Auckland Trotting Club Incorporated v Canam Group Limited (now Medway Limited)

[2023] NZHC 713

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-1110

[2023] NZHC 713

IN THE MATTER

of the Companies Act 1993 ss 148(1)(c), 135, 136, 271 and 301 in the liquidation of CANAM CONSTRUCTION LIMITED (now TRIBOLA767 LIMITED)

AND IN THE MATTER

of the Property Law Act 2007, ss 344 to 350, Subpart 6: setting aside of dispositions that prejudice creditors

BETWEEN

AUCKLAND TROTTING CLUB INCORPORATED

Plaintiff

AND

CANAM GROUP LIMITED (now MEDWAY LIMITED)

First Defendant

Continued

Hearing:

29 March 2023

Appearances:

M C Black and L M Wallace for the Plaintiff

D J Chisholm KC and MBE Morrison for the First Defendant, Second Defendants, First-Named Third Defendant and Fourth Defendants

Judgment:

3 April 2023

JUDGMENT OF GAULT J

This judgment was delivered by me on 3 April 2023 at 2:30 pm pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

……………………………………

AUCKLAND TROTTING CLUB INCORPORATED v CANAM GROUP LTD (now MEDWAY LTD) [2023] NZHC 713 [3 April 2023]

Continued …

AND

CANAM VENTURES LIMITED, CANAM INDUSTRIAL LIMITED)
Second Defendants

LOUKAS SOTERI PETROU, NICHOLAS ARTHUR PAGE, and ANDREW CROSBIE CLARK

Third Defendants

CABINETRY INVESTMENTS LIMITED, CANAM BUILDING LIMITED (now 1962TREES LIMITED), CANAM MANAGEMENT SERVICES LIMITED and CANAM BUILDING SOLUTIONS

LIMITED

Fourth Defendants

[1]                 The first defendant, second defendants, first-named third defendant and fourth defendants apply to change the allocated trial date in this proceeding – a five week fixture commencing on 29 October 2024. The application is supported by the second- named third defendant.

[2]The plaintiff, Auckland Trotting Club Inc (ATC), opposes a change.

Background

[3]                 The dispute arises out of a large apartment complex development project by the ATC on its land at the Alexandra Park horse racing venue in Epsom, Auckland. On 23 October 2015 ATC and Canam Construction Ltd (Canam) entered into a construction contract in relation to the project. The construction contract price was approximately $78 million excluding GST.

[4]                 On 19 July 2018 ATC gave notice terminating the construction contract. Canam subsequently commenced proceedings in this Court seeking injunctive relief to restrain ATC from calling up the contractor’s performance bond. The matter proceeded to a hearing in November 2018 but was adjourned part-heard and the parties agreed to proceed to arbitration.

[5]                 The arbitral proceedings commenced in 2018 before the Hon Rodney Hansen KC. Canam’s primary claim was that ATC’s termination of the construction contract was unlawful. ATC argued it was entitled to cancel the construction contract and also advanced a counterclaim.

[6]                 Over three substantive awards issued between May 2021 and March 2022, the arbitrator found in favour of ATC and awarded it approximately $85.6 million in damages and arbitration costs.

[7]                 Following the arbitration, ATC commenced this  proceeding  in  July  2022. In essence, it seeks to recover from the defendants the amount awarded to it in the arbitration. The pleadings include claims under s 301 and related sections of the Companies Act 1993, including a contribution against related Canam entities. ATC’s

causes of action against the defendant directors focus upon s 135 and 136 for breach of directors’ duties.

[8]                 Following Canam’s liquidation in 2021, the Canam related companies restructured. ATC seeks creditor remedies for the accounting and disposal of property and the setting aside of dispositions of transfers under ss 344 to 350 of the Property Law Act 2007. ATC also seeks recovery of costs expended in the arbitration by it against non-parties.

Trial date

[9]                 By minute dated 17 November 2022, (then) Associate Judge Andrew directed this proceeding be set down for a five week trial at a time to be set by the registry in consultation with counsel.

[10]              The following day, the registry contacted counsel advising that the Court was nearing the end of 2024 for available trial dates. The same day, counsel conferred. Mr Chisholm KC, counsel for the corporate defendants and the first-named third defendant director, was unavailable for periods in July and August 2024, and between mid-September and mid-October 2024. Thus, in late 2024, counsel were available from mid-October. Counsel’s unavailable dates were provided to the registry the same day.

[11]              It appears a fixture was not allocated at that time.   On 23 January 2023,     Mr Chisholm received notice of a two week trial in another proceeding allocated to commence on 4 November 2024. That proceeding commenced earlier than this proceeding.

