Houghton v Saunders
[2025] NZHC 108
•10 February 2025
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2008-409-348
[2025] NZHC 108
UNDER the Fair Trading Act 1986 IN THE MATTER
of a representative action
BETWEEN
ERIC MESERVE HOUGHTON
First Plaintiff
PORT STAFFORD LIMITED
Second PlaintiffAND
TIMOTHY ERNEST CORBETT SAUNDERS, SAMUEL JOHN MAGILL, JOHN MICHAEL FEENEY, CRAIG
EDGEWORTH HORROCKS, PETER DAVID HUNTER, PETER THOMAS and JOAN WITHERS
First DefendantsCREDIT SUISSE PRIVATE EQUITY LLC
Second DefendantCREDIT SUISSE FIRST BOSTON ASIAN MERCHANT PARTNERS LP
Third Defendant
Hearing: 23 October 2024 Appearances:
N R Williams and A Parlane for the representative Plaintiffs D J Cooper KC and S T Coupe for First Defendants
C J Curran, J W Upson and M G Alison for Second Defendant No appearance by or for Third Defendant
Judgment:
10 February 2025
JUDGMENT OF ASSOCIATE JUDGE SKELTON
HOUGHTON v SAUNDERS [2025] NZHC 108 [10 February 2025]
Introduction
[1] The representative plaintiff, Eric Houghton and Port Stafford Ltd (PSL), as the proposed new lead plaintiff (applicants) apply for an order reinstating the proceeding against the second and third defendants so that a claim against those defendants can be pursued under the Fair Trading Act 1986 (FTA). It is proposed that, in the first instance, PSL would pursue a claim for compensation for its own alleged losses, and that directions would then be made “for a facilitation process to remedy losses incurred by five plaintiff representatives and the other represented claimants”.
[2] The proceeding was previously struck out as a result of failure to comply with unless orders relating to security for costs in respect of the stage two trial and confirmation that the claimants were adequately resourced to prepare for and present all aspects of their stage two claims.1 The representative plaintiff sought relief from the consequences of non-compliance with the unless orders. As the proceeding had been struck out, relief would necessarily have involved revival or reinstatement of the proceeding. By agreement between the parties, this application was heard by the Court of Appeal. The application was declined.2 The Supreme Court declined leave to appeal.3
[3] The second defendant opposes the application to reinstate the proceeding on the basis that the application is an abuse of process because it is seeking to relitigate the matters already determined by the Court of Appeal or should otherwise be declined.
[4] There is an extant issue as to whether the third defendant has been properly served with the application. Counsel for the second defendant filed a memorandum dated 16 October 2024 recording that they had recently obtained limited instructions to act for the interests of the third defendant. It is contended that service has not been validly effected on the third defendant because the applicants have not sought leave to serve the application out of New Zealand under r 6.30 of the High Court Rules 2016
1 Houghton v Saunders [2019] NZHC 1362 at [90]; Houghton v Saunders [2020] NZHC 2030.
2 Houghton v Saunders [2020] NZCA 638 at [89].
3 Houghton v Saunders [2021] NZSC 38 at [18].
and because the third defendant was dissolved and ceased to exist on 16 May 2023. The memorandum also submits that it is not necessary to resolve the issue of service at this stage because if the application for reinstatement is unsuccessful, there is no live proceeding and nothing to serve. The memorandum states that counsels’ instructions are that the third defendant’s interests would oppose reinstatement if validly served. The memorandum also records that in the meantime there will be no appearance for the third defendant at the hearing and counsel for the second defendant are not instructed for that purpose.
[5] The applicants contend that the third defendant has been validly served and that any necessary leave of the Court under r 6.30 has been given.
[6] I do not consider that I need to determine the issue of service for the purposes of the present application. Even if the third defendant has been validly served as contended by the applicants, the position would be that the third defendant has not filed a notice of opposition to the application. Failure to file a notice of opposition has no formal legal effect.4 It would still be necessary to assess the application against the third defendant on its merits.5 In the circumstances, without determining whether the third defendant has been validly served at this stage, I propose to assess the application against the third defendant on its merits.
[7] With regard to the first defendants, although they are not named as respondents in the application, directions were made that they were to be served and were to have the opportunity to file an opposition to the applicants’ reinstatement application.6 On 15 October 2024, counsel for the first defendants filed a memorandum indicating that the first defendants did not seek to be heard at the hearing of the application. However, on 16 October 2024, counsel for the first defendants filed a further memorandum seeking to be heard at the hearing and filing a notice of opposition and submissions in support of that opposition. Although the submissions were filed in accordance with the relevant timetable, the notice of opposition was late. The reason given by counsel
4 Jessica Gorman and others McGechan on Procedure (online ed, Thomson Reuters) at HR7.24.03.
5 Mihinui v Attorney-General [2017] NZHC 654; Ruscoe v Houchens [2023] NZHC 3224 at [18].
6 Houghton v Saunders HC Wellington CIV-2008-409-348, 18 June 2024 (Minute of La Hood J) and Houghton v Saunders HC Wellington CIV-2008-409-348, 19 August 2024 (Minute of McHerron J).
for the first defendants for the change of position and late filing of the notice of opposition was that the first defendants only received confirmation from their insurer that it would meet the costs of the first defendants’ opposition on 16 October 2024.
[8] At the hearing, counsel for the applicants, Mr Williams, opposed leave being given by the Court to accept the late filing of the first defendants’ notice of opposition and to allow the first defendants to be heard. However, given the first defendants’ significant role in the proceeding (from 2008–2021) and the fact that their interests may well be affected by any order for reinstatement (as discussed below), it is clearly in the interests of justice that the first defendants be heard. Accordingly, I granted leave to the first defendants to file their notice of opposition and submissions and to appear and be heard at the hearing of the application.
[9] The first defendants oppose the application on the basis that it is an abuse of process because it seeks the very same relief which has already been declined by the Court of Appeal.
Background
[10] There is an extensive and lengthy background to this matter as the proceedings originally commenced in 2008 and were struck out in 2020. In 2021, Cooke J determined the final costs awards in the matter.7 I gratefully adopt Cooke J’s concise summary of the background to the proceedings:
[5] The plaintiff brought these proceedings as a class action under r 4.24 of the High Court Rules 2016. The plaintiff represented some 3,600 claimants. Litigation funding was arranged by JAFL and Mr Gavigan. The key allegations concerned an allegedly misleading prospectus relating to the public issuing of shares in Feltex Carpets Limited (Feltex) in 2004. The key causes of action were under the Fair Trading Act 1986 and the Securities Act 1978.
