Having agreed to a legal services contract described as ‘highly unorthodox’ by the High Court with a client agreeing to guarantee loans for a property purchase as part payment of legal fees, former Wellington lawyer Quentin Haines has become entangled in his client’s octopus-like grip with no sign of immediate resolution.
Mr Haines took on Mr Memelink as a client when setting up practice as a lawyer on his own account. Mr Haines surrendered his practising certificate in 2018, but the tangled state of his former relationship with Mr Memelink lives on. The courts have been kept busy with argument over the level of fees charged Mr Memelink and his family trust together with an as yet unresolved dispute over Mr Memelink’s assistance in the purchase of a property occupied by Mr Haines in Eastern Rise at Manakau, near Levin.
The High Court was told Mr Memelink agreed to guarantee loans raised by Mr Haines to purchase Eastern Rise. When the two fell out, interests associated with Mr Memelink took ownership of a second mortgage registered over the property. Interests associated with Mr Haines then bought out the first mortgage. A sale by the first mortgagee left Mr Memelink unsecured; the sale did not clear enough to repay monies owed Mr Memelink’s family trust.
This resulted in Link No.1 Trust, Mr Memelink’s family trust, challenging circumstances of the Eastern Rise mortgagee sale. The property was sold by private sale, not auction.
Meanwhile, Link No.1 Trust was put into receivership by the High Court with a further court order blocking all legal actions against Link No.1 without court approval. This had the effect of removing Mr Memelink from day to day control of his family trust. A de facto liquidation of Link No.1 is underway.
Mr Haines then asked the High Court to strike out Link No.1’s challenge to the Eastern Rise mortgagee sale. Receivers had no interest in pursuing the claim, he said. And in any event, it was a frivolous and vexatious claim with no chance of success, he claimed.
The strike-out application was set down for a brief one hour hearing slot at the High Court. The hearing took a little longer. Mr Memelink turned up. As a trust beneficiary of Link No.1, Mr Memelink emphasised he had rights to share in any surplus after all Trust creditors have been repaid.
Justice Grice dismissed Mr Haines strike out application. All legal actions were on hold so receivers could sort out Link No.1’s financial position. This did not stop residual litigation recommencing after the receivership ended.
Memelink v. Haines – High Court (31.07.23)
23.124