Erwood v Holmes
[2019] NZHC 2049
•20 August 2019
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2004-404-007211
[2019] NZHC 2049
BETWEEN ROBERT ERWOOD
Plaintiff
AND
JOHN ROBIN HOLMES
First Defendant
ANTHONY DAVID BANBROOK
Second DefendantGRAEME EDWARD MINCHIN
Third Defendant
Hearing: 5, 6 and 8 August 2019 Appearances:
Plaintiff in person
JM Keating and RJ Bingham for First Defendant Third Defendant in person
Judgment:
20 August 2019
JUDGMENT OF DOWNS J
This judgment was delivered by me on Tuesday, 20 August 2019 at 4 pm pursuant to r 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Solicitors/Counsel:
Kennedys Law, Auckland. GE Minchin, Auckland.
Copy to: Plaintiff
ERWOOD v HOLMES [2019] NZHC 2049 [20 August 2019]
Table of Contents
An unsatisfactory case [1]
Important events [7]
The judgment of Ronald Young J [29]
The claim against Mr Minchin [38]
Duties of litigation guardians [40]
Did Mr Minchin breach his duties? [57]
The claim against Mr Holmes [77]
Did Mr Holmes fail to protect Mr Erwood’s interests in relation to
Dr Wettasinghe’s letter? [82]
Did Mr Holmes wrongly deduct fees? [91]
Trial [105]
Orders [115]
Costs [116]
Postscript [117]
An unsatisfactory case
[1] Mr Robert Erwood lost a lot of money when Renshaw Edwards, a law firm, collapsed in 1992. Mr Erwood has sued repeatedly since then to recover his losses. He sued the New Zealand Law Society1 and an insurer. Failure against the latter outweighed success against the former. Mr Erwood then sued the lawyers who had acted for him, Mrs Raylee Harley and her firm, Glasgow Harley. Mr Erwood alleged negligence. Among other things, Mr Erwood argued Mrs Harley should have sought appointment of a litigation guardian for him. Put broadly, a litigation guardian represents a party in litigation when that party does not have capacity to make decisions. The litigation guardian makes those decisions for the party, and in doing so, binds them. In a sense, the litigation guardian becomes the party. Mr Erwood suffers, or at least suffered, a mental illness.
[2] In 2003, Mr Erwood’s suit against Mrs Harley and Glasgow Harley settled with the help of a litigation guardian. Mr Erwood now sues that litigation guardian and the lawyers who had been acting for him. Mr Erwood alleges they settled without his authority. Mr Erwood contends he did not actually need a litigation guardian and his advisors knew this. Mr Erwood relies on a short letter from a psychiatrist written
1 NZLS.
seven weeks before settlement, and a judgment of Ronald Young J in a related case in which the Judge did not appoint a litigation guardian.2 Mr Erwood wanted a litigation guardian in that case and argued the absence of one vitiated orders against him.
[3] As may be gleaned from this introduction, little about this case is satisfactory. Mr Erwood filed this claim 22 December 2004.3 Few contemporaneous documents survive, apart from court records. Memory of events is faint. Or spent. A host of judgments encircles relevant events. For example, in 2006, the Court of Appeal declined Mr Erwood’s application to re-open settlement because it “smacks of abuse of the Court’s processes”.4
[4] The former litigation guardian represents himself. So too Mr Erwood, albeit he has considerable forensic experience. The psychiatrist who wrote the letter is now 82. His evidence was to be taken remotely through closed-circuit television, but he was not told about arrangements.5 By agreement, his evidence was then read.6 No other medical or psychiatric evidence was adduced. The primary defendant, Mr Tony Banbrook, is “missing”. So too his file. Mr Banbrook was a barrister but has since been struck off.
[5] Mr Erwood’s claim against Mr Banbrook is not before me. Mr Banbrook did not file a statement of defence, so, this part of the claim is being determined through formal proof by another Judge. However, reference to Mr Banbrook is unavoidable; he played a central role.
[6] Mr Erwood cross-examined extensively on the assumption credibility is in issue. But with Mr Banbook gone, this is not a case about credibility.
2 Glasgow Harley v Erwood HC Nelson CP22/98, 30 May 2002.
3 A stay and Mr Erwood’s bankruptcy explain some of the delay.
4 Erwood v Glasgow Harley CA52/06, 11 December 2006 at [32].
5 Erwood v Holmes HC Auckland CIV-2004-404-007211, 18 July 2019 (Minute of Associate Judge Andrew).
6 I encouraged this once we encountered difficulties with the psychiatrist’s evidence.
Important events
[7] It is unnecessary to rehearse Mr Erwood’s suit against NZLS and the insurer in the wake of Renshaw Edwards’ collapse. This litigation took a decade and reached the Privy Council. Related history is recounted by Lord Hope of Craighead in Harley v McDonald,7 as Mr Erwood was then known. From here, relevant events begin 20 May 2002 when Mr Erwood filed his negligence claim against Mrs Harley and Glasgow Harley. I call this the Glasgow Harley claim.
[8] Mr Banbrook prepared and acted for Mr Erwood on the Glasgow Harley claim. An important aspect of the claim concerned Mr Erwood’s mental health. As observed, Mrs Harley and her firm were said to have been negligent in not seeking the appointment of a litigation guardian given Mr Erwood’s mental health.
[9] Mr Banbrook prepared an application for the appointment of a litigation guardian in relation to the Glasgow Harley claim. The application said Mr Erwood was “mentally disordered” in terms of s 2 of the Mental Health (Compulsory Assessment and Treatment) Act 1992. That section reads:
Mental disorder, in relation to any person, means an abnormal state of mind (whether of a continuous or an intermittent nature), characterised by delusions, or by disorders of mood or perception or volition or cognition, of such a degree that it—
(a) Poses a serious danger to the health or safety of that person or of others; or
(b) Seriously diminishes the capacity of that person to take care of himself or herself;—
and mentally disordered, in relation to any such person, has a corresponding meaning.
[10] The application was supported by affidavits from Dr Roy Knill and Mr Graeme Minchin. No version of Mr Minchin’s affidavit remains available. That
7 Harley v McDonald [2002] 1 NZLR 1 (PC).
in relation to Dr Knill is a copy of a draft.8 The application was filed 20 May, the same day as the claim. Harrison J granted it the next day.9
[11] The Judge made Mr Minchin Mr Erwood’s litigation guardian. Mr Minchin was a junior barrister and solicitor; he was admitted to the Bar in 2000. Mr Erwood met Mr Minchin through Mr Minchin’s involvement in a community law centre. Mr Minchin said Mr Erwood “would often claim that he was unable to cope, and … would raise his mental issues”. Mr Erwood asked for Mr Minchin’s help with the Glasgow Harley claim. Mr Minchin agreed to help. That help was unpaid.
