Bridgeman's Ready Mix Limited v Huntly Quarries Limited HC Hamilton CIV 2004-419-1741
[2005] NZHC 1294
•11 March 2005
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
CIV 2004-419-001741
BETWEEN BRIDGEMAN’S READY MIX LIMITED
Appellant
AND
HUNTLY QUARRIES LIMITED
Respondent
Hearing: 11 March 2005
Appearances: Ms N R Hall for Appellant
Mr D M O’Neill for Respondent Judgment: 11 March 2005
ORAL JUDGMENT OF VENNING J
Solicitors:Simpson Grierson, Private Bag 92518, Auckland Nielsen Law, PO Box 1108, Hamilton (D Nielsen)
Copy to: D M O’Neill, Barrister, PO Box 815, Hamilton
BRIDGEMAN’S READY MIX LIMITED V HUNTLY QUARRIES LIMITED HC HAM CIV 2004-419- 001741 [11 March 2005]
Introduction
[1] This is an appeal from a decision in the District Court declining the appellant’s application for leave to give notice of objection to the proceeding being tried in the District Court and for transfer to the High Court.
Background
[2] The respondent carries on business at Huntly as a quarry owner. It has supplied aggregate to a number of companies within the Bridgeman Concrete Group. The appellant is one of those companies.
[3] Apart from the appellant, which operates in the Napier/Hastings area, there are a number of other companies within the Bridgeman Concrete Group, including:
· Bridgeman Concrete (Hamilton) Limited;
· Bridgeman Concrete Akld Limited; and
· Bridgeman Concrete (Tauranga) Limited.
[4] The respondent supplied aggregate to the companies within the Bridgeman Concrete Group from May 2003 to August 2003, to a value of $116,743.85. The respondent has not been paid for that aggregate supplied. It issued these proceedings in the District Court at Huntly against the appellant. The respondent sought summary judgment.
[5] The proceedings were issued on 18 February. They were served on 27 February 2004. The application for leave was brought on 24 March 2004. The appellant seeks to have the proceedings transferred to the High Court including the application for summary judgment.
[6] It is the appellant’s case that the respondent sued the wrong defendant, and that the proper defendants are in fact Bridgeman Concrete (Hamilton) Ltd, Bridgeman Concrete Akld Ltd and Bridgeman Concrete (Tauranga) Ltd. The appellant also says that the respondent has overcharged those companies for the aggregate in the past and has rendered invoices for amounts in excess of the aggregate actually supplied. The appellant says that the companies within its group have a set-off that exceeds the respondent’s claim and to the extent that their claim exceeds the claim a counterclaim for the balance. I understand that the respondent accepts that it initially sued the wrong defendant and the correct defendants have now been joined in the District Court proceeding.
District Court Decision
[7] The District Court Judge declined the appellant’s application referring inter alia to:
· There were no identifiable particular intricate questions of law that would suggest the matter is better suited to the High Court.
· There is no information available, even if it were the High Court in Hamilton, which was to deal with the matter, that the Court would be able to deal with it more rapidly than the District Court.
[8]In terms of the summary judgment application the Judge found:
· the case did not involve questions of general public interest beyond the rights of the parties.
· There was no conflict of authorities on the matter.
· The questions in issue were not affected by other litigation before the High Court.
· There were no novel or difficult questions of law arising.
[9] The District Court Judge then noted generally, referring to a decision of Doogue J in R v Franklin (High Court, Wellington M265/98) that:
· the matter was within the jurisdiction of the District Court;
· the High Court has other commitments as an appellant review Court;
· and what should normally be a relatively straightforward contested summary judgment application would be further frustrated by the application for leave.
[10] In the result the appellant failed to persuade the Judge that failure to grant the application would cause a miscarriage of justice. The Judge noted appeal rights would remain.
[11]For those reasons the District Court Judge declined the application.
[12]The appellant appeals from that decision.
The appellant’s case
[13] The appellant’s case is that the Judge in the District Court misdirected himself and failed to apply the correct test to the application for leave under s 43 (1) of the District Courts Act 1947.
The respondent’s case
[14] For the respondent, Mr O’Neill submitted that the decision was made by the District Court Judge in the exercise of his discretion and this Court should not interfere with that exercise. Next he submitted that the appellant had not led any evidence to provide an adequate explanation for the delay in order to justify departure from the time limit. Then he emphasised that the claim by the other defendants in the Bridgeman Concrete Group can proceed in the separate proceedings and finally he submitted the Judge was correct as a matter of policy to retain the proceeding within the District Court.
