Green & McCahill Holdings Limited v Williams

[2023] NZHC 3576

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-1247

CIV-2020-404-1385 [2023] NZHC 3576

BETWEEN

GREEN & MCCAHILL HOLDINGS LIMITED
Plaintiff

AND

EVAN CHRISTOPHER WILLIAMS

First Defendant

ARA WEITI DEVELOPMENT LIMITED
Second Defendant

ARA WEITI BAY DEVELOPMENT LIMITED

Third Defendant

ARA WEITI INVESTMENTS LIMITED|

Fourth Defendant

Conference:

28 November 2023

Appearances:

B Dickey, K Morrison for the Plaintiff

D J Chisholm KC, M H L Morrison and L R Green for the First to Fourth Defendants
R J Gordon for the Fifth Defendant
D T Broadmore for the Sixth Defendants

Judgment:

7 December 2023

JUDGMENT OF HARVEY J

This judgment is delivered by me on 7 December 2023 at 4.30 pm pursuant to r 11.5 of the High Court Rules.

.....................................................

Registrar / Deputy Registrar

GREEN & MCCAHILL HOLDINGS LTD v WILLIAMS [2023] NZHC 3576 [7 December 2023]

/2

CIV-2020-404-1385 CIV-2020-404-1247

LAMBTON QUAY PROPERTIES NOMINEE LIMITED

Fifth Defendant

CLEARWATER CAPITAL PARTNERS DIRECT LENDING OPPORTUNITIES FUND LP and CLEARWATER NZ1 SMA LIMITED

Sixth Defendants

Introduction

[1]    On 17 May 2023, I issued a minute confirming the detail of an amended timetable for the orderly progression of this proceeding, following receipt of counsels’ submissions. By that minute, GMHL was required to file and serve its evidence by 20 November 2023. GMHL has not done so. Instead, by a memorandum dated 21 November 2023, it seeks an extension to 21 December 2023 for the filing of its evidence and a draft chronology along with its nominations for the agreed bundle of documents. GMHL also seeks an extension to the close of pleadings date from 20 October 2023 to 8 December 2023. Further consequential changes to the timetable are also proposed as set out in paragraph five of counsel’s memorandum.

[2]    The defendants oppose these requests and argue that they should not have to suffer prejudice because of the plaintiff’s conduct and decisions. The defendants submit that if any extension is granted, it should be accompanied by unless orders. The first to fourth defendants also filed an application for enforcement orders on 13 November 2023. The plaintiff’s notice of opposition was filed on 20 November 2023.

[3]    A telephone conference was held with counsel on 28 November 2023. Before then the parties filed memoranda dealing with pretrial preparation matters including filing dates for evidence. These have now been considered along with counsels’ oral submissions. The issues for determination are: should the plaintiff’s extension requests be granted, and if so, should they be accompanied by unless orders?

Should the plaintiff’s extension requests be granted?

Plaintiff ’s submissions

[4]    In addition to his written submissions, Mr Dickey highlighted that he agreed the timetable should have been maintained while noting his instructions were recent. Counsel confirmed that the plaintiff’s legal team were heavily engaged in briefing evidence and were reassessing the pleadings with a view to reducing their scope. Mr Dickey contended that, given the time available, it was not feasible to have these matters attended to any earlier. He also accepted that the situation was undesirable.

[5]    Regarding discovery, Mr Dickey confirmed that Mr Liu had filed an affidavit. He also confirmed that he would review Mr Williams’ latest letter while acknowledging that further statements needed to be obtained from one of Mr Liu’s overseas banks. Counsel submitted that he had gone back to Mr Liu to seek further assurances that there were no further discoverable materials that have come to light.

