Hammond v Gash
[2024] NZHC 2446
•17 December 2024
IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY
I TE KŌTI MATUA O AOTEAROA
TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE
CIV 2017-463-000107
[2024] NZHC 2446
BETWEEN JOHN DAVID HAMMOND and NOELEEN MARGARET HAMMOND
PlaintiffsAND
ANDREW WILLIAM GASH and JOY CHERIE GASH
Defendants
Hearing: 21 November 2024 Appearances:
Plaintiffs in person
D Sheeley and T Bielby for the Defendants
Judgment:
17 December 2024
JUDGMENT OF TAHANA J
This judgment was delivered by me on 17 December 2024 at 2.30pm Pursuant to Rule 11.5 of the High Court Rules
…………………………
Registrar/Deputy Registrar
Solicitors/Parties:
Tompkins Wake, Hamilton Copy to: the Plaintiffs
HAMMOND v GASH [2024] NZHC 2446 [17 December 2024]
Introduction
[1] The defendants apply under r 15.2 of the High Court Rules 2016 (the HCR) to dismiss the plaintiffs’ claim for want of prosecution because of the plaintiffs’ failure to take any steps in the proceeding from July 2020 until July 2024 when they confirmed to the Court that they wished to pursue their claim. The plaintiffs oppose.
[2] The plaintiffs are now self-represented. They seek leave under r 12.4(2) to apply for summary judgment in relation to their claim for non-payment of rates and insurance. The defendants oppose.
[3]I therefore need to consider:
(a)whether the plaintiffs’ claim should be struck out because of the delay in pursuing the claims; and
(b)whether it is appropriate to grant leave to the plaintiffs to apply for summary judgment given the time that has lapsed since the claim was filed.
Background
[4] The plaintiffs filed their claim in 2017. The initial claim sought an order for vacant possession of their farm property located at Putāruru. They had leased their farm to the defendants, Mr and Mrs Gash in 2008. The parties had signed a standard form of lease and there were no incidents until 2015, when the parties fell out over discussions about a new formal lease.
[5] The defendants had spent monies building a new underpass connecting two parts of the farm which they understood to be the basis for a new 15-year lease. They did not agree to give possession of the farm to the plaintiffs.
[6] The defendants filed a statement of defence, counterclaims and a summary judgment application. They deny the original lease was renewed to 31 May 2017 for a second three-year term or that they have been holding over. They rely on two
affirmative defences: that there is a new lease or there is an enforceable lease to which the doctrine of part-performance applies. The counterclaim relies on a breach of an agreement regarding the underpass and an entitlement to restitution.
[7] In 2018, the Court declined the defendants’ summary judgment application on the basis that there were disputed issues of material fact, and those facts could not be determined from affidavit evidence. The Court also noted that:1
Though the plaintiffs’ case certainly appears to have weaknesses, the defendants’ case, dependent as it is on a claim that there is an unwritten lease and part-performance, has the hallmarks of a case that is not suitable for summary judgment.
[8] On 11 July 2019, the plaintiffs filed an amended statement of claim which included additional causes of action for breach of the lease terms. In addition to vacant possession, the plaintiffs also seek damages for alleged non-payment of outgoings under the lease. The defendants deny those additional claims.
[9]The matter was set down for hearing at Rotorua from 8 to 10 June 2020.
[10] On 27 May 2020, by consent, the parties requested the Court to vacate the hearing date because the parties had been engaged in settlement negotiations and were making good progress. Evidence had not been filed as directed and the parties considered it was not in their best interests to proceed to trial when it was “likely that a settlement can be reached.”
[11] The Court vacated the fixture and directed that the proceeding be referred to the Court for further directions if a notice of discontinuance had not been filed by 30 June 2020. No further fixture was to be allocated without reference to Lang J.
[12] On 22 July 2020, the parties filed a joint memorandum indicating that settlement negotiations were ongoing but that a trial date should be allocated as there “is a real possibility that these discussions will not be successful.” The joint memorandum proposed a three-day hearing be allocated for the first available date
1 Hammond v Gash [2018] NZHC 2097 at [47].
after 1 December 2020 with proposed directions as to the filing of evidence, preparation of the common bundle and submissions.
[13] The joint memorandum does not appear to have been referred to a judge for consideration. No directions were therefore made as requested.
