Crummer v Winston Home Staging Limited

[2017] NZHC 2391

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-000940 [2017] NZHC 2391

BETWEEN

LESLIE ROSS CRUMMER

Appellant

AND

WINSTON HOME STAGING LIMITED Respondent

Hearing:	31 August 2017
Appearances:	P F Chambers for the Appellant D J Clark and S Fletcher for the Respondent
Judgment:	29 September 2017

JUDGMENT OF HINTON J

This judgment was delivered by me on 29 September 2017 at 3.30 pm pursuant to Rule 11.5 of the High Court Rules

……………………………………………………………………

Registrar/Deputy Registrar

Counsel/Solicitors:

Henley-Smith Law, Auckland

Paul F. Chambers, Barrister, Auckland

Wilson McKay, Auckland

CRUMMER v WINSTON HOME STAGING LIMITED [2017] NZHC 2391 [29 September 2017]

[1]      This  is  an  appeal  from  a  decision  of  Judge  Andrée  Wiltens  in  the District Court at Manukau.1     The short point is whether (and how) r 7.70 of the District Court Rules 2014 applies where a lien is claimed over goods under the Carriage of Goods Act 1979 and the owner wants to recover the property.

[2]      The appellant is a furniture mover who entered into an agreement with the respondent,  a  home  staging  company,  to  remove  and  redistribute  furniture  in six houses over 2-3 December 2015.  The respondent maintains this was all to have been done for an agreed price of $750.   The appellant maintains the respondent misrepresented the extent of the work required and that furniture was actually shifted from nine houses.

[3]      The appellant completed the majority of the work and then issued what seems to have been a quantum meruit invoice of $4,617.82, based on his usual hourly rate. He required payment from the respondent prior to delivering up the final load of furniture.  Payment was not forthcoming, which resulted in the appellant’s claiming a lien on the furniture then in his possession, he apparently having reloaded some of the  furniture  onto  his  truck  from  the  respondent’s  warehouse.    The  respondent alleges that the appellant took all of the furniture in the warehouse at the time.  The appellant contests that.  The appellant says he subsequently deposited the furniture that is the subject of his lien in a storage facility at $250 per month.

Relevant law

[4]      The appellant asserts a lien under s 23 of the Carriage of Goods Act 1979, whereby a carrier can give notice of their claim to the owner of the goods, specifying the amount and particulars of the claim and requiring the owner to pay or secure to the carrier the amount of the freight claimed and all recoverable expenses.  Pending settlement of the claim, the carrier may remove the goods to any suitable premises for storage.

[5]      The respondent contests the validity of the lien, but it seems to me that the question as to whether the lien can be peremptorily removed must proceed on the

basis of assumed validity.  It is certainly not clear that the lien is invalid.

1      Winston Home Staging Ltd v Crummer DC Manukau CIV-2016-092-979, 7 April 2017.

[6]      The respondent applied to the District Court under r 7.70 of the District Court

Rules for recovery of the chattels held.

[7]      Rule 7.70 provides as follows:

7.70     Recovery of specific property subject to lien or other security

(1)       This rule applies if a party (A) seeks to recover specific property other than land and the party from whom recovery is sought (B) does not dispute the title of A, but claims to retain the property by virtue of a lien or otherwise as security for a sum of money.

(2)       The court may order that A may pay into court the amount of money in respect of which the lien or security is claimed, and such further sum (if any) for interest and costs as the court directs, and money so paid in must be held by the court until the result of the proceeding is known.

(3)       If payment into court is made, the court may order that the property claimed be delivered to its claimant.

(4)       Subclause (1) is applicable as soon as the claim to retain the property appears from the statement of defence or otherwise.

District Court decision

[8]      In the District Court, Judge Andrée Wiltens was satisfied that r 7.70 did apply and should be applied.  He ordered that the respondent pay into Court the amount of the  appellant’s  invoice,  being  $4,617.82,  and  that  the  furniture  seized  by  the appellant be returned to the respondent.   He ordered that costs be paid to the respondent by the appellant in the sum of $1,602.

[9]      Judge Wiltens said he considered increasing the sum paid into Court to meet the increased storage costs, but he was mindful that the appellant had been ordered to pay costs by Associate Judge Bell in respect of an unsuccessful liquidation proceeding brought against the respondent.   Those costs apparently amounted to

$9,304.50.   I understand that a bankruptcy notice has since been served on the appellant, which he has applied to have set aside. The hearing of that application has been set down for 17 October 2017.

