Hum Hospitality Limited v Stylo Medical Services Limited
[2018] NZHC 2971
•16 November 2018
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2016-404-636
[2018] NZHC 2971
BETWEEN HUM HOSPITALITY LIMITED
Plaintiff
AND
STYLO MEDICAL SERVICES LIMITED
Defendant
Hearing: 13 November 2018 Appearances:
R Sussock for the Plaintiff
R Parmenter for the Defendant
Judgment:
16 November 2018
JUDGMENT OF GORDON J
This judgment was delivered by me
on 16 November 2018 at 10.30 am, pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
Solicitors: Lowndes Jordan, Auckland
Winston Wang & Associates, Auckland
Counsel: R O Parmenter, Auckland
HUM HOSPITALITY LTD v STYLO MEDICAL SERVICES LTD [2018] NZHC 2971 [16 November 2018]
Application
[1] The plaintiff, Hum Hospitality Limited (Hum), seeks to join three additional defendants to its current claim against the defendant, Stylo Medical Services Limited (Stylo). Stylo opposes the application.
Background
[2] On 22 January 2011, Hum entered into a lease (the lease) with Stylo for the property at 123 Grafton Road, Auckland (the property). At the time, the property was a dilapidated villa which Stylo had no funds to renovate.
[3] Particular features of the lease for the purposes of the present application are as follows:
(a)It is a long-term lease, comprising an initial term of six years followed by two rights of renewal of eight years each, with a final expiry date of 31 January 2033;
(b)Hum was to repair and restore the property to a habitable state, with the lease setting out the following as required to be completed:
(i)Repaint and repair (if necessary) the exterior of the building;
(ii)Repair the roof (if necessary);
(iii)Fence around the balcony;
(iv)Landscaping;
(v)Fitout, including installation of a toilet and kitchen; and
(vi)Any other work that, at Hum’s option, is necessary for Hum’s business use of the premises.
[4] As to its use of the premises, Hum, together with Falling Apple Charitable Trust, operates a community project/social enterprise. The project provides “a supportive and inclusive environment to foster culture, art, music, education, health, sustainability, and wellbeing in the community”.1 The director of Hum is Rosanne Armitage.2 The community project/social enterprise is run by volunteers and all monies raised go back to the community.
[5] Under the lease, Hum was given a three-year rent holiday in consideration for it carrying out the renovations referred to above.
[6] Hum alleges that prior to entering into the lease with Stylo, Stylo represented through its agents, including Shen Tat Ooi (the proposed second defendant), that:
(a)A complete repile and relevel of the property had been undertaken;
(b)The repile and relevel of the property complied with the Building Code;
(c)A code compliance certificate (CCC) had been issued for the full repile and relevel of the property; and
(d)Further work had been undertaken restoring the upper deck that complied with the Building Code.
(together, the representations).
[7] Hum’s position is that while it had complied with the provisions in the lease to repair and complete substantial work, further development was not possible and the work already undertaken had been compromised because the property had not been repiled and relevelled in accordance with the Building Code.
1 Stylo Medical Services Ltd v Hum Hospitality Ltd [2016] NZHC 803 at [9].
2 At [9].
Background to the proceedings
[8] There is an extensive litigation history between the parties, the first part of which is summarised in the judgment of Faire J in Stylo Medical Services Ltd v Hum Hospitality Ltd:3
[17] The parties have a reasonably extensive litigation history which I will outline briefly.
[18] Stylo first sought to cancel the lease when it issued a Property Law Act notice on 20 August 2012. That notice was withdrawn due to acknowledged deficiencies in the notice.
Ellis J Decision
[19] Stylo then issued another Property Law Act notice on 27 November 2012 requiring Hum to complete the renovation work and apply for building consent as required by the lease. This notice was then the subject of a 2013 decision by Ellis J. In that decision, Ellis J held that it was strongly arguable that the Property Law Act notice did not adequately inform Hum of what it was required to do to remedy the breach of the lease. However, Hum was clearly in breach. Ellis J considered the factors set out in Studio X Ltd v Mobile Oil New Zealand Ltd as to when the Court will exercise its discretion under s 253 of the Property Law Act and grant the lessee relief. Ellis J found that the factors weighed in Hum’s favour and Hum was granted relief against cancellation.
