Gordhan v Kerdemelidis HC Christchurch CIV-2010-409-002982
[2011] NZHC 1808
•20 December 2011
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
CIV-2010-409-002982
BETWEEN MUKESH GORDHAN Plaintiff
ANDSAVVA KERDEMELIDIS ALSO KNOWN AS SAVVAS KERDEMELIDIS Defendant
Hearing: 21 September 2011 (Heard at Christchurch)
Appearances: B Gustafson for Plaintiff
G H Nation and T F McKenna for Defendant
Judgment: 20 December 2011
JUDGMENT OF ASSOCIATE JUDGE OSBORNE
as to strikeout applications
[1] Mr Gordhan in this proceeding sought summary judgment for US$4,082,667.89 plus interest, pursuant to a judgment granted on 23 August 2010 by the eighth judicial District Court for Clark County, Nevada, United States of America (“the foreign Court”).
[2] Mr Kerdemelidis defends the proceeding upon two bases, namely that the foreign Court had no jurisdiction over him and that the judgment was obtained by the plaintiff’s fraud (in the sense of mala fides whereby the plaintiff misled or deceived the foreign Court).
[3] Mr Kerdemelidis has applied for an order striking out those parts of Mr Gordhan’s claim which assert that the foreign Court had jurisdiction over him. For his part, Mr Gordhan has applied for the striking out of that part of the defence
which alleges fraud.
GORDHAN V KERDEMELIDIS HC CHCH CIV-2010-409-002982 20 December 2011
[4] This judgment relates to the competing strikeout applications. Mr Gordhan, as plaintiff, accepted that his summary judgment application had to be adjourned pending the outcome of the strikeout applications. Counsel for the plaintiff accepted that authorities such as Pawson v Claridge1 indicate that where there is an evidential foundation sufficient to establish an arguable case of fraud, by way of defence to the recognition of a foreign judgment, summary judgment will be inappropriate.
A bitter falling-out
[5] I shall begin with some background and, given the strikeout context, turn to the facts as pleaded by the parties. The background with which I begin is not the focus of the pleadings. The pleadings, by the nature of the plaintiff’s claim to obtain judgment pursuant to the foreign judgment, focus on the process by which the foreign judgment was obtained.
Employment background
[6] Compudigm International Limited (“Compudigm”) was a New Zealand company registered under the Companies Act 1993 with its head office at Wellington. It was a consultant in business and technology. Compudigm had a wholly-owned subsidiary, Compudigm Services Incorporated (“CSI”) which had facilities and conducted business in Nevada, United States of America.
[7] Mr Gordhan was employed by Compudigm as its Chief Operating Officer from March 2001. The Chief Executive Officer was Andrew Cardno. The employment contract signed by Mr Gordhan and by Mr Cardno for Compudigm on
13 January 2002 recorded that Mr Gordhan’s place of work was –
Wellington or such other place or places as required to perform services under this contract.
[8] From 2005 to 2007 Mr Gordhan travelled to Nevada to undertake Compudigm work, using CSI facilities. He continued to be paid in New Zealand. There is a dispute, unresolvable in the present context, as to the extent of the
1 Pawson v Claridge HC Auckland CIV 2009-404-004367, 25 June 2010.
connection which Mr Gordhan and Mr Kerdemelidis respectively had with Nevada. Mr Gordhan’s pleading asserts that the closest connection of the plaintiff ’s causes of action is with Nevada on various grounds including Mr Kerdemelidis’s various associations with Nevada. Mr Kerdemelidis denies significant connection. Mr Kerdemelidis pleads also that Mr Gordhan’s connection with Nevada was temporary and not significant in terms of connection.
The suspension and dismissal
[9] On 10 May 2007 Compudigm suspended Mr Gordhan, with pay, pending an investigation into certain conduct. He was subsequently dismissed by letter dated 11
December 2007 (signed by Mr Kerdemelidis as Legal Counsel and Company
Secretary). The stated grounds of dismissal were:
1.Attempting to gain personal advantage by conspiring with Mr Andrew Cardno to sign new employment contracts between yourselves without the appropriate delegated authority and Board knowledge; and
2. Knowingly authorising irregularities in Compudigm’s trade
financing activities with ANZ bank and Silicon Valley Bank.
Mr Gordhan had in the meantime filed a proceeding in the foreign Court by which he sued Compudigm for enforcement of an employment agreement allegedly entered into on or about 13 February 2007, signed by Mr Cardno as Chief Executive Officer for Compudigm and by Mr Gordhan. The agreement characterises Mr Gordhan as “Executive” and provides that it is governed by the law of Nevada, with the parties submitting to the jurisdiction of the Courts of that State and waiving any forum non- conveniens rights.
[10] There is fundamental disagreement between the parties as to the factual circumstances relating to the new employment contracts which Mr Gordhan and Mr Cardno signed and as to the circumstances and probity of, and responsibility for, some transactions which were double-financed through the banks referred to in the dismissal letter.
[11] After Mr Gordhan issued his Nevada proceeding against Compudigm, Compudigm was subsequently put into receivership and still later into liquidation. Mr Gordhan filed a First Amended Complaint, in early 2008, in which in addition to suing Compudigm he sued Mr Kerdemelidis and other individuals. The twelfth cause of action was for defamation. The thirteenth cause of action was for intentional interference with Mr Gordhan’s employment agreements. The fourteenth cause of action was for civil conspiracy.
[12] On 23 August 2010 the foreign Court granted judgment to Mr Gordhan against (amongst others) Mr Kerdemelidis.
[13] The judgment for a total of US$4,012,260.47 comprises sums awarded in relation to each of the three causes of action and includes punitive damages of
$1,757,368.