[6] The proceedings were managed in two stages. Stage 1 was to determine Mr Houghton’s claim in full, and also to deal with findings common to the represented group.8
[7] The stage 1 trial proceeded before Dobson J over 14 weeks. By judgment dated 15 September 2014 he dismissed the plaintiff’s claims, and
7 Houghton v Saunders [2021] NZHC 3590.
8 Houghton v Saunders [2012] NZHC 1828 (French J).
accordingly the entire proceeding.9 By judgment dated 24 March 2015 Dobson J then ordered that the plaintiff pay costs to the defendants, and these were duly paid.10
[8] The judgment dismissing the claims was upheld on appeal to the Court of Appeal.11 On appeal to the Supreme Court, however, that Court found that one of the plaintiff’s allegations of misrepresentation was established as the revenue forecast for the 2004 year in the Feltex prospectus was untrue. The Court held that the proceedings needed to proceed to stage 2 to determine whether any of the represented claimants could establish reliance, and that loss to them had been caused by the untrue statement.12
[9] On 14 June 2019, as one of a number of further judgments arising in relation to stage 2, Dobson J made a provisional costs reassessment — that is he determined how the costs of stage 1 should be redetermined following the plaintiff’s partial success arising from the decision of the Supreme Court.13 Because the costs award in the defendants’ favour had been paid, this involved determining the amount the defendants needed to repay. That judgment also dealt with the defendants’ application for security for costs for stage 2. As I will address in greater detail below Dobson J ordered that the remaining defendants refund substantial amounts arising from their earlier successful costs award for stage 1, but he also directed that part of the funds he ordered the defendants to repay would be held by them as security pending the plaintiff meeting the terms of a security for costs order that he made. In other words part of the amount the defendants were required to repay was held by the defendants as security for the security.
[10] The amount ordered by way of security for costs was never provided by the plaintiff. This reflects the fact that the plaintiff struggled to obtain funding to pursue the claims at stage 2. In January 2019 the Court allocated a trial date in November and issued directions for the steps required. But the plaintiff group was unable to meet the directions, including by failing to provide a list of claimants, briefs of evidence or discovery.
[11] On 29 October the plaintiff applied to adjourn the trial fixture beginning 4 November. This application was heard on the first day of the scheduled trial. Dobson J did not accept the plaintiff’s reasons for seeking an adjournment (that the trial should await an intended appeal to the Supreme Court from rulings he had made about the scope of the stage 2 hearing), but he nevertheless adjourned the trial as the plaintiff was simply unable to proceed such that the adjournment was a fait accompli.14
[12] A replacement fixture beginning 11 May 2020 was offered and accepted. But by late February 2020 counsel for the plaintiff indicated that the plaintiff would not be ready to proceed with the stage 2 trial in May. The defendants then applied for an order striking out the proceeding if security for costs were not provided, or if the plaintiff was not ready to proceed to trial. This was heard on the first day of the adjourned stage 2 trial on 11 May.
9 Houghton v Saunders [2014] NZHC 2229.
10 Houghton v Saunders [2015] NZHC 548.
11 Houghton v Saunders [2016] NZCA 493, [2017] 2 NZLR 189.
12 Houghton v Saunders [2018] NZSC 74, [2019] 1 NZLR 1.
13 Houghton v Saunders, above n 1.
14 Houghton v Saunders [2019] NZHC 2906.
Dobson J made an unless order striking out the proceeding if security for costs and funding were not provided by 13 July 2020.15 A new trial date was set for 27 October 2020.
[13] When the plaintiff did not comply with either limb of the unless order the proceeding was duly struck out by the operation of that order. An application by the plaintiff to stay the effect of those orders was dismissed on 11 August 2020.16 The plaintiff appealed against the May 2020 judgment imposing an unless order. On appeal it advanced alternative arguments for the provision of security but the appeal was declined.17 Leave to appeal was then declined by the Supreme Court.18
[11] On 3 May 2024, the applicants filed an interlocutory application seeking a number of orders as follows:
a. Adding and substituting PSL as lead plaintiff and recording the retirement of the existing representative plaintiff [Mr Houghton].
b. Reinstating this proceeding against the second and third defendants to obtain compensation orders for PSL under the FTA following on from the Supreme Court’s finding that Credit Suisse had breached s 9; and
c. Making directions for a facilitation process to remedy losses incurred by five plaintiff representatives and the other represented claimants in light of established breaches by the defendants of the FTA; and
d. Orders to protect interests of the plaintiffs/aggrieved persons under s 523 and s 539 Financial Markets Conduct Act 2013 (FMCA).
[12] On 17 June 2024, Justice La Hood determined that the application for reinstatement should be determined first.19
Legal Principles – relief from consequences of failure to comply with unless order
[13] The applicants rely on the inherent jurisdiction of this Court to reinstate proceedings that have been struck out for failure to comply with unless orders. They refer to number of cases as examples of the exercise of this jurisdiction, including Jarden v Lawlor.20 In that case, the third parties requested particulars from the
15 Houghton v Saunders [2020] NZHC 1088 at [92].
16 Houghton v Saunders, above n 1.
17 Houghton v Saunders, above n 2.
18 Houghton v Saunders above n 3. Two subsequent applications for recall of the leave judgment were also dismissed - Houghton v Saunders [2021] NZSC 76 and Houghton v Saunders [2021] NZSC 92.
19 Minute of La Hood J, above n 6, confirmed in Minute of McHerron J, above n 6.
20 Jarden v Lawlor (1998) 12 PRNZ 516. The applicants also refer to Automatic Parking Coupons Ltd v Time Ticket International Ltd HC Christchurch CP 181/96, 6 May 1998; Remarkables Park Ltd v McDonald HC Invercargill CP1/97, 7 December 2000; Ben View Farms Ltd v GE Capital
defendant, and the Court granted unless orders which were not complied with. Orders were made striking out the defendant’s claim against the third parties. The defendant applied for reinstatement on the grounds that the failure had been inadvertent. The Court confirmed the inherent jurisdiction to reinstate proceedings struck out for want of compliance with unless orders and referred to factors that the Court should consider in exercising the discretion. These included the reasons for and explanation of the default, the general merits of the claim or defence, and the considerations of overall justice, including any prejudice to the other parties.
[14] However, the leading case on the exercise of the jurisdiction to grant relief from the consequences of unless orders (including strike out) is SM v LFDB.21 In that case, the Court of Appeal considered English, Australian and New Zealand authorities22 and drew together the following principles:
(a)As an unless order is an order of last resort, it is properly made only where there is a history of failure to comply with earlier orders.