Whata J Decision No 1
[20] Stylo later issued another Property Law Act notice stating that the works had not been completed to the required standard. This notice was the subject of several decisions by Whata J in 2014 and 2015. In the first decision, Whata J found that there was a genuine dispute about the extent of the repairs undertaken by Hum. Hum was granted relief from cancellation conditional upon the production of a report by an expert specifically assessing whether the required work had been completed in a workman-like manner.
Whata J Decision No 2
[21] Stylo then made a further application to the Court for cancellation for non-payment of rent. This was joined to the earlier proceeding. Hum argued that relief should be granted as the building’s foundations had never been fit for purpose and the rent should be abated pending the completion of the necessary repairs to the foundation by Stylo. Whata J considered the factors set out in Studio X v Mobil Oil New Zealand Ltd and also noted that “[i]n cases concerning non payment of rent, relief is likely to be granted if arrears are paid, though subject to such conditions as the Court thinks fit”. Whata J found that Hum had assumed the risk in relation to the building; however, given the improvements Hum had made to the building, conditional relief was granted. Whata J ordered that Hum pay all outstanding rent and outgoings within 15 working days.
3 Stylo Medical Services Ltd v Hum Hospitality Ltd, above n 1.
Extension Decision
[22] The amount was paid 16 working days later, one day outside the stipulated time. Stylo applied to the Court on the basis that failure to comply with the order meant that the lease must now be cancelled. Hum advised the Court that it had tried to pay on the fifteenth working day but could not do so because of banking transfer difficulties. Whata J held that the non-compliance was de minimis and that the Court had inherent jurisdiction to extend the time to comply with the order.
Court of Appeal Decision
[23] Stylo then appealed the Extension Decision to the Court of Appeal, who dismissed the appeal.
Whata J Decision No 3
[24] Whata J Decision No 3 came after the report of the expert appointed as a result of Whata J Decision No 1. In that decision, the issues before Whata J were:
(a)Whether the lease should be cancelled for non-compliance with the covenant to repair;
(b)Whether the lease should be cancelled for non-payment of rent in January 2015; and
(c)Whether a stay should be granted preventing Stylo from commencing further proceedings against Hum, pending resolution of an appeal by Stylo against the Extension Decision.
[25] Whata J considered that the amount owing at any given time was small relative to the contribution Hum made to the property and that the insistence by Stylo on enforcing its strict legal rights was not in accordance with the underlying premise of the agreement between the parties. However, he also stated that Stylo should not have to face any more non-compliance with the terms of the lease and that the Court would not indulge any further breaches by Hum.
(Citations omitted)
[9] The proceeding before Faire J was an originating application by Stylo for cancellation of the lease pursuant to s 244(1)(a) of the Property Law Act 2007. Faire J refused the application and granted Hum relief against forfeiture.4
[10] Hum filed these proceedings in March 2016, the month before the hearing before Faire J.
4 At [39].
[11] Under the lease, Hum was required to provide written notice of its intention to renew the lease by 1 November 2016. That date passed without Hum taking any steps. Stylo refused to renew the lease. Hum brought a separate proceeding seeking relief against Stylo’s refusal.
[12] Katz J delivered a judgment on 11 April 2018 granting Hum’s application for relief and renewing the lease.5
[13] Following delivery of that judgment, a case management conference was set for 14 June 2018.
[14] As at the case management conference on 14 June 2018, these proceedings had not progressed past consideration of an urgent application by Stylo for an interim injunction restraining the use of the property pending determination of the substantive proceedings. There had also been consideration of issues in relation to inspection and testing of the property for the purposes of ascertaining the extent (if any) of methamphetamine contamination which Hum says pre-dated its tenancy.