[6]    Mr Dickey reiterated that he too wished for the defendants to have the plaintiff’s briefs of evidence and contended that this should not be a lengthy exercise given the preparation that had been occurring to date. Counsel confirmed that there are approximately six briefs of evidence that would be filed by the plaintiff. Overall, Mr Dickey submitted that the plaintiff is fundamentally committed to progressing the proceedings. He proposed the following timetable changes:

Event	Current date	Proposed date
Close of pleadings	20 October 2023	8 December 2023
Plaintiff’s briefs of evidence, nominations for bundle and chronology due.	20 November 2023	21 December 2023
Defendants’ briefs of evidence, nominations for bundle and chronology due evidence due.	7 February 2024	4 March 2024
Plaintiff’s supplementary briefs, further bundle nominations due.	6 March 2024	25 March 2024
Pretrial telephone conference	6 March 2024	15 April 2024
Joint expert statements due	20 March 2024	12 April 2024
Electronic common bundle and casebook due.	12 April 2024	19 April 2024
Plaintiff’s opening submissions due.	29 April 2024	No change

Defendants’ submissions

[7]    By way of background, Mr Chisholm KC submitted GMHL commenced the proceedings over three years ago in July–August 2020 when it was represented by Meredith Connell, now MC. On 9 February 2021, all parties confirmed that the proceedings were ready to be set down for trial, submitting in a joint memorandum that the necessary pretrial steps including, it is assumed, the preparation of brief of evidence, could “comfortably be completed” throughout 2021. Associate Judge

Gardiner noted this confirmation her minute of the same date setting the original trial fixture of 13 June 2022, along with a pretrial timetable which required that GMHL file and serve its briefs of evidence by 31 January 2022. Standard discovery orders were also made at that time.

[8]    That fixture was eventually adjourned on 31 March 2022 when GMHL’s application to join the fifth and sixth defendants was granted.1 The adjournment included the condition that GMHL “expeditiously prosecute the substantive proceedings”.2 Following receipt of counsels’ joint memorandum on 13 December 2022, the current filing timetable was then confirmed in a minute issued by the Court on 22 December 2022.

[9]    Counsel emphasised that it was critical to the orderly management of the proceedings for the defendants to receive the plaintiff’s briefs of evidence well before Christmas. Mr Chisholm underscored how the proceedings had already been adjourned at the request of the plaintiff and how that had been conditional on GMHL proceeding expeditiously.3 Instead, there had been significant delays caused principally by GMHL’s failure to comply with discovery and related orders and directions, as well as several changes of counsel in 2023 alone. To avoid doubt, counsel confirmed that the defendants oppose the proposed extension.

[10]   Turning to the issue of the bank statements, counsel highlighted that Mr Liu had sworn an affidavit denying the existence of these accounts yet here was his new counsel confirming that not only did they exist but that steps were finally being taken to access the statements for the purposes of discovery. Mr Chisholm underscored that this was an example of how Mr Liu’s undertakings cannot be taken seriously. Counsel submitted that these very discussions over disclosure and evidence had been travelling between counsel beforehand.

[11]   He emphasised that the defendants wanted to know the detail of the case they are facing to properly prepare to respond to those claims in an orderly way. Counsel

1      Green & McCahill Holdings Ltd v Williams [2022] NZHC 643.

2 At [40].

3 At [40].

acknowledged that some brief accommodation for Mr Dickey as new counsel was likely inevitable but underscored that this should not be to 21 December 2023.

[12]   Mr Gordon supported Mr Chisholm’s submissions. He added that recent events highlighted the glib and casual attitude of the plaintiff to proceedings where his client had been added late. As to the request for an extension for the filing of briefs, Mr Gordon endorsed Mr Chisholm’s submissions including that unless orders should be made. As to the extension for the close of pleadings, Mr Gordon was opposed to that. Counsel added that filing all of the briefs of evidence immediately before the Christmas holidays was unfair to the defendants.

[13]   Mr Broadmore echoed the submissions of Mr Chisholm. Counsel argued that any suggestion of amended pleadings would be strongly opposed and that leave should in any event be sought. Mr Broadmore contended that the filing date should not be extended, given that the plaintiff has had over a year to prepare.

Discussion

[14]   As mentioned, the timetable had been confirmed in my minute of 17 May 2023 following the receipt of counsels’ submissions. This was following changes to the original 22 December 2022 timetable minute which I recorded at the time had been agreed to by all counsel. Yet at five minutes after midnight, GMHL, without any real explanation according to Mr Chisholm, other than it has changed counsel again, seeks further changes to that timetable at the very moment it is already in breach—and all of this against a background of confirmation that the case could proceed to hearing in 2022. In fairness to the parties, the delay caused by the caveats dispute and in the issuing of the discovery judgment has undoubtedly added to the challenges, although as Mr Chisholm has consistently maintained, in respect of discovery obligations, the plaintiff’s, like those of the defendants, are in any case ongoing.

