JOHNS V JOHNS AND HOLLOWAY AND ANOR CA CA206/07

JOHNS V JOHNS AND HOLLOWAY AND ANOR CA CA206/07 5 December 2007JUDGMENT REISSUED ON 13/12/07 PURSUANT TO RECALL JUDGMENTIN THE COURT OF APPEAL OF NEW ZEALAND CA206/07 [2007] NZCA 559BETWEEN STEPHEN HENRY CYRIL JOHNS Appellant AND L R JOHNS AND C C HOLLOWAY First Respondent AND L R JOHNS Second Respondent Hearing: 1 November 2007 Court: William Young P, Hammond and Ronald Young JJ Counsel: P T Finnigan for Appellant G J Judd QC and D R I Gay for Respondents Judgment: 5 December 2007 at 10 amJUDGMENT OF THE COURT A The appeal is dismissed B We specify, for the purpose of s 40(5) of the Legal Services Act 2000, that the respondents would have had costs of $3,000 together with usual disbursements save for the fact that the appellant was legally aided. REASONS OF THE COURT(Given by Ronald Young J)[1] In early 2000 the appellant issued proceedings against his father and Mr Holloway who are trustees of a family trust of which the appellant is a discretionary beneficiary. They allege various breaches of the trust. The appellant also sued his father personally alleging breach of fiduciary duties. The case in the High Court was due to be heard in the week of 16 April 2007. On Thursday 12 April 2007 the appellant filed an application to adjourn the trial. The application was opposed and heard by Asher J on 16 April 2007. It was refused. On the following day the appellant elected not to proceed with the case, which on the application of the respondent was then dismissed. [2] The appellant appeals against the refusal to grant an adjournment claiming: (a) The Judge failed to take into account that the appellant had no appropriate counsel to conduct the trial through no fault of his own; (b) The Judge failed to take into account the problems the appellant had with his grant of Legal Aid thereby preventing him from obtaining suitable counsel; (c) The Judge failed to adequately assess the effect of refusing to grant the adjournment; (d) The Judge failed to take into account the appellant's request for further discovery; and (e) The Judge wrongly concluded that the interests of justice lay in refusing the adjournment. [3] The appellant acknowledges that this is an appeal from the exercise of a discretion carrying with it, therefore, the well established appellate burden:May v May (1982) 1 NZFLR 165 at 170 (CA). We also proceed as if there were a right of appeal from the refusal to grant an adjournment: Bevan-Smith v Reed Publishing (NZ) Ltd (2006) 18 PRNZ 310 (CA).[4] We turn to consider, therefore, each of the assertions of error by the Judge.Availability of counsel and Legal Aid problems[5] The appellant submits the Judge either failed to take into account or gave insufficient weight to the efforts the appellant had made to obtain alternative counsel. As to sufficiency of weight, as May makes clear, it is for the first instance Judge. As part of his difficulty in obtaining counsel the appellant says the Judge failed to take into account the difficulties he experienced with the Legal Services Agency. The appellant claims the Judge failed to appreciate that the respondent had also contributed to delays leading up to trial. [6] As to this the Judge said:[35] Mr Johns was on clear notice that further delays could not be tolerated. New counsel should have been sought from September 2006. Particularly strenuous efforts should have been made from mid-December 2006, and the absence of briefed counsel should have led to an adjournment application at that time or early in the new year. [36] In summary there is no justification for this late application for an adjournment in the sense of there having been any just cause shown for the delay. The explanation that is given shows a careless disregard for the history of the case and the obvious need for its prompt disposal.[7] The appellant has instructed a number of counsel over the intervening seven years since commencement of this litigation. The appellant's most recently instructed counsel, Ms A Duffy QC (as she then was), began acting for Mr Johns in September 2005. At that stage a hearing date of October 2005 had been given. The trial did not proceed then and in August 2006 the April 2007 trial date was allocated. In late December 2006 Ms Duffy formally told the appellant she could no longer act for him. The appellant did not instruct alternative counsel between then and the April trial date. [8] In our view the Judge was entitled to conclude that the fault in failing to obtain counsel was the appellant's and that there was no reason for Mr Johns' late application for adjournment.