Halpin v Darlow

[2024] NZHC 3352

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-428

[2024] NZHC 3352

UNDER

High Court Rules 2016, Part 27 and Rule 27.34

IN THE MATTER OF

the ESTATE OF BARBARA MORRIS

and the grant of Probate of a Will and Codicil by the High Court at Wellington on 15 July 2022

BETWEEN

SALLY-ANNE HALPIN and
DAVID CHRISTOPHER STAFFORD
MORRIS and
TIMOTHY STAFFORD MORRIS

Plaintiffs

AND

CHRISTOPHER ROBERT DARLOW and

DAVID ROBERT APPLEBY, as Executors of the Estate of Barbara Morris

First Defendants

RICHARD JOHN STAFFORD MORRIS

Second Defendant

Hearing:

17 October 2024

Appearances:

J Cundy for the plaintiffs

P Napier for the second defendant

Judgment:

12 November 2024

JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR

[Application for leave to appeal]

This judgment was delivered by me on 12 November 2024 at 3:00pm

pursuant to Rule 11.5 of the High Court Rules

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

HALPIN v DARLOW [2024] NZHC 3352 [12 November 2024]

Introduction

[1]                 On 23 April 2024 the Court delivered a judgment (the Judgment) which dismissed the second defendant’s application for orders that specified paragraphs in the plaintiff’s statement of claim be struck out.1

[2]                 The second defendant filed an application dated 16 May 2024 for leave to appeal the Judgment.

[3]                 The plaintiff filed notice of opposition to the second defendant’s application for leave to appeal, dated 29 May 2024. The plaintiff’s application was heard on 17 October 2024.

Legal principles

[4]                 No appeal2 lies from any order or decision of the High Court made on an interlocutory application in respect of any civil proceeding unless leave to appeal to the Court of Appeal is given by the High Court or by the Court of Appeal following the High Court’s refusal of leave.3

[5]                 The relevant principles are set out in the decision of the Court of Appeal in Greendrake v District Court where the Court of Appeal identified the following considerations:4

(a)a high threshold exists;

(b)the applicant must identify an arguable error of law or fact;

(c)the alleged error should be of general or public importance warranting determination or otherwise of sufficient importance to the applicant to outweigh the lack of general or precedential value;

1      Halpin v Darlow [2024] NZHC 894.

2      Except for those appeals provided for under s 56(4) of the Senior Courts Act (the Act).

3      Section 56 of the Act.

4      Greendrake v District Court of New Zealand [2020] NZCA 122 at [6].

(d)the circumstances must warrant incurring further delay; and

(e)the ultimate question is whether the interests of justice are served by granting leave.

[6]                 The Court of Appeal in that decision also approved the observations of Fitzgerald J in Finemore Upholstery Ltd v Vaughan to the effect that the requirement for leave was a filtering mechanism to ensure that unmeritorious appeals of no great significance do not unnecessarily delay the proceedings in which the orders had been made.5

Grounds of appeal

[7]                 Mr Napier, for Mr Morris, has restricted the application for leave to appeal to the decision dismissing Mr Morris’s application seeking an order that paragraphs 26 to 37 of the plaintiff ‘s amended statement of claim (the Relevant Pleadings) be struck out. The other paragraphs of the amended statement of claim which Mr Morris’s application sought to strike out have not been pursued in the leave to appeal application.

First ground of appeal

[8]                 Mr Napier submits that the Judgment erred in failing to consider whether allegations in the statement of claim were necessary to prove and consequentially plead for each cause of action considering relevance from a pleadings perspective. He submits there must be valid reasons for including an allegation in the statement of claim and the reasons must be one of the three reasons set out by the Court in Russell v Taxation Review Authority as follows:6

It should not be necessary to state that there are only three possible reasons for including an allegation in a pleading. The primary reason is that the allegation forms one of the essential factual planks upon which judgment depends. Whether an allegation is justified under this heading is easily tested. The question is whether, in the absence of proof of the pleaded fact, the

5      Greendrake v District Court of New Zealand, above n 4, referring Finemore Upholstery Ltd v Vaughan [2017] NZHC 1679 at [13].

