Great Northern Land Company Limited v Daji HC Auckland CIV-2009-404-008510

[2011] NZHC 1046

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2009-404-008510

BETWEEN  GREAT NORTHERN LAND COMPANY LIMITED

Plaintiff

ANDYVONNE DAJI First Defendant

ANDREALTIES BUSINESS BROKERS LIMITED

Second Defendant

CIV-2009-404-008514

AND BETWEEN            GREAT NORTHERN LAND COMPANY LIMITED

Plaintiff

ANDGAVIN DAJI AND PARVATI DAJI AS TRUSTEES OF THE G DAJI FAMILY TRUST NO. 2

First Defendants

ANDREALTIES BUSINESS BROKERS LIMITED

Second Defendant

Hearing:         29 June 2011

Appearances: Mr A Commons for plaintiff

Mr P G Revell for defendant (CIV-2009-404-008510) Mr P Spring for defendant (CIV-2009-404-8520)

Mr A Ross for second defendants

Judgment:      29 June 2011

(ORAL) JUDGMENT OF LANG J

[on application for adjournment of trial and other orders]

GREAT NORTHERN LAND COMPANY LTD V DAJI HC AK CIV-2009-404-008510 29 June 2011

CIV-2009-404-008520

AND BETWEEN            GREAT NORTHERN LAND COMPANY LIMITED

Plaintiff

ANDGAVIN DAJI ALSO KNOWN AS GAMAN GAJI

First Defendant

ANDREALTIES BUSINESS BROKERS LIMITED

Second Defendant

[1]      The trial of these three proceedings is due to commence in this Court on Monday 4 July 2011.  Mrs Yvonne Daji, the first defendant in CIV-2009-404-8510, now seeks a variety of orders notwithstanding the proximity of the trial.  This has been brought about by the fact that she has recently been obliged, through no fault of her own, to instruct fresh counsel to represent her at trial.

Application for leave to file amended statement of defence

[2]      The plaintiff seeks an order requiring Mrs Daji to specifically perform two agreements for sale and purchase of land in a development in North Auckland.  She resists the plaintiff’s claim principally on the ground of alleged misrepresentations by an agent associated with the second defendant.   She contends that the misrepresentations were of such magnitude that they entitled her to cancel the contracts and that she is not obliged to complete the purchase of the properties.

[3]      At the initial stages of this proceeding Mrs Daji intimated an intention to argue that, in the event that the plaintiff established liability on her part, an order for specific  performance  should  be  refused  because  it  was  impossible  for  her  to complete the purchase.  She obviously proposed to base that defence on her financial position.

[4]      Last year, however, counsel then acting for Mrs Daji unequivocally told the other parties and  the Court  that  she did  not  propose to  rely on  the defence of impossibility.   The Court has recorded this concession on numerous occasions in Minutes issued since then.

[5]      Counsel who has now been instructed to act on behalf of Mrs Daji wishes to revisit the issue, and to file an amended statement of defence so that the defence of impossibility is once again raised.  Counsel acknowledges that the application comes extremely late in the piece.  He submits, however, that the interests of justice require Mrs Daji to avail herself of any defence that might be open to her.

[6]      Counsel for the plaintiff strongly resists the application.  He points out that the parties have prepared for trial for more than a year on the basis that the defence of impossibility was not to be run.  He also submits that it has no prospect of success in any event.  He points to a statement of assets and liabilities that Mr and Mrs Daji provided at the time that the plaintiff’s application for summary judgment was to be

heard in March 2010. This includes the following information:

Yvonne Daji bank accounts

Assets        Liabilities

BNZ 0152-XXXXX X-00  $246

BNZ 0152- XXXXX X -01  $0.00

BNZ 0152- XXXXX X -03  $632

BNZ 0152- XXXXX X -25  $17,700
BNZ Visa XXX-XXXX-XXXX-XXXX  $10.69

ASB 12-3025-XXXXX X-00                 $  2,279

ASB 12-3025-XXXXX X-50                 $73,879

[7]      The statement of assets and liabilities also shows that Mr and Mrs Daji own other assets having a significant value.

[8]      As counsel for the plaintiff points out, Mrs Daji’s bank accounts alone had credit balances of more than $280,000 as at March 2010.  He has also referred me to an open letter that the solicitors acting for the plaintiff have sent to the defendants offering to assist them to find mortgage finance.  Moreover, it appears to be common ground that Mrs Daji earns a significant income and would not find it difficult to service  the  borrowing  necessary  to  complete  the  agreements.    Counsel  for  the plaintiff therefore submits that it is a waste of time allowing Mrs Daji to run a defence that has no prospect of success.

[9]      I consider that it would be wrong in principle for the Court to permit Mrs Daji to change her pleading in such a fundamental way at this stage.   Her former counsel obviously provided her with advice regarding the viability of the proposed defence before he made the concession last year.  Since that time Mrs Daji has not provided discovery of any documents that might support the defence, and this would need to be done before trial.

[10]     I consider that Mrs Daji must now defend the case on the basis that her counsel has run it in the past.  For that reason I decline to grant leave to allow Mrs Daji to amend her statement of defence to include the defence of impossibility.

