Ford v Ensor
[2018] NZHC 2903
•8 November 2018
IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY
I TE KŌTI MATUA O AOTEAROA NGĀMOTU ROHE
CIV-2016-443-55 [2018] NZHC 2903
BETWEEN MARK WAYNE FORD
Plaintiff
AND
CHARLES RICHARD ENSOR Defendant
Teleconference: 7 November 2018 Counsel:
L T Meys for the Plaintiff
I D Matheson for the DefendantJudgment:
8 November 2018
JUDGMENT OF CHURCHMAN J
Background
[1] On 13 June 2016, the plaintiff filed a statement of claim in this matter. The statement of claim referred to events which had occurred as long ago as 2008.
[2] The plaintiff alleged that he had entered into certain agreements with the defendant relating to cutting rights and trapping of animals on a large block of land owned by the defendant in rural Taranaki.
[3] The losses claimed by the plaintiff against the defendant as a result of alleged breach of contract were judgment for special damages (relating to works carried out by the plaintiff in preparation for exercising the cutting rights) in the sum of
$54,645.93; loss of net profit from harvesting and milling trees estimated to be in
excess of $2 million, general damages of $20,000, as well as interest and costs.
FORD v ENSOR [2018] NZHC 2903 [8 November 2018]
[4] The defendant did not immediately file a statement of defence but one was filed on 23 January 2017.
[5] The matter has been before the Court on a number of occasions. The plaintiff, by memorandum dated 10 August 2016, sought judgment by default. By minute dated
25 October 2016, Dobson J refused judgment by default saying that he was not satisfied the claim was a liquidated demand as defined in r 15.7(5). He directed that a copy of the minute be provided to the defendant.
[6] On 9 February 2017, the parties filed a joint memorandum indicating that the defendant would pay costs to the plaintiff of $1,115 in relation to the plaintiff’s application for default judgment, and that the plaintiff consented to the late filing of a statement of defence and discontinued the application for judgment by default.
[7] The fixture for formal proof set down for 3 March 2017 was vacated by
Dobson J on 10 February 2017.
[8] By minute dated 24 July 2017, Thomas J directed a one-day judicial settlement conference on 20 September 2017. That proceeded before Associate Judge Smith but did not result in settlement.
[9] After a teleconference on 18 October 2017, Associate Judge Smith issued a minute dated 20 October 2017 which, among other things, directed that the plaintiff file an amended statement of claim providing proper particulars of the claim for damages for alleged loss of profit by 2 November 2017; directing a statement of defence to the amended of claim by 16 November 2017; that sworn discovery lists were to be provided by the parties by 30 November 2017, and that the close of pleadings date was fixed at 21 December 2017. Further timetable directions were made in anticipation of a trial after 1 June 2018.
[10] By memorandum of 2 November 2017, counsel for the plaintiff sought an extension of time for the filing of an amended statement of claim by 27 November
2017, and for the close of pleadings date to be 5 February 2018. Those directions were made by Clark J on 4 December 2017.
[11] By memorandum dated 19 December 2017, counsel for the plaintiff sought a further extension to require the amended statement of claim to be filed and served by
31 January 2018, and the close of pleadings date to be 8 March 2018. Those orders were made by Dobson J on 26 January 2018.
[12] The fixture in New Plymouth for five days from 9 July 2018 was set.
[13] By memorandum dated 15 March 2018, the defendant sought the vacation of the fixture on the grounds of the plaintiff ’s failure to comply with even the extended time limits.
[14] A teleconference was held on 16 April 2018, and by minute of 17 April 2018, Cull J refused to vacate the fixture.
[15] On 23 April 2018, a teleconference was held before Simon France J who issued a minute making various directions in relation to evidence to be given at the trial.
[16] On 7 May 2018, a teleconference was held before Ellis J in response to the plaintiff’s application for an adjournment of the five-day trial scheduled to commence on 9 July 2018. The grounds relied on were that Mr Moore, the plaintiff ’s forestry valuation expert, had been ill and was due to retire. Ellis J required an affidavit from
Mr Moore setting out his position.
