Burnside v Burnside
[2024] NZHC 1735
•27 June 2024
IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY
I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE
CIV-2023-470-002
[2024] NZHC 1735
BETWEEN ROBERT MICHAEL BURNSIDE VERA IRENE BURNSIDE
Plaintiffs
AND
STEPHEN JOHN BURNSIDE
First Defendant
AND
WAI-RONGOA AROHANUI LIMITED
Second Defendant
Hearing: 25 June 2024 Counsel:
D M Fraundorfer for the Plaintiffs No appearance for the Defendants
Judgment:
27 June 2024
JUDGMENT OF ASSOCIATE JUDGE BRITTAIN
This judgment was delivered by me on 27 June 2024 at 12 Midday.
Pursuant to Rule 11.5 of the High Court Rules.
…………………..
Registrar/Deputy Registrar
Counsel:
Holland Beckett, Tauranga
BURNSIDE v BURNSIDE [2024] NZHC 1735 [27 June 2024]
Introduction
[1] The first named plaintiff, Robert Burnside (Robert) and the first defendant, Stephen Burnside (Stephen) are brothers. Stephen is the sole shareholder and director of the second defendant, Wai-Rongoa Arohanui Ltd (Wai-Rongoa). He is now self-represented.
[2] Following a subdivision of land in 2004, Robert owned the property at 233 Landlyst Road, Waihi, comprising Lots 2 and 3 on Deposited Plan (DP) 90136. Stephen, or his interests, owned the property at 245 Landlyst Road, comprising Lot 4 on DP 90136. At some point, Lot 4 was transferred by Stephen to Wai-Rongoa, the current owner.
[3] In 2021, Robert subdivided Lot 3 into two lots, and sold those lots to unrelated parties. Those parties are not involved in this litigation. Robert continues to own Lot
2. He lives there with his wife, Vera Burnside (Vera), the second named plaintiff. Stephen lives on Lot 4.
[4] Between 2013 and 2020, various issues arose between Robert and Stephen from their relationship as neighbours, related to easements created on the subdivision in 2004 and a common boundary fence. Those historic disputes are now the subject of claims and counterclaims in these proceedings.
[5] These proceedings began life in the District Court. On 29 November 2022, Judge Ingram transferred the proceedings to the High Court, because it appeared that Wai-Rongoa was in substance challenging the validity of the subdivision in 2004, including the registration of the easements on the titles to Lots 2, 3 and 4 created by the subdivision. Judge Ingram considered that those matters were beyond the jurisdiction of the District Court.1
[6]This judgment determines four interlocutory applications:
1 Burnside v Wai-Rongoa [2022] NZDC 22975.
(a)by Stephen and Wai-Rongoa for an order restraining Mr Fraundorfer, counsel for Robert and Vera, from continuing to act for them;
(b)by Stephen and Wai-Rongoa for an order that I recuse myself;
(c)by Robert and Vera for an order striking out part of Stephen and Wai-Rongoa’s counterclaim; and
(d)by Stephen for leave to continue to represent Wai-Rongoa in these proceedings.
The application to restrain counsel from acting
[7] This Court has inherent jurisdiction to restrain counsel from appearing before the Court in a proceeding, where to allow them to do so may impair the integrity of the judicial process.2
[8] The application is dated 30 April 2024. The only coherent ground advanced in support of the application is that Mr Fraundorfer is acting with a conflict of interests. Reference is made to a conflict between Mr Fraundorfer’s personal interests and the interests of his clients, Robert and Vera, and to Mr Fraundorfer having an interest in the matters that are the subject of the proceedings.
[9] Mr Fraundorfer has no interest in the subject matter of this litigation. Stephen is unable to articulate precisely what the alleged conflict of interests is.
[10] The application goes on to allege that Mr Fraundorfer is assisting in a fraud, and engaging in bullying behaviour towards Stephen. No particulars are given and there is no evidential basis for these allegations. These grounds are scandalous.
[11] Stephen’s application is misconceived and hopeless. There is no basis to restrain Mr Fraundorfer from acting.
2 Black v Taylor [1993] 3 NZLR 403 (CA).
Recusal
[12] The application for my recusal is dated 17 June 2024. As I understand the application, two grounds are advanced:
(a)I was employed as a solicitor by the law firm Holland Beckett from 2000 to 2002. Mr Fraundorfer was until recently a partner in Holland Beckett, and this gives rise to an appearance of bias; and
(b)dissatisfaction with the procedural directions that I have made in these proceedings to date.
[13] At the time that I was employed by Holland Beckett, Mr Fraundorfer was not a partner or an employee of that firm. It is a coincidence that Mr Fraundorfer and I have both been engaged by Holland Beckett at different stages of our careers. While I was employed by Holland Beckett, I did not carry out any work for any of the parties to these proceedings.
[14] A fair minded, fully informed observer would not have a reasonable apprehension that I might not bring an impartial mind to the resolution of the questions that I am required to decide in these proceedings.
