Archaeology North Limited v Efstratiou HC Wanganui CIV-2010-083-350
[2011] NZHC 1859
•13 December 2011
IN THE HIGH COURT OF NEW ZEALAND WANGANUI REGISTRY
CIV-2010-083-350
BETWEEN ARCHAEOLOGY NORTH LIMITED Plaintiff
ANDCHRIS JOHN EFSTRATIOU Defendant
Hearing: 6 December 2011
Counsel: L C Rowe for Plaintiff
J Unsworth for Defendant
Judgment: 13 December 2011
JUDGMENT OF WILLIAMS J
In accordance with r 11.5, I direct the Registrar to endorse this judgment with the delivery time of 10:00am on the 13th December 2011.
ARCHAEOLOGY NORTH LIMITED V CHRIS JOHN EFSTRATIOU HC WANG CIV-2010-083-350 13
December 2011
Background facts
[1] Much of the relevant background to this matter is set out in the judgment of
Clifford J in 7 September 2011.[1] It is sufficient for me to outline the bare bones.
[1] Efstratiou v Archaeology North Limited HC WANG CIV-2011-483-175, 7 September 2011.
[2] The defendant is a property developer who proposed to redevelop land in downtown Whanganui. Because it was a site of human habitation prior to the turn of the 20th century, no work could be undertaken without an authority from the New Zealand Historic Places Trust (HPT). With the support of HPT, the defendant retained Archaeology North Limited (ANL) to undertake the archaeological work HPT required. An authority was duly granted provided that the work was undertaken by ANL pursuant to an agreed archaeological management plan.
[3] Original estimates for the archaeological work were of the order of $300,000, though that was subsequently reduced to $220,000 and then, once initial work had been completed, revised upwards by 10 percent overall to around $250,000.
[4] Work began on site on 8 February 2010 with ANL rendering bills on 1 March and 1 April 2010. The bills were not paid. At the end of the March, ANL indicated that it would not continue without payment. The defendant who was overseas at the time, assured ANL that payment would be made and asked for a meeting with ANL on 14 April when he returned to New Zealand. On the basis (it said) of the comfort gained from this assurance, ANL continued work, but by 19 April when neither the meeting nor payment had occurred, ANL ceased work and rendered a third (and what turned out to be its final) invoice.
[5] Unknown to ANL, the defendant had triggered the HPT’s statutory review procedures claiming a dispute over price. The review was undertaken without ANL’s knowledge or involvement and HPT apparently concluded that ANL’s costs and forward estimate were in fact a little on the light side.
[6] After a good deal of to-ing and fro-ing, including attempts to mediate the matter, ANL issued proceedings on 5 October 2010 in the District Court at
Whanganui for the work as invoiced in the sum of $138,547.37 plus interest and costs.
[7] A further attempt to resolve matters was made at a meeting on 9 November
2010. Geraldine Baumann, senior legal advisor, HPT, was present and acted as facilitator of the discussions. ANL says this meeting produced an agreement as to how the existing invoices would be dealt with as well as a new process for future invoices. Ms Baumann confirms that perspective in her own affidavit. The defendant denies any such agreement.
[8] No further payments were made in accordance with that or any other process, and work never recommenced. The planned redevelopment is now stalled.
This proceeding
[9] This proceeding has been the subject of extensive interlocutory conflict. On
9 December 2010 the defendant filed and served an appearance in the District Court protesting jurisdiction on the ground that there was a compulsory mediation clause in their contract. On 10 February 2011 the defendant also applied to stay the proceeding. On 20 May 2011 His Honour Judge Dawson set aside the defendant’s appearance protesting jurisdiction and dismissed the stay application. The District Court ordered that a formal notice of response to ANL’s claim in accordance with the District Court Rules be served on the plaintiff by 10 June 2011. On 9 June, the defendant filed an appeal against that decision and a second application to stay the proceeding.
[10] On 26 July 2011 His Honour Judge Cameron dismissed the second application for stay and ordered the defendant to serve its notice of response by
2 August 2011. On 1 August 2011, that decision was in turn appealed and a third stay application was made pending this further appeal. By letter of 2 August 2011, the defendant’s solicitor gave the plaintiff formal notice of the existence of a substantial counterclaim “that goes considerably beyond the jurisdiction of the District Court and will be filed if our continued attempts to resist the court’s jurisdiction are unsuccessful.”
[11] On 31 August 2011, the defendant filed his counterclaim for $2,569,113.84 +
GST. The next day, Clifford J heard the defendant’s appeal. He dismissed it on
7 September 2011 in the written judgment to which I have already made reference.
[12] On 12 September 2011, the defendant then filed the current application seeking transfer of the claim and counterclaim to the High Court.
[13] It transpires that counsel for ANL had not received the defendant’s application for transfer and was not made aware of it until November. In this state of ignorance, and as required by the District Court Rules, ANL served its information capsule on the defendant in relation to its own claim and a notice of response in relation to the counterclaim on 30 September 2011.
[14] On 3 November 2011, the defendant abandoned its appeal against Judge Cameron’s refusal to stay the District Court proceedings pending the High Court appeal that had by that time been heard and decided by Clifford J.