[15] In its memorandum for the case management conference, counsel for Stylo advised that counsel would wish to revisit Stylo’s pleading once Hum’s amended claim was filed. Therefore, any defences to counterclaims raised by Stylo needed to await Stylo’s pleading to the amended statement of claim.
[16] The memorandum filed by Ms Armitage, on behalf of Hum, for the case management conference recorded that other parties “may or may not be added” to the proceeding. Hum sought a further case management conference in the first week of September 2018 by which time it was hoped Hum would have legal representation.6
[17] Although Ms Armitage was permitted to listen in to the case management conference held by telephone, she was not permitted to represent Hum (having been told on a number of previous occasions that she was unable to do so).
5 Stylo Medical Services Ltd v Hum Hospitality Ltd [2018] NZHC 642.
6 Hum had had legal representation by different counsel in the various earlier proceedings but, at the time of the pre-trial conference on 14 June 2018, it was not legally represented.
[18] The timetable orders made on 14 June 2018 were designed to ensure that Hum had adequate opportunity to obtain necessary legal representation. Hum was given until 27 September 2018 to file any amended statement of claim. Other orders timetabled various steps to trial, which was set for 27 May 2019, with four days allowed. There was no timetable order in relation to any application for joinder. No discovery orders were made but a date was set by which a memorandum requesting a case management conference for outstanding discovery could be filed.
[19] Hum obtained legal representation following the conference and orders were made by consent on 2 October 2018 adjusting the timetable orders made on 14 June 2018, giving Hum until 10 October 2018 to file and serve its amended statement of claim. Other adjustments were made to the timetable.
[20] Hum has annexed a draft amended statement of claim incorporating claims against the proposed second to fourth defendants, to its application to join those proposed defendants.
[21] In relation to Stylo, the draft amended statement of claim includes claims for misrepresentation inducing entry into a contract and for breach of the covenant of quiet enjoyment.
[22] The draft amended statement of claim has been served by Hum on the proposed second to fourth defendants. Representatives of both the proposed third and fourth defendants were present in court but did not appear on the application.
Proposed defendants
[23] The draft amended statement of claim in relation to the proposed second defendant, Dr Ooi, is for negligent misstatement. It refers to the same representations relied upon in part for the claim against Stylo referred to in [6] above.
[24] The proposed third defendant is Grace Repiling and Releveling Limited (Grace Repiling). It is alleged that Grace Repiling was engaged by Stylo to carry out repiling and releveling work on the property prior to Hum entering into the lease with Stylo.
The proposed claim against Grace Repiling is for negligence in relation to the repiling and releveling work.
[25] The proposed fourth defendant is the Auckland Council (the Council). It is alleged that the Council issued a building consent for the repiling and releveling work, inspected and approved the works, and issued a CCC for the work on 24 September 2009. The proposed claim against the Council is for negligence in granting the building consent without condition, inspecting and approving the works, and issuing the CCC in respect of the repiling and releveling work.
The application to join
[26] The application to join the proposed second to fourth defendants is made under r 4.56 of the High Court Rules:
4.56 Striking out and adding parties
(1)A Judge may, at any stage of a proceeding, order that—
(a)the name of a party be struck out as a plaintiff or defendant because the party was improperly or mistakenly joined; or
(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.
(2)An order does not require an application and may be made on terms the court considers just.
(3)Despite subclause (1)(b), no person may be added as a plaintiff without that person’s consent.
[27] The plaintiff relies on both grounds in r 4.56(1)(b), namely that the proposed defendants ought to have been joined and also that their presence is necessary to enable the Court to settle all questions raised in the proceeding.
[28]An application for joinder under r 4.56(1)(b) involves a two-stage inquiry:7
(a)First, the Court must consider objectively whether there is jurisdiction to join the proposed parties; and
(b)Second, if there is jurisdiction, whether the Court should exercise its discretion to order joinder.