[9] The appellant had previously been the subject of critical judicial commentarising from his failure to take timely steps in this litigation. As the Judge observed, Mr Johns had expressed concern about his relationship with Ms Duffy as early as August 2006 to the Legal Services Agency. Given his level of dissatisfaction, it is surprising that Mr Johns did not seek alternative representation much earlier than December 2006. When Ms Duffy formally withdrew as counsel in December 2006, Mr Johns left it until late January/early February 2007 to ask Mr Molloy QC to represent him at the coming trial. Mr Johns told the Judge that Mr Molloy was prepared to act for him but that was subject not only to Legal Services Agency approval, but also to the difficulty that Mr Molloy would not be available for an April 2007 trial. [10] When Mr Molloy agreed to act for him Mr Johns neither sought Legal Services approval nor made an application for an adjournment based on Mr Molloy's lack of availability. Instead, Mr Johns said, in early February 2007 he contacted all Queen's Counsel on the Legal Services list. However, none were prepared to take his case. Mr Johns, in his second affidavit, made it clear he considered his case required a Queen's Counsel and so he limited his search to such senior counsel. [11] Mr Johns did not explain the delay from February, when he knew no Queen's Counsel was available to act for him, until late March when he asked his solicitors to apply for an adjournment. The application was filed on 12 April. [12] Connected to Mr Johns' concern that he had no counsel to represent him was his complaint that Legal Services delays and failures contributed to his inability to obtain counsel to represent him. We reject this claim. [13] By the setting down date of August 2006 the Legal Services Agency had granted Mr Johns' legal aid for the trial including the instruction of a forensic accountant. Ms Duffy instructed the accountant and prepared briefs of evidence for him and Mr Johns, which were served on the defendants. The only contact, therefore, that Mr Johns had with the Agency from mid to late 2006 until trial was his request that it approve a second opinion from Mr Molloy relating to the quantum of his claim. This request was made by his solicitors to the Legal Services Agencyon 13 December 2006. Legal Services responded on 6 February asking why it was necessary to obtain a second legal opinion on quantum, asking whether or not Mr Johns' counsel was still Ms Duffy, and making the observation that a forensic accountant seemed the more appropriate person to assess quantification of loss than a lawyer's opinion. [14] Mr Johns responded personally and at length on 26 February. He told the Agency that Ms Duffy no longer acted for him and that he had his files in his possession. There was no further correspondence between the parties (that we are aware of) from 26 February until the application for adjournment and subsequent ruling. [15] These facts demonstrate that Mr Johns did not ask the Agency to transfer the grant of legal aid to another lawyer. We therefore reject the suggestion that any delay by the Legal Services Agency contributed at all to Mr Johns' failure to obtain counsel or to his inability to run the case on 16 April. [16] These facts demonstrate that the Judge correctly concluded that after December 2006 the appellant made no effort to get legal aid approval for alternative counsel, limited his efforts to find alternative counsel to Queen's Counsel and failed to apply for an adjournment shortly after December 2006 when he knew he had representation problems. These factors were, as the Judge said, with a background of judicial warnings that further delays by him would not be tolerated. [17] No error has been shown in the Judge's approach or conclusions.Effect of refusing the adjournment[18] The third point raised by the appellant is that the Judge failed to adequately assess the effect of refusing to grant an adjournment on the plaintiff. As to this the Judge said:[38] The consequences of a judgment against the plaintiff will be severe in that I am advised, and this has not been contested, that even if theJudgment were not conclusive, there would be time limitation problems that would probably preclude the filing of further proceedings. [39] Thus, the consequence of refusing to grant the adjournment are likely to be that Mr Johns is not able to pursue his claim further and that the substantial investment of time and money he has put into it over the previous years will be lost, without its being heard on its merits.