Jones v Stace Hammond Lawyers
[2022] NZCA 450
•22 September 2022 at 4.00 pm
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA253/2022 [2022] NZCA 450 |
| BETWEEN | GREGORY JOHN JONES |
| AND | STACE HAMMOND LAWYERS |
| Court: | Miller and Collins JJ |
Counsel: | Applicant in person |
Judgment: | 22 September 2022 at 4.00 pm |
JUDGMENT OF THE COURT
AThe application for leave to appeal is declined.
BMr Jones must pay costs for a standard application on a band B basis with usual disbursements.
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REASONS OF THE COURT
(Given by Miller J)
This judgment responds to an application for leave to appeal from a decision of the High Court[1] dismissing an appeal against summary judgment entered in the District Court[2] and the related costs judgment.[3] Leave is required under s 60 of the Senior Courts Act 2016. Mr Jones was declined leave in the High Court and now applies to us.[4]
[1]Jones v Stace Hammond Lawyers [2022] NZHC 47 [High Court substantive judgment].
[2]Stace Hammond Lawyers v Jones [2021] NZDC 10376 [District Court summary judgment].
[3]Stace Hammond Lawyers v Jones [2021] NZDC 15547 [District Court costs judgment].
[4]Jones v Stace Hammond Lawyers [2022] NZHC 884 [High Court leave judgment].
We note that the record before us did not include the pleadings and affidavits filed in the District Court. Miller J asked the Registry to obtain those documents to verify whether they were accurately summarised in the judgments below. Mr Jones initially protested that this was an error, apparently assuming their absence aided his cause. That was incorrect; in their absence he could not easily show that the courts below erred in what they said about the pleadings and affidavits. The burden is on him to identify an error that is arguable and merits a second appeal. The parties were permitted to file submissions about the affidavits. Mr Jones did so, and he also asked us to consider other documents that he had filed or sought to file below. We have considered this material.
The judgment debt comprised professional fees (and interest) incurred by Stace Hammond in the defence of a summary judgment application brought against Mr Jones and a partnership involving Mr Jones and a Mr Green. The plaintiff was a partnership known as Wentwood Grange which had sued Mr Jones and his partnership for unpaid agistment fees for thoroughbred horses.
It was not in dispute below that Stace Hammond acted for Mr Jones, or that the fees were incurred in carrying out his instructions. He took issue with the firm’s decision to withdraw on ethical grounds. He contended that the firm was aware when it accepted instructions of his extensive bloodstock interests and existing and potential litigation concerning his animals, including an historic dispute between him and a client of the firm, Te Akau Stud. And he sought to show that there was no ethical barrier to the firm acting, because he is the victim of a conspiracy in the bloodstock industry and Wentwood Grange is among the conspirators.
As van Bohemen J found in the High Court, Mr Jones instructed the firm to act for himself and the partnership in December 2018. There was a discussion about a possible conflict with Te Akau Stud. The firm did not see a difficulty, and Mr Jones agreed.[5] Justice van Bohemen J observed that if anyone knew of a conflict of interest it would be Mr Jones, who is a barrister and better placed than the firm to decide whether his interests were in conflict with those of Te Akau Stud.[6]
[5]High Court substantive judgment, above n 1, at [5]–[11].
[6]At [68].
The firm engaged senior counsel, Mike Ring KC, to defend the Wentwood Grange claim. Mr Ring and the firm subsequently withdrew after considering a draft statement of defence that Mr Jones had prepared. The defence included allegations of dishonesty and fraud and an intention to cause harm to Mr Jones and a valuable colt of his. Mr Ring pointed out that neither he nor the firm could act unless they had taken steps to ensure that reasonable grounds existed for such allegations. Extensions to the deadline for filing the defence were negotiated, but Mr Jones did not supply the evidence. The firm and counsel both withdrew, citing the absence of supporting evidence and Mr Jones’s and the partnership’s failure to pay fees incurred to date.
Mr Green and the partnership subsequently settled their share of liability for the fees. Mr Jones resisted. He filed a counterclaim in which he pleaded that the firm knew of potential litigation involving Te Akau Stud.
In the District Court Judge Mathers took what she described as a robust and realistic approach to the evidence.[7] The allegations against Mr Jones were inherently credible, and there was no credible evidence of bad faith against the firm. Te Akau Stud had nothing to do with Wentwood Grange.[8] There was no sufficient link between the claim by Wentwood Grange and Mr Jones’s counterclaim, which she accordingly put to one side.[9] Summary judgment was entered for $14,900 with interest and costs.[10] The total, with interest and costs, was $46,207.61 at the time of the High Court hearing.
