Carver v Jack HC Auckland CIV-2008-404-5910
[2011] NZHC 2020
•20 December 2011
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2008-404-5910
BETWEEN SHIRLEY-ANNE CARVER, GARRY DESMOND STEWART AND HAYDN ASH AS TRUSTEES OF THE WHITIORA TRUST
Applicant/Appellant
ANDNEIL CLARENCE JACK First Respondent
ANDNEIL CLARENCE JACK AND ALAN ROBERT JACK
Second Respondents
ANDOFFICIAL ASSIGNEE Third Respondent
Hearing: 8 and 19 December 2011
Counsel: Applicant/Appellant in Person on 8 December 2011
D G Collecutt for Applicant/Appellant on 19 December 2011
S P Bryers for First and Second Respondents
No appearance for Official Assignee
Judgment: 20 December 2011
JUDGMENT OF WHATA J
This judgment was delivered by Justice Whata on
20 December 2011 at 4.30 p.m., pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Date:
Solicitors:
Simpson Dowsett Mackie, DX CP 39001, Mt Roskill
Ayres Legal, PO Box 8159, Symonds Street, Auckland
R S Wood, PO Box 6422, Wellesley Street, Auckland
Copy to:D G Collecutt, PO Box 105 270, Auckland 1143
S A Grant, PO Box 4338, Shortland Street, Auckland 1140
S P Bryers, PO Box 5444, Wellesley Street, Auckland 1141
CARVER V JACK HC AK CIV-2008-404-5910 20 December 2011
[1] This matter concerns various applications in respect of my decision not to review or set aside a decision recorded in a minute of Associate Judge Matthews to grant leave to discontinue: Jack & Ors v Carver & Ors.1
[2] The trustees of the third defendant in those proceedings want the opportunity to make a claim on an undertaking as to damages given in connection with a Mareva injunction (freezing orders). They say that Associate Judge Matthews wrongly deprived them of an opportunity to be heard on this and that I should have set aside the discontinuance of the proceedings because of his error.
[3] I refused because I could see no error, and when I looked at the facts, I could see no serious injustice to the Trustees in refusing to set aside the discontinuance. I considered that the claim based on the undertaking was weak.
[4] The applicants specifically seek the following relief:
(a) Granting the applicant leave to appeal to the Court of Appeal against the judgment of the Honourable Justice Whata delivered on 20 June
2011 (―the Review Judgment‖) on review of a minute of Associate Judge Matthews made on 5 April 2011 granting leave to the First and Second Respondents to discontinue proceedings against the Trustees and the Third Respondent in these proceedings (―the Minute‖); or
(b) In the alternative, recalling the Review Judgment; or
(c) In the further alternative, setting the discontinuance aside under r 15.22 of the High Court Rules; and
(d) Setting aside the summary judgments entered against the applicant on
14 April 2009; and
1 Jack & Ors v Carver & Ors HC Auckland CIV-2008-404-5910, 5 April 2011 (Associate Judge
Matthews) and 20 June 2011 (Whata J).
(e) Granting the Trustees costs of and incidental to this application.
[5] Given the way the applications are framed, it is necessary to deal with them individually, but on the papers they essentially involve the same complaint, namely that:
(a) The Associate Judge said Mrs Carver had no standing, which amounted to a breach of natural justice;
(b)By not allowing a review or reversal of the discontinuance, I therefore deprived the applicants of their ability to ventilate their claims in relation to a Mareva injunction – namely that the injunction was granted in reliance on a false or fraudulent deed and was disproportionate;
(c) I erred at [22] of my judgment in finding that the most appropriate time to rely on the undertaking as to damages is in the context within it was granted.
(d)I erred at [23] in finding that the summary judgment vindicated the injunction and at [26] that a claim in respect of the Mareva injunction would have had no serious prospect of success;
(e) The summary judgment was based on invalid or fraudulent documentation;
(f) The Trust has incurred significant loss as a consequence of the
Mareva injunction.
[6] In summary, the applicants allege that I got it wrong, both as to the process followed by Associate Judge Matthews and the merits of their complaint.