6      Russell v Taxation Review Authority (2000) 19 NZTC 15,924 (HC) at [40].

plaintiff would be entitled to judgment. The second is that the pleaded fact is critical to the quantum or nature of the remedy sought. The third is that contextual facts may be pleaded if without them it would not be possible to understand the more critical factual allegations.

[9]                 Mr Napier submits there is a bona fide and serious argument available in that the judgment erred in finding that the Relevant Pleadings were necessary to prove, and consequently plead, each cause of action when considering relevance from a pleadings perspective. Mr Napier cites as an example paragraph 27 of the statement of claim which pleads allegations regarding Mr Morris’ domestic affairs with his ex-wife and children, and refers to a paragraph in the decision which concluded “relevant to the overall assessment of the degree of influence and control Mr Richard Morris had over Mrs Morris’ property and finances”. He submits that there was no reasoning supporting this finding.

[10]              Mr Cundy, for the plaintiffs, submits that the Judgment7 identified that the Relevant Pleadings were relevant to the plaintiffs’ claim as:

(a)the plaintiffs’ claim of an undue influence is a circumstantial one, based on the totality of factors that independently point to the conclusion that the codicil in issue was procured by Mr Morris’s undue influence;

(b)the Relevant Pleadings are directly relevant to the broad factual inquiries the Court will be required to conduct in assessing the undue influence claim, and the plaintiffs are entitled to plead relevant matters that support the inference of undue influence. These matters were contextual and relevant to undue influence as part of the matrix of facts surrounding the undue influence claim.

Second ground of appeal

[11]              Mr Napier submits there is a bona fide and serious question to be argued whether the Judgment applied the correct threshold for “irrelevance” in undertaking the assessment pursuant to r 15.1(1)(b) to (d) of the High Court Rules. He submits the

7      At [31], [36] and [40].

Judgment  referred  to  specified  parts  of  the  decision  in  Cayman   Spectrum (New Zealand) v Spark New Zealand Trading Ltd8 as an example of allegations that were conceded to be “wholly irrelevant” to the pleaded claims. Mr Napier submits the implication is that the pleading must be assessed as being “wholly irrelevant” as opposed to “irrelevant” in its generally understood meaning in order to fall within     r 15.1(1)(b). He submits that this is arguably not the intended or appropriate standard or threshold of reasonableness in assessing a strike out application.

[12]              Mr Cundy submits that the allegation that the Judgment failed to consider authorities on strike out applications under r 15.1(1)(b) is incorrect and the authorities were addressed at [12] of the Judgment.

Third to fifth grounds of appeal

[13]              Mr Napier submits in relation to the third to fifth grounds of appeal that the Judgment wrongly conflated the issue as to what is admissible evidence and what is a relevant pleading. He submits that it is open to argument that the Judgment failed to assess the implications of requiring the second defendant to respond to the Relevant Pleadings, particularly as this would be time-consuming and needlessly prolong the proceeding. He submits that setting a high threshold for irrelevance arguably opens up broad fields of enquiry that are not necessary to prove for a cause of action, are of secondly significance, and constrain the ability of the judge to appropriately limit the scope of evidence. He submits that limiting the allegations in the statement of claim to those necessary to enable the plaintiffs to present their claims at trial ensures the pleadings do not unnecessarily delay or prolong the proceedings.

[14]              Mr Napier also submits that the Judgment wrongly included issues relating to credibility as relevant to pleadings when credibility is purely an evidential matter and this point is capable of serious argument. He also submits that it is open to argument that the Judgment erred in failing to address the question of whether the suggestion by the plaintiffs that Mr Morris misrepresented his interest in and/or remuneration from a company owned by his mother in unrelated Court proceedings and statutory declarations was vexatious and an abuse of the court’s process. He submits that the

8      Cayman Spectrum (NZ) Co v Spark New Zealand Trading Limited [2023] NZCA 428 at [51].

Judgment provides no reasoning as to how any misrepresentations by Mr Morris allegedly made about his level of remuneration are relevant to the assessment of the degree of influence and control he had over the deceased’s property and finances, and it is arguably that this conclusion was erroneous.