[7]District Court summary judgment, above n 2, at [11].
[8]At [14].
[9]At [22].
[10]At [24].
On appeal, van Bohemen J recited Mr Jones’s submissions:[11]
[37] Mr Jones submits that the issue in the case is not his desire not to pay Stace Hammond but the propriety of the actions of Mr Jones and Stace Hammond and other parties involved in a dispute with Mr Jones, part of which concerns the [Wentwood] Grange proceeding. The basis of Mr Jones’s defence is that Stace Hammond did not offer their services in good faith. Partners in the firm were aware of actions taken to cause Mr Jones financial harm and that one such party was the Te Akau Stud (in particular, its principle, Mr Ellis), for whom Stace Hammond had acted and had continued to act.
[38] Mr Jones disputes the District Court Judge’s acceptance that Mr Ring and Stace Hammond were right and Mr Jones wrong in relation to the availability of his defence to the [Wentwood] Grange claim. Mr Jones sets out the nature and bases of the defence he had intended to make to the claim. These were, in essence, that actions had been taken by [Wentwood] Grange to compromise the profitability of Mr Jones’s horses and that his horses had been intentionally harmed.
[39] Mr Jones goes into some detail on these matters and, in support of his allegation of conspiracy in the bloodstock industry to cause him harm, seeks leave to adduce the sworn affidavit, which exhibits material Mr Jones prepared for use in another proceeding, and the unsworn affidavit, which exhibits material concerning treatment of a horse in Australia owned by Mr Jones.
[40] Mr Jones says it was an implied term of the contract of retainer between himself and Stace Hammond that Stace Hammond should not have accepted instructions where it was likely that Stace Hammond would need to terminate its services because of its relationship with another client, namely Te Akau Stud and Mr Ellis. He also says it was an implied term that Stace Hammond could charge him only for services that were reasonable having regard to the need for the retainer to be terminated. Mr Jones also says Stace Hammond was in breach of its fiduciary obligations to him and cannot properly charge him for services provided in the face of so serious a breach. For these reasons, Stace Hammond’s services were of no value to Mr Jones.
[41] Mr Jones says the Court is entitled to assume that the conspiracy he has alleged may exist and that there is a link between that conspiracy and Stace Hammond’s client, Te Akau Stud and Mr Ellis, based on Mr Jones’s allegations and in the absence of evidence to the contrary.
[11]High Court substantive judgment, above n 1.
The Judge refused to allow Mr Jones to file affidavits intended to verify the existence of the conspiracy and its connection to Te Akau Stud.[12] These attached other affidavits sworn in other proceedings. Mr Jones explained that he had reconsidered his stance in the District Court that he need not present his entire case to stave off summary judgment. As noted earlier, we have considered the material that he sought to file in the High Court.
[12]At [51].
Justice van Bohemen described this evidence as bizarre, explaining why he found it so. He found that it provided no credible support to the existence of the alleged conspiracy. Nor was there anything of any probative value to link the alleged conspiracy to the firm’s ability to act for Mr Jones.[13] The Judge found no tenable case that there was a relevant conflict of interest, noting that Mr Jones had supplied no evidence of it but merely asserted that he had only to allege the conflict existed. He was wrong about that.[14] The Judge pointed out that the counterclaim was predicated on there being a conspiracy and it lacked any particulars of Stace Hammond’s involvement to support the allegations of conspiracy.[15]
[13]At [47]–[49].
[14]At [59]–[69].
[15]At [75]–[78].
Mr Jones then sought leave to appeal, inviting the Judge to recuse himself for bias. This the Judge declined to do.[16] The allegation of bias took issue with his description of evidence as “bizarre”, the Judge’s alleged failure to pay sufficient attention to the evidence of conspiracy, and the seriously flawed nature of the Judge’s reasons. Much of the judgment was taken up with explaining why the Judge need not recuse himself. As he noted, it is normal practice in New Zealand for the judge who has decided a matter to deal with a subsequent application for leave to appeal.[17]
Analysis
[16]High Court leave judgment, above n 4, at [51].
[17]At [5].
Justice van Bohemen found that the proposed appeal lacked merit, resting as it did on the assumption that his allegation of a conspiracy should be accepted for summary judgment purposes. The Judge followed settled authority in holding that a court need not accept uncritically evidence that is inherently lacking in credibility or is inherently improbable.[18] The evidence established no tenable basis for the existence of the alleged conspiracy or its relevance to the non-payment of Stace Hammond’s fees. Even if the asserted errors were arguable, they plainly were not of general or public importance, or of sufficient importance to Mr Jones, to outweigh the lack of general or precedential value.
