Johnson v Johnson
[2021] NZHC 2540
•27 September 2021
NOTE: PURSUANT TO S 35A OF THE PROPERTY (RELATIONSHIPS) ACT 1976, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B,
11C AND 11D OF THE FAMILY COURT ACT 1980. FOR FURTHER INFORMATION, PLEASE SEE
https://
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2018-454-144
[2021] NZHC 2540
BETWEEN BRYAN EWART JOHNSON, DAVID HOUGHTON WALE and CHRISTOPHER DAN WILLIAMS
PlaintiffsAND
CRAIG BRYAN JOHNSON and MARIA BERNADETTE JOHNSON
First Defendants continued…
Hearing: 23 September 2021
(By Telephone Conference)
Counsel:
RJ B Fowler QC for Trustees of Abel Trust and for family members
of Johnson family witnesses to be subpoenaed by Maria Johnson C M Stevens, T Mijatov and H L Stanford for Craig Johnson in all
proceedings
G M Illingworth QC, C J R Baird and P J Magee for Maria Johnson in all proceedings
O E Jaques for Johnson Preschool Limited
M L Greenhough for Craig Johnson in the relationship property proceeding
Judgment:
27 September 2021
JUDGMENT OF ASSOCIATE JUDGE LESTER
(Judgment on application for an adjournment)
JOHNSON v JOHNSON [2021] NZHC 2540 [27 September 2021]
AND LITTLE SCHOOL LIMITED
Second Defendant
AND JOHNSON PRESCHOOL LIMITED
Third Defendant
CIV-2020-485-417
BETWEEN MARIA BERNADETTE JOHNSON
Plaintiff
AND CRAIG BRYAN JOHNSON
First Defendant
ANDCRAIG BRYAN JOHNSON, MARIA BERNADETTE JOHNSON and GRANT MAITLAND RICHARDSON,
Trustees of the C B and M B Johnson Family Trust
Second Defendants
CIV-2020-485-421
BETWEEN CRAIG BRYAN JOHNSON
Plaintiff
ANDLIFE LEARNING AOTEAROA LIMITED
First Defendant
AND MARIA BERNADETTE JOHNSON
Second Defendant
AND LITTLE SCHOOL LIMITED
Third Defendant
AND JOHNSON PRESCHOOL LIMITED
Fourth Defendant
CIV-2021-485-118
BETWEEN MARIA BERNADETTE JOHNSON
Applicant
AND CRAIG BRYAN JOHNSON
Respondent
[1] The four proceedings referred to above are set down to be heard together in an eight-day hearing commencing on 8 November 2021. Maria Johnson (Maria) applies to vacate the hearing date. That hearing date was allocated in October 2020 in respect of all but the relationship property proceeding which Maria commenced in the Family Court in December 2017. That proceeding was transferred to this Court relatively recently and in June 2021 I directed that it be heard at the November 2021 hearing. All counsel confirmed there was sufficient hearing time available for that to occur.
[2] In a memorandum dated 22 September 2021, Mr Illingworth QC, counsel for Maria in all proceedings, said none of his legal team “had been fully or finally engaged to act as counsel at the November hearing”. I was not made aware of any such limitation in counsel’s instructions.
[3] The procedural history of these proceedings has not been straightforward. Maria, while initially represented by a large law firm, was for some time represented by a sole practitioner in Wellington, Mr Wigley. Mr Wigley’s failure to comply with timetabling directions has been the subject of comment in numerous Minutes in these proceedings, resulting in costs awards, warnings about unless orders, and the making of such orders.
[4] The issue of timetabling evidence for the hearing came to a head at a telephone conference on 10 September 2021, which was adjourned to 13 September 2021. I do not repeat the contents of the Minute I issued on 14 September 2021. Mr Baird appeared with Mr Wigley at the telephone conference on 10 September 2021 and he and a Ms Wademan are named as counsel on documents filed with the Court at around that time. Ms Wademan was apparently instructed in the relationship property proceeding.
[5] At the hearing of the application for adjournment on 23 September 2021, Mr Baird advised that he had “been in the seat” six days when he attended the telephone conference on 10 September 2021. That would mean Mr Baird accepted instructions a little over two months out from the hearing.