[19] Counsel submitted that given the work carried out by the appellant and his advisors in this litigation, an adjournment of four months to find alternative counsel and complete discovery was not unreasonable in achieving justice between the parties. [20] The Judge was well aware of the effect of his refusal to grant an adjournment. He had been told that the appellant could not in those circumstances proceed with the case. The Judge, therefore, knew when he refused to grant the adjournment that it was probable the plaintiff would not proceed and the defendant would seek entry of judgment and dismissal of the claim. [21] We observe, however, that given all of the plaintiff's briefs had been filed and given the real dispute in the case appeared to be between the forensic accountants, Mr Johns could have conducted the case before the Judge when the adjournment application was refused. It was a matter for him to elect whether to do so. He knew the potential consequences if he chose not to do so. No error by the Judge has been shown in his appreciation of the effects of the adjournment.Discovery[22] The appellant said in his adjournment application that he needed discovery of tax returns from Inland Revenue (and so non-party discovery would be required) relating to the L R Johns Family Trust. The defendant had already obtained discovery of financial statements relating to the Trust. They provided details of income and tax paid. The appellant had never previously sought discovery of these tax records which could only be relevant if they identified a different position than that disclosed in the Trust's financial statements. There is no evidence that they would.[23] Mr Johns has had seven years in which to identify these documents as relevant. Given their marginal importance it is difficult to see how they could have been so pivotal as to compel an adjournment of the trial.Balancing of effects[24] The appellant submits that the Judge overemphasised the effect of an adjournment on Mr L R Johns. Mr L R Johns has poor health and the respondents advised the appellant before the trial commencement date that he would not be well enough to give evidence. The appellant says that given Mr L R Johns was not going to be able to give evidence the effect of any adjournment on his health was "near to an irrelevant consideration". As to this, the Judge said:[40] The Judgment of Venning J and the Minute of Harrison J both refer to the state of health of Mr LR Johns. An affidavit has been filed by his wife, Mrs GP Johns, in this regard. Mr LR Johns has suffered a severe stroke and although he is in Court today, a report from the Waitemata District Health Board attached to Mrs Johns' affidavit shows that his health and understanding are greatly impaired. Because of his medical condition the effects of the litigation upon him are lessened, but it is clear that he is still affected by it. [41] Mrs Johns cares for her husband on a full-time basis from her home. She nurses him 24 hours a day seven days a week. Her existing property is too large and she wishes to sell down to something more manageable, and possibly move to a sunnier climate. She feels unable to make any significant decisions or to plan ahead while the litigation is hanging over her and her husband. The litigation is a great worry to her. [42] This is family litigation which is undoubtedly highly stressful and unpleasant for the parties involved. Mr and Mrs LR Johns are elderly and I accept entirely that an adjournment would cause them great further distress and anxiety. The delay in obtaining a further hearing will need to be, on the plaintiff's own account, four to six months and it may be longer before a fixture can be made available.[25] The Judge was entitled to take into account as part of the balance to be struck the effect of a further adjournment on the lives and health of the respondent and his family. As counsel for the respondent pointed out, if the proceedings had been adjourned in April 2007, a further fixture would have been unlikely until early 2008. We see no error in the Judge's approach.Conclusion[26] We are satisfied the Judge took into account all relevant factors, did not take into account any irrelevant factors, and it cannot be said his decision to refuse the adjournment was plainly wrong. It was a decision well open to the Judge given the facts of this case. [27] The appeal will therefore be dismissed. [28] The appellant is legally aided. We make an order specifying the sum of $3,000 plus disbursements was the order for costs that would have been made against the appellant in favour of the respondent save for the fact that the appellant was legally aided (s 40(5) Legal Services Act 2000).Solicitors: Rennie Cox, Auckland for Appellant Anthony Thomas, Auckland for Respondents