Crisson v Marshall Diel & Myers Ltd

• Jurisdiction: Bermuda
• Judge: Clarke P,Kay JA,Gloster JA
• Judgment Date: 11 June 2021
• Court: Court of Appeal (Bermuda)
• Docket Number: Civil Appeal 2020 No 9

[2021] Bda LR 52

In The Court of Appeal for Bermuda

Before:

Clarke P; Kay JA; Gloster JA

Civil Appeal 2020 No 9

Between:

Andrew Crisson

Appellant

and

Marshall Diel & Myers Limited

Respondent

Mr C Hill for the Appellant

Mr J Pachai for the Respondent

The following cases were referred to in the judgment:

Iraqi Ministry of Defence v Arcepey Shipping Co SA (The “Angel Bell”) [1981] 1 QB 65

Gavin Edmonds Solicitors Ltd v Haven Insurance Co Ltd [2018] UKSC 21

Candey v Russel Crumpler [2020] EWCA Civ 26

Freezing injunction — Solicitor's equitable lien — Angel Bell relief — Appeal against refusal to discharge or vary injunction

JUDGMENT of Gloster JA

Introduction

1. This is an appeal by the appellant, and the defendant in the action, Andrew Crisson (“Mr Crisson”), against the decision of Chief Justice Hargun dated 7 May 2020 (“the May 2020 judgment”) whereby the Chief Justice refused Mr Crisson's application to vary a freezing injunction (“the freezing injunction”) previously made against him by Stoneham J on 13 December 2019 (“the December 2019 order”) at the suit of the claimant in the action, and the respondent to this appeal, Marshall Diel & Myers Limited (“MDM”). The Chief Justice rejected an application by Mr Crisson to vary the December 2019 order so as to allow for payment for living expenses, legal fees and other liabilities, in accordance with the decision in Iraqi Ministry of Defence v Arcepey (“the Angel Bell”)[1981] 1 QB 65. The Chief Justice refused the application on the basis that the December 2019 order had not been made under the Mareva jurisdiction, but pursuant to the court's jurisdiction under Order 29 Rule 2(1) for the purposes of preserving the funds, until such time as MDM's “interest in the funds could be determined by the Court”. In other words, the Chief Justice appears to have taken the view that the injunction which had been granted by Stoneham J was in fact a proprietary injunction, to which the Angel Bell exceptions were not applicable, and accordingly that there was no basis for any variation in its terms.

2. On 16 November 2020 this Court (the President, Sir Christopher Clarke, Justice of Appeal, Sir Maurice Kay and Justice of Appeal, Dame Elizabeth Gloster DBE) granted Mr Crisson leave to appeal out of time against the May 2020 judgment, after refusal by Justice of Appeal, Mr Geoffrey Bell, sitting as a single judge of this Court. The reasons why we considered it appropriate to do are set out below.

3. The appeal was heard before us on 20 November 2020, in a virtual video hearing. Mr Cameron Hill of Westwater Hill & Co appeared as counsel for Mr Crisson; and Mr Jay Pachai of Wakefield Quin Ltd appeared as counsel for MDM. We are grateful to both counsel for their helpful oral and written submissions.

The Procedural History

4. The current proceedings relate to the attempts by MDM to collect what it alleges are outstanding legal fees due from Mr Crisson, arising out of its representation of him during matrimonial ancillary relief proceedings between him and his wife during the period 2012 to 2019. Winchester Global Trust Co Ltd (“the Trustee”) as trustee of the A Fund, and other trusts known respectively as the B Fund, the C Fund, the D Fund and the X Trust, had been joined as second respondent to a supplemental application for ancillary relief brought by the wife, which sought variation of settlement in relation to those trusts. During the relevant time, Mr Crisson was represented by Mrs Georgia Marshall (“Mrs Marshall”), a partner in MDM, in the ancillary relief proceedings. The Trustee, as trustee of the A Fund, held a property known as “Mirabeau”, the former matrimonial home.

5. The following summarises the salient steps in the litigation for present purposes.

6. It appears that, by January 2018, Mr Crisson owed MDM a sum in excess of $280,000 on account of legal fees incurred by him relating to the divorce and ancillary relief proceedings. Indeed, in January 2018 MDM applied to be removed as attorneys of record on behalf of Mr Crisson on account of non-payment of outstanding fees. An order of the Supreme Court dated 11 January 2018 confirmed this point. It was, however, never served and MDM remained as the attorneys of record for Mr Crisson.

