Sanson v Blackwells HC Auckland CIV 2010-404-218

[2010] NZHC 1385

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2010-404-000218

BETWEEN  CHRIS ALEXANDER SANSON AND UNIQUE DRINKS OF NEW ZEALAND LIMITED

Appellants

ANDBLACKWELLS Respondent

Hearing:         9 August 2010

Appearances: C A Sanson in person and on behalf of the Appellants

M Phillipps for the Respondent

Judgment:      9 August 2010

ORAL JUDGMENT (NO 2) OF WOODHOUSE J

Solicitors / Counsel / Parties: Mr C A Sanson, Auckland

Mr M Phillipps, Barrister, Auckland

Blackwells, Solicitors, Newmarket, Auckland

SANSON AND UNIQUE DRINKS OF NEW ZEALAND LIMITED V BLACKWELLS HC AK CIV 2010-404-

000218  9 August 2010

[1]      This judgment follows on from, and should be read in conjunction with, my judgment of 22 June 2010.

[2]      Three matters are dealt with in this further judgment:

a)        An application by the appellants for leave to appeal to the Court of

Appeal.

b)An application by the respondent to fix costs arising from my first judgment in which I awarded costs to the respondent on a 2B basis but without quantifying those costs.

c)       A question as to whether my earlier judgment should be recalled to deal with an issue not expressly dealt with in that judgment.   I will deal with the recall question first.

Recall

[3] The possibility of recall of the judgment arises in respect of s 140 of the Law Practitioners Act 1981. The appellants on the substantive appeal had relied on s 140. In my earlier judgment I held that s 140 of the 1981 Act does not apply because of the enactment of the Lawyers and Conveyancers Act 2006 (the 2006 Act). I applied rules 10.7.1 and 10.7.2 of the Lawyers and Conveyancers Act (Lawyers : Conduct and Client Care) Rules 2008 (the Rules).

[4]      In support of the application for leave to appeal, Mr Sanson, for himself and the second appellant, pointed out that the 2006 Act did not come into force until 1

August 2008.  It was submitted that for that reason the Rules under 2006 Act would not apply.

[5]      I consider it is appropriate to recall the judgment to deal solely with this point; or at least to deal with it more fully than I did.  Recall is possible because the judgment has not been sealed.  It is appropriate to deal with the point because it was

not argued before me – the 2006 Act and the 2008 Rules made under it were first referred to in my judgment – and, if this matter does go further, some fuller comment from me on the applicability of the 1981 Act would seem to be appropriate.

Applicability of the 1981 Act

[6]      Having heard argument on the point, I remain satisfied that the 1981 Act does not apply.   Section 140 of the 1981 Act was concerned with matters which arose only  when  a  claim  was  made  for  a  barrister’s  fee.    In  this  case,  although  Mr Rooney’s invoice to Mr Sanson is dated 13 May 2008, no claim in the sense contemplated  by  s 140  was  made  until  6  July  2009;  that  is,  when  Blackwells commenced these proceedings.  In July 2009 the 1981 Act was not in force.  It is not apparent why it would be necessary for s 140 to apply in every case where the retainer had been entered into before 1 August 2008.  Section 140 had no bearing on the relationship between the lawyer and the client prior to the point of formal action being taken to recover the fee.

[7]      There are numbers of transitional provisions in the 2006 Act, dealing with a range of matters.  But there are no transitional provisions which appear to indicate that s 140 would apply in any case where the retainer had been entered into before 1

August 2008.

[8]      When considering the 2008 Rules – looking at the matter from the other perspective – there does not appear to be anything in the Rules presently in issue which suggests that they should not or could not apply in the case of a retainer entered into before the Rules came into force.  This is to be contrasted with some other rules.   I refer in particular to rule 3.10 of the 2008 Rules which expressly provides that “rules 3.4 and 3.5 do not apply to a retainer entered into by a lawyer before 1 August 2008”.   There is no such provision in respect of rules 10.7.1 and

10.7.2, being the rules referred to in my earlier judgment.

