Mason v Robertson

[2019] NZHC 2989

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-000897

[2019] NZHC 2989

UNDER

Section 124 of the District Courts Act 2016 and r 20.4 of the High Court Rules 2016

BETWEEN

ALEXANDER CHARLES MASON
Appellant

AND

ELIZABETH ANN ROBERTSON

Respondent

Hearing:	14 November 2019
Counsel:	GJ Thwaite and YS Kim for Appellant RS Pidgeon for Respondent
Judgment:	15 November 2019

JUDGMENT OF DOWNS J

This judgment was delivered by me on Friday, 15 November 2019 at 3 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:

GJ Thwaite, Auckland. YS Kim, Auckland.

RS Pidgeon, Auckland.

MASON v ROBERTSON [2019] NZHC 2989 [15 November 2019]

The case

[1]    Alexander Mason engaged Robert Hacking, a barrister, to represent him in relation to two pressing legal matters. As a barrister, Mr Hacking needed an instructing solicitor  to  represent  Mr  Mason.  So,  with  Mr Mason’s  agreement, Mr Hacking engaged Elizabeth Robertson as his solicitor. Mr Mason later paid some but not all of Mr Hacking’s fees. $48,852 remains unpaid. Ms Robertson obtained summary judgment against Mr Mason in relation  to  Mr  Hacking’s  unpaid  fees. Mr Mason appeals. He contends he has arguable defences to the claim for unpaid fees.

[2]    Mr Hacking acted for Mr Mason for just over a year: 5 November 2015 until 10 November 2016.  Ms  Robertson  filed  the  claim  for  Mr  Hacking’s  fees  on  11 April 2017. Mr Mason then complained to the New Zealand Law Society about Mr Hacking. The Law Society dismissed the complaint on 1 December 2017. It follows the case is already quite old.

[3]    Summary judgment is given only when the defendant has no defence to the plaintiff’s claim. If a defence is arguable, the claim should be tried.1 Judge M E Sharp held there was no arguable defence to Ms Robertson’s claim for Mr Hacking’s unpaid fees. Other context is given as the judgment unfolds.

An impermissible approach

[4]    The  Judge’s  decision  is  comprehensive.2  It   addresses   all  arguments.   Mr Mason does not identify any material, reversible error in the decision. Mr Mason’s submissions largely ignore it—as if the decision did not exist. It is not open to an appellant to approach an appeal this way.

[5]    As is well known, in Austin, Nichols & Co Inc v Stichting Lodestar, the Supreme Court held in a general appeal, an appellant is entitled to judgment in

1      Krukziener v Hanover Finance Ltd [2008] NZCA 187, (2008) 19 PRNZ 162 at [26].

2      Robertson v Mason [2019] NZDC 6528.

accordance with the independent opinion of the appellate court.3 However, that Court did not hold or imply the first-instance decision is irrelevant.

[6]    I am far from the first to make this point. In Green v Green, the Court of Appeal commented on the unfortunate tendency of appellants to approach their task as if the appeal Court “were conducting a retrial in the absence of a primary judgment”.4 For that Court, French J said it was “still axiomatic that the appellant bears the onus of persuading the appellate Court to reach a different conclusion” from that below.5 French J also said when “discharging that onus the appellant must identify the respects in which the judgment under appeal is said to be in error”.6 Again, Mr Mason made no attempt to do so.

[7]    For these reasons, I first assess Mr Mason’s alleged arguable defences by reference to what Judge Sharp held about each. Only then I do offer my view (based on my independent examination of the record).

No retainer? No contract? A sham?

[8]    Mr Mason contends it  is  reasonably  arguable  no  contract  existed  with  Ms Robertson. Mr Mason submits there was no retainer between them, meaning no agreement Ms Robertson would provide him legal services, and even if there was a retainer, no contract.7 Mr Mason contends it is arguable there was no intention to create legal relations, no consideration, and no certainty.

[9]    Mr  Mason  filed  an  affidavit  in  the  District  Court.    Mr Mason  says    Ms Robertson did not advise “on any part of the litigation” and “never met with me to discuss the litigation”.

