Radaly v Richards
[2017] NZHC 1850
•2 August 2017
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2017-404-634 [2017] NZHC 1850
BETWEEN BRENDA ANNE RADALY
ROBERT BRETT STREET AND KAREN LESLIE THOMPSON Plaintiffs
AND
ROBERT WILLIAM RICHARDS Defendant
Hearing: 2 August 2017 Appearances:
A J Steele for Plaintiffs (the Street children) A G Jackson for the Williams children Defendant in person
Judgment:
2 August 2017
ORAL JUDGMENT OF ASSOCIATE JUDGE R M BELL
Solicitors:
Martelli McKegg (A J Steele), Auckland, for Plaintiffs
Copy for:
Anthony G Jackson, Whangarei, for the Street childrenR W Richards, 50A Cresta Avenue, BeachHaven, Auckland
RADALY STREET AND THOMPSON v RICHARDS [2017] NZHC 1850 [2 August 2018]
[1] On 23 March 2017 there was a judicial settlement conference for a proceeding CIV-2015-404-180. The conference led to the parties entering into a written agreement. All parties at that conference were represented, bar one – that was Mr Richards. Because Mr Richards did not have a lawyer, a special provision was inserted in the agreement. That was cl 17:
The parties agree that the second defendant (Mr Richards) has until
31 March 2017 to seek legal advice on this agreement and unless he notifies the parties to the contrary by that date at 4pm he will be bound by all and each part of its terms.
[2] On 29 March 2017, Mr Richards sent a memorandum to the court and to the parties in which he said, amongst other things:
After consultation and considerable consideration I am not proceeding with the settlement and formally give notice to all parties of my decision.
[3] The plaintiffs in this case, who were parties to the settlement agreement, say that the notice that Mr Richards gave on 29 March 2017 was ineffective to terminate the agreement under cl 17. They have brought this proceeding seeking declarations that his termination notice was ineffective and that the settlement agreement remains in force. They have applied for summary judgment.
Some procedural matters
[4] Before he gave his notice on 29 March 2017, Mr Richards went to a Community Law Centre for assistance. The plaintiffs were keen to have the lawyer who dealt with Mr Richards give evidence as to what passed between him and Mr Richards. They invited that lawyer to make an affidavit but he declined to do so. The plaintiffs obtained an order under r 9.75 for the lawyer to appear to give evidence in person. In the event, that lawyer did not appear. The plaintiffs went ahead without any evidence from that lawyer.
[5] Ordinarily, communications between a lawyer and a client are privileged if they are confidential and relate to advice for the client.1 In this case, however, privilege has been waived in two ways. First, the advice has been put in issue in the proceeding under s 65(3)(a) of the Evidence Act. Moreover, Mr Richards has been candid about what passed between him and the lawyer at the Community Law Centre. In particular, he has stated what happened in his notice of opposition. It
says:
On the weekend of 25 and 26 March I researched options on the internet and found the community law website. On Monday 27 March 2017, I went to a Community Law centre in Birkenhead and was advised that they no longer worked out of that office and was given details of the Glenfield Office for Tuesday morning.
Tuesday 28 March 2017 I attended a meeting with a Lawyer from the Community Law centre in Glenfield from about 12:20. I now know that he was Neil Shaw. He took and recorded my name and address details.
I was not aware that the community Law centre did not give legal advice until I arrived at the venue and was greeted with a sign next to the door that stated “appointments are 15 minutes and no legal advice is given”. It was the last appointment of the day and I shortened my request as it was after the finishing time. Andrew Steele, Mr Shaw has stated, he did look over a draft of my response and made several suggestions which were appreciated and followed.
[6] In answer to my questions Mr Richards said that that was what happened when he saw the lawyer at the Community Law Centre in Glenfield. He confirmed that it was the last meeting of the day. He confirms that the meeting was only for about 15 minutes, and that the lawyer told him at the end of that meeting that he had not given him any legal advice.