[18]Krukziener v Hanover Finance Ltd [2008] NZCA 187, [2010] NZAR 307 at [26].
The application in this Court for leave to bring a second appeal contends that the Judge was wrong to refuse leave to adduce further evidence, and in deciding there was no tenable basis for concluding the firm had a conflict of interest. Mr Jones alleges that the Judge was motivated by bias against him, and acted improperly, by failing to consider his case adequately or at all.
The approach of this Court to second appeals by leave in the civil jurisdiction is long-settled. As the Court held in Waller v Hider, the appeal must raise some question of law or fact capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the costs and delay of the further appeal. The guiding principle is the requirements of justice. On a second appeal this Court is not engaged in general correction of error; its primary function is to clarify the law and determine whether it has been properly construed and applied by the court below. The task of an applicant is harder when the disputed matter is entirely or largely a question of fact.[19]
[19]Waller v Hider [1998] 1 NZLR 412 (CA) at 413. See also Rennie Cox Lawyers v EA [2020] NZCA 348 at [15].
In our view the application for leave to appeal is misconceived. Mr Jones’s liability does not turn on whether there exists a conspiracy against him in the bloodstock industry. His difficulty is that Stace Hammond undoubtedly had reasonable grounds to withdraw for ethical reasons. As Mr Ring had pointed out, the firm could not file a pleading alleging fraud without satisfying itself that there was some evidence for it. Mr Jones did not provide the firm with the evidence needed. Having given him clear warning, it followed senior counsel in withdrawing.
It follows that no purpose was served by attempting to prove the existence of the alleged conspiracy, as Mr Jones did below and in his submissions before us. We appreciate that the courts below did address the issue, considering whether there was credible evidence of conspiracy. But on the view we take, what matters is that the firm was justified in withdrawing when it did, and that would remain the case even if the conspiracy did exist. He was obliged to pay the firm’s reasonable fees to that point. This is, as the firm contends, a straightforward claim in debt.
Mr Jones claims that the firm tried to persuade him to settle with Wentwood Grange, failed to prosecute his claims and misrepresented the firm’s connection with Te Akau Stud. In effect he says that from the outset the firm failed to act in his interests; and that being so, he received no value and is not obliged to pay the fees. These claims were found to lack credibility on the facts, both at first instance and on appeal.
We observe that the issue of a conflict of interest with Te Akau Stud was raised at the outset, in December 2018, and settled to the parties’ satisfaction. The firm saw no obvious conflict and Mr Jones agreed and proceeded to instruct the firm. The alleged conflict did not compromise their representation of Mr Jones; they withdrew before filing a defence. We see no issue here of general or public importance, or anything to suggest the courts below were wrong to discount Mr Jones’s allegation, pointing to the absence of particulars or evidence about the alleged difficulties between Mr Jones and Te Akau Stud.
Nor do we see any issue of general or public importance, or any error, in the refusal of the courts below to recognise a set off for Mr Jones’s counterclaim, which is predicated on the conspiracy.
The allegation of actual bias against van Bohemen J is founded on alleged deficiencies in his reasoning, which are said to be so gross as to demonstrate impropriety. In our view the allegation of bias is untenable on the face of the record. The Judge was asked to evaluate the material to ascertain whether it pointed to a credible defence. He expressed his firm opinion that it did not. We have looked at the affidavits. All that need be said was that the view he reached was available to him.
It was also open to the Judge to express concern that the allegations were so lacking in cogency as to lead him to share another Judge’s doubts, expressed in a different proceeding, about Mr Jones’s state of mind. In his further submissions Mr Jones argued that these comments are sufficiently important to him as a legal practitioner to justify leave to appeal in themselves.
We accept that leave may be granted where the proposed appeal concerns an issue of great private importance. We also accept that this issue does not rest on the allegation of bias, which we have found lacks sufficient merit to warrant leave. It ultimately turns on what the Judge found to be the “inherently incredible” allegation of a conspiracy.
However, this is not an appropriate case in which to allow Mr Jones to show, by establishing that the conspiracy exists, that the Judge’s reservations about his state of mind were unfounded and unfair. Stace Hammond’s claim is entirely peripheral to the alleged conspiracy. Nor is it necessary to use this proceeding for that purpose, since reservations about his judgement have been expressed in other proceedings some of which appear to directly engage the alleged conspiracy.
The application for leave to appeal is dismissed. Mr Jones must pay costs for a standard application on a band A basis with usual disbursements.
Solicitors:
Stace Hammond Lawyers for the Respondent
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