3      Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.

4      Green v Green [2016] NZCA 486, [2017] 2 NZLR 321 at [27].

5 At [30].

6 At [30].

7 Retainer is defined by r 1.2 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008. It “means an agreement under which a lawyer undertakes to provide or does provide legal services to a client, whether that agreement is express or implied, whether recorded in writing or not, and whether payment is to be made by the client or not”.

[10]   Mr Hacking and Ms Robertson also filed affidavits in the District Court. Each exhibited  relevant  correspondence,  including  Mr Mason’s   opening   email   to  Mr Hacking on 4 November 2015. Mr Mason asked Mr Hacking to “please arrange one of your solicitors to refer me”. The next day, Mr Mason signed a letter of engagement between Mr Hacking and Ms Robertson. Mr Mason later deposited money to Ms Robertson’s trust account; and directed the payment of fees for an expert witness from that account.

[11]   The Judge observed, correctly, Ms Robertson had to establish a contract of retainer. The Judge held Ms Robertson established this and no arguable, contrary defence existed:8

Mr Mason asked Mr Hacking for a solicitor to “refer” him from the outset; he signed the retainer which mentions that he was Ms Robertson’s client, and he used and instructed her to use, hold and disburse funds in her trust account. She advised him of the balance retained on his behalf in her trust account. At all times Mr Mason knew that Ms Robertson was to be the instructing solicitor for Mr Hacking and was to handle Mr Mason’s monies for the purposes of meeting disbursements such as Dr Jane Casey and Mr Hacking. There was an intention to create legal relations between the parties. There was consideration. Given the facts here I find an implied contract of retainer between the parties.

[12]   Mr Mason wanted Mr Hacking to help him in relation to two legal matters. First, Mr Mason’s wife was in secure care as a dementia patient. Mr Mason wanted her home, and quickly.  This  necessitated  Mr  Mason’s  daughter’s  removal  as  Mrs Mason’s welfare guardian under the Protection of Personal and Property Rights Act 1988. (She wanted Mrs Mason to remain in secure care.) Second, Mr Mason wanted to remove trustees from trusts and return their control to him. This matter was pressing too.9 Mr Hacking considered Mr Mason needed “urgent legal advice” on both.

[13]   Mr Mason knew Mr Hacking was a barrister. It is clear Mr Mason knew this meant Mr Hacking required an instructing solicitor.  Hence Mr Mason’s  email to  Mr Hacking on 4 November to “arrange one of your solicitors to refer me”. In other words, Mr Mason knew Mr Hacking needed to reverse-brief a solicitor before

8      Robertson v Mason, above n 2, at [17].

9      Mr Hacking engaged another lawyer to help with this.

Mr Hacking could help him in relation to either legal matter. Mr Hacking responded accordingly. He emailed Ms Robertson the same day, asking “for instructions to advise Alex Mason who I’ve yet to meet”. Ms Robertson promptly agreed.

[14] On 5 November, Mr Hacking sent a letter to Ms Robertson saying he accepted her instructions to advise Mr Mason on trust and Protection of Personal and Property Rights Act matters. Mr Hacking’s letter covered how he would calculate his fees, how these were to be paid, and other matters contemplated by r 3.4 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, or the rules. The letter ended this way:10

6.Please confirm your  acceptance  of these terms  either by signing a   copy of this letter below and returning it to me, or by some written means, including email. Please also confirm that you have brought the terms of this letter to the attention of your client, and that the client has accepted them.

[15]   On 6 November—so, the next day—Mr Mason emailed Ms Robertson and Mr Hacking his acceptance of these terms of engagement. Mr Mason then paid funds into Ms Robertson’s trust account. Ms Robertson managed these and used them to pay disbursements. For example, on 13 April 2016, Mr Mason emailed Mr Hacking. Mr Mason asked him to “arrange payment from the Elizabeth Robertson trust account” of expert witness fees. Mr Hacking sent the email to Ms Robertson. She paid the expert from the trust account.