[14] There was correspondence between counsel and the Registry in 2021 about setting a fixture and a suggestion by the Registry that the matter be listed for case management, but this did not occur.
[15] There were communications between the parties during 2022 about inspections of the farm and the plaintiffs issued further notices of intention to cancel the lease on 20 February 2023, 13 March 2023 and 14 March 2024, being the third to fifth such notices.
[16] The Registry then made enquiries with the parties in October 2023 requesting an update from the parties.
[17] In April 2024, the defendants’ lawyers responded to the notices disputing their validity and inviting resolution of the dispute.
[18] On 5 June 2024, the defendants proposed that the plaintiffs confirm by 12 June 2024 whether they wish to pursue the claim and that the defendants apply to strike out the claim by 12 July 2024.
[19] The plaintiffs have confirmed they wish to pursue their claim. They have applied for leave to seek summary judgment against the defendants for the alleged non-payment of amounts owing under the lease.
Should the claim be struck out for want of prosecution?
Relevant law
[20] Under r 15.2 of the HCR, a party may apply to have a proceeding dismissed if the plaintiff fails to prosecute the proceeding to trial and judgment.
[21] The relevant legal principles when considering whether a proceeding should be dismissed for want of prosecution were set out in Lovie v Medical Assurance Soc NZ Ltd,2 where the Court considered three requirements should be met before a claim is struck out:
(a)The plaintiff has been guilty of inordinate delay.
(b)The plaintiff’s delay is inexcusable.
(c)The delay has seriously prejudiced the defendant such that there is a substantial risk that a fair trial of the issues will no longer be possible due to the delay.
[22] The overriding consideration is always whether justice can be done at trial despite the delay.3
Was the delay inordinate?
[23]There has been a delay of almost four years. I accept that is an inordinate delay.
Is the delay inexcusable?
[24] Turning to whether the delay is inexcusable, it is necessary to consider the reasons for the delay.
[25] First, the joint memorandum dated 20 July 2020 does not appear to have been referred to a judge for directions. Had that occurred, timetable directions would likely have been made and a trial date allocated. The plaintiffs are not responsible to the extent that has contributed to the delay. I note that there was further correspondence between the parties and the Registry in 2021, but no timetable directions were made, or a fixture allocated. Counsel does not appear to have provided a follow-up joint memorandum with a proposed timetable.
2 Lovie v Medical Assurance Society New Zealand Ltd [1992] 2 NZLR 244 (HC) at 248.
3 Fitzgerald v Beattie [1976] 1 NZLR 265 (CA) at 269; and Commerce Commission v Giltrap City Ltd (1997) 11 PRNZ 573 (CA) at 579.
[26] Second, the evidence indicates that the parties continued settlement discussions into early 2021 so these discussions may have also contributed to the delay.
[27] Third, there is no evidence that the plaintiffs’ counsel took any action to follow up with the Court between October 2021 and June 2024 when he sought leave to withdraw. During that period of delay, the plaintiffs were represented by counsel.
[28] The defendants argued that any delay caused by legal advisers rather than the party is not an acceptable excuse and referred to Lovie v Medical Assurance Society New Zealand Ltd.4 There, the Court noted that any excuse for the delay needed to be convincing. In that case, the Court did not consider that an explanation that counsel was busy and gave other work priority excused either the barrister or his instructing solicitor. The Court did not consider the position of the client, but I accept that a client has a potential remedy against legal advisers if they have acted negligently and that causes the client to suffer loss. The question here, however, is whether the plaintiffs should be denied the right to have their claim determined in these circumstances. The cases indicate that such a right should only be denied if there is serious prejudice to the defendants of a fair trial by reason of the delay.
[29] Fourth, the plaintiffs’ evidence indicates that they were concerned about the extent of the legal fees they had incurred (in the hundreds of thousands of dollars) and this concern to avoid further legal costs may have contributed to their failure to follow up with their counsel. This, however, does not excuse the plaintiffs from not having taken any steps themselves to notify the Court that they wished to pursue their claims.
[30] Fifth, the delay occurred during the time that New Zealand was subject to the COVID-19 pandemic. Parts of New Zealand were in lock-down at various times and this likely impacted counsel, the plaintiffs and the Court. That is relevant context.