[15]   Counsel is also correct that the case was adjourned on the condition that GMHL “expeditiously prosecute the substantive proceedings.” Even a cursory review of the Court file reveals that GMHL could not reasonably be said to have acted in compliance with that adjournment condition.

[16]   As foreshadowed, counsel submitted that GMHL has failed to provide any explanation for its noncompliance with the longstanding trial timetable that it had previously agreed to almost a year ago. GMHL’s 21 November 2023 memorandum asserts that an amendment is necessary due to its change of solicitors. Mr Chisholm contended that this assertion is insufficient, given GMHL’s obligation to prosecute the case without delay and taking account of the overall the history of the proceedings to date. GMHL had intimated to the defendants on 20 October 2023 that it might seek an amendment of the pretrial timetable. Despite that, according to counsel, GMHL ignored the defendants’ requests for an explanation as to why an extension was necessary, or whether it would provide undertakings to comply with any amended timetable. According to Mr Chisholm, this suggested that GMHL’s current extension request is not tied to its change of counsel.

[17]   As to the effects of the change of counsel, when I first heard the adjournment application in February 2022, GMHL’s counsel was Mr Francis followed by Mr Johnson. That remained the case throughout the proceedings including the caveat conditions and discovery judgment hearings in 2022, and the subsequent applications for leave to appeal and for a stay in 2023. The plaintiff then decided to change its solicitors and counsel on 21 September 2023, two months out from the due date for the filing of its evidence. Almost two months later, on 15 November 2023, and a mere five days before GMHL’s evidence was due, astonishingly, the plaintiff then changed its solicitors and counsel again.

[18]   The plaintiff has now returned to its original solicitors so has come full circle, or four sets of solicitors during the lifetime of the proceedings to date. As Mr Dickey said, any firm institutional knowledge of the file left some time ago and so there was no advantage to the plaintiff by that return. Yet these have been choices that GMHL has made, which it is entitled to do, in full knowledge of the consequences. They were doubtless decisions taken with the benefit of advice. Inevitably, those decisions will impact on the plaintiff’s preparation. Equally unsurprising is that the plaintiff’s choices affect the defendants’ preparation too. I agree therefore with the defendants that they should not be prejudiced by the plaintiff’s conduct.

[19]    I appreciate that for such a complex proceeding it would require time for counsel to gain familiarity with the file. Even so, in the context of these proceedings and the conduct of the parties to date, any indulgence over late filing must be reasonable in the particular circumstances of this case. At the risk of belabouring the point, the plaintiff has decided to change its counsel three times within three months. It is entitled to do so but must accept that there will be consequences where a timetable has been agreed following a lengthy adjournment ordered on the application of the plaintiff for joinder.

[20]    The plaintiff proposes that filing for their briefs of evidence be extended to 21 December 2023. The defendants oppose any unreasonable extension and certainly to 21 December. By the end of this week three further weeks would have elapsed since the 20 November 2023 deadline passed. Having carefully considered counsels’ submissions, and with some reluctance, I grant an extension to the plaintiff to file all its briefs of evidence by 2 pm Friday 15 December 2023. This will effectively give the plaintiffs an extension of almost four weeks which I consider generous in the circumstances. In addition, and as discussed at the conference, the plaintiff should file briefs as and when they have been finalised rather than wait for them all to be completed and then filed together.

[21]   As to the close of pleadings, I appreciate Mr Gordon’s entirely reasonable submission that any proposed extension should be supported by a formal application, supporting evidence along with the opportunity for the defendants to properly respond. The date of 20 October 2023 was also confirmed in May 2023 yet GMHL failed to take steps to seek a change until recently. Even so, because of the delays to date, including over when the telephone conference was convened and the issuing of this judgment, the date is now nigh. While I accept it is not ideal, I acknowledge that the focus for the parties must be on the filing of GMHL’s evidence.