[16]   Mr Mason is correct Ms Robertson provided no legal advice. However, the definition of legal work (vis-à-vis a retainer) is  inclusive, not exhaustive.11  And,   Mr Mason did not anticipate Ms Robertson would provide such advice. It was to come (and did come) from Mr Hacking. Indeed, that was the whole point of the arrangement, presumably to reduce cost.

[17]   It follows there could be no reasonably arguable defence based on absences of: intent to create legal relations; consideration; or certainty because Mr Mason got exactly what he bargained for: a promptly arranged, reverse-briefed instructing

10     Emphasis added.

11 Lawyers and Conveyancers Act 2006, s 6.

solicitor with an essentially passive role. Moreover, case law holds just because a barrister has brought about a relationship with an instructing solicitor by way of a reverse-brief, does not mean a contract of retainer cannot be implied between client and instructing solicitor.12

[18]   Mr Mason’s real argument appears to be reverse-briefs should not be permitted unless the instructing solicitor takes an active role in advising the client. This conclusion is supported by Mr Mason’s related argument the arrangement was “a sham”. Mr Mason contends because Ms Robertson performed no obvious legal role, “no real solicitor and barrister relationship existed”; this was “pretence”.

[19]   There are fours answers to this argument. First, reverse-briefs like this one are not uncommon in New Zealand. A similar situation occurred in New Zealand Tamil Society Inc v Kiely Thompson Caisley.13 Courtney J expressed no concern. Another occurred in the recent case of Erwood v Holmes.14 I expressed none in that either.15 Second, acceptance of the argument would necessarily result in much higher client costs, a proposition presumably unattractive to Mr Mason, and incommensurate with access to justice. Third, summary judgment is not an appropriate vehicle for exploration of this issue. Fourth, as I said earlier, Mr Mason got exactly what he bargained for.

[20]   I return to Judge Sharp’s reasoning. The Judge held “a legitimate contractual relationship” existed between Mr Hacking and Ms  Robertson.16  The Judge noted  Ms Robertson was required to undertake a service or services, “none the least of which was the holding of monies for Mr Mason and the disbursing of them to Mr Hacking and others”.17 The Judge said there was “no evidence from which I could or should

12     See for example, New Zealand Tamil Society Inc v Kiely Thompson Caisley [2011] NZAR 722 at [18], [26]; Sanson v Blackwells HC Auckland CIV-2010-404-0218, 22 June 2010 at [29].

13     New Zealand Tamil Society Inc v Kiely Thompson Caisley, above n 12.

14     Erwood v Holmes [2019] NZHC 2049 at [77]–[78].

15 Mr Thwaite submits Giles J expressed a reservation about reverse-briefing in the context of the extensive litigation involving Mr Erwood (then known as Mr McDonald); see McDonald v FAI (NZ) General Insurance Co Ltd [1999] 1 NZLR 583 at 589-590. Reservation is not deprecation. Moreover, Giles J did not suggest this precluded the existence of a contract of retainer; his comments were specifically made in response to a submission a barrister was never liable to an award of costs against them personally.

16       Robertson v Mason, above n 2, at [35].

17 At [35].

deduce … Mr Hacking and Ms Robertson intended to use their retainer as an imitation of a real relationship”.18 The Judge concluded the degree of the instructing solicitor’s involvement “is not necessarily instructive of the legitimacy of the relationship”.19

[21]   I agree with the Judge for the reasons she gave. And, highlight one to which I return at the end of the judgment. There is no evidence Mr Hacking and Ms Robertson intended to use their retainer to imitate a genuine, professional relationship. In short, there is no evidence of a sham or pretence.

An arguably illegal contract?

[22]   It is common ground Ms Robertson did not provide Mr Mason a client-care letter as required by r 3.4 of the rules. As observed earlier, a letter of this type explains, among other things, how fees will be charged, when they are to be paid, whether fees may be deducted from funds held in trust on behalf of the client, and how complaints are handled. Mr Mason contends this omission means it is reasonably arguable any contract of retainer was illegal, hence unenforceable.