[7] Just as he was not represented at the judicial settlement conference, Mr Richards has also been unrepresented in this proceeding. He is 81 years old. He has, however, as a layman presented his case to the best of his ability. While he says that he is hard of hearing, he has not had difficulty understanding what has been said to him during the hearing. To all intents and purposes I am satisfied that he is as fit and able as could be expected for a person his age. In particular, he seemed to have a clear understanding of the issues and was able to address them. I do not consider
that Mr Richards is under any disability because of his age. He has conducted
1 See Evidence Act 2006, s 54.
himself in the way that any other unrepresented litigant would represent himself in court. He has, in particular, made the best efforts he can as a lay person to comply with the court’s directions. He has shown appropriate respect to the other parties as well as to the court.
Background to the settlement conference
[8] The case concerned a property where Mr Richards lives. It is at 50A Cresta Avenue, Beachhaven, Auckland. Originally it was owned by a Mr Eric Peter Williams and a Mrs June Helen Davis, also known as Ms June Helen Street. They owned it as tenants in common in equal shares. Mr Williams died in April 1995. In his will he left a life interest in his half share to Ms June Helen Street. The remainder went to his children, Diane Williams and Paul Williams, Mr Jackson’s clients. After Mr Williams’ death, Ms Street entered into a relationship with Mr Richards. She has now died. Probate of her will was granted to the Public Trust on 20 March 2014. Under her will, she gave a life interest in the property at
50A Cresta Avenue to Mr Richards. That was a flaw in the will because Mr Richards could not enjoy a life interest in the property when the Williams children could claim that their rights as remaindermen had accrued. Mr Richards would not be able to continue occupying the property without their consent.
[9] In the proceeding CIV-2016-404-180 the Williams children sought declarations that their rights as remaindermen in the property had accrued. They sought an order for sale of the property and for distribution of the proceeds. That proceeding led to the settlement conference in March this year. Those taking part in the settlement conference were the Williams children represented by Mr Jackson, the Public Trust represented by a lawyer, the Street children represented by Mr Steele, and Mr Richards in person.
[10] As mentioned, the conference resulted in an agreement being drawn up. It was handwritten and, in the way of agreements reached on settlement conferences and mediations, it was ready made. It has some clumsiness in expression. It was agreed that a transcript would be made afterwards. I have relied on that transcript to understand the agreement.
[11] In general terms, the agreement provides that all parties abandon claims each other, of course barring the provisions made under the agreement. The property at
50A Cresta Avenue is to be sold and Mr Richards was required to vacate the property by 23 June 2017. There are provisions for the distribution of the proceeds of sale. The Williams children were to take a half share, with a payment to be made to Mr Richards. The Street children were also to take a half share, subject to other distribution provisions. Mr Richards was to take $20,000. The Williams children would pay their costs and then there would be a sharing of the balance with 30 per cent to Mr Richards and 70 per cent to the Williams children. The Public Trust also agreed to waive part of its charges against the estate. There were also provisions to allow the children to uplift chattels and heirlooms from the property.
[12] Clause 13 of the agreement says:
Each party acknowledges and agrees that they have had ample opportunity to receive any legal and/or other advice prior to the Settlement conference of today and in respect of the 2nd Defendant that he waives any and all rights to legal advice for the purposes of the Settlement Conference and this agreement.
[13] Clause 17 was added at the end of the agreement, in a space after the parties had signed. There were further signatures after cl 17.
[14] The judge who took part in the settlement conference issued a minute, part of which includes this:
[1] …There is one provision which particularly affects Mr Richards which is of a procedural kind. That provision records that Mr Richards will be signing the handwritten agreement that is to be circulated at the conference here this afternoon on the basis that hereafter he will have an opportunity to get legal advice. He will have until 31 March to do so. If his legal advice is against proceeding with the settlement, the onus will be on him to advise the other parties by 31 March 2017 that his legal advice has been against him proceeding with the settlement, in which case the settlement will be of no effect. If he does not give that notice he will be bound by the default terms of the agreement. …
[15] In a summary judgment application I have to be satisfied that the defendant has no defence to the allegations in the statement of claim. The burden of proof is on the plaintiff throughout.
