Tapp v McVeagh Fleming

[2017] NZHC 926

IN THE HIGH COURT OF NEW ZEALAND

AUCKLAND REGISTRY

CIV-2017-404-60

[2017] NZHC 926

BETWEEN

STEPHEN JOHN TAPP

Appellant

AND

MCVEAGH FLEMING

Respondent

Hearing:

23 March 2017

Appearances:

P Kennelly for Appellant

J D Turner for Respondent

Judgment:

9 May 2017

JUDGMENT OF PAUL DAVISON J

This judgment was delivered by me on 9 May 2017 at 4.30 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

TAPP v MCVEAGH FLEMING [2017] NZHC 926 [9 May 2017]

Solicitors:

Kennelly Law, Orewa

McVeagh Fleming, Auckland

[1]    The appellant, Stephen Tapp, has appealed the decision of the District Court at Auckland in which judgment was entered against him in favour of the respondent for legal fees of $10,507 together with interest and costs, being the amount of legal fees outstanding in relation to a series of fee accounts rendered by the respondent to the appellant between December 2008 and December 2009. The District Court dismissed the appellant’s counterclaim in which he sought damages of $38,000 together with interest and costs, being the sum the appellant alleged he had lost by reason of the respondent’s failure to carry out instructions to pursue a third party on the appellant’s behalf. That claim was time barred. The District Court hearing took place on 1 December 2016, and the appellant represented himself.

[2]The appeal is set down for a one day hearing on Thursday 15 June 2017.

[3]    This judgment relates to an application made by the appellant for leave to adduce further evidence at the appeal.

The proposed further evidence

[4]    The appellant has sworn an affidavit in support of the application for leave to adduce further evidence at the appeal. In his affidavit he says that some time following receipt of the District Court judgment delivered on 1 December 2016, an envelope (the envelope) containing documents was anonymously left for him at his residential address. At the time that this envelope was left at his address the appellant had made a complaint to the New Zealand Law Society regarding matters arising from his engagement of the respondent. The appellant has annexed to his affidavit a series of documents which I understand to be the contents of the envelope. These documents all appear to be copies of documents from the respondent’s file in relation to the appellant. According to the appellant the documents inside the envelope were accompanied by a handwritten note which reads “ extracted: place in side [sic] folder of our copy”. The appellant says in his affidavit that he has searched the copy of his solicitor’s file that he was given by the respondent and none of the documents in the envelope were included in the copy.

[5]    The documents in the envelope include copies of correspondence forwarded by the respondent to the solicitors representing TEA Custodians (Bluestone) Limited (“Bluestone”) which was the party in respect of which the appellant had engaged the respondents and from whom he sought to recover the sum of $38,000.

[6]    Also included within the envelope documents are handwritten file notes made by the respondent’s staff solicitors or principals.

[7]    The appellant wishes to produce the contents of the envelope at the hearing of his appeal to support his claim that the respondent at all relevant times, knew and understood that the appellant had not signed an admission of claim document between himself and Bluestone, Bluestone had failed to send him a copy of the admission of claim document as had been previously arranged.

[8]    The appellant says that this was an important issue at the District Court hearing. The appellant further says that the District Court Judge wrongly concluded that the appellant had represented to the respondent that he had executed and signed an admission of claim with Bluestone and that, contrary to that assertion, the respondent discovered that those instructions were incorrect. This issue of whether or not a signed admission of claim document existed was material to the legal advice provided by the respondent to the appellant as to whether a statutory demand process should be pursued against Bluestone, as opposed to bringing civil proceedings.

[9]    Amongst the documents contained in the envelope is one page of a draft letter apparently prepared by the respondent and addressed to Bluestone’s solicitors, Jones Fee. The letter is dated 30 May 2011 and is marked as a draft with handwritten notes added. The typewritten part of the letter includes the following:

Our client did not sign the admission of claim by 17 December 2007 because you did not send it to him. Bluestone were in breach of the agreement and therefore waived it as a condition. Our client chased this up numerous times with you and by email on 21 January 2008 you unilaterally asked to vary the terms of the agreement whereby the admission of claim would be signed by

5.00 pm on 22 January 2008, which was undesirable in the circumstances given you [sic] client. Our client could not accept this offer. You included in that email on 21 January 2008 a copy of the admission of claim. Our client promptly replied on Tuesday, 22 January 2008 confirming his telephone call with you that afternoon that Bluestone did not intend to

honour the arrangement and [sic] no intention of accepting the payment that had been arranged with the IRD. Our client indicated in that email that he was obviously concerned and that he was going to sign and send you the admission of claim and that your client was going to retain the GST refund and use the admission of claim to procure further funds. Our client specifically asked you to confirm whether Bluestone would now settle and that he would sign the admission of claim that day. You did not respond to this email.