The statement of defence
[14] Mr Kerdemelidis contends that –
1.The foreign Court did not have jurisdiction over Mr Kerdemelidis personally;
2. The causes of action did not arise in the jurisdiction of the foreign
Court;
3. Mr Kerdemelidis did not submit to the jurisdiction of the foreign
Court;
4. Mr Kerdemelidis did not confer jurisdiction on the foreign Court;
5. Mr Gordhan did not have locus standi to bring the proceedings;
6. Mr Gordhan obtained judgment by default;
7.Mr Gordhan misled the foreign Court on a number of matters and failed to disclose relevant material to the foreign Court;
8. The principles of natural justice have been breached;
9. Punitive damages are not enforceable in law.
[15] More specifically, Mr Kerdemelidis pleaded (paragraph 30(b) of his statement of defence) that the foreign Court would not have entered judgment by default against him had it been made aware of eleven circumstances, namely:
(i)Mr Gordhan (the plaintiff) and Compudigm were parties to an employment agreement dated 2002;
(ii) The plaintiff had secretly executed another employment agreement in
2007, conferring on himself substantial benefits, which agreement did not have Board approval and which accordingly had not been validly or legally executed by Compudigm or CSI;
(iii)The plaintiff was suspended from his employment with Compudigm when the existence of this other employment agreement was established;
(iv)The plaintiff was also suspected of having double-financed invoices of Compudigm to its two bankers in order to ease cash flow of Compudigm, placing Compudigm at risk of being charged with fraud;
(v)The plaintiff was dismissed after the investigations into the conduct of the plaintiff established that the plaintiff had executed the 2007 employment agreement and that he also signed a contract on behalf of Compudigm for the benefit of Andrew Cardno without Board approval. In addition it was established that the plaintiff had knowingly authorised financial irregularities including the double- financing of invoices;
(vi)The plaintiff asserted the defendant had made allegations about the plaintiff to a company called WMS Gaming Incorporated (“WMS”). The defendant had never communicated with anyone from WMS about the plaintiff. In May 2007 Compudigm received a buy-out offer from WMS. WMS began a due diligence after the plaintiff was suspended. The plaintiff’s suspension was communicated to WMS on a fully confidential basis but it was not the defendant who made this communication. Disclosure of this fact would have been necessary and not in breach of any of the plaintiff’s legal rights, as WMS was carrying out due diligence and were entitled to know of the plaintiff’s suspension.
(vii)There was no conspiracy or intentional interference with the plaintiff’s employment agreement of 2002. The 2007 employment agreement was not an agreement executed by or binding on Compudigm and this was known to the plaintiff as he was blind copied in on an email from Mr Cardno to Anthony Wamsteker requesting Board approval for his employment agreement. Mr Wamsteker responded to this email by confirming that Mr Cardno’s contract required Board approval as well as to keep the Board informed of any actions in excess of shareholder agreements (which would have included the signing of the plaintiff’s contract by Mr Cardno).
(viii)In addition, the plaintiff entered into the 2007 employment agreement in breach of his fiduciary duties to Compudigm knowing that it was signed in contravention of a shareholder agreement with Ganeden Technology Pty Ltd and Winchmore Pty Ltd, who are major shareholders in Compudigm. In the shareholder’s agreement, which binds Compudigm and several shareholders, including Mr Cardno, Ganeden and Winchmore’s consent is required for Compudigm to “alter the remuneration paid or payable to Andrew John Cardno... or any other senior management employee.” The new contracts were
never presented to Ganeden or Winchmore for approval as required under the shareholder agreement.
(ix) The plaintiff also entered into the employment agreement in breach of his fiduciary duties to Compudigm, in that the employment contract contained terms that placed an unreasonable burden on Compudigm, including a clause requiring payment for the remainder of the contract even if it is terminated for cause. The plaintiff knew or ought to have known that Compudigm would not have agreed to a new employment contract with the plaintiff on the terms of the 2007 agreement.
(x) On 11 December 2007, after conducting an investigation into the plaintiff’s conduct and considering all the information before it, Compudigm dismissed the plaintiff for serious misconduct.
(xi) The defendant did not make the statements relied on by the plaintiff in making his claim for damages for defamation and such statements that were made about the plaintiff were not defamatory of the plaintiff because they were true.
Mr Gordhan’s strikeout application
[16] Mr Gordhan applies to strikeout sub-paragraphs i, ii, iii, iv, v, vii, viii, ix and x of paragraph 30(b) of the statement of defence. For convenience these allegations were referred to at the hearing and are referred to in this judgment as the “fraud allegations”.
[17] In his notice of application, Mr Gordhan, in order to have the fraud allegations struck out, relies on three particular grounds namely –
1. The employment contracts were not executed fraudulently;
2. The employment contracts were before the foreign Court;
3.The allegation that the double-invoicing by Compudigm involved fraudulent action by Mr Gordhan is unsustainable.
[18] If Mr Gordhan succeeds on his application to strike out the fraud allegations, he then intends to have his summary judgment application brought on for hearing.
Mr Kerdemelidis’s strikeout application
[19] In parallel with his statement of defence, Mr Kerdemelidis applies to strike out those aspects of the statement of claim (paragraphs 11 to 29) which deal with the
following subject matter –
Mr Kerdemelidis’s representation and acceptance of service through
counsel (paragraphs 11 - 15);
Mr Kerdemelidis’s consent to the Nevada proceeding being heard in a
foreign Court (paragraphs 16 - 18);
Steps taken by or for Mr Kerdemelidis in the Federal Court (paragraphs
19 - 24);
Further steps taken by or for Mr Kerdemelidis in the foreign Court, particularly through an unsuccessful motion to dismiss the proceeding
(paragraphs 25 - 29).
[20] Additionally, Mr Kerdemelidis applies to strike out paragraph 41 of the statement of claim dealing with the jurisdiction of the foreign Court to award the foreign judgment.
[21] Mr Kerdemelidis withdrew an application to strike out two other paragraphs of the statement of claim (45 and 48) in which Mr Gordhan asserted that the foreign judgment was not obtained by fraud and that the foreign judgment did not relate to taxes or penalties.
[22] Mr Gustafson, for Mr Gordhan, accepted that were the Court to strike out paragraph 41 of the statement of claim (as to jurisdiction) Mr Gordhan would no longer have a sustainable cause of action and his claim would be struck out.
Analysis of the competing applications
[23] It is convenient to deal with the competing applications (as did counsel) by first dealing with Mr Gordhan’s application to strike out Mr Kerdemelidis’s fraud allegations and to then deal with Mr Kerdemelidis’s application to strike out key parts of the statement of claim.
Striking out a pleading – the principles
[24] High Court Rule 15.1 makes provision for orders striking out all or part of a pleading. Both parties in this case invoke r 15.1(1). Mr Gordhan relies on r 15.1(1)(d) (abuse of the process of the Court) while Mr Kerdemelidis relies on r 15.1(1)(a) (no reasonably arguable cause of action).
[25] I adopt the following as principles applicable to the consideration of this application:
(a) The Court is to assume that the facts pleaded are true (unless they are entirely speculative and without foundation).
(b)The cause of action must be clearly untenable in the sense that the Court can be certain that it cannot succeed.
(c) The jurisdiction is to be exercised sparingly and only in clear cases.
(d)The jurisdiction is not excluded by the need to decide difficult questions of law, even if requiring extensive argument.
(e) The Court should be slow to rule on novel categories of duty of care at the strikeout stage. (See Attorney General v Prince2).