[12] In the first half of 2003, Mr Erwood tried to circumvent Mr Minchin’s role as litigation guardian in relation to possible settlement of the Glasgow Harley claim. Harrison J was the Judge managing it. On 9 May 2003, the Judge issued a Minute requiring the parties to outline “advice of steps taken to arrange either a judicial settlement conference or a mediation”. The Judge recorded Mr Erwood had filed a letter with the Court earlier that month, and said:
[Mr Erwood] has no right to be heard personally on any applications in this proceeding given the appointment of Mr Graeme Minchin as guardian ad litem. Mr Minchin is in the position of plaintiff, and he alone has authority to give instructions to counsel.
[13] Mr Erwood was not dissuaded. On 20 June 2003, Harrison J issued another Minute. The Judge said the Registry “has been accepting documents filed by the plaintiff, Mr Robert Erwood, personally”. The Judge described the most recent as “a document headed ‘Memorandum to His Honour Justice Harrison for Judicial Conference 9 am 20/6/03’”. Harrison J directed Registry staff remove from the file “all documents written or tendered by Mr Erwood” and “reject any further documents written or tendered by him personally for filing”. This direction likely explains why these documents are no longer available.
8 The draft affidavit says Dr Knill has known Mr Erwood, as a patient, for 12 years. It says he suffers chronic schizophrenia; is on regular medication for this; is not fit to properly instruct counsel as he is mentally disordered under s 2 of the Mental Health (Compulsory Assessment and Treatment) Act 1992; and should have a litigation guardian. It refers to two medical reports in relation to Mr Erwood, both of which were to be annexed as exhibits. Dr Knill is described as a general practitioner.
9 The application was made without notice to Mrs Harley and her firm.
[14] By September 2003, prospect of settlement had increased. On 3 September, Harrison J adjourned three interlocutory applications because “counsel agree … the parties should participate in a judicial settlement conference to be convened … as soon as possible”. Counsel for Mrs Harley questioned whether Mr Minchin had “authority to settle”. Harrison J recorded Mr Banbrook’s “unconditional assurances that, first, he receives all instructions directly from Mr Graeme Minchin in the latter’s capacity as guardian ad litem” and, “second, Mr Minchin has absolute authority to negotiate and settle the terms of any agreement”.
[15]The Judge addressed likely settlement conference participants:
Counsel envisage that attendance at the conference would be limited to counsel for each party together with the parties themselves and, possibly, a representative of Mr Timothy Harley’s indemnifier. Mr Minchin will participate for the plaintiff; Mr Erwood will not be present unless all parties agree.
[16]And, encouraged settlement:
I am confident that a conference will provide a constructive avenue for resolution of litigation which in one form or another has involved these parties for nearly 10 years. Finality is long overdue. This litigation must be an ongoing source of emotional stress and distraction for all parties, particularly Mr Timothy Harley and Mrs Raylee Harley. I hope that they are able to settle their differences with the assistance of a judicial officer at a formal conference.
[17] The settlement conference was held seven weeks later, on 25 November 2003. Mr Erwood did not attend. But before then, Mr Erwood arranged to see Dr L S Wettasinghe, a psychiatrist. Mr Erwood had known Dr Wettasinghe for many years. Mr Erwood saw Dr Wettasinghe on 14 October 2003.10 Dr Wettasinghe wrote this letter the next day. It lies at the heart of Mr Erwood’s case:
I interviewed Mr Erwood on 14 October 2003 at Kawai Street Outpatient Clinic at his request and spent nearly an hour discussing his needs and also assessing him. Mr Erwood is well known to me, and during the above interview I found no evidence of an active mental disorder in him at present, that would impair his ability to make decisions relating to his welfare. His current mental state is such that he is capable of making decisions in relation to legal matters and instruct a counsel of his choice in court proceedings.
10 Mr Erwood suggested the consultation might have been court-ordered. No evidence supports this proposition, and the letter itself is clear Dr Wettasinghe saw Mr Erwood at the latter’s request. I find that is what happened.
I find that Mr Erwood currently does not come under rule 82(b) of the High Court Rules.
Mr Erwood considers that he no longer requires a guardian ad litem and clinically I have no reason to oppose this. Accordingly, I support his assertion that he no longer requires a guardian ad litem in relation to his current litigation.
[18] It is clear Mr Minchin received Dr Wettasinghe’s letter, because he promptly wrote this letter to Mr Erwood on 30 October 2003:
I have received Dr Wettasinghe’s opinion in regard to your mental competency and messages relating to your requests for me to retire as your guardian including threats of reporting me to the law society.
As I informed the doctor and have informed you previously it is my belief that it is best for your case to proceed with me as your guardian. As discussed this means that I would make all the decisions in regard to the litigation.
I understand that you have difficulties with this and want to take the matter into your own hands. Accordingly, and on the basis of the medical opinion you have provided, I have instructed Mr Banbrook to make an application to the Court seeking to have me removed as your guardian.
As a favour you have asked me to contact counsel in Auckland who you think may assist you. I have been unable to speak with Mr Williams QC but I have contacted Mr Illingworth QC. Mr Illingworth indicated that he would not be able to assist as he is no longer a listed provider.
In light of the very considerable time and effort I have expended on your behalf, none of which has been remunerated, I must inform you that I am no longer able to assist you in any way.
[19] Mr Minchin also wrote to Mr Banbrook, asking he be removed as litigation guardian. This letter was not placed in evidence. Presumably, Mr Minchin did not keep a copy or could not find one. As observed, Mr Banbrook’s file is unavailable.
[20] Mr Banbrook did not apply to remove Mr Minchin. Instead, Mr Banbrook told Mr Minchin he “needed to go to the High Court for a conference”. Mr Minchin said Mr Banbrook told him, “We’ll just be in and out”. Mr Minchin assumed the conference involved some “formality” that could be quickly addressed. He believed his role as litigation guardian was about to end (given his request to be removed). In fact, the conference was the settlement conference directed by Harrison J.
[21] Mr Minchin said he was “completely unprepared and surprised”, and “out of his depth”, when he appreciated what was happening. Exactly what was said at the
conference is disputed.11 Events are not. Mr Farmer QC appeared at the conference for Mrs Harley; Mr Till for Glasgow Harley. Frater J presided. The Glasgow Harley claim was settled. Mr Erwood received $45,000, and a waiver of adverse costs and outstanding fees totalling $151,646.50. But, Mr Erwood remained liable for unpaid fees and costs of $93,905.36. Frater J made corresponding orders the same day by consent. Mr Minchin said he agreed to settlement because “I was still the guardian and … I thought this was the best that could be done”.
[22] Mr Minchin promptly told Mr Erwood about settlement. He then sent this letter to Mr Erwood on 26 November 2003:
I have discussed the issue of sending a memo to Justice Frater with Mr Banbrook.
He has advised me that I should not send any such memo to the Court and I am informing you that I intend to take that advice and accordingly I will not be contacting Justice Frater.
As I advised you this morning should you be unhappy with the result it is up to you, either in person or by your legal representative, to seek to have the order set aside.
[23] On 27 November 2003, Frater J issued a Minute affirming the settlement agreement “as appropriate in all the circumstances”.
