Jens William Jenssen v John William Jenssen as a Contributor and for the Contributors of NZ Fisheries Limited
[2000] NZCA 17
•17 February 2000
| IN THE COURT OF APPEAL OF NEW ZEALAND | CA 271/99 |
| BETWEEN | JENS WILLIAM JENSSEN |
| First Appellant |
| AND | JOHN WILLIAM JENSSEN AS A CONTRIBUTOR AND FOR THE CONTRIBUTORS OF NZ FISHERIES LIMITED |
| Second Appellant |
| AND | MINISTRY OF COMMERCE |
| Respondent |
| Hearing: | 15 February 2000 |
| Coram: | Blanchard J McGechan J Fisher J |
| Appearances: | Mr John W Jenssen as second appellant in person and, with the Court’s leave, on behalf of the first appellant. G.L. Lang for Respondent |
| Judgment: | 17 February 2000 |
| JUDGMENT OF THE COURT DELIVERED BY FISHER J |
Introduction
The appellants are father and son. In these proceedings they claim damages from the Ministry of Commerce for negligence on the part of the Official Assignee in failing to pursue appeal rights in respect of fishing quota. In November 1999 two interlocutory applications came before Durie J in the High Court. One was the Jenssens’ interlocutory application for damages. The other was the Ministry’s application to strike out the claim. In a reserved decision of 3 November 1999 Durie J decided both applications against the Jenssens. From that decision they now appeal.
Background relating to the Company
For present purposes certain facts are expressed or implied in the statement of claim. Others are incontrovertible matters of record recorded in affidavits filed in the proceedings.
The Jenssens were shareholders in a company called NZ Fisheries Limited. The company pursued a claim to fishing quota based upon the catch history relating to its fishing vessels “Newfish 1” and “Newfish 2”. When quota was denied in the first instance the company appealed to the Quota Appeal Authority.
That appeal was still unresolved when the company was placed into liquidation on 29 November 1989. On that date the Official Assignee became the provisional liquidator. His role as provisional liquidator relevantly continued until 19 January 1990 when that winding up was stayed. It so happens that in subsequent liquidation proceedings the Official Assignee was also appointed provisional liquidator for three months from 5 March 1990 to 30 May 1990 but it is not suggested that the latter period is relevant to the current proceedings. Following legal advice the permanent liquidators elected to abandon the company’s appeal in April 1991.
At least so far as the company is concerned, the negligence pleaded was the alleged failure of the Official Assignee to attend a hearing of the Quota Appeal Authority on 11 December 1989. That that is the critical date is clear from paragraphs 5, 9, 10 and 14 of the statement of claim. The thrust of the claim is that the Official Assignee’s failure to appear meant that the chance to win the quota appeal on that occasion was lost; that this caused loss to the company; and that the loss to the company in turn harmed the financial interests of the Jenssens as shareholders.
The proceedings
The present proceedings were issued on 11 August 1999. Along with the statement of claim and notice of proceedings the Jenssens filed a document described as a “notice of interlocutory application by plaintiffs for an order of damages of compensation”. Although referring to some background rules and the Insolvency Act, the notice of application does not suggest the source of the jurisdiction for the orders sought.
On 1 November 1999 the Ministry responded with an application to strike out the statement of claim as an abuse of process. The grounds relied upon were the Limitation Act, the plaintiffs’ lack of standing to sue, and the fact that the quota appeals were still extant when the permanent liquidators took over from the Official Assignee.
Judgment of first instance
In a reserved decision Durie J dealt first with the Jenssens’ interlocutory application for damages. He pointed out that there was no basis in law to have their substantive claim dealt with in this way. He dismissed that application without costs. No contrary argument was advanced in this Court and we dismiss it from further consideration. The appeal in that regard is dismissed.
The Judge then turned to the strike out application. A preliminary difficulty was the obscurity of a statement of claim demonstrably drafted by a lay person. After identifying the core of the claim as the alleged failure of the Official Assignee to attend a hearing of the Quota Appeal Authority on 11 December 1989 he commented “Mr Jenssen, while canvassing a range of matters to which the statement of claim might be said to give vent, was unable to demonstrate that there was any other cause of action expressed in that claim or which might reasonably be admitted by leave to amend.” He further understood that the claim related solely to the Official Assignee’s activities as provisional liquidator of the company.
Approaching the case on that basis the Judge held that the strike-out application must succeed on two grounds. First, the statement of claim appeared to confuse the Official Assignee with the permanent liquidators. It was not arguable that any failure on the part of the Official Assignee to appear on 11 December 1989 prejudiced the company. On that occasion the appeal was simply adjourned without prejudice to the company’s rights. Quota appeal rights had been maintained until the permanent liquidators were appointed. It was the permanent liquidators who decided to abandon the appeal, not the Official Assignee. On the uncontested facts, the proceedings could not succeed against the Official Assignee in his role as provisional liquidator. That in itself would be fatal to the proceedings.