(b)An unless order should be clear as to its terms. That is, it should specify clearly what is to be done, by when and what is the sanction for non-compliance. That sanction should be proportionate to the default.
(c)The sanction will apply without further order if the party in default does not comply with the order by the time specified. However, the party in default may seek relief by application to the Court.
(d)Justice may require that the party in default be relieved of the consequences of the unless order where the Court is satisfied that the breach resulted from something for which that party should not be held responsible. The party should not assume that belated compliance will suffice.
(e)Where the unless order has been deliberately breached – that is, flouted – it is difficult to conceive of any situation where the interests of justice would require granting the flouter relief from the sanction imposed, notwithstanding belated compliance with the order.
(f)In deciding whether or not to excuse breach of an unless order the question for the Judge is: what does justice demand in the circumstances of this case? Considerations in answering that question include:
Returnable Packaging Systems Ltd [2002] 1 NZLR 698; Innes-Jones v Rodney District Council
HC Auckland CIV-2007-404-2657, 21 January 2009.
21 SM v LFDB [2014] NZCA 326, [2014] 3 NZLR 494 at [31].
22 Including authorities such as Jarden v Lawlor, above n 20.
(i)The public interest in ensuring that justice is administered without unnecessary delays and costs.
(ii)The interests of the injured party, in particular in terms of delay and wasted cost.
(iii)Any injustice to the defaulting party, although that consideration is likely to carry much less weight in the circumstances than considerations (i) and (ii).
[15] In my view, in considering whether relief should be granted from the consequences of unless orders (in this case, whether the proceedings should be revived or reinstated after having been struck out) it is appropriate to apply the principles for granting relief from the consequences of unless orders as set out by the Court of Appeal in SM v LFDB.23
Issues
[16]The following issues arise for consideration:
(a)Whether the application should be dismissed on the basis that it is an abuse of process?
(b)Even if the application is not an abuse of process, whether there is any basis for reviving or reinstating the proceedings?
Should the application be dismissed on the basis that it is an abuse of process?
[17] Both the first defendants and second defendant contend that the application is an abuse of process because it is attempting to relitigate matters that have already been determined by the Court of Appeal in 2020.24
[18] There is jurisdiction to strike out or dismiss an interlocutory application as an abuse of process under rr 7.42A and 15.1 of the High Court Rules, and the inherent
23 This was the authority applied by the Court of Appeal in considering Mr Houghton’s previous application for revival/reinstatement of the proceedings - Houghton v Saunders, above n 2 at [82]-[90].
24 Houghton v Saunders, above n 2.
jurisdiction of the Court.25 Attempting to relitigate matters already determined is a recognised type of abuse of process. 26
[19] Regarding relief from the consequences of non-compliance with the unless orders (that is, that the proceeding had been struck out), the Court of Appeal stated:27
We raised with the parties the question whether any application for relief from the consequences of failure to comply with the unless order should have been made in the High Court, rather than this Court, as it was in SM v LFDB. We consider where the making of unless orders has not been challenged, and the only issue is whether the a failure to comply with such orders should be excused, an application for relief should be made in the High Court rather than by way of appeal to this Court. However in this case there was a challenge to the making of the unless orders in the notice of appeal, and the request for relief from non-compliance was pursued in the alternative (albeit, as matters developed , as the appellant’s preferred alternative). Counsel for all parties confirm that they sought a determination by this Court of the argument that relief should be granted. In those circumstances we consider that we can and should determine that issue, despite the absence of an application for relief in the High Court, in the absence of a decision of that Court on the issue.
[20] The Court of Appeal noted “this case is very different from SM v LFDB because the claimants still have not complied with the requirements of the unless orders … they have not provided security for costs in a form that is acceptable to the respondents or to the Court”.28 The Court found that:29
It cannot be the case that claimants in a representative proceeding are allowed unlimited time to prosecute their claim, free of the disciplines that apply to any other litigant. That would not be consistent with the public interest in the effective administration of justice. It would be profoundly unfair to the defendants in such a claim. Defendants are no less entitled to access to justice than plaintiffs. For a defendant, one very important element of access to justice is the hearing and determination of the claims against them in a timely manner. It is oppressive and unfair for claims to be left hanging over the head of a defendant for an unnecessarily protracted period.
[21] The Court noted that the May 2020 High Court judgment had allowed adequate time for compliance with the unless orders, and that the claimants had not put forward
25 Slavich v Collins [2023] NZHC 2488 at [7]; McGechan on Procedure, above n 4, at HR7.42A.01
– HR7.42A.02.
26 McGechan on Procedure, above n 4, at HR15.1.05(2)(a); Hunter v Chief Constable of the West Midlands Police [1982] AC 529 (HL) at 541 and 542; Little v New Zealand Law Society [2023] NZHC 1880 at [35], [38] and [42].
27 Houghton v Saunders, above n 2. at [82].
28 At [83].
29 At [84].
any new date by which they would be able to comply with the orders made.30 The Court found that there had not been any material change in the circumstances since May 2020:31
Nothing material has changed either in relation to the rationale for requiring security for costs, or the adequacy of the arrangements made by the claimants to provide that security. That remains the position following the hearing, despite the further opportunities afforded to the claimants to put in place an appropriate form of security for costs. No security is yet in place. …
[22]The Court of Appeal concluded:32
[87]In these circumstances, it is difficult to identify any proper basis on which the claimants’ failure to comply with the orders made in the May 2020 judgment could be excused, or in which they could be relieved from the consequences of non-compliance. They have had a generous amount of time to provide security and to prosecute their claims. They have repeatedly failed to do so.
[88]We are not in a position to determine whether, as the respondents submit, the only likely beneficiaries of any further indulgence would be the litigation funders who funded stage one, rather than the claimants. Certainly, they would be the initial beneficiaries of a claim, on the basis of the distribution of proceeds contemplated by the claimants’ funding arrangements. However we observe that if the funders who have first claim to any recoveries considered that the claims were strong, they would have a strong incentive to provide additional funding to enable those claims to be pursued. And if the claimants – some of whom are well resourced and have significant claims – were persuaded there was a good prospect of success at a level that would provide them with meaningful recoveries, they could have funded stage two. They have chosen not to do so. The reluctance of the original funders and the claimants to fund any further steps cast considerable doubt on the extent of prejudice that the claimants will suffer as a result of the proceeding remaining struck out.
