Erwood v Harley HC Wellington CIV 2000 485 27
[2007] NZHC 2107
•12 September 2007
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV 2000 485 27
BETWEEN ROBERT JOHN ERWOOD Applicant
ANDRAYLEE PATRICIA HARLEY Respondent
Hearing: 6 September 2007
Counsel: Applicant in person
C R Carruthers QC for Respondent
Judgment: 12 September 2007 at 9.30 a.m.
RESERVED JUDGMENT OF RONALD YOUNG J
Introduction
[1] These proceedings are about Mr Erwood’s claim that he owes no money to Mrs Harley, the respondent and so her enforcement of cost orders of the courts by seizing his assets should be set aside. Mr Erwood has therefore applied for orders that the two writs of sale obtained by Mrs Harley and executed by the Registrar of the High Court Auckland be “set aside”.
Background
[2] On 29 June 2007 a writ of sale was issued against Mr Erwood’s property following an ex parte application on 5 June 2007 to the High Court. The amount covered by this writ arose from costs awarded to Mrs Harley against Mr Erwood;
firstly, by the Costs Revision Committee of the Law Society who considered a bill of
ERWOOD V RAYLEE PATRICIA HARLEY HC WN CIV 2000 485 27 12 September 2007
costs of Mrs Harley’s and on appeal before the Registrar of the High Court of
$37,050.69; secondly, costs orders on a review of the decision of the Registrar to the High Court of $16,915.21; and further costs on an application for waiver of security for costs on a proposed appeal to the Court of Appeal of $9,120.29. In addition, there were subsequent fees and accumulated interest. The total owing was
$87,385.33. A second writ of sale was issued arising from the Auckland High Court also in relation to Mr Erwood, for further costs orders made in the High Court at Auckland of approximately $17,000 plus interest and costs and fees also relating to Mrs Harley. All writs were executed on 10 July 2007 against funds held to the credit of a Robert Woods, whom it has not been challenged is the plaintiff Robert Erwood, for a total of $121,236.64. That sum, with the agreement of the respondent has been held by the Registrar of the High Court at Auckland pending resolution of these proceedings. The $121,236.64 was part of a larger sum of approximately $630,000 held by a finance company in 2005 to the credit of Robert Woods (Erwood).
[3] Mr Erwood’s proceedings were filed in this court on 9 July 2007 and a further application described as an “extension” of his original application filed subsequently. In this application Mr Erwood seeks orders setting aside the writs of sale and setting aside “any other orders in which the respondents had obtained and not known to the appellant”.
[4] The grounds in support of the application can be summarised as an allegation by Mr Erwood that the sum claimed as owing by the respondent was the subject of a settlement between the parties by a Court order. Mr Erwood alleges that the order makes it clear that the respondent abandoned claims to these sums as part of that settlement. In oral submissions, Mr Erwood claims that the affidavit sworn by Mrs Harley in support of the writ of sale contained untruthful and misleading information and that the ex parte order therefore obtained should be set aside. In addition, Mr Erwood claims that in the ex parte application Mrs Harley failed to disclose all relevant information and so the ex parte order should be set aside. Next, as I understood Mr Erwood’s submission, he alleged the sealed order did not reflect the actual settlement of the parties. And finally, the sealed order of the Court had been misinterpreted and did not entitle Mrs Harley to the sums of money claimed by her the subject of the writ of sale.
[5] Mrs Harley and Glasgow Harley have had a long history of litigation with Mr Erwood from Mr Erwood’s proceedings (when he was then known as McDonald) against the New Zealand Law Society arising out of the defalcations involving the Upper Hutt law firm of Renshaw Edwards. Mrs Harley acted as Mr Erwood’s counsel. After resolution of these proceedings Glasgow Harley sued Mr Erwood for outstanding legal fees and court costs. Mr Erwood then sued Glasgow Harley and Mrs Harley alleging they had negligently conducted the litigation against the New Zealand Law Society. In May 2002 Harrison J made an order appointing Mr Graeme Minchin, barrister of Auckland, a guardian ad litem for Mr Erwood. Mr Minchin in turn instructed Mr Banbrook, an Auckland barrister, to act as his counsel in the proceedings involving Glasgow Harley and Mrs Harley.