[23]   Mr Mason’s argument is unsupported by authority. The learned authors of Ethics, Professional Responsibility and the Lawyer observe a failure to provide a client-care letter would constitute a breach of professional ethics but “not affect the existence of legal obligations between the parties”.20

[24]Judge Sharp cited this text and later said:21

Mr Mason also argues that the lack of a letter of engagement means any existing contract will be illegal at common law. He cites s 71 Contract and Commercial Law Act 2017 which defines illegal contracts in New Zealand. There are examples provided under s 71 of the Act for guidance. These include a contract agreeing to the commission of a serious crime and a contract agreeing to use improper influence to affect the award of a public honour. The gravity of the situations which are cited as examples is far greater. This is not an illegal contract.

18 Robertson v Mason, above n 2, at [35].

19 At [35].

20 Duncan Webb, Kathryn Dalziel and Kerry Cook  Ethics, Professional Responsibility and the  Lawyer (3rd ed, LexisNexis, Wellington, 2016) at [5.4]. A point made by the Judge too; see Robertson v Mason, above n 2, at [21]–[24].

21     Robertson v Mason, above n 2, at [23]–[24].

Mr Mason further argues that the lack of a letter of engagement means any existing contract will be in breach of s 4(a) Lawyers and Conveyancers Act 2006. Even if I was to find that the contract or retainer between the parties was against the rule of law in the Lawyers & Conveyancers Act 2006, s 72 Contract and Commercial Law Act 2017 states that the contract would nevertheless be legal. It is possible that the lack of a letter of engagement was a professional breach by Ms Robertson, in which case Mr Mason could have made a complaint under the Lawyers and Conveyancers Act 2006.

[25]   While doubt attaches to whether the categories of illegal contracts are closed, it is not seriously arguable the absence of a client-care letter is prejudicial to the administration of justice, the category exhorted by Mr Mason.22 The examples cited in the Law of Contract in New Zealand appear self-evident: an agreement not to appear at the public examination of a bankrupt; an agreement not to testify; and an agreement to stifle a prosecution. In each instance, the administration of justice is threatened by the mere existence of the agreement. Therein lies the evil. This is not so when a client does not receive the client-care letter she or he ought to have.

[26]   At the hearing, Mr Thwaite submitted the absence of a client-care letter could lead to a lawyer being disbarred, because it was such a serious omission. This submission is so unrealistic it is unhelpful.

Ms Robertson’s liability for Mr Hacking’s fees

[27]   Mr Hacking sent his invoices directly to Mr Mason. And, Mr Hacking absolved Ms Robertson of liability for his fees in his 5 November letter. Mr Mason submits  it  is  therefore  arguable  Ms  Robertson  cannot  pursue  Mr Mason  for   Mr Hacking’s fees.

[28]This argument relies on these rules:

Fees of other lawyers

10.7A lawyer who, acting in a professional capacity, instructs another lawyer, must pay the other lawyer’s account promptly and in full unless agreement to the contrary is reached, or the fee is promptly disputed through proper professional channels. This rule applies to the accounts of barristers sole and foreign lawyers.

22     See Jeremy Finn, Stephen Todd and Matthew Barber Burrows, Finn and Todd on the Law of Contract in New Zealand (6th ed, LexisNexis, Wellington, 2018) at [13.2.2].

10.7.1Where the instructing lawyer and the lawyer undertaking the work have agreed that the instructing lawyer’s client is to be solely responsible for paying the lawyer’s account then (unless agreed otherwise) the instructing lawyer must use all reasonable endeavours to ensure the client pays the account. The instructing lawyer must promptly inform the instructed lawyer if it appears that the client will be unable or unwilling to pay the account.

10.7.2A lawyer with a practising certificate as a barrister and solicitor may sue for and recover from the party chargeable any fees paid or payable by the lawyer to a barrister sole for work done or to be done on the instructions of the lawyer in relation to a client’s affairs, if those fees are shown as a disbursement in a bill of costs rendered by the lawyer to the party chargeable.