The relationship between s 43 and 45A
[15] Section 43 provides for the transfer of the proceeding as a whole to the High Court. Section 45A, which was inserted after the summary judgment jurisdiction was extended to the District Court, provides for the transfer of an application for summary judgment. Section 45A contemplates that an application for summary judgment may be transferred to the High Court leaving the substantive proceedings in the District Court.
[16] Different considerations apply to transfers under the different sections of the Act, ss 43 and 45A. In the event proceedings are transferred under s 43 and the proceedings have an interlocutory application for summary judgment within them then the entire proceedings, including the summary judgment application, is transferred. In such a case there is no need for a separate application for transfer of the summary judgment proceedings under s 45A.
[17] To that extent, in this case where the application is pursued under s 43 (1) for the transfer of the proceedings as a whole, it is unnecessary and indeed inappropriate to have regard to the authorities relevant to an application for the transfer of an application for summary judgment under s 45A.
Section 43 (1)
[18] Section 43 provides for the transfer of proceedings to the High Court in three situations:
· first, where the claim exceeds $50,000;
· second, where the claim does not exceed $50,000; and
· finally, a general transfer provision, s 43 (6) which can be regarded as a catch-all provision.
Different considerations apply.
[19] Section 43 (1) provides a defendant to a claim in the District Court that exceeds $50,000 has the absolute right to have those proceedings heard in the High Court. All that is required to exercise that right is for the defendant to issue a notice within the prescribed time. In this case r 252 of the District Court Rules provides a period of seven days (after service) as the prescribed time. If notice is given within that time then the District Court Judge is directed to order a transfer of the proceedings to this Court.
[20] In the present case the time provided expired on 6 March. When the time for giving notice as of right has expired, as in this case, then s 43 (1) requires an applicant to obtain leave of the Court to issue the notice. The application for leave in this case was filed on 24 March some 18 days after the right period as of right expired.
[21] The leading authority on an application for leave to transfer under s 43 (1) is Industrial Assets Limited v Allingham [1953] NZLR 679. In that case the Court held an application for leave under s 43 (1) is effectively an application for enlargement of time and should be dealt with in accordance with the principles applicable to such applications. See also Potemkin v Protector Safety Limited & Anor (unreported, Court of Appeal, CA 77/87, 7 December 1987).
In my opinion, applications for such leave should be dealt with on the principles which have been applied in general to applications for enlargement of time, the true question on the application to the Magistrate being, not whether the applicant can show that the case is one more fit to be dealt with in the Supreme Court, but whether, under all the circumstances, the right of removal which the Legislature gave has been lost beyond recall by the applicant’s acts or omissions in the course of the proceedings. In other words, one should start from the view that the applicant possessed a right, and one to which the Legislature has apparently at all times attached some importance; and the question is whether he ought nevertheless to be compelled to submit to the trial in the Magistrates’ Court of an action which, had he acted promptly or circumspectly, he could have removed as of right into the Supreme Court. …
As was said in 14 Encyclopaedia of the Laws of England, 2nd Ed., 106 (quoted in 1952 Annual Practice 1375 in notes to O.64, r.7):
An application to enlarge time is an appeal to the Court for increased facilities to carry on the action, and the Court in such a case is always disposed to act with clemency towards the applicant, provided he can show that his opponent will not be thereby be injuriously affected.
(p 683 per F B Adams J)
[22] With respect to the District Court Judge in this case in my judgment he fell into error in applying the tests that he did and the considerations he had regard to in reaching his decision as those tests and considerations were more applicable to an application for transfer generally or to the transfer of a summary judgment application rather than an application for leave to transfer under s 43 (1).
[23] I accept Mr O’Neill’s submission as to the principle that where a decision involves an exercise of discretion this Court should be very reluctant to interfere with it on appeal. However, that is not to say a decision cannot be reviewed on appeal. Rather as was noted in Alex Harvey Industries Limited v CIR (2001) 15 PRNZ 361 p 364 where the appeal is against a discretion the onus is on the appellants to show:
… that the Judge acted on a wrong principle; or that he failed to take into account some relevant matter or that he took account of some irrelevant matter or that he was plainly wrong.
Where the appellate Court finds, as I have that the Judge at first instance acted on a wrong principle it is proper for this Court to revisit the matter.