[89]Conversely, it is clearly contrary to the public interest to permit this proceeding to continue to absorb the finite resources of the courts to the detriment of other litigants, for a further – potentially lengthy – period. There would be an obvious prejudice to the respondents in having the proceeding revived, with the result that it would continue into a thirteenth year, still with no certainty about when security for costs could be provided and a trial take place. As this Court said in SM v LFDB, in the context of an application for relief from the consequences of non-compliance with an unless order these considerations carry much more weight than the interests of the defaulting party.
30 At [85].
31 At [86].
32 At [87]–[90].
[90]The claimants’ request that their non-compliance with the unless orders be excused fails by a wide margin.
[23] As noted above, the claimants then applied for leave to appeal to the Supreme Court and the application was dismissed.33 One of the issues considered was whether there would be a substantial miscarriage of justice because, unless the appeal was heard, the class represented by the applicant would be deprived of their opportunity to pursue the benefits of the findings of the Supreme Court in the stage two trial. The Supreme Court held:34
[18] In Junior Farms Ltd v Hampton Securities Ltd (in liq), this Court indicated that the substantial miscarriage of justice ground has limited scope in civil cases. Leave will be given on this ground only in a rare case of a sufficiently apparent error of such a substantial character that it would be repugnant to justice to allow it to go uncorrected. We are not satisfied that any such error has arisen in the present case. Considerations of the justice of the case must take into account the interests of all of the parties, not just the applicant for leave. In that respect, we note the Court of Appeal’s assessment that it is contrary to the public interest to permit the proceeding to continue. This is because it would absorb the resources of the courts to the detriment of other litigants for a further (potentially lengthy) period. It would also cause prejudice to the respondents if the proceeding were revived with the result that it would continue into a thirteenth year.
[24] It is clear that the Court of Appeal determined the application by the claimants for relief from the consequences of non-compliance with the unless order, that is, for revival or reinstatement of the proceeding that had been struck out. In doing so, the Court of Appeal determined the central issue in such an application, being what justice demands in the circumstances of the case. This involved considerations as to the circumstances of the non-compliance, the interests of the injured party, any injustice to the defaulting party including observations as to the prospects of success, and the public interest. The Court of Appeal found against the claimants on all these matters. On the application for leave to appeal, the Supreme Court did not consider that it was necessary or appropriate to revisit the Court of Appeal’s assessments on appeal including the assessment that it would be contrary to the public interest to permit the proceeding to continue and it would cause prejudice to the respondents if the proceeding was revived with the result that it would continue, at that time, into a
33 Houghton v Saunders, above n 3.
34 At [18].
thirteenth year. The Supreme Court’s dismissal of the application for leave to appeal exhausted the appeal process and brought the matter to an end.
[25] The applicants contend that their application for reinstatement in this Court is appropriate and not an abuse of process because there are new circumstances and/or fresh evidence which must be considered in the interests of justice. Mr Williams, for the applicants, refers to the decision of the Court of Appeal in Taipeti v R.35 He submits that, in that case, the Court of Appeal held that where a defendant intends to challenge a bail decision on the basis of fresh evidence, this should ordinarily be pursued by way of a fresh application for bail rather than an appeal.36 Mr Williams contends that by analogy, the appropriate procedural course in this case is for the applicants to make a fresh application for revival or reinstatement of the proceeding in this Court.
[26] I disagree. In the context of this case, I do not consider that it is appropriate for the applicants to make a fresh application in this Court for relief from the consequences of non-compliance with the unless orders and revival of the proceeding, thereby also potentially leading to two further levels of appeal. As noted above, the Court of Appeal has already heard an application for relief and determined the relevant issues set out in SM v LFDB, and an application for leave to appeal was dismissed by the Supreme Court. This application seems to me to be a clear attempt to relitigate matters that have already been determined and undermines the judgments of the Court of Appeal and Supreme Court. In my view the application is not consistent with the principle of finality of litigation, nor fair use of judicial processes and maintaining public confidence in the administration of justice.37
[27] If indeed there are material new circumstances and/or fresh evidence which have arisen since the judgments of the Court of Appeal and the Supreme Court, it seems to me that the appropriate procedural course in this case may be an application
35 Taipeti v R [2017] NZCA 547.
36 At [61].
37 New Zealand Social Credit Political League Inc v O’Brien [1984] 1 NZLR 84 (CA) 1995 at 95 per Somers J and Little v New Zealand Law Society [2023] NZHC 1880 at [43]–[44], citing Reid v New Zealand Trotting Conference [1984] 1 NZLR 8 at [9] and Hunter v Chief Constable of the West Midlands Police [1982] AC 529 (HL) at 541.
for recall of the judgment of the Supreme Court dismissing the application for leave to appeal.38
[28] I consider that the applicants’ interlocutory application for revival or reinstatement of the proceeding is an abuse of process and therefore the application should be dismissed. However, in case I am wrong on the issue of abuse of process, I now consider whether there is any basis for reviving or reinstating the proceeding.
Even if the application is not an abuse of process is there any basis for reviving the proceeding?
[29] The applicants raise a number of reasons why it is in the interests of justice to revive or reinstate the proceeding.
Nature of the breach
[30] The applicants submit that the breach of the unless orders was only a procedural breach which “was not wanton or deliberate but due to financial difficulties in arranging funding”.
[31] However, these considerations were before the Court of Appeal and did not persuade the Court of Appeal to grant relief.39 The Court found that:40
[85] Once one accepts that there must be some limit on the time that claimants are allowed to comply with Court orders and prosecute their claims, the critical question becomes how much time ought fairly to be permitted. In this case, we consider that the May 2020 judgment allowed adequate, indeed generous, time for compliance. Not did the claimants put forward any new date by which they would be able to comply with the orders made.
[86] We also accept the respondents’ submission that there has not been any material change in circumstances since May 2020, let alone the significant change in circumstances claimed by Mr Houghton. At the date of the hearing before us there was no additional funding or security on offer over and above the proposals canvassed before the High Court in May 2020 and August 2020. As the respondents submitted, Mr Houghton’s personal assets have always been on the line. Nothing material has changed either in relation to the
38 Craig v Williams [2019] NZSC 60 at [10], citing Horowhenua County v Nash (No 2) [1968] NZLR 632 (SC) at 633; KI Commercial Ltd v Christchurch City Council [2018] NZHC 2896 at [40]; see generally McGechan on Procedure, above n 4, at [HR11.9.01 (1)-(12)].
39 For example, see Houghton v Saunders, above n 2, at [36]-[37] regarding the allowances made for the difficulties caused by COVID-19.
