Erwood v Holmes
[2017] NZHC 556
•23 March 2017
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2004-404-7211 [2017] NZHC 556
BETWEEN ROBERT ERWOOD
Plaintiff
AND
JOHN ROBIN HOLMES First Defendant
ANTHONY DAVID BANBROOK Second Defendant
GRAEME EDWARD MINCHIN Third Defendant
Hearing: 23 November 2016
(on papers)
Appearances:
Ms Cooper for counsel appointed to assist the Court
Mr Erwood Plaintiff
Ms Keating for Mr Holmes - First Defendant
Mr Minchin - Third DefendantJudgment:
23 March 2017
JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE [LITIGATION GUARDIAN AND APPOINTMENT OF AMICUS]
This judgment was delivered by me on
27.03.17 at 10 a.m., pursuant to
Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
ERWOOD v HOLMES & ORS [2017] NZHC 556 [23 March 2017]
Background
[1] Mr Erwood made investments in a mortgage business operated by a firm of solicitors, Renshaw and Edwards, between June 1988 and October 1989. Because of the dishonesty of those operating the mortgage scheme, he lost his entire investment of $185,276. He then instructed a firm of solicitors, Glasgow Harley, to bring proceedings against the New Zealand Law Society and an insurance company to recover his loss. He obtained judgment in that proceeding for $212,843.67 against the Law Society, but failed against the insurance company. The history of these proceedings is reasonably well known and does not need to be repeated in detail in this judgment.
[2] Mr Erwood eventually commenced proceedings in May 2002 against the lawyers who represented him in those proceedings, namely the firm Glasgow Harley and the barrister Ms Harley. Those proceedings were commenced in the Auckland High Court.1
[3] In that litigation, he pleaded a number of breaches of duty. One such breach was an alleged failure to apply to the High Court for appointment of a guardian at litem before trial. Mr Erwood was apparently mentally disordered at that time. Another breach concerned the alleged failure of the lawyers to advise Mr Erwood of offers that had been made to settle the litigation, which were significantly greater than the amount for which judgment was eventually entered. The course of the litigation which he alleged his solicitors negligently carried on is recounted in
Harley v McDonald.2 In that litigation, Mr Erwood was represented by the second
defendant to this proceeding as counsel. The third defendant was a litigation guardian who had been appointed to represent his interests.
[4] That litigation came to an end when a settlement was entered into following a judicial settlement conference on 25 November 2003. Mr Erwood did not attend the conference. Settlement was effected by agreement between the defendants and his
litigation guardian.
1 Erwood v Harley HC Auckland CIV-2002-404-001663, 15 December 2005.
[5] Prior to the judicial settlement conference, though, Mr Erwood had been assessed by a psychiatrist, Doctor Wettasinghe. The Doctor issued a report following the examination, which was dated 15 October 2003, expressing his opinion that Mr Erwood was not suffering from an active mental disorder and that he no longer required a litigation guardian.
[6] Mr Erwood alleges that the litigation guardian, who is the third defendant in the current proceedings, agreed to apply for his discharge from that position following the report from Doctor Wettasinghe.
[7] It is not entirely clear from the second amended statement of claim what additional allegations are made against the first and second defendants arising from the judicial settlement conference. There is an express complaint, though, that they arranged for deduction from the settlement fund of their costs without authority.
[8] The current proceeding is therefore concerned with the circumstances in which the proceeding was compromised at the judicial settlement conference.
[9] In this proceeding, concerns have emerged that Mr Erwood is an incapacitated person who ought to be represented by a litigation guardian, as required by r 4.30 of the High Court Rules (“HCR”).
[10] On 22 June 2016, I directed the appointment of counsel to assist the Court pursuant to r 10.22 of the HCR. Initially, the request for assistance concerned the question of whether Mr Erwood was an incapacitated person pursuant to r 4.30 of the HCR. I have since received a very comprehensive and well considered memorandum from counsel appointed to assist, Ms Jennifer Cooper. Brief reference will be made to the question of capacity shortly.
[11] In addition to the consideration of the question of whether Mr Erwood was an incapacitated person, the Court also requested assistance from counsel on the question of whether counsel to assist or an amicus curiae ought to be appointed to assist the Court through until the conclusion of the proceedings. Again, I am grateful for the second memorandum that Ms Cooper filed concerning this subject.
[12] After considering the matter further and receiving submissions from the various parties, I have come to a view concerning the question of whether a litigation guardian and amicus curiae are in fact necessary. I will return to these issues subsequently in the judgment.
[13] On 7 October 2005, Faire AJ considered an application which Mr Erwood had made in memorandum form seeking an order appointing an amicus curiae. That application was declined and the Judge summarised the reasons as follows:3
[7] My reasons for declining the application are the following:
(a) I have been presented with no specific evidence to suggest that Mr Erwood has exhausted his legal aid entitlement. If, in fact he is either in a position to instruct solicitors or would qualify for a grant of legal aid to do so, I see no reason why he should be relieved of that obligation by the appointment of an amicus curiae;
(b) There is some doubt as to whether an amicus curiae should be appointed in any event where the object of the exercise is to plead the case, collect the evidence and generally present the position of a single party to the litigation;
(c) I do not find, in this particular piece of litigation, any issue of public importance that singles this case out for special treatment;
(d) If an appointment was made it seems that the costs of the amicus’ attendances would have to be paid by the Crown, but not through the facilities offered through the Legal Services Agency;
(e) If an appointment was made in this case, it is clear that for it to be worthwhile the person appointed would have to take all steps that are required to be undertaken by solicitor and counsel for a party in what is essentially private litigation.