[31] I accept that it is not the defendants’ responsibility (nor in their interests) to take action to progress the claim such that it could be said that the defendants caused the delay.
4 Lovie v Medical Assurance Society New Zealand Ltd, above n 2.
[32] I accept that no reasonable excuse has been advanced for the delay and the delay is inexcusable.
Is there significant prejudice to the defendants?
[33] As the cases indicate, the most important consideration is what is in the interests of justice? Can justice still be done despite the delay? It is necessary to balance the interests of the plaintiffs in having access to the Court to determine their claim against the prejudice to the defendants if the claims proceed to trial after the length of the delay.
[34] In Commerce Commission v Giltrap City Ltd, the Court noted that the right to have a claim determined should only be denied if that important right is outweighed by prejudice to the defendants:5
In cases of delay and alleged want of prosecution, the right of all citizens and organisations to have access to the Courts for the determination of the issues they have raised should be denied only if that important right is outweighed by a stronger right vested in the defendant to have the case dismissed because justice can no longer be done in the light of the delay … Case management principles and practices are important, indeed vital, for controlling crowded calendars and promoting the expeditious despatch of Court business; but they should not be allowed to obscure or undermine the fundamental purpose of any system of justice which is to deliver justice to all concerned.
[35] Counsel for the defendants refer to the time that has lapsed since the claim was filed and say that it has been over 10 years since the dispute arose and almost seven years since the claim was first filed.
[36] The relevant delay for the purpose of assessing whether there is any serious prejudice, is the delay since July 2020.
[37] The defendants argue that the case will rely heavily on oral evidence and the witnesses’ ability to recall events. With a further delay of four years, they argue that this gives rise to prejudice to the defendants.
5 Commerce Commission v Giltrap City Ltd (1997) 11 PRNZ 573 (CA) at 579.
[38] Each of the defendants filed affidavits in 2017 in support of their application for summary judgment against the plaintiffs. Those affidavits set out the defendants’ evidence as to the discussions regarding the underpass, the construction of the underpass, the instructions to their solicitors about drafting the lease and the notice of termination. To the extent that the alleged lease relies on memory and oral discussions, I am not satisfied that there is any serious prejudice to the defendants. The defendants have the benefit of those affidavits and the documents that were provided to the Court in the context of the previous summary judgment application. Those affidavits will assist in refreshing their memories so to that extent, the prejudice is limited.
[39] The defendants also argue that they will suffer serious prejudice because the damages claimed have escalated during the delay. They refer to Fitzgerald v Beattie6 and Lysaght v NZ Insurance Co Ltd.7 What is relevant is whether the delay impacts the defendants’ ability to defend the claim or adduce evidence that may be relevant to damages. Here, the claim concerns alleged non-payment of outgoings. It will be the plaintiffs who will be required to prove the requirement to pay outgoings and the actual amount of the outgoings. It is unclear how the delay prejudices the defendants when they have had notice of the claims and the scope of those claims. They have also been aware from the Property Law Act 2007 (PLA) notices of the quantum of those claims and the fact that the plaintiffs were continuing to demand payment.
[40] In Lysaght, the defendant had no witnesses who could recollect or give evidence. Further, there were no records available from which the witnesses could refresh their memories. The Court considered it was those circumstances that indicated prejudice.8 Further, the Court noted that if there had been notice that the claim had not been abandoned, that might have gone some way to preventing the defendant from establishing prejudice.9
[41] Here, the defendants continued to receive PLA notices so have been aware that the plaintiffs continue to demand payment. As I understand the defendants’ position, whether the monies are owed depends on the terms of the lease. The evidence as to
6 Fitzgerald v Beattie, above n 3.
7 Lysaght v NZ Insurance Co Ltd HC Auckland A1021/81, 16 January 1990 [Lysaght].
8 At 166-167.
9 At 174.
the relevant lease terms is captured in the defendants’ affidavits filed in support of
their 2017 summary judgment application.
[42] It is therefore unclear why the escalation in damages, on its own, creates prejudice. The defendants have been aware of the nature of the claim since the filing of the amended statement of claim in 2019. The defendants argue that the quantum of the claim has escalated by $725,242.60 due to alleged unpaid outgoings. If the terms of the lease required that the defendants pay outgoings, then they have been on notice as to those potential liabilities since the time the plaintiffs filed their amended claim and subsequent PLA notices. The defendants were aware by reason of those notices that the plaintiffs were continuing to demand payment despite not pursuing the Court proceedings.