[10]   Viewed overall the envelope documents all appear to relate to the appellant’s engagement of the respondent in connection with a claim against Bluestone, and to action taken or records made by the respondent regarding that engagement. That being the case, the documents are all prima facie relevant to the dispute between the appellant and the respondent regarding the respondent’s claim for unpaid legal fees in respect of that engagement and to the appellant’s counterclaim against the respondent.

[11]   Mr Kennelly for the appellant submits that the envelope documents were delivered anonymously to the appellant and are all relevant to the dispute between the parties which was the subject of the District Court hearing. Mr Kennelly says that the District Court Judge found that the appellant was never completely honest with the respondent when providing them with his instructions. However, if the envelope materials had been available and provided as evidence to the District Court Judge, Mr Kennelly submits that her Honour would have been unlikely to find the appellant had been dishonest.

[12]   Mr Kennelly further submits that not only would the District Court Judge not have made a finding that the appellant had been dishonest in his dealings with the respondent, but she would not have made a finding that the appellant was the author of his own misfortune. Mr Kennelly says that admission of the envelope documents is necessary to enable the appellant’s appeal to be dealt with and for the Court to be presented with a fully informed factual basis consistent with the interests of justice. He submits that no prejudice to the respondent would arise from the admission of the envelope documents as fresh evidence for use at the appeal.

[13]   Mr Turner, for the respondent, opposes a grant of leave to the appellant to adduce further evidence for use in connection with his appeal. He submits that the appellant must show “special reasons” justifying a grant of leave to adduce further evidence and he submits that the appellant has not established any such special

reasons. Mr Turner submits that the envelope material is not new evidence that was unavailable at the time of the hearing and, there being no special reasons, the Court should refuse the application. In support of the respondent’s opposition, Mr Turner relies upon the affidavit of Ms Chloe Werner in which she says that following the termination of the respondent’s engagement as the appellant’s solicitors, the appellant through a further firm of solicitors, Killian & Associates Albany, requested his client files from the respondent. Following that request Ms Werner says that she copied the appellant’s file in full and arranged for it to be delivered to Killian & Associates. Ms Werner states that she wrote the note stating “ extracted: place in side [sic] folder of

our copy”. She explains that upon delivery of the file to Killian & Associates, an acknowledgment of receipt was signed and dated 7 October 2015. She has annexed the receipt signed for and on behalf of Killian & Associates Limited as an exhibit to her affidavit.

[14]   On the basis of Ms Werner’s evidence, Mr Turner submits that the full client file including the contents of the envelope, was in the appellant’s solicitor’s possession from 7 October 2015 and was therefore within the appellant’s possession prior to and at the time of the District Court hearing on 1 December 2016. On that basis, says Mr Turner, it can be concluded that the appellant chose not to produce the envelope documents at the District Court hearing and ought not now be permitted to do so for the purposes of the appeal.

[15]Rule 20.16 of the High Court Rules provides:

Further evidence

(1)Without leave, a party to an appeal may adduce further evidence on a question of fact if the evidence is necessary to determine an interlocutory application that relates to the appeal.

(2)In all other cases, a party to an appeal may adduce further evidence only with the leave of the court.

(3)The court may grant leave only if there are special reasons for hearing the evidence. An example of a special reason is that the evidence relates to matters that have arisen after the date of the decision appealed against and that are or may be relevant to the determination of the appeal.

(4)Further evidence under this rule must be given by affidavit, unless the court otherwise directs.

[16]   As noted in McGechan on Procedure, in general an appeal proceeds on the evidence that was before the decision-maker and the parties cannot bolster their cases with new evidence without prior leave being granted to do so.1 The Court may grant leave only if there are special reasons for hearing the further evidence.

