Hargreaves v Smith

[2012] NZHC 3316

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2012-409-1892 [2012] NZHC 3316

BETWEEN  PENELOPE ANN HARGREAVES Applicant

ANDKEROLI SMITH First Respondent

ANDPHEROZE JAGOSE Second Respondent

Hearing:         27 November 2012

Counsel:         Applicant in person

D J Boldt and D L Harris for First Respondent
T C Weston QC and CEJ Deans for Second Respondent

Judgment:      10 December 2012

In accordance with r 11.5 I direct that the delivery time of this judgment is 3pm on the 10th day of December 2012.

RESERVED JUDGMENT OF MACKENZIE J

[1]      There are applications by both respondents to strike out the applicant’s proceeding, an originating application alleging that the respondents are in contempt of court.

[2]      In 2002, Ms Hargreaves commenced proceedings against Radio Network Ltd as first defendant and Radio Network of New Zealand Ltd as second defendant.  She sought damages for bodily injury and other loss and damage alleged to have been caused by emissions from a radio mast operated by the defendants.   Those proceedings  (which  I  refer  to  as  “the  earlier  proceedings”)  have  a  long  and chequered  interlocutory  history.    They  were  finally  disposed  of  by  a  judgment

delivered by Associate Judge Matthews on 7 September 2012.  In that judgment, he

HARGREAVES V SMITH HC CHCH CIV-2012-409-1892 [10 December 2012]

dismissed the proceedings, on the grounds that it was clear, to the standard required on a strike-out application, that the claim could not succeed because no cause of action had been pleaded, or could be pleaded, that was not barred by the Limitation Act 2010.

[3]      The  allegations  of  contempt  of  court  made  by  Ms Hargreaves  in  this proceeding relate to actions of the respondents in the course of the earlier proceedings.  The first respondent, a member of the staff of the High Court Registry in Christchurch, was the case officer for the earlier proceedings.   The second respondent was, from February 2004, the solicitor for both defendants in the earlier proceedings.

[4]      The principles to be applied in an application to strike out a proceeding are clear.  They are set out by the Court of Appeal in Attorney-General v Prince.[1]    A strike-out application proceeds on the assumption that the facts pleaded in the statement of claim are capable of proof.  However, the court is not obliged to accept as  capable  of  proof  allegations  which  are  speculative  and  without  foundation. Before the court may strike out a proceeding, causes of action must be so clearly

untenable that they cannot possibly succeed.  The jurisdiction is one to be exercised sparingly and only in a clear case where the court is satisfied that it has the requisite material.   The fact that the application may raise difficult questions of law and require extensive argument does not exclude jurisdiction.[2]

[1] Attorney-General v Prince [1998] 1 NZLR 262 (CA).

[2] At 267.

[5]      The applicant’s claim is for contempt of court.   The purpose of the law of contempt is to preserve an efficient and impartial system of justice and public confidence by dealing with challenges to the fundamental supremacy of the law.  It is a  process  to  be  used  only out  of  public  necessity and  must  be  exercised  with scrupulous care, and only when the case is clear and beyond reasonable doubt.[3]

[3] Solicitor-General v Radio Avon Ltd [1978] 1 NZLR 225 (CA) at 229.

[6]      Contempt of court is classified into two broad groups.  The first is criminal contempt, which consists of words or acts obstructing or tending to obstruct or

interfere with the administration of justice.   The second is civil contempt, which

consists of disobedience to the judgments, orders, or other processes of the court. Civil contempt is not in issue in this case.   Ms Hargreaves’ allegations are not of disobedience to court orders or processes which would fall within the scope of civil contempt.   She does allege that in some respects the rules governing the court’s processes, the High Court Rules, have not been complied with.   Non–compliance with those Rules does not fall within the scope of civil contempt.  Civil contempt involves disobedience of, or a refusal or neglect to do an act required by, a judgment or order of the court.   The rules which govern the procedure of the court are not orders of the court.  There are potential consequences and sanctions for a breach of such rules. These do not include a proceeding for contempt of court.