40 At [85]–[87].
rationale for requiring security for costs, or the adequacy of the arrangements made by the claimants to provide that security. That remains the position following the hearing, despite the further opportunities afforded to the claimants to put in place an appropriate form of security for costs. No security is yet in place. The latest of the three proposals advanced before us has been rejected by the respondents on grounds which, as we explained at [74] above, are well-founded and reasonable.
[87] In these circumstances, it is difficult to identify any proper basis on which the claimants’ failure to comply with the orders made in the May 2020 judgment could be excused, or on which they could be relieved from the consequences of non-compliance. They have had a generous amount of time to provide security and prosecute their claims. They have repeatedly failed to do so.
Health issues of junior counsel
[32] The applicants contend that there was a difficulty in adhering to the timetable in 2019 and 2020 due to the deteriorating mental and physical health of junior counsel for the plaintiffs. Mr Williams submits that the applicants only became aware of the formal diagnosis in February 2021. Mr Williams also submits that notwithstanding the emerging symptoms and concern about the condition and performance of junior counsel, the plaintiffs could not re-resource.
[33] There is, of course, sympathy for junior counsel’s health condition. However, as submitted on behalf of the second defendant, the plaintiff had the services throughout the relevant period of an instructing solicitor and senior counsel, Colin Carruthers KC. Further, the affidavit evidence indicates that the main issues arising from the health condition were regarding speaking in Court, operating the video system and mixing up paperwork in Court when senior counsel was speaking. Ultimately, the reason for the proceeding being struck out and no relief being granted was not the performance of junior counsel but the repeated failures by the claimants and their litigation funder to comply with the order for security for costs. Also, it is not clear why the claimants could not have engaged additional legal support when the symptoms of the deteriorating health condition became clear to Mr Houghton and others in late 2019, despite there being no formal diagnosis. Further, the health issue does not appear to have been raised with the Supreme Court in 2021 even though there had been a formal diagnosis in February 2021.
Refined stage two case
[34] The applicants contend that the proceeding should be revived because they now intend to proceed only against the second and third defendants and only in respect of the FTA cause of action (they are not pursuing any cause of action under the Securities Act 1978).
[35] The second defendants submit that these proposed amendments were all possible and within the claimants’ control during the period the proceeding was on foot and therefore cannot now be claimed as a change of circumstances. I agree that the proposed belated amendment of the claim and causes of action should not be a basis for granting relief from the consequences of the unless order at this stage. The proposed amendments are matters that could have been raised before the Court of Appeal as part of the application for revival of proceedings in late 2021. However, I will in any event consider the consequences of the proposed amendments.
[36] First, the applicants contend that the number of parties involved in the stage two hearing will be reduced and relieve the individual first defendants from the burden of the revived proceeding. However, as submitted by Mr Cooper KC, on behalf of the first defendants, even if the applicants were successful in having the proceeding reinstated to proceed only against the second and third defendants, there remains an obvious risk that the first defendants would be joined back into the proceeding through applications for joinder by the second and/or third defendants. This risk has already been recognised at the case management conferences in relation to this interlocutory application. The applicants did not name the first defendants as parties to the interlocutory application. However, the applicants have been allowed to file an opposition to the application and to participate in the hearing because of the recognised exposure to the risk of joinder if the proceeding is revived against only the second and third defendants.41
[37] Further, Mr Curran, for the second defendant, submits that the presence of the first defendant directors is necessary for a just determination of the proceeding. He submits that, for example, even if the FTA claim successfully established the second
41 Minute of McHerron J, above n 6, at [9].
defendant’s liability in damages, the Court would need to consider the relative causal contribution and culpability of all defendants under s 43 of the FTA.42
[38] Mr Curran also submits that the effect of what is proposed by the applicants is that the second defendants would be denied the right to object to what is essentially a discontinuance against the first defendant directors. Rule 15.20(4) of the High Court Rules provides that discontinuance of a proceeding against a particular defendant is only possible with the consent of the other defendants or leave of the Court. He submits that the applicants have their sequencing wrong, and the proposed mode of “reinstatement” involves additional and unnecessary prejudice to the second defendants. He submits that any proposed amendments with regard to parties and causes of action should only be pursued in accordance with the High Court Rules after obtaining any order reviving the proceeding.
[39] It seems to me that, whether the proceedings are revived only against the second and third defendants, or there is an application for leave to discontinue the claim against the first defendants after any revival, there remains a risk that the first defendants will remain involved in the proceeding. In the first scenario, it is apparent that at least the second defendants would seek joinder of the first defendants back into the proceeding as defendants or third parties. In the second scenario, even if an application for leave to discontinue the claim against the first defendants was successful, it is apparent that at least the second defendants would seek to join the first defendants as third parties. As submitted by Mr Cooper, the issues of prejudice in reviving the proceeding are particularly acute for the first defendants as individuals. It is now over 20 years since the events on which the claim is based. Although their personal situations differ, some of the first defendants are now elderly and they face the usual range of age-related health issues.
[40] The second argument put forward by the applicants is that the proposed amendments would simplify the stage two trial and all that would be required to determine the FTA claim would be an enquiry into the extent of the losses. Mr Williams submits that the issues of reliance and causation have effectively already
42 Mr Curran submits that s 43 Fair Trading Act 1986 (FTA) is a broad provision providing the Court with remedial discretion in respect of any FTA liability.
been answered by the Supreme Court. However, Mr Curran submits that a substantial stage two trial would still be required to deal with the remaining issues remitted by the Supreme Court on an FTA claim, for example:
(a)Mr Curran submits that the claimants would need to prove reliance; that the claimants were actually misled or deceived by the defendants’ conduct. He submits that this would require examination of each claimant’s investment decision-making process in 2004, including cross-examination. He submits that the applicants’ submissions overlook that the FTA reliance requirement is not affected or determined by the Supreme Court’s findings on a different reliance standard (“on the faith of a prospectus”) relevant to the Securities Act cause of action which the applicants no longer propose to pursue.43
(b)Regarding causation, Mr Williams contends that a finding that there has been loss as a result of the misleading and deceptive conduct is “effectively a given” as a relevant cause of loss does not have to be the sole cause of loss, but simply more than immaterial.44 However, Mr Curran submits that the issue of causation was scheduled to be the subject of competing expert analysis at stage two, and was to be a keenly contested matter - even the issue of the admissibility of the claimants’ intended evidence reached the Court of Appeal.45
(c)Mr Curran also submits that the question of defences to, and/or relief from, any liability likely requires close consideration of the defendants’ conduct at stage two.46
[41] Based on the history of this proceeding, the amount of material put before the Court just for this interlocutory application and the competing arguments of the parties as to the issues remaining to be determined, I agree with Mr Curran that any revived proceeding and stage two trial is likely to be anything but straightforward.