In addition, Durie J accepted that the proceedings were statute-barred. The proceedings were founded upon negligence. Section 4(1)(a) of the Limitation Act 1950 imposes a time limit of six years for such actions. The hearing at which the Official Assignee had allegedly failed to appear was 11 December 1989. Any damage must have been suffered no later than April 1991 when the appeal was abandoned. The Jenssens were told of the abandonment in a letter of 1 May 1991 and demonstrated knowledge in their own letter of 17 May 1991. The six-year period started no later than that date. Any proceedings therefore needed to be brought by 16 May 1997. The present proceedings were not issued until 11 August 1999. The inevitability of a limitation defence provided a basis for dismissing the proceedings as an abuse of process.
Durie J noted that either of those grounds would be sufficient for dismissal of the proceedings. Judgment was entered for the Ministry together with costs of $500 and disbursements.
Appeal relating to the company
In this Court the Jenssens traversed essentially the same issues with respect to their claim against the Official Assignee as provisional liquidator.
There is little we can usefully add to the careful judgment of Durie J in that regard. Any responsibility for the fate of the quota appeal rested with the permanent liquidators, not the Official Assignee. That conclusion must follow when the dates in the statement of claim are combined with unchallenged dates as to the appointment of provisional and permanent liquidators and the abandonment of the appeal to the Quota Appeal Authority. As to the limitation defence, there remains no answer to the fact that the proceedings were issued more than six years after the alleged cause of action arose.
Durie J did not find it necessary to go on to consider the Jenssens’ standing to sue in their own names. It is similarly unnecessary to resolve the point in this Court but it is difficult to see how either appellant had the requisite standing. Any rights of Mr Jens Jenssen in relation to the company appear to have devolved upon the Official Assignee when Mr Jens Jenssen was adjudicated bankrupt on 13 August 1990. There is nothing in the pleading which would bring Mr John Jenssen within one of the exceptions to the general rule that where a wrong is suffered by a company the plaintiff must be the company itself.
For the reasons given by Durie J, we think that he was right to strike out the statement of claim in so far as it related to the Official Assignee’s activities as provisional liquidator.
Appeal relating to administration of bankrupt estate
In this Court Mr John Jenssen developed an argument relating to the activities of the Official Assignee in his capacity as assignee in the bankruptcy of the estate of Mr Jens Jenssen. Mr John Jenssen told us that his father had been the owner of three fishing vessels until they were sold in 1988 and 1989; that notwithstanding the sale of the vessels his father continued to pursue a claim to quota rights arising from their prior catch history; that those appeal rights were still extant when his father was adjudicated bankrupt on 13 August 1990; that his father was discharged from bankruptcy on 13 August 1993; that his father did not then or subsequently receive any surplus funds arising from the Official Assignee’s administration of his estate in bankruptcy; that he alleges negligence on the part of the Official Assignee in failing adequately to pursue appeal rights during the period of his administration; and that this negligent failure caused loss to his father in that there was no surplus available to him out of the bankrupt estate.
We do not find it at all surprising that Durie J did not discern any cause of action of this nature in the statement of claim. However, Mr Jenssen persuaded us that it is a possible interpretation of paragraphs 2, 12, 13, 14 and 16. As Mr Lang conceded, the application to strike out and the judgment in relation to it were confined to the Official Assignee’s role as provisional liquidator of the company. A cause of action of the kind discussed in this Court has yet to be addressed.
We make no comment as to the merits or validity of a cause of action founded upon the Official Assignee’s activities in the administration of Mr Jens Jenssen’s bankruptcy. It is sufficient to say that that subject awaits further consideration in the High Court. Plainly as a first step Mr Jens Jenssen will need to file an amended statement of claim confined to that cause of action. It will be for the parties and the Court to then determine the future of the proceedings.
Result
The appeal is allowed in part. To the extent that the judgment in the Court below struck out those parts of the statement of claim alleging a cause of action in respect of the Official Assignee’s role as provisional liquidator of NZ Fisheries Limited, the judgment is upheld. To the extent that the statement of claim alleges a cause of action against the Official Assignee in his capacity as administrator of the estate of Jens William Jenssen in bankruptcy the proceedings are remitted to the High Court for such further steps as may be thought necessary for resolution of the proceedings. There will be no order for costs in this Court in favour of any party.
Solicitors
Elvidge & Partners, Napier
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