Jin v North Shore District Court

[2013] NZHC 1519

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2012-404-004905 [2013] NZHC 1519

UNDER  the Judicature Amendment Act 1972

BETWEEN  RUJING JIN Applicant

ANDNORTH SHORE DISTRICT COURT First Respondent

YASUKI KONISHI AND MAKIKO KONISHI Second Respondents

Hearing:                   20 June 2013

Appearances:           Y Lee for the Applicant

First Respondent abiding decision of the Court
D B Hickson for the Second Respondents

Judgment:                20 June 2013

[ORAL] JUDGMENT OF WYLIE J

Distribution:

Y Lee, Auckland

North Shore District Court

D B Hickson, Auckland

JIN v NORTH SHORE DISTRICT COURT & ANOR [2013] NZHC 1519 [20 June 2013]

Introduction

[1]      This  is  an  application  for  interim  relief  under  s  8  of  the  Judicature

Amendment Act 1972 (the Act).

[2]      Ms Jin seeks orders declaring that no further steps should be taken in the District Court, and that, pending the final determination of her appeal by the Court of Appeal, there be a stay of proceedings in the District Court.

[3]      The application is opposed by the second respondents, Mr and Mrs Konishi. The first respondent, the District Court at North Shore, has taken no steps.   It is abiding the decision of the Court.

[4]      The application raises the following issues:

(a)      Does this Court now have jurisdiction to make an order under s 8 of the Act, or can it grant interim relief, in effect a stay, in the exercise of its inherent jurisdiction?;

(b)If the Court has jurisdiction, should interim relief be granted?  This, in turn, requires an analysis of the following:

(i)       Is interim relief necessary to protect Ms Jin’s position?;

(ii)      Is there a serious question to be tried?;

(iii)Do  the  interests  of  justice  require  that  interim  relief  be granted?

[5]      First, I detail briefly the factual background.  I then consider the above issues in turn.

Background

[6]      The factual background is set out in some detail in my substantive judgment dated 19 February 2013.

[7]      Ms  Jin  was  the  developer  of  a  residential  dwelling  in  Wolsley Avenue, Milford.  She sold the dwelling while it was in the course of construction to Mr and Mrs Konishi.  A sale and purchase agreement was entered into on 19 July 2010 and Mr and Mrs Konishi paid a deposit of $30,000 in accordance with the agreement.

[8]      Mr and Mrs Konishi arranged for the dwelling to be inspected by a building surveyor.    He  considered  that  there  were significant  defects  in  its  construction. Mr and Mrs Konishi gave notice of the defects to Ms Jin, but she refused to remedy them.    On  11  January  2011,  Mr  and  Mrs  Konishi  gave  notice  cancelling  the agreement for sale and purchase.  They followed this up by filing a notice of claim in the District Court on 2 February 2011 seeking the refund of the deposit, and seeking to be reimbursed for rental costs incurred by them, interest, and their full solicitor/client costs.   Ms Jin filed a notice of response on 28 March 2011.   She asserted that the agreement for sale and purchase was not subject to a satisfactory building report being obtained, and that the maintenance period provided for in the agreement had not come into effect as at 11 January 2011.

[9]      Ms Jin proceeded to obtain a composite cross lease title to the property and then called on Mr and Mrs Konishi to settle.  Mr and Mrs Konishi considered that they had contracted to buy a fee simple title and they requisitioned the title, seeking removal of the cross lease.  Ms Jin refused to take that step and Mr and Mrs Konishi gave a further (without prejudice) notice cancelling the agreement on 21 April 2011.

[10]     There then followed a number of steps in the District Court.  On 23 August

2011, Judge Hinton issued a minute.   It recorded that a short trial needed to be allocated.  Mr and Mrs Konishi then wished to file an amended statement of claim to raise their assertion that the agreement for sale and purchase had also been cancelled for the failure by Ms Jin to comply with their requisition to remove the cross lease from  the  title.    Ms  Jin  objected  to  that  request.    A telephone  conference  was convened and Judge Hinton issued a further minute on 25 November 2011.   He directed Mr and Mrs Konishi to file an amended claim within seven days, recorded that the parties were agreed that the matter should be set down for a short trial, and directed the Registrar to allocate a day for the hearing.