43 Houghton v Saunders, above n 12, at [127]–[128].
44 Leigh v MacEnnovy Trust Ltd [2010] 2 NZLR 492 at [42] and [53].
45 Houghton v Saunders [2019] NZCA 506.
46 Houghton v Saunders, above n 12, at [292] and [310].
[42] In this regard, it is also necessary to consider the main reason that the proceeding was struck out in 2020; repeatedly failing to comply with an unless order requiring security for costs in the sum of $1.65 million to be paid by the claimants for stage two. As held in SM v LFDB,47 a party cannot assume that belated compliance with unless orders will suffice to relieve the party of the consequences of the orders. In the present case, there was no belated compliance for the purposes of the application to the Court of Appeal in late 2020 or the application for leave to appeal to the Supreme Court in 2021, and the applicants have not put forward any proposal for payment of security for costs in respect of the proposed revived proceeding. Rather, it seems to me that the applicants attempted to obfuscate the issue of compliance.
[43] In the written submissions on behalf of the applicants, it was submitted that security for costs “have now been settled and paid” on the basis that the claimants paid the defendants $447,457.20 on 30 September 2022.48 However, this figure is the quantum (including interest) of the net costs liability of the claimants to the defendants for the proceeding after it was struck out.49 The figure takes into account stage one costs and the defendants’ wasted costs in respect of stage two, which involved a series of interlocutory applications but never proceeded to a hearing. It does not provide any security for the defendants’ costs of future participation in any revived proceeding.
[44]In his oral submissions in reply, Mr Williams clarified that the sum of
$447,457.20 was paid out of a total fund of $1.25 million held in a trust account. Mr Williams submitted that this leaves approximately $800,000 available for security for costs in respect of the proposed revived proceeding.
[45] Mr Williams suggested that an order for reinstatement of the proceeding could be made conditional on payment of security. However, it is not apparent on the material before me that the applicants would be able to pay the $1.65 million previously ordered for security for costs. And, if the proceeding was otherwise to be reinstated subject only to payment of security costs, there may well be a review of the
47 SM v LFDB above n 21, at [31].
48 It was also submitted that this Court determined in late 2021 and early 2022 that security for costs should not have been set at $1.650 million, but only $447.457. However, the Court did not make any such determination when considering the final costs awards - Houghton v Saunders above n 7.
49 The parties reached agreement on the net aggregate liability of the claimants based on the judgment in Houghton v Saunders, above n 7./
previous order which may be increased or decreased.50 Further, the material before me does not address whether, in the event the proceeding was reinstated, there is sufficient funding for the proposed plaintiffs and other represented claimants to prepare for and present their proposed stage two claims.
[46] In summary: there was no belated compliance with the relevant unless order; counsel for the applicants does not dispute that security for costs will be required for the proposed revived proceeding but the applicants have not put forward any firm proposal for payment of security for costs; there is uncertainty as to the level of security for costs that would ultimately be required for the proposed revived proceeding; and there is uncertainty as to whether there is or would be adequate funding for the proposed plaintiffs to pay security for costs and prepare and pursue the proposed stage two claims. This is not a sound basis for exercise of the Court’s jurisdiction to grant relief from the consequences of non-compliance with the unless orders and to reinstate the proceeding.
Fresh evidence in relation to legal status of the third defendant
[47] The applicants contend that there is fresh evidence in relation to the legal status of the third defendant which may well have altered the assessment of the High Court and Court of Appeal in relation to the striking out of the claim for failure to comply with the unless orders.
[48] The applicants contend that searches of the Delaware Court of Chancery indicate that the third defendant filed a certificate of cancellation during the course of the proceeding in 2018. The applicants submit that this was at a crucial time when costs and security for costs were at issue between the parties. The applicants submit that despite the third defendant’s legal status, or lack thereof, various representations were made to the plaintiffs and to the Court that indicated that the third defendant was still trading between 2018 and 2019. The applicants submit that it is clear from the filing records that the third defendant or its authorised agents filed a certificate of
50 McGechan on Procedure, above n 4, at [HR5.45.04]. The previous order for $1.65 million was made up of $800,000 for all projected pre-trial and stage two trial costs which appears to have been a global figure jointly proposed by the defendants; and $850,000 for disbursements quantified on the basis of the defendants’ projected costs at that time for shared experts.
cancellation to commence the dissolution/winding up process on 23 May 2018. The applicants say that on 6 May 2019, a correction was made “lifting the status of the third defendant’s cancellation”. However, from 23 May 2018 to 6 May 2019, the solicitors for the second and third defendants continued to purport to act for the third defendant, but the third defendant did not advise the Court or the plaintiffs that it had entered a winding up process.
[49] The applicants submit that had the plaintiffs known as at 23 May 2018 that the third defendant had commenced a winding up process in Delaware, they would have taken a number of different decisions in the course of the litigation as follows:
(a)The plaintiffs would have taken a completely different approach to stage two and the issue of security for costs. The applicants submit that the non-disclosure of the third defendant’s legal status created an injustice, including adding to the quantum of security for costs that the plaintiffs were required to, but could not, pay which resulted in the proceedings being struck out.
(b)The plaintiffs would have strenuously opposed the giving of any security for costs to the third defendant and would have sought the equivalent security protections now sought in its wider interlocutory application.
(c)If the plaintiffs had known at the time of the Supreme Court judgment on 15 August 2018 that the third defendant did not exist or had commenced a winding up process, they would have asked the Supreme Court to consider the ramifications of that status and to make some protective orders for the claimants.
(d)At a minimum, it is submitted the plaintiffs have a right to receive a refund of all the costs they paid as a result of steps taken during the time the third defendant did not fully and fairly disclose its legal status to the Court and the parties, and this misrepresentation itself permits reinstatement to occur.
[50] As noted above, the third defendant is not represented in this application. Mr Curran, counsel for the second defendant, submits that the second defendant should be entitled to make submissions in respect of this issue because, if the proceedings are reinstated against any or all defendants, then this will affect all defendants. For example, even if the proceeding was reinstated against the third defendant only, there is a risk that the second defendant would be joined back into the proceeding in any event. In the circumstances, I accept that the second defendant has an interest in responding on this issue and should be heard.