[24] On 1 December 2003, Mr Erwood filed an application to set aside the settlement orders. On 9 December, Harrison J directed the Registry return it to Mr Erwood on the basis settlement was not his to impugn.
[25] On 12 January 2004, Mr Minchin filed an application to be discharged as litigation guardian; permitting Mr Erwood to represent himself; and setting aside the settlement orders. Mr Minchin said he filed the application because he regretted settling the case without referring to Dr Wittesinghe’s letter at the conference.
11 Mr Erwood asked me to read affidavits from other participants at the conference filed in the Court of Appeal in Erwood v Glasgow Harley, above n 4. I did so. It is unnecessary to resolve the admissibility of these affidavits. I assume Mr Banbrook and Mr Minchin represented, at least implicitly, they had authority to settle the claim.
[26] On 16 February 2004, Mr Banbrook appeared on the application filed by Mr Minchin. Mr Banbrook prosecuted only the first aspect: Mr Minchin’s removal as litigation guardian. Mr Banbrook asked the Judge to “dismiss” the rest of the application. Frater J discharged Mr Minchin as litigation guardian. The Judge dismissed the balance of the application, saying she was “pleased” the remaining aspects had been abandoned. The Judge said it was “unnecessary” to determine if Mr Erwood had been mentally disordered at the time of the conference.
[27] We now move to late 2005. Through new lawyers, Mr Erwood applied to set aside the settlement orders. Mr Erwood argued he had not been incapacitated at the time of settlement so he ought not then have had a litigation guardian. On 15 December 2005, Harrison J dismissed the application.12 The Judge held Mr Erwood had been mentally disordered when he appointed Mr Minchin as a litigation guardian; validity of that appointment was not challenged; and Mr Minchin had not been released from this role until after settlement.
[28] Mr Erwood then sought special permission to appeal from the Court of Appeal. On 11 December 2006, that Court declined permission:13
When considering the overall interest of justice, however, we cannot ignore the tortured history of this proceeding in the High Court and the multiplicity of applications which the applicant (or representatives on his behalf) have made or attempted to make since the consent order was made in November 2003: Belling v Belling. An applicant cannot expect any indulgence from the Court to continue litigation which smacks of an abuse of process.
The judgment of Ronald Young J
[29] As observed earlier, Mr Erwood also relies on a judgment of Ronald Young J. Mr Erwood contends this judgment put his advisors “on notice” he did not need a litigation guardian.14 For reasons that will become apparent, this judgment is very much a dual-edged sword.
[30] Mr Erwood did not pay Mrs Harley’s and Glasgow Harley’s fee. They obtained summary judgment. The case reached Ronald Young J. Again, Mr Banbrook
12 Erwood v Glasgow Harley HC Auckland CIV-2002-404-001663, 15 December 2005.
13 Erwood v Glasgow Harley, above n 4, at [28].
14 Amended statement of claim, para 8.
acted for Mr Erwood. Before Ronald Young J, Mr Erwood argued he was mentally disordered when summary judgment had been entered, so r 92 of the High Court Rules applied. It read:
92 Effect of service on mentally disordered person
Where a proceeding is served upon a mentally disordered person who is not a person subject to a property order under the Protection of Personal and Property Rights Act 1988, no further step shall be taken in the proceeding until a guardian ad litem or manager of his or her property has been appointed.
[31] Mr Erwood contended as he did not then have a litigation guardian, summary judgment should not have been entered against him. Mr Erwood also argued his ill mental health meant the Court should appoint him a (free) lawyer. This case was heard 30 May 2002, only nine days after Harrison J had appointed Mr Minchin as litigation guardian in the Glasgow Harley claim.
[32] Mr Erwood’s argument was supported by two affidavits: one from Dr Knill, a general practitioner, and a second from Dr Cumming, a psychiatrist. Sworn versions are no longer available; only drafts. Dr Knill’s affidavit is essentially that placed before Harrison J only days earlier; see [10].
[33] Ronald Young J referred to “a large amount of material dealing with Mr Erwood’s mental health”,15 and later, to more than 100 pages of material from Mr Erwood’s medical file. The Judge said:
(a)Mr Erwood had made many applications of his own to courts. “Some have succeeded. Some have not. Some are clever and articulate and show an in-depth knowledge of legal procedure.”16
(b)Mr Erwood had not been committed under the Mental Health Act in the last 10 years. He had been admitted to North Shore Hospital voluntarily in the 1990s, and committed overnight to Sunnyside Hospital in 1984.
15 Glasgow Harley v Erwood, above n 2, at [19].
16 At [22](1).
(c)Psychiatric reports implied Mr Erwood was “mentally fragile and sometimes ill, [but] not mentally disordered”.17
(d)Mr Erwood had challenged decisions of doctors in relation to his mental health without a litigation guardian.
(e)Mr Erwood had asked to be excused from cross-examination in relation to his case against NZLS and the insurer based on ill mental health.
[34] The Judge held Mr Erwood was not mentally disordered when summary judgment had been entered, and no “clear evidence” of mental disorder existed “today” (meaning 30 May 2002).18 The Judge said there was “evidence of a mentally fragile man who has used his mental illness at times in a highly manipulative way to advantage himself in litigation.”19 The Judge also said there was evidence “his mental fragility has been well publicised by [Mr Erwood] to counsel, Judges and others”.20
[35] Mr Banbrook must have informed Ronald Young J of Mr Minchin’s appointment, because the Judge said this in his judgment:21
Guardian ad litem appointment. The Plaintiffs’ submission is that it is significant that a guardian ad litem has now been appointed in these and other proceedings (the Auckland litigation issued on 20 May). Whatever the propriety of the order appointing a guardian ad litem, Mr Erwood has in my analysis not suffered any disability as a result of not having a guardian. He has been represented by senior counsel throughout. I repeat, that every possible ground of appeal has been explored by those counsel and Mr Erwood has pursued his appellate rights effectively as far as he could.
[36] Mr Minchin said he was ignorant of Ronald Young J’s judgment until only recently. Mr Erwood cross-examined Mr Minchin repeatedly on this point, arguing Mr Minchin knew about the judgment at the time. Mr Minchin said Mr Banbrook acted “appallingly” and never told him about it. While Mr Minchin struggled to recall many events, he said he was sure he did not know about the judgment because he
17 Glasgow Harley v Erwood, above n 2, at [22](4).
18 At [29].
19 At [29].
20 At [29].
21 At [35](4).
“would have been horrified that a High Court Judge had questioned the propriety of my appointment, and I would have done something about that”.
[37] Mr Minchin impressed me as decent, compassionate and responsible; and, someone who took his obligations seriously. I accept his evidence. I find he did not know of Ronald Young J’s judgment while he was Mr Erwood’s litigation guardian.
The claim against Mr Minchin
[38] Mr Erwood sues Mr Minchin for negligence. Mr Erwood contends Mr Minchin owed him a duty of care as litigation guardian. Mr Erwood alleges Mr Minchin breached this duty by failing to take steps to enable Mr Erwood to attend the settlement conference; failing to disclose Mr Erwood was mentally competent; and by settling the case knowing this. Mr Erwood also sues Mr Minchin for breach of fiduciary duty, relying, essentially, on the same alleged failings.