[7]      Accordingly,  it  is  necessary  for  me  to  consider  whether  Ms Hargreaves’ allegations may support proceedings for criminal contempt.  Criminal contempt falls broadly into two categories:   contempt in the face of the court and contempt committed outside the court.  Ms Hargreaves’ allegations fall to be considered under that second category.  Conduct which may amount to contempt of this type includes acts done outside court which are intended or likely to interfere with or obstruct the fair administration of justice.   Acts punishable as a contempt may include the deliberate misuse of the court’s processes, but not every abuse of process will be punishable as contempt.  Where the court, by exercising its other available powers, can give an adequate remedy it will not in general punish an abuse as contempt of court.   For example initiating or carrying on proceedings which are frivolous, vexatious, or oppressive, is an abuse of process, but the court has power to prevent such abuses by striking out or staying proceedings.

[8]      It is necessary at the outset to make one fundamental point.  Many if not all of the matters raised by Ms Hargreaves relate to aspects of the earlier proceedings.  It is important to make it clear that the issues raised in the earlier proceedings have been finally disposed of, by the order of Associate Judge Matthews dismissing that proceeding.  There has been no appeal against the order. Those proceedings, and any contest over the issues raised in those proceedings, are at an end.  This proceeding is not an opportunity to relitigate those issues.

[9]      Ms Hargreaves sought to introduce at the hearing of this application a good deal of material which concerns her claims in the earlier proceedings.   I do not intend, in the course of this judgment, to address much of that material.  The reason is that it is irrelevant to the only issue which is before the Court on this application. That issue is whether there is a tenable claim that either of the respondents has committed a contempt of court.

[10]     I come then to the allegations in the originating application.  The originating application has been drafted without the benefit of legal assistance and is quite discursive and difficult to follow.   Doing the best I can to identify the points of complaint, I address them paragraph by paragraph, while recognising that they contain much overlap and repetition.

[11]      Paragraphs   1,   2   and   3   make   allegations   of   contempt   against   both respondents, and particularly the second respondent, in respect of actions or inaction by each of them to notify the Court and the plaintiff of, and to amend the pleadings to reflect, changes which occurred, during the period when the earlier proceedings were on foot, in the corporate structures of the defendants to those proceedings.

[12]     A  brief  description  of  the  relevant  background  to  those  allegations  is necessary.  The earlier proceedings concerned emissions from a radio transmission tower on land at Lower Styx Road, Ouruhia, Christchurch (the land), adjoining the plaintiff’s land.   Allegations made in the statement of claim, and admitted in the statement of defence, were that the first defendant was, from about 1 August 1999, the owner and occupier of the land, and that the second defendant had from about

21 December 1995  been  an  occupier  of  the  land  and/or  responsible  for  the broadcasting of radio transmissions from the transmitter.   There were further allegations, also admitted, about the ownership of the land and changes in the corporate structure prior to 1999.

[13]     On 30 September 2008, the second defendant, and three other companies in the group, amalgamated under Part 13 of the Companies Act 1993 to become ARN Holdings (NZ) Limited, and that company changed its name on amalgamation to New Zealand Radio Network Limited.   Subsequently, the second defendant was

removed from the Register.  Neither the Court nor Ms Hargreaves were advised of the amalgamation and subsequent removal from the register.  No steps were taken to amend the intituling or change the parties.

[14]     It is important to make clear to Ms Hargreaves a point which I endeavoured to explain to her in the course of the hearing.  That is that her rights, and her position in  the earlier proceedings,  cannot  possibly have been  adversely affected  by the failure to take steps to have the name and status of the parties regularised.  Under s 225  of  the  Companies  Act  1993,  the  effect  of  an  amalgamation  is  that  the amalgamated company succeeds to all the liabilities and obligations of each of the amalgamating   companies   and   proceedings   pending   against   an   amalgamating company may be continued against the amalgamated company.  Ideally, some steps should have been taken to change the name of the second defendant to that of the amalgamated company.  That was however a matter of form, not of substance, since s 225 enabled the earlier proceedings to be continued whether or not that formal step was taken.  Ms Hargreaves’ rights were in no way adversely affected by the fact that no formal steps were taken.

[15]     It is also important to record, in this application against Mr Jagose personally for contempt of court, that, although his firm, Chapman Tripp, acted on the amalgamation, Mr Jagose was not personally aware of the amalgamation until the point was raised by Ms Hargreaves in a memorandum filed on 30 January 2012.  He has sworn an affidavit to that effect.  Ms Hargreaves can be in no position to refute that, so the Court cannot properly accept any assertion to the contrary as capable of proof.  In those circumstances, Mr Jagose cannot possibly have been in contempt of court in the respects alleged in these paragraphs.  But even if he had been aware of the change, a failure to take the steps which should ideally have been taken could not possibly give rise to a tenable cause of action for contempt.

