McDonald v New Zealand Law Society CA124/06

[2006] NZCA 475

IN THE COURT OF APPEAL OF NEW ZEALAND

CA124/06

BETWEEN  R MCDONALD Applicant

ANDNEW ZEALAND LAW SOCIETY Respondent

Hearing:         16 October 2006

Court:            Glazebrook, Chambers and Ellen France JJ Counsel:   P D McKenzie QC for Applicant

P N Collins for Respondent

Judgment:      1 November 2006         at 11 am

JUDGMENT OF THE COURT

A        The application for special leave to appeal out of time is dismissed.

BThe applicant must pay to the respondent costs of $1,500 plus usual disbursements.

REASONS OF THE COURT

(Given by Chambers J)

Application for special leave to appeal out of time

[1]      Robert McDonald (now known as Robert Erwood) seeks special leave to appeal out of time from a decision delivered in the High Court on 31 May 2002 (and

now reported as McDonald v FAI (NZ) General Insurance Co Limited 16 PRNZ

MCDONALD V NZ LAW SOCIETY CA CA124/06  1 November 2006

298).  In that decision, Rodney Hansen J ordered the New Zealand Law Society, one of  the  defendants  to  Mr  Erwood’s  proceeding,  to  pay  costs  to  Mr  Erwood. Mr Erwood now says the costs award should have been higher.

[2]      The  New  Zealand  Law  Society opposes  the  application  on  a  number  of grounds.  The principal grounds relied on are:

(a)     Mr Erwood’s delay in seeking special leave to appeal and the resultant prejudice to the society;

(b)The fact that Mr Erwood was seeking to advance on appeal a point not argued before Rodney Hansen J;

(c)     The fact that the proposed grounds of appeal had no chance of success.

[3]      We are satisfied that each of those grounds has merit.   Taken collectively, they   are   unanswerable:   the   overall   interests   of   justice   clearly   dictate   that Mr Erwood’s application must fail.

[4]      We discuss each of the grounds of opposition in turn.   These reasons are brief, in accordance with r 27(3) of the Court of Appeal (Civil) Rules 2005.

Delay and prejudice

[5]      This is, in fact, Mr Erwood’s third attempt to appeal from Rodney Hansen J’s judgment.  His first appeal was deemed abandoned after he failed to pay security for costs.  Mr Erwood then applied to the High Court for special leave to appeal, which Harrison J conditionally granted.  When the condition was not fulfilled, that appeal too was treated as abandoned under the then applicable Court of Appeal rules.  The third attempt to appeal was then made in December 2003, when Mr Erwood filed in this court an application for special leave to appeal out of time.  The registrar of the Court of Appeal rejected that application.   The  application was resubmitted for consideration in June this year.

[6]      The delay from 31 May 2002 to 8 June 2006 – over four years – speaks for itself.  We accept that Mr Erwood is not responsible for all of the delay, but he is responsible for a large part of it.  Many applications for leave to appeal out of time have failed solely on the grounds of delay in circumstances where the delay was much less egregious than here.

New point

[7]      Mr McKenzie QC, for Mr Erwood, seeks to run on appeal two arguments. The first is that Rodney Hansen J’s decision was wrong in law because the judge failed to take into account the effect of ss 161(a) and 169(1) of the Law Practitioners Act 1982.  The argument is that these sections obliged the law society to reimburse all of Mr Erwood’s costs in pursuing his claim against the Solicitors’ Fidelity Guarantee Fund administered by the society.

[8]      This is a new argument, an argument not considered by Rodney Hansen J as it was not put to him.  Mr McKenzie pointed out that s 161(a) had been raised in some written submissions prepared by Mr LaHatte, Mr Erwood’s then lawyer, and filed  on  13  August  2001  (some  four  months  prior  to  the  actual  hearing  before Rodney Hansen J).  According to Mr McKenzie, the following statement appeared in paragraph 52 of those submissions:

By the Law Practitioners Act 1982 s 161(a), the amount of all claims including costs established against the Solicitors’ Fidelity Fund shall be paid out of the Solicitors’ Fidelity Fund.

[9]      Mr  LaHatte  did  not  end  up  appearing for  Mr  Erwood  at  the  hearing  in December  2001.    We  do  not  know  why.    Instead,  Mr  Banbrook  appeared  on Mr Erwood’s  behalf.     Mr  Banbrook  filed  fresh  submissions.     Mr  McKenzie acknowledged  that  Mr  Banbrook  had  not  run  the  s  161  argument,  to  which Mr LaHatte had briefly and obliquely referred.

[10]     We are satisfied that the primary argument Mr McKenzie seeks to run is a new point.  While that is not of itself fatal to the application for special leave, it is nonetheless relevant in the overall assessment of the justice of the case.

No chance of success

[11]     It is well established that leave will not be granted if the proposed appeal appears to be hopeless: Prudential Building and Investment Society of Canterbury (in liquidation) v Hankins (1991) 5 PRNZ 160 at 162; Ngati Tahinga and Ngati Karewa Trust v Attorney-General CA73/02 27 June 2002.   We are satisfied that Mr McKenzie’s principal ground has no chance of success.   Neither s 161(a) nor s 169(1) requires the society to reimburse a person’s actual costs in pursuing a claim against the fund.  All those provisions do is authorise the society to pay out of the fund the amount of claims, including such costs as may be allowed or established against the fund.   It is, for instance, s 161(a) which authorised the society to take from the fund money required to meet Rodney Hansen J’s costs order.  So far as we are aware, no one has ever previously argued since the fund’s creation in 1929 that the fund was bound to reimburse a claimant’s actual costs in pursuing a claim against the fund.  The result in Florence v New Zealand Law Society [1989] 1 NZLR 132 (CA) is against Mr McKenzie’s proposition. In that case, Mr Florence was successful against the society in terms of part of a claim against the fund which the society had rejected. Mr Florence nonetheless received by way of costs in this court only $1,000 (the then standard contribution ordered in this court by way of party and party costs) and in the High Court scale costs: at 136. On Mr McKenzie’s argument, Mr Florence should have received indemnity costs with respect to his High Court proceeding and the subsequent appeal.

[12]     Mr  McKenzie’s  back-up  argument  is  that  Rodney  Hansen  J  wrongly exercised his costs discretion.  We do not consider that either alleged error, both of which relate to His Honour’s treatment of the society’s Calderbank offer, have any chance of success.

Conclusion

[13]     When all these matters are taken into account, we are clear that Mr Erwood’s application must fail.

Solicitors:

McKay and Gilkison, Wellington, for Applicant

Glaister Ennor, Auckland, for Respondent