Background
[7] In support of these applications a further affidavit was filed by Ms Shirley- Anne Carver. This is one of several affidavits addressing discontinuance together with multiple and voluminous attachments.
[8] In the most recent affidavit, Ms Carver nevertheless helpfully essays the background, from her perspective, dating from 1986 through to 12 May 2011.
[9] She refers to:
(a) Her dispute with her then husband (―Pete‖) in the late 1980s;
(b) Mr Jack’s ―active role‖ in that dispute and payments he made to
litigation costs;
(c) The Family Court proceedings and appeals to the High Court and the difficulties she had with retaining counsel;
(d)A consent order she signed under duress, under one version of which she was to receive $50,000;
(e) Mr Jack’s stroke and his daughter, Lisa’s, enduring power of attorney;
(f) Lisa’s demands for payment of the money Mr Jack had given Ms
Carver;
(g) Ms Carver’s assumption that the money would only be repaid if the
litigation was successful;
(h)Mr Jack’s summary judgment proceedings for sums in excess of $3 million, including a first cause of action alleging loans of about $2.2 million to Ms Carver, $76,000 to Mr Stewart and $1.175 million to her and Mr Stewart and $319,934.21 to the Trust.
(i)Mr Jack’s ex parte interim injunction application, attaching alleged deeds of acknowledgement of debt and of assignment of debt, which Ms Carver says were invalid;
(j) An unlimited undertaking in support of the application, even though
Mr Jack was impecunious at that time;
(k)Woodhouse J’s summary judgment on the second to fourth causes of actions, noting that the first cause of action was not pursued at summary judgment;
(l) Charging orders sought and obtained by Mr Jack (though varied by
Venning J) over the various properties;
(m)The mortgagee sale of 2A Cowie Street, Parnell previously owned by the Trust, with a surplus of $60,360 going to Mr Jack;
(n)Her bankruptcy and then the Official Assignee’s refusal to assist, which then precluded pursuit of an appeal against the summary judgment;
(o) Associate Judge Faire’s decision refusing to modify the Official
Assignee’s decision;
(p)Loan arrangements with Broadlands Finance and their taking of possession of the MV Teng.
(q)Case management of the underlying proceeding, leading up to the notice of discontinuance and the Official Assignee’s consent to that notice;
(r) Memoranda filed by the applicants opposing discontinuance. [10] Ms Carver then says that:
53. In his subsequent minute, Associate Judge Matthews allowed the plaintiffs’ discontinuance and discharged the freezing order. His Honour recorded that there was no opposition from the Trust or the Official Assignee. I did not oppose, because I understood that I was not able to speak and thought that if I did, I would be in contempt of court. However, as advised in the filed on 5 April 2011 memorandum that the Trustees, the Trustees opposed the discontinuance, as they did not want to lose the undertaking as to damages.
[11] In relation to my judgment, she then says that she did not want to review the
Associate Judge’s decision, but to have the notice of discontinuance set aside.
New information
[12] I granted leave for the applicant to file further affidavit evidence de bene esse. I indicated that the likelihood of such evidence being finally admitted at this very late stage was small, given that it was likely to amount to repetition in any event. So it has transpired.
[13] For completeness, however, I record that the pith and substance of the affidavit evidence relates to attendance at the conference before Judge Matthews. In particular, it is recorded at paragraph 9 of the affidavit of Grant James Adams:
9. Associate Judge Matthews said that she could attend the telephone conference in an ―audience capacity only‖ and that she would not be able to represent the Trust at any subsequent conference or hearing. The Associate Judge twice told Mrs Carver that her attendance at the conference was a one off event and that she could attend in an ―audience capacity only‖.
[14] He says that other than a question to Mrs Carver about legal representation, the Judge did not at any time during the conference ask Mrs Carver what the Trust’s position was on the discontinuance of proceedings and/or the discharge of the Mareva injunction.2
[15] The second affidavit was an affidavit of Gary Desmond Stewart. He notes that his recollection of what was said is consistent with Mr Adams’ recollection. He
repeats the reference to ―audience capacity only‖. He elaborates, however, that
2 At paragraph 22.
Ms Carver was told by the Associate Judge that she had no speaking rights and was effectively gagged.
