Bank of New Zealand v Davey
[2021] NZHC 1816
•16 July 2021
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2021-409-000046
[2021] NZHC 1816
BETWEEN BANK OF NEW ZEALAND
Plaintiff
AND
MATTHEW ROBERT DAVEY
Defendant
Hearing: 16 July 2021 Counsel:
K M Paterson and C F Olds for Plaintiff C Lin for Defendant
(Oral) Judgment:
16 July 2021
(ORAL) JUDGMENT OF ASSOCIATE JUDGE PAULSEN
This oral judgment was delivered by me on 16 July 2021 at 2.15 pm
Registrar/Deputy Registrar Date: 16 July 2021
BANK OF NEW ZEALAND v DAVEY [2021] NZHC 1816 [16 July 2021]
The application
[1] The plaintiff, Bank of New Zealand (the Bank), has applied for summary judgment against the defendant, Matthew Robert Davey (Mr Davey), pursuant to his guarantee in favour of the Bank in respect of the obligations of Fortress Information Systems Ltd (in rec and liq) (Fortress).
[2] Mr Davey opposed the application for summary judgment and it was set down to be heard on 12 July 2021. It was then adjourned on Mr Davey’s application to be heard today, 16 July 2021. Mr Davey has now filed a second application to adjourn the hearing. Specifically, Mr Davey applies for orders:-
(a)granting him leave to amend his notice of opposition and to file further evidence in opposition to the summary judgment application;
(b)to vacate the hearing today; and
(c)for orders incidental to the making of the orders in (a) and (b) above.
[3] If leave were to be granted to Mr Davey to file an amended notice of opposition and further evidence he would not be in a position to proceed with the hearing today. No draft amended notice of opposition or affidavits have been provided. The granting of the order would necessarily require me to adjourn the summary judgment application.
[4]The Bank opposes Mr Davey’s application in its entirety.
Factual background
[5] Mr Davey is the director of Fortress. It had banking facilities with the Bank. These were guaranteed by Mr Davey. Fortress defaulted on its facilities in May and June 2020. The Bank made demand upon Fortress on 28 July 2020. It then made demand upon Mr Davey pursuant to his guarantee on 3 August 2020. Fortress went into receivership and then liquidation later in 2020.
[6] This proceeding was filed on 22 February 2021 and accompanied by the application for summary judgment. The Bank seeks judgment against Mr Davey for
$3,851,640 plus interest and costs.
[7] The application was to be called before the Court for the first time on 29 April 2021.
[8] Mr Davey was personally served with this proceeding at Sydney, Australia on 3 March 2021. Mr Davey resides at Sydney. I understand he has lived and worked from there for some time and operated his businesses in New Zealand remotely. Mr Davey instructed New Zealand lawyers to represent him defend the Bank’s claim.
[9] On 23 April 2021, Mr Davey filed a notice of opposition and affidavit in opposition to the summary judgment application. He said he had not been able to meaningfully instruct his lawyers because he did not have access to relevant documents. To deal with this, he requested the application for summary judgment be adjourned to a date after 14 June 2021 to allow time for him to file an “updating affidavit”.
[10] Counsel conferred over appropriate timetable directions. This culminated in the filing, on 12 May 2021, of a joint memorandum in which they sought directions, inter alia, the summary judgment application be heard on 12 July 2021 and Mr Davey was to file his updating affidavit by 27 May 2021. In a minute of 13 May 2021, I made the directions sought.
[11] On 3 June 2021, the Bank’s counsel filed a memorandum expressing concern that Mr Davey had not filed his updating affidavit. The affidavit was filed on 4 June 2021.
[12] Mr Davey’s counsel filed a memorandum on 8 June 2021 consenting to amended directions relating to the filing of the Bank’s reply evidence and the parties’ submissions for hearing on 12 July 2021. The directions included that Mr Davey was to file his submissions in opposition to summary judgment by 7 July 2021. Those directions were made on 13 May 2021.
[13] The Bank filed its reply affidavits on 24 and 25 June 2021. Its submissions were filed on 2 July 2021 (which was in accordance with the timetable). Mr Davey, however, did not file his submissions as required on 7 July 2021.
[14] On 8 July 2021, counsel for the Bank filed a further memorandum expressing concern that Mr Davey’s legal submissions had not been filed.
