Hum Hospitality Limited v Stylo Medical Services Limited
[2024] NZHC 2427
•28 August 2024
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2016-404-636
[2024] NZHC 2427
BETWEEN HUM HOSPITALITY LIMITED
Plaintiff
AND
STYLO MEDICAL SERVICES LIMITED
First Defendant
SHEN TAT OOI
Second DefendantGRACE REPILING AND RELEVELING LIMITED (IN LIQUIDATION) (removed)
Third DefendantAUCKLAND COUNCIL
Fourth DefendantMICHAEL PERCY FIELD
First Third Party
Hearing: 16 August 2024 at 2:15pm Appearances:
No appearance of the Plaintiff
R Parmenter for the First Defendant and the Second Defendant Kirsten Wakelin for the Fourth Defendant
Judgment:
28 August 2024
JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR
[Application for joinder as a co-plaintiff;]
[First, Second and Fourth Defendants’ application for dismissal of claim]
This judgment was delivered by me on 28 August 2024 at 3:00pm
pursuant to Rule 11.5 of the High Court Rules
…………………………. Registrar/Deputy Registrar
HUM HOSPITALITY LIMITED v STYLO MEDICAL SERVICES LIMITED [2024] NZHC 2427 [28 August 2024]
TABLE OF CONTENTS
Paragraph
Introduction [1]
Background [5]
Legal principles [12]
Joinder [12]
Dismisal for want of prosectuion [13]
Ms Armitage’s application for joinder as co-plaintiff [15]
Conclusion in relation to Ms Armitage’s joinder application [18]
Ooi’s Interests and Auckland Council’s application for strike-out [19]
Conclusion on strike-out applications [25]
Result [26]
Orders [27]
---
Introduction
[1] By an on notice interlocutory application, dated 17 July 2024, the first defendant, Stylo Medical Services Limited (Stylo), and second defendant, Shen Tat Ooi (together, the Ooi Interests) seek an order that the amended statement of claim by the plaintiff, Hum Hospitality Limited (In Liquidation) (Hum) filed on 5 December 2018 (the claim) be struck out as against the Ooi Interests.
[2] By an on notice interlocutory application dated 8 August 2024, the fourth defendant, Auckland Council, sought an order that Hum’s amended statement of claim dated 5 December 2018 (the claim) be struck out as against Auckland Council.
[3] By interlocutory application dated 10 August 2024, Ms Roseanne Armitage (Ms Armitage) filed an interlocutory for joinder as a co-plaintiff.
[4] This judgment deals with the striking-out of the claims against the Ooi Interests and Auckland Council, and with Ms Armitage’s application for joinder as a co- plaintiff.
Background
[5] These proceedings have a long history. The proceedings related to a lease of a property situated in Grafton, Auckland, between Stylo Medical Services Ltd as lessor and Hum as lessee, that was entered into in 2011 (the Lease). Mr Ooi, the second defendant, is a director of Stylo. The Lease of the property has now been cancelled.
[6] The third defendant, Grace Repiling and Releveling Limited, is in liquidation and has been removed from the Companies Office Register. Mr Field, the first Third Party, is its director.
[7] Auckland Council, as the fourth defendant is a successor to Auckland City Council, being the entity responsible for regulatory responsibilities under the Building Act 2004 in relation to property.
[8] Hum’s claims against the Ooi Interests relate to misrepresentation, and a claim for breach of quiet enjoyment as lessee under the Lease. Hum’s claim against the Auckland Council is in negligence.
[9] Both the Ooi Interests and Auckland Council seek to strike-out Hum’s claim for want of prosecution.
[10] Ms Armitage seeks to be joined as co-plaintiff in the proceedings, on the basis that she is the tenant under the Lease and as guarantor of Hum’s obligations under the Lease.
[11] I deal with Ms Armitage’s application to be joined as a co-plaintiff first, and then with the Ooi Interests and Auckland Council’s respective applications to strike out Hum’s claim.
Legal principles
Joinder
[12]Rule 4.56(1)(b) of the High Court Rules 2016 provides:
4.56 Striking out and adding party
(1)A Judge may, at any stage of a proceeding, order that –
…
(b)the name of a person be added as a plaintiff or defendant because –
(i)the person ought to have been joined; or
(ii)the person’s presence before the court may be necessary to adjudicate on and settle all questions involved in the proceeding.