[16] Given that this evidence essentially repeats matters that have been brought to my attention previously by Ms Carver, I do not propose to formally admit them. I nevertheless accept that they hold the view that Associate Judge Matthews referred to an ―audience capacity only‖ and that they interpreted this to mean that they could not take an active role in the conference.
Preliminary procedural issue
[17] On 6 December, two days before hearing, Ms Grant filed an application for leave to withdraw on the basis that her fees were not paid. At the hearing Ms Carver sought an adjournment of this matter on the basis that she wished to instruct fresh counsel. She indicated that Ms Grant had lied about fee arrangements, and that she had taken steps to ensure that Ms Grant was paid. She relies on affidavit evidence about discussions that, she says, occurred with Ms Grant; as well as the basis upon which Ms Grant was proceeding.
[18] Mr Bryers strongly opposed the adjournment on the basis that his client was seriously prejudiced by the ongoing running of this litigation. Mr Jack’s financial circumstances are parlous. He is relying on superannuation, and is currently hospitalised, with the result that he has weekly discretionary spend of only $20. Mr Bryers notes that the small success that Mr Jack has had in this litigation, namely the sum of about $60,000, is subject to a charging order in favour of Legal Services Agency. Mr Bryers has made an application for that sum to be released but cannot do so until such time as this litigation is brought to an end. Mr Bryers is concerned that if there is a further adjournment, it will be a considerable time before Mr Jack can access the funds which are properly his.
[19] Ms Carver complained that she knew nothing about the applications before me, and indeed, she said she is not familiar with the contents of affidavits that have been filed on her behalf in relation to this application. I therefore adjourned the
hearing of this application for 30 minutes in order for her to familarise herself with the contents of those affidavits.
[20] I was not prepared to grant a further, unqualified adjournment. I proceeded with the hearing but afforded Ms Carver the opportunity to retain further counsel and, if so, to notify the Court by 5.00 p.m. on Monday 12 December 2011. In that event, I proposed to afford counsel the opportunity to be heard on Monday 19
December 2011.
[21] For completeness, I set out my reasons for proceeding on this basis.
[22] While Ms Carver insists that she put measures in place to pay Ms Grant’s fees, I am not satisfied that Ms Grant would seek withdrawal without a proper basis for doing so, namely that fees were not properly dealt with. Moreover, the grounds upon which Ms Carver seeks to have her applications addressed by me were thoroughly identified in the application documents and supported by further affidavit evidence.
[23] Furthermore, the law on the matters subject to this application is well settled. It is the application of that law to the facts that is in issue. Ms Carver has a very strong view of the facts, which she was well able to express. Accordingly, I think that any prejudice that my approach causes to Ms Carver is outweighed by the prejudice to Mr Jack in having this matter further prolonged. Having said that, the short adjournment to allow counsel to be retained did not overly prejudice Mr Jack.
[24] As it happens, Mr Collecutt appeared and argued the applications for Ms
Carver on 19 December 2011, including a new argument to which I now turn.
New argument
[25] Under Mr Collecutt’s guidance, Ms Carver maintains her central complaint, namely that she has been wrongly deprived of an opportunity to ventilate her claim under the undertaking as to damages. He adds however, a few fresh aspects, namely:
(a) Under r 15.20 of the High Court Rules, an applicant seeking to discontinue must file an interlocutory application with supporting evidence. This must be served at least 10 working days prior to any hearing of that application and the respondent must be given the opportunity to file a notice of opposition up to three days prior to the hearing. He thus says that the application has never been on a proper footing and the Trust has never had a proper opportunity to respond to it. He says the only notice of the application to discontinue was by way of the Mr Jack’s memorandum dated 1 April 2011, three days before the telephone conference the following day.
(b)He cites Universal Thermosensors v Hibben.3 The central point to that case is that a plaintiff may be liable under an undertaking as to damages if the injunction was out of all proportion to the claim made by the plaintiffs. Mr Collecutt emphasised that the claim against the three defendants was $3.78 million, some 23 times greater than the ultimate summary judgment award and nine times greater than the full claim against the Trust.