[15]              Mr Cundy submits that the Judgment does not conflate the issues of what is admissible evidence and what is relevant pleading. He submits Mr Morris’s position at the hearing was that the paragraphs which he sought to have struck out were not relevant and the Judgment held that the paragraphs are relevant and the grounds for strike out under rr 15.1(b) to (d) were not made out.

Conclusion in relation to the first to fifth grounds of appeal

[16]              In my view, the first to fifth  grounds  put  forward for leave to  appeal  by  Mr Morris do not justify granting leave. As has been submitted on behalf of the plaintiffs, the enquiry which must be undertaken by the Court in relation to an undue influence claim is based upon the strength of circumstantial evidence that is to be inferred from all the surrounding circumstances.9 It is clear from the authorities that all the circumstances bearing directly or indirectly on the free will of the will-maker at the time of execution are relevant. These include dependency on others and legal, business, social, medical and/or domestic matters and any powerful need, obligation, or vulnerability which others might be able to exploit.

[17]              As determined in the Judgment, these are paragraphs relevant to the contextual context. In my view, the matters raised in the Relevant Pleadings go towards showing the involvement of Mr Morris in, and his conduct in respect of, dealings in relation to the deceased’s assets such as the company MTC Perennials. His alleged mis representations of his financial situation and the benefits he allegedly obtained from operating MTC are relevant to why he might have had a motivation to influence the deceased in respect of the contents of the codicil. These matters are clearly part of the contextual context of the undue influence claim.

9      Re Dudley (Deceased) HC Auckland, P1042/92, 14 May 1993 at [11]-[12]; Green v Green [2015] NZHC 1218, and Gorringe v Pointon [2023] NZCA 426 at [25] to [26].

[18]              As to the allegation that the Judgment conflates the issues of what is admissible evidence and what is a relevant pleading, in my view is incorrect. In fact, the application to strike out the Relevant Pleadings conflates alleged concerns about the form of the pleadings with matters relating to admissibility, relevance and weight of evidence. These are matters for the trial judge who will determine what relevant evidence can be brought and the weight to be given to that evidence. The Judgment only analyses relevance from a pleadings perspective, not relevance for the purposes of admissibility of evidence.

Delay

[19]              Mr Napier submits the proposed appeal will not result in any delay in progressing the proceeding. He submits that there is no concern regarding delay in the present case as there is a two-week trial scheduled to commence on 28 September 2026 and the appeal will be able to be dealt with within that timeframe.

[20]              I am of the view that delay, of itself, is not a factor to refuse the grant of the leave to appeal.

Significant public or private importance

[21]              Mr Napier submits that if Mr Morris is correct that the Relevant Pleadings are irrelevant to the Court’s determination of the issues that need to be addressed at trial and/or are brought for an improper purpose of seeking to impugn Mr Morris’s integrity and generally disparage his reputation and good character and/or are vexatious and an abuse of the Court’s process, then requiring him to plead to (and subsequently undertake discovery in respect of) those matters is highly prejudicial and therefore a matter of significant private importance to him.

[22]              Mr Napier submits there is a matter of public importance involved in the appeal in that there is very little authority on the question of what “level” of relevance is required before a pleading is liable to be struck out and whether a pleading relevant only to a party’s credibility is a valid pleading. He submits that given the importance of pleadings in setting the framework of a claim, and setting the benchmark for the

assessment of relevance of evidence at trial, these matters are of public or general importance and should be taken to appeal.