[39] Mr Erwood seeks approximately $855,000 in damages. His arithmetic is difficult to follow. The figure appears to include exemplary damages; the statement of claim refers to the defendants acting “in a high-handed and contumelious manner”.
Duties of litigation guardians
[40] The High Court Rules 2016 provide for litigation guardians. An incapacitated person must have such a guardian unless the Court orders otherwise.22 An incapacitated person is someone:23
... who by reason of physical, intellectual, or mental impairment, whether temporary or permanent, is—
(a) not capable of understanding the issues on which his or her decision would be required as a litigant conducting proceedings; or
(b) unable to give sufficient instructions to issue, defend, or compromise proceedings.
22 High Court Rules 2016, r 4.30.
23 Rule 4.29.
[41] A Court may appoint a litigation guardian when satisfied the litigant is an incapacitated person and the guardian:24
(a)Can fairly and competently conduct the case on behalf of the litigant.
(b)Does not have interests adverse to the litigant.
(c)Consents to appointment.
[42] A litigation guardian may do anything in a case the incapacitated person could do if she or he were not incapacitated.25
[43] There is little jurisprudence in New Zealand about the obligations of a litigation guardian or their nature. This is unsurprising; most litigants do not sue their guardian.
[44] In Re Goldman, Toogood J considered litigation guardians were analogous to fiduciaries.26 Toogood J dismissed an application to remove Mrs Goldman’s litigation guardian. He held a lawyer was an appropriate litigation guardian because the lawyer “and his firm have fiduciary duties to her which are consistent with the responsibilities of a litigation guardian”. The Judge said in each role, the lawyer “has a legitimate interest in ensuring that Mrs Goldman’s claim is resolved in a manner which suits her best interests.”27
[45] In S v Attorney-General, S, through his litigation guardian, alleged the litigation guardian regime was discriminatory. S sought a declaration the High Court Rules were inconsistent with the New Zealand Bill of Rights Act 1990.28 Ronald Young J disagreed. The Judge said a litigation guardian “has a wide discretion in the way … they function”.29 He noted the rules empowered “the guardian to do anything the litigant could do if they had capacity”.30
24 High Court Rules, r 4.35.
25 Rule 4.38.
26 Re Goldman [2016] NZHC 1010.
27 At [33](a).
28 S v Attorney-General [2012] NZHC 661.
29 At [37].
30 At [37].
[46] The Judge considered there was “no reason why the litigation guardian could not, depending upon the extent of the incapacity, take into account in decision making any views expressed by the incapacitated person”.31 This consideration answered S’s contention the litigation guardian regime is objectionable “because one size fits all”.32 The Judge noted the guardian “can ‘fit’ his or her conduct of the case into the individual incapacitated person’s strengths and weaknesses”.33
[47] In L v Chief Executive of the Ministry of Social Development, Winkelmann J held a litigation guardian enjoyed a wide discretion concerning the extent to which the litigant’s views should be considered, or even placed before a court:34
… it was competent for Mr Mahon as litigation guardian to discontinue the claims on behalf of the plaintiffs and that he was not required to accept or act on instructions from the children. I also said that if Mr Mahon considered the children were able to comprehend the nature of the proceeding and that their views could usefully be placed before the Court without detrimentally impacting their emotional well-being, then he might also seek and place that information before the Court. However, as litigation guardian that was a matter for his discretion.
[48] In this case, Harrison J described as “fundamental” Mr Minchin’s obligation of independence as a litigation guardian.35
[49] In A v D, the Court considered an application for removal of a father as the young child’s “next friend”.36 The defendants claimed the father had opposing interests to his child in an ongoing Family Court case. The Judge accepted a “next friend” could not act when their interests were adverse to the litigant’s. As observed, the High Court Rules also insist on this.
[50] In Australia, a litigation guardian owes fiduciary duties to the litigant. In Dauguet v Centrelink, Mortimer J described the limited situations a person can participate in a case when they have no legal interest in the outcome:37
31 S v Attorney-General, above n 28, at [37].
32 At [37].
33 At [37].
34 L v Chief Executive of the Ministry of Social Development (2008) 27 FRNZ 328 at 330.
35 Erwood v Glasgow Harley HC Auckland CP179-SD02, 17 March 2003 at [30].
36 A v D (1994) 7 PRNZ 502.
37 Dauguet v Centrelink [2015] FCA 395 (emphasis added).
113. The law operates on the basis of individual autonomy and responsibility. It requires the person whose interests are affected to be a party, unless that person is incapable of participating in a proceeding and giving instructions to a lawyer, if a lawyer is retained. In those circumstances the law has always provided for a litigation guardian to be able to conduct the proceeding on behalf of the person under an incapacity. If that occurs, not only is the litigation guardian liable for the costs of the proceeding, but the litigation guardian has fiduciary duties to the represented person, which the Court can oversee and enforce. Where a person is represented by a lawyer, again the lawyer has a suite of professional and ethical responsibilities towards the party, which are designed to ensure that the party's interests are advanced by the litigation, rather than those of the lawyer, or anyone else.
[51] The Ontario Superior Court has held a litigation guardian acts as a fiduciary for the litigant. Kavuru v Ontario (Public Guardian and Trustee) has some similarity to this case.38 Mr Kavuru sued the Public Guardian for settling two cases in which the Public Guardian acted as Mr Kavuru’s litigation guardian. The Public Guardian had obtained the Court’s approval when settling. Myers J dismissed the claim, and held:39
… a litigation guardian is the substitute decision-maker for the plaintiff in respect of the litigation. It is the party for the purposes of entering into a settlement. The person under disability for whom a litigation guardian acts as a fiduciary has no separate right to demand a hearing on the merits (let alone an absolute right to a hearing on the merits) where the litigation guardian settles the case.
[52] Myers J suggested it was vexatious to sue a litigation guardian for taking steps the Court had approved, at least when there had been no appeal from that Court’s decision.40
[53] The Canadian Supreme Court has described the role of a litigation guardian without express reference to fiduciary duties. In Gronnerud,41 that Court considered an application to remove a litigation guardian on the grounds they no longer acted in the best interests of the litigant. The Court held a litigation guardian must be “both qualified and prepared to act, and … indifferent as to the outcome of the proceedings”. The Court said:42
The third criterion, that of “indifference” to the result of the legal proceedings, essentially means that the litigation guardian cannot possess a conflict of
38 Kavuru v Ontario (Public Guardian and Trustee) 2015 ONSC 6344.
39 At [4].
40 At [8].
41 Gronnerud (Litigation Guardian of) v Gronnerud Estate 2002 SCC 38.
42 At [20].
interest vis-à-vis the interests of the disabled person. Indifference by a litigation guardian requires that the guardian be capable of providing a neutral, unbiased assessment of the legal situation of the dependent adult and offering an unclouded opinion as to the appropriate course of action. In essence the requirement of indifference on the part of a litigation guardian is a prerequisite for ensuring the protection of the best interests of the dependent adult. A litigation guardian who does not have a personal interest in the outcome of the litigation will be able to keep the best interests of the dependent adult front and centre, while making decisions on his or her behalf. Given the primacy of protecting the best interests of disabled persons, it is appropriate to require such disinterest on the part of a litigation guardian.