Application for leave to amend defence so as to include a claim for relief under the Fair Trading Act 1986

[11]     Mrs Daji also wishes to amend her statement of defence to include a claim for relief under s 44 of the Fair Trading Act 1986.  The plaintiff does not oppose that claim, but warns that issues may arise in the event that Mrs Daji serves valuation evidence requiring a response from the plaintiff.

[12]     It is not possible to address that possibility at this juncture.  If the evidence that Mrs Daji serves in support of this aspect of her defence is likely to cause difficulties, counsel should ask for an urgent telephone or face to face conference with the trial Judge.

Application to file cross-notices against second defendant

[13]     Mrs Daji wishes to file and serve a cross-notice on the second defendant. This will apparently allege a breach of the provisions of the Fair Trading Act 1986. Her counsel for Mrs Daji submits that all parties have, in fact, proceeded on the basis that Mrs Daji had already filed and served cross-notices on the second defendant. He also contends that all of the evidence relevant to the proposed cross-notice is already before the Court.  He therefore submits that there will be no prejudice to the second defendant if Mrs Daji is now permitted to file the cross-notice.

[14]     I have considerable difficulty following the basis upon which a cross-notice could be of any utility in the context of the present case.  Mrs Daji is defending the plaintiff’s claim on the basis that the second defendant was guilty of significant misrepresentations made by a real estate agent to her husband.   If this defence succeeds, the Court will be likely to find that Mrs Daji was entitled to terminate the contract.     The  plaintiff  will  then  need  to  look  to  the  second  defendant  for recompense.  If the defence does not succeed, Mrs Daji will be liable to complete the

contracts and the second defendant will be exonerated.  Either way, I do not see how a cross-notice could have any practical utility.

[15]     During the hearing today, counsel for Mrs Daji submitted that it is possible to envisage a situation in which the Court finds that the misrepresentations were made, but that they are insufficiently serious to justify Mrs Daji cancelling the contracts.  If that should occur, Mrs Daji would want to be indemnified by the second defendant.

[16]     As matters currently stand, I do not consider that there is sufficient prospect of this occurring for an order to be made.  I am therefore not prepared to grant the application at this stage.  The existence of a cross-claim will not, however, alter the evidence to be called for the plaintiff or Mrs Daji.   I therefore leave open the possibility that the issue may need to be reviewed in light of the evidence as it emerges at trial.   If the evidence raises the prospect that the above scenario is a realistic possibility, Mrs Daji may seek to raise the issue again.  The fact that this application has been unsuccessful should not stand in the way of that possibility.

Application to join IAG as a defendant

[17]   The second defendant is now in liquidation.   Its insurer has assumed responsibility for defending the plaintiff’s claim against the second defendant.  Mrs Daji seeks an order that the insurer be formally joined to the proceeding.

[18]     I see no need for such an order to be made.  It would inevitably delay the start of the trial, and none of the other parties want that to occur.  The insurer has made it clear that it has accepted the second defendant’s claim and proposes to stand, to all intents and purposes, in the shoes of the second defendant.   That application is accordingly dismissed.

Application for leave to serve evidence late

[19]     Mrs Daji’s evidence has not yet been served.  It was due to be served some considerable time ago.  As I have already indicated, the events that led to her current counsel being appointed appear to have been largely beyond Mrs Daji’s control.

[20]     The Court and the parties have no option but to face reality.  The briefs have not yet been served and will not be served until later today or tomorrow morning.

[21]     I therefore grant leave to serve the evidence late, but direct that the evidence must be served no later than 10 am tomorrow morning.

[22]     I direct that the amended statement of defence is to be filed and served no later than 12 noon on Thursday 30 June 2011.

Status of Parvati Bilkey

[23]     The intituling in CIV-2009-404-8514 presently records the first defendant as being Gavin Daji and Parvati Bilkey as trustees of the D Daji Family Trust No. 2.  I draw the attention of the trial Judge to the fact that Gavin Daji is recorded as being the only defendant in both the original and the amended statement of claim.

[24]     So  far as  I have been  able to  determine,  Parvati  Bilkey has  never been formally joined as a defendant in the proceeding.  She appears to have been added to the intituling of documents filed after Mr Daji filed an affidavit deposing that his co- trustee was Ms Bilkey.  Whether or not this is sufficient to formally add Mrs Bilkey as a defendant is a matter that will need to be determined, if necessary, in due course.

Costs

[25]     In   relation   to   applications   in   respect   of   which  Mrs   Daji   has   been unsuccessful, I award costs to the opposing party on a Category 2B basis together with disbursements as fixed by the Registrar.  Although the costs are fixed at this stage, they should be payable once the outcome of the proceeding is known.

[26]     I record by way of postscript that Mrs Daji also originally applied for an order adjourning the trial.  That will not be necessary given the orders that I have

made.

Lang J

Solicitors:

Hornabrook Macdonald Lawyers, Auckland

Keegan Alexander, Auckland

Chapman Tripp, Auckland
Counsel:

Mr A Commons, Auckland