondent
AND
GRACE HADEN
Judgment Debtor/Applicant
Hearing: 29 April 2015 Appearances:
M G Locke for the Respondent
Ms Haden the Applicant in personJudgment:
30 April 2015
JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN
This judgment was delivered by me on
30.04.15 at 4:30pm, pursuant to
Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
EQUITY LAW BARRISTERS LIMITED v G HADEN [2015] NZHC 877 [30 April 2015]
[1] Ms Haden has applied to recall the judgment of Associate Judge Doogue dated 19 December 2014. By that judgment Associate Judge Doogue dismissed Ms Haden’s application to set aside a bankruptcy notice.
Background
[2] Mr Orlov, Ms Haden’s lawyer acted for her in various matters. Bills of costs were rendered by invoices raised by “Equity Law, P O Box 8333, Symonds Street, Auckland”.
[3] Ms Haden challenged Mr Orlov’s bills of costs. The lawyer’s National Standards Committee (NSC) ordered Mr Orlov to refund the sum of $28,962.97 to Ms Haden.
[4] Mr Orlov applied to have the Legal Complaints Review Officer (LCRO)
review the matter.
[5] Prior to any determination by the LCRO, Ms Haden in an attempt to enforce the decision of the NSC served a statutory demand on the judgment creditor. She assumed it was they who had invoiced her in respect of Mr Orlov’s fees. The judgment creditor disputed that and applied to set aside Ms Haden’s statutory demand.
[6] In his consideration of that matter Associate Judge Abbott noted that the NSC had made its refund order against Mr Orlov and not against the judgment creditor. Ms Haden immediately contacted the judgment creditor to advise she would not be pursuing the demand but by then the judgment creditor had, as it was obliged to, filed a response to the setting aside application.
[7] When dismissing the application Associate Judge Abbott fixed costs on a 1A
basis in the sum of $3,190. That judgment was not appealed.
[8] The judgment creditor has served a bankruptcy notice in respect of the unpaid costs order.
[9] Ms Haden then applied to set aside the bankruptcy notice. Her grounds were that a valid set off existed, and that the judgment creditor’s application was an abuse of process and vexatious.
[10] The judgment creditor opposed on grounds that the claim of a set off related to Mr Orlov personally and not the corporate entity, Equity Law Barristers Limited, the judgment creditor. Mr Orlov’s affidavit in support stated no debt was due by the judgment creditor because the debt related to him personally.
[11] Two issues confronted Associate Judge Doogue namely whether there was a sufficiency of mutuality of the Orlov and Equity Law Barristers Limited entities, and also whether any set off was in the circumstances available to Ms Haden.
[12] Associate Judge Doogue considered whether the making of the costs order was fair, whether there was substance to the claim of a set off, and whether the service of the judgment creditor’s bankruptcy notice was an abuse of process.
[13] As to those, Associate Judge Doogue held, inter alia:
(a) Ms Haden had forsaken her challenge to the fairness of Associate
Judge Abbott’s costs order because she filed no appeal of that order;
(b)the determination of the LCRO displaced any obligation imposed by the NSC requiring the repayment of a refund by Mr Orlov and there was insufficient evidence indicating otherwise or available to establish that it was the obligation of the judgment creditor to reimburse such funds anyway;
(c) the contentions of abuse of process are founded upon claims the judgment creditor which is associated with Mr Orlov was using the processes of the court to extract a sum of money from Ms Haden which would hamper her in conducting other litigation to which Mr Orlov is a party, but that it cannot be said the judgment creditor has contrived to put itself in a position where it would be able to enforce
the costs order against Ms Haden for the purposes of hindering her with regard to the other litigation because there is no evidence of that.
Recall application
[14] It is made on the following grounds:
(a) the judgment was based on the deception that Equity Law Barristers Limited was the trading name for a person rather than the judgment creditor;
(b) the judgment was founded on false assertions;
(c) Section 27 New Zealand Bill of Rights Act 1990 considerations have not been observed; and
(d) includes what Ms Haden has deposed by her affidavit dated 15
January 2015 filed in support of the recall application.
[15] In a further description of the grounds in support of her recall application Ms
Haden contends:
(a) she never paid fees owing to Mr Orlov but that all financial transactions were between herself and the judgment creditor;
(b) that trading names have been used to deliberately “blur the reality”;
(c) that the court has been deceived as to the contractual arrangements;
(d) counsel for the judgment creditor informed the court that “I am told
that Equity Law is a trading name for Mr Orlov personally”; and
(e) that counsel appears to act on instructions from a fictional law firm called Stewart & Associates Equity Law which Ms Haden considers to be acting as a proxy for Mr Orlov.