Mr Gordhan’s strikeout application
Fraud as a ground of resisting enforcement of a foreign judgment
[26] A foreign judgment obtained by fraud on the part of a plaintiff will not be enforced in New Zealand: Svirskis v Gibson3.
[27] The breadth of the concept of fraud in this context is illustrated by the following passage from Spencer, Bower & Turner Res Judicata (2nd ed, 1969) at p
323 –
The fraud necessary to destroy a prima facie case of estoppel by res judicata includes every variety of mala fides and mala praxis whereby one of the parties misleads and deceives the judicial tribunal.
[28] This passage has been adopted by Staughton LJ in Jet Holdings Inc v Patel4 and was in turn adopted by Master J H Williams QC in SHC Corporation v O’Brien5.
[29] The practical outcome of this special defence is reflected in another part of the judgment of Staughton LJ in Jet Holdings¸ at 652, where his Lordship said –
The defendant may have been served in a foreign country, entered an appearance, given evidence, been disbelieved and had judgment entered against him. If he asserts the plaintiff’s claim and evidence were fraudulent that issue must be tried all over again in enforcement proceedings. The lesson for the plaintiff is that he should in the first place bring his action where he expects to be able to enforce a judgment.
[30] This passage has also been adopted in New Zealand – for instance, see
Pawson v Claridge (above [4]) at [53] - [56].
2 Attorney General v Prince [1998] 1 NZLR 262.
3 Svirskis v Gibson [1977] 2 NZLR 4 (CA).
4 Jet Holdings Inc v Patel [1989] 2 All ER 648 at 654.
5 SHC Corporation v O’Brien HC Wellington CP 823-90, 18 April 1991 at p 29.
[31] The fraud alleged may be one or both of two varieties. These are helpfully reviewed in an article by Richard Garnett “Fraud and Foreign Judgments: the Defence that Refuses to Die” (2002) 1(2) Journal of International Commercial Law
161-186. Fraud may be analysed either as jurisdictional fraud in which the defendant alleges that it was precluded from presenting its case in the foreign Court by the deceit or false representations of the plaintiff. The second situation is perjury fraud, with that term used to connote a situation in which the foreign Court has been misled or deceived by the plaintiff in the conduct of its case, including through the presentation of purged or forged evidence.
The facts as pleaded by Mr Kerdemelidis
[32] Given the strikeout context, I return to the pleaded facts.
[33] Mr Kerdemelidis’s case as pleaded in paragraph 30 of his statement of defence involves allegations of perjury fraud. His allegations relate to both aspects of Mr Gordhan’s claim in the foreign Court, that is to say both allegations of conspiracy or intentional interference with the plaintiff’s employment agreement and allegations that Mr Kerdemelidis was involved in defamatory statements made to WMS Gaming Incorporated in relation to Mr Gordhan.
[34] Mr Gordhan does not seek to have struck out those pleadings (paragraph
30(b)(vi) and (xi)) which relate to the defamation cause of action. The defendant’s
pleading in relation to that cause of action will therefore remain in any event.
Mr Gordhan’s 2007 “employment contract”
[35] Apart from paragraphs 30(b)(vi) and (xi) (which deal with the cause of action in defamation), the balance of paragraph 30(b) of the statement of defence is concerned with the Mr Kerdemelidis’s allegation that Mr Gordhan misled the foreign Court. That allegation is introduced in paragraph 30(b) with the words –
... the Foreign Court would not have entered judgment by default against the
Defendant had it been aware of the following: ...
[36] While there then follow in relation to the employment contract matters nine particulars, Mr Nation in his submissions fairly characterised the nature of the defendant’s pleading as being allegations that –
a.The Plaintiff deliberately misled the Foreign Court in contending that his employment with Compudigm International Limited was governed by a binding Employment Agreement dated 13 February
2007, when he knew or ought to have known that such contract was not binding until approved by the Compudigm Board and certain shareholders, and that approval had not been obtained.
b.The Plaintiff deliberately misled the Foreign Court in contending that but, for the termination of his contract by Compudigm, he was entitled to the benefit of the 2007 contract continuing when he knew that would not have been the case if he signed the 2007 contracts, including the Cardno contract, in breach of his obligations to the company and/or he had been involved in seriously irregular financial dealings with two of the companies banks, ie the double invoicing.
(c) The Plaintiff misled the Foreign Court by asserting that the Defendant had been part of a conspiracy to wrongly terminate the Plaintiff’s contract when he knew or was reckless as to whether the Defendant as a mid level legal officer for Compudigm had simply been involved in implementing a decision to terminate the Plaintiff’s employment on grounds which the board of Compudigm had considered were justified.
(d) The Plaintiff misled the Foreign Court as to the damage which he had suffered by reason of the alleged defamation through not disclosing all the circumstances in which the 2007 contract had been entered into, the circumstances relating to the double financing and the circumstances in which his contract had been terminated.
[37] These allegations are classic perjury fraud allegations. They are allegations of mala fides and mala praxis. They involve the proposition that Mr Gordhan misled the foreign Court by withholding relevant information or providing incorrect or misleading information.
[38] In his submissions, Mr Gustafson, for Mr Gordhan, pointed to a number of Mr Kerdemelidis’s particulars of perjury fraud which were clearly disclosed to the foreign Court when one looks at that Court’s documentary record which has been put in evidence. He refers, for instance, to allegations concerning the 2002 and 2007 employment agreement documents. He says in relation to both those documents and the events surrounding them that they were referred to in numerous Court documents in the foreign Court.
[39] Mr Gustafson’s submission in this regard involves a miscuing as to what is the true subject matter of the perjury fraud allegations. The miscuing can be illustrated by reference to the first two particulars in paragraph 30(b) which were –
i. The Plaintiff and Compudigm were parties to an employment agreement dated 2002;
ii. The Plaintiff had secretly executed another employment agreement in 2007, conferring on himself substantial benefits, which agreement did not have Board approval and which accordingly had not been validly or legally executed by Compudigm or CSI;
[40] It was Mr Gustafson’s submission that those particulars (amongst others) must be struck out because the record in the foreign Court discloses that such information was before the foreign Court. He points, correctly, to documentation which was filed in the foreign Court in which Compudigm’s case as to the ongoing validity of the 2002 employment agreement and the invalidity of the 2007 document was substantially recorded.
[41] The fact that issues or contentions on both sides may have appeared in Court documentation misses the point. In relation to an allegation of perjury fraud a defendant says that the plaintiff misled the foreign Court. The allegation in this case is that the plaintiff misled the foreign Court by maintaining in bad faith a contention as to factual matters which was incorrect. In such a case, it matters not that there were documents before the foreign Court which in some way identified or captured the defendant’s central allegations – what is critical in the defendant’s fraud allegation in this jurisdiction (New Zealand) is that the plaintiff in the foreign jurisdiction is alleged to have misled the foreign Court. The fact that another side to the story may have been before the foreign Court does not detract from what is assumed in the striking out context to be fraud (as pleaded) on the part of the plaintiff in obtaining his foreign judgment.