[22]   Accordingly, the close of pleadings date is now varied from 20 October 2023 to 8 December 2023 as requested by GMHL.

[23]   As for the rest of the proposed changes, subject to the amendment sought by Mr Chisholm that the defendants should have the same time allowance as the plaintiff

should any changes be granted, given the changes to the close of pleadings and filing of evidence dates by the plaintiff, some adjustment will be necessary. To that end the following additional changes are now made to the timetable:

(a)Defendants’ briefs of evidence, nominations for bundle and chronology due evidence due: 4 March 2024.

(b)Plaintiff’s supplementary briefs, further bundle nominations due: 18 March 2024.

(c)Pretrial telephone conference: 8 April 2024.

(d)Joint expert statements due: 5 April 2024.

(e)Electronic common bundle and casebook due: 19 April 202

[24]   If any of these amended dates need further consideration and review counsel should file a memorandum urgently.

Should unless order be made?

Defendants’ submissions

[25]   Mr Chisholm argued that Mr Liu was an experienced litigant who had even engaged in litigation in the UK Supreme Court. There has been blatant noncompliance by the plaintiff according to counsel and so the defendants should not be prejudiced by the plaintiff’s conduct. As mentioned, almost without exception the delays had been due to GMHL’s tardiness rather than the defendants. Counsel referred to Mr Williams’ affidavit from October 2022 where these very same issues including over discovery and timetabling had been canvassed with the plaintiff’s solicitors more than once. In the circumstances therefore unless orders were entirely appropriate.

Plaintiff ’s submissions

[26]   Mr Dickey confirmed he had no particular submission on the matter of unless orders and contended that his priority was to proceed to trial.

Legal principles

[27]Rule 7.48 of the High Court Rules 2016 provides:

7.48 Enforcement of interlocutory order

(1)   If a party (the party in default) fails to comply with an interlocutory order or any requirement imposed by or under subpart 1 of Part 7 (case management), a Judge may, subject to any express provision of these rules, make any order that the Judge thinks just.

(2)   The Judge may, for example, order—

(a)    that any pleading of the party in default be struck out in whole or in part:

(b)   that judgment be sealed:

(c)    that the proceeding be stayed in whole or in part:

(d)   that the party in default be fined, ordered to do community work, or committed to prison under section 16 of the Contempt of Court Act 2019:

(e)    if any property in dispute is in the possession or control of the party in default, that the property be sequestered:

(f)    that any fund in dispute be paid into court:

(g)   the appointment of a receiver of any property or of any fund in dispute.

(3)   An interlocutory order may only be enforced by the following (in accordance with subpart 4 of Part 2 of the Contempt of Court Act 2019):

(a)    an order imposing a fine or community work:

(b)   a warrant committing the person to prison:

(c)    a sequestration order.

[28]   Fisher J in Smith v Antons Trawling Company Ltd listed several relevant considerations in the context of default, including:4

(a)its duration;

(b)its overall impact upon the progress of the proceeding;

(c)whether there appears to be any excuse or explanation;

(d)whether it continued after reasonable opportunities and reminders, particularly where the Court has already made a fresh order, or given a warning, due to earlier non–compliance;

4      Smith v Antons Trawling Company Ltd HC Auckland CL40/98, 24 March 2000 at [4].

(e)whether it has substantially prejudiced the innocent party, whether procedural or due to some wider impact upon the innocent party’s interests and affairs; and

(f)whether there is any realistic expectation that it will be rectified following further opportunity for compliance.

[29]   In an earlier decision, Butler v Li, Giles J also underscored the nature of defaults and the consequences of non-compliance.5 Two points are apposite here. First, Court orders must be complied with and that any failure to comply is a contempt. It is trite that procedural orders are intended to ensure there is prompt compliance so that the case can proceed without unreasonable delay. The remedy is either judgment in the case of a defaulting defendant, or dismissal in the case of a defaulting plaintiff. Secondly, where a party is unable, for good reason, to comply, then opposing counsel must be informed and a formal application supported by affidavit evidence put before the Court seeking a variation to any timetable or other order. Where that is made out, it will be accommodated, albeit accompanied by an appropriate costs order.