[11]     Various further steps were taken by the parties.   The matter came before Judge Hinton again on 25 January 2012.  He directed Ms Jin to file a response to the amended claim, and indicated that if a response was not filed by a set date, her defence would be struck out and judgment entered for Mr and Mrs Konishi.   He reiterated his direction the Registrar should allocate a short trial of one day duration.

[12]     In  a  memorandum  sent  to  the  Court,  counsel  for  Mr  and  Mrs  Konishi suggested that the matter was more likely to take two days.  This memorandum was placed before Judge Perkins and he issued a minute on 3 April 2012.  He directed that the matter should be set down for a two-day simplified trial.  He noted that the time limits provided for by the rules should be strictly adhered to.   The Registrar then set the matter down for a two-day hearing to commence on 29 August 2012.

[13]     Ms Jin failed to comply with the relevant rules.  She did not file affidavits of evidence.  Mr and Mrs Konishi, through their counsel, sought an urgent telephone conference.  The matter came before Judge Sharp on 14 August 2012.  She directed that Ms Jin’s defence would be struck out and judgment entered for Mr and Mrs Konishi, if Ms Jin did not serve her affidavits of evidence by Friday, 17 August

2012.

[14]     Ms Jin did not file her affidavits of evidence by that date.  Rather, Mr Lee on her behalf, filed a memorandum seeking a recall of Judge Sharp’s minute.  Mr and Mrs Konishi then applied to strike out Ms Jin’s defence for failing to comply with Judge Sharp’s unless order.

[15]     The matter came back before Judge Hinton again on 23 August 2012.   By consent, the fixture date was vacated and a conference was directed.  This was held on 12 October 2012.  Directions were made requiring various steps to be taken by both parties.   Insofar as I am aware, the relevant documents were filed within the requisite timeframe.

[16]     Ms Jin had challenged in this Court, by way of application for review, various minutes issued by the District Court.  That application came before me for hearing

on 6 December 2012.  I declined the application for review in a reserved judgment issued on 19 February 2013.

[17]     On 8 March 2013, Mr Hickson, on behalf of Mr and Mrs Konishi, filed a memorandum  in  the  District Court  seeking  to  rectify  what  he  described  as  a “technical defect” in the notice of claim.  He also sought an order striking out Ms Jin’s defence for failure to comply with the various unless orders that had been made and entry of judgment against her.

[18]     On 18 March 2013, Ms Jin filed a notice of appeal to the Court of Appeal against my decision.

[19]     On  18 April  2013,  I issued  a  costs  judgment  in  favour  of  Mr  and  Mrs Konishi.  I granted them costs in the sum of $25,568.48, being costs calculated on a full solicitor/client basis.

[20]     Mr Hickson then filed a further memorandum in the District Court on behalf of Mr and Mrs Konishi on 26 April 2013.   In that memorandum, he again sought orders permitting the Konishis to rectify the notice of claim, and striking out Ms Jin’s defence.  The matter came before Judge Sharp on 30 April 2013.  She granted the strikeout application.  She also granted leave to Mr and Mrs Konishi to amend their statement of claim.   She set the matter down for a one-hour formal proof hearing.  The Court has subsequently advised that the formal proof hearing will take place at 10.00 am on 14 August 2013.

[21]     It  is  important  to  note  that  Ms  Jin  did  not  take  any  steps  to  appeal

Judge Sharp’s decision of 30 April 2013. The appeal period has now expired.

[22]     Mr and Mrs Konishi have sought payment of the costs ordered in their favour from Ms Jin.   No payment has been made.   Accordingly, they have commenced bankruptcy proceedings against Ms Jin.  They have obtained orders for substituted service of those proceedings on Ms Jin’s sister.  They have been served.  Ms Jin has now filed an application to set aside the bankruptcy notice.  I do not know whether or not that application has been allocated a hearing.

Jurisdiction

[23]     When I read the papers in this matter, it occurred to me that this Court may no longer have jurisdiction to make an order under s 8 of the Act.  I sent out a minute to counsel referring them to the decision of Fisher J in Faavae v Ministry of Immigration.[1]   I asked counsel to consider the issue and to be in a position to address me in relation to the matter.

[1] Faavae v Ministry of Immigration (1997) 11 PRNZ 168 (HC).

[24]     Mr Lee asked me to resort to my inherent jurisdiction, or alternatively, to take a wide view of the words in s 8, “at any time before the final determination”. Mr Hickson submitted that Fisher J may well have been in error in deciding Faavae. Further, he queried whether this Court has an inherent jurisdiction which could potentially conflict with relevant statutory provisions.