[16] By Ms Haden’s affidavit she backgrounds her professional relationship with
Mr Orlov and, she says:
(a) she did not appeal Associate Judge Abbott’s decision within time
because she believed she had a longer period of time to do so;
(b)that Equity Law was not a registered lawyer or incorporated law firm able to provide legal services;
(c) the Law Society was wrong when it claimed that Equity Law
Barristers was an incorporated law firm;
(d) that Equity Law Barristers was not an incorporated law firm;
(e) that Equity Law Chambers could not offer legal services to her because it was neither a law firm nor lawyer and she believed she had engaged a company capable of providing legal services;
(f) that her agreement for provision of services was with Equity Law Chambers as shown by the logo contained on the document that was used on Equity Law’s website but that in her agreement there was no definition of Equity Law Barristers, Equity Law Chambers or Equity Law;
(g) that the court was deceived when advised by Mr Locke that Equity
Law was a trading name for Mr Orlov;
(h) that the only person who provided legal services to her was Mr Orlov; (i) while believing she had engaged a bona fide law firm she says most of
the work was done by persons who at the time did not hold a practicing certificate;
(j)that there is evidence rejecting claims that Equity Law was the trading name of Mr Orlov;
(k)the existence of Equity Law Barristers Limited ‘appears to have unsound foundations’, for various reasons detailed;
(l)she agrees that she cannot get a refund from somebody she has not paid and acknowledges and says that the judgment creditor was not legally able to provide her with legal services;
(m)that Equity Law Barristers registered as an incorporated law firm from November 2008 even though “legally it could not have been an incorporated law firm”; that when she made a complaint regarding Mr Orlov’s invoicing she was of the belief she was not dealing with an incorporated law firm; that it now appears she was represented by a fictional law firm called Equity Law Chambers; that she did not before Associate Judge Abbott raise issues regarding the identity of her legal provider which is why she agreed not to enforce her statutory demand;
(n)that she now challenges the integrity of Mr Orlov’s invoices; that she has been deceived into believing that the person with whom she contracted legal services to be provided was the same person who delivered those to her or issued invoices in the matter, but they were not;
(o)that issues arise when legal services are provided through trading names and companies which are not law incorporated firms; and
(p)that a fictional law firm “Stewart & Associates Equity Law” claims to have provided instructions to counsel but that that entity is controlled by Mr Orlov.
The applicant’s submissions
[17] Ms Haden submits there is evidence that the costs judgment relied on by the judgment creditor for its bankruptcy application has as its source fraudulent invoices.
[18] Ms Haden challenges the integrity of the lawyers involved including those now acting for the judgment creditor.
[19] The 105 pages of exhibits attached to Ms Stewart’s affidavit demonstrate the extent she has undertaken and the sources of information she has obtained in support of these contentions.
[20] Ms Haden submits it is inappropriate for bankruptcy action to be pursued while she awaits a response still to her claims of “over charged invoices”.
[21] Ms Haden submits “if Mr Orlov in this action as director and shareholder of the judgment creditor has made it a sport to try and cost me as much money as possible to offset the sums which he extracted from me by false and fraudulent invoices”. She complains about the use of the bankruptcy process to prevent her pursuing her reasonable enquiry of Mr Orlov’s charges.
Legal principles
[22] It is clear there must be a very special reason to justify a judgment being recalled.1
[23] In Erwood v Maxted 2 the Court of Appeal set out guidelines for recall applications and distinguished between correction of accidental slips and omissions and applications for recall. As to applications for recall the Court of Appeal held that the decision of the court in Horowhenua County would strictly apply i.e. that very special reasons of justice would be required.
[24] In the Unison Networks case 3 the Court of Appeal concluded that the ‘very special reason’ circumstances appropriate for recall were “likely to be rare”.
[25] Within the realm of appropriate cases for recall consideration the Court of
Appeal in Unison Networks at [32] stated:
1 Wild CJ and Horowhenua County v Nash (No2) [1968] NZLR 632 (SC) at 633.
2 [2010] NZCA 93 at [23].
3 Unison Networks Limited v Commerce Commission [2007] NZCA 49.
[A] plain mistake on the part of the court; a failure of the parties to draw to the court’s attention a fact or point of law that was plainly relevant; or discovery of new facts subsequent to the judgment being given. Another good reason was if the applicant could argue that he was taken by surprise by a particular application from which the court ruled adversely to him and that he did not have a fair opportunity to consider.