[9]      I will go on to consider the result if I am wrong in my conclusion that s 140 of the 1981 Act did not apply in this case.  In that event the decision of Robertson J in Findlay v Webb, Morice & Partners[1]  would apply, unless I came to a different conclusion.   As I indicated in my earlier judgment I respectfully agree with the decision of Robertson J and for the reasons he gave.

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

[10]     There is a further consideration which bears not only on the question of the applicability of s 140 but also the question of leave to appeal.   In addition to my being satisfied that Robertson J’s decision is correct, I consider that it would not be appropriate to review it, in the absence of compelling reasons, bearing in mind that it has been unchallenged for some 11 years.  I am not aware of any decision contrary to the decision of Robertson J.   There is at least one earlier High Court decision following it.  This is a decision responsibly brought to my attention by Mr Sanson:

Weal v Wilson.[2]   There are also a number of District Court judgments which have

applied the decision of Robertson J: see Webb Ross v Watson[3] and the cases noted in that judgment at [40].

[2] Weal v Thomson Wilson HC Whangarei, CIV 2008-488-73, 22 July 2008, Keane J.

[3] Webb Ross v Watson DC Whangarei, CIV 2006-088-001024, 4 April 2008, Judge J Cadenhead.

[11]     For these reasons, if s 140 did apply in the present case, the result would be the same; I would dismiss the appeal.

[12]     There is a further consideration bearing both on my decision under the 2006

Act and under the 1981 Act and on the application for leave to appeal.  This is that in my judgment even if the appellants’ argument is correct in respect of the application of either s 140 or rule 10.7.2, there is no substantive merit in the argument.  It is an argument directed to form and process, not to substance.   For example, if the appellants are correct, Blackwells could tomorrow render a formal bill of costs with Mr Rooney’s fee shown as a disbursement.   In terms of form that would be strict compliance  with  the  literal  wording  of  s 140,  and  treating  it  as  a  mandatory requirement, and the same would apply in respect of rule 10.7.2.   Following the rendering of that formal bill of costs with a disbursement, and further costs and delay which in considerable measure would simply involve paper shuffling, the matter

would be back to the point it is at at the present time – the debt would clearly be established to be due.  And this would have occurred as a result of the following: Blackwells would have rendered a bill of costs from Blackwells when no costs were owing to  Blackwells;  and  this  bill  would have  recorded  Mr  Rooney’s  fee  as  a disbursement when in fact it was not a disbursement of Blackwells.

[13]     There is one further point going to substantive merit and also bearing on whether there should be leave to appeal.   Mr Sanson, in his oral submissions in support  of  the  present  application,  said  in  as  many  words  that  had  he  in  fact instructed Blackwells there would have been no argument.  That point is unrelated to the questions arising under s 140 of the 1981 Act and under rule 10.7 of the 2008

Rules.   And in respect of the factual foundation for the submission, my earlier judgment records my conclusion that there clearly was an effective instruction of Blackwells to act as the solicitors on the record for Mr Sanson and in a manner that bound Mr Sanson.

Costs on the judgment

[14]     The appellants raise a  question relating to  costs as  grounds  for leave to appeal.  Costs have not been fixed as to quantum.

[15]     The principal issue is whether the respondent is entitled to claim costs in respect of item 2 of schedule 3 of the High Court Rules.  Item 2 appears under the sub-heading “General civil proceedings” and provides an allowance to the defence for “commencement and defence by defendant (receiving instructions, researching facts and low, and preparing, filing and serving statement of defence or notice of opposition)”.

[16]     There is a separate sub-heading “Appeals and reviews of Associate Judges”. There is no item corresponding to item 2 (or to item 1).

[17]     Following discussion with Mr Phillipps he did not press the claim for costs under item 2, although he did not withdraw it in a formal sense.

[18]     There are sound reasons in my judgment why item 2 would not as a matter of course apply in favour of a respondent on an appeal.   In this judgment I do not consider it is necessary to set out expanded reasons for that conclusion.  The short point  is  that  the  circumstances  where  item  2  arise,  in  respect  of  an  original proceeding commenced in the High Court, are quite different from the position of a respondent who receives notice of an appeal.