[17]   In Complaints Committee No1 of the Auckland District Law Society v P Duffy J citing Andrews J summarised the principles as being:2

The discretion is sparingly exercised and the presumption is that appeals will be heard on the record, as it exists. In order to satisfy the test the evidence must be cogent and likely to be material and could not reasonably have been produced at first instance.

[18]However Duffy J went on to observe:3

There is always room for a special case where fresh evidence is admitted, even though it was reasonably available for the hearing at first instance. The discretionary power in r 716 is broad enough to permit a Court to allow such evidence to be adduced. Furthermore, discretionary authority should never be fettered by fixed guidelines. But such exceptions would be rare and to occur the fresh evidence would need to be cogent and material to the appeal’s resolution, as was the case in Comalco.

[19]   Having reviewed the envelope materials, I am satisfied that the documents are both relevant and material to the issues in dispute between the appellant and respondent which were the subject of the District Court hearing and decision of 1 December 2016.

[20]   It is not possible on the limited information available regarding the envelope material to determine just how and when the contents came into the appellant’s possession. However, Ms Werner’s explanation of having copied and forwarded the file to Killian & Associates on 7 October 2015 is confirmed by the signed receipt annexed to her affidavit. Furthermore, Ms Werner states in her affidavit that on her inquiry no-one from the respondent delivered the anonymous envelope to the

1      Andrew Beck and others McGechan on Procedure (looseleaf ed, Brookers) at [HR20.16.01].

2      Complaints Committee No 1 of the Auckland District Law Society v P (2007) 18 PRNZ 769 (HC) at 8; citing Culverden Retirement Village Ltd v McLuckie HC Auckland CIV-2007-404-750, 18 September 2007 at [16].

3 At [21].

appellant’s address and she observes that his residential address was unknown to the respondent.

[21]   Whilst I accept Ms Werner’s evidence and the submission made on behalf of the respondent that the respondent did not arrange for the envelope to be delivered to the appellant’s address, the origins of the envelope as delivered to the appellant’s residence still remain unclear.

[22]   The envelope documents are all relevant to the dispute between the appellant and the respondent and it is inconceivable that if the appellant had possession of those documents at the time of the District Court hearing, he would not have disclosed and employed them in support of his case, as they appear to address the very matter at issue.

[23]   I consider that the documents are both relevant and material to the issues to be determined in this appeal and, in the circumstances I consider that special reasons do exist that warrant leave being granted to the appellant to adduce this further evidence. This is not a case of the appellant deliberately withholding the material or making a tactical decision not to employ certain material and now wishing to adopt a different course in light of the District Court’s decision. To the contrary, it appears to be a situation where, for whatever reason, the documents were not in the appellant’s possession at the time of the District Court hearing and having subsequently been received or obtained, they are recognised by the appellant as being of central material significance, hence this application.

[24]   Moreover, the contents of the 30 May 2011 draft letter included within the envelope are relevant not only to the issue of whether the respondent firm knew that the appellant had not signed a confession of claim form and why but is also relevant to the fundamental issue of the appellant’s credibility. This document would appear to support the appellant’s explanation and therefore his credibility. In a case where the District Court has found against the appellant in terms of his credibility, in my view the interests of justice require that leave be granted to enable the appellant to present this further evidence for the purposes of his appeal. As I have noted above, there is no indication here of the appellant having deliberately withheld this

information for tactical or other reasons and although it should be recognised that the envelope material may well have been discovered had the appellant taken reasonable steps, if he had no knowledge of their existence it is quite understandable that no steps were taken.

[25]   The admission of this further evidence will undoubtedly add to the completeness of the factual material upon which the Court will be required to determine the appeal and furthermore, as all of the materials are documents from the respondent’s file, there will be no element of surprise or significant prejudice that could arise by reason of the admission of this material.

[26]   While the power to grant leave to a party to adduce further evidence is to be exercised sparingly, I consider that this is a case where it is proper to exercise the power in the interests of justice to ensure that the appeal is determined on a more complete and thereby better informed factual basis.

[27]   Accordingly I make an order granting the appellant leave to adduce as further evidence in the appeal the documents annexed to the appellant’s affidavit as exhibit A.

[28]Costs on the application are reserved.

Paul Davison J