[42] The defendant in this situation is entitled to his hearing in this jurisdiction on the very same questions as may have been decided by the foreign Court. See the judgment of the Court of Appeal in Svirskis v Gibson, per Cooke J ((above [26]) at 9
–
The setting of authorities in which the question arises is that in two nineteenth century English cases, Abouloff v Oppenheimer (1882) 10 QBD
295 and Vadala v Lawes (1890) 25 QBD 310, the Court of Appeal had held that in an action brought in England on a foreign judgment the defence may
be raised that the judgment was obtained by the fraud of the plaintiff, even though that may involve retrying on the same evidence questions already adjudicated on by the foreign court.
[43] Mr Nation notes that the record of proceedings in the foreign Court would appear to indicate that the foreign Court did not even have to reach a decision of deciding the facts for itself. Mr Nation noted the memorandum filed in the foreign Court by Mr Gordhan’s attorney on 5 May 2010 in which he submitted that, as a result of the entry of default against each of the defendants, all of the facts alleged in Mr Gordhan’s pleadings were deemed admitted. Reference was made by the
attorney to Estate of LoMastro v American Family Insurance Group6.
[44] It is not a ground upon which to strike out Mr Gordhan’s perjury fraud allegations in this case that some or many aspects of what Compudigm or Mr Gordhan could say in reply were before the foreign Court.
The allegations as to double-financing
[45] Mr Kerdemelidis’s particularised allegations of perjury fraud include also the allegation that Mr Gordhan, having been suspected of having double-financed Compudigm invoices to its two bankers, had subsequently been established to have knowingly authorised those activities.
[46] Mr Gustafson characterised Mr Kerdemelidis’s allegations in relation to a knowing irregularity in the double-invoicing as “unsustainable”. In cases involving strikeout applications, the Courts have also sometimes enquired as to whether a pleading is “untenable”. Such terms must be understood to mean unsustainable or untenable in the sense that the Court can be certain that the pleading cannot succeed;
per Elias CJ and Anderson J in Couch v Attorney-General (No. 1)7.
6 Estate of LoMastro v American Family Insurance Group (2008) 195 P.3d 339, 345 in 14.
7 Couch v Attorney-General (No. 1) [2008] 3 NZLR 725 at [33].
[47] With a number of layers of allegation involved in this case (and in the foreign Court), including allegations containing separate instances of mala fides or dishonesty, it is important to consider particular allegations in the context of their own “layer”. Mr Kerdemelidis’s defence to the application for summary judgment is that Mr Gordhan obtained his judgment in the foreign Court by fraud. Put another way, he alleges that in a number of ways Mr Gordhan misled the foreign Court. One of the central allegations Mr Gordhan made in the foreign Court was that Compudigm and various individuals had conspired against him in actions to suspend him during an investigation and to later terminate his employment relationship. It is in that context that Mr Kerdemelidis says there is another layer of fides which is relevant, namely Mr Gordhan’s fides in the double-financing transactions. If Mr Gordhan’s fides were at least open to question and, particularly if Mr Gordhan knew that or should have known that, then Mr Gordhan’s allegation that Mr Kerdemelidis and others did something unlawful when involved in the suspension and dismissal might be found by a New Zealand Court to have resulted in a judgment obtained in the foreign Court by fraud.
[48] Against this background the Court on a strikeout application must be careful not to confuse the layers of fraud allegation. The Court’s primary focus in the immediate context is on whether Mr Kerdemelidis’s allegation that Mr Gordhan obtained his foreign judgment by fraud is so clearly untenable that the Court can be certain it cannot succeed. To obtain that judgment Mr Gordhan presented his evidence in the foreign Court on the subject of the employment suspension, investigation and dismissal. His case involved an assertion that there had been a conspiracy involving Mr Kerdemelidis and others and that thus there had been an unlawful interference with Mr Gordhan’s employment rights.
[49] Mr Kerdemelidis’s defence in relation to the employment investigation is to be seen in the context of Compudigm’s rights and responsibilities as an employer. Mr Kerdemelidis alleges a suspicion of Mr Gordhan’s involvement in the double- financing of invoices. Mr Kerdemelidis then alleges that when the plaintiff was dismissed it was for two reasons, namely his involvement in the execution of the
2007 employment agreement and, secondly, because it had been established that he
had knowingly authorised financial irregularities including the double-financing of invoices.
[50] At a trial, Mr Kerdemelidis will wish to establish the evidence upon which those allegations in his pleadings are based. He will be entitled to do so having regard to all the information which was before Compudigm at the time of the suspension, during the investigation and at the time of the dismissal. That evidence will be adduced at trial and tested at trial.
[51] In this strikeout application, Mr Gustafson for Mr Gordhan, has focussed substantially on three reports which were prepared in 2007 by PricewaterhouseCoopers (PWC).
[52] Mr Gustafson drew from those reports a number of comments which might indicate that the report writers concluded that Mr Gordhan was free of any dishonest intention in his involvement in the double-financing or that he was not involved in some particular transactions which were double-financed. Mr Gustafson notes particularly an absence of conclusion in the PWC reports to any motivation on the part of Mr Gordhan at all.
[53] In a strikeout context (in which Mr Gordhan must establish that Mr Kerdemelidis’s allegations are unsustainable) Mr Gordhan’s reliance on an analysis of the PWC reports is not helpful. Mr Kerdemelidis will be entitled at the trial to adduce all evidence by which Compudigm reached its conclusions. That is not limited to the PWC reports and, what is more, when the PWC reports are fully read, it may at the very least be said that they do not rule out a conclusion of fraudulent involvement by at least some, including Mr Gordhan, who were involved in the double-financing.