[15] Stephen’s dissatisfaction with my procedural directions to date does not amount to grounds for my recusal. Stephen had the option of seeking variations of the directions under r 7.50 of the High Court Rules 2016 (HCR), or to file an application for leave to appeal under s 56 of the Senior Courts Act 2016. He did not pursue either option.
[16]There is no basis for me to recuse myself.
The application to strike out part of the counterclaim by Stephen and Wai-Rongoa
The pleadings
[17]By their pleadings, the parties agree that the 2004 subdivision created:
(a)a right of way over Lot 4 in favour of Lot 3 (the right of way);
(b)a water easement over Lots 2 and 3 in favour of Lot 4;
(c)a water easement over Lot 4 in favour of Lot 3.
[18] Robert and Vera’s most recent pleading is their second amended statement of claim dated 18 January 2022, originally filed in the Waihi District Court (the statement of claim). There are two causes of action.
[19] In the first cause of action, Robert and Vera allege that Stephen and Wai-Rongoa wrongfully denied them access to the right of way on several occasions between 2012 and 2018 and interfered with Lot 3’s water rights.
[20] In the second cause of action, Robert and Vera allege that Stephen trespassed on their land on occasions between 2016 and 2020.
[21] The damages that Robert and Vera claim in respect of both causes of action are, at most, $70,000. Stephen and Wai-Rongoa deny interfering with Robert and Vera’s rights, and Stephen denies trespassing.
[22] Stephen and Wai-Rongoa have filed a second amended statement of defence and counterclaim dated 30 April 2024. Paragraphs [1] to [38] respond directly to paragraphs of the same number in the statement of claim. The counterclaims then follow:
(a)The first cause of action in paragraphs [39] to [58] is a claim for alleged breaches of the Fencing Act 1978 (the Act), seeking orders that a fence constructed by Stephen between Lots 3 and 4 was justified under the Act, and requiring Robert and Vera to pay $11,464 towards the cost of construction.
(b)The second cause of action in paragraphs [59] to [65] alleges that work undertaken on the right of way by Robert and Vera was unlawful and
caused damage to the land. Stephen and Wai-Rongoa seek an order that the land be reinstated.
(c)The third cause of action in paragraphs [66] to [73] alleges that Robert cut off the water supply from Lot 3 to Lot 4 in breach of the terms of the easement, seeking declarations and damages for the costs incurred in obtaining an interim water supply to Lot 4.
(d)The fourth cause of action in paragraphs [74] to [82] alleges that Robert and Vera arranged for branches to be cut off trees on Lot 4, followed by wrongful conversion of the felled limbs for use as firewood. Damages of $10,000 are sought.
(e)The fifth cause of action begins in paragraphs [83] to [86] by alleging that Vera assaulted Stephen during an altercation between them, constituting a battery. Paragraphs [87] to [93] are discursive and incoherent.
[23] Paragraphs [1] to [86] of the statement of defence and counterclaim are conventional in form and comply with the requirements for pleadings prescribed in the HCR.
[24]Paragraphs [87] to [93] include:
(a)a claim for an indemnity based on some form of estoppel, arising out of an incident when Robert and Vera arranged for the construction of a concrete driveway on the right of way;
(b)references to the concepts of time and living entities;
(c)allegations that Stephen has suffered psychological and physical harassment; and
(d)a claim for damages of $7,000,000.
[25] Robert and Vera seek an order striking out paragraphs [87] to [93] of the counterclaim on the grounds that they are frivolous or vexatious, or otherwise an abuse of process.
Strike out principles
[26] Pursuant to r 15.1(1) of the HCR, the Court may strike out all or part of a pleading if it:
(a)discloses no reasonably arguable cause of action;
(b)is likely to cause prejudice or delay;
(c)is frivolous or vexatious; or
(d)is otherwise an abuse of the process of the Court.
[27] The principles governing strike-out applications are summarised in the Court of Appeal decision in Attorney-General v Prince:3
(a)A strike-out application is to proceed on the assumption that the facts pleaded in the statement of claim are true unless those pleaded facts are entirely speculative and lack any foundation.
(b)It is only where, on the facts alleged in the statement of claim, however broadly they are stated, no private law claims of the kind or kinds advanced can succeed that it is appropriate to strike out the proceedings at a preliminary stage.
(c)The threshold for strike-out is high. Before a proceeding may be struck out the causes of action must be so clearly untenable that they cannot possibly succeed.
3 Attorney-General v Prince [1998] 1 NZLR 262 (CA) at 267.
(d)The jurisdiction is one to be exercised sparingly, and only in a clear case where the Court is satisfied it has the requisite material.
(e)The fact that an application to strike out raises difficult questions of law, and requires extensive argument, does not exclude the jurisdiction.
Analysis
[28] The pleadings in the fifth cause of action relating to the concrete driveway duplicate the second cause of action and are superfluous. The references to the legal concepts of indemnity and estoppel appear to be misplaced. The claim for damages of $7,000,000 is pleaded to be somehow related to an “enhancement of remaining TIME”.