[54] Canadian case law suggests courts can remove litigation guardians if they do not exhibit rudimentary standards of competence.43
[55] The New Zealand cases above assume removal of a litigation guardian, and appointment of an alternative guardian, constitutes an obvious remedy. English authority suggests a breach of a litigation guardian’s duties can lead to the affected decision being set aside. In R v Liverpool Justices, the child’s litigation guardian did not adequately convey opposition to the proposed adoption of the child.44 The guardian had a duty to report to the court “all circumstances relevant to the proposed adoption with a view to safeguarding the interests of the infant”. The Court said the guardian’s failure to advance relevant opposition might be a ground for setting aside the adoption order. This conclusion was affirmed in R v Beverley County Court.45
[56] I summarise. A litigation guardian may do anything the litigant could do, if able. This broad power attracts a duty to act in the litigant’s best interests, and independently. These duties are fiduciary, or analogous to fiduciary ones. Litigation guardians have a broad discretion concerning the extent to which the litigant’s views should be considered, or placed before a court. A litigation guardian may not have interests adverse to the litigant. Breach of any of these may lead to the removal of the guardian, and substitution of an alternative guardian. Breach may also lead to the quashing of an order, at least in sufficiently clear cases.46 Courts will not enter this area lightly given the nature and breadth of a litigation guardian’s discretion.
43 Lavoie v Hulowski (Litigation Guardian of) 2005 SKQB 26.
44 R v Liverpool Justices, ex parte W [1959] 1 WLR 149.
45 R v Beverley County Court, ex parte Brown Court of Appeal, 24 January 1985 per Purchas LJ.
46 See also High Court Rules, r 4.34.
Did Mr Minchin breach his duties?
[57] I find Mr Minchin did not breach his duties as Mr Erwood’s litigation guardian. Mr Minchin acted independently and in Mr Erwood’s best interests, throughout. At no time did Mr Minchin prefer his interests to Mr Erwood’s.
[58] Dr Wettasinghe’s letter of 15 October 2003 does not change the calculus. It is clear Mr Erwood had asked to see Dr Wettasinghe. And, asked him to write a letter to facilitate Mr Minchin’s removal. The letter says as much. Mr Erwood contends the letter unequivocally demonstrates he had capacity to make decisions. I disagree. The letter is guarded. It refers to “no evidence of an active mental disorder … at present”, to Mr Erwood’s “current mental state”, and to Mr Erwood not “currently” coming under r 82(b) of the High Court Rules.47 The last paragraph, repeated below for convenience, presents as carefully framed:
Mr Erwood considers that he no longer requires a guardian ad litem and clinically I have no reason to oppose this. Accordingly, I support his assertion that he no longer requires a guardian ad litem in relation to his current litigation.
[59] The letter provided some support for Mr Minchin’s removal, but was not definitive.48 More importantly, the letter was evidence of manipulative behaviour by Mr Erwood of the very type described by Ronald Young J; see [34]. All this placed Mr Minchin in an awkward position, especially as Harrison J had stressed he must act independently, and without reference to Mr Erwood.
[60] Unsurprisingly, Mr Minchin was torn. His letter of 30 October 2003 to Mr Erwood refers to it being “best” if he continued to act as litigation guardian, but this being outweighed by Mr Erwood’s desire “to take the matter into your own hands”. Mr Minchin’s letter also refers to threats by Mr Erwood to report Mr Minchin to NZLS. I do not doubt Mr Erwood made these to Mr Minchin.
47 Emphasis added.
48 Rule 4.47 requires the removal of a litigation guardian if the Court is satisfied the litigant is no longer an incapacitated person; a similar rule (r 94A) applied at the time. A mental illness can affect someone in different ways at different times. Presumably, the rules do not envisage a litigation guardian repeatedly coming and going according to episodic symptoms, especially if the litigant’s judgement remains impaired. Otherwise, this would place the litigant—and other parties—in an impossible position.
[61] Mr Minchin instructed Mr Banbrook to make an application to the Court to be removed. Mr Minchin was entitled to assume Mr Banbrook would make this application, and promptly. For whatever reason, Mr Banbrook did not. That decision is not referable to Mr Minchin.
[62] The contention Mr Minchin breached his obligations by participating in the settlement conference, agreeing to settlement, and not facilitating Mr Erwood’s presence, overlooks the obvious: Mr Minchin was still Mr Erwood’s litigation guardian. Consequently, Mr Minchin was required to act independently until he was released from that role.49 Mr Minchin said he regretted his involvement with settlement once “the issue of [Mr Erwood’s] capacity had been put in issue” by Dr Wettasinghe. This is understandable but misplaced. Mr Minchin had no choice but to remain involved until he was released, by the High Court, as litigation guardian.
[63] This conclusion is consistent with the Canadian case of Kavuru mentioned earlier. The first-instance Judge declined to authorise settlement on the basis Mr Kavuru did not want to settle. The Ontario Court of Appeal reversed and approved settlement.50 For that Court, Nordheimer J said a litigation guardian “may resolve the litigation, if that can be achieved and is in the best interests of the party under disability”.51 The Judge said a litigation guardian “is the substitute decision maker for the party under disability”,52 and it was “entirely within the authority of the … litigation guardian, to agree to settlement of these actions”.53
[64] This conclusion is also consistent with the High Court Rules which, again, permit a litigation guardian to do anything the incapacitated person could do if she or he were not incapacitated.
[65] This leads to Mr Erwood’s core complaint: that Mr Minchin breached his obligations by not raising Dr Wettasinghe’s letter with Frater J at the settlement conference.
49 Mr Erwood does not argue Harrison J ought not have appointed a litigation guardian. He could not; Mr Erwood asked Ronald Young J to appoint a guardian on similar evidence.
50 Kavuru v Heselden [2014] ONSC 6718.
51 At [11].
52 At [11].
53 At [12].
[66] I disagree. It is clear Mr Erwood was trying to circumvent Mr Minchin’s role, and equally clear Mr Erwood was again seeking to use his mental health for forensic advantage. Mr Erwood’s case against Mrs Harley and Glasgow Harley was that they failed him by not seeking appointment of a litigation guardian. Mr Erwood’s attempt to reverse summary judgment in relation to their fees relied on the same argument; that he was mentally disordered when summary judgment had been entered, and he needed a litigation guardian to protect his interests. Mr Erwood also relied on this argument in seeking court-appointed counsel. Mr Erwood’s attempt to personally enter settlement negotiations in relation to the Glasgow Harley claim is irreconcilable with his stance in these other cases, and at best, disingenuous behaviour.