[54] I accept Mr Nation’s submissions that, even limiting oneself to the PWC
reports themselves would leave the following matters as at least arguably established
–
a. Double financing did occur.
b.The documents for the double financing with Silicon Valley Bank were signed solely by Defendant.
c.While Plaintiff may have told staff double financing was not a fraud, if the intent was to use the finance raised the second time to repay the ANZ, and PWC may have considered in one instance his intent may have been “good”, that motivation did not mean there had not been a deliberate misleading of Silicon Valley Bank or an involvement in irregular transactions as far as the banks were concerned.
d.In relationship to the NCR Corporation, invoices had been financed twice, the advances obtained both times were still outstanding and the invoice had not been paid.
e.In relation to finance raised on Viejas invoices, trade finance had been raised on invoices that had not been issued to customers due to the work not having been completed.
f. PWC identified six instances of invoices being raised prior to work being completed, invoices being financed only with the ANZ but not sent to customers as there was not yet an obligation to pay.
g. These transactions occurred when Compudigm was under significant financial pressure and there must have always been a risk that because of those pressures that the finance raised a second time could not be used to repay the advance obtained the first time.
h. What Compudigm were doing with the Plaintiff’s knowledge put
Compudigm seriously at risk.
i. The Plaintiff had been aware of what was happening with these transactions and not brought that to the attention of the Board.
j. The Plaintiff’s then explanation for what occurred was in a number of instances not consistent with what had actually happened as identified by PWC.
[55] In addition there is the concluding comment by the PWC Partner and Director of their Investigations & Forensic Services division in their culminating report of 23 November 2007 where they conclude –
As stated above, these issues could be considered fraud by the two financial institutions providing trade finance and arrangements to Compudigm. On this basis, Compudigm could, if it wished, justifiably make a report to the authorities in both New Zealand and in the United States that it had been involved in transactions that could be considered fraudulent.
[56] Against this background, and upon the basis of his pleading, Mr Kerdemelidis is entitled to have these allegations remain in his pleadings and tested at trial.
[57] This more general observation can be added. The overall thrust of Mr Gordhan’s case in the foreign Court was that there was something in the nature of a conspiracy by others to drive him (and his Chief Executive Officer, Mr Cardno), out of Compudigm while he and Mr Cardno were blameless employees. The overall thrust of Compudigm’s position as evidenced by the contemporary documents relating to the investigations conducted into the conduct of Messrs Cardno and Gordhan, was that Mr Cardno and Mr Gordhan set about creating employment contract documents which would purport to give them entitlements and rights in Nevada far beyond and different to any rights they had under their existing employment contracts. There was also double-financing in which Mr Gordhan had engaged and which had grave implications for Compudigm. Given that perjury fraud is available as a defence in relation to the recognition of foreign judgments, it would be an unjust outcome if an officer of Compudigm, such as Mr Kerdemelidis, was not entitled to set up at trial the evidence to support the allegations which I have just summarised.
Conclusion
[58] Mr Gordhan has not established grounds for striking out Mr Kerdemelidis’s
fraud allegations (as contained in paragraph 30(b) of the statement of defence).
Mr Kerdemelidis’s strikeout application
The Jurisdiction of the Foreign Court in personam
The law
[59] The jurisdiction of a foreign Court to give judgment in personam which binds the judgment debtor and is recognised in New Zealand at common law is summarised in Laws of New Zealand Conflict of Laws at [67] as arising in the following four circumstances –
1.If the judgment debtor was resident in the foreign country at the time the proceedings were instituted, and possibly if he or she were merely present in the country at that time;
2.If the judgment debtor was the plaintiff or counterclaimed, in the proceedings in the foreign Court.
3. If the judgment debtor submitted to the jurisdiction of the foreign
Court by voluntarily appearing in the proceedings.
4.If the judgment debtor had agreed before the commencement of the proceedings to submit to the jurisdiction of that Court, or of the Courts of that country, in respect of the subject-matter of the proceedings.
Mr Gordhan’s pleading
[60] Mr Gordhan makes two sets of allegations both of which Mr Kerdemelidis applies to strike out. First, Mr Gordhan pleaded (paragraph 41.1) that Mr Kerdemelidis had submitted to the jurisdiction of the foreign Court. Secondly, Mr Gordhan pleaded (paragraph 41.2 to 41.9) that the causes of action had their closest connection with Nevada, which was an umbrella pleading as Mr Gustafson’s submissions made clear for the proposition that Mr Kerdemelidis was present in the jurisdiction prior to and at the time the proceedings in the foreign Court were issued.
[61] I will deal with those alleged grounds of jurisdiction in that order.
Submission to the jurisdiction
[62] The circumstances in which a defendant is held to have submitted to the jurisdiction of a foreign Court were reviewed by the Court of Appeal in Von Wyl v
Engeler8. Delivering the judgment of the Court Richardson P at 420 – 421 said –
8 Von Wyl v Engeler [1998] 3 NZLR 416.
Submission to the jurisdiction
At common law a judgment in personam of a foreign Court of competent jurisdiction is regarded as creating a debt owed by the judgment creditor to the judgment debtor on which an action may be brought in the High Court. The general common law principles relating to submission to the jurisdiction of foreign Courts in actions in personam and in support of recognition of foreign judgments in personam are well settled. Rather than reviewing the authorities in detail it is sufficient to refer to relevant passages in Dicey and Morris on the Conflict of Laws (12th ed, 1993) adapted to refer to this country.
With various exceptions and qualifications a foreign judgment in personam given by the Court of a foreign country with jurisdiction to give that judgment in accordance with the principles set out in Rules 36 to 39 (of Dicey and Morris), which is not impeachable under Rules 42 to 45, is enforceable by action in New Zealand (p 461). The foreign Court must have had jurisdiction as determined by the New Zealand rules of conflict of laws, rather than according to the foreign Court's own law (p 473). Jurisdiction in personam exists where the debtor was present in the foreign country at the time the proceedings were instituted; or where the judgment debtor was plaintiff or counterclaimed in the foreign Court; or where, being defendant in the foreign Court, submitted to the jurisdiction of that Court by voluntarily appearing in the proceedings; or before the commencement of the proceedings agreed in respect of the subject-matter of the proceedings to submit to the jurisdiction of that Court or of the Courts of that country (pp
472 – 473); and an agreement to submit may take the form of an agreement to accept service at a designated address (p 483). The corollary under Rule
42 (p 503) is that a foreign judgment is impeachable if the Courts of the foreign country did not have jurisdiction to give that judgment in the view of New Zealand law in accordance with the principles set out in Rules 36 to 40;
and so where, as submitted here, the defendant did not submit or agree to submit to the jurisdiction of the foreign Court.
The foundation of the jurisdiction in personam is service of the writ or other originating process. Personal service on a defendant present within the jurisdiction and, where it is impracticable to serve the proceeding in the prescribed manner, substituted service within the jurisdiction by taking such steps as the Court may direct to bring the proceeding to the defendant's notice, satisfy that requirement. And it seems there is no jurisdiction to order substituted service within the jurisdiction on a defendant who was outside the jurisdiction when the proceeding was issued (p 303). The principle underlying the concept of submission to the jurisdiction is that a person who would not otherwise be subject to the jurisdiction of the Court may preclude himself or herself by his or her own conduct from objecting to the jurisdiction and thus giving the Court an authority over that person which, but for that submission, it would not possess (p 310). Accordingly, the onus is on the party seeking to enforce the foreign judgment to establish that the non-resident accepted the jurisdiction of the foreign Court to determine the proceeding. It follows that a person who appears merely to contest the jurisdiction of the Court does not thereby submit:
``In order to establish that the defendant has, by his conduct in the proceedings, submitted or waived his objection to the jurisdiction, it must be
shown that he has taken some step which is only necessary or only useful if the objection has been waived or never been entertained at all'' (p 311).