[51] The second defendant has put forward an affidavit from Sandra Degaray, Executive Director (Asset Management) of the second defendant. In her role she is familiar with the status of the third defendant including its status during the period 2018 and 2019 and her affidavit explains what happened. She explains that the 23 May 2018 filing of a certificate of cancellation referred to by the applicants was an error. Before the commencement of the Feltex proceeding, the third defendant was treated within Credit Suisse as a dormant entity, as it no longer held any assets. In 2007, it was therefore marked internally for dissolution in line with Credit Suisse’s normal practice. However, the filing of the certificate of cancellation on 23 May 2018 appears to have been in error based on the earlier approval. It appears it was done without knowledge of the ongoing Feltex proceeding. A certificate of correction was filed on 6 May 2019 after Credit Suisse’s internal litigation team discovered the erroneous filing of the certificate of cancellation on behalf of the third defendant. Given the existence of the Feltex proceeding, they promptly sought to correct matters by filing a certificate of correction. Ms Degaray states that:
The certificate of correction states that the inaccuracy or defect in the 23 May 2018 cancellation certificate is that “Since the entity has pending litigation, it will need to be in legal existence”. The certificate of cancellation was thereby corrected as follows: “The Certificate of Cancellation should be rendered null and void”. …
[52] She also says that the third defendant was dissolved on 23 May 2023. She says this is in accordance with Credit Suisse’s ordinary approach being that, where an entity has no assets or liabilities, for example, where it has sold all of its positions and made final distributions accordingly, the entity is dissolved and removed from the relevant
register to avoid incurring ongoing compliance and management costs associated with a dormant entity.
[53] Mr Curran submits that this issue does not provide any basis for revival of the proceedings. First, he submits that the stage two security for costs order was not made until 14 June 2019 (the hearing was on 30 May 2019) and did not fall due for payment until 12 July 2019. Therefore, there can be no question about the third defendant’s status when the order for stage two security for costs was made and during the entire period of the claimants’ default on that order, when the relevant unless orders were made in May 2020, and when the claimants defaulted on the unless orders in July 2020. He submits that the same is true of the times when the claimants failed to advance the claims at the aborted November 2019 and May 2020 trials.
[54] Secondly, Mr Curran submits that the second and third defendants had the same legal counsel, faced the same legal claims, and had the same defence in the proceedings. He submits that there was no double counting when security for costs was set (that is, there was only one set of costs taken into account for the second and third defendants). Therefore, even if the Court put the third defendant’s needs for security entirely to one side, the security ordered would have been identical.
[55] It is apparent on the evidence before me that the filing of a certificate of cancellation in respect of the third defendant between 23 May 2018 to 6 May 2019 was an error which was rectified as soon as it was discovered. There is no issue about the third defendant’s status (that is, the third defendant was not dissolved) when the application for security for costs was heard on 30 May 2019 or subsequently until the proceedings were struck out. Even if the claimants had become aware of the 23 May 2018 certificate of cancellation and the status of the third defendant had been considered in relation to security for costs as at May/June 2019, I do not consider that would have made any material difference to the quantum of security ultimately ordered by the Court which was based on one set of costs for both the second and third defendants and shared experts. Even if the issue had come to light in 2018 or 2019 and given rise to applications for some form of protective orders against the third defendant, and even if any such orders had been granted, I do not consider that would have changed the position with regard to the claimants’ failures to comply with the
order for security for costs and prosecute the claims to trial.51 The short point is that even if this issue about the third defendant had come to light, it is difficult to see how it would have made any difference to the decisions of the High Court and Court of Appeal in 2020 with regard to striking out of the proceeding.
[56] The applicants also contend that they should at least receive a refund of costs paid as a result of steps taken during the time the third defendant did not fully and fairly disclose its legal status to the Court and the parties, and that this misrepresentation itself permits reinstatement to occur. I disagree. It is not clear why the claimants would be entitled to a refund of costs paid for steps taken during this period. It is not apparent that the erroneous filing of the certificate of cancellation in May 2018 and subsequent rectification of the position in May 2019 had any material impact on the proceedings or steps taken in the proceedings during the relevant period. Further, even if the third defendant was found not to be entitled to costs in the relevant period, as noted above, there was only one set of costs for the second and third defendants, so there would not be any refund. If the contention with regard to a refund of costs is relevant at all, it should be the subject of an application for recall of the final costs judgment of this Court in 2021.52
[57] I am not satisfied that the evidence as to the legal status of the third defendant between May 2018 and May 2019 provides a sound basis for granting relief from the consequences of non-compliance with the unless orders and reinstating the proceeding.
The overall justice of the case
[58] The applicants contend that the plaintiffs and all the investors they represent have never received a remedy despite a liability judgment in their favour. They submit that despite the significant delays in this case, it is in the interests of justice that the investors are allowed to prove their loss and receive their remedies in a stage two proceeding. The applicants say this is particularly so as “they have had to bear the brunt of the majority of the costs of forging New Zealand’s judge-made class action
51 Houghton v Saunders [2020] NZHC 1088 at [81]-[82].
52 Houghton v Saunders, above n 7.
regime”. The applicants refer to potential losses of $200 million (including interest) since 2005. The applicants submit that they hold a sealed order of the Supreme Court finding a breach of s 9 of the FTA. They submit that the usual time for enforcement of a sealed order is six years and the present application by analogy has been made within that timeframe.
[59] The applicants contend that many of the delays in the case were not of their making. The applicants refer to the extensive delays at stage one as a result of the defendants opposing the plaintiffs’ case and the need for procedural rulings to be appealed all the way to the Supreme Court. The applicants also refer to: the effect of the Global Financial Crisis; the various appeals on procedural issues between 2010 and 2014; the 2011 Christchurch Earthquake requiring the proceeding to be moved to Wellington; successful appeals by the plaintiffs between 2015 to 2018; the “time costs of evolving a r 4.24 mechanism that actually worked”; and finally the impact of Covid 19, including the prevention of proper in-person court hearings and the withdrawal of international litigation funders and insurers.
[60] However, I do not consider that issues regarding delays in stage one are relevant to the question of whether there should be relief from the consequences of failure to comply with unless orders made in respect of security for costs for, and prosecution of, stage two. Further, all the matters referred to by the applicants were either raised and considered by the High Court and Court of Appeal in 2020 or could have been raised by the claimants. They are not new circumstances, or fresh evidence that was not available at the time of the hearings in 2020 (and before the Supreme Court in 2021), which might justify reconsideration by this Court of whether the proceeding should be revived some four years later. Regarding funding, Dobson J made express allowances for Covid disruption, while also noting that capital markets activities continued in the relevant period,53 and this was noted by the Court of Appeal.54 The Court of Appeal concluded:55
… And if the claimants – some of whom are well resourced and have significant claims, were persuaded that there was a good prospect of success at a level that would provide them with meaningful recoveries, they could
53 Houghton v Saunders [2020] NZHC 1088 at [67]-[68]
54 Houghton v Saunders, above n 2 at [36]-[37] and [85-[87].
55 At [88].
have funded stage two. They have chosen not to do so. The reluctance of the original funders and the claimants to fund any further steps casts considerable doubt on the extent of prejudice the claimants will suffer as a result of the proceeding remaining struck out.