[67] Mr Minchin promptly asked to be removed as litigation guardian. He, reasonably, was expecting that to occur. Mr Minchin could not know Mr Banbrook would not act on that request. The settlement conference caught Mr Minchin by surprise. However, Mr Minchin discharged his obligations at that conference. He acted independently and in Mr Erwood’s best interests. He did not prefer his interests to those of Mr Erwood. There is no evidence, expert or otherwise, terms of settlement were unreasonable. And, Frater J approved them twice.54
[68] For completeness, I accept it is arguable Mr Minchin should have told the Judge of the letter given Mr Minchin’s duty to the Court as a barrister and solicitor. It is elementary Mr Minchin had an “absolute duty of honesty to the court” as its officer.55 This duty—one of absolute candour—might have required Mr Minchin to tell Frater J he knew of correspondence that, on one view, questioned Mr Erwood’s incapacity. Mr Minchin accepted he should have raised the letter with the Judge; he described his omission as “a personal failure”. I need not decide if this concession is correct. The important point is that any omission did not implicate a duty to Mr Erwood; rather, one owed to the Court.
[69] In any event, it is all but certain settlement would have occurred if the letter had been raised with Frater J or another Judge. So, even if one assumes Mr Erwood may obtain damages in a case like this—which appears to be unprecedented—any
54 See [21] and [23].
55 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008.
breach of Mr Minchin’s obligations as a litigation guardian did not cause Mr Erwood loss. Later events are instructive.
[70] On 1 December 2003, Mr Erwood filed an application to set aside the settlement agreement. Mr Erwood swore an affidavit in support of his application. A copy of the affidavit is no longer available, but it reasonable to assume Mr Erwood referred to Dr Wettasinghe’s letter. On 9 December 2003, Harrison J directed these papers be removed from the file and returned to Mr Erwood. The Judge reminded the Registry of his previous directions not to accept papers from Mr Erwood personally.
[71] On 12 January 2004, Mr Minchin filed an application to be removed as litigation guardian; setting aside the settlement agreement; and allowing Mr Erwood to appear. Mr Erwood swore an affidavit in support of this application too. I infer Dr Wettasinghe’s letter was appended to the affidavit as Mrs Harley’s notice of opposition specifically refers to it.
[72] On 16 February 2004, Frater J dismissed all but the first. The Judge said she was “pleased to note that when the matter was called … Mr Banbrook sought an order dismissing the application” save in relation to Mr Minchin’s discharge. It is clear the Judge understood the argument animating the application to set aside the settlement agreement, as she recorded that had been brought on the basis Mr Erwood “was not mentally disordered at the time the consent order was made”. Frater J also said it was “unnecessary” to determine if Mr Erwood had been mentally disordered at the time of the conference.
[73] Harrison J again declined to intervene on 15 December 2005. So too the Court of Appeal a year later, citing abuse of process; see [28].
[74] This history illuminates the obvious difficulty with Mr Erwood’s argument foreshadowed by Ronald Young J in 2002: because Mr Erwood uses his mental health “in a highly manipulative way to advantage himself in litigation”, there was no real prospect Dr Wettasinghe’s letter would be given the credence it might otherwise attract in the hands of another litigant.
[75] A final observation on this topic. Mr Minchin testified that looking back, he believed Mr Erwood saw Dr Wettasinghe so that if he disliked the settlement negotiated by Mr Minchin and Mr Banbrook, he would have a possible way to overturn it. I share this view.
[76] The tort of negligence is not available in this setting. For the reasons explained above, the remaining causes of action fail on the facts.
The claim against Mr Holmes
[77] Mr John Holmes is 72. He is a solicitor.56 Mr Holmes shared office space, including a reception, with Mr Banbrook. The two got on well. Mr Holmes did not go to court. Mr Banbrook did. So, Mr Banbrook often reverse-briefed Mr Holmes when he needed a solicitor. Mr Banbrook did so for the Glasgow Harley claim and the case that reached Ronald Young J.
[78] Mr Holmes’ role was passive, and administrative. He signed some court documents as Mr Banbrook’s instructing solicitor but relied on what Mr Banbrook told him.57 Mr Holmes did not attend the settlement conference or any other hearing.
[79] Mr Erwood sues Mr Holmes for negligence, breach of contract, breach of fiduciary duty, and “wrongful deduction of fees”.58 None is well drafted. The last cause of action is either a contract or negligence claim. The four causes of action reduce to two contentions:
(a)Mr Holmes failed to protect Mr Erwood’s interests, as his solicitor, by not acting on Dr Wettasinghe’s letter. Mr Erwood contends Mr Holmes should have ensured Mr Erwood attended the settlement conference (as a litigant with capacity), placed the letter before the Court, or otherwise acted on the letter.
56 Mr Holmes was admitted to the Bar in 1969.
57 Mr Holmes signed the application to appoint Mr Minchin as litigation guardian and notice of proceeding in relation to the Glasgow Harley claim.
58 Mr Erwood said it was “important” I know Mr Holmes is insured.
(b)Mr Holmes wrongly deducted his (modest) fee and Mr Banbrook’s fee from the settlement proceeds. Mr Erwood argues there was no reason for Mr Holmes to be involved. And, Mr Banbrook agreed to conduct his cases on legal aid, with a contingency agreement, or both.
[80]For reasons that will become apparent, both can be addressed swiftly.
[81] Mr Erwood cross-examined Mr Holmes extensively. In closing, he described Mr Holmes as “an untruthful and evasive witness”.59 I reject this submission.60 As with Mr Minchin, Mr Holmes impressed me as decent and responsible. But, as with Mr Minchin, Mr Holmes has little recollection of events. This is unsurprising given passage of time and Mr Holmes’ role. Again, this is not a case about credibility.
Did Mr Holmes fail to protect Mr Erwood’s interests in relation to Dr Wettasinghe’s letter?
[82] Mr Holmes said he took no actual instructions from Mr Erwood until early 2004—after settlement. Before then, he dealt with Mr Banbrook. Mr Holmes said Mr Erwood would occasionally come into reception and chat with him or his staff while waiting to see Mr Banbrook. Mr Holmes said Mr Erwood would then “talk at some length about his various proceedings”, but that was the extent of his communication with Mr Erwood until 2004.
[83] Mr Holmes said he could not recall when he was told about Dr Wettasinghe’s letter, but he did not learn of it until after the Glasgow Harley claim had been settled. Mr Holmes said when he did, he could not recall what Mr Banbrook said, other than Mr Banbrook’s response would have satisfied him everything was in hand.
59 Mr Erwood made a similar submission about Mr Minchin’s evidence.
60 Mr Erwood contended Mr Holmes’ evidence was inconsistent with affidavits made by Mr Holmes dated 10 March 2005 and 27 September 2017. Nothing significant emerged in relation to the first. In relation to the second, Mr Holmes accepted his statement he “provided no legal services to Mr Erwood” was “probably an overstatement” and “could have been better worded”. Mr Erwood submitted this meant the affidavit was “false”. The submission is misplaced: Mr Holmes was emphasising he was reverse-briefed and had little real interaction with Mr Erwood. Mr Erwood also attached some significance to my observations at page 69 of the notes of evidence, when I said it was “a little unsatisfactory” for Mr Holmes’ brief of evidence to be revised in evidence-in- chief. My observation was not directed at credibility but process; I had assumed Mr Holmes’ concerns about his evidence had been resolved over the adjournment.