[23]              Mr Cundy submits that there is no issue of general or public importance, and the principles applicable to determination of applications under rr 15.1(b) to (d) are well settled and the proposed appeal would not be of precedential value.

[24]              As to Mr Morris’s submissions that it is highly prejudicial for him to plead to, and provide discovery in respect of,  the  allegations  in  the  Relevant  Pleadings.  Mr Cundy submits there cannot be any relevant prejudice to Mr Morris in the context where Mr Morris:

(a)is facing the same factual allegations to which he objects in the present proceeding in a separate proceeding brought by the deceased’s executors to recover the amounts he allegedly wrongly misappropriated from her;

(b)has pleaded to the executors’ claim;

(c)has already pleaded to the plaintiffs’ amended statement of claim (and had done so before the hearing of the strike out application).

[25]              Mr Cundy submits that there is no factual basis for the assertion by Mr Morris that the plaintiffs’ allegations are advanced for an improper or collateral purpose of denigrating Mr Morris’s character.

Overall justice

[26]              Mr Napier argues that the interests of justice would be served by granting leave as there are seriously arguable points in relation to the judgment which are of significant importance to Mr Morris, and potentially also of public importance. He submits no undue delay will be occasioned by the appeal.

[27]              Mr Cundy argues that there are no errors in the Judgment and in any event the proposes appeal does not raise any issue of proper significance. He submits the

proposed appeal would involve unnecessary cost and inconvenience for the parties and would not be an efficient use of judicial resources, and accordingly the interests of justice are against granting leave.

Conclusion

[28]              I am of the view that Mr Morris’ application for leave to appeal the Judgment should be dismissed. The reasons for this view are:

(a)The Judgment relates to an interlocutory matter and the appeal does not meet the high threshold required for leave to appeal. Mr Morris has already pleaded to the amended statement of claim prior to the strike out application and the argument that the relevant pleadings will be onerous for Mr Morris to plead to does not succeed. As noted by the Court of Appeal in Dokad Trustees Ltd v Auckland Council, if a procedural decision (in this case the Court declining to strike out the Relevant Pleadings) has affected the ultimate outcome, that issue can be raised in an appeal against the substantive High Court decision that concludes the proceeding;10

(b)arguable errors of law or fact in the Judgment have not been established. The contention that the Judgment applied a standard requiring the Relevant Pleadings to be “wholly irrelevant” as referred to in the Cayman Spectrum11 judgment is incorrect. The Judgment simply applied the standard of “relevance”;

(c)the Relevant Pleadings are contextual to the undue influence claim, having regard to the fact that the Court must examine the wide range of circumstances relevant to whether Mr Morris exercised undue influence over the deceased. His conduct in respect of involvement in the deceased’s property and financial affairs are contextually relevant

10     Dokad Trustees Ltd v Auckland Council [2022] NZCA 177 at [10].

11     Above, n 8.

as are misrepresentations which may be relevant to Mr Morris’s motivations to influence the content of the codicil;

(d)the allegations that the Judgment conflates relevance of pleadings with relevance of admissibility of evidence is incorrect. The issue is whether the pleadings are relevant to the pleaded causes of action, and as noted above, in this instance they are contextually relevant to the pleaded causes of action and the admissibility of evidence and the weight given to that evidence is a decision for the trial judge;

(e)there is no evidence of the allegation made by Mr Morris that the Relevant Pleadings were brought for the improper purpose of seeking to impugn Mr Morris’s integrity and generally disparage his reputation and good character and/or were vexatious and an abuse of the Court’s process. In the absence of any evidence of this allegation, it does not support granting leave;

(f)while in the present instance delay is not a reason of itself to refuse leave for appeal, there is still cost and inconvenience to the plaintiffs of having the appeal proceed which is not justified given my assessment of the lack of merit in the grounds for appeal.

Orders

[29]I make the following orders:

(a)Mr Morris’ application for leave to appeal the Judgment is dismissed.

(b)Costs are reserved.

……………………………….

Associate Judge Taylor