[30]   In the specific context of unless orders, in Anderson v Mainland Beverages Ltd the Court of Appeal confirmed that such orders should be reserved for cases where breach or continued breach is objectively measurable and beyond challenge.6 That said, discovery issues and related disputes should only be the subject of “unless” orders if the defaulting party’s obligation has been previously defined by the Court.

[31]   In addition, the authorities confirm that where there is substantial prejudice to the innocent party through inexcusable non-compliance, an unless order may be justified.7 Where an inexcusable delay gives rise to a substantial risk that a fair trial of the issues will not be possible at the earliest date the proceeding will come to trial if allowed to continue, then substantial prejudice will be present.

5      Butler v Li (1997) 12 PRNZ 23.

6     Anderson v Mainland Beverages Ltd (2005) 17 PRNZ 757.

7     Allen v Sir Alfred McAlpine & Sons Ltd [1968] 2 QB 229 at p 259.

Discussion

[32]   At the risk of belabouring the obvious, this is the plaintiff ’s case which it commenced almost three and a half years ago. The plaintiff then sought to join the fifth and sixth defendants which was granted. The case was then adjourned on condition that the plaintiff prosecute the substantive proceedings “expeditiously”. The delays with responding to the discovery judgment by the plaintiff coupled with the changes of solicitors twice within two months and with the deadline for the filing of evidence looming are entirely inconsistent with the condition to proceed expeditiously. As the authorities confirm, an unless order is one of last resort invariably made against a background of default. Further, if an indulgence has been sought due to, inter alia, the third change of solicitors within two months, the plaintiff, for whatever reason, could seek to do so again. Then there would be no end to the delays.

[33]   As the Court record will confirm, from time to time the defendants have submitted that the plaintiff’s strategy is to delay the proceedings and place financial stress on the defendants and thereby impede the latter’s efforts to properly engage with the case.8 Hitherto, I have been unmoved by such suggestions. Yet, in recent months, my observation is that the plaintiff’s conduct in its ongoing delays in complying with the discovery judgment, despite the defendants’ repeated requests, along with the changes of counsel in a short space of time, to an uncharitable eye, might start to present as has been suggested. The timing of the latest change of counsel juxtaposed against the due date for the filing of the plaintiff’s evidence was concerning as well as being particularly problematic for the defendants. To echo the Court of Appeal, all of this presents “a curious portrait”, particularly for a party who is the plaintiff.9

[34]   In any event, I put that no higher than an observation and simply record that the effect on the defendants of these ongoing delays in the filing of evidence cannot but prejudice their preparation and the filing of evidence, given the time of year and the proximity to the May 2024 fixture.

8     For example, see Green & McCahill Holdings Ltd v Williams, above n 1, at [30]–[31]; and Green & McCahill Holdings Ltd v Ara Weiti Development Limited [2022] NZCA 218 at [105].

9      Green & McCahill Holdings Ltd v Ara Weiti Development Limited, above n 8, at [106].

[35]   In summary, I agree with the defendants that unless orders are appropriate, given this background. Accordingly, unless the plaintiff’s briefs are filed by 15 December 2023, the claims of GMHL as against the defendants will be struck out.

Decision

[36]   Unless the plaintiff files all its briefs of evidence by 2 pm on Friday 15 December 2023 its claims as against the defendants will be struck out.

[37]   The plaintiff should file briefs as and when they have been finalised rather than wait for them all to be completed and then filed together.

[38]   The close of pleadings date is varied from 20 October 2023 to 8 December 2023. All other changes to the timetable are set out in paragraph [23] above. The filing date for the plaintiff’s opening submissions remains unchanged.

[39]   Counsel may exchange memoranda as to costs of no more than five pages before 21 December 2023.

Harvey J

Solicitors:

M C, Auckland ( K Morrison)

Morrison Mallett, Auckland (B Morrison)

MinterEllisonRuddWatts, Wellington

Buddle Findlay, Auckland (D Broadmore)

Counsel:

Brian Dickey, Auckland

D J Chisholm KC, Auckland

Michael Morrison, Auckland

S T Dymond, Barrister, Auckland