Discussion and result

[10]     The appellant’s point on the appeal is the same point unsuccessfully argued in the District Court, namely that r 7.70 does not apply to the statutory lien under the Carriage of Goods Act 1979 (or to other statutory liens), but rather applies in the

case of a lien arising at common law, such as can arise with regard to a solicitor’s

file, or for work done on chattels.

[11]     I can see nothing in the rule that would indicate it is so restricted.  Rule 7.70 came into existence after the Carriage of Goods Act, so it would have been easy enough  to  specify  that  such  a  lien  or  statutory  liens  generally  were  excluded. Mr Chambers has not provided any authority in direct support of his proposition. The authorities to which he has referred are on somewhat different points.   There does not appear to be any case law or commentary of relevance, including on the equivalent provision in the High Court Rules 2016 (r 7.78).

[12]     Like Judge Andrée Wiltens, I see no reason to read down r 7.70.   In fact I would have thought it is clearly applicable, subject of course to the Court’s having a discretion both as to whether to apply it and to some extent as to the terms on which it is applied.  The provision in r 7.70(4) and the fact that the rule as a whole applies to a “lien or security” both reinforce a broad application of r 7.70.

[13]     I agree with Judge Andrée Wiltens that r 7.70 should be applied in this case.

[14]     I respectfully disagree as to the amount of the payment to be made into Court. I can see no reason why the payment should not include an amount on account of costs, which the Court may order under r 7.70(2).  Carriers are typically exposed to incurring significant costs for what are often small invoices which are uneconomic to pursue.   The point of a lien under the Carriage of Goods Act is that it gives the carrier leverage to achieve a quick resolution, particularly in the case of a small uneconomic debt.  Payment into Court removes most of that leverage, because the carrier is faced with long delays and the ongoing cost of litigation over a small amount.

[15]     Judge Andrée Wiltens considered increasing the sum paid into Court to meet storage costs, but decided against it because the appellant had already been ordered to pay costs ($9,304.50) by Associate Judge Bell on his unsuccessful application to liquidate the respondent and also ordered to pay costs on the District Court application.   The Judge did not consider ordering a payment on account of future

costs, quite possibly because it was not put to him.   The appellant’s focus is on

stopping an order under r 7.70 on any basis.

[16]     I would agree entirely that no further sum should be paid if the costs order made by Associate Judge Bell had been stayed, because in effect the appellant would have security for the sum of $9,304 plus the $4,617.82 already paid into Court. As it is, my understanding is that he is being pursued for the High Court costs.  It would therefore seem irrelevant to the quantum of an order under r 7.70 that such a costs order had been made.  The appellant is in effect being doubly penalised for wrongly pursuing the liquidation of the respondent.   (Judge Andrée Wiltens may not have been aware that the High Court costs award was being enforced.)

[17]     The amount that should be payable into Court should reflect something of the costs of litigation over such a small sum.  I treat the costs award made by Associate Judge Bell as a guide to the minimum costs likely in a defended proceeding, as compared to a summary procedure such as a liquidation application.

[18]     I therefore direct that the respondent pay into Court the total sum of $14,000, inclusive of the sum of $4,617.82 already paid. As an alternative, at the respondent’s election, the costs already awarded in the respondent’s favour of $9,304.50 can be stayed pending a final Court order in this litigation or agreement between the parties, in which case no further payment into Court is required.

[19]     The sum of $14,000 is also on account of any interest, storage costs or other incidental expenses that might arise in respect of the lien, should it ultimately be declared valid.

[20]     It follows also that the costs order made by Judge Wiltens is reversed, as the appellant has been partially successful.  I question in any event whether the summary judgment application by the respondent was in fact appropriate, given there is no right under r 7.70, but rather a discretion that the Court can be asked to exercise in appropriate circumstances.   There will be no costs order in respect of either the District Court hearing or this one, as although the appellant has been partly successful, his primary argument before Judge Andrée Wiltens and before me, that

the lien should not be lifted at all under r 7.70, was unsuccessful.  Each party has therefore succeeded in part.

[21]     I reiterate wholeheartedly the observations of Judge Andrée Wiltens that this matter needs to be resolved.  It is understandable that Mr Crummer has a sense of grievance, as, without knowing anything further of the facts, there is some instinctive merit in his misrepresentation point.   Even if the furniture being moved was only from six houses, a price of $750 seems unlikely.  However, while it is alleged that Mr Crummer helped himself to at least some of the furniture that he is holding (a matter yet to be resolved), he has not helped himself in the way he has conducted this litigation.   He has been particularly over-aggressive:   the respondent also, but less so.  Both parties need to take a long, hard look at this matter and resolve it.

[22]     The appeal is therefore allowed in part, on the basis set out above.  No orders are made as to costs.

--------------------------------------------- Hinton  J