[84] The statement of claim says Mr Minchin received Dr Wettasinghe’s letter on or about 15 October 2003, but nothing about when Mr Holmes allegedly received it.
[85] Mr Erwood prepared a brief of evidence dated 14 June 2019. In this, Mr Erwood says he gave the letter “to Messrs Banbrook, Holmes and Minchin and put them on notice”. Mr Erwood does not say when. Or how. Mr Erwood also says he “rang Banbrook, Holmes and Minchin to apply to the court to remove the guardian forthwith”. Mr Erwood does not say when he did this; context suggests between 15 and 30 October 2003.
[86] Mr Erwood also prepared a reply brief to Mr Holmes’. In this, Mr Erwood says he faxed Dr Wettasinghe’s letter on 15 October 2003 “to Holmes, Banbrook and Minchin”. Mr Erwood also says he rang Mr Holmes on 16 October; “he confirmed to me he had seen Dr Wettasinghe’s report”. Mr Erwood says in the same conversation, he instructed Mr Holmes to apply to the court to remove Mr Minchin. Mr Erwood identifies other alleged conversations with Mr Holmes before settlement and shortly thereafter.
[87] I find Mr Holmes did not learn of the letter until well after settlement. Dr Wettasinghe’s letter is addressed to Mr Minchin. It bears two handwritten facsimile numbers only: Mr Minchin’s and Mr Banbrook’s. Mr Minchin said he has no recollection of dealing with Mr Holmes; he dealt with Mr Banbrook. Mr Minchin said he did not send Dr Wettasinghe’s letter to Mr Holmes. Mr Holmes’ evidence on this point is consistent. Mr Erwood’s contentions about service of the letter have changed—and grown—as trial became imminent.61 While Mr Erwood cross- examined Mr Holmes’ extensively, he did not question Mr Holmes on alleged pre- settlement conversations about the letter.62 No independent evidence supports the contention Mr Holmes knew about the letter before January 2004. It is unlikely Mr Banbrook told Mr Holmes about the letter in a timely manner given Mr Banbrook’s inactivity after Mr Minchin asked to be removed as litigation guardian.
61 To avoid doubt, I reject Mr Erwood’s evidence on this topic.
62 Evidence Act 2006, s 92.
[88] Consequently, I reject the factual contention underpinning Mr Erwood’s claims in negligence, breach of contract and breach of fiduciary duty. Mr Holmes could not act on Dr Wettasinghe’s letter as he did not know about it. Before January 2004— about which more shortly—nothing was brought to Mr Holmes’ attention to alert him to any potential problem about settlement or Mr Banbrook’s handling of the Glasgow Harley claim.63 Again, Mr Minchin has no recollection of dealing with Mr Holmes, there is no reason to believe Mr Banbrook alerted Mr Holmes to any difficulty, and Mr Erwood did not contact Mr Holmes until January 2004. Mr Holmes did not breach his duty of care, contract, or fiduciary duty.
[89] In any event, if Mr Holmes had been told about the letter or ought reasonably have known of it, history would remain unchanged. Harrison J twice dismissed Mr Erwood’s application to set aside the settlement orders (in 2003 and 2005). Mr Banbrook abandoned Mr Minchin’s application to do so before Frater J (in early 2004). The Judge considered that appropriate. The Court of Appeal dismissed Mr Erwood’s application for permission to appeal out of time in relation to settlement. Ventilation of the letter is highly unlikely to have been fruitful; see [74]. So, Mr Holmes cannot have caused Mr Erwood loss.
[90] For these reasons, it is unnecessary to make any observations about the obligations of a solicitor to a client in a reverse-brief setting.
Did Mr Holmes wrongly deduct fees?
[91] On 22 January 2004, Mr Erwood telephoned Mr Holmes about the settlement funds to come into Mr Holmes’ trust account. Mr Erwood said he wished to challenge settlement. Over the next few weeks, Mr Holmes made inquiries about what had happened. He communicated with Mrs Harley’s lawyer and Mr Banbrook.
[92] On 18 February 2004, Mr Banbrook submitted an invoice to Mr Holmes for his fee. It concerned Mr Banbrook’s representation of Mr Erwood in respect of the
63 Mr Erwood cross-examined Mr Holmes about another case in which he had been reverse-briefed by Mr Banbrook and discovered Mr Banbrook had been inaccurate. Mr Holmes said he “gradually became aware that Mr Banbrook had misled me not only in that case but others, but that awareness did not occur until round the time I was leaving West Plaza which would’ve been around 2008/2009”. These events post-date this case by several years.
insurer Mr Erwood had sued; more specifically, the insurer’s costs, which Mr Erwood had been ordered to pay. Mr Erwood had challenged these. Mr Banbrook’s fee was
$29,894.50 (including GST and disbursements).
[93] On 20 February 2004, Mr Holmes wrote to Mr Erwood. Mr Holmes explained the Court had dismissed Mr Minchin’s application to set aside the settlement orders, and he was now obliged to pay Mr Banbrook’s fee. Mr Holmes said he had deducted Mr Banbrook’s fee from the settlement funds; so too his own fee of $1,727.50. Mr Holmes said his fee “covers time spent on discussions with you in person and by telephone over the last couple of years and consultations with Tony Banbrook concerning your case”. Mr Erwood objected on the basis he wanted settlement overturned, and Mr Bankbrook had been appointed by the Court as his lawyer. Plainly, that was not correct.
[94] Mr Erwood also complained to the Auckland District Law Society. On 12 May 2004, the Society dismissed his complaint.
[95] On 21 March 2005, Mr Holmes sent a cheque issued to cash to Mr Erwood for the balance of funds. Mr Erwood had wanted the funds returned to Mrs Harley’s lawyers.
[96] As observed, Mr Erwood argues this sequence discloses a breach of contract or negligence because Mr Banbrook agreed to conduct Mr Erwood’s cases on legal aid, with a contingency agreement, or both. Mr Holmes should not have been involved. So, Mr Holmes should not have deducted any fees from the Glasgow Harley settlement funds. I reject these contentions and Mr Erwood’s related testimony.
[97] First, Mr Banbrook could not act without an instructing solicitor. Mr Minchin was not the instructing solicitor—Mr Holmes was. That Mr Erwood might not have agreed to this is beside the point; Harrison J’s appointment of Mr Minchin as litigation guardian presupposed Mr Erwood could not give instructions.