[29] When paragraphs [87] to [93] are read together, I consider that the pleadings carry no sensible meaning and should be struck out.
[30] The tort cause of action for battery remains, and it is open to Stephen to plead for damages.
Representation for Wai-Rongoa
Legal principles
[31]The general rule regarding corporate representation was stated by Cooke J in
Re G J Mannix Ltd:4
… apart from statutory exceptions, a corporation has no right to bring or carry on proceedings in a Court except by a solicitor. This refers to the filing of documents — writs, statements of defence, notices of appeal, etc.
[32] The rule was reaffirmed by the Court of Appeal in Commissioner of Inland Revenue v Chesterfields Preschools Ltd.5 In that case, the rationale behind the rule was described as follows:
4 Re G J Mannix Ltd [1984] 1 NZLR 309 (CA) at 311.
5 Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2013] NZCA 53, [2013] 2 NZLR 679.
[34] We consider that there are sound policy reasons why a solicitor, rather than a lay person such as an officer of a company, should act for the company in commencing and continuing civil litigation. A company is not a natural body and may have a number of officers, each with their own individual concerns and interests. A solicitor is ethically constrained to represent the company’s interests, unlike an individual officer who seeks to represent it. Moreover, if a solicitor is involved, the court can generally be satisfied that careful attention has been given to the validity of the proceedings, and that the company’s interests will be adequately presented and protected. Similarly, solicitors recognise the duties and responsibilities that are owed to the court and to the defendant in the conduct of litigation, and are less likely to require indulgences in the rules of procedure or to use court processes for vexatious purposes. The court must also have a solicitor on the record as it cannot exercise its disciplinary powers over a company. If a director or shareholder is representing the company there is a heightened risk that the representative will lack the objectivity that an independent solicitor can bring to the case …
(footnotes omitted)
[33] In appropriate circumstances a court may make an exception to the general rule and exercise its discretion to allow a non-lawyer to appear on behalf of a corporate.6 However, a corporate’s lack of funds will not, by itself, justify the making of an exception.7
Analysis
[34] I accept that Stephen’s interests are closely aligned with the interests of Wai-Rongoa. However, this is not a suitable case for a director to be given leave to represent a company in the High Court.
[35] Stephen has demonstrated that he lacks the objectivity that an independent solicitor can bring to the case.
[36] Stephen is prone to filing discursive and incoherent memoranda, sometimes containing scandalous and/or vexatious allegations. The applications for orders restraining counsel from acting and for my recusal would not have been filed by a competent solicitor.
6 See Keemati Ltd v Civil Ltd [2021] NZHC 538 at [6].
7 Business Associates Ltd v New Zealand Post Ltd (1998) 12 PRNZ 497 (HC) at 501 citing
Radford v Freeway Classics Ltd [1994] 1 BCLC 445 (CA) at 448–449.
[37] This is a case where the Court should have a solicitor on the record for Wai- Rongoa because the Court cannot otherwise exercise its disciplinary powers over a company.
Next steps
[38] Stephen filed a document titled “Notice of precautionary counterclaim” dated 23 April 2023. In that document, Stephen intimated that he might wish to challenge the validity of the titles resulting from the subdivision in 2004. However, the defendants have not commenced a cause of action seeking to overturn the subdivision or the creation of the titles and easements in 2004.
[39] It is not clear what the cause of action would be, and the indefeasibility of the titles acquired by the unrelated third parties when Lot 2 was subdivided may also be problematic for any claim.
[40] The plaintiffs’ claims against the defendants are for no more than $70,000. The defendants’ remaining claims against the plaintiffs are for less than that. There is no prospect of Stephen being awarded damages on his cause of action for battery that would exceed the jurisdiction of the District Court. Therefore, these proceedings are within the jurisdiction of the District Court and are most appropriately dealt with in that jurisdiction.
[41] Accordingly, I will make an order under s 94 of the District Court Act 2016 transferring these proceedings to the District Court once costs in this Court have been resolved. I will also direct that the Registry of the Tauranga District Court should not accept any amended pleadings from the defendants without the leave of a Judge.
[42] A transfer of these proceedings to the District Court will enable Stephen to continue to represent Wai-Rongoa, as a company does not require legal representation to conduct a proceeding in the District Court.
Orders
[43] The defendants’ application for an order restraining Mr Fraundorfer from acting for the plaintiffs is dismissed.
[44]The defendants’ application for an order that I recuse myself is dismissed.
[45] Paragraphs [87] to [93] of the defendants’ second amended statement of defence and counterclaim dated 30 April 2024 are struck out.
[46] The first defendant is denied leave to represent the second defendant, other than in complying with the directions in [47] below.
[47]I make the following directions regarding costs:
(a)The plaintiffs may file and serve submissions on costs, of no more than 3 pages, by 12 July 2024;
(b)The defendants may file and serve submissions on costs, of no more than 3 pages, by 19 July 2024; and
(c)I will then determine costs on the papers.
Associate Judge Brittain
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