The crucial question, then, is whether the absent defendant is shown to have conferred jurisdiction on the foreign Court by submitting to it or agreeing to submit to it.
[63] The law as now summarised in the current edition of Dicey, Morris & Collins The Conflict of Laws (14th ed, 2006), (still under Rules 36 – 39, pp 588 – 619) is materially the same as that summarised by the Court of Appeal in Von Wyl.
[64] Von Wyl was a case in which the plaintiff sought summary judgment. The Court of Appeal upheld Master Gambrill’s refusal of the summary judgment application. Richardson P, having reviewed the law (above [62]), observed at p 421 that the onus is on the party seeking to enforce the foreign judgment to establish that a non-resident accepted the jurisdiction of the foreign Court to determine the proceeding. That, as I have said, was in the context of a summary judgment application. The present context is a strikeout application where the allegations in the statement of claim are taken to be correct.
Mr Gordhan’s particular allegations
[65] At the relevant part of his claim, Mr Gordhan alleges that Mr Kerdemelidis submitted to the jurisdiction of the foreign Court in this way –
41.1 The defendant submitted to the jurisdiction of the foreign Court by:
41.1.1 agreeing to accept service of:
41.1.1.1the summons and the Amended Complaint, both filed in the Foreign Proceeding; and
41.1.1.2subsequent court documents filed in the Foreign Proceeding, at a designated address in the foreign country, namely the addresses of the Defendant’s U.S. Attorneys; and
41.1.2 appointing firms of attorneys to act on his behalf in respect of the Foreign Proceeding which firms acted for the defendant for approximately two years while the Foreign Proceeding was being litigated; and
41.1.3 seeking further time to file his response to the plaintiff’s Amended Claim, without making reservations as to any protest to jurisdiction; and
41.1.4 voluntarily appearing through counsel in the Foreign
Proceeding and taking steps, including:
41.1.4.1accepting service of the Amended Complaint and summons without making reservations as to any protest to jurisdiction; and
41.1.4.2 Either:
41.1.4.2.1consenting to the removal of the case to the Federal Court by the other defendants; or
41.1.4.2.2removing the Foreign Proceeding from the foreign Court to the Federal Court
without making reservations as to any protest to jurisdiction; and
41.1.4.3paying the costs awarded against the defendant in the amount of $US15,556.95 in respect of his unsuccessful opposition to the plaintiff’s motion to remove the Foreign Proceeding back to the foreign Court; and
41.1.4.4filing a Notice of Appearance, in the Federal Court without making reservations as to any protest to jurisdiction; and
41.1.4.5filing a Certificate of Interested Parties in the Federal Court, without making reservations as to any protest to jurisdiction; and
41.1.4.6 filing his Dismissal Motion; and
41.1.4.7 filing his statement of removal; and
41.1.4.8filing his joint memorandum in the Federal Court advising it of the status of all pending motions; and
41.1.4.9filing his opposition to the plaintiff’s motion to remand the proceeding back to the foreign Court; and
41.1.4.10 filing his foreign Court Dismissal Motion.
Acceptance of service – discussion
[66] Mr Gordhan alleges that Mr Kerdemelidis accepted service of the documents in the proceeding by two separate means, namely by acceptance initially of the summons and the Amended Complaint as filed in the foreign Court and subsequently by acceptance of service (within Nevada at his US attorney’s address) of subsequent Court documents.
[67] In his statement of defence Mr Kerdemelidis does not plead particularly to paragraph 41.1.1 of the statement of claim. Rather, Mr Kerdemelidis denies paragraph 41 in its entirety, adopts earlier pleadings in his statement of defence, and further states (amongst other things) that the foreign Court never had jurisdiction over him to hear the matter and that he never submitted to the foreign Court’s jurisdiction. Mr Kerdemelidis, in his pleading, does not engage directly with the allegation that he had accepted service by two particular means.
[68] In his interlocutory application for strikeout, Mr Kerdemelidis said in relation to service –
Acceptance of service of documents in the Foreign Proceedings does not constitute a submission to jurisdiction, if it was qualified, in the sense that the defendant’s legal representatives accepted the documents on the grounds that they would only be challenging the foreign Court’s jurisdiction...
[69] Mr Kerdemelidis’s interlocutory application does not directly refer to the
pleading in relation to service of the initial documents.
[70] Notwithstanding the strikeout context, both parties filed affidavit evidence in this interlocutory proceeding.
[71] Mr Kerdemelidis, in his first affidavit, deposed that he did not submit to the jurisdiction of the foreign Court and that any action he took in relation to the foreign proceeding was for the purpose of protesting the foreign Court’s jurisdiction. He deposed that the acceptance of service of the proceedings and the subsequent application for transfer to the Federal Court was done on the advice of his legal representative in the United States for the purpose of dealing with the issue of jurisdiction.
[72] In a subsequent affidavit he deposes that his brother (Theo) was served with
the amended complaint “on my behalf” on 17 May 2008.
[73] In his affidavit, Mr Gordhan deposes that after service of the initiating documents upon Mr Kerdemelidis’s brother, he reached an agreement with Mr Kerdemelidis (“the extension”) whereby Mr Gordhan agreed to grant Mr Kerdemelidis an extension of time to 13 June 2008 to file and serve his response to the Gordhan pleadings and Mr Kerdemelidis agreed not to challenge the fact of service of the initiating documents upon him. Mr Gordhan deposes that following that agreement the attorney for Mr Kerdemelidis gave written notification to Mr Gordhan (through Mr Gordhan’s attorneys) that the law firm Sheppard Mullin Richter & Hampton was now acting for Mr Kerdemelidis in the foreign proceeding and confirming the extension. Mr Gordhan has produced a letter from Sheppard Mullin dated 29 May 2008 in which Robin L Lewis of that firm states –
Re: Gordhan v. Compudigm, et al. Eighth Judicial District Court, Clark
Co., Nevada Case No. A546295
Dear Chris
This letter is to inform you that Sheppard, Mullin, Richter & Hampton, LLP has now been retained by Savva Kerdemelidis to represent him in the abovementioned matter.