(c) He also cited Telstra New Zealand Holdings Ltd v Commissioner of Inland Revenue.4 In that case, Wylie J helpfully essays the cases concerning abuse of process as a basis for setting aside discontinuance.
[26] In response Mr Bryers made two short point, namely that:
(a) The Trust was on notice from May 2010 that Mr Jack was seriously looking at discontinuing proceedings if it was revealed that the defendants were incapable of meeting judgment. That was not
revealed until early 2011.
3 Universal Thermosensors v Hibben [1992] 1 WLR 840.
4 Telstra New Zealand Holdings Ltd v Commissioner of Inland Revenue (2011) 25 NZTC 20-010.
(b)There has never been any evidence produced that would support a claim based on the undertaking of damages.
[27] On the latter point, following a short adjournment to allow Mr Collecut to take instructions, Mr Collecutt produced an exhibit P to the affidavit of Shirley Anne Carver of 29 November 2010 and Garry Desmond Stewart of 29 November 2010. That exhibit records a proposal to retire debt whereby the trustees indicated a desire to sell one of their properties (112 Wisley Road), which would enable them to discharge the $250,000 owing under the summary judgment together with other debt. It was put to me by Mr Collecutt that this would have enabled them, if accepted by Mr Jack, to deal with creditors and avoid the wholesale disposal of the Trust’s assets.
[28] Mr Bryers stressed that I should put little weight on this document as it was not properly produced for the purposes of opposing or reversing discontinuance, but for some other purpose. Mr Collecutt retorts that had the defendants been given the appropriate opportunity to respond to a properly framed application, it would have come in at that point. As it happens, exhibit P was one of the documents attached to the voluminous affidavit of Ms Carver and the affidavit of Mr Stewart in support of the application to review. But to further complicate matters, according to Mr Bryers, Mr Jack never received this proposal.
[29] Mr Collecutt also developed an argument in relation to the other applications, which I will deal with through my assessment. It broadly echoes matters that had first been brought to my attention by Ms Carver, and then in the pleadings of Ms Grant.
Assessment
[30] The logical sequence for assessment of the applications is: (a) The application for recall;
(b) The application for leave to appeal;
(c) The application to set aside the discontinuance;
(d) The application to set aside the summary judgment.
[31] A grant of any one of the applications earlier up the chain obviates the need to consider the other applications.
Recall
[32] The threshold test is succinctly stated in Horowhenua County v Nash (No.2):5
Generally speaking, a judgment once delivered must stand for better or worse subject, of course, to appeal. Were it otherwise there would be great inconvenience and uncertainty. There are, I think, three categories of cases in which a judgment not perfected may be recalled — first, where since the hearing there has been an amendment to a relevant statute or regulation or a new judicial decision of relevance and high authority; secondly, where counsel have failed to direct the Court’s attention to a legislative provision or authoritative decision of plain relevance; and thirdly, where for some other very special reason justice requires that the judgment be recalled.
[33] Of particular relevance to this case, however, is the approach taken by the Court of Appeal in Ngahuia Reihana Whanau Trust v Flight,6 wherein it was observed that applications that merely seek to relitigate matters already considered or to challenge substantive findings of fact and law were not allowed.
[34] In this case the primary points of challenge relate to my findings of fact and law. Essentially, Ms Carver and now Mr Collecutt are asking me to revisit those findings.
[35] There is also the allegation of error by me as to jurisdiction, namely that I proceeded by way of review and not fresh application. As counsel for Mr Jack says, I examined the merits of the discontinuance after affording Ms Carver an opportunity to be heard. In short, whether Ms Carver’s application was a review or an application under r 15.22, Ms Carver was afforded a full opportunity to state her
position.
5 Horowhenua County v Nash (No.2) [1968] NZLR 632 at 633.
6 Ngahuia Reihana Whanau Trust v Flight CA23/03, 26 July 2004.
[36] I also note in this regard that the jurisdiction under r 15.22 to set aside discontinuance is premised on a finding that there has been an abuse of process. I specifically address that question at paragraph [20] of my judgment.
