Solicitor avoids summary judgment

Summary judgment can be an effective means of disposing of litigation before it ever reaches trial.  However, there are certain requirements that need to be carefully considered before launching such an application.  Recently, Rice Speir successfully defended its solicitor client in a summary judgment application brought in the High Court at Whangarei (Daisley v Whangarei District Council & Peters).

The facts

In 2004 Mr Daisley purchased a rural property in Northland where a quarry was located.  The LIM that Mr Daisley obtained prior to his purchase made no reference to any consent issued in relation to the quarry on the property.  Nevertheless, Mr Daisley (through a company controlled by him) began operating the quarry shortly after the purchase.

The Whangarei District Council maintained that the quarrying operation was unconsented and unlawful.  Mr Daisley was issued with a series of abatement and infringement notices culminating in an enforcement order application.

Mr Daisley did not accept that his quarrying activities were unlawful and so, upon service of the order application, he instructed his solicitor to oppose the council’s application.  Mr Daisley’s solicitor arranged for a search of the council’s files which revealed an ancient land use consent relating to quarrying at the property.

The claim

Mr Daisley filed a claim in the High Court against the council and his then-solicitor.  The amount claimed is in excess of $35M.  Rice Speir is defending the solicitor.

Mr Daisley’s claim against his solicitor alleged that, after discovery of the consent, his solicitor failed to provide him with advice as to his legal options for holding the council to account when Mr Daisley had instructed his solicitor to do so.  The causes of action against the solicitor included negligence and breach of fiduciary duty.

Summary judgment

Earlier this year, Mr Daisley applied for summary judgment against both the council and his solicitor.  The application sought judgment on liability only (not damages).

Because Mr Daisley had not sought summary judgment when he first filed his claim, his application for summary judgment could only be filed with the Court’s permission.  Practically speaking, this required Mr Daisley to explain why the application was being made almost three years after he first filed his claim.  Mr Daisley could not adequately explain this delay.  In addition, Mr Daisley only wanted summary judgment on some of his causes of action and not others.  As a result, even if Mr Daisley had been successful in his application, the Court would still need to decide issues of liability at trial.

Mr Daisley failed to satisfy the Court that either the council or the solicitor had no arguable defences to the claims against them – the essential criteria for a successful summary judgment application.

In terms of Mr Daisley’s claim against the solicitor, the Court first observed that a successful claim against him was reliant upon the Court being satisfied that the claims against the council would succeed, which it was not.  In addition, there were significant factual disagreements between the solicitor and Mr Daisley – yet a further feature of the claim that meant it was not appropriate for summary judgment.  The Court referred to written correspondence that failed to support Mr Daisley’s position that he had given the instructions to his solicitor which he now claimed he had.

Ordinarily, costs would not be awarded following a summary judgment application.  However, the Court determined that the merits of Mr Daisley’s application were such that he should pay the solicitor and the council costs associated with defending the summary judgment application.

Take away points

Whether as a plaintiff or defendant, summary judgment applications can be an efficient and cost-effective means of disposing of litigation before trial.  However, Daisley is an important reminder of the high bar that must be reached before a court will give summary judgment.

Broadly speaking, at the very least defendants should not have arguable defences, the relevant law should be settled, and there should not be disagreements about significant facts.  The judgment in Daisley is also a reminder that, where appropriate, summary judgment applications need to be pursued promptly.  These applications do not have to be made at the time the claim if first filed, but unexplained and lengthy delays could be fatal to a court giving permission to file an application at a later time.

Parties should carefully consider whether summary judgment is a realistic possibility.  The consequences of pursuing summary judgment where a party cannot satisfy the basic requirements of the application can be costly.  As demonstrated in Daisley such costs can include not only the party’s own costs but also the costs of the party required to respond to the application.  A cost-saving exercise can quickly become a cost-adding exercise.

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