[43] While I accept the claims will be limited to those that are within the relevant limitation period, I do not accept that the increase in potential liability indicates serious prejudice to the defendants in circumstances where they have had notice of those claims during the delay period and are able to advance evidence in defence of the claim. I am satisfied that justice can still be done despite the delays.
[44] The defendants then refer to the general stress, anxiety and impact of the proceedings on their lives. They refer to the uncertainty and how this has impacted their ability to plan for the future. While I accept those as valid concerns, I do not consider that they indicate serious prejudice that will prevent justice from being done if the claim proceeds to trial.
[45] While I accept that the delays are lengthy and inexcusable, I do not consider that they create serious prejudice to the defendants. The defendants have the benefit of the evidence they prepared for the 2017 summary judgment application which can assist in refreshing their memories. They have also been continuing to receive notice from the plaintiffs seeking to recover monies allegedly owed so to that extent, they were aware that until the claim was resolved, there was a risk of escalating damages and uncertainty.
[46] For these reasons, I am not satisfied that there is serious prejudice to the defendants that justifies striking out the plaintiffs’ claim.
Should leave be granted to apply for summary judgment?
Relevant law
[47] Under r 12.4(2) of the HCR, a plaintiff may apply for summary judgment either at the time the statement of claim is served on the defendant, or later with the leave of the Court.
[48] The authors of McGechan on Procedure note that there are no guidelines for granting leave however, the Court will consider whether the delay is satisfactorily explained; the merits of the applicant’s case; and any risk of a miscarriage of justice of determining the summary judgment application at the later time.10 The Court should not grant leave unless doing so will have the effect of avoiding prolonged proceedings.11
[49] The question is a discretionary one, and it will be up to the party applying for leave to show why it should be granted. The overriding consideration must be the interests of justice having regard to the stated objectives of the HCR to secure the just, speedy and inexpensive determination of proceedings.12
Application to circumstances of this case
[50] I do not consider that it would be in the interests of justice to grant leave for the plaintiffs to apply for summary judgment at this late stage and where the proceedings have been on foot for over seven years. Such an application would not resolve the issue of whether the plaintiffs are entitled to vacant possession. The Court has already ruled that that aspect of the claim is not suitable for summary judgment.13
10 Jessica Gorman and others McGechan on Procedure (online ed, Thomson Reuters), at [HR12.4.01A] citing Tip Top Ice Cream Co Ltd v Polarland Ltd (2002) 7 NZBLC 103,564 (HC) at [28].
11 Waihopai Valley Vineyard Ltd v Savvy Vineyards 3550 Ltd [2015] NZHC 592, (2015) 22 PRNZ 724 at [34]–[35]; and Mulholland v Mulholland [2023] NZHC 1692.
12 High Court Rules 2016, r 1.2.
13 Hammond v Gash, above n 1.
[51] There has been significant delay since the filing of the claim and an application for summary judgment will delay overall resolution of the dispute even further. The just, speedy and efficient determination of the issues requires that a hearing be set down and the parties proceed to trial on all issues. The parties indicated in July 2020 that the matter was ready for trial and proposed a timetable. It is now time to make timetable orders and allocate a trial date.
Result
[52] The application to strike out the claim and the application for leave to apply for summary judgment are declined for the reasons set out above.
[53]I direct that:
(a)a hearing is set down to commence at 10 am on 5 May 2025 for three days;
(b)the plaintiffs’ briefs of evidence are to be filed and served by 3 March 2025;
(c)by 24 March 2025, the defendants to:
(i)provide the plaintiffs with nominations for the common bundle;
(ii)file and serve briefs of evidence;
(d)the plaintiffs to file and serve the common bundle (ensuring documents are arranged chronologically) by 7 April 2025;
(e)the plaintiffs to file and serve opening submissions by 23 April 2025; and
(f)the defendants to file and serve opening submissions by 30 April 2025; and
(g)leave is granted to the parties to file memoranda by 7 February 2025 (noting the upcoming holidays) addressing any issues arising from the above timetable and fixture date.
Costs
[54] Both parties have been unsuccessful in their respective applications. It is appropriate that costs should lie where they fall.
Tahana J
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