[37] Ms Carver now claims that I erred in relying on the impecuniosity of the defendants. She says that this has not been objectively ascertained. That claim was made in spite of the information that has been tabled before this Court, albeit in the context of earlier applications before Venning J. As Venning J observed in his judgment of 12 August 2009:
[22] As noted, the financial position of the defendants is bleak. In my judgment there is a real risk that, if the assets they do have remain under their control at all, there will be insufficient moneys to meet the judgments, let alone the balance of the claim which is secured by the freezing orders. The mortgagees are likely to take steps to sell the property. On their own evidence the defendants, particularly Ms Carver, are unable to meet the mortgage commitments over the property she owns. In relation to the two properties owned by the third defendant Trust, Mr Ash confirmed the mortgagees had issued Property Law Act notices. While the plaintiffs have some security they have been out of their money (represented by the judgments) for some time. The security they have will be eroded by mortgagee sales. They should be allowed to realise the assets to meet those judgments, so that in the event the appeal is unsuccessful they can have ready access to the funds. The defendants have no particular personal attachment to the land. The main use of the various properties over recent years has been as a means of raising money.
[38] If the first and second defendants or the Trust are not now impecunious, then they should have brought that specifically to my attention with supporting evidence. In any event, Ms Carver when addressing me on the potential for security for costs said that the Trust was impecunious.
[39] The other alleged errors, including my assessment of the merits of Ms Carver’s claims based on wrongful imposition of a disproportionate Mareva injunction, are not properly matters to be revisited on recall. If they are to be challenged now, then that should be through the appellate process, if such a course is appropriate.
[40] For completeness, I note that at [22] of my judgment I accepted that the
Associate Judge should have resolved any issue relating to the undertaking prior to
discontinuance. For this reason, out of an abundance of caution, I turned to the
merits of Ms Carver’s claim.
[41] Mr Collecutt’s belated complaint that the application went wrong from the outset rings hollow against a background where the defendants were on notice from as early as May 2010 that the applicants were looking at exiting the proceedings. However, it might be said that had the procedural irregularity been squarely brought to the attention of the Associate Judge, he would have been obliged to give the Trustees an opportunity to respond to a properly framed application. The major difficulty for Ms Carver is that all of this could have been raised with me on the application for review. I appreciate that she is at a disadvantage as a lay litigant. But I remain of the view that any procedural irregularity was remedied by affording Ms Carver an opportunity to state her case before me. I squarely addressed whether or not the notice of discontinuance should be set aside in order to enable Ms Carver to make the claim pursuant to the undertaking as to damages.
[42] I am also conscious that Mr Jack ought to be entitled to finality unless that result would be unjust through some error on my part. The fresh matters raised by Mr Collecutt do not fall into that category. They are, with respect to his skilful argument, repackaged contentions, rather than genuinely new matters overlooked by me.
[43] I record for completeness that Mr Collecutt helpfully brought to my attention that, contrary to my initial impression, the Mareva injunction was not tailored to meet the claim against the Trust. Only the charging orders had been varied to make them proportionate to the summary judgment outcome. But, as I said in my judgment, the third defendant had ample opportunity to challenge the scope of the injunction.7 Any misapprehension on my part is not sufficient in my view to warrant a recall of the judgment. I have nevertheless taken the step of re-examining this
issue in the context of leave to appeal.
7 At [18].
Leave to appeal
[44] The Trustees seek to appeal against both my findings that there was no breach of natural justice and that the discontinuance was not an abuse of process.
[45] My discretion to grant leave to appeal is governed by the Judicature Act 1908 s 26P(1AA). This proposed appeal is in reality a third or fourth bite at the cherry on the question of discontinuance. In terms of the threshold test for leave, I therefore apply by analogy, the following guidance from Snee v Snee:8
[22] To summarise, for leave to be granted pursuant to s67, the appeal must raise some question of law or fact capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost, both to the court system and to the parties, and the delay involved in the further appeal. Upon a second appeal this Court is not engaged in the general correction of error. Its primary function is then to clarify the law and to determine whether it has been properly construed and applied by the Court below. It is not every alleged error of law that is of such importance, either generally or to the parties, as to justify further pursuit of litigation which has already been twice considered and ruled upon by a Court.