[15] On 11 November 2011 (the last day for the defendant to serve his own information capsules in accordance with the District Court Rules), the defendant applied for an extension of time for that purpose.
The current applications
[16] With that background in mind, there are therefore two applications from the defendant to be dealt with. The first is the application to transfer the proceeding to the High Court. And the second is an application to extend the time for service of the defendant’s information capsule on the plaintiff.
[17] As I have said, the defendant filed his counterclaim on 31 August 2011 and his transfer application on 12 September. The District Court Rules provide that this application should have been filed within five days of the counterclaim.[2] Apparently, the Brooker’s service wrongly advises that the application could be filed within 10
[2] Rule 5.69(2)(a).
days and the defendant’s previous counsel followed this advice. In addition the
defendant has not served his information capsule in time – that capsule being due for service on 11 November 2011. The defendant has no stay of proceeding. He has not stopped the clock running.
[18] The lack of a stay presents the defendant within an insurmountable procedural barrier in my view. Rule 2.27 of the District Court Rules provides the procedure for filing and service of counterclaims in response to claims filed under r 2.10 to r 2.17 but the commentary makes it clear that counterclaims are conceptually independent actions and a counterclaim is subject to the rules in the same way as if it were a claim in the strict sense. Thus, the counterclaimant in this proceeding is treated as a plaintiff for the purpose of r 2.14 in relation to the service of information capsules. Rule 2.14.4 provides:
The plaintiff’s proceeding comes to an end if the plaintiff does not serve the plaintiff’s information capsule on the defendant within the 30 day period specified in r 2.14.1.
[19] “Proceeding” is defined broadly in the rules as meaning any application to the court for the exercise of its civil jurisdiction other than an interlocutory application.
[20] An extension on the 30 day requirement can be granted under r 1.18 and an application for such extension can be made either before or after the 30 day period has expired.
[21] Rule 2.14.6 provides:
A proceeding that comes to an end under this rule is treated as having been discontinued by the plaintiff.
Thus the rules are clear that in the absence of compliance with the timeframe in r 2.14.1 or an extension under r 1.18, there is no counterclaim before the court. An application for an extension (which is what the defendant has in this case) is not enough. The extension must have been granted. There is therefore no extant proceeding capable of being transferred. There seems no way around this.
[22] Perhaps for this reason, the defendant also applies to have this court exercise the District Court’s jurisdiction to extend time, but that seems misconceived. No provision in the District Court Rules or the High Court Rules was brought to my attention to the effect that the High Court can exercise the District Court’s extension discretion under r 1.18 in the absence of a relevant appeal.
[23] One path through this procedural tangle would be to adjourn the present application until after the District Court has addressed the extension application currently before it, but for two reasons I am not attracted to that approach.
[24] The first reason is that if the extension is granted, the defendant can make a fresh application for transfer in light of that changed circumstance. The second reason is that there is some evidence available to me indicating that the defendant may be gaming the system in an attempt to wear the plaintiff out. There are grounds to suspect (I put it no higher than that) that the counterclaim has little substance and that the application to transfer is part of a wider strategy of constant delay.
[25] Mr Unsworth protests that this is not the case, and he may in the end be proved right. But the history of this proceeding shows a consistent course of last minute point-taking, and a marked reluctance to show the defendant’s substantive hand, both in his defence and counterclaim. Should the District Court grant the defendant an extension (and I express no view on the merits of that application), the defendant will be required in its information capsule to reveal the substance of his counterclaim in far more detail than has been available up until this point.
[26] Rule 2.14.3 sets out what must be contained in an information capsule. It
provides that in a plaintiff’s information capsule the plaintiff must:
(a) rebut the defences raised by identifying and addressing the essential facts and disputes; and
(b) explain why any offer (other than an offer expressly stated to be without prejudice except as to costs) made by the defendant has been rejected (for example, by stating why the offer is considered unsatisfactory); and
(c) list the witnesses the plaintiff intends to call during the trial; and
(d) include or attach will say statements for each witness; and
(e) list or describe sufficiently the essential documents supporting the
plaintiff’s claim; and
(f) to the best of the plaintiff’s knowledge and belief verify the contents
on oath or by affirmation.
[27] In his capsule, the defendant will be required to comprehensively disclose his hand: to discover documents relevant to his claim and to provide will say statements by those whose evidence might put flesh on the bones of the grounds advanced in support of the counterclaim.
[28] The cases in relation to transfer provide a checklist of considerations (Cromwell Property Holdings and Development Limited v Checketts McKay[3]and Wix Corporation NZ Limited v Hayward[4]) but it seems to me that it is too early to consider such an application. In the particular context of this case the appropriate course is to await the completion of these interlocutory steps. If the defendant gets his extension, it will be open to him to then renew his application for transfer with
[3] (1999) 13 PRNZ 709 at [14] to [20].
[4] HC Auckland, CP 292/86, 11/4/86 (Tompkins J).
this court in a much better position to assess the seriousness of this counterclaim and on that basis to select the appropriate forum for resolving the underlying dispute. If the extension is refused, the application to transfer will be moot.
[29] Both applications are dismissed accordingly. ANL will be entitled to costs on a Category 2B basis.
Williams J
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