Sundberg v Malley & Co Lawyers - [2020] NZHC 1789

IN THE HIGH COURT OF NEW ZEALAND TIMARU REGISTRY

I TE KŌTI MATUA O AOTEAROA TE TIHI-O-MARU ROHE

CIV-2018-476-000039

[2020] NZHC 1789

BETWEEN JANINE NORA SUNDBERG and LINDA BEVERLY SUNDBERG
Applicants

AND

MALLEY & CO LAWYERS

Respondent

Hearing: 22 July 2020

Counsel:

J L Bates for the Applicants M McKay for the Respondent

Judgment:

22 July 2020

JUDGMENT OF DOOGUE J

This judgment was delivered by Justice Doogue on 22 July 2020 at 5.45 pm
pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar Date:

Solicitors:
Brown & Bates Ltd, Napier Malley & Co, Christchurch

SUNDBERG & ANOR v MALLEY & CO LAWYERS [2020] NZHC 1789 [22 July 2020]

Introduction

[1] The applicants are the registered proprietors of separate half shares in the property with identifier CB40B/659, Canterbury Land Registry District (the property).

[2] The Sheriff of the High Court has fixed an auction of the property pursuant to sale orders, for midday this Friday 24 July 2020.

[3] The applicants have filed an application for an order staying sale. They seek a one month stay in order to pursue a prospective private sale of the property.

[4] The applicants claim that a substantial miscarriage of justice would be likely to result if the order for sale of the property were enforced.

[5] The judgment debt leading to the order for sale arises from services provided to the applicants by the respondent, a firm of solicitors (Malley & Co), which they say were professionally negligent.

[6] As at 21 July 2020, the applicants were jointly and severally liable to pay Malley & Co the sum of $127,677.11 (together with the costs of sale regarding the property), being:

(a)a principle sum of $119,858.16 (including interest from 1 August 2018 to 21 July 2020 of $7,167.38);

(b)the costs award on the interlocutory application for renewal of sale orders of $4,121.18 (including interest from 30 September 2019 to 21 July 2020 of $93.18);

(c)the costs award on the interlocutory application for renewal of charging orders with interest up to 27 August 2020 of $3,697.77 (including interest from 26 February 2020 to 21 July 2020 of $39.17); and

(d)costs of sale associated with the auction.

[7] The applicants say they will be rendered homeless and without funds if the auction proceeds and the property is sold by that process.

Background

[8] On 9 June 2017 the applicants were served with proceedings seeking judgment for their unpaid legal fees owed to Malley & Co.

[9] On 4 July 2017 the applicants filed a statement of defence and counter-claim (including allegations of professional negligence).

[10] On 13 December 2017 Malley & Co applied to strike out the statement of defence and counter-claim, and the applicants took no steps to oppose their application. The applicants’ proceedings were duly struck out.

[11] On 22 February 2018 Malley & Co obtained judgment against the applicants in the District Court for the sum of $110,338.67 following a formal proof hearing in respect of which the applicants were…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] NZHC 1789
Decision Date: 22 July 2020

CaseChat Overview and Summary

The applicants, Janine Nora Sundberg and Linda Beverly Sundberg, sought a one-month stay of the sale of their property to allow them to pursue a private sale. They argued that a substantial miscarriage of justice would likely result if the order for sale were enforced. The judgment debt arose from services provided by the respondent, Malley & Co Lawyers, which the applicants claim were professionally negligent. The applicants sought to stay the sale to allow time for redecoration and marketing of the property and claimed to have a prospective buyer who could pay more than the auction would realise. The legal issues were whether the applicants had demonstrated that a substantial miscarriage of justice was likely if the sale proceeded and whether the court should exercise its discretion to grant the stay. The court found that the applicants had not discharged the onus of persuading the court to exercise its discretion in their favour. The applicants had not challenged the judgment debt or pursued a claim for professional negligence against the respondent. Their claims of having an interested buyer and plans to market the property were inconsistent with their past conduct and did not build confidence that a private sale would be realised. The court declined the application to stay the sale of the property. Costs of the application were ordered against the applicants in favour of the respondent. The court noted that real prejudice would occur to the respondent if the sale were stayed. The sale of the property was to proceed as scheduled.

Orders