[46] I understand Mr Collecutt to be in general agreement with this, citing
Gregory v Gollan.9
[47] I consider that there are major obstacles in the way of the applicants regarding the key grounds of appeal:
(a) The minute of proceeding before Associate Judge Matthews records that Ms Carver was afforded an opportunity to speak – notably the Trustees’ evidence confirms that Ms Carver had audience capacity – regrettably, this may have been interpreted to mean a right to listen, rather than a right of audience;
(b) Even though Ms Carver did not speak, the Associate Judge had the
Trust’s memoranda and he specifically addressed the need for leave;
8 Snee v Snee [2000] NZFLR 120.
9 Gregory v Gollan HC Auckland CIV-2005-404-3485, 4 July 2007.
(c) Ms Carver was then afforded and took the opportunity to present her position to me, so that any prior procedural irregularity was cured;
(d)In terms of the merits, the third defendant’s claim on the papers is based on an allegation that the Mareva injunction should not have been granted. But that issue was thoroughly tested by Woodhouse J and his refusal to do so was, in my respectful view, based on compelling reasoning (refer [82]-[91]). He also concluded at [92]:
[92] It is also appropriate to review the overall justice of the case. In my judgment this consideration favours the plaintiffs. I will refer to two matters only. The first is the conclusions I have reached on the summary judgment application. The second is other evidence of Mrs Carver. Mrs Carver gave evidence of equity in three other properties. This includes an estimate that the equity of the property at
2A Cowie Street is between $250,000 and $315,000 depending on market value. This is the property financed in
part by the loan from Mr Jack evidenced by the deed of
acknowledgement of debt.
(e) Ms Carver now says that the summary judgment against the third defendant and the injunction were based on fraudulent and forged deed of acknowledgement. I accept that fraud might be a basis for revisiting a judgment. But that aspect was addressed by Venning J in relation to an application to have the Trust’s deed of acknowledgement produced. Venning J observed in dealing with that application:
[27] In any event, it is unnecessary, in the context of the current proceedings, for the matter to be explored further. The deed of acknowledgement of debt was not relied upon by Woodhouse J in entering judgment against the defendants. Woodhouse J recorded in his judgment it was agreed that the amount actually advanced to the third defendants was $159,655, not $175,000, so there was agreement the sum had been advanced. The second defendant had deposed to the existence of the deed, taking the point that $175,000 had not been advanced but implicitly accepting $159,655 had been. The issue taken by the defendants was that demand had not been properly made. The Judge rejected that submission. The Judge also referred to and relied upon a number of other documents to support the finding that the sum of $159,655 was owing, including a contemporaneous letter consistent with the debt from the
Property Law Centre to the third defendants and to the first plaintiff. The information was further verified by a statement from the third defendants’ own solicitors.
(f) While, it might be said that the deed in fact supported the summary judgment, it is plain that Woodhouse J had no doubt that Mr Jack was owed the judgment sum by the Trust, based on all of the evidence.
(g)The substantive claim thus left to Ms Carver is that scale of the Mareva injunction was grossly disproportionate and has caused significant loss to her, Mr Stewart and the Trust. As I have said in the judgment,10 Trustees have had ample opportunity to challenge the scope of the injunction as it relates to the Trust’s assets. Further, in reality, the other secured creditors took the remaining assets to pay
their debts and there is no evidence, other than assertion, that the
Mareva injunction caused or exacerbated the Trust’s exposure.
[48] I also invited Mr Collecutt to direct me to evidence he says supported Ms Carver’s application to review and/or set aside discontinuance. He referred me to passages in the Trustees’ evidence that referred to a debt reduction proposal set out in exhibit P. At most the exhibit simply suggests that, had Mr Jack accepted the Trust’s proposal, subsequent action by other creditors might have been avoided. But that does not establish, even in a prima facie way, that the Mareva injunction was a primary or substantial cause of losses suffered by the Trustees.
[49] Two factors that Mr Collecutt highlighted to me, however, are deserving of further reflection:
(a) It was not for Ms Carver to set the limits to the scope of the injunction. That was the task of the plaintiff.
