NICHOLA ANN BURLEY AND ANOR V ALEXANDRE SAMOILOV HC TAU CIV 2003-070-123

NICHOLA ANN BURLEY AND ANOR V ALEXANDRE SAMOILOV HC TAU CIV 2003-070-123 28 February 2008IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY CIV 2003-070-123BETWEEN NICHOLA ANN BURLEY AND PATRICK CHARLES STUART Plaintiffs AND ALEXANDRE SAMOILOV Defendant Hearing: 25 February 2008 Appearances: Mr Moorcroft for plaintiffs Defendant in person Judgment: 28 February 2008JUDGMENT OF ALLAN J APPLICATION FOR LEAVE TO APPEALIn accordance with r 540(4) I direct that the Registrar endorse this judgment with the delivery time of 4.15pm on Thursday 28 February 2008Solicitors/parties: G Brittain, PO Box 13473, Tauranga A Samoilov, PO Box 15111, Tauranga[1] This is an application for leave to appeal to the Court of Appeal from a judgment of 1 November 2007, in which I dismissed the defendant's application for review of a decision of Associate Judge Doogue, delivered on 19 October 2006. In my judgment I upheld the decision of the Associate Judge to strike out the defendant's amended statement of counterclaim dated 9 June 2006.Relevant principles[2] The right of the defendant to seek leave to appeal from my judgment is governed by the provisions of s 26P(1)(1AA) of the Judicature Act. Section 26P commences:26P Review of, or appeals against, decisions of Associate Judges(1) Any party to any proceedings who is affected by any order or decision made by an Associate Judge in Chambers may apply to the Court to review that order or decision and, where a party so applies in accordance with the High Court Rules, the Court— (a) Must review the order or decision in accordance with the High Court Rules; and (b) May make such order as may be just. (1AA) The determination of the High Court on a review under subsection (1) is final, unless the High Court gives leave (or the High Court refuses leave, but the Court of Appeal gives special leave) to appeal from it to the Court of Appeal.[3] The principles to be applied in determining the defendant's application are those set out in Waller v Hider [1998] 1 NZLR 412, at 413, and Snee v Snee (1999) 13 PRNZ 609, at 612-613. 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. In the end, the guiding principle must be the requirements of justice. Upon a second appeal, the Court of Appeal is not engaged in the general correction of error. Its primary function is to clarify the law and determine whether it has been properly construed and applied by the court below. It is not every alleged error of law that isof such importance, either generally or to the parties, as to justify the further pursuit of a matter which has already been twice considered and ruled upon by a court. [4] Although s 26P(1AA) of the Judicature Act post-dates both Waller v Hiderand Snee v Snee, the principles in those cases apply to the present application: Jew v Jew (2003) 22 FRNZ 815 at [9], Payne v Attorney General [2005] NZFLR 846 at [5]. [5] The correctness or otherwise of my decision of 1 November 2007, from which the defendant now wishes to appeal, is not of itself a matter relevant to the determination of the question whether leave should be granted: Adams Bruce Ltd v Frozen Products Ltd (No.2) [1953] NZLR 310, 313; Green v Commissioner of Inland Revenue (leave) (1990) 3 PRNZ 628; Commerce Commission v Bay of Plenty Electricity Ltd HC WN CIV 2001-485-917 29 August 2005.Background[6] Between 1997 and 2002 the plaintiffs, a firm of solicitors, acted for the defendant. From February 1997, they acted, in particular, in respect of the purchase by the defendant of a rural property near Tauranga. The land to be purchased was part of a larger block from which it was to be subdivided. The plaintiffs were involved in the negotiation of the relevant agreement for sale and purchase which was executed late in February 1997. [7] The defendant, who is of Russian birth, has been self-represented throughout this proceeding. English is not his first language. He has, however, been able to make himself readily understood throughout the hearings before me, in each case with the assistance of an interpreter. But the counterclaim, which is the subject of the present application, reflects both his unfamiliarity with the Court's pleading requirements, and his less than perfect command of English. [8] In his counterclaim the defendant says that the plaintiffs have failed him in a number of important respects. In my judgment of 1 November 2007, I analysed thedefendant's claim against the plaintiffs as comprising the following separate allegations: a) instead of obtaining title to a lot which included a long dog-leg over which the subdividing vendor had a right of way easement, the defendant instead got only a right of way easement over the vendor's land. In the result, the defendant complains a portion of the land to which he was entitled has been "stolen", and