Additionally, we would like to confirm your previous agreement on behalf of Plaintiff Mukesh Gordhan to grant defendant Savva Kerdemelidis an extension of time to respond to the First Amended Complaint no later than June 13, 2008. You previously indicated that you would be willing to grant this extension for Savva Kerdemelidis if we were retained to represent him as anticipated. Per the agreement, we also agree not to challenge service of process on defendant Savva Kerdemelidis based on method of service.
If this letter does not accurately set forth our agreement, please let me know by close of business today if possible.
(emphasis added).
[74] Sheppard Mullin subsequently (on 9 June 2008) notified Mr Gordhan’s attorneys that Sheppard Mullin no longer represented Mr Kerdemelidis (or two other defendants named, West and Irvine).
[75] Mr Kerdemelidis refers to the “acceptance of service of documents in the foreign proceeding” but contends that that does not constitute a submission to jurisdiction if it was qualified in the sense that the defendant’s legal representatives accepted the documents on the grounds that they would only be challenging the foreign Court’s jurisdiction. The notice of application invokes the principles as discussed in Von Wyl.
[76] When one returns to the underlying discussion of principle in Dicey Morris & Collins, one finds this discussion at 11-132 (in relation to Rule 25, as to submission to the jurisdiction) –
A person who appears voluntarily after service on him submits to the jurisdiction, even though he is out of England at the time of issue and service of the process. He may, for instance, instruct his solicitor to accept service on his behalf; and the Civil Procedure Rules provide that where a solicitor is authorised to accept service on behalf of a party, in principle process must be served on the solicitor. But the solicitor may accept service of proceedings on the basis that the defendant remains free to contest the jurisdiction in the same way as if the claimant had obtained permission to serve aboard and had effected service abroad. If the defendant instructs his solicitor to accept service and the solicitor communicates those instructions to the claimant, the defendant will be regarded as having submitted, even if the instructions are withdrawn. (Footnotes omitted).
[77] This is a strikeout application. It happens that the parties have adduced evidence, including by way of exhibited correspondence, which casts some light on the circumstances of the acceptance of service. The plaintiff alleges the acceptance of service on behalf of the defendant without reference to any qualification as to the basis upon which service was accepted. Mr Kerdemelidis deposes that the acceptance of service of the proceedings (and the subsequent application for transfer of the matter to a higher Court) was done on the advice of his attorney and for the purposes of dealing with the issue of jurisdiction. On the other hand, such correspondence as has been produced (which has been produced by Mr Gordhan) does not refer to any qualification by Mr Kerdemelidis’s attorneys at the time the acceptance of service was agreed. It may be that there are other communications which will become the subject of evidence at trial. The complete picture is not in evidence at this point.
[78] In these circumstances the Court cannot find, as Mr Kerdemelidis invites, that the plaintiff’s allegation as to submission to jurisdiction through acceptance of service is unsustainable. Mr Gordhan points to documentary evidence which provides a foundation for the allegation. Any further findings, one way or the other, are properly a matter for trial.
Mr Gordhan’s other particulars as to submission to jurisdiction
[79] By reason of my finding as to the particulars as to acceptance of service, Mr Gordhan’s claim will not be struck out in its entirety. It is nonetheless necessary to consider whether other particulars (as set out in paragraph 41.1 of the statement of claim) ought to be struck out as unsustainable in themselves.
[80] In the circumstances of this case I would not consider it appropriate to strike out those particulars which chronologically flow after the acceptance of service. A plaintiff is entitled to invite the Court to consider a defendant’s subsequent conduct in determining whether other particular conduct has amounted to on its own or in combination a submission to jurisdiction.
[81] An example of other conduct which should be considered in this case may lie in Mr Kerdemelidis’s involvement in the attempts to remove the foreign proceeding from the foreign (State of Nevada) Court to the Federal Court in Nevada.
[82] Mr Gordhan alleges in the statement of claim, in that regard, that the removal to the Federal Court took place without reservation as to any protest to jurisdiction. In his statement of defence, Mr Kerdemelidis does not plead an express reservation or protest to jurisdiction when the transfer occurred. Rather (at 41(c)) Mr Kerdemelidis simply alleges –
All steps taken by the Defendant in response to the Foreign Proceedings were taken to challenge the Jurisdiction of the Foreign Court and the Federal Court.
[83] Beyond that the defence comprises a blanket denial to the allegations contained in paragraph 41 of the statement of claim.
[84] The Notice of Removal, by which Mr Kerdemelidis and other defendants sought to remove the foreign proceeding into the federal jurisdiction has been produced in evidence. On its face it appears to contain no expression of reservation of protest to jurisdiction. Rather the transfer appears to have been premised on the proposition that the federal jurisdiction was the appropriate jurisdiction because there was a complete diversity among all parties and the amount in controversy by reason of the employment contract claim exceeded $75,000. Within the Notice of Removal the statement is made to the District Court that the District Court’s personal jurisdiction over the defendants and subject matter jurisdiction to hear the case is not admitted. But there appears to be no contemporaneous reservation in relation to the Federal Court’s jurisdiction.
[85] In his submissions, Mr Gustafson emphasised that in a number of subsequent steps taken in the Federal Court (including Notice of Appearance and Certificate of Interested Parties) no reservation as to Mr Kerdemelidis’s protest jurisdiction was recorded.
[86] In this strikeout jurisdiction, even with some evidence filed, it is not possible or appropriate to dismiss as unsustainable the plaintiff’s allegations that various steps were taken in relation to the Federal Court proceeding which did not involve reservations as to any protest to jurisdiction and which may therefore have amounted to (separately or jointly) submissions to jurisdiction. This encompasses all the remaining particulars in paragraph 41.1.4 of the statement of claim.
Presence in the jurisdiction
[87] Under a heading “Particulars – The causes of action had their closest connection with Nevada” Mr Gordhan’s statement of claim at paragraphs 41.2 – 41.9 went on to state –
41.2 The causes of action arose in Nevada.
41.3At relevant times (from approximately 2005 to early 2008) the defendant was an employee of Compudigm, holding office as its secretary and assistant in house general counsel. Compudigm’s operational headquarters were based in Nevada.
41.4At relevant times from approximately 2005 to early 2008 the defendant maintained:
41.4.1 to third parties a Nevada physical address which he communicated as part of his signature line of emails;
41.4.2 a Nevada fax number; and
41.4.3 a personal Nevada telephone number.
41.5The defendant was registered with the Nevada Secretary of State as being an officer (namely, secretary and treasurer) of a Nevada Corporation, namely Compudigm Services, Inc.
41.6The defendant had substantial and regular contact with individuals, companies and governmental entities residing or based in Nevada.