[15] On 9 July 2021, Mr Davey’s counsel filed a memorandum seeking an adjournment of the scheduled hearing on 12 July 2021 predominantly on the basis that:
(a)Mr Davey had not been able to consider the Bank’s reply evidence or submissions because of the public health response in Sydney to the COVID-19 pandemic; and
(b)Mr Davey wished to raise new grounds in opposition to the summary judgment application.
[16] A telephone conference was convened on 9 July 2021. Mr Davey did not make out grounds for an adjournment. As an indulgence, and so that his counsel had further time to prepare submissions, I adjourned the hearing of the Bank’s summary judgment application from 12 July 2021 to 16 July 2021. Mr Davey was directed to file his submissions by 4.00 pm on 13 July 2021. That gave his counsel the weekend and both 12 and 13 July 2021 to prepare the submissions.
[17] Mr Davey did not file his submissions on 13 July 2021. Instead he instructed his counsel not to file submissions but to file this application.
The grounds for the adjournment
[18] As a starting point, I observe the application is notable for the fact that Mr Davey has not proposed a timetable for the filing of an amended notice of opposition nor does he suggest an adjournment to a new date of hearing. He proposes the hearing be vacated and the parties confer on a new timetable which presumably would include the filing of an amended notice of opposition and affidavits, the Bank’s
reply affidavits and the parties’ legal submissions. The effect of all of that would be, as the Bank submits, to return the proceeding effectively to square one.
[19] The grounds advanced by Mr Davey in support of this application largely mirror the grounds relied upon for his unsuccessful application of 9 July. Mr Davey says the COVID-19 Lockdown in Sydney has limited his ability to engage with the proceeding and delayed the filing of this application. The Lockdown has, he says, necessitated significant alterations to his working, family and other arrangements.
[20] Mr Davey says, upon reviewing the Bank’s reply evidence and submissions he realised that his notice of opposition does not adequately reflect all the grounds he wishes to raise in defence of the Bank’s claim. He deposes he has been searching for documents but is having trouble locating evidence that he needs in order to amend his opposition.
[21] As to what might be contained in an amended notice of opposition, Mr Davey identifies three matters. First, Mr Davey wishes to raise an allegation the Bank was negligent in the manner it handled Fortress’s request for lending in 2020. Mr Davey says, as a result of the Bank’s negligence Fortress lost the opportunity to complete its application for further funding and later ran into cashflow issues which put an end to the incomplete lending application. Second, he says he is searching for his copies of guarantees and other documents he signed with the Bank and, “may amend my Opposition and raise a new ground on this basis”. Third, he refers to “other possible grounds” of defence upon which he has not received full merits advice and does not disclose.
Mr Davey’s submissions
[22] For Mr Davey, Mr Lin argues the overall justice of the case favours granting an adjournment. He asks me to take into account Mr Davey’s personal circumstances and in particular that during 2020 he was pre-occupied with attempting to deal with the problems of Fortress and throughout there has been disruption caused by the COVID-19 pandemic and resulting lockdowns. While Mr Lin acknowledges there is no medical evidence before the Court he advises from the Bar that his instructions are that Mr Davey has had difficulty coping with these matters. He points out, also, that
at the present time Sydney is in lockdown which has been a reason for this late application.
[23] Mr Lin also argues that there can be no real prejudice to the Bank in granting the adjournment, whereas refusing the adjournment will inevitably result in Mr Davey’s bankruptcy.
The issue
[24] The issue on this application is whether it is in the interests of justice to adjourn the summary judgment hearing. If it is, it will follow that Mr Davey should be granted leave to raise any new grounds of opposition.
[25] Although not relied upon in the notice of application, the relevant rule is r 7.42 of the High Court Rules 2016 which provides:
The hearing of an application may, from time to time, be adjourned on any terms that the Judge thinks just.
[26] There is a parallel provision to r 7.42 in r 10.2 of the High Court Rules in relation to trials.
[27] The commentary in McGechan on Procedure [HR7.42.01] notes justice must be considered both as between the parties and the interests of other litigants in achieving what is the most efficient use of court resources.
[28] In a case where the adjournment is sought to allow a party to raise what are said to be new grounds of defence/opposition, the relevant considerations in determining where the interests of justice lie will include such matters as: –
(a)the importance of the principle that a party should have every opportunity to ensure that the real controversy goes to trial so as to secure the just determination of the proceeding;
(b)the timing and reasons for the application for an adjournment;
(c)the merits of the proposed amended grounds of defence/opposition;
(d)the risk of prejudice to other parties; and
(e)the effect of the adjournment on public resources and the integrity of court processes.