[29] Mrs Sussock, appearing for Hum, submitted that it has consistently been recognised that the New Zealand courts take a liberal approach to joinder.8
[30] As to the allegations in this case, Mrs Sussock submitted that the falsity or otherwise of the representations made by Stylo and the proposed second defendant, and the negligence or otherwise of the proposed third and fourth defendants in performing, approving and certifying the repiling and releveling work, all depend in part on a consideration and assessment of the work in terms of the Building Code and a consideration of the responsibilities of each of the parties.
[31] Mrs Sussock submits that requiring separate proceedings to be brought within which compliance with the Building Code and the responsibility of each of the parties in relation to the repiling and releveling work is separately assessed, may lead to inconsistent results and result in real injustice between the parties.
[32] At the hearing, Mr Parmenter, appearing for Stylo, accepted that there is jurisdiction to join each of the three proposed defendants. The matters raised by Stylo go to the second step, namely the exercise of the Court’s discretion to order joinder.
[33] In those circumstances, it is not necessary for any further consideration of the jurisdictional threshold, the concession having been made that it is met. I move on to consider the exercise of my discretion to order joinder.
7 Andrew Beck and others McGechan on Procedure (online looseleaf ed, Thomson Reuters) at [HR4.56.08].
8 Relying on Newhaven Waldorf Management Ltd v Allen [2015] NZCA 204 at [44]-[46].
Discretion to order joinder
[34] Mrs Sussock submits that once jurisdiction is established, a plaintiff’s application to join defendants will normally be granted.9 She submits that none of the matters raised by Stylo in its notice of opposition should prevent the exercise of the Court’s discretion to order joinder.
[35]Stylo opposes Hum’s application on the following grounds (in summary):
(a)There has been unreasonable delay on the part of Hum in bringing the application.
(b)The inevitable consequence of granting the application will be the loss of a four-day trial fixture commencing 27 May 2019 which was set at the case management conference on 14 June 2018.
(c)While the proposed second defendant, Dr Ooi, would likely be ready for the May trial date were he to be joined, the proposed third and fourth defendants would be unlikely to be ready.
(d)Hum has a weak case against Stylo and the proposed second defendant.
(e)Technical issues arising in relation to the proposed third and fourth defendants would not arise in any trial against Stylo. Accordingly, the proposed third and fourth defendants would be obliged to spend the time in the trial “on the sidelines”.
(f)In relation to all defendants, there would be an application for security for costs which Hum would not be able to meet. The involvement of the proposed third and fourth defendants would lead to expert evidence and that would inflate the sum of security for costs.
9 Relying on Beck, above n 7, at [HR4.56.11].
Analysis
Has there been unreasonable delay?
[36] Mr Parmenter submits that Hum’s assertion of fault with the repiling goes back to at least 2 April 2013 where, in earlier litigation between the parties, Ms Armitage deposed that “the lower deck and main house structure is not to standard, the repiling and releveling is botched … The Code of (sic) Compliance certificate pertaining to this work is in question”.10 He further submits that this proceeding has been on foot since 31 March 2016 and it is unreasonable to seek to add the further defendants at this late stage.
[37] In response, Mrs Sussock accepts that there will be delay if Hum’s application is granted, but she submits the delay will not be unreasonable in all the circumstances. Although the proceeding was filed in March 2016, it is still at an early stage with discovery and inspection yet to be completed. The proceeding was effectively put on hold in April 2017 whilst the lease renewal proceedings were decided (Mr Parmenter having submitted at that time that issues of inspection and testing of the property relevant to Stylo’s counterclaim, could not be advanced until the status of the lease was resolved).
[38] The case management conference on 14 June 2018 was, therefore, the first case management conference in the proceeding.
[39] Mrs Sussock submits that given the nature of the issues between the parties and the complexity of the background to these proceedings, it is important that proper discovery takes place. Mrs Sussock notes the memorandum filed for Stylo in advance of the case management conference on 14 June 2018 which stated that discovery orders were not necessary because the abundance of litigation between the parties meant that everything which could be relevant has been aired.