[98] Second, contingency fees were not common in the early 2000s, and there is no reason to believe Mr Banbrook agreed to act on a contingency basis in relation to a
dispute over the insurer’s costs. This type of dispute was highly unlikely to yield Mr Erwood—and hence Mr Banbrook—any money.64
[99] Third, Mr Holmes was not a legal aid provider. There is no reason to believe Mr Banbrook agreed to represent Mr Erwood on legal aid in relation to the insurer’s costs. Mr Banbrook’s invoice implies otherwise.65
[100] Fourth, the likely correct position is that Mr Banbrook agreed with Mr Erwood not to render a fee until Mr Erwood had money to pay it. The timing of Mr Banbrook’s invoice supports this conclusion.
[101] Fifth, the statement of claim implies mischief. Mr Erwood contends, as an alternative argument, he lacked capacity to agree to pay fees because of his mental illness. When this was put to him in cross-examination, Mr Erwood suggested someone else drafted the statement of claim.
[102] Sixth, as instructing solicitor, Mr Holmes was obliged to pay Mr Banbrook’s fee.66 He was also entitled, absent specific written authority from Mr Erwood, to deduct his own fee from funds held on Mr Erwood’s behalf because of a lawyer’s historical right of set-off.67 Both invoices appear reasonable. Whatever Mr Banbrook’s failings, he performed a lot of work for Mr Erwood in relation to the insurer’s costs.
[103] Mr Erwood correctly notes Mr Holmes did not record attendances until 22 January 2004 on (when he contacted Mr Holmes), and Mr Holmes never sent him terms of engagement. The latter is anachronism. Terms of engagement became a feature of legal practice from 1 August 2008 (through the Rules of Conduct and Client Care for Lawyers). Mr Holmes said practice in the early 2000s was “quite casual”,
64 This is not the first time Mr Erwood has claimed he negotiated a contingency fee. In 2001, Mr Erwood tried to avoid paying Mrs Harley’s fee on the basis she had agreed to a contingency. The Court of Appeal did not accept this argument; see Erwood v Glasgow Harley [2001] 1 NZLR 251 at [46].
65 The invoice is a little clumsy in that it is more consistent with an ordinary brief than a reverse- brief. But, the point goes nowhere.
66 Law Practitioners Act 1982, s 140.
67 Section 89(4). See also Shand v M J Atkinson Ltd (in liquidation) [1966] NZLR 551 (CA); Richard Zhao Lawyers Ltd v Chen [2017] NZCA 6 at [32]; and Anne Shirley, “Deducting Fees from Trust Accounts” [2009] NZLJ 425.
and if this happened now, he would “open a file immediately … do a letter to the client noting the engagement, [and] charge a small initial fee”. I accept this evidence. It accords with my experience of solicitors in this period.
[104]All causes of action against Mr Holmes fail.
Trial
[105]Some events must be recorded.
[106] At the beginning of the trial, Mr Erwood sought an adjournment. He said he had collapsed on Friday, gone to hospital, and “they thought I’d had a small stroke”. Mr Erwood said he had been told to have a scan. Mr Erwood gave me a medical certificate from a general practitioner, Dr Sanjay Govind. Dr Govind said it “would be wise to adjourn this case until his MRI provides a definitive diagnosis as the stress of the court case could cause a major debilitating stroke”. I asked Mr Erwood when he was having the scan. He said he did not know, and “when they can fit me in”.
[107] I dismissed the adjournment application. Mr Erwood appeared to be in good health (aside from a minor cough). I considered serious health concerns would likely have resulted in a prompt scan. Mr Erwood’s claim was already very old; it was filed 2004. Mr Minchin and Mr Holmes were ready to proceed. And, entitled to resolution. Mr Erwood had sought an adjournment on 28 June 2019. Wylie J declined that. Mr Erwood sought another adjournment on 31 July 2019. Venning J declined that. I believed there was a real risk Mr Erwood would continue seeking adjournments, and the mix favoured trial.
[108] Mr Erwood was upset by this ruling. He questioned how I could second-guess a doctor. I asked Mr Erwood to open his case. He would not. I asked repeatedly. Mr Erwood eventually capitulated after I said I would dismiss his claim if he would not open.
[109] Under cross-examination, Mr Erwood complained he had not been given all papers by Ms Keating, counsel for Mr Holmes, and this infringed his right to natural justice. Mr Erwood refused to answer a question for this reason. The complaint lacked
substance. Mr Erwood is uncontactable by phone or email. He had previously collected material from Ms Keating’s office, by arrangement. In the week preceding trial, Mr Erwood failed to collect the common bundle and case volumes from Ms Keating. Mr Erwood would not have engaged with this material anyway—at least in this format. Mr Erwood has an encyclopaedic knowledge of his litigation since the collapse of Renshaw Edwards, and he prefers his own document management system. This involved spreading papers across much of the rear table, and during some sessions, the barrier between the public gallery and counsel’s tables. So, not only was Mr Erwood not prejudiced, he used a claim of prejudice to avoid answering a question he did not wish to answer.68
[110] Mr Erwood’s cross-examination of the defendants was needlessly repetitive. It involved grandstanding and submission too. For these reasons, I intervened frequently. Mr Erwood did not accept many of my interventions. For example, I would direct him to move to the next topic. He would not. I shepherded cross- examination by taking the extraordinary step of saying I would release the witnesses at a certain point; the transcript does not capture the many long pauses between answer and next question, or obvious scratching around for the next question. I considered Mr Erwood would cross-examine for as long as he could. And, for the sake of it.
[111]Mr Erwood was repeatedly late, without apology.69
[112] Mr Erwood complained of “ambush” when Ms Keating gave him a copy of her closing address just before she delivered it. Closing addresses are normally served at this time. Mr Erwood did not provide a copy of his closing address to the defendants even though he had a day to prepare it.70
[113] These events—and a quarter century of litigation—support Ms Keating’s submission that when “an outcome does not go his way, Mr Erwood has trouble accepting it”.
68 Mr Erwood raised the same complaint later in the trial.
69 For example, on the last day of trial, Mr Erwood arrived at 10.14 am. At 11.25 am, he argued about the length of the morning adjournment, saying he wanted a shorter one. Mr Erwood was then five minutes late. I sent Mr Minchin to find him. Mr Erwood was on the telephone.
70 I gave the parties an entire day to prepare their closings.
[114] Mr Holmes wished to call Mr David Morris as an expert witness. Mr Morris’ proposed testimony concerned the obligations of a solicitor in a reverse-brief setting. Mr Erwood objected to the evidence. I upheld the objection and excluded Mr Morris’ evidence as insubstantially helpful on these facts.71
Orders
[115]I dismiss all of Mr Erwood’s causes of action.
Costs
[116] Mr Holmes is entitled to costs. So too, perhaps, Mr Minchin. I invite each to consider whether they wish to prolong this case by seeking them. If so, each may file a memorandum of not more than eight pages by 4 September 2019. Mr Erwood may reply, with a memorandum of not more than eight pages, by 18 September 2019.
Postscript
[117] Mr Erwood said he would like a transcript of the entire hearing. I shall release this when it is available. Mr Erwood already has the notes of evidence (a copy was made available the day before closing addresses).
……………………………..
Downs J
71 Evidence Act 2006, s 25.
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