[6] In 2003, Mr Minchin, as guardian for Mr Erwood and Mr Banbrook as counsel and Glasgow Harley and Mrs Harley entered into negotiations to try and settle all matters in dispute between them. Eventually a settlement was reached. The terms of the settlement were recorded in a handwritten note dated 25 November
2003 and attached to it two typed annexures (“D” and “E”). The handwritten agreement and the annexures were signed by Mr Minchin as guardian ad litem, Mr Banbrook as counsel and representatives of Glasgow Harley and Mrs Harley. The handwritten settlement document was filed in Court. This document was in the form of a draft order. The matter came before Frater J who considered the draft order was appropriate and made a formal order. The draft order was then typed and, together with annexures, sealed by the Court as an order of the Court on 27 November 2003.
[7] A copy of the order of the Court and its annexures is attached to and is part of this judgment.
[8] It is appropriate now to turn to another document upon which Mr Erwood relied in his submissions which he says places a completely different complexion on the order of the Court.
[9] Mr Erwood attached to his submissions a document intituled “Second
Memorandum of Counsel for plaintiff for Justice Frater on settlement conference
25 November 2003”. At [3] of that memorandum it states:
3.At the conclusion of the settlement conference settlement terms were agreed between the parties pursuant to which a consent order was made in terms of which the Plaintiff will benefit by the following amounts:
(i) Cash to be paid within 60 days $45,000.00 (ii) Release of existing orders and unpaid fees
(a) Schedule E $151,646.50 (b) Raylee Harley costs $ 93,905.36
Total $245,551.86
[10] Mr Erwood’s submission refers to para [3](ii)(b) of this memorandum and Mrs Harley’s costs of $93,905.36. Mr Erwood says that sum incorporates the sums which gave rise to the writs of sale. Thus he submits the sums which Mrs Harley says are owing were, as part of the settlement of November 2003, agreed by her as no longer owing.
[11] Curiously, there appear to be two versions of Mr Banbrook’s “Second Memorandum” of November 2003. The version annexed to Mr Erwood’s submissions is a copy of the Memorandum which currently appears on the Court file. It is difficult to know if this document on the Court file is an original itself or a copy. I note that the three pages of the document are not stapled together.
[12] The second version of this document appears in the affidavit of Mrs Harley dated 5 September 2007. In that affidavit is an original copy of a letter of
27 November 2003 from Mr Banbrook to Mr Farmer QC who acted for Mrs Harley and to Mr Nicholas Till QC, barrister of Christchurch who acted for Glasgow Harley. The letter says that it is enclosing a copy of a memorandum that Mr Banbrook has filed in the court. The memorandum is headed in an identical way to the version Mr Erwood has referred to. However, clause 3 is different. Clause 3 of this memorandum provides as follows:
3.At the conclusion of the settlement conference settlement terms were agreed between the parties pursuant to which a consent order was made in terms of which the plaintiff will benefit by the following amounts:
(i) Cash to be paid within 60 days $45,000.00 (ii) Release of existing orders and unpaid fees
(a) Schedule E $151,646.50 (b) Glasgow Harley fees $ 10,160.00
Total $206,806.50
[13] In addition, Mr Till QC has provided the Court with his copy of the letter of
27 November from Mr Banbrook in identical terms to the one sent to Mr Farmer QC. The copy of the memorandum received by Mr Till QC has the same clause 3 as that received by Mr Farmer [12].
[14] In addition to the different figure at para [3](ii)(b) the “Erwood” version of the memorandum adds together only those figures in para [3](ii)(a) and (b). The Farmer/Till version adds together those figures in para [3](i) and (ii)(a) and (b).
[15] Whatever the reasons for these differences, I conclude that the form and content of the memorandum is irrelevant to the issue I have to resolve. My focus must be on the sealed order of the Court for it is this document which resolved the proceedings not Mr Banbrook’s second memorandum to the Court (whatever version).
[16] Nor in my view can there be any doubt that the sealed order of the Court reflected the parties’ agreement given the handwritten signed draft of the Court order of 25 November. That handwritten draft, which included Schedules D and E which appear in the Court order itself, were signed and initialled. The sealed form of the Court order follows this written agreement.