(b)Ms Carver did not need to prove her damages claim to a high or even a moderate standard. All she needed was a plausible or logical basis
10 At [18] and [23].
for her claim. If she had such a basis, then it arguably she should have the opportunity to make her claim.
[50] I accept that the Court of Appeal might disagree with my reasoning both as to scope of the injunction and the level of evidence required. But I remind myself that all of this must be set against the threshold test under r 15.22, namely whether discontinuance is an abuse of process. The question is not whether the Trustees have a legitimate claim. Rather, the question is whether discontinuance is procedurally or
substantively unfair and for a collateral purpose.11 In my view, the facts simply do
not make out an abuse, even if I adopt the approach contended for by Mr Collecutt. Ultimately, the discontinuance was validly sought, as the defendants have no money; and any procedural irregularity was remedied, as they had the opportunity to persuade me that the proceeding should be kept alive to enable a claim under the undertaking.
[51] In terms of substantive unfairness, I find it highly implausible that the Court of Appeal, in the full and lengthy context of this case, would be persuaded that the costs of maintaining these proceedings is outweighed by a bare claim based on the undertaking. The merits of the injunction were fully ventilated, as was the scope of the charging orders over the Trust’s properties, together with the merits of the plaintiff’s claims, with the result that he was successful at every step of the process. Furthermore for the reasons I give below at paragraph [55], I have reached the view that discontinuance does not preclude a separate claim based on the undertaking. Any prejudice to the Trust is small.
[52] In these circumstances, leave to appeal is declined.
Other Applications
[53] As to the other matters raised by the Trustees, my reasoning at paragraph [47] (e) and (f) addresses the merits of the application to set aside the summary judgment.
I have thoroughly dealt with the discontinuance. I am also of the view that to
11 As noted above, the case law is helpfully summarised by Wylie in Telstra New Zealand Holdings
Ltd v Commissioner of Inland Revenue at [41].
entertain a further and belated application to set aside the discontinuance again would constitute an abuse of process. Ms Carver has had ample opportunity to ventilate her position. I do not propose to address these applications further, save in one respect, namely to consider again whether Ms Carver can now separately sue on the undertaking.
[54] Mr Bryers submitted that the discontinuance did not preclude the trustees from separately suing on the undertaking. He could see no reason in principle why a damages claim could not be pursued in fresh proceedings. This has been his position from the outset. Mr Collecutt accepted that if that were the case, then there would be no need to maintain the present applications. However, he was concerned that in the event that Mr Bryers was wrong, the Trustees would be left without a remedy. No authorities either way were cited by Counsel.
[55] As I indicated in my judgment, I consider that the third defendant could commence its own proceedings.12 I also noted that there are authorities to suggest that the most appropriate time to rely on an undertaking as to damages is the context of the proceedings within which they were granted.13 In simple terms, the nexus between the primary order and the undertaking means that it is most appropriate to have any claim based on the undertaking heard within the proceedings under which the primary order was obtained. But, the undertaking in this context was a pre- condition of the Mareva injunction. In my view, it forms part of the order of this Court until the order is set aside.14 The order itself provides the Trustees with the right to seek to have the order set aside.15 Resolution of any claim based on the
undertaking could sensibly be resolved at the same time as any application to set aside is considered. Mr Bryers proffered, reasonably in my view, that an application to set aside could still be made even by way of oral application. Accordingly, the trustees remain free to pursue a claim based on the undertaking.
[56] For avoidance of doubt, I have simply resolved that, on the evidence before me, the merit of such a damages claim was not sufficient to preclude discontinuance.
12 At [19].
13 At [22]. See DB Baverstock Ltd v Haycock (19860 1 NZPC 56.
14 Refer sealed order and by analogy to High Court Rules 7.54 (2) and 32.2(5).15 Refer sealed order; and now High Court Rules 32.8.
I have not resolved any substantive claim based on the undertaking, as it never came before me in any formal sense.
Costs
[57] There shall be costs awarded in Mr Jack’s favour on a 2B basis, together with reasonable disbursements. He has been put to significant cost to essentially re- litigate matters. Quantum should be able to be agreed. If necessary, I invite
submissions by Monday 23 January 2012.
Whata J
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