[61] It is also clear that any injustice to the defaulting party “is likely to carry much less weight” than the interests of the non-defaulting party and the public interest.56 The applicants submit that there is no prejudice to the defendants in the reinstatement of the proceeding “as to date they have not paid the plaintiffs any remedy under the FTA”. However, this submission seems to me to completely ignore the impact of reinstatement on the defendants.
[62] First, the defendants are no less entitled to access to justice than the plaintiffs, including having the claims against them heard and determined in a timely manner. In 2020, the Court of Appeal held that “it is oppressive and unfair for claims to be left hanging over a defendant for an unnecessarily protracted period” and there would be “an obvious prejudice to the respondents in having the proceeding revived, with the result that it would continue into a thirteenth year, still with no certainty about when security for costs could be provided and a trial take place”.57 This finding was endorsed by the Supreme Court.58 The “obvious prejudice” that existed in 2020 can only have been exacerbated by the passage of time and, as noted above, uncertainty remains about security for costs and when any stage two trial would take place.
[63] As submitted by Mr Curran, the delay in this case since the breach of the unless orders and striking out of the proceeding is “orders of magnitude greater” than the delays experienced in the cases relied on by the applicants where relief was granted.59 Those cases involved relief being granted in a matter of months rather than years. And none of those cases involved a second application for relief from dismissal following unsuccessful appeals on the first application, as is the position here.
[64] As noted above, while the situations of the individual first defendants differ, many are elderly and suffer from age-related health issues. With regard to the second
56 SM v LFDB, above n 21, at [31(f)(iii)].
57 Houghton v Saunders [2020] NZCA 63 at [84] and [89].
58 Houghton v Saunders above n 3, at [18].
59 Jarden v Lawlor, above n 20.
defendant, the evidence is that, since 2021, the second defendant has made accounting and other financial decisions in relation to its asset position and insurance coverage on the basis that the proceeding was at an end. With regard to the third defendant, the evidence is that it was dissolved on 23 May 2023 on the basis that it has no assets or liabilities and to avoid ongoing compliance and management costs.
[65] Second, there is an issue as to the defendants’ right to a fair trial. It is now more than twenty years since the events in issue occurred (the May 2004 IPO), giving rise to real concerns about the availability and reliability of the witnesses required to give evidence (for any party) at stage two. The evidence of Ms Degaray is that, as a result of the passage of time and relevant individuals leaving Credit Suisse, the second defendant no longer has at its disposal the people it previously relied on to respond to the allegations against it.60
[66] I also accept that the defendants’ exposure to further costs is a factor against revival, particularly as there is still uncertainty about security for costs for the defendants.61
[67] The public interest in ensuring that justice is administered without unnecessary delays and costs is highly relevant to the overall justice of the case. This factor is essentially ignored by the applicants. In 2020, the Court of Appeal held that “… it is clearly contrary to the public interest to permit this proceeding to continue to absorb the finite resources of the courts, to the detriment of other litigants, for a further – potentially lengthy – period.”62 This finding was endorsed by the Supreme Court.63 I
60 See also Bank of New Zealand v Savril Contractors Ltd [2005] 2 NZLR 475 (2004) 16 PRNZ 1096 (CA). In that case, a proceeding was struck out as being an abuse of process where an earlier and virtually identical proceeding had also been struck out for inexcusable delay in progressing the substantive proceedings including delays in complying with an order for security for costs. The Court held at [18] that:
The transactions that are the subject of these proceedings happened some twenty years ago now and litigation in respect of those transactions has been before the courts for over ten years. This Court has already determined that the delay in prosecuting substantially similar proceedings was inordinate and that a fair trial is now impossible. To allow the proceedings again to come before the courts is in these circumstances an abuse of process. The litigation must end.
61 See discussion above at [42]-[46].
62 Houghton v Saunders above n 2at [89].
63 Houghton v Saunders above n 3 at [18].
accept the submission of Mr Curran that the harm to the public interest recognised in 2020 can only have been exacerbated by the increased staleness of the claims. It is now over 20 years since the relevant events occurred, 16 years since the proceeding was initially brought, and four years since it was struck out. Other litigants presently pursuing their claims in a timely and compliant way have greater claims to the finite resources of the courts.
[68] Second, the Court of Appeal recognised in 2020 that it would be inconsistent with the public interest in the effective administration of justice if claimants in a representative proceeding were allowed unlimited time to prosecute their claims, free of the disciplines that apply to any other litigants.64 Given the aborted hearings in November 2019 and May 2020, the failures by the claimants to comply with the 2019 order for security for costs and subsequent unless orders, and the fact that there is still uncertainty about security for costs for the defendants, it seems to me that allowing revival of this proceeding would undermine the public interest in the effective administration of justice.
Summary
[69] For the reasons set out above, even if the applicants’ application for reinstatement is not an abuse of process, I am not satisfied that there is any sound basis to grant relief from the consequences of non-compliance with the unless orders and to reinstate the proceeding.
Result
[70] The application for reinstatement of this proceeding against the second and third defendants is dismissed.
[71] I have not heard fully from the parties on costs. My preliminary view is that the first and second defendants are entitled to costs on a 2B basis and reasonable disbursements. The parties should endeavour to agree costs. However, if costs cannot
64 Houghton v Saunders above n 2 at [84].
be agreed then memoranda may be filed (not exceeding three pages excluding costs schedules) and costs will be determined on the papers.
[72] I released a copy of this judgment to counsel for the parties inviting comment on whether any party seeks redactions to the section of the judgment dealing with the health of former junior counsel for the plaintiffs. The plaintiffs’ position is that they do not see any need for redactions. The first defendants abide the decision of the Court. The second and third defendants do not seek any redactions. In the circumstances, no redactions are made.
Associate Judge Skelton
Solicitors:
Parlane Law, Auckland for Plaintiff
Gilbert Walker, Auckland for First Defendants Russell McVeagh, Wellington for Second Defendant
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