BIL NZ Treasury Limited v PriceWaterhouseCoopers New Zealand

[2020] NZHC 2773

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV 2020-485-668

[2020] NZHC 2773

UNDER

The Fair Trading Act 1986 and the Contracts (Privity) Act 1982

BETWEEN

BIL NZ TREASURY LIMITED

First Plaintiff

GL MANAGEMENT PTY LIMITED
Second Plaintiff

GL LIMITED
Third Plaintiff

AND

PRICEWATERHOUSECOOPERS NEW ZEALAND

Defendant

On the papers
Appearances:	R J Hollyman QC and G D Sims for Plaintiffs D J Friar and T G H Smith for Defendant
Judgment:	23 October 2020

JUDGMENT OF GWYN J

(Application for joinder of plaintiff and order backdating joinder)

[1]This file came before me as Duty Judge on 9 October 2020.

[2]       Counsel for the plaintiffs have filed a memorandum  seeking  an order under  r 4.56 of the High Court Rules 2016 (Rules) for joinder of Brierley Holdings Limited (BHL) as a further plaintiff in the proceeding.

BIL v PRICEWATERHOUSE [2020] NZHC 2773 [23 October 2020]

[3]       The memorandum notes that BHL is a wholly-owned subsidiary of the first plaintiff, a member of the same group of companies as the second plaintiff and a subsidiary of the third plaintiff. BHL is one of two parties (the other being the first plaintiff, BIL NZ Treasury Limited) involved in the arrangement that is the focus of the proceedings. The causes of action and relief pleaded in respect of BHL are the same as for the other plaintiffs. In counsel’s submission BHL ought to have been joined as a plaintiff and its presence before the Court is necessary to adjudicate on and settle all questions involved in the proceeding.

[4]        The Court has a broad discretion to join new plaintiffs. Rule 4.2 of the Rules provides:

4.2      Plaintiffs

(1)Persons may be joined jointly, severally, or in the alternative as plaintiffs,—

(a)if it is alleged that they have a right to relief in respect of, or arising out of, the same transaction, matter, event, instrument, document, series of documents, enactment, or bylaw; and

(b)if each of those persons brought a separate proceeding, a common question of law or fact would arise.

(2)On the application of a defendant, the court may, if it considers a joinder may prejudice or delay the hearing of a proceeding, order separate trials or make any order it thinks just.

[5]The criteria in r 4.2 are satisfied here.

[6]       I am also satisfied that, under r 4.56, joinder of the proposed fourth plaintiff is necessary to ensure that all matters in dispute between the parties can be effectively and completely determined.

[7]       Counsel confirms that there will be no prejudice or delay arising from the joinder and the defendant has confirmed that it will abide the decision of the Court on the application for joinder.

Retrospective joinder

[8]       The plaintiffs also seek an order that the joinder of BHL be backdated from 21 August 2020, being the date that the plaintiffs filed an amended statement of claim naming BHL as the fourth plaintiff, together with a memorandum noting that the plaintiffs would seek an order adding BHL as a plaintiff.

[9]       The memorandum filed by counsel for the plaintiffs notes that as the matters covered in the proceeding go back to 1998, and the defendant has raised limitation defences, it is important that BHL is added as a plaintiff with delay.

[10]     I have no information before me as to potential limitation issues, other than the plaintiffs’ memorandum. As Grice J observed in Winton v Winton,1 the limitation regime is carefully designed to enable the balancing of various rights and interests to ensure the proceedings are dealt with fairly. It is not appropriate to attempt to deal with those interests in response to a memorandum and without the full picture being available to the Court.

[11]     I sought the view of counsel for the defendant on the question of retrospective joinder. By memorandum of 15 October 2020, counsel advised the Court that, although the defendant will abide the decision of the Court in relation to joinder per se, it opposes the application for retrospective joinder.

[12]     There has been a subsequent exchange of memoranda by the parties. Counsel for the defendant has referred me to the decision of McLachlan v MEL Network Ltd2 where Potter J cited Ketteman v Hansel Properties3 in support of the proposition that the “action is brought” on “the date upon which the defendant is joined as a party in accordance with the rules of Court.” (Potter J’s emphasis). The Court rejected a submission that the date of application for joinder is the operative date for limitation purposes.4 Counsel for the defendant’s second memorandum reinforces the

1      Winton v Winton [2018] NZHC 1323 at [31]-[35].

2      McLachlan v MEL Network Ltd HC Auckland CIV-1998-404-253, 9 December 2004, Potter J.

3      Ketteman v Hansel Properties [1987] 1 AC 189 (HL).

4      McLachlan v MEL Network Ltd above n 2, at [60]-[61].

defendant’s view that joinder should be in accordance with “the usual rule”, that is it should take effect as of the date it is made.

[13]     The plaintiffs point to Commerce Commission v Air New Zealand Limited5 as authority for the proposition that backdating of a joinder application would not be contrary to principle and caselaw. In that case, an order for joinder was deemed to have been made as at the date of hearing, rather than the date the order was made.6

[14]     I am satisfied that the “usual rule” is that the order for joinder applies from the date it is made. That is not to say there are not cases where it is appropriate to depart from the usual rule. The question is whether this is one of those cases.

[15]     Counsel for the plaintiffs refer7 to the lapse of time since the date the plaintiffs filed an amended statement of claim adding BHL as a plaintiff, 21 August 2020. Counsel note that the defendant responded to the plaintiffs’ request as to its position on joinder on 25 September 2020, and the memorandum seeking the joinder order was filed on 2 October 2020.

[16]     Accordingly, the plaintiffs seek an order for joinder as at 21 August 2020, or alternatively, 2 October 2020. As to the latter option, the plaintiffs say that the defendant should not be able to benefit from any delay in the order being made “when such delay has been created by the defendant raising issues after having consented”.

[17]     I reject that submission. The plaintiffs’ 2 October 2020 memorandum seeking joinder noted (at paragraphs 2 and 8) that “the defendant has confirmed it will abide any decision of the Court on the issue of joinder”. The memorandum did not advise the Court of the defendant’s position as to backdating of any order for joinder and it became apparent from correspondence from the defendant’s counsel, on service of the memorandum, that the plaintiffs had not conferred with the defendant on this question. It was left for the Court to follow up with the defendant as to its position on backdating.

5      Commerce  Commission  v  Air  New  Zealand  Limited   HC  Auckland   CIV-2009-404-8352, 10 December 2009, Potter J.

6      Commerce Commission v Air New Zealand Limited, above 5 at [35].

7      Memorandum of 16 October 2020.

[18]     Counsel for the defendant has now made the defendant’s position very clear.8 First, that it agreed to abide the decision of the Court on joinder per se, rather than consenting to joinder; and, second, it opposed any backdating of the order for joinder.

[19]     While there has been a short delay between the Court’s receipt of the plaintiffs’ request for joinder and this order that delay has largely been occasioned by the plaintiffs’ failure to adequately inform the Court of the defendant’s response to all aspects of the application in its original memorandum seeking joinder.

[20]     In the circumstances outlined above, and, having regard to the lack of information before the Court as to the impact of the timing of joinder on any limitation defences, I have reached the view that the order for joinder ought not to be backdated.

Result

[21]The application for joinder of BHL as a plaintiff is granted.

[22]The application for backdating the order for joinder is dismissed.

Gwyn J

Solicitors:

WynnWilliams, Auckland Bell Gully, Wellington

8      Memoranda of counsel for the defendant 15 October 2020 and 20 October 2020.