[17] It is, however, a matter of concern there appear to be two versions of Mr Banbrook’s memorandum of 25 November 2003. It may be that a simple error has occurred and that Mr Banbrook has mistakenly sent different versions of his memorandum to counsel and to the Court. If, however, there was only ever originally one version of Mr Banbrook’s second memorandum, the version sent to Mr Till QC and Mr Farmer QC, then there is a serious question to be answered as to
how the Court version of Mr Banbrook’s memorandum came to be changed. This is a matter I leave for the enquiry of the Registrar of the High Court at Auckland.
Mr Erwood’s case and discussion
[18] I turn now to Mr Erwood’s submissions in support of his challenge to the writ of sale. Mr Erwood’s first submission is that this Court should have responded to his request, filed earlier this week, that this court order Mr Minchin, Mr Banbrook and Mr John Holmes, instructing solicitor to Mr Banbrook, to present themselves to Court or file up to date affidavits, relating to the terms of the settlement, Mr Banbrook’s memorandum of 27 November 2003 and in relation to an affidavit of Mr Holmes. Mr Holmes’ affidavit was attached to Mr Erwood’s submissions. The affidavit of Mr Holmes, as I understand it, was filed in proceedings where Mr Erwood was suing Mr Holmes. Mr Holmes had sought security for costs. At [5] of his affidavit he says:
5.In addition to the foregoing there is another reason to believe that the Plaintiff will be unable to pay costs in the event that this claim is unsuccessful. Annexed “JRH1” is a copy of an order made in this court by the Honourable Justice Frater on 25 November 2003. Annexures D and E to that order schedule a series of unpaid fees, costs and interest totalling $245,551.86 which the Plaintiff Mr Erwood accrued over a four year period from 1999 to 2003 with the legal firm of Glasgow Harley and the barrister Raylee Patricia Harley. I am told and believe that Mr Erwood was unable to pay these costs which were written off as part of the settlement concluded in the proceeding in CIV 2004/404/7211.
[19] Mr Erwood’s submission in relation to this affidavit was that Mr Holmes had sworn that Mrs Harley had written off fees, costs and interest totalling $245,551.86. That sum (see [9]) Mr Erwood said supported the proposition that the intention of the settlement and order of the Court was that all of the outstanding money he may have owed Mrs Harley was to be written off as part of the settlement.
[20] I advised Mr Erwood during submissions that it was a matter entirely for him as to which witnesses he may have wished to summons to give oral evidence at the hearing today and what persons he may have wished to file affidavits. It was not, I advised him, a matter for the Court to call evidence in support of one party’s case.
Mr Erwood did not seek an adjournment to file any such affidavits or call any such witnesses. Secondly, the reference by Mr Holmes in his affidavit to $245,551.86 comes from Mr Banbrook’s second memorandum (the Erwood version). It does not appear in the Court order.
[21] Mr Erwood’s second submission was that I should feel able, in any event, to look behind the order of the Court and take into account his version of the second memorandum of Mr Banbrook and Mr Holmes’ affidavit which said that Mrs Harley had forgiven, as part of the settlement, all costs owing to her in whatever form. Mr Erwood was not able to refer me to any authority for the proposition that where there appears to be no ambiguity in an order of the court that it can be interpreted in a way which appears to be inconsistent with its plain words based on other “evidence”. This “evidence” was no more than Mr Erwood’s claim that the parties had a different intention than that expressed in the Court order.
[22] Two further points. Firstly, whatever the parties may have negotiated beforehand they clearly expressed the settlement in their handwritten note of 25
November 2003 signed by all of the relevant parties and converted essentially verbatim into the Court order. What Mr Banbrook’s second memorandum did or did not provide is therefore not relevant. Secondly, Mr Holmes’ affidavit is based on his interpretation of the second memorandum of Mr Banbrook (the “Erwood” version). It has no relevance to these proceedings.
