Copland v Goodwin
[2012] NZHC 996
•11 May 2012
IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY
CIV-2004-412-000346
CIV-2008-412-000662 [2012] NZHC 996
BETWEEN BRIAN STEWART COPLAND Plaintiff
ANDWAYNE ERNEST GOODWIN Defendant
Hearing: 11 May 2012 (at Christchurch) Counsel: J C D Guest for Plaintiff
T J Shiels for Defendant
Judgment: 11 May 2012
Reasons: 15 May 2012
REASONS FOR JUDGMENT OF GENDALL J
[1] When this matter was heard on 11 May 2012, because of the exigencies of time I delivered an oral judgment. The following records it, with some corrections as to grammar, and correcting a misunderstanding the Court had as to Justice John Hansen granting a judgment which was, rather, made on admission. These reasons also provided citations for some matters mentioned in the decision.
[2] The defendant applied, first, to stay the execution of enforcement of a judgment and, secondly, to set aside a judgment obtained on admission by the plaintiff against the defendant five and a half years ago on 11 October 2006. However, the Court is not required to decide on its merits that application to set aside the judgment today.
[3] The application for stay arises because on 12 May 2012, a property owned by the defendant or his interests in Te Anau was to be auctioned pursuant to a judgment
COPLAND v GOODWIN HC DUN CIV-2004-412-000346 [11 May 2012]
or order made by Associate Judge Christiansen on 26 January 2009 in proceedings CIV-2008-412-662. That was an order directing the Registrar or Sheriff of the Dunedin High Court to sell the property. The judgment which is sought to be set aside is that made on an admission filed and entered on 11 October 2006 in proceedings CIV-2004-412-346 (which I incorrectly referred to as having been made by John Hansen J). The judgment of Associate Judge Christiansen in the 2008 proceedings was an unopposed summary judgment ordering the Registrar to sell the property.
[4] The application in its present form was commenced in a confusing way because the defendant, having instructed new counsel who understandably was not aware of the extensive background, sought to stay enforcement of a different judgment (the sale order made by Associate Judge Christiansen) to that which is now sought to be stayed and to be set aside. However, Mr Shiels for the defendant has made oral application, and it is not disputed that the Court has an inherent
jurisdiction or power where justice demands to ensure that overall justice is done.[1]
So, the “enforcement” order sought to be stayed is not the judgment sought to be set aside, but nevertheless a stay of the implementation of the judgment ordering the sale could be made as it had its genesis under the original judgment by admission.
[1] Pinson v Pinson (1991) 5 PRNZ 177.
[5] The essence of the application is that that sale should not proceed because the basic underlying judgment by admission is the subject of the defendant’s present application to set it aside. That application, if proceeded with, will require full argument. Mr Shiels, on behalf of the defendant, accepts that that is something that will require a substantive fixture and cannot be determined today. In determining where the interests of justice lie, and in the exercise of the Court’s discretion and its inherent jurisdiction, regard must be had to whether the application to set aside the underlying judgment might succeed. In my oral judgment I referred to it as a “possibility”, but the position is that the onus is on the applicant to show a substantial miscarriage of justice might be probable rather than possible and that
there is a real and substantial risk.[2]
Background
[2] Crawford v Din Enterprises Pty Ltd [2009] NZCA 199.
[6] The background facts are contained within the substantial files held in the Dunedin High Court. I only had access to them overnight and have done my best to obtain a basic understanding of them. When the application came before me as duty Judge in Christchurch on Tuesday, 7 May 2012, I declined to grant the stay application ex parte, but advised that if the matter was to be pursued I would remain in Christchurch to hear it this morning. Counsel for the defendant wished that to happen and accordingly the matter has been heard.
[7] The plaintiff sued the defendant and his interests for a sum of approximately NZ$1 million. Judgment by admission was entered on 11 October 2006. It is referred to in a Minute of John Hansen J. The terms of the settlement agreement are contained in a document which set out the terms of the judgment. Mr Shiels says that one of those terms has been breached. So the defendant has within the past few weeks asserted, through his solicitors, that he has cancelled the agreement.
[8] Payment of the monetary sums in the judgment of US$465,000 was not made as required by 29 September 2006, nor were the costs of $30,000, ordered in the judgment, paid by 31 August 2006. Indeed, I am told nothing has been paid by the defendant other than through the realisation, in part, of some funds through the plaintiff’s charging order over another property. I gather it was for that reason that the plaintiff obtained summary judgment under the Property Law Act 2006 proceedings on 26 January 2009, unopposed, by the decision of Associate Judge Christiansen.
[9] The reason the defendant seeks to set aside the judgment is that he contends one of seven clauses in the settlement agreement has been breached and he is entitled, under the Contractual Remedies Act 1979, to do so.
[10] But to return to the narrative. In 2010, the defendant made application to set aside the judgment by admission (that is, under CIV-2004-412-346). After full argument by counsel, Associate Judge Faire delivered a reserved decision on 11 June
2010. At that time, the defendant was aware of the charging orders made against his
property as he deposes in his affidavits of 24 March and 8 April 2010. No challenge was made to the judgment of Associate Judge Christiansen made one year earlier. Judge Faire dismissed the application, observing that if, as a matter of fact and law, the defendant could establish a fundamental breach of contract, then he could bring separate proceedings for damages against the plaintiff. As I have alluded to, the breach related to one clause in the settlement terms, namely that the plaintiff would cause a reference to the defendant, on a website of another person in the United States, to be removed as soon as reasonably practicable.