[29]   Rule 10.7.2 above acknowledges the longstanding principle a barrister may not sue the client for her or his fees.23

[30]   The Judge rejected these arguments. She thought it immaterial Mr Hacking invoiced Mr Mason directly. The Judge applied New Zealand Tamil Society Inc v Kiely Thompson Caisley, a case mentioned earlier. The New Zealand Tamil Society resisted payment of the barrister’s fee. As here, the barrister invoiced the client directly; his fees were not “shown as a disbursement in a bill of costs rendered by the lawyer” under r 10.7.2. Courtney J dismissed the argument: “I do not consider … this alone would preclude [the solicitor] from suing for the fees and do not consider this point further.”24

[31]   I can think of no reason  to adopt a different  approach.  It would be odd if  Mr Mason has a defence simply because he was invoiced directly when he would have no defence had he been invoiced indirectly. To uphold this distinction would triumph form over substance, especially as there is no doubt Mr Mason owes Mr Hacking for unpaid fees.

[32]   I turn to the additional feature: the solicitor’s express absolution from responsibility for payment of the instructed barrister’s fees. This occurred  in  Findlay v Webb Morice too.25 Mr Findlay instructed a firm of solicitors to brief a

23     Atkinson v Pengelly [1995] 3 NZLR 104; Cutting v Liu [2014] NZHC 1063, [2014] 3 NZLR 224 at [72]–[74].

24     New Zealand Tamil Society Inc v Kiely Thompson Caisley, above n 12, at [12].

25     Findlay v Webb Morice & Partners HC Auckland AP82-SW99, 6 September 1999.

barrister, Mr MacLean. They made plain to Mr MacLean they would not be responsible for Mr Findlay’s non-payment of his fees. But, they sued for them nonetheless. Robertson J saw “no reason in logic or common sense” the firm could not sue even though it was not liable for Mr MacLean’s fees. The Judge said:26

What is exposed on this file is the sort of arrangement which I suspect is not uncommon where solicitors are prepared to facilitate the contact between barristers sole and members of the public. It is clear that in being available as a tame solicitor, Webb Morice were making it clear to Mr MacLean that if he did not get paid they were not going to be responsible to him for the payment of his fee. That is what on a plain reading of the words the signed document said.

Mr Goddard submits that as a matter of necessary inference it follows that not being responsible for the payment of any unpaid fees meant that they had no rights to assist Mr MacLean. I do not see why that follows at all. If they chose (as they did) to make the demand and to pursue Mr Findlay on Mr MacLean’s behalf because Mr MacLean is precluded by an existing rule from doing so directly, that is their business. If they had said no, Mr MacLean would have been left lamenting. But they did not say no.

[33]   Findlay demonstrates an agreement between an instructing solicitor and barrister of non-liability for fees says nothing about the client’s obligations to pay them, or the solicitor’s ability to seek their payment. I consider this correct. The rules impose an ethical obligation on an instructing solicitor to pay the barrister’s fees. The rules also provide the barrister and solicitor may agree to the contrary. If they do, the solicitor is released from her or his ethical obligation to pay the barrister’s fees. However, such a release does not preclude the solicitor from seeking payment from the client; nor afford the client a defence to payment should the solicitor elect to do so.

[34]   In short, X’s release from an ethical obligation to Y in relation to Z is not a legal impediment to X pursuing Z on Y’s behalf. Any other conclusion would mean a barrister could not obtain relief in these circumstances, even though they had diligently done everything asked of them by the client, for the client’s advantage. That would be unjust.

[35]No reasonably arguable defence arises here either.

26     Findlay v Webb Morice & Partners, above n 25, at 3–4.

Quantum?

[36]   Mr Mason contends it is reasonably arguable he could contest quantum. He submits Mr Hacking failed to appreciate a medical certificate activating an enduring power of attorney for Mrs Mason was invalid; should have identified mediation as an option from the outset; and charged for tasks more properly within Ms Robertson’s role as instructing solicitor, for example, sending correspondence to Mr Mason, and filing documents in the Family Court.