7. Mr Crisson was keen to retain the services of MDM and on, or about, 22 January 2018 he signed an agreement (“the Acknowledgement Agreement”) in the following terms in relation to his outstanding legal fees:

“Acknowledge of Debt Due and Payment Agreement to Marshall Diel & Myers Limited

The following Payment Agreement is associated with the outstanding debt to Marshall Diel & Myers Limited (“the Firm”), with respect to Georgia Marshall representing me, Andrew L. Crisson in my divorce proceedings (Andrew L. Crisson and Christine H. Crisson) to date, i.e., to January 2018. In which case, I, Andrew L. Crisson (“the Respondent”), acknowledge that my current debt is BD$288,417. I am committed to paying this debt by means of the following, and in this order:-

1. With respect to the above stated debt, I confirm that I will begin making weekly payments of BD$346.26 (based on BD$1,500 per month annualized) until the Judgment of the court is rendered. The payments will be made by way of an attachment of earnings so that the funds are paid by the payroll clerk of Crisson Limited directly to the Firm. My first payment will be arranged on or prior to January 31, 2018.

2. I guarantee that upon completion of the case and rendering of the Judgment, I will ask that the Trustees of the Andrew L. Crisson Trust, to exercise their discretion to release to the Firm from the net equity of Mirabeau, sufficient funds to clear off my debt to the Firm. If there are Insufficient funds received from the sale of Mirabeau or if the Trustees do not exercise their discretion in my favor, then a Guarantee from the owners of the New York apartment will be relied upon1, in accordance with the “Charge Over Security Guarantee” dated [sic]

3. Please see the attached “Charge over Security Guarantee”, with respect to the New York apartment.

4. Any sum which remains outstanding after paragraph 2 above and the fulfilment of the “Charge Over Security Guarantee” will be paid from my other resources, but in any event in a sum of not less than $1,500 per month.”

8. The correspondence leading up to the signing of the Acknowledgement Agreement, and the affidavit evidence of Mrs Georgia Marshall, the barrister and attorney, and a director of MDM, acting for Mr Crisson in the proceedings, shows that the agreement also included terms that:

• i. MDM would cap its fees for the ongoing proceedings to conclusion of the case, but not including appeal work after judgment, in a sum of $50,000;

• ii. and that that sum would be paid by Mr Crisson by the end of January 2018.2

9. The Charge over Security Guarantee in relation to the New York apartment was indeed provided to MDM by Mr Crisson's mother and daughter in a deed dated 25/26 January 2018. So far as material, it was in the following terms:

“Charge Over Security Guarantee

We the undersigned Anja E. Crisson and Helen C. Crisson, joint owners of the property known as apartment 8E, 333 East 55th Street New York, United States of America (“the Property”), hereby acknowledge that we have been given full opportunity to seek and obtain independent legal advice on this Charge Over Security Guarantee and grant this Security freely. This Charge Over Security Guarantee is granted to Marshall Diel & Myers Limited in consideration of the natural love and affection which the undersigned, mother and daughter respectively of Andre Crisson bear towards him and in our desire to assist him in securing a portion of the outstanding legal fees which are due and owing to his said attorneys, the total of which is understood to be approximately $288,000 and by so doing secure ongoing representation for him by the Firm.

The following Charge Over Security Guarantee (the “Charge Over”) is only [sic] the proceeds from the sale of the Property, which is presently being placed on the market for sale. The Charge Over is subject to Georgia Marshall, of Marshall Diel & Myers Limited (“the Firm”), continuing to represent Andrew Crisson to conclusion before the Supreme Court of Bermuda, of the ongoing Divorce Matter 2012 No 65, which is intended to be listed for hearing in 2018.

The extent of the Charge Over shall be limited to the sum set out hereunder and shall be paid upon the sale of the Property to the extent that there are monies, which remain due and owing to the Firm, which have not been paid from any other source.

In the event that the Property is sold prior to the conclusion of the Divorce Matter 2012 No 65, the sum of $150,000 will be paid into the Firm and shall be held in escrow pending the conclusion of the matter before the Supreme Court in relation to Divorce matter 2012 No 65.

The undersigned, Anja E. Crisson and Helen C. Crisson, confirm and commit and hereby grant to the Firm a Charge Over secured against the Property in the Sum of $150,000 and hereby commit to expeditiously marketing the Property for sale no later than immediately following the conclusion of the proceedings being Matrimonial Matter 2012 No 65. Upon sale, such amount which remains outstanding in relation to the fees owed to the Firm by Andrew Crisson which have not been paid from any other source shall be paid to the Firm to the extent of $150,000 or such lesser sum as i-Is required to fully extinguish the debt. For the avoidance of doubt, the Charge Over Is limited to $150,000 irrespective of whether the full debt owed to the Firm is fully extinguished by payment of this sum.”

10. On 7 November 2019, Stoneham J delivered her judgment in the matrimonial proceedings in relation to ancillary relief issues arising in the divorce (“the November 2019 judgment”). The ancillary relief hearing actually started in September 2016 and only concluded on 31 May...