in consequence the certificate of title issued to him is a "title of fraud"; b) the defendant's property is legally landlocked as the result of the situation described in paragraph (a); c) the defendant received incorrect advice from the plaintiffs as to his entitlement to remove and conceal a gate placed across the right of way by a purchaser from the subdividing owner of that owner's remaining land; d) the plaintiffs failed to provide accurate advice as to the defendant's entitlement to further subdivide his land which, in consequence, is worth far less than he had expected and believed; e) the plaintiffs failed to prepare the agreement for sale and purchase so that responsibility for replacing the existing bridge over a portion of the right of way with a culvert was the vendor's obligation and not that of the defendant; f) the plaintiffs failed to prepare the agreement for sale and purchase so that the responsibility for fencing the southern boundary of his property was an obligation of the vendor and not of the defendant.The judgment of 1 November 2007[9] At the heart of the defendant's claim is the contention that the plaintiffs failed to secure for him title to a strip of land, 1.3 km in length, which affords access across the land of his subdividing vendor, to the land he purchased. The agreement for sale and purchase provided for a right of way in favour of the defendant over the vendor's land. But a right of way easement of that length was non-complying under the district plan of the Western Bay of Plenty District Council. So the agreement for sale and purchase provided that in the event that the Council's consent to the easement was not forthcoming, then the defendant would have the right to purchase from his vendor for $1, a strip of land which would provide access to his lot, from the point at which a right of way over his vendor's land terminated. In other words, instead of taking a right of way easement across 1.3 km of the vendor's land, the defendant would have an easement of right of way across part of the vendor's land and ownership of a dog-leg strip subject to a right of way easement in favour of his vendor in respect of the remainder of the access strip. [10] The Council did grant consent, so that it was not necessary for the parties to resort to the default provision in the agreement for sale and purchase. But the defendant does not accept that the Council did in fact grant a dispensation. He says that on a proper construction of the relevant documents, the default provision in the agreement for sale and purchase was triggered, that he ought to have become the owner of a strip of 800 metres, subject to a right of way easement in favour of the vendor, and that the plaintiffs were negligent in not procuring that outcome. [11] The defendant's argument relies upon his interpretation of a letter of application from the vendor's surveyor to the Council, and a letter of 3 June 1997 from the Council, approving the application for subdivisional consent on certain terms and conditions. The defendant argues that the Council's consent must necessarily have involved an acceptance of the proposal set out in the letter from the surveyors, and argued at the earlier hearing before me, that in consequence of the terms of the Council's consent, his entitlement to purchase additional land from the vendor for $1 was triggered. [12] In my view however, the defendant's interpretation of the surveyor's letter was erroneous. The letter raised two alternative solutions, the second of which thesurveyors themselves recommended to the Council. The Council plainly adopted that recommendation, with the result that the defendant's right to purchase further land from his vendor did not arise. That was also the conclusion of the Associate Judge. [13] The defendant's argument to the contrary is simply not tenable, and raises no issue for which it would be appropriate to grant leave. [14] A further claim to the effect that by reason of the plaintiffs' alleged failings, the defendant's land is legally landlocked, is equally untenable. The defendant has a right of way easement over his vendor's property. There can be no question that his property is legally landlocked. [15] The defendant also holds the plaintiffs responsible for what he says is an inability to further subdivide the land he purchased. As part of a rambling and somewhat incoherent statement of claim, he alleges that the plaintiffs failed to advise him adequately as to his entitlement to further subdivide the land purchased by him in 1997. I held that aspect of the claim to be fatally deficient, upholding the decision of the Associate Judge. There is no plea of negligence nor of causation factors, nor of consequential loss. I held there was no prospect of bringing the pleading into line by way of amendment, because it needed to be completely recast. [16] Moreover, when first pleaded it was already statute barred as indeed are all of the defendant's claims against the plaintiffs, including a number of subsidiary claims which were not addressed by the defendant in the course of his oral argument on the present application. [17] Alive perhaps to the difficulties posed by the Limitation Act, the defendant has alleged that all of the plaintiffs' breaches and defaults are fraudulent in character. He seeks, in effect, damages for common law fraud. He says that he realised the nature and extent of the plaintiffs' deception only when he became aware in 2001 that the plaintiffs had failed to disclose to him certain documents from their conveyancing file.