[40] The point Mrs Sussock makes is that those other proceedings related to specific issues in relation to cancellation or renewal of the lease. Further, no discovery orders
10 I give Mr Parmenter leave as sought under r 7.32 of the High Court Rules to use the contents of an affidavit in another proceeding.
were made in those earlier proceedings. She submits that whether the further defendants are joined or not, the proceeding cannot be justly disposed of without an order for discovery. All of these points, Mrs Sussock submits, underline Hum’s submission that this proceeding is at an early stage. In other words, there has been no unreasonable delay.
[41] Finally, on this point, in relation to Stylo’s reference to Ms Armitage being aware at an early date that there were issues with the repiling and releveling, there is some substance in Mrs Sussock’s submission that since that time there have been a number of proceedings between the parties initiated by Stylo. It is only now that the status of the lease has been settled that the focus has returned to this particular claim, with the first case management conference being on 14 June 2018.
[42] As noted above, in her memorandum for that conference Ms Armitage signalled that an application for joinder may be made.
[43] Having regard to the history of the proceeding referred to above, although the period of time from the date of filing of the statement of claim to date, on its face, is lengthy, I do not consider in all the circumstances the delay has been unreasonable.
Loss of trial date/benefits of joinder
[44] Counsel agree that if the three proposed defendants are added, the existing trial date would be lost. Mr Parmenter says that while the proposed second defendant, Dr Ooi, could be ready for a May 2019 trial,11 it is clear that the other two proposed defendants could not be. Also, a trial involving further defendants would take longer than the allocated four days.
[45] Mrs Sussock says that Hum wishes to proceed to a hearing as quickly as possible, but she submits that the benefits of having all issues determined in one proceeding far outweigh any perceived benefit of retaining an early trial date. She submits loss of that date is not sufficiently prejudicial to outweigh the benefits of joinder at this stage.
11 But without detracting from his submission that it is not necessary for Dr Ooi to be joined.
[46] I deal first with issues in relation to the loss of trial date and will then turn to any benefits from having one hearing.
[47] Mrs Sussock submits that adding discovery and inspection into the timetable, and allowing for delay in filing the amended pleadings, will necessarily mean that the trial date would be required to be moved even if Hum’s application were not granted.
[48] In response, Mr Parmenter submits that the trial date would not necessarily be lost even allowing for discovery, inspection and the filing of amended pleadings. Mr Parmenter took me through the further steps required and submitted the time required for amended pleadings would be very short; that discovery and inspection could run in parallel with other steps, and with tight management the trial date could be maintained.
[49] There is some merit in Mr Parmenter’s submission, although there is an additional step for third party discovery which Mrs Sussock mentions is likely to add to time required for pre-trial steps.
[50] Additionally, Mr Parmenter submits that the loss of the trial date would be prejudicial to Stylo as this will result in a delay in having Stylo’s counterclaim against Hum resolved. He says that should the counterclaim succeed, the effect will be that Hum is in breach of the lease which will then be cancelled. A delay in having that matter determined is costing Stylo money as it is not able to achieve increased rental on the property, Hum having breached its obligation to establish a restaurant on the property.
[51] In response, Mrs Sussock submits that the issue of whether or not Hum was obliged to establish a restaurant on the property was considered by Katz J who said:12
[34] Ultimately, I have not been persuaded that Hum is a bad tenant due to its failure to install a restaurant on the Property. It is not clear whether the Lease imposes such an obligation on Hum at all. If it does, it is not clear what the timeframe is for performance of that obligation. Further, there may (or may not) be merit in Hum’s argument that it has been unable to perform any such obligation as a result of misrepresentations or other misconduct on the part of Stylo. Finally, and perhaps most significantly for present purposes,
12 Stylo Medical Services Ltd v Hum Hospitality Ltd, above n 5.
there is no evidence that the failure to install a restaurant has caused any material prejudice to Stylo.
