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Bush lawyer stung with $17,700 costs order over $2,000 agreement

16 March 2015

There is an often quoted saying “He who acts as his own lawyer has a fool for a client”. This saying means that representation in court is tough stuff and that self-representation is likely to end badly.

 

Mr Brown agrees to remove shed from Solan’s land

Mr Brown had agreed to buy a shed from Solan Heights Limited (Solan) for $2,000 and remove it from Solan’s land. A dispute arose between Mr Brown and Solan about Mr Brown’s obligations under the agreement. Mr Brown registered a caveat against Solan’s land to improve his negotiating position.

 

Effect of the caveat

A caveat prevents any dealings (such as a transfer or mortgage of the land) being registered unless the caveator consents to their registration, the caveat is withdrawn or lapses, or the matter is resolved by the court. A person is only entitled to register a caveat if there is an agreement with the owner giving that person an interest in the land which will legally support a caveat, such as the interest of a purchaser, tenant, mortgagee, holder of an easement or, in some circumstances, a beneficiary of a trust. If a person registers a caveat without reasonable cause, that person is liable to pay compensation to any person who suffers damage as result.

 

Solan successfully sues for removal of caveat

When Solan discovered Mr Brown had registered a caveat its solicitors wrote to Mr Brown requiring him to remove the caveat immediately. Mr Brown wrote back advising that he would remove the caveat if Solan paid him $3,000. Solan’s solicitor’s replied reminding Mr Brown that he had no legal justification for lodging the caveat, urging him to take legal advice and advising him that “$3,000 will pale in comparison to any amounts claimed by Solan”.  Mr Brown stood firm, despite Solan’s attempts to negotiate a solution. When the shed had not been removed, Solan cancelled the agreement and issued proceedings in the High Court for the removal of the caveat. Mr Brown represented himself. The Court ordered removal of the caveat.

 

Unhappy ending for Mr Brown

Solan then claimed against Mr Brown for its actual legal costs and disbursements incurred in the proceedings amounting to $17,700. The judge referred to the High Court rules which enable him to order payment of the other party’s actual costs if a party has acted vexatiously, frivolously, improperly, or unnecessarily in defending a proceeding, or if some other reason exists which justifies such an order. The judge found that such an order was warranted – he found that Mr Brown had lodged a caveat without any justification; he had been given notice that he had no legal justification and the opportunity to remove the caveat but he had refused; he had improperly sought to use the presence of the caveat as a negotiating tool; and that he had chosen not to take legal advice. Solan was entitled to seek urgent relief from the Court and was entitled to the costs order of $17,700 it had sought. Mr Brown had acted as his own lawyer and that representation had indeed ended badly.

Please email me at barbara.mcdermott@nwm.co.nz with your ideas for future articles. Keep an eye out for next month's column, where I will discuss another relevant rural legal issue.


Barbara McDermott is a partner of Norris Ward McKinnon, specialising in commercial and rural law. With offices in Hamilton and Huntly, we have friendly, expert legal advisors ready to help you with your business and personal legal matters.