Dismissal for want of prosecution
[13]Rule 15.2 of the High Court Rules provides:
15.2 Dismissal for want of prosecution
Any opposite party may apply to have all or part of a proceeding or counterclaim dismissed or stayed, and the court may make such order as it thinks just, if—
(a)the plaintiff fails to prosecute all or part of the plaintiff’s proceeding to trial and judgment; or
(b)the defendant fails to prosecute all or part o the defendant’s counterclaim to trial and judgment.
[14] There are established criteria for dismissal for want of prosecution which are succinctly summarised by Eichelbaum CJ in Lovie v Medical Assurance Society New Zealand Ltd:1
Turning to the principles applicable to the substantive issue, the applicant must show the plaintiff has been guilty of inordinate delay, such that delay is inexcusable, and that it has seriously prejudiced the defendant. Although these considerations are not necessarily exclusive, and at the end one must always stand back and have regard to the interests of justice in this country, ever since NZ Gases Ltd v Andersons Ltd ([1970] NZLR 58) it has been accepted that if an application is to be successful, the applicant must commence by proving the three factors listed.
Ms Armitage’s application for joinder as co-plaintiff
1 Lovie v Medical Assurance Society New Zealand Ltd [1992] 1 NZLR 244 (HC) at 248.
[15] The grounds on which Ms Armitage seeks to be joined as co-plaintiff in the proceedings are as set out in her interlocutory application dated 10 August 2024 as follows:
(a)She ought to have been joined under r 4.2 as her role as guarantor and tenant is intrinsically linked to the issues arising from the Lease and the subsequent actions of the defendants which directly affect her legal rights and obligations, and it is necessary to do justice;
(b)her presence may be necessary to adjudicate and settle all questions involved in the proceeding as her involvement is crucial for a full and fair resolution of the issues, particularly concerning the financial impact and obligations arising from the alleged misrepresentations, negligence and breach of quiet enjoyment;
(c)she ought to have been joined in her capacity as guarantor of the Lease and as a tenant under the Lease from the outset of the proceeding as her involvement is directly tied to the issues of misrepresentation, negligence and breach of quiet enjoyment in the proceedings.
[16] Counsel for the Ooi Interests has filed a memorandum dated 12 August 2024 opposing Ms Armitage’s application for joinder as a co-plaintiff. Mr Parmenter for the Ooi Interests submits that neither ground on which Ms Armitage seeks to be joined as a co-plaintiff is arguable for the following reasons:
(a)Ms Armitage’s claim against the defendants is a result of her being the former tenant of the property. Ms Armitage has never been the tenant;
(b)the first cause of action in Hum’s claim related to alleged misrepresentations as to the soundness of the premises and so is a personal claim to Hum;
(c)the second cause of action is to the effect the first two defendants were in breach of Hum’s right of quiet enjoyment so the claim is a personal
claim to Hum and it is not possible for Dr Ooi, a director of Stylo, to be in breach of Stylo’s contractual obligations;
(d)Ms Armitage’s position as guarantor under the Lease is irrelevant to her claims for breach of lease against the Stylo and the other defendants.
[17] Mr Parmenter also submits that even if Ms Armitage did have a claim personally, it is time-barred, given the chronology set out at [5] of Mr Parmenter’s memorandum filed in support of the Ooi Interests’ application to strike out Hum’s claim.
Conclusion in relation to Ms Armitage’s joinder application
[18] I am of the view that Ms Armitage’s application to be joined as a co-plaintiff should be dismissed. The reasons for this are:
(a)her assertion that she is a tenant under the Lease is clearly untenable. The tenant who entered into the Lease and has brought the claim which the defendants are now seeking to strike out, is Hum. As Mr Parmenter has pointed out, the claims against the Ooi Interests relate to misrepresentations and breach of a covenant for quiet enjoyment, both of which are claims personal to Hum;
(b)Ms Armitage’s position as guarantor of Hum’s obligations under the Lease is irrelevant and is an untenable ground for joinder as a plaintiff;
(c)Ms Armitage’s presence before the Court is not necessary for the Court to adjudicate on and settle all the questions in the proceeding as the claims relate to Hum as tenant under the Lease.