[14] On 15 August 2006, Faire AJ issued a minute that ordered a stay by consent in the current proceeding pending the outcome of an appeal in the proceedings Erwood v Glasgow Harley.4 The reason for the stay was that the Court of Appeal had pending before it an application to set aside the consent arrangement entered into at the judicial settlement conference. As it turned out, the Court of Appeal declined to set aside the arrangement. In a further minute on 6 May 2011, Faire AJ recorded
that the stay of the current proceeding had now expired and also referred to the fact
3 Erwood v Holmes HC Auckland CIV-2004-404-7211, 10 October 2005.
that there was an application to appoint an amicus curiae before the Court. This was the second time that an application for the appointment of an amicus curiae was sought. On an earlier occasion, when Mr Erwood had sought appointment of Mr D Smith in that capacity, Faire AJ declined the application on 10 October 2005.5
[15] In the meantime, on 22 November 2007, Mr Erwood was adjudicated bankrupt. A subsequent challenge to the bankruptcy notice, upon which the adjudication was based, was dismissed by the Court of Appeal in a judgment that it issued on 27 March 2012.6
[16] On 4 April 2012, Faire AJ issued a minute that ordered a further stay of the proceedings, with leave to reconsider the matter in the event that Mr Erwood might obtain an order of annulment of his bankruptcy. In fact, that annulment was subsequently granted and the order was made on 23 July 2013.
Litigation guardian
[17] A litigation guardian has been appointed in the past for Mr Erwood. As recorded at the time of settlement of the proceedings in Erwood v Glasgow Harley, Mr Erwood was represented by Mr Minchin following orders to that effect made by Harrison J on 21 May 2002.7 The application was made by Mr Erwood himself and was supported by the affidavit of a psychiatrist.
[18] The Court is entitled, of its own motion, to raise the question of whether a litigation guardian ought to be appointed. I initiated inquiries in this case out of concern that there might be a need for a litigation guardian to be appointed.
[19] However, while Mr Erwood may have in the past been an incapacitated person, as defined in r 4.29 of the HCR, there is currently no evidence that he
remains in that state.
5 Erwood v Holmes, above n 3, at [8].
6 Erwood v Maxted [2012] NZCA 110.
7 Erwood v Glasgow Harley, above n 4.
[20] The last medical evidence, which would bear upon his catagorisation as an incapacitated person, was in 2003 when Doctor Wettasinghe issued the report that I referred to in paragraph [5]. As Ms Cooper noted in the submissions she made on this issue, Mr Erwood has in fact represented himself in proceedings since that time without the intervention of a litigation guardian. In some of the proceedings that he has been involved in, counsel has been appointed to assist the court or act as an amicus curiae. However, because there has been no recent determination by a Court that Mr Erwood is an incapacitated person and because of the absence of up to date medical evidence indicating that he is, I do not consider that any further inquiry is required into this issue. I have noted the submission that Ms Cooper makes that:
The overall picture presented by this information tends to suggest that the Court should exercise caution before making any appointment.
[21] I agree with those remarks. I do not intend to consider the possibility of an appointment of a litigation guardian further.
Amicus curiae
[22] Mr Erwood has conducted the present proceeding in his own right from the outset. He considers, however, that he would be assisted by the appointment of an amicus curiae.
[23] That view is opposed by counsel for the first defendant, Ms Keating. In her submissions, she generally opposed either the making of an order for the appointment of a litigation guardian or the appointment of counsel assisting. Ms Keating submitted that the plaintiff has the conjunctive burden of establishing that:
There is any or substantial public interest in the outcome of these proceedings; and
The Court is likely to be materially assisted by evidence or submissions to be provided by the proposed amicus as contrasted by evidence or submission from the parties including all three defendants.
23. It is further respectfully submitted that a broad role is likely to prove problematic and that an amicus would best be able to assist the Court if his or her role is limited to the “core” function identified by Fogarty J as follows:
“But, at the core of it, an amicus is not acting on instructions from a party to the proceedings. The amicus does not act on instructions from a client. The amicus selects independently arguments which he/she thinks are appropriate to put before the Court, or as in this case, the amicus discharges requests from the Court for analysis of one matter or another. In the latter instance, as here, the amicus, as a professional, then assists the Court as best he or she can to provide that analysis in an independent fashion.”
24. As such, providing substantive legal advice to Mr Erwood and preparation of Mr Erwood’s submissions, briefs, and evidence would not be within the role of the amicus. Rather, the role of the amicus would be to provide assistance to the Court, as and when required, at the direction of the Court, as has been the role of counsel assisting the Court to date.
[25] I respectfully agree with the views of Fogarty J referred to above and I concur with counsel’s submission. In my view, there is no public interest aspect which would justify the appointment of an amicus in this case. Further, I consider that the proper function of an amicus in the circumstances of this case would only be to take a neutral position. Counsel would not in any sense be viewed as representing Mr Erwood as the plaintiff. No doubt Mr Erwood would prefer to have the assistance of counsel assisting the Court to make submissions in his favour, but that is not an outcome that I consider would be justified. If Mr Erwood wishes to have legal assistance, he must retain his own counsel or apply for legal aid. If he not entitled to legal aid, then there would be no justification for the Court to remedy any perceived deficiency in the legal aid regime by appointing counsel. For all of those reasons and the particular grounds which are fully identified in Ms Cooper’s
submission, I conclude that no order appointing counsel ought to be made.
8 See Solicitor-General v Moodie HC Wellington CIV-2005-485-1026, 25 July 2006 at [19].
[26] The parties should now please file memoranda within 10 working days identifying what steps are required to complete the interlocutory phases of this case and to make it ready for trial.
[27] For the sake of completeness, I make an order discharging counsel appointed to assist the Court.
J.P. Doogue
Associate Judge
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