[24] In approaching the matter in the way he did in this case the District Court Judge fell into error and applied the wrong principles to the application for leave. That is apparent from the expression of his reasons for declining the application, including the reference to the principles to apply on an application for transfer of a summary judgment application and the citation of the general principles relating to transfer referred to by Doogue J in R v Franklin (supra).
[25] I now turn to consider the matters directly relevant to an application for an extension of time, as were identified in the Industrial Assets case. They are:
· the length of delay;
· whether the other party will suffer serious prejudice; and
· whether refusal to grant leave will potentially cause a miscarriage of justice.
[26] There is no explanation given for the delay in the affidavit in support of the application for transfer as observed by Mr O’Neill. However, the delay is a relatively short period of some 18 days. Mr O’Neill properly conceded the delay of itself was not inordinate.
[27] Given the material before the Court in relation to the summary judgment application it is apparent it would have taken the defendant some time to ascertain which of the parties it considered were the correct defendants and to identify the claims that each of those had against the plaintiff in order to support their position. To a degree the difficulty in relation to the parties has been acknowledged by the respondent itself by joining the correct defendants to the proceedings. The application was made as the first step taken by the appellant in the District Court proceedings. It was made before the time for filing a statement of defence was due in those proceedings. It was made some three days outside the period when a notice of opposition to the summary judgment application was required. In those circumstances I do not consider the delay to be a factor that weighs against the appellant.
[28] The next issue is that of serious prejudice. The only real prejudice to the respondent is the delay in having the application for summary judgment determined. Regrettably there has been a significant delay in having that application determined. To a large degree the reason is it seems there was a lengthy delay in the District Court before the application for leave was able to be dealt with. There is no material before the Court at present to suggest when an application for summary judgment could be heard in the District Court as opposed to in the High Court at Hamilton. From my inquiries I would not have thought there is much difference in the matter from here on. If anything one might expect an earlier hearing in the High Court. To that extent I note that the Judge in the District Court considered that such delays as there would be in hearing the summary judgment application did not amount to serious prejudice in any event.
[29] That leaves the issue of overall justice. It is apparent there are issues that the appellant wishes to raise against the respondent’s claim by way of the set-off and counterclaim. The respondent has for its part, perhaps understandably given the
structure of the Bridgeman Concrete Group and without any criticism of it or its advisers, initially sued the wrong party. That has now been addressed. The correct defendants however are entitled to raise by way of argument the set-off and to the extent their claim exceeds the plaintiff’s claim a counterclaim for the overpayment for the aggregate. It is the set-off which is primarily in issue in relation to the summary judgment proceedings. It will be a matter for the Judge determining the respondent’s summary judgment application to determine whether the claims raised by the appellants qualify as a set-off so that it would be inappropriate to enter judgment against them without first having their claims heard.
[30] There is nothing in the actions of the appellant that would justify denying it the right to have the claim against it heard in the High Court. It has to be borne in mind that the application is made under s 43 (1). The claim against the appellant exceeds the $50,000 by a significant sum and, as noted, the delay was not in my view material. It is no answer to point to appeal rights as the District Court Judge did. Overall I am satisfied that if anything the interests of justice favour the appellant’s position on the application under s 43 (1).
[31] For the above reasons the appeal is allowed. There will be an order granting the appellant leave to give notice of objection and directing that the proceeding including the respondent’s application for summary judgment is to be transferred to the High Court at Hamilton.
Costs
[32] The appellant has effectively put itself in a position where it has to seek the leave of the Court. For whatever reason it has allowed the period of right to expire. In the circumstances while the appellant has succeeded I direct costs are to lie where they fall on this appeal.
Hearing of Summary Judgment
[33] As to the future conduct, I am not sure that I can fix terms on the grant of leave. Section 43 (1) does not seem to contemplate that. However, for the assistance of the parties I indicate my view of the appropriate future progress of the proceeding. Once these proceedings are transferred to the High Court at Hamilton the plaintiff’s application for summary judgment should be heard in that Court.
[34] If the application for summary judgment is dismissed then at that time the issue of the appropriate venue and consolidation with the defendant’s other proceedings extant in the High Court at Auckland could be addressed. For my part I consider the respondent’s application for summary judgment should be heard in the High Court at Hamilton first before that issue is addressed. Obviously during the course of that summary judgment hearing reference can be made by the appellant/defendant to the other proceedings and the set-off.
G J Venning J
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