[23] Mr Erwood challenged Mrs Harley’s affidavit in support of the application for writs of sale. Mr Erwood claimed the affidavit was inaccurate in a number of ways. These allegations related to claims as to the exact amount of the legal fees incurred by Mr Erwood over the years. Mr Erwood compared figures contained in Mrs Harley’s affidavit with those in Schedule E of the Court order of 25 November
2003. He said in a number of respects they differed. It is impossible, from Mr Erwood’s submissions, to analyse whether the figures are or are not reconciled. The important point, however, is that in none of these allegations of inaccuracy was there any challenge to the accuracy of the figures identified in Schedule D which were the sums upon which writs of sale were issued. I have reached the conclusion that Mr Erwood’s submissions challenging the accuracy of Mrs Harley’s affidavit
with regard to other fees and other sums is irrelevant to these proceedings and can be set to one side.
[24] Mr Erwood challenged the order itself which he says made no sense at all. He questioned why anyone would agree, as apparently had been done in para (1) of the order to receive $45,000 but then allow Mrs Harley to pursue him for the costs identified in Schedule D. He submitted that the order could not possibly mean this and that some error must have occurred. He said that the order of 25 November did not mean, as claimed, that Mrs Harley was free to pursue him for those costs identified in Schedule D. Mr Erwood submitted that para (2) of the order of 25
November meant that Mrs Harley had agreed to release him and discharge him from any responsibility to pay those costs set out in Schedule D.
[25] I reject these submissions. In my view, the order made by the Court is abundantly clear. At para (1) the defendants, (first and second Glasgow Harley and Mrs Harley) are obliged to pay the plaintiff $45,000. All parties agree that sum has been paid. The sum was to be paid free of any set-off, including any set-off for unpaid costs owing by the plaintiff to the second defendant listed in Schedule D. The second defendant is Mrs Harley. Therefore, the order protects Mrs Harley’s rights to pursue Mr Erwood for the costs orders set out in Schedule D. Para (2) confirms, that in addition to the sum of $45,000 referred to in para (1), Glasgow Harley and Mrs Harley agree to forego any rights they may have to pursue Mr Erwood for the amounts set out in Schedule E totalling $151,464.50. In addition, Glasgow Harley is prohibited from pursuing Mr Erwood for any fees or costs that may be owed by him to them. It is clear from the affidavit of Mrs Harley that the parties, immediately after the settlement, identified the outstanding costs owed by Mr Erwood to Glasgow Harley as $10,160 and that sum was included in Mr Banbrook’s memorandum of 27 November (the Farmer/Till version).
[26] Finally, Mr Erwood claimed that there was no consideration for his settlement with Mrs Harley. That is when he gave up his right to sue Mrs Harley there was no consideration for that compromise. Clearly that is incorrect. Mrs Harley, along with Glasgow Harley, paid Mr Erwood $45,000 and in addition she, along with Glasgow Harley forego $151,646.60.
[27] After completion of the hearing on 6 September, I received a further memorandum from Mr Erwood of 7 September. I referred the memorandum to counsel for the respondent for any comment. In the circumstances, although irregular I propose to consider Mr Erwood’s further submissions in his memorandum.
[28] The first point made by Mr Erwood was that the sums covered by the writ of sale in Wellington “relate to matters brought by Glasgow Harley for Mrs Harley’s costs”. Thus Mr Erwood submits these sums are only enforceable by Glasgow Harley as the instructing solicitor for Mrs Harley (a barrister). These sums he submits cannot be recovered because they come within Schedule E. This submission misunderstands the nature of the sums of money the subject of the Wellington writ of sale. These sums were costs orders made by the High Court and the Registrar of the High Court in litigation involving Mr Erwood and Mrs Harley personally. They are not barristers fees. They are enforceable personally by Mrs Harley, therefore.
[29] The second submission in the 7 September memorandum relates to Mr Banbrook’s memorandum of 27 November and the “Farmer/Till version”. I have already found that whichever is the “true” version of the memorandum is irrelevant to this case.
[30] Finally Mr Erwood repeats what he says he was told by Mr Banbrook and Mr Holmes about the 27 November settlement. I have found, irrespective of what Mr Erwood claims he was told of the terms of the settlement, that the Court order speaks for itself. I therefore reject these further submissions.