[12]              On 25 January 2023, the registry notified counsel that this proceeding had been allocated a five week  fixture commencing on 29 October 2024.  That  same day,  Mr Chisholm alerted the registry to this scheduling conflict and noted that he was now not available for  a  trial  in  this  proceeding  commencing  on  29 October  2024.  He requested that a new trial date be set commencing after 18 November 2024.

[13]              The registry advised counsel that the next available five week trial date would most likely be in early 2025 and requested the Canam defendants to file a memorandum. On 26 January 2023, the Canam directors did so.

[14]              On 4 February 2023, ATC objected to the request for a change of trial date. The registry requested a formal application to adjourn the trial or for counsel to decrease the length of trial to accommodate counsel’s unavailability.

[15]              On 9 February 2023, the application to adjourn was filed with an affidavit in support. On 13 February 2023, ATC filed a notice of opposition. No affidavit was filed in support of the opposition. On 15 February 2023, Lang J directed a hearing of the application.

Legal principles

[16]              Rules 10.2 of the High Court Rules 2016 provides that the Court may, before or at the trial, if it is in the interests of justice, postpone or adjourn the trial for any time, to any place, and upon any terms it thinks just. The interests of justice are the overriding consideration. This includes justice to both parties as well as other litigants and the ability of the Court to manage and hear matters efficiently and within a reasonable timeframe. It is a balancing exercise.

Discussion

[17]              Mr Chisholm submitted this is simply a scheduling conflict and if ATC had co-operated when the issue arose, the delay would likely have been little more than three months. Mr Black, for ATC, submitted that when he was approached to accept this instruction he had retired, or at least was winding down his practice, and he accepted this instruction in the expectation that the proceeding would proceed to trial and be determined by 2024. He advised that if the trial is to be rescheduled into 2025, ATC will need to find alternative counsel.

[18]              I accept that Mr Chisholm’s availability was accurately provided to the registry in late 2022. If the trial date had been allocated then, this fixture would have taken priority over the fixture allocated on 23 January 2023. If there was communication

between the registry and Mr Chisholm immediately after the other fixture was allocated,  the  registry  would  not  have  allocated  this  fixture  commencing  on   29 October 2024. It is only because there was no communication between the registry and Mr Chisholm in the meantime that this fixture allocated on 25 January 2023 clashed with the other fixture. Given the proximate timing of the allocation of senior counsel’s fixtures, this is a scheduling conflict and, even though the trial is 18 months away, not a situation where the relevant defendants should be expected to find alternative counsel. I do not consider the application involves tactical delay on their part.

[19]              Mr Chisholm advised that his two week November 2024 fixture remains in place. As indicated, it was allocated before the fixture in this proceeding and relates to a proceeding commenced earlier than this proceeding, and I do not consider that proceeding should be impacted by the scheduling conflict that subsequently arose.

[20]              I accept that Mr Black’s expectation in November 2022 was that the fixture would be in late 2024 and I accept that, if a late 2024 trial can no longer be accommodated, ATC will need to find alternative counsel. However, as Mr Chisholm submitted, that is a risk ATC took when instructing Mr Black who had retired or at least was winding down his practice. In any event, it is Mr Black’s choice rather than a scheduling conflict that means that if the trial is to  be  rescheduled into  2025,  ATC will need to find alternative counsel.

[21]              ATC has not filed any evidence indicating specific prejudice. I accept there is general prejudice resulting from delay but in this money claim there is little prejudice given that interest accrues. The proceeding is not of an urgent nature. Given the relatively early stage of the proceeding, there is no issue of wasted costs.

[22]I consider that the interests of justice favour changing the trial date.

[23]              Counsel’s updated trial estimate remains five weeks although this would reduce if the strike out/summary judgment application by the first-named third defendant heard by Associate Judge Gardiner on 28 March 2023 is successful.

[24]              A five week fixture is now not available until May 2025. Mr Chisholm has a three week fixture commencing on 5 May 2025.

[25]              In relation to costs, in the circumstances I consider that each party bears some responsibility and I decline to award costs.

[26]              Mr Black suggested consideration be given to assignment of the proceeding to a Judge. Whether that is appropriate is better considered following determination of the strike out/summary judgment application by the first-named third defendant.

Result

[27]I make the following orders:

(a)The five week trial commencing on 29 October 2024 is vacated.

(b)A new five week trial is allocated commencing on 3 June 2025.

(c)There is no order as to costs.

Gault J

Solicitors / Counsel:

Mr M C Black, Barrister, Auckland

Mr G Harford and Ms L M Wallace (plaintiff’s instructing solicitors), Dawson Harford, Auckland Mr D J Chisholm KC, Barrister, Auckland

Mr T Lindsay and Ms MBE Morrison (defendants’ instructing solicitors), Lindsay & Francis, Auckland