[25]   In Faavae, Fisher J held that s 8 allows orders only up until a final determination.  He held that it is too late to exercise that jurisdiction once the Court has ruled on the application for review, and notwithstanding that the Court’s decision may have been taken on appeal to the Court of Appeal.   He expressed the view, however, that the Court retains an inherent jurisdiction to grant declarations to preserve effective appeal rights pursuant to s 16 of the Judicature Act 1908.  On the facts of the case before him, he decided that a declaration should be made that no deportation should take place until the appeal had been heard.

[26]     Although the issue was not discussed in any detail, when the substantive decision went before the Court of Appeal, the Court of Appeal did not make any adverse comment on the order and observations made by Fisher J.[2]

[2] Faavae v Ministry of Immigration [2000] NZAR 177 (CA) 177 at 178.

[27]     Fisher J followed a decision of Smellie J in Pinson v Pinson.[3]    In Pinson, Smellie  J  held  that  the  Court  has  an  inherent  jurisdiction  to  make  any  order necessary to enable it to act effectively, even in respect of matters regulated by rules

of Court, so long as it does not contravene those rules.

[3] Pinson v Pinson (1991) 5 PRNZ 177 (HC).

[28]     Some doubt as to the existence of the inherent jurisdiction was raised by Anderson J in Area 1 Consortium Limited v Treaty of Waitangi Fisheries Commission.[4]    However, in that case, the Judge found that there was jurisdiction to make the order sought under s 8 and it was unnecessary for him to go on and decide whether there was an inherent jurisdiction to make orders of the kind there sought.

[4] Area One Consortium Limited v Treaty of Waitangi Fisheries Commission (1993) 7 PRNZ 200 (HC).

[29]     Faavae has been followed since.   I refer to the judgment of Venning J in

Avowal Administrative Attorneys Ltd v District Court at North Shore (No. 2).[5]

[5] Avowal Administrative Attorneys Ltd v District Court at North Shore (No. 2) (2009) 24 NZTC

23,486 (HC) at 23,487–23,488.

[30]     I agree with Fisher J in Faavae.  Unless an unusual meaning is given to the expression “final determination”, once the High Court has ruled on an application for review, it is too late for it to exercise the jurisdiction conferred by s 8 of the Act. However, I also agree with Fisher J that it would be anomalous if there was no remedy in a situation where a stay is required pending an appeal.  It may be the case that there is no stay available under r 20.10 of the High Court Rules, or r 35 of the Court of Appeal Rules.  In such situations, the Court must have a general equitable jurisdiction  to  make the  appropriate directions.    Inter  alia,  the  Court  can  make declaratory  orders  which  preserve  the  rights  of  parties  pending  the  substantive hearing of any appeal.

[31]     Insofar   as   the   first   respondent,   the   District Court,   is   concerned,   the declarations sought by Ms Jin would simply mirror s 8(2) of the Act.  I cannot see that any other statutory provision would be infringed by the making of such declarations and Mr Hickson did not refer me to any relevant provision in this regard.

[32]     Accordingly, I accede to Mr Lee’s request.  I proceed on the basis that there is no longer any jurisdiction under s 8, but that I have an inherent jurisdiction to make a declaration dealing with the matters raised.  Mr Hickson responsibly accepted that

the issues which the Court is required to consider are essentially the same as they

would be under s 8, and he did not suggest that there was any prejudice to his client if I proceed on that basis.

Should a declaration be made staying further proceedings?

[33]     Unless the statute conferring the appeal right provides otherwise, the bringing of an appeal does not operate to stay the effect of the judgment being appealed.  In the absence of an order from either this Court, or the Court of Appeal, the successful party is entitled to enforce the judgment given in his or her favour.  Where a stay is sought under r 20.10 of the High Court Rules, or r 35 of the Court of Appeal Rules, in general terms, the party seeking the stay has to persuade the Court that if a stay

were not granted, his or her appeal rights would be rendered nugatory.[6]

[6] Philip Morris (New Zealand) Ltd v Liggett & Myers Tobacco Co (New Zealand) Ltd [1977] 2

NZLR at 41 (CA).