[37]   The Judge dealt with these arguments comprehensively. She noted the reasonableness of Mr Hacking’s fees had been considered by the New Zealand Law Society. As will be recalled, Mr Mason complained to the Law Society shortly after Ms Robertson brought this claim. The Law Society reviewed Mr Hacking’s fees and concluded no action should be taken. The Judge then considered the fees herself, and Mr Hacking’s conduct of Mr Mason’s case. She concluded:27

[45]      It appears obvious to me that any invalidity of the medical certificate of 10 August 2015 would only have slowed down the course upon which Middlemore Hospital and the trustees had embarked in respect of Mrs Mason who by anybody’s reckoning (from the evidence that I have read and the background set out in the judgment of Fitzgerald J in the High Court) was in a perilous state of mental health which Mr Mason was loathe to accept. It is also clear from Mr Hacking’s evidence that he did give advice on the mediation agreement and he went before the Family Court to effect the mediated outcome. It should be remembered however that he had always advised Mr Mason prior to the mediation that it was unwise to participate in a mediation without legal representation. Mr Mason appears to be a man who has fallen out with many people including lawyers, his daughters, caregivers and medical practitioners for his wife. He is not new to legal representation and instructing solicitors or to litigation. I am satisfied that Mr Hacking worked diligently and ably to assist Mr Mason at all times. On a number of occasions until he terminated Mr Hacking’s retainer, Mr Mason thanked him and assured him of  his  gratitude  for  his  assistance.  I am satisfied  that  Mr Hacking fulfilled his legal obligations to Mr Mason. There is no reasonably arguable defence here.

Quantum

[46]      As the defences raised by Mr Mason in respect to quantum are the same as those traversed above, (plus one more), I shall not repeat my findings. However, I add: I have perused Mr Hacking’s time sheets and carefully read his affidavit. It is clear that he was not only required by Mr Mason but actually put a huge amount of time and effort into Mr Mason’s problem, as instructed. The problem was multi-dimensional and intricate. Mr Hacking cannot be

27     Robertson v Mason, above n 2.

criticised for anything that he did. Unfortunately Mr Mason appears to have a history of taking issue with his legal advisor’s fees after he has curtailed their retainers and one could be forgiven for concluding that he is a hard person to satisfy. Neither the reasonableness of the fees charged by Mr Hacking nor the work that he carried out are challengeable. He carried out all of his obligations to Mr Mason carefully and appropriately and cannot be criticised.

[47]      The additional ground on which Mr Mason relies under quantum is that Mr Hacking was not entitled to charge for impermissible work such as:

(i)  sending correspondence to the lawyer for the other parties;

(ii)  sending correspondence to Mr Mason and/or;

(iii)  filing documents with the Family Court.

[48] The reality is that if Mr Hacking did not carry out those activities, Ms Robertson would have had to. I note that r 14.12 and 14.13 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 provides that correspondence between parties on matters relating to litigation should normally be carried out between the instructing barrister and solicitor.

[49]      That appears not to be a hard and fast rule. Equally, there appears to be no rule preventing barristers from filing documents in the Court provided they do not show their own rooms or chambers as the address for service.

[38]   I agree with the Judge, and for the reasons she gives. No elaboration is required save this: belated, meritless complaints about the adequacy of legal advice should not be permitted to delay or defeat payment for that advice.

Result

[39]The appeal is dismissed.

Costs

[40]   Ms Robertson  should  have  at  least  2B  costs.  I  say  “at  least”  because Mr Mason’s sham argument implied Mr Hacking and Ms Robertson deliberately presented an inaccurate picture about their professional relationship. The allegation was serious, and potentially injurious to reputation. There was no evidence to support it. The allegation should not have been ventilated. I said this to Mr Thwaite at the hearing, so he could comment. Nothing he said dissuades me from this view.

[41]   If the parties cannot agree on costs, they may file memoranda of not more than five pages each:

(a)Ms Robertson by Friday, 6 December 2019.

(b)Mr Mason by Friday, 13 December 2019.

……………………………..

Downs J