Ooi’s Interests and Auckland Council’s application for strike- out
[19] Both the application by the Ooi Interest and Auckland Council to strike out Hum’s claim are based on the same grounds under r 15.2, namely, that Hum has filed to prosecute its claim to trial as being guilty of delay. Mr Parmenter, at [5] of his
memorandum dated 2 August 2024, sets out the chronology of events at [5][i] to [xi]. He concludes that there has been inaction on the part of Hum since 2021, being the time of the adjournment of the third trial.
[20] Mr Parmenter submits that Hum is in liquidation and while Ms Armitage has appealed the liquidation judgment (which is currently deemed abandoned albeit that Mr Armitage has applied for an extension of time to comply with r 43 and Stylo has applied to strike out the appeal), there is no stay of the liquidation judgment.
[21] The Official Assignee has filed a memorandum dated 22 July 2024 advising the Court that the Official Assignee has been served with the defendants’ application to strike out the plaintiff’s statement of claim and that the Official Assignee does not intend to take any action in relation to the proceeding unless the Court requires it.
[22] Mr Parmenter refers to Lovie v Medical Assurance Society New Zealand2 and submits the three factors listed in that decision are satisfied. He submits that the delay has been inordinate, especially in the last three years since the adjourned trial in 2021, and the Official Assignee has no interest in pursuing the claim. He submits there can be no excuse for the delay which has happened, and there is serious prejudice to the defendant as memories and documents from 13 to 15 years ago must be compromised or lost, as well as prejudice of the ongoing financial cost for the Ooi Interests in having this proceeding continuing on in Court.
[23] Ms Wakelin, for Auckland Council, makes similar submissions pointing to the three adjourned trials, the events complained of by Hum being 13 to 15 years ago and the continued existence of the proceeding prejudicing Auckland Council and the cost impact on its legal resources having to respond to the proceeding each time there is a mentions hearing.
[24] There is no opposition filed by Hum (or, for that matter, Ms Armitage) to the Ooi Interests and the Auckland Council’s applications for strike out.
2 Above, n 1.
Conclusion on strike out applications
[25] I am of the view that the Ooi Interests’ application to strike out the claim and the Auckland Council’s application to strike out should be granted. The reasons for this conclusion are:
(a)There has clearly been inordinate delay having regard to the original proceedings being issued in 2016 and in the three adjourned trials. There have been no steps taken to progress the claim since August 2021 and the Official Assignee, as liquidator of Hum, has indicated that the claim will not be pursued by him.
(b)While Ms Armitage has attempted to appeal the liquidation order, there is no stay of the liquidation order, and therefore Hum remains in liquidation and accordingly any decision in respect of Hum’s claim rests with the Official Assignee who does not wish to proceed.
(c)There is prejudice to both the Ooi Interests and Auckland Council to allow the claim to continue as the events are now 13 to 15 years ago, memories must be compromised and documentation potentially lost. In addition, there is prejudice of the ongoing costs to the defendants of the proceeding, in particular in respect of Auckland Council allocating limited legal resources to a proceeding which has not been pursued is prejudicial to their interests and not in the public interest as a use of public funds.
Result
[26] As a result the conclusions I have reached at [18] and [25], I am of the view that Ms Armitage’s application for joinder as a co-plaintiff with Hum should be dismissed, and the Ooi Interests and Auckland Council’s applications to strike out the claim against each of them respectively should be granted.
Orders
[27]I make the following orders:
(a)Ms Armitage’s application to be joined as a co-plaintiff with Hum is dismissed;
(b)pursuant to r 15.2, the Ooi Interests’ application to dismiss Hum’s claim against them is granted;
(c)pursuant to r 15.2, Auckland Council’s application to dismiss Hum’s claim against it is granted.
[28] As to costs, the Ooi Interests and Auckland Council have been the successful parties. The Ooi Interests, in the memorandum supporting the application, have indicated they do not seek costs. Auckland Council seeks costs and as the successful party costs should follow the event. Accordingly, Auckland Council is entitled to costs on the application to dismiss Hum’s claim on a 2B basis, together with disbursements.
……………………………… Associate Judge Taylor
Solicitors:
Winston Wang & Associates, Newmarket, Auckland, for the First and Second Defendants Auckland Council (Kirsten Wakelin), the Fourth Defendant
Copy for:
Ms Roseanne Armitage, self-represented.Insolvency & Trustee Service (David Dingwall), Official Assignee, Christchurch, as liquidator of the Plaintiff R O Parmenter, Barrister, Auckland, for the First and Second Defendants
Michael Field, Third Party
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