Interpretation questions
[16] The first interpretation question is the inconsistency between cl 13 and cl 17. While one provides that Mr Richards waives the right to any legal advice, the other specifically provides for him to take legal advice. Clearly the two are inconsistent. Both cannot stand. That does not make the agreement itself void. The agreement remains effective, but the inconsistency has to be resolved in some way. It appears on the face of the agreement that cl 17 is an add-on. If the parties had paid more care they would have appreciated the inconsistency and altered clause 13. Clause 17 is to be read as intended to apply, notwithstanding cl 13. There is no hardship to Mr Richards in my adopting that interpretation of the agreement. If cl 17 were to be jettisoned and only cl 13 were to apply, he would have no right to legal advice after the agreement. It is in his interests to have cl 17 in preference to cl 13.
[17] The next aspect is how cl 17 applies. Mr Steele has provided carefully considered submissions as to the approach taken by the courts on the interpretation of contracts. In particular he has dealt with cases relating to implied terms. In my view it is not necessary to go into the case law at length because I regard the interpretation of the agreement as relatively straightforward. Clause 17 is not a simple escape clause for Mr Richards. He cannot simply give notice by 31 March
2017 that he no longer wishes to be bound by the agreement. Instead, he has to do something else if he wishes to terminate the agreement. He is required to seek legal advice about the agreement. Any notice he gives has to be given after he has taken legal advice about the agreement. That becomes clear when the clause is read in context. All the other parties at the judicial settlement conference did have lawyers representing them. During the conference they were given the opportunity to consider their lawyer’s advice and make decisions informed by that advice. Mr Richards did not have that advantage. Mr Steele’s submissions refer to the Lawyers Conduct and Client Care Rules 2008, r 12.1 which says:
When a lawyer knows that a person is self-represented, the lawyer should normally inform that person of the right to take legal advice.
[18] Clearly the parties intended that Mr Richards should not be fully committed to the agreement made in the judicial settlement conference without first having had
the opportunity to take legal advice about that agreement. Clause 17 provided for that. I therefore accept that under cl 17 there is a clear linkage between the opportunity to obtain legal advice and the decision to notify the termination of the agreement.
[19] That leads to the question as to the nature of the legal advice that Mr Richards was to receive. The role of the lawyer advising Mr Richards under cl 17 may be compared with the role of a lawyer in the judicial settlement conference. In a judicial settlement conference, a lawyer representing a party will advocate for his client, will negotiate with other parties as to possible terms for agreement. But alongside that, he also advises his client. The role will involve formulating proposals for settlement in conjunction with the client, advising the client about those proposals, and also advising the client about the responses made by the other sides and any proposals made by other parties. While doing that, the lawyer typically will evaluate the client’s position in comparison with the position if there were no agreement. For example as to the likely outcome if the case were to go to court rather than be resolved by agreement. The purpose is to ensure that when the client enters into an agreement at a conference the client has been adequately informed of the effects of the proposals of the agreement being made.
[20] A lawyer advising Mr Richards under cl 17 will be presented with a fait accompli. The agreement has been made. The lawyer is presented with a case where the client has a black-and-white decision – either to stand by the agreement or to give notice terminating it. The job of the lawyer is to explain the effects and implications of the agreement to Mr Richards, so that he understands the effects of it. Once the lawyer has explained the effects and implications of the agreement, including an evaluation of Mr Richards’ position under the agreement compared with his position under alternative scenarios including what might happen if the case were taken to court, Mr Richards can elect whether to cancel the agreement or not.
[21] The way that I have outlined the role of the lawyer in giving advice is similar to that of a lawyer who advises a client about an agreement under s 21A of the Property (Relationships) Act 1976: see the Court of Appeal’s decision in Coxhead v
Coxhead.2 It is in fact what would be expected of any lawyer advising a client about any agreement.
[1] Clause 17 is a condition subsequent. The agreement has already been made. The question is whether Mr Richards can give notice under it once he has taken legal advice. Lerner v Schiehallion Nominees Ltd related to an agreement for sale and purchase, which was conditional on obtaining a building report within seven days of signing the agreement. Potter J said:3
The parties have entered into a contract intending to be bound by it. A subjective interpretation of a conditional clause which provides for one party an unfettered route of escape is contrary to the intention expressed by the parties in entering into the contract in the first place. In effect it can convert what the parties intended should be a binding contract, subject to a condition subsequent, into an option in favour of one of the parties.