[17] Following a teleconference on 16 May 2018, Ellis J issued a minute of 17 May
2018 vacating the fixture set for 8 July 2018 and indicating that a five-day fixture was available starting on 11 February 2019. That fixture was subsequently confirmed.
[18] The plaintiff filed a memorandum of counsel on 6 November 2018. It confirmed that the plaintiff intended to rely on the expert evidence already filed. That indicated that the loss of profits claim had reduced from some $2 million to between
$29,250 and $49,250 plus GST for each of the two periods of the potential logging permits. In addition to this sum was the special damages claim for $54,645.93.
[19] Notwithstanding the fact that the Court had long ago directed that an amended statement of claim be filed, the plaintiff’s memorandum submitted that:
… the plaintiff does not consider that an amended statement of claim is necessary. The defendant has all of the information which is relevant to the damages claim.
[20] The plaintiff’s memorandum set out a proposed timetable order towards hearing.
[21] The defendant filed a memorandum of counsel also dated 6 November 2018. It submitted that none of the procedural steps required in the minute of Associate Judge Smith of 18 October 2017 had been complied with despite the extension to dates on 26 January 2018. It was acknowledged that there had been some progress in relation to discovery. In the memorandum, the defendant sought that the trial date be vacated and that the proceeding be transferred to the District Court.
[22] The memorandum noted that, in purported satisfaction of the obligation to provide details of the claim for the special damages of $54,645.93, the plaintiff had provided the defendant with invoices to various entities other than the plaintiff including the “Wessex Trust”, East Holdings Ltd, Select Timbers Ltd, and Heli Logging 2008 Ltd. It was pointed out by the defendant that none of these entities were plaintiffs in these proceedings.
[23] The plaintiff filed a memorandum of 6 November 2018 in response to the defendant’s memorandum. It noted that the plaintiff opposed the application to vacate the fixture and transfer the proceeding to the District Court. It referred to s 86 of the District Court Act 2016 which was said to allow “transfer of proceedings to the High Court as of right or a claim is over $90,000.”
[24] The memorandum sought a timetable toward hearing and asserted that the claim was ready for trial.
The teleconference
[25] During the course of the teleconference, both parties amplified the contents of their written memoranda.
[26] Mr Matheson renewed his application for a transfer of the proceedings to the District Court submitting that, given that the plaintiff indicated that he was now relying on the joint memoranda of the forestry experts as the evidence of loss, the damages claim was well within the $350,000 jurisdiction of the District Court. He also submitted that a hearing in the District Court would be substantially less expensive for the defendant who is described as being “…a 70-year-old man living off-grid in remote Taranaki with limited financial resources.”
[27] He also submitted that s 86 of the District Court Act referred to by Mr Meys gave the defendant a right to request the transfer to the High Court of proceedings where the relief claimed exceeded $90,000 but did not confer any rights on a plaintiff.
[28] In response to the defendant’s arguments, Mr Meys said that if the proceedings were transferred to the District Court, they may take as much as a year to obtain a fixture and he argued that costs incurred in running proceedings in the High Court would not be greatly different than costs in the District Court.
[29] Mr Meys estimated that the total claim was in the vicinity of $153,000 plus interest, general damages and costs. He specifically conceded that even if all the claimed losses were recovered in full, the claim would fall within the $350,000 jurisdiction of the District Court.
Discussion
[30] These proceedings have followed a leisurely pace with the plaintiff waiting almost until the limitation period had expired before commencing them, and more than two years having passed since the statement of claim was filed. While it is acknowledged that the plaintiff is in receipt of legal aid and has had difficulties obtaining and briefing an expert, he has now made the choice to rely on the report prepared by the joint experts dated 3 May 2018. This report dramatically reduces the claim for potential losses by way of lost profit from some $2 million down to under
$100,000.
[31] Had the plaintiff obtained the benefit of an expert report like this prior to commencing the proceedings, they would not have been issued in the High Court.