[34]     The principles applicable to applications for interim orders under s 8 are slightly wider.  They have been considered by the Court of Appeal in Carlton and United Breweries v Minister of Customs.[7]   The Court must be satisfied that the order sought is reasonably necessary to preserve the position of the applicant.  Thereafter, the  Court  has  a  wide  discretion  to  consider  all  the  circumstances  of  the  case, including the apparent strength or weakness of the claims of the applicant, and all

repercussions, public or private, of granting interim relief.

[7] Carlton and United Breweries v Minister of Customs [1986] 1 NZLR 423 (CA) at 429.

[35]     Given the genesis of this application and the way in which this matter has developed, it seems to me appropriate to apply the Carlton and United Breweries principles to the present application.

Is an order necessary to preserve Ms Jin’s position?

[36]     In my substantive judgment, I declined an application to review a number of decisions made by way of minute by the District Court.  Ms Jin’s position, as I see it, is affected not so much by my decision on the application for review, but rather, by Judge Sharp’s decision of 30 April 2013.  That decision post-dates my decision on

the application for review by some two and a half months.

[37]     In the circumstances as they now are, I cannot see that Ms Jin has a position which it is reasonably necessary for the Court to preserve.  Judge Sharp has struck out her statement of defence and set the matter down for formal proof.  Had Ms Jin wished to preserve her position, the solution was in her hands.  She ought to have filed  her  application   for  interim   relief  before  the  matter  came  before  the District Court on 30 April 2013.   She failed to take that step, apparently in the mistaken belief that an application for interim relief which she had filed in October

2012, prior to the hearing of the application for judicial review in December 2012, was somehow still extant.   Indeed, she sought “advice” from this Court in that regard.  Allan J in a minute issued on 16 May 2013 confirmed that the interim relief application had been extinguished by my decision of 19 February 2013.   Ms Jin’s position has been compounded by the fact that she did not file an appeal from Judge Sharp’s decision striking out her defence.  As I have noted, the appeal period has lapsed.

[38]     In  my judgment,  Ms  Jin  no  longer  has  a  position  to  preserve,  not  as  a consequence of my judgment, but as a consequence of Judge Sharp’s decision.  That judgment will not be affected, even if the appeal succeeds.  It follows, that it would be pointless for this Court to grant the present application for interim relief.

Serious question to be tried?

[39]     Mr Lee stated that there are four matters that he wishes to challenge before the Court of Appeal arising out of my substantive decision.

[40]     First, he argued that I did not make findings on whether rr 2.44–2.46 in the District Court had been breached after a short trial had been allocated by Judge Hinton.

[41]     Judge Hinton did initially direct that the matter should proceed by way of a short one-day trial.   By memorandum dated 7 March 2012, Mr and Mrs Konishi advised that two days would be necessary for the hearing.   They indicated that at least six witnesses were being called to give evidence, that most of the witnesses were not native speakers of English, and that the services of a translator would be

required.   They also  noted that  there were a number of preliminary procedural matters which the Court would need to deal with.

[42]     Judge Perkins in his minute addressed the issues raised by counsel, and set the matter down for a two-day simplified trial.  I set out in my substantive decision why I considered that that course was available to Judge Perkins, and why I considered that the steps taken by him were appropriate.  I refer to [87]–[89] of my judgment.

[43]     It does not appear to be in dispute that the District Court has an inherent jurisdiction to regulate its procedure so that it can exercise the functions, powers and duties conferred on it by statute.  Further, r 1.13 in the District Court Rules gives the Court power to dispose of a case in a manner that it thinks is best calculated to promote  the  objective  of  the  rules,  if  there  are  no  relevant  District Court  or High Court Rules.

[44]     In my view, the course taken by Judge Perkins was open to him.  In ordering a simplified trial, Judge Perkins was doing no more than was appropriate in the circumstances in order to secure the just, speedy and inexpensive determination of the proceedings, in accordance with the overall objective of the District Court Rules. I cannot see that there is any serious prospect that Ms Jin will succeed in relation to this issue on her appeal to the Court of Appeal.

[45]     Secondly, Mr Lee argued that all decisions arising out of what he called a “defective amended notice of claim” were void.   This included the substantive decision issued by me.

[46]     I had some difficulty following this argument.  Where a statement of claim is filed and subsequently amended, it does not follow that the original statement of claim was void.  There is no fresh proceeding issued.  Rather, there is an amendment to the documents which are before the Court.