[16]     For Ms Smith, the position is also very clear.  Her role was to administer the file by properly recording and dealing with the papers filed by the parties.  She had no duty, or right, to initiate any steps to address the identity of the parties.   She cannot possibly have been in contempt in the respects alleged in these paragraphs.

[17]     Ms Hargreaves  submits  that  she  was  deprived  of  her  right  to  seek  the restoration of the second defendant to the register.  Again, it is important to make clear that there can be no possibility that she has been adversely affected.  One of the grounds on which application may be made to restore a company which has been removed from the register is that, at the time it was removed, it was a party to legal proceedings.  There is no possibility that this ground could have been successfully invoked in this case.   The proceedings had, by the operation of s 225, become proceedings to be continued against the amalgamated company.  None of the other grounds for restoration could have any possible application.   Any application to restore the company to the Register would have been doomed to fail, as it was both unnecessary and inappropriate.

[18]     Paragraph 4 of the originating application pleads matters which question Mr Jagose’s motives in the matters alleged in the earlier paragraphs.  In the light of my conclusions on those earlier allegations, this cannot provide a tenable basis for a claim of contempt.

[19]     Paragraph 5 refers to Ms Smith’s “premature deposition” of the proceedings. (Ms Hargreaves confirmed that she meant “disposition”).  This allegation arises from a copy of the register of documents filed, dated 2 March 2012 which was supplied to Ms Hargreaves.  The first page recorded the status of the case as “disposed”.  That was incorrect as at that date.   The case had been earlier struck out, in November

2008, by an order of Associate Judge Christiansen.  It seems likely that the entry of the case status as “disposed” was made following that decision.  That decision was revoked on a review in March 2010 by Chisholm J.  The status of the case should then have been changed. The fact that it was not cannot possibly raise the suggestion that the case officer was in contempt of court.  In reaching that conclusion, it is not necessary for me to address the question whether judicial immunity may apply to the first respondent.  Mr Boldt referred to the differences of view on that issue in Crispin

v Registrar of the District Court[4]  and Derrick v Attorney-General.[5]     I need not

address this, because there can be no possible claim for contempt against Ms Smith

for which immunity might be required.  The allegations in Paragraph 5 provide no possible basis for a claim of contempt.

[4] Crispin v Registrar of the District Court [1986] 2 NZLR 246 (HC).

[5] Derrick v Attorney-General [1994] 1 NZLR 112 (HC).

[20]     Paragraph 6 raises allegations about an interlocutory application which Ms Hargreaves sought to file in the earlier proceedings in August 2012.  That application was heard by Associate Judge Matthews on 30 August.   He dismissed it in his judgment of 7 September.   He described it as “entirely without foundation”.   The present application is an improper attempt to relitigate that issue.  The fact that the application was filed and heard means that there can be no possible suggestion that the course of justice may have been interfered with by the conduct of either respondent.  No possible cause of action in contempt arises.

[21]     Paragraphs  4,  5  and  6  all  refer to  a sale in  2008  of the land and  raise questions  whether  the  new  owners  were  made  aware  of  the  alleged  harmful emissions from the land, and whether these might devalue their investment.   The only relevant transaction in 2008, of which there is evidence, was the amalgamation to which I have referred.  The amalgamated company succeeded to any liability of the second defendant in the earlier proceedings.  No question of any duty to notify new owners, or concealment from new owners, can possibly arise.

[22]     Paragraphs 7 and 8 plead an aspect of the applicant’s complaint against the

second   respondent   which   was   raised   with   Mr Jagose   in   a   letter   dated

28 October 2010 from a lawyer then acting for Ms Hargreaves.  The essence of the point raised was that Mr Jagose’s firm had acted for the previous owners of the Ouruhia Tower, Radio New Zealand, in relation to radio wave transmissions.  Radio New Zealand sold part of its undertaking, including the  Ouruhia  site,  to Radio Network.    Chapman Tripp  subsequently acted  for Radio  Network.   The lawyer asserted that FM transmissions from the Ouruhia site were unlawful when the sale took place, and that Chapman Tripp must have been aware of that.  The letter raised in essence two issues about Chapman Tripp’s position as solicitors and counsel for the defendants in the earlier proceedings:

(a)      Whether the defendants had given fully informed consent to Chapman Tripp acting in the earlier proceedings, with knowledge of the firm’s earlier involvement acting for the vendor.

