De Lage Landen Limited v Crafar - [2017] NZHC 2709

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

I TE KŌTI MATUA O AOTEAROA
TE ROTORUA-NUI-Ā-KAHU ROHE

CIV-2016-463-000140 [2017] NZHC 2709

BETWEEN
DE LAGE LANDEN LIMITED

Plaintiff

AND

ALLAN JOHN CRAFAR First Defendant

FRANK JOHN CRAFAR Second Defendant

ELIZABETH JEAN CRAFAR Third Defendant

Hearing: 19 October 2017

Appearances:

S D Campbell for Appellant
A Crafar for Defendants, in person

Judgment:

8 November 2017

JUDGMENT OF JAGOSE J

This judgment is delivered by me on 8 November 2017 at 11.00 am pursuant to r 11.5 of the High Court Rules.

..................................................... Registrar / Deputy Registrar

Solicitors:
Wynn Williams, Christchurch

And to:
The Defendants

DE LAGE LANDEN LIMITED v CRAFAR & ORS [2017] NZHC 2709 [8 November 2017]

Introduction

[1] The defendants – brothers Allan and Frank Crafar, and Allan’s wife, Elizabeth Crafar (the “Crafars”) – were directors of Plateau Farms Limited (“PFL”).

[2] PFL entered into farm equipment leasing and hire purchase agreements with the plaintiff, De Lage Landen Ltd (“DLL”). Performance of PFL’s obligations under the agreement was secured by guarantees from the Crafars.

[3] On PFL’s alleged failure to perform its obligations under the agreements, DLL now seeks to enforce guarantees provided by the Crafars, claiming $98,703.23 plus interest from July 2011.

[4] The Crafars originally responded to the claim with a defence and counterclaim. The counterclaim was struck out by Associate Judge Sargisson.1 In conjunction with the trial (and before determination) of DLL’s claim, the Crafars seek review of Associate Judge Sargisson’s decision.

[5] Two days before hearing, the Crafars purported to file an amended

counterclaim. They also sought a ‘McKenzie friend’ to assist them in the proceeding.

McKenzie friend

[6] Allan Crafar – who made oral submissions at the hearing, also on behalf of his brother and wife – sought leave to be assisted by one Ashley Palmer, as the Crafars’ ‘McKenzie friend’.

[7] A ‘McKenzie friend’ is:2

… a support person who may attend as a friend and sit beside an unrepresented party to civil litigation to provide support, take notes, make suggestions and give advice. A McKenzie friend does not have the right to take part in the proceedings as an advocate, although the Court has a

1 De Lage Landen Ltd v Crafar [2017] NZHC 1419.
2 Craig v Slater [2017] NZHC 874, [2017] NZAR 649 at [2], omitting its footnoted reference to
Mihaka v Police [1981] 1 NZLR 54 (HC) and McKenzie v McKenzie [1970] 3 WLR 472 (CA).

discretion to allow the friend to play a greater role, such as speaking for the party, if that is thought appropriate. That discretion is exercised sparingly.

[8] I asked Mr Crafar whether Mr Palmer had assisted him in the drafting of the

Crafars’ amended counterclaim and synopsis of submissions. Mr Crafar said he had.

[9] I had earlier considered both documents, neither of which showed signs of relevant focus or legal competence. I decided Mr Palmer’s assistance was not likely to be constructive, and refused…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2017] NZHC 2709
Decision Date: 8 November 2017

CaseChat Overview and Summary

De Lage Landen Limited, a financial institution, brought a claim against the Crafar brothers, Allan and Frank, and Allan’s wife, Elizabeth, who were directors of Plateau Farms Limited (PFL), for monies owed under farm equipment leases and hire purchase agreements. The Crafars had guaranteed PFL’s obligations under these agreements. The claim was for $98,703.23 plus interest from July 2011. The Crafars had previously filed a counterclaim, which was struck out by Associate Judge Sargisson. They sought review of this decision, as well as leave to file an amended counterclaim and to be assisted by a 'McKenzie friend'. The court had to determine whether the Crafars could review the Associate Judge’s decision, whether they could file an amended counterclaim, and whether Allan Crafar could be assisted by a McKenzie friend.

The court found that the Crafars could not successfully challenge the Associate Judge’s decision to strike out their counterclaim. The Associate Judge correctly held that De Lage Landen Limited had no obligations to the Crafars, either at all or in any event as guarantors. The court also found that the Crafars could not file an amended counterclaim without leave, and that leave would not be granted because filing the counterclaim would not be in the interests of justice, and would significantly prejudice De Lage Landen Limited. Finally, the court found that Allan Crafar could not be assisted by a McKenzie friend because the friend’s assistance was unlikely to be constructive.

The Crafars were liable to pay De Lage Landen Limited $34,863.59 owing under the four mixer wagon leases, plus interest at the rate of 5 per cent per annum from 14 June 2012 until payment. They were also liable to pay De Lage Landen Limited $52,493.31 in fees and disbursements invoiced to De Lage Landen Limited to 30 September 2017, and such fair and reasonable costs incurred by De Lage Landen Limited thereafter to the date of this judgment as certified by the Registrar.

The final orders of the court were that the Crafars were jointly and severally liable to pay De Lage Landen Limited (a) $34,863.59; (b) interest on that sum for the period from 6 July 2011 to the date of payment, calculated at the rate of 5 per cent per annum; and (c) costs in the amount of $52,493.31 to 30 September 2017, and such fair and reasonable costs incurred by De Lage Landen Limited thereafter to the date of this judgment as certified by the Registrar.

Orders