[52] Weighed against the loss of trial date, is that, as noted in McGechan on Procedure, the purpose of the joinder rules is to prevent multiplicity of proceedings and the associated delay, expense and possible inconsistency of result.13
[53] Mrs Sussock advised the Court that if the proposed three defendants were not joined, then Hum would commence separate proceedings against those proposed defendants and would seek consolidation.
[54] In Lyttelton Port Co Ltd v Aon New Zealand, Associate Judge Matthews, in the course of his consideration of an application for leave to issue a third-party notice under r 4.4 of the High Court Rules, commented in a way that I consider is applicable here:14
[37] Thirdly, the premise underlying r 4.4 is that the Court should determine on one occasion all issues between parties involved in a transaction who are alleged to have liability to one or more of the other parties. The same premise appears in r 4.56 which provides that a Judge may order that the name of a person be added as a plaintiff or a defendant because that person’s presence before the Court may be necessary to adjudicate on and settle all questions involved in the proceeding. In relation to applications for leave to issue third party proceedings, the Court of Appeal in KPMG Peat Marwick v Cory-Wright & Salmon Ltd (in rec & in liq) said:
The interests of justice between all parties must be paramount … If there is delay it will be regrettable … but the attainment of justice by the most efficient means has to be the overriding consideration.
[38] In my opinion justice between all parties can only be attained by all the issues now raised being tried in the same proceeding, or by consolidation. An application for consolidation is not before the Court, and I do not find it attractive to defer how all the causes of action are to be tried until a later date, while Aon sues Colliers and Opus separately and then makes such an application. Efficiency for the Court and the parties, cost effective procedure from now to trial, and above all the objective of securing a just outcome for all parties clearly favour granting leave as sought. The facts must all be tried once, and once only.
(Citations omitted)
13 Beck, above n 7, at [HR4.56.03].
14 Lyttelton Port Co Ltd v Aon New Zealand [2018] NZHC 568.
[55] The Court of Appeal, in an earlier judgment, Newhaven Waldorf Management Ltd v Allen,15 referred to the following passage in McKendrick Glass Manufacturing Co Ltd v Wilkinson:16
It is the constant aim of a Court of equity to do complete justice by deciding upon and settling the rights of all persons interested in a subject of the suit, to make the performance of the order of the Court perfectly safe to those who are compelled to obey it, and to prevent future litigation. For this purpose all persons materially interested in the subject ought generally to be parties to the suit, plaintiffs or defendants, however numerous they may be, so that the Court may be enabled to do complete justice by deciding upon and settling the rights of all persons interested, and that the orders of the Court may be safely executed by those who are compelled to obey them, future litigations may be prevented.
[56] Mr Parmenter submits that Hum’s case against Stylo can be defended simply on the basis of the terms of the lease. But that ignores Hum’s overall case against Stylo and the proposed defendants.
[57] I accept the submission of Mrs Sussock that having regard to the allegations made against Stylo and the proposed further defendants, if the responsibility of each of them in relation to the repiling and releveling work is separately assessed, this has the possibility of leading to inconsistent outcomes and the possibility of injustice between the parties.
[58] Further, in relation to the proposed second defendant, Dr Ooi, the very representations relied on as part of the claim against Stylo were those made by Dr Ooi and are relied on by Hum in the case against him.
[59] The delay that will result from the three proposed defendants being joined is regrettable. However, the interests of justice clearly favour the three proposed defendants being added.
[60] There are, however, further matters raised by Mr Parmenter. I examine each to see if any of them changes my view on the outcome.
15 Newhaven Waldorf Management Ltd v Allen, above n 8, at [45].
16 McKendrick Glass Manufacturing Co Ltd v Wilkinson [1965] NZLR 717 (SC) at 723; citing John Mitford A Treatise on the Pleadings in Suits in the Court of Chancery (5th ed, V&R Stevens and G S Norton, London, 1847) at 190.