(b)Whether   Mr Jagose’s   involvement   as   counsel   in   the   earlier proceedings might have been contrary to the views expressed by Tipping and Wilson JJ in Vector Gas Ltd v Bay of Plenty Energy Ltd,[6] by reason of the involvement of Mr Jagose’s firm in matters relevant to and in issue in the earlier proceedings.

[6] Vector Gas Ltd v Bay of Plenty Energy Ltd [2010] NZSC 5, [2010] 2 NZLR 444.

[23]     It is not appropriate for me to engage with these issues, except to the extent that they may be relevant to the contempt of court allegations.  On neither of the two issues which I have summarised does any possible issue of contempt of court arguably arise.   Contempt of court involves conduct which interferes with the administration of justice.  Contempt of court is not an appropriate remedy for dealing with issues such as potential conflicts of interest, authority to act, and similar issues which may be relevant to the particular litigants.   Other remedies are potentially available to ensure that justice is done between the parties in the proceedings concerned.  The question of whether Chapman Tripp did, or did not, have the fully informed consent of the clients for whom they were acting in the earlier proceedings is a matter which could relate only to the private interests of the litigants in that litigation, which is now concluded.  It is not a matter which comes within the scope of what is reasonably necessary to protect the public interest in preventing interference with the administration of justice.

[24]     As  to  Mr Jagose’s  position  as  counsel,  the  comments  of  Tipping  and Wilson JJ are directed to the undesirability of practitioners appearing as counsel in litigation where they have been personally involved in the matters that are being litigated.  There is no evidence that Mr Jagose was involved in the earlier events at the time of sale.  Furthermore, there is no suggestion in the remarks of either Judge that counsel who does appear as counsel in litigation where he or she has been

personally involved might be held to be in contempt of court.

[25]   For these reasons, the allegations of contempt based upon the earlier involvement of Chapman Tripp at the time of the sale are entirely misconceived. Paragraphs 7 and 8 provide no basis for a claim of contempt.

[26]     Paragraph 9 alleges that affidavits filed on behalf of the defendants in the earlier proceedings were false.   There is no evidential foundation for this serious assertion.   This paragraph, too, refers to the alleged concealment of harm  from emissions from the land.  The allegations in this paragraph are an improper attempt to relitigate the issues in those proceedings and cannot be allowed to proceed.

[27]     Paragraph 10 alleges that the first respondent has obstructed Ms Hargreaves in her dealings with the registry.  Registry staff have an often difficult job in dealing with the members of the public, who are often under considerable stress.   Their actions in that capacity are not actions which fall within a class which might fall within the scope of contempt of court. This allegation cannot be allowed to proceed.

[28]     Paragraphs 11, 12 and 13 all raise matters which have been addressed in dealing with the earlier paragraphs, or which seek to relitigate issues in the earlier proceedings.   Paragraph 14 refers to authorities on judicial impartiality which can have no bearing on the claims of contempt.  These allegations also cannot succeed and must be struck out.

[29]     For  these  reasons,  I  have  reached  the  very  clear  view  that  none  of  the allegations of contempt could possibly succeed.   I order that the proceedings be struck out.

[30]     The respondents are each entitled to costs.  Mr Weston seeks indemnity costs. Rule 14.6(4) of the High Court Rules provides:

The court may order a party to pay indemnity costs if—

(a)       the   party   has   acted   vexatiously,   frivolously,   improperly,   or unnecessarily in commencing, continuing, or defending a proceeding or a step in a proceeding;

…

[31]     I consider that the plaintiff’s action in commencing these proceedings falls within that paragraph.  However, on this occasion I do not think that indemnity costs should be awarded.   It is possible that a lay litigant may not have a proper appreciation of the hopelessness of the case, until that is pointed out by the court.  I give the applicant the benefit of that possibility on this occasion.  The costs in favour of each defendant will be on a 2B basis, plus disbursements to be fixed by the Registrar.

“A D MacKenzie J”

Solicitors:         Thomas Weston Queen’s Counsel, Christchurch, for Applicant

Crown Law, Wellington for First and Second Respondents