[26] McGechan on Procedure 4 details a number of cases where these ‘very special reason’ judgments have been recalled. These include:
(a) Where a Judge failed to determine an issue properly put to him. (b) Where the Judge’s orders did not reflect the Judge’s findings.
(c) Where matters have changed subsequent to delivery of the judgment, affecting the outcome.
[27] McGechan 5 also refers to cases where courts decline to order recall, including:
Applications which merely seek to relitigate matters already considered or to challenge substantive findings of fact and law.
Considerations
[28] Limiting Ms Haden’s ability to apply for a recall is a fact the court is seldom justified in considering again matters which are about arguments already raised at the former court hearing.
[29] Even if she does raise matters which she had not previously argued or provided evidence she should not have a further opportunity for those to be considered if she could have raised them and if there was an opportunity for her to have raised them previously.
[30] In her recall application Ms Haden claims inter alia that the court was deceived into believing that Equity law was the trading name for a person where as
4 HR11.9.01 (4).
5 HR11.9.01 (5).
in fact it was the trading name for the judgment creditor; that for the court to accept that Equity law was the trading name for Mr Orlov would amount to condoning the deception/perjury of persons responsible for that deception; and by maintaining that position Ms Haden’s rights to natural justice have been ignored.
[31] It appears clear that Associate Judge Abbott accepted and the NSC and LCRO Review Authorities agreed Ms Haden’s costs complaints concerned Mr Orlov. There is no outcome from those various processes which have suggested otherwise.
[32] Ms Haden’s affidavit provides highly argumentative material which is not relevant to the court’s present consideration of matters. She makes a number of assertions as to fraud but the hearing before Associate Judge Doogue was not concerned with these matters but rather was focussed upon a failure to pay a costs order; a costs order that had been sealed and therefore which could not be altered unless exceptional circumstances were present.
[33] The court’s focus must be upon the judgment of Associate Judge Doogue. Ms Haden has endeavoured to establish a link between Mr Orlov and the solicitor firm which has instructed Mr Locke who appears today and who appeared before Associate Judge Doogue on behalf of the judgment creditor. This court does not accept there is any significance in any submissions made in that regard. It is plain that Ms Haden does not directly point to any deception in the submissions or evidence filed by the judgment creditor in the hearing before Associate Judge Doogue or before this court.
[34] In this court’s view Ms Haden’s prime concern is about whether Mr Locke made a statement from the Bar concerning Equity law being a trading name for Mr Orlov.
[35] The Court has read the notes of evidence of the hearing before Associate Judge Doogue and is satisfied there was no evidence filed nor any submission or concerning the claim of misuse of a trading name. It follows the court cannot have relied on such a statement even if it had been made further.
[36] Instead it seems the issues have always focussed upon a right of set off against the judgment creditor. The clear evidence is there was no current judgment or potential litigation against the judgment creditor. Ms Haden’s claims of a discussion with the judgment creditor about rights of set off are probably irrelevant but in any event have already been argued extensively by her.
[37] Ms Haden claims she always believed she contracted for the supply of legal services from the judgment creditor. Why then did she complain to the Law Society about the cost of Mr Orlov’s services; and why did she not oppose the judgment creditor’s statutory demand/setting aside application?
[38] Ms Haden’s recently filed documents offer evidence she says confirming her claims of deception even fraud to conceal the fact that her services contract was with the judgment creditor and not Mr Orlov. But this information is not new. It has always been available and certainty before the hearing before Associate Judge Doogue.
[39] Ms Haden asserts the availability to her of a set off claim. That cannot be correct. The Law Society’s present position is that there is no ruling requiring a refund of fees to Ms Haden. Therefore no right of set off presently exists.
[40] Ms Haden’s submissions and evidence focus upon claims of deception. Mr Locke is correct and the court accepts that such submissions and evidence would require serious and incontrovertible proof that the court was deceived and that an incorrect judgment resulted because of that deception.
[41] This court is satisfied that evidence has not been provided to it nor was it provided to Associate Judge Doogue.
Result
[42] A special reason does not exist to permit a judgment recall. Rather Ms Haden’s recall application and the material resourced in support of that, does not raise any issue that was not, nor was capable of argument before Associate Judge
Doogue. Rather it is the court’s view that Ms Haden’s application seeks to relitigate matters which have, in all material respects, already been considered by the court previously.
Judgment
[43] The application for recall is dismissed.
[44] Costs are awarded to the respondent on a 2B basis.
Associate Judge Christiansen
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