Strength of Hum’s case against Stylo
[61] Mr Parmenter submits that the issue of liability for misrepresentations inducing the entry into the lease has been raised and rejected in previous litigation between the current parties. Mr Parmenter refers to Stylo Medical Services Ltd v Hum Hospitality Ltd, where Whata J stated that cl 48.7 of the lease “drew down the curtain of liability for preceding conduct”.17
[62] In response, Mrs Sussock first submits the comments by Whata J were obiter dicta, as the Judge stated he did not need to decide the point with finality at that stage.18 Next, she submits that those comments were made in reliance on PAE (New Zealand) Ltd v Brosnahan.19 However, in that case there was an entire agreement clause in the contract,20 which justified the Court of Appeal’s finding that the parties had “effectively drawn down the curtain of liability” excluding all preceding conduct.21 She submits that the clause relied on in these proceedings does not amount to an entire agreement clause, so preceding conduct or representations are still relevant.
[63] Mrs Sussock further submits that this analysis is supported by the fact that the lease expressly set out the matters that were required to be completed, as referred to in [3](b) above. She submits that if the true agreement between the parties was for Hum to be required to bring the property up to Building Code standards for the purposes of its business use (including completing the repiling and releveling work, if necessary), it would have been expected that the lease would state that, rather than set out specific matters that needed to be completed.
[64] For the purposes of this application, I do not consider it could be said that Hum’s case is clearly untenable. I do not consider it is necessary to go further than that in terms of assessing the strength or otherwise of its claim. In that regard, I note the comment of Venning J in Tourplan Pacific Ltd v Australian Tours Management Pty Ltd:22
17 Stylo Medical Services Ltd v Hum Hospitality Ltd [2014] NZHC 2428 at [28].
18 At [27].
19 PAE (New Zealand) Ltd v Brosnahan [2009] NZCA 611.
20 At [10].
21 At [46].
22 Tourplan Pacific Ltd v Australian Tours Management Pty Ltd [2017] NZHC 2310.
[22] It is not for the Court on an application such as this to determine the merits of the proposed claim. As Randerson J noted in Bridgeway Projects Ltd v Webb the Court will ordinarily accept the applicant’s factual assertions relevant to the proposed causes of action against the parties to be joined and what is required is a tenable cause of action.
(Citations omitted)
Oppression to proposed third and fourth defendants?
[65] This ground relates to Mr Parmenter’s submission that the proposed third and fourth defendants will be obliged to spend four days “on the sidelines” in relation to issues between Hum and Stylo.
[66] However, r 4.3(3) of the High Court Rules expressly provides for orders to be made allowing a defendant to attend only parts of the hearing. If there are parts of the hearing that will not be relevant to the proposed third and fourth defendants, then appropriate orders may be made.
Security for costs
[67] Mr Parmenter submits that Hum would not be able to pay security for costs and he says it is not clear if Hum will continue to be legally represented.
[68] With Hum currently legally represented, and in advance of any application for security for costs, I do not take these factors into account in the exercise of my discretion.
Conclusion
[69] Weighing all of the above considerations, I have determined that Hum’s application to join the proposed second, third and fourth defendants should be granted. While my order will inevitably result in the trial being delayed, for all the foregoing reasons it is in the interests of justice that Hum’s application be granted.
Result
[70]I make the following orders joining:
(a)Shen Tat Ooi as second defendant;
(b)Grace Repiling and Releveling Limited as third defendant; and
(c)Auckland Council as fourth defendant.
Costs
[71] Given Hum has succeeded on its application, costs would normally follow the event. I encourage the parties to agree costs and file a joint memorandum. Any such joint memorandum is to be filed within 15 working days of the date of this judgment.
[72] However, as I did not hear submissions on costs, I reserve leave to the parties to file separate memoranda if costs cannot be agreed between counsel. Any separate memorandum on behalf of Hum is to be filed within five working days of the date for the agreed memorandum. Any response from Stylo is to be filed within a further five working days. Memoranda should not exceed four pages (excluding attachments). My decision on costs will then be made on the papers.
Gordon J
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