[11] Earlier, on 27 January 2010, the plaintiff had applied for directions as to the sale of the property pursuant to the order of Associate Judge Christiansen. The defendant was represented by solicitors and senior counsel in Dunedin. On 12 April
2010 there is a record on the Court file of a conference before an Associate Judge and counsel which does not show any objection being taken to the judgment directing sale of the property. There is a Minute on the file of CIV-2008-412-662 to the effect that the defendant’s counsel confirmed he had been instructed that the defendant would co-operate in this sale to the extent of ensuring that the best possible price would be obtained.
[12] The basis upon which Mr Shiels now argues the case for the defendant is that his client claims to have cancelled the settlement agreement. That is because, he alleges, there is now reference to him on the particular website referred to in the original judgment by admission, or that that reference has “re-appeared”. It is clear that reference was earlier removed in accordance with the judgment. Mr Shiels argues that no prejudice, however, would be caused to the plaintiff (although acknowledges the substantial delay that has occurred and the fact that nothing has been paid by the defendant to satisfy the judgment) by there being a stay of the separate judgment directing sale of the property (in which the defendant and his family do not reside).
[13] I have heard careful argument from both counsel as to the merits of the application to set aside the original judgment under the provisions of the Contractual Remedies Act and otherwise. But as I have said, and as is acknowledged by counsel, this must be a matter for final argument. But the position as advanced by Mr Shiels
on behalf of the defendant as to his claims is very tenuous, to say the least, and unlikely to succeed.
[14] In determining where the interests of justice lie and whether they require a stay of the operation of the order of Associate Judge Christiansen, I note that it is not strictly an “enforceable” proceeding because the order is a direction, in the form of a mandatory requirement, to the Registrar or Sheriff that he conduct a sale. But the Court has a wide discretion and I am satisfied there is inherent jurisdiction to stay the implementation of this order should justice require it. Within that wide discretion, the Court is entitled to take a robust, yet measured, approach. The Court has to be satisfied there is a substantial ground existing to support the claim that the judgment (that is, the judgment by admission) should be set aside. The onus is on the applicant to show that a substantial miscarriage of justice is probable, rather than
impossible[3], and that there is a real and substantial risk. A balancing exercise is
required to recognise conflicting interests of both parties.[4] I take into account whether the plaintiff would suffer irreparable injury if the judgment is set aside or if there is a stay, and whether the delay in the defendant acting has reasonably been explained. It is three and a half years since the order for sale was made by Associate Judge Christiansen, and very much longer has expired in respect of the original judgment. Significantly, the application to set aside, essentially on the same grounds as advanced now, was dismissed by Associate Judge Faire.
[3] Crawford v Din Enterprises Pty Ltd [2009] NZCA 199.
[4] Enright v Gold Metal Exports Ltd (1989) 3 PRNZ 243.
[15] The plaintiff has been kept out of his entitlement to the monetary awards due to him since 2006. The defendant has failed in his effort to set aside that judgment. He did not challenge the decision of Associate Judge Faire. The defendant did not give a satisfactory explanation or reasons to me for the delay, other than to assert that he now believes one clause in the settlement agreement has been breached. If he is right he may, as Associate Judge Faire intimated, bring proceedings for damages (or enforce that part of the judgment in his favour). I am satisfied by a wide margin that this attempt is a collateral last-gasp attack on the entry of judgment on the same basis that was asserted and failed before Associate Judge Faire. Of course the
defendant is entitled to change counsel and obtain new advice, but the position, as
submitted to me, is that the defendant believes that he has good grounds to cancel the contract because he has been “advised” that that is the case. Whether such cancellation is, in fact, valid or not is very much another question.
[16] The application was originally made under r 17.29, and varied by the oral application, and I very much doubt that the rule applies. That is because the rule speaks of there being a substantial miscarriage of justice being likely to result if the judgment was enforced and, as intimated at the start of these remarks, it is an entirely different judgment that is being implemented now. Nevertheless, I have proceeded on the basis that this does not affect the ability of the Court to grant a stay if the interests of justice so permit it.
[17] I might have been prepared to stay the operation of the orders of Associate Judge Christiansen on terms, but they would have been that security be offered and provided by the defendant to alleviate and remove the possible prejudice that would occur to the plaintiff if there was a stay. The defendant has not offered security and I am told he is in no position to do so. He cannot therefore, in my view, expect any further indulgence from the Court.
[18] The refusal of the stay application that I made on Tuesday, 7 May 2012, is confirmed. The application now dealt with on notice is dismissed.
[19] The application to set aside the judgment entered in 2006 under CIV-2004-
412-346 is adjourned and is to be placed in the Associate Judge’s list for timetabling and for the allocation of a fixture.
[20] I am grateful to both counsel who were required to attend today having had to travel from Dunedin. But this was not a matter that the Court was entitled to deal with on the papers or otherwise without hearing counsel, and because of the pending auction on 12 May 2012, the defendant was entitled to have his application heard, even at short notice.
[21] The application having failed, costs will follow the event. The defendant will pay costs to the plaintiff on a category 2B basis, together with reasonable
disbursements, including counsel’s travel and accommodation expenses in having to appear today in Christchurch. If there is any contest as to the issue of disbursements, they are to be settled by the Registrar. He is entitled, and required, to comply with the order of 26 January 2009 made on the judgment entered by Associate Judge
Christiansen directing sale of the property.
J W Gendall J
Solicitors:
Downie Stewart, Dunedin for Plaintiff
Scholefield Cockroft Lloyd, Invercargill for Defendant
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