[32] Pursuant to s 94 of the District Court Act, the Judge of the High Court is entitled to transfer proceedings to the District Court, either on the application of a party to the proceeding or on the Judge’s own initiative if:
(a) the subject matter of the proceedings is within the jurisdiction of the
District Court; and
(b)the Judge is satisfied that no important question of law or fact is likely to arise in the proceeding.
[33] The Act does not set out criteria for the Court to apply in exercising this discretion. In the case of Moodie v Lane,1 the High Court set out a number of criteria which have subsequently been applied in other cases. They are:
(a) the nature of the case;
(b) the complexity of the case;
(c) whether the case is of general or public importance;
(d) the amount in issue;
(e) the likely length of the hearing; and
(f) the financial resources of the parties.
[34] Other cases2 have also identified as a further relevant factor, the general policy of encouraging more suitable civil litigation to be heard in the District Court than had previously been the case.
[35] Since these two cases, the jurisdiction of the District Court has been increased to $350,000 and that is consistent with an indication by Parliament that normally
1 Moodie v Lane HC Auckland CP1484/87, 18 September 1990, Thomas J.
2 See for example Tapp v Elders Real Estate HC Whangarei CP70/90, 15 October 1990, Tompkins J.
unless an important question of law or fact arises, litigation involving sums less than this is most appropriately dealt with in the District Court.
[36] Analysing the present case against these criteria, I find:
(a) the case is relatively straightforward alleging a breach of contract in relation to forestry cutting and trapping rights;
(b)the case is not particularly complex. Agreement was reached by the experts on the central question of the potential value of the cutting rights in dispute. It is unlikely that there will be a large number of factual witnesses;
(c) the case is not of general or public importance and will turn very much on the evidence of the parties;
(d)the amount in issue is acknowledged by the plaintiff as being well within the jurisdiction of the District Court;
(e) the hearing is unlikely to exceed a week in length and, given the fact that the experts have agreed as to the parameters of the loss of profits claim, may even be of shorter duration;
(f) both parties seem relatively impecunious with the plaintiff being in receipt of legal aid and the defendant being described as of modest means. I accept that litigation in the High Court is generally more expensive than corresponding litigation in the District Court.
[37] Additional factors that I have considered are the potential length of time towards hearing. I am in no position to determine whether it will take a year to obtain a fixture for this matter in the District Court. However, given the relative lack of urgency shown by the plaintiff in relation to this proceeding so far, time would not appear to be of the essence as far as the plaintiff is concerned.
[38] It appears that the plaintiff did not obtain expert evidence as to the likely nature of provable loss before issuing these proceedings. That is unfortunate and much time and effort has been wasted as a result. However, having commenced proceedings in the High Court on the basis of wholly erroneous assumptions as to the value of the plaintiff’s claim against the defendant, there is no reason why these proceedings should remain in the High Court when the limited extent of the plaintiff’s potential loss is identified. It is unfortunate that, for a second time, this will result in a confirmed High Court fixture having to be vacated at relatively short notice.
[39] I am satisfied that the requirements of s 94(2) of the District Courts Act have been met.
[40] Rule 7.41 of the High Court Rules 2016 authorises the High Court to hear an oral application for an interlocutory order if the order sought has been outlined in a memorandum filed for a case management conference, and no party will be unduly prejudiced by the absence of a formal notice of the application.
[41] I am satisfied that notice of the application to transfer these proceedings to the
District Court was articulated in the memorandum of counsel for the defendant of
6 November 2018, and that there is no prejudice to the plaintiff given that the matter was able to be fully canvassed.
[42] In case I am wrong in that, I note that I have jurisdiction, pursuant to s 94(2)
of the District Courts Act 2016 to make such an order of my own initiative.
[43] Accordingly, these proceedings are hereby transferred to the District Court and the fixture set to proceed in the High Court at New Plymouth on 11 February 2019 is vacated.
Churchman J
Solicitors:
Neilsons Lawyers, Auckland for the Plaintiff
RMY Legal, New Plymouth for the Defendant
0
0