[19]     Mr Phillipps did, in the alternative, submit that an additional allowance might be made for the filing of a memorandum on the case management hearing for the appeal.   In this case, in the case management conference, issues relating to the representation of the second appellant arose in addition to the reasonably straightforward case management questions that usually arise.  There is provision in item 4.10 for “filing memorandum for case management conferences or mentions hearing”.  Although this is not expressly provided for under the appeal sub-heading it might be allowed in the Court’s general discretion.   In my judgment there are grounds to allow this additional item, although I would allow 0.2 days rather than 0.4 stipulated in item 4.10 for band B.  I therefore fix costs on the appeal at the category

2 rate of $1,880 per day as follows:

Item 4.10                   0.2 days Item 14  0.2 days Item 14  0.5 days Item 16  0.5 days

[20]     There are no costs issues in this case providing grounds for leave to appeal.

Interest

[21]     The appellants/applicants referred to the question of interest as  a  further matter warranting leave for appeal.  The essence of the point for the appellants is that interest should have run from November 2008, when the $16,000 was paid, rather than the date of Mr Rooney’s bill.    I do  not consider that this raises an issue warranting leave for appeal.

Leave to appeal

[22]     The remaining ground for leave to appeal relates to the issues under s 140 of the 1981 Act and under the 2008 Rules.

[23]     The relevant statutory provision on leave is s 67 of the Judicature Act 1908. The broad test, and aspects of it, is discussed in the commentary in McGechan[4]  as follows:

[4] R A McGechan, McGechan on Procedure (looseleaf ed, Brookers).

J67.02 The test

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 cost and delay of the further appeal. Not every alleged error of law is of such importance, either generally or to the parties, as to justify further pursuit of litigation already twice considered and ruled upon by a Court, so the test is a restricted one.  The expense for parties incurred, “without realistic hope of benefit”: Snee v Snee [2000] NZFLR 120; (1999) 3 PRNZ 609 (CA), at pp 125-126; pp 612-613, Waller v Hider [1998] 1 NZLR 412 (CA) at p 413. Further, the Court of Appeal has noted the trend, both in New Zealand and in the United Kingdom, “to reverse the steady increase in the number of (second appeals) reaching the Court of Appeal, and so to free up valuable and expensive judicial resources to give more and more effective attention to hearing first appeals”: Downer Construction (NZ) Ltd v Silverfield Developments Ltd [2008] 2 NZLR 591, at para 36. In Chief Executive of Land Information NZ v Luke 3/3/08, CA503/07 at para 18, the Court of Appeal explained that that trend reflected the Court’s fundamental role and the need for proportionality in civil litigation.

[24]     Mr Sanson presented careful submissions directed to the matters that arise.  I am nevertheless not persuaded that in this case leave to appeal should be granted.  In considerable measure my reasons have already been noted in considering the applicability of s 140 and rule 10.7 under the 2008 Rules.  In essence, the issues that arise are arguments over form and process, not over matters of substantive merit.  In addition, the net amount originally in issue was the balance of Mr Rooney’s fee in a sum of approximately $6,500.  The quantum of the dispute is by no means decisive, but it is a matter I take into account in deciding that this is not a matter appropriately allowed a second appeal.  Further, the issues under s 140 of the 1981 Act, on which the appellants primarily relied, are largely spent.  By this I mean that it is unlikely

that there will be many further cases giving rise to arguments under that Act which on the present matter expired on 1 August 2008.  Although there are clearly common issues arising under rule 10.7.2 of the 2008 Rules, those rules give rise to further issues not arising on this appeal.

[25]     Overall I do not consider that this case, when considered in its totality, meets the test of “proportionality” noted by the Court of Appeal in Chief Executive of Land Information New Zealand v Luke.[5]

[5] [2008] NZCA 43.

[26]     For these reasons I dismiss the application for leave to appeal.

Costs on the present application

[27]     The respondent seeks  costs on the present  application.   I allow  costs as follows:

Preparing and filing notice of opposition                  0.6 days Preparing for hearing  0.25 days Attending hearing  0.5 days

[28]     These are allowed under band B.  The daily rate is $1,880 under category 2.

Peter Woodhouse J