[18] In my earlier judgment I recorded the matters relied upon by the defendant in support of his fraud allegations in the following way: a) an alleged failure by Mr Stuart, the partner in the plaintiff firm who acted for him throughout, to furnish the defendant with a copy of that portion of the District Plan which related to limited right of way distances, and/or the surveyor's letter to the Council. b) The inclusion in the agreement for sale and purchase of a special condition dealing with the possibility of further subdivision by the defendant and indicating that "the property may be subdivided". The defendant takes this provision to amount to an assurance by the plaintiffs to the defendant that the property purchased by him is legally capable of being further subdivided. Although this allegation refers more particularly to allegedly negligent advice as to subdivisibility, it is relied upon by the defendant as evidence of Mr Stuart's general dishonesty. c) The plaintiffs deliberately used the word "may" instead of "can". The defendant says that, as a Russian immigrant, he thought the word "may" was equivalent to "can". He contends that the choice of language was deliberate on the part of the plaintiffs and was intended to mislead him. d) The foregoing matters provide evidence of the plaintiffs' dishonesty. They were dishonest because, for reasons of their own, they wanted the defendant to buy this property and knew that he would not if he was aware of the non-complying character of the proposed right of way. e) The plaintiffs threatened the defendant in two advice letters that he would suffer financial loss if he did not settle the agreement for sale and purchase with the vendor.f) The plaintiffs failed to advise the defendant of correspondence arising in connection with the vendor's need to file a memorandum of variation of easement of right of way. g) The defendant trusted Mr Stuart, who became a director of a company controlled by the defendant and a trustee of a charitable trust promoted by the defendant; h) The defendant's legal problems, including problems arising from the right of way, were the result of a deliberate course of action pursued by the plaintiffs aimed at exacerbating the defendant's legal difficulties with the result that the plaintiffs would be able to derive substantial fees. [19] At the hearing of the present application I pressed Dr Samoilov as to the motives which the plaintiffs might have had for deceiving him. Dr Samoilov gave a variety of answers. He said: a) There would need to be an inquiry as to that, possibly in the context of a criminal proceeding (presumably involving the plaintiffs); b) All of Dr Samoilov's neighbours knew that he had been deceived; c) Mr Stuart had business and personal contacts with the real estate agents who were involved in the sale; d) The plaintiffs looked after the interests of the other parties in the transaction rather than him; e) The plaintiffs were interested in creating legal problems for him so that they could charge additional fees; f) Given the plaintiffs' alleged concealment of documents which should have been disclosed to the defendant, what other explanation could there be but fraud?[20] Those explanations are self-evidently inadequate. Nothing in the Court record suggests that Dr Samoilov has any prospect of establishing a cause of action based upon common law fraud. A party who pleads fraud must be able to identify evidence capable of supporting such a serious allegation: Prosser v NZ Investment Trust Ltd [1937] CLR 93 at 95; Associated Leisure v Associated Newspapers [1970] 2 QB 450 at 456, Belmont Finance Corp Ltd v Williams furniture Ltd [1970] 1 Ch 250 at 268. The defendant's allegations of fraud ought not to have been made.Conclusion[21] I am satisfied that the defendant's intended appeal raises no question of law or fact capable of bona fide and serious argument justifying the grant of leave to appeal to the Court of Appeal. The defendant's arguments are simply untenable.Result[22] The application is accordingly refused. The plaintiffs are entitled to costs and may file a memorandum if quantum cannot be agreed.C J Allan