Marshall Diel & Myers Ltd v Andrew Crisson

• Jurisdiction: Bermuda
• Judge: Chief Justice Hargun
• Judgment Date: 07 May 2020
• Court: Supreme Court (Bermuda)
• Docket Number: CIVIL JURISDICTION
• Date: 07 May 2020

[2020] SC (Bda) 27 Civ

In The Supreme Court of Bermuda

Before:

Hon. Chief Justice Hargun

CIVIL JURISDICTION

2019: No. 491

Between:

Marshall Diel & Myers Limited

Plaintiff

and

Andrew Crisson

Defendant

Appearances:

Mr Adam Richards, Marshall Diel & Myers Limited, for the Plaintiff

Mr Cameron Hill, Westwater Hill & Co, for the Defendant

RULING

Application to vary a freezing injunction based upon the Angel Bell exceptions; distinction between a Mareva and preservation order

1 These proceedings relate to the attempts by Marshall Diel & Myers Limited (“the Plaintiff” or “MDM”) to collect outstanding legal fees due from Mr Andrew Crisson (“the Defendant” or “Mr Crisson”) arising out of bitterly fought and protracted divorce proceedings between Mr and Mrs Crisson during the period 2012 to 2019. Stoneham J delivered her Judgment in relation to ancillary relief issues on 7 November 2019. During the relevant time Mr Crisson was represented by Mrs Georgia Marshall of MDM.

2 It appears that by January 2018, the Defendant owed MDM a sum in excess of $280,000 on account of legal fees incurred by him relating to the divorce proceedings. Indeed, in January 2018 MDM ceased to act as Attorney of Record on behalf of the Defendant on account of non-payment of outstanding fees. This was confirmed by an Order of this court dated 11 January 2018.

3 However, the Defendant was keen to retain the services of Mrs Marshall and on 15 January 2018 confirmed his agreement to the following terms in relation to outstanding legal fees:

• 1. I will provide to the firm a signed Acknowledgement confirming that I owe a current debt of $288, 417 to date;

• 2. I confirm that I will begin making weekly payments towards the above stated debt, of $346.26 (BDA) (based on $1,500 per month annualised) until the Judgment of the Court is rendered. The payment will be made by way of an attachment of earnings so that the funds are paid by the payroll clerk of Crisson directly to this firm. At the time that the judgment is handed down, payments with respect to the sum which remains outstanding will be payable at a rate to be negotiated at that time, but, based on a minimum monthly payment of $1,500 (BDA);

• 3. The trustees of the Andrew Crisson Trust will provide the firm a guarantee that from my share of the net equity in Mirabeau and subject to whatever order is made by the Court in that regard, the trustee will pay to the firm the outstanding fees or such portion thereof which is reflected in my share of the net equity which should be less than what is owed to this firm;

• 4. MDM will be given a charge over apartment of 8E in New York for $100,000. This charge will only be executed upon if the outstanding fees are not met from #3 above. Upon payment of the outstanding fees in full from #3 above, the charge will be discharged.

• 5. With respect to outstanding proceedings, resolving the divorce matter, I will pay to the firm $50,000 (BDA) on or before end of January 2018 or the cost of work required to complete this case. I understand that you will cap fees for drawing this case to conclusion at $50,000 and that this does include any appeal which may arise from the judgment.”

4 The Trustees of the Andrew Crisson Trust did not consider that they were able to provide the guarantee envisaged in paragraph 3 of the agreement referred to above and in light of that development the Defendant agreed that he will “ 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 the net equity of Mirabeau, sufficient funds to clear off my debt to the Firm”. On 22 January 2018, the Defendant executed the following document setting out the agreed position between MDM and the Defendant in relation to the issue of payment of outstanding 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 upon BD $1, 500 per month annualised) until the Judgment of the court is rendered. The payment 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 favour, then a Guarantee from the owners of the New York apartment will be relied upon, in accordance with the “Charge Over Security Guarantee” dated…

• 3. Please see 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 the sum of not less than $1,500 per month.”

5 As noted above Stoneham J delivered a judgment on 7 November 2019. Following the delivery of the judgment, Mrs Marshall, in her First Affidavit dated 12 December 2019, states that she confirmed with the Defendant that payment would be transferred by the Trustees of the Andrew L. Crisson Trust to MDM to meet the balance of the outstanding legal fees owed by the Defendant.

6 The Defendant, in his First Affidavit dated 10 February 2020, states that when approached “the trustees began to evince a certain squeamishness about paying such a large sum to my lawyers”. The Defendant further states that “ in the circumstances, I asked the trustees to transfer my share of the net proceeds of the Former Matrimonial Home to my account held with HSBC Bermuda. This was not an attempt to place those funds beyond the reach of my creditors. Quite the contrary, I did so in order to ensure that the funds were available to me to meet my obligations to my creditors”.

7 In light of these developments MDM applied for a freezing injunction by summons dated 13 December 2019. The application was supported by an affidavit of Mrs Marshall dated 12 December 2019. The hearing of the application took place before Stoneham J on 13 December 2019 and at the conclusion of the hearing, Stoneham J made an order that “the Defendant must not in any way dispose of, deal with, or diminish any funds held in any bank account in the Defendant's name, whether held solely or jointly, save for funds in excess of the amount of $242, 457.99.”

8 By summons dated 18 February 2020, the Defendant sought an order that “the Mareva injunction Order, granted by Stoneham PJ sitting as a judge of this Honourable Court, made in these proceedings on 14 December 2019 be set aside on the grounds set out in the First Affidavit of Andrew Crisson”. It is apparent that Counsel for the Defendant, Mr Hill, appears to be under the impression that the Order of 13 December 2019 was made under the Mareva jurisdiction.

9 In his First Affidavit, the Defendant states in paragraph 59 that he is of the view that the application for the Mareva injunction is defective at its very core because it failed to disclose a cause of action, there having been no breach, or accepted breach, of the fee agreement dated 22 January 2019. In addition, the Defendant states, there is no allegation made that he has any intention of placing his assets beyond the reach of is creditors and he makes the point that the bare assertion that Mrs Marshall has such a relief, is not sufficient without providing any grounds for that belief.

10 On 3 April 2020, I received a 28 page letter from Mr Hill, setting out various administrative and substantive complaints in relation to the Defendant's application to set aside the Order of Stoneham J on a timely basis. The letter complained, inter alia, that the Mareva order did not provide for the normal exceptions on account of living expenses and the payment of legal fees by the Defendant. The letter is addressed for the attention of the Chief Justice. Having considered that letter I directed that all the matters raised in the letter, to the extent relevant to the application to set aside the injunction, should be raised at the inter parties hearing. I stated that the issues raised in the letter cannot be dealt with on an ex parte basis without giving the other side the opportunity to respond to the relevant evidence and legal submissions.

11 I further directed that the Court would be willing to consider an application for variation of the Order on account of living expenses and legal fees on the papers, and for this application the Court requires a summons, supporting affidavit and any written submissions. I gave that direction on the assumption, as represented by Mr Hill in his letter, that the Order of 13 December 2019 was indeed a Mareva injunction. At that time, it seemed to me, that an application for the Angel Bell exceptions should be determined on an urgent basis, and given the Covid 19 constraints, should be determined on papers only. Nothing said in this Ruling is intended to affect or prejudge the anticipated...