She considered authorities which had approached the question in different ways, allowing a subjective decision, an objective decision, or a decision made only in good faith. Applying the objective approach she said:4
A party will be bound by the contract to which he has committed unless on the basis of a fair and reasonable decision in terms of a condition subsequent inserted in the contract for the benefit of the party seeking to rely upon it, he is entitled to be relieved of his obligations under the contract.
[22] For this case, I suggest that so long as Mr Richards has received advice that outlines for him the effects and implications of the agreement in the way that I have discussed, Mr Richards is free to choose whether to be bound by the agreement or not. He has the same right to reject the agreement at that stage, as if he had declined to enter into the agreement during the settlement conference itself. He was without legal advice during the conference. He has been given the option of terminating the agreement after he has had the advice. He may not terminate the agreement unless
he has taken legal advice about it.
2 Coxhead v Coxhead [1993] 2 NZLR 397 (CA).
3 Lerner v Schiehallion Nominees Ltd [2003] 2 NZLR 671 (HC) at [33].
4 At [38].
Did Mr Richards obtain advice under cl 17?
[23] On the facts of this case, however, I am satisfied that Mr Richards did not in fact receive advice in terms of cl 17. That is shown by his statement of facts in his notice of opposition and his answers to my questions.
[24] For the hearing, he also provided a bundle of documents. That has a draft of a memorandum he sent to the court. It has, at the top of it, the words “draft not sent yet”. That draft shows handwritten changes to it. Mr Richards explained that the handwritten changes made to that document were the changes made when he spoke with the lawyer at the Community Law Centre. He identified some of the markings on the front page as changes made by the lawyer, and the handwriting on the final page as his own. These are merely cosmetic changes to the agreement, such as would be made on proof reading of the document. Mr Richards confirmed that he had prepared this document himself before showing it to Mr Shaw. The document shows Mr Richards’ intention not to proceed with the agreement. He formed that intention even before seeing the lawyer. The lawyer’s advice did not extend beyond assisting him making those cosmetic changes to the agreement. Mr Richards has confirmed today in court that the lawyer told him at the end of the meeting, “I have not given you any legal advice”.
[25] In those circumstances the requirement in cl 17 to obtain legal advice has not been satisfied. As he did not obtain legal advice about the agreement, Mr Richards is unable to invoke cl 17. If that were not so, it would make cl 17 a simple escape route rather than a condition subsequent to enable him to obtain advice about the agreement.
Outcome
[26] Accordingly, I find that Mr Richards’ memorandum sent on 29 March 2017 is not effective as a notice of termination of the settlement agreement. It also follows that the settlement agreement remains in force. I make declarations accordingly.
[27] There has been a brief adjournment. Mr Steele and Mr Jackson have taken up with Mr Richards proposals for him to vacate the property in Beachhaven. No agreement has been reached. I do not make any order for him to vacate the property. That relief was not expressly sought in the statement of claim. The plaintiffs will have to take that matter up on another day. To that end, they seek a direction for a prompt case management conference in the other proceeding. I direct the Registrar to arrange a face-to-face case management conference for the proceeding CIV-2015-
404-180. That should be for the judge who is case-managing that file. I do not need to be involved in the case management. Mr Jackson may take part by telephone.
[28] The plaintiffs and Mr Jackson seek costs. Mr Richards says that he does not have the means to pay the costs. He points out that he has no funds and he is also going to be in an unfortunate position in being required to leave the Beachhaven property. Notwithstanding that, the rules are clear that a successful party is entitled to claim costs against an unsuccessful party. The case is category 2. The plaintiffs are entitled to recover costs under that category. I regard most steps taken in the proceeding as falling within band B. I direct the plaintiffs and Mr Jackson to write to Mr Richards, setting out their proposals as to costs. Mr Richards will have five working days in which to reply. If there is any disagreement over costs the matter is to be referred to me to fix costs. If there is no disagreement, costs will be fixed by the Registrar.
……………………………….
Associate Judge R M Bell
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