Burgess v Tait and Ors

• Jurisdiction: New Zealand
• Judge: Dunningham J
• Judgment Date: 02 October 2014
• Neutral Citation: [2014] NZHC 2408
• Docket Number: CIV-2013-409-001385
• Court: High Court
• Date: 02 October 2014

BETWEEN

Gary Owen Burgess

Plaintiff

and

Ernest John Tait

First Defendant

and

Malley & CO

Second Defendant

and

District Court, Christchurch

Third Defendant

and

Legal Complaints Review Officer

Fourth Defendant

and

New Zealand Law Society

Intervenor

[2014] NZHC 2408

CIV-2013-409-001385

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

Application for judicial review of two decisions of the Legal Complaints Review Officer (LCRO) and to various steps taken, and decisions made, in District Court (DC) proceedings-plaintiff had been involved in long running dispute over his former lawyer's representation of him in relationship property proceedings-complained that had not been properly advised as to effect of a consent memorandum dealing with the transfer of property as required under s21 Property (Relationships) Act 1976 (contracting out), there had been an unauthorised deduction of funds and that his lawyer had certified as correct, a notice of claim lodged in his former wife's name (as part of agreement to allow plaintiff to refinance) when he was not acting for her-lawyer was suing him for fees owing in DC and plaintiff counterclaimed for damages-said that that procedural irregularities in DC proceedings meant that default judgment should have been given in his favour and the failure of the DC to do so and its failure to give reasons for refusing it amounted to a breach of natural justice-whether the LCRO or DC had erred.

Appearances:

G O Burgess (In Person)

M Parker for Respondent, Second and Third Defendants

HDP van Schreven for Intervenor (excused)

JUDGMENT OF Dunningham J

Table of Contents

Introduction	[1]
What are the issues on judicial review?	[9]
Issues arising out of District Court proceedings	[12]
Issues arising out of the first LCRO decision	[13]
Issues arising out of the second LCRO decision	[14]
The History of the District Court Proceedings	[15]
The District Court Rules	[26]
Issues arising out of the decision to refuse default judgment	[34]
Was there a decision declining entry of default judgment	[34]
Did the decision to refuse default judgment breach natural justice or otherwise constitute a reviewable error, including because there was a failure to give reasons?	[38]
Was the decision not to enter default judgment unlawful under the District Court Rules 2009?	[41]
Should I grant relief in the exercise of my discretion?	[47]
Issues arising out of the decision(s) to stay the counterclaim	[49]
Did the District Court's decision to stay the counterclaim breach natural justice or otherwise constitute a reviewable error including because no hearing was conducted, no reasons were given and it caused unreasonable delay?	[49]
Was the District Court's decision to stay the counterclaim unlawful, because Malley&Co had “no live claim before the Court”?	[54]
Did the District Court act unlawfully in refusing a copy of the record requested pursuant to s 60 of the District Courts Act?	[55]
Issues arising out of the first LCRO decision	[59]
Did the LCRO err in law in his understanding of the duty to give advice including, in particular, in relation to a relationship property agreement?	[59]
Did the LCRO fail to adequately inquire into the extent of the advice given by Malley & CO	[72]
Did the LCRO err in law in his understanding of the duties of lawyers when deducting fees from the trust account, and was the finding that no sanction should be imposed for this action unreasonable?	[77]
Did the LCRO act unlawfully in issuing a section 161 certificate?	[86]
Issue arising out of the second LCRO decision	[98]
Did the LCRO err in law when she decided that Mr Burgess's lawyer was not acting in a conflict of interest when he certified the s 42 notice of claim in the name of Ms Beaven?	[98]
Conclusion	[120]

Introduction

1 Mr Burgess has been in a long running dispute with his lawyers, Malley & Co, over their advice (or alleged lack of it) during the period they were engaged to act for him in relationship property proceedings.

2 Malley & Co began acting for Mr Burgess in February 2008. At that point he had received a judgment from the Family Court awarding him only about a third of the relationship property that he and his former wife, Ms Beaven, had owned, which he had appealed, with some modest success, to the High Court. Malley & Co represented him in the second hearing before the Family Court (where he fared only slightly better), and also on the appeal of that decision to the High Court and the Court of Appeal.