41.7The defendant was engaged in business in the state of Nevada, through his contact with Nevada-based individuals.
41.8The defendant derived income from Compudigm which in turn derived its income from Nevada.
41.9 The plaintiff repeats paragraphs [28.1] to [28.2.4.2].
Mr Gordhan’s allegations as to presence in the jurisdiction
[88] In his submissions Mr Gustafson confirmed that the focus of those (paragraphs 41.2 – 41.9) allegations was to indicate that Mr Kerdemelidis was present in the jurisdiction prior to and at the time the proceedings were issued.
[89] Mr Gustafson submitted that from a review of the statement of defence there are serious factual issues in relation to the pleaded particulars which cannot be resolved on a strikeout application and would need to be the subject of cross- examination. He identified as examples of such issues the following:
1. Where was the operational headquarters of Compudigm (Nevada or
Wellington)?
2.Did Mr Kerdemelidis maintain a Nevada address, facsimile and phone number?
3.Was Mr Kerdemelidis holding himself out as legal counsel for a company registered and trading in Nevada?
4. Was Mr Kerdemelidis registered as an officer of Compudigm in
Nevada with the Nevada Secretary of State?
[90] In his application for an order striking out parts of the statement of claim, and in this context paragraphs 41.2 - 41.9, Mr Kerdemelidis submitted that the strikeout should occur because the evidence establishes unarguably that:
1.Mr Kerdemelidis had never travelled to Nevada, never taken up residence in Nevada, never did business in Nevada and was not in Nevada when the proceedings were issued and served.
2.Mr Kerdemelidis’s email signature had Compudigm’s subsidiary’s Nevada address, but all email signatures within the Compudigm group were the same for the purpose of consistency. The defendant never had a Nevada telephone number.
3.Compudigm did have a Skype number which was an American number but Skype logs calls via the internet to the Skype number. Mr Kerdemelidis never received any calls from any customers of Compudigm on the Skype number.
[91] Upon that basis in his application for strikeout, Mr Kerdemelidis contended that he was not a resident of the United States at the time the proceedings giving rise to the judgment were instituted, nor was he ever present within the United States’ jurisdiction. He stated that there was therefore an essential criterion required to be satisfied by Mr Gordhan.
[92] In determining whether to recognise a foreign judgment, New Zealand Courts apply the common law requirements in relation to jurisdiction. The Court of Appeal, after the passage in Von Wyl v Engeler to which I have referred (above [62]), referred to the jurisdictional basis in these terms:
The foundation of the jurisdiction in personam is service of the writ or other originating process. Personal service on a defendant present within the jurisdiction and, where it is impracticable to serve the proceeding in the prescribed manner, substituted service within the jurisdiction by taking such
steps as the Court may direct to bring the proceeding to the defendant's notice, satisfy that requirement. And it seems there is no jurisdiction to order substituted service within the jurisdiction on a defendant who was outside the jurisdiction when the proceeding was issued ...
[93] For a recent application of that principle see Exportrade Corporation v Irie
Blue New Zealand Ltd9.
[94] Where the Court of Appeal referred to “a defendant present within the jurisdiction”, Courts have also often referred to “a person resident within the jurisdiction”. To the extent that “present” may convey a broader, more temporary, meaning I adopt it for the purposes of this analysis.
[95] I accept Mr Gustafson’s submission that many of the matters Mr Kerdemelidis relies upon in relation to his or Compudigm’s association with Nevada are matters for factual contest. The plaintiff’s allegations in his statement of claim must be accepted upon the assumption that they can be proved.
[96] What is critically missing from the plaintiff ’s allegations is the allegation of residence or presence which Mr Gustafson’s submissions by implication suggested exist. I do not find that Mr Gordhan has in paragraphs 41.2 – 41.9 alleged that Mr Kerdemelidis was either present or resident in Nevada at the relevant time. Indeed, the heading to those particulars does not itself refer to residence or presence but makes the allegation that –
The causes of action had their closest connection with Nevada.
[97] Whether or not the plaintiff and his advisors deliberately chose to refrain from making an allegation of presence or residence is not for the Court to speculate. The plaintiff chose to insert paragraphs 41.2 – 41.9 as the second set of particulars and basis for the allegation in paragraph 41 that the foreign Court had jurisdiction over the defendant. The first set of particulars related to submission to jurisdiction. This second set of particulars, as Mr Gustafson’s submissions appeared to accept,
more logically related to an in personam jurisdiction suggested to exist by reason of
9 Exportrade Corporation v Irie Blue New Zealand Ltd HC Auckland CIV 2008-404-007130, 22
December 2010 (HC) at [14]).
Mr Kerdemelidis’s residence or presence in Nevada. But there is no allegation of
such presence or residence in Nevada.
[98] In these circumstances the particulars from paragraphs 41.2 – 41.9 collectively do not contain such allegations as would amount to a basis for this Court to recognise that on common law principles the foreign Court had personal jurisdiction over Mr Kerdemelidis. This set of particulars, as a purported basis for establishing the foreign Court’s jurisdiction over Mr Kerdemelidis, must fail. Upon that basis they should be struck out so that Mr Kerdemelidis does not needlessly have to deal with the factual allegations that have been made.
Orders
[99] I order –
1. The plaintiff’s interlocutory application for orders striking out parts of
the defendant's statement of defence is dismissed.
2.The defendant's application for orders striking out paragraphs 11 – 22 and paragraph 41.1 of the statement of claim is dismissed.
3. Paragraphs 41.2 to 41.9 of the statement of claim are struck out.
Costs
[100] The defendant has advised that he is legally aided. Had the plaintiff been successful in his strikeout application, the defendant's legal aid status would have had implications in relation to costs issues.
[101] My tentative view is that both parties have succeeded either wholly or significantly in opposing the strikeout application made by the other. That might suggest that an appropriate order would be that costs lie where they fall. That may be particularly appropriate having regard to the fact that the clear emphasis in the plaintiff’s case was on submission to jurisdiction rather than on the secondary
allegation that the defendant had been present or resident within the Nevada jurisdiction. Matters relating to that aspect of the case took little time.
[102] This may be a sufficient indication for counsel and the parties to be able to resolve issues of costs between them. If such issues are not resolved then any party seeking an order for costs is to first file his memorandum (maximum five pages) to be followed within five working days by the respondent. In that event the Court
would then proceed to determine costs on the basis of the written submissions.
Associate Judge Osborne
Solicitors:
Lowndes Jordan: Email – [email protected]
(Counsel) Bret Gustafson: Email – [email protected]
Wynn Williams: Email – [email protected] /
thomas.mckenna@ wynnwilliams.co.nz
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