[47]     I agree with Mr Hickson’s criticism that it is extraordinary for Ms Jin to now contend that my decision of 19 February 2013, on an application made by her, was

void simply because a District Court Judge has, subsequent to my decision, granted leave to Mr and Mrs Konishi to file an amended statement of claim to correct a defect in the papers which had earlier been filed.  I am not aware of any basis on which it could be said that a decision of this Court is void in such circumstances. Again, I cannot see that there is a serious question to be tried in this regard.

[48]     Thirdly, Mr Lee argued that [87], [88] and [89] of my judgment are plainly wrong.  He referred to r 1.18 in the District Court Rules which defines a simplified trial as meaning a simplified trial allocated at a judicial directions conference under r 2.48.2.    He  argued  that  there  was  no  judicial  directions  conference,  and  that therefore, there could not be a simplified trial.

[49]     I have already dealt with this matter above.  For the reasons which I there set out, I do not consider that there is a serious question to be tried in this regard either. An   interpretation   provision   included   in   the   District Court   Rules   cannot   be determinative  of  the  procedure  followed  by  this  Court.    I  cannot  see  that  the definition of the words “simplified trial” imposes any immutable obligation to allocate a simplified trial only at a judicial directions conference.

[50]     Finally, Mr Lee argued that my decision ignored explicit provisions in the District Court Rules.   He argued that I ignored the use of the word “must” in the rules, and that I failed to treat the rules as imposing mandatory directions which must be followed in every case.

[51]     Once again, it seems to me that there is no serious question to be tried in this regard.  The District Court Rules do not provide for every eventuality.  No rules ever can.   There is a slip rule — r 1.13.   As I noted in my substantive decision, the District Court Rules have to be interpreted in a way that brings about a result that is just to all parties. They invoke case management principles, but slavish adherence to the rules should not be allowed to obscure or undermine the fundamental purpose which is to deliver justice to all concerned.   That to my mind is a self-evident proposition.

The overall justice of the case

[52]     I now turn to the overall justice of the case.

[53]     In my view, the overall justice of this case requires that the long outstanding proceedings in the District Court, involving a relatively trifling sum, be brought to a head as soon as is reasonably practicable.

[54]     In this regard, I note the observations of Judge Sharp.   She referred to the “relentless litigation” to which Mr and Mrs Konishi are being subjected by Ms Jin. In my view, the litigation simply has to come to a head.  The Court has to be left to resolve this litigation so that the parties can get on with their lives.

[55]     Mr  Lee  submitted  that  there  is  a  public  interest  in  ensuring  that  the

District Court Rules are adhered to.

[56]     In a general sense, that proposition is, of course, correct, but in my view, there will be no public repercussions if the Court declines to grant interim relief. The  difficulty with  the  stance  being  taken  by  Ms  Jin  is  that  the  District Court processes are being brought into disrepute by endless litigation over trivial matters. Such repercussions as there are, are private to the parties.  In my judgment, Ms Jin has brought those repercussions on herself for failure to comply with the various Court orders which have been made against her.

[57]     For the avoidance of doubt, I record that, in my view, Ms Jin’s appeal will not be rendered nugatory if interim relief is declined.   First, there is no evidence of impecuniosity.  Insofar as I am aware, she could meet the costs order made against her if she wished to do so.  Further, it is still open to her to bring judicial review proceedings in respect of Judge Sharp’s decision of 30 April 2013, although this should not be seen as an indication that I consider that such proceedings are appropriate.   Indeed, it will be patently clear from what I have said, that I do not consider that to be the case.

[58]     As matters stand at the moment, if interim relief were to be granted in the terms sought, it would be doing no more than delaying the inevitable.  There is no

defence to the claim brought by Mr and Mrs Konishi and there is no current prospect of a defence being filed, given that the strike out has not been appealed.

[59]     The application for interim relief is declined.

Costs

[60]     Mr Hickson has indicated that his client will be seeking indemnity costs.  He has sought leave to make application in that regard by way of memorandum.  Mr Lee agrees that that course is appropriate. Accordingly, I direct as follows:

(a)       Any memorandum seeking costs by Mr and Mrs Konishi is to be filed and served within 10 working days of the date of this judgment;

(b)Any memorandum in response from Ms Jin is to be filed and served within a further 10 working-day period.

Memoranda are not to exceed five pages in length (excluding annexures such as invoices).   I will then deal with the application for costs on the papers, unless I

require the assistance of counsel.

Wylie J