3 The retainer ended in late 2009, but the litigation continued, with further decisions from the High Court, Court of Appeal and then the Supreme Court. In the meantime, a property which had been transferred into Mr Burgess's name was sold by the mortgagee, and Mr Burgess was left without any of the fruits of his litigation. He blamed his lawyers for this outcome.

4 Mr Burgess took his complaints to the Lawyers Complaints Service. In two separate decisions, one on the standard of the advice given and the level of fees charged, the other in relation to his lawyer certifying as correct a notice of claim lodged in Ms Beaven's name, the Standards Committees hearing the complaints largely exonerated his lawyers. He sought a review of both decisions from the Legal Complaints Review Officer (LCRO) 1 The decisions of the respective Standards Committees were upheld in two separate decisions by the LCRO which issued on 9 March 2012 2 and 9 April 2013 3 respectively.

5 In September 2010, Mr Burgess's lawyers commenced proceedings in the District Court suing for their unpaid fees. Mr Burgess filed a defence and counterclaim seeking damages totalling just over $1,000,000. His lawyers had, however, jumped the gun because the quantum of fees was still the subject of the first complaint being dealt with by the Lawyers Complaints Service. The proceedings were required to be stayed under provisions of s 161 of the Lawyers and Conveyancers Act 2006, until the relevant LCRO decision issued.

6 When the first LCRO decision did issue in March 2012, Mr Burgess tried to press his counterclaim forward with no success. He made an application for default judgment and Malley & Co filed fresh proceedings on the certificate issued by the LCRO under s 161 for that firm's fees. The District Court refused default judgment on the counterclaim.

7 Mr Burgess's counterclaim is still to be determined, having been consolidated with the fresh proceedings issued by Malley & Co for their unpaid fees and transferred to this Court at Mr Burgess's request. 4

8 This application for judicial review relates to the two LCRO decisions and to various steps taken, and decisions made, in the District Court proceedings relating to Malley & Co's unpaid fees and Mr Burgess's counterclaim against that firm.

What are the issues on judicial review?

9 A joint memorandum summarising the issues for judicial review was prepared on 11 June 2014.

10 Leaving aside the paragraphs which were inserted to provide background, that still left around 20 separately numbered issues (some of which contained sub-points or sub-questions) to be determined on review. These included general issues that apply to more than one of the decisions and issues which were specific to a particular decision. However, helpfully, the parties were able to refine the issues during oral argument and I summarise them in [12] to [14] below.

11 The general issues raised in the joint memorandum can be disposed of briefly. The defendants accept that decisions of the LCRO, and of the District Court are, prima facie, amenable to review. Whether or not, in the circumstances of this case, the applications are substantive appeals dressed up as reviews, or whether other reasons exist for denying relief, will be addressed as I deal with the following specific issues.

Issues arising out of District Court proceedings

12 The issues relating to the District Court proceedings can be summarised as follows:

• (a) Was the District Court's decision of 21 September 2011 (if there was such a decision) to refuse to enter default judgment on Mr Burgess's counterclaim;

  • (i) procedurally unfair, including because no proper hearing was conducted, no reasons were given, and because it was in breach of natural justice?

  • (ii) unlawful, particularly having regard to relevant rules of the District Court?

• (b) If there are grounds to review the decision, should the Court in its discretion grant relief having regard to the utility of any such relief, and the failure by Mr Burgess to exercise his rights to appeal that decision?

• (c) Was the District Court's decision on 6 December 2011, and extended on 10 February 2012, to stay the counterclaim:

  • (i) procedurally unfair, including because no proper hearing was conducted, no reasons were given and it caused delay in breach of natural justice?

  • (ii) unlawful, when Malley & Co had “no live claim before the Court” ?

• (d) Did the District Court act unlawfully in refusing a copy of the record requested pursuant to s 60 of the District Courts Act?

Issues arising out of the first LCRO decision

13 In relation to the first LCRO decision (203/2010), dealing with complaints of negligence and overcharging, the relevant issues are:

• (a) Did the LCRO err in law in his understanding of the duty of a lawyer to give advice to his client including in relation to a relationship property agreement?

• (b) Did the LCRO commit a reviewable error by failing to adequately inquire into the extent of the advice given by Malley & Co, including by failing to obtain evidence using his powers under s 151(2) or s 207(2) of the Lawyers and Conveyancers Act 2006?

• (c) Did the LCRO err in law in his understanding of the duties of...