Discussion
[29] Mr Davey’s application is made very shortly before the hearing, after a similar application was refused and after he has been given more time to instruct his counsel to prepare for the hearing.
[30] Notwithstanding that I accept Mr Lin’s submission that in 2020 Mr Davey would have been largely pre-occupied with the affairs of Fortress, there can be no suggestion he has not had sufficient time to prepare and present his defence to the Bank’s claim. The proceeding was served on Mr Davey on 3 March 2021 which is over 4 months ago. He has been in receipt of legal advice since around that time and the agreed timetable made accommodations for his circumstances.
[31] I do not accept the COVID-19 situation in Sydney is a reason for Mr Davey’s asserted inability to present a full defence. Mr Davey has filed two affidavits in opposition to the summary judgment application. Because he said, in his first affidavit, he was having difficulty obtaining relevant documents he was given time to file a further affidavit. That further affidavit was reasonably substantial.
[32] Importantly, while Mr Davey says he only came to reflect upon his grounds of opposition after receiving the Bank’s reply evidence, the Bank’s reply evidence raised nothing new. It was in reply to Mr Davey’s updating affidavit. Nothing in it could have been a surprise to him.
[33] Mr Davey also says he wished to attend the hearing today in person. In the present circumstances that is simply not possible. His attendance is not required but arrangements could have been made for him to attend remotely by audio visual link if a request had been made. No request was made.
[34] Mr Davey has not identified any new or meritorious grounds he wishes to raise in opposition to the Bank’s claim. The complaint he makes as to the manner in which the Bank dealt with Fortress’s lending request is already before the Court. To the extent that he now seeks to frame this as a claim in negligence, that argument was always available to him and could have been presented today.
[35] As to his evidence he is searching out documents signed with the Bank, there is no challenge to the documents produced by the Bank. It appears Mr Davey is in search of a defence without any realistic expectation of finding one. This is reinforced by the third matter advanced being the vague “other possible grounds” of defence.
[36] Notably also, Mr Davey appears to have no answer to the Bank’s position that any claims he may wish to raise against it do not preclude the Bank from obtaining summary judgment because of the no set-off clause in the guarantee.
[37] Mr Davey submits the Bank will not suffer prejudice should the adjournment be granted. I do not accept that is necessarily the case. Mr Davey has not provided any detail of his financial circumstances from which such an assessment could be made. In any event, if the Court were to grant an adjournment the Bank’s wasted costs would be significant. Mr Davey is not offering to pay all wasted costs nor is there evidence he is in a position to pay them if he was ordered to do so.
[38] I do not accept the submission that it would be unfair to enter summary judgment because that will inevitably result in Mr Davey’s bankruptcy. The fact summary judgment is entered will not preclude Mr Davey pursing any claims against the Bank or defending bankruptcy proceedings on the basis he has cross-claims against the Bank.
[39] Finally, there is a public interest factor. In my view, there are at least two aspects to this. First, there is the public interest in ensuring the efficient use of public resources which includes the expectation that cases will proceed on the days they are set down. Second, is integrity of the court’s processes. Relevantly, the summary judgment procedure is designed to ensure that plaintiffs who can establish a defendant has no defence to their claim obtain immediate judgment and that justice is not delayed
or denied by a defendant advancing unmeritorious defences or engaging in procedural manoeuvring.
[40] In summary, Mr Davey has had sufficient time to prepare and present his defence. I do not accept he has been prevented from doing so by disruption caused by COVID-19 or any other factors. He has not raised any issues that are not already before the Court that he could rely on in defence of the Bank’s claim. He has not satisfied me, either, that there may be matters that he could put before the Court that would provide an arguable defence to the Bank’s claim. The Bank will suffer some prejudice if the adjournment is granted (even if limited to wasted costs) and the public interest weighs heavily against granting an adjournment.
Result
[41]Mr Davey’s application is dismissed.
[42] Costs will be reserved pending the hearing of the Bank’s application for summary judgment.
O G Paulsen
Associate Judge
Solicitors:
Buddle Findlay, Christchurch Norling Law Limited, Auckland
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