Erwood v Glasgow Harley
[2000] NZCA 191
•7 September 2000
| IN THE COURT OF APPEAL OF NEW ZEALAND | CA303/99 |
| BETWEEN | ROBERT JOHN ERWOOD |
| Applicant |
| AND | GLASGOW HARLEY |
| Respondent |
| Hearing: | 4 September 2000 |
| Coram: | Gault J |
| Appearances: | D L Mathieson QC for Applicant L Taylor for Respondent |
| Judgment: | 7 September 2000 |
| JUDGMENT OF THE COURT DELIVERED BY GAULT J |
Mr Erwood seeks special leave to appeal out of time under r5 Court of Appeal (Civil) Rules from a judgment of the High Court (Gallen J) given on 28 July 1999. By that judgment an order for summary judgment against Mr Erwood and in favour of the solicitors’ firm Glasgow Harley in respect of their fees and those of Mrs Raylee Harley of counsel was set aside as to quantum but not as to liability. No reasoned decision was given, the orders made having been discussed with counsel – though not consented to on behalf of Mr Erwood.
Mr Erwood appealed within time but that appeal was deemed to be abandoned under r11(3) for failure to give security for costs within the specified time. The application for special leave to appeal was made in December 1999 after Mr Erwood’s application to the High Court (made after the time for giving security had expired) for an order dispensing with security for costs was dismissed. It was also after an application he had made to the High Court for a rehearing was ruled inappropriate.
When the application for special leave was called in this Court on 20 March 2000, it was adjourned with leave to apply. Mr Erwood, seemingly pursuant to that leave, now seeks to have the Court rule on his application. It is opposed by the respondent solicitors. Affidavits have been filed and we have heard quite wide-ranging argument.
The background is both complicated and worrying. As appears from the judgment of this Court in Harley v McDonald [1999] 3 NZLR 545, Mr McDonald (who is the same person as Mr Erwood) lost money as the result of defalcations by the solicitors’ firm of Renshaw Edwards. He was represented by the firm Glasgow Harley and Mrs Harley in proceedings taken against the professional indemnity insurer of Renshaw Edwards and against the New Zealand Law Society as administrator of the Solicitors’ Fidelity Guarantee Fund.
At first instance (before Giles J) Mr McDonald failed against the insurer but succeeded in part against the Law Society. Costs were awarded against him in favour of the insurer but Glasgow Harley and Mrs Harley were ordered jointly to pay part of those costs – see [1999] 1 NZLR 583. Both the firm and Mrs Harley appealed against the order for costs against them. That appeal was heard in this Court on 3 May 1999. In the course of the hearing there was reference to the solicitors having obtained summary judgment for their fee and that of counsel even though Giles J had referred Mrs Harley’s bill of costs to the Wellington District Law Society for revision. That matter was not relevant to the issues before this Court and it was not mentioned in the judgment which was delivered on 11 August 1999. The orders made by Giles J were upheld although he was found to have taken into account some extraneous matters. This Court held, after Mrs Harley had placed before the Court an extensive affidavit, that the strong adverse findings made by Giles J in respect of the handling of the litigation by the solicitors and counsel were open to him.
In the meantime, before the judgment of this Court was delivered, the application to set aside the summary judgment for the fees was heard in the High Court by Gallen J. At that time the costs revision had not been dealt with. He ordered the judgment to be set aside as to quantum but allowed it to stand on liability. The proposed appeal is against that order. It is said the Master who entered the summary judgment had not been told of the referral of counsel’s bill of costs for revision and would not have made the order had he been properly informed in response to an enquiry he made by those present in Court. Rather, it is said, he would have acceded to Mr Erwood’s request to further adjourn the application to allow him to secure the assistance of counsel. Mr Mathieson told us that there are substantive matters to be addressed on the question of liability. He will argue matters going to the question of liability of his client for any fee relying on a claim that the retainer was on a contingency basis and on the findings in relation to the competence of counsel. He submitted that the judgment on liability should not be allowed to stand even though quantum had not been fixed because of the potential effect on the costs revision procedure.
Since the date of the judgment against which Mr Erwood wishes to appeal there have been developments in addition to the delivery of the judgment of this Court. Leave to appeal to the Privy Council against that judgment has been granted. There has been a lengthy hearing before the Costs Revision Committee of the Wellington District Law Society. We were told from the Bar that notwithstanding the judgment on liability for costs in the High Court and the judgment of this Court upholding the findings of Giles J on counsel’s competence, the members of the Committee were persuaded to hear evidence and form their own views on the liability of Mr Erwood for counsel’s fees and quantum. A decision was issued on 2 June 2000 containing findings apparently inconsistent with those of Giles J and this Court. An appeal and cross-appeal to the Registrar are pending.
The only matter presently before the Court is the application for special leave to appeal from the judgment of Gallen J so that Mr Erwood can have this Court review the refusal to set aside the summary judgment on liability. That is opposed even though Mr Taylor for the respondent firm accepted that the circumstances in which the judgment was originally obtained were unsatisfactory. He submitted that so much has occurred since then that it would be futile now to re-visit the question of Mr Erwood’s liability for costs in some amount which will be determined in due course in the fee revision process. He referred specifically to the fact that the fee of the solicitors’ firm, as distinct from that of counsel, has never been challenged and so is payable. He submitted further that Mr Erwood has had opportunities before Gallen J and before the Costs Revision Committee to fully ventilate all matters going to liability. Referring to the applicable principles governing the grant of special leave he argued that Mr Erwood’s application was inexcusably delayed and that having allowed an earlier appeal to lapse for failure to give security for costs, he cannot meet the test of showing the interests of justice require special leave.
We have concluded that leave should be granted. Mr Erwood does not help his cause by rejecting able counsel provided for his assistance and taking steps on his own behalf. It was behaving in this way that led to the deemed abandonment of his earlier appeal. But he has particular personal difficulties for which some allowance is reasonable – though he must recognise that there are limits to indulgences he can expect. There have been previous cases in which the impact of the time limit for providing security for costs has been ameliorated by special leave to appeal (Lange v Town & Country Planning Appeal Board [1967] NZLR 915 (CA)). We have considered whether we should again adjourn the application, but in light of how matters have developed we are satisfied leave to appeal is appropriate in this case. The circumstances in which the summary judgment was obtained, against the background to which we have referred and the issues arising from the manner in which Gallen J determined to make the orders he did - and of course he did not have the judgment of this Court on appeal from Giles J - all suggest that the interests of justice call for the grant of leave. The appeal preferably should be heard after the Privy Council appeals have been determined.
There will be special leave to appeal accordingly.
The applicant, having secured an indulgence, is not entitled to costs on this application.
Solicitors
Radich Dwyer Hardy-Jones Clark, Blenheim, for Applicant
Glasgow Harley, Nelson, for Respondents
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