[31] Then on 10 September Mr Erwood filed another memorandum, partly typed partly handwritten. No new material was contained in the document.
[32] Having rejected all of Mr Erwood’s grounds of challenge to the writ of sale and its execution, I am satisfied that the writ of sale was properly issued and executed. The order for the writ of sale was based on the order of the Court made by Frater J of 25 November 2003 which permitted Mrs Harley to pursue Mr Erwood for
those sums set out in Schedule D. The writ of sale is simply the method by which she has done so.
[33] Before completing this judgment I mention also the following matters raised by Mr Erwood during the course of the hearing.
(a)These proceedings were originally set down to be heard by Randerson J. As a result of, my criminal jury trial finishing earlier than predicted, and of other commitments by Randerson J, I was assigned to hear Mr Erwood’s case. At the beginning of the hearing Mr Erwood said that he had expected Randerson J to hear this case. I explained to him the circumstances under which it came to be that I was the Judge to hear his application.
At the end of the hearing Mr Erwood said for the first time that he was concerned that I had heard this case because I had previously given judgments in relation to proceedings between himself, Mrs Harley and Glasgow Harley. I advised Mr Erwood that if this was a suggestion that I should recuse myself then the mere fact that I had previously given a decision in this case was in my view no basis for disqualification and having heard the matter I proposed to give judgment in due course.
(b) This matter was set down for a half day hearing commencing
2.15 p.m. on Thursday 6 September 2007. Throughout the hearing there was significant difficulty in having Mr Erwood focus on the issues in this case. At 3.30 p.m. I advised him that I would call a halt to his submissions at 4.15 p.m. which meant of the half day he had had the vast majority. I indicated he should therefore ensure that his best points in support of this appeal were raised in the remaining time available to him. At 4.15 p.m. I required Mr Erwood to complete his submissions. I then heard submissions from counsel for the respondent. After that I invited Mr Erwood to respond to counsel for Mrs Harley’s submissions. Mr Erwood took that as an opportunity to
go back and reiterate the submissions he had previously made. I allowed him to do so for some time. I then required him to focus on Mr Carruther’s submissions and respond to them. At that stage Mr Erwood said he did not feel he had had a fair opportunity to make his submissions. He could not, however, identify any further submissions of relevance that he wished to make which had remained unmade.
[34] Finally, Mr Erwood said that whatever the result of his application I should stay payment of the monies held by the Registrar of the High Court because he said he may wish to challenge my judgment and, in any event there was, before the Court of Appeal, a challenge to the settlement of November 2003.
[35] While I do not have copies of the proceedings that Mr Erwood alleges challenge the November 2003 settlement in the Court of Appeal, it does seem to me that the Court of Appeal dealt with Mr Erwood’s ability to challenge the order of 25
November 2003 in its judgment of 11 December 2006: Erwood v Glasgow Harley & R Harley CA52/06 11 December 2006.
[36] These proceedings have now been the subject of numerous court cases. Essentially, all of the litigation involving Mr Erwood, Glasgow Harley and Mrs Harley was settled by the order of 25 November 2003. Mrs Harley and Glasgow Harley carried out their part of the deal. They paid the $45,000 and are prohibited from pursuing Mr Erwood for any of the sums set out in Schedule E of that order. As I have said, however, the order entitled Mrs Harley to pursue Mr Erwood for the costs set out in Schedule D. This writ of sale and its execution has done nothing more than that. It is now almost four years since that order.
[37] I also need to remind myself that this is a challenge to an execution process. It is not a stay of execution sought as a result of a judgment being entered. I see no reason now to order any form of stay to prevent Mrs Harley from receiving the funds held by the Registrar at the High Court in Auckland.
[38] In summary, therefore:
(a) The application challenging the writs of sale is refused.
(b)I refuse the application for a stay of payment of the sum held by the Registrar of the High Court at Auckland and order its immediate distribution in terms of the execution process.
[39] The respondent should file memorandum as to costs within 14 days and the applicant has a further 14 days within which to respond.
“Ronald Young J”
Annexure 1
Annexure 2
Annexure 3
Annexure 4
Annexure 5
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