The Gwyn J Costs Judgment
[6] Earlier this year, Mr Wigley, on behalf of Maria, was granted an injunction on a without notice basis concerning certain documents held by Craig Johnson (Craig). Craig applied to set the injunction aside and Mr Illingworth became involved at Mr Wigley’s request to assist with settlement of that application. The application to set aside was settled. The injunction was set aside by consent and costs reserved.
[7] On 16 September 2021, Gwyn J issued a judgment ordering that Maria pay Craig’s reasonable solicitor/client costs arising from the without notice injunction.1 Mr Illingworth, in advancing the application for adjournment on behalf of Maria, described Gwyn J’s costs decision as “a bombshell”. The judgment is critical of the without notice application prepared by Mr Wigley.
[8] For completeness, I also mention the decision of Gendall J of 10 June 2021, which was also critical of Mr Wigley.2
[9] Be that as it may, it was not until the release of Gwyn J’s judgment that Mr Wigley considered he was unable to continue to act for Maria. I am told both decisions were brought to the attention of the Law Society. Mr Illingworth emphasised is not a case of a party changing counsel at the last minute but of counsel withdrawing leaving Maria with no choice but to instruct a new legal team.
[10] Maria has instructed new solicitors. Mr Baird remains instructed and Mr Illingworth is now lead counsel.
[11] At its most basic, Maria’s application for an adjournment is made on the grounds that she has been left “high and dry” as she faces a timetable to file evidence on an unless basis that cannot be complied with. Mr Illingworth’s submissions for an adjournment build on that foundation.
[12] While Mr Illingworth acknowledged an adjournment would cause some prejudice to Craig, he said the withdrawal by Mr Wigley so close to hearing leaves
1 Johnson v Johnson [2021] NZHC 2432.
2 Johnson v Johnson [2021] NZHC 1369.
Maria’s new legal team “scrambling” to get up to speed. Mr Illingworth went so far as to describe the situation as an “unmitigated disaster”. He said Maria’s right to a fair trial was at peril and Maria was at risk of losing her right to meaningful justice. He emphasised that the new legal team, while it had some historical involvement, only had fragmentary knowledge of the various proceedings and he did not consider they could fulfil their obligation as counsel under current circumstances. At its most basic, Mr Illingworth said Maria would not have a fair opportunity to be heard if required to proceed. He said this meant there was “only one conclusion” and that was to modify the factor that drove that outcome, that is, to change the hearing date.
[13] Mr Illingworth emphasised that Mr Wigley had not wished to end his involvement as counsel for Maria, but having regard to his professional duties and obligations, he had no option but to withdraw. Accordingly, there is no hostility between Mr Wigley and Maria.
[14] Mr Illingworth went so far as to say that it would be a “nightmare” if an adjournment was declined in terms of getting evidence in. He said Maria’s team would attempt to complete the evidence if required, but that they could not do the best job possible.
[15] Mr Baird suggested that declining the adjournment would place counsel in a position where they could not comply with their professional obligations. I did not accept that submission. Mr Illingworth acknowledged that the professional responsibilities of counsel were not the primary issue. Maria’s legal team have accepted instructions in a proceeding in which a trial date is set. They are to be commended for doing so and supporting Maria. Maria’s legal team cannot be expected to achieve the same results as if they had been instructed throughout. What they can achieve will have to be seen in context.
The state of the evidence for the hearing
[16] The evidence in these proceedings was directed to be by way of affidavit. On 12 July 2021, I issued a Minute directing that, where a deponent had sworn numerous affidavits, the relevant parts of those affidavits be consolidated into one document. The intent of that step was to avoid duplication, inclusion of superseded material and
the need for the trial judge to work with a number of affidavits in the trial bundle. This being essentially a “cut and paste” exercise.
[17] At [24] of the 12 July 2021 Minute, Maria was also directed to file evidence in respect of important issues in the relationship property proceedings.3 Maria’s evidence was to be filed by 30 August 2021. The evidence referred to at [24] of the 12 July 2021 Minute was filed but not the composite document drawing together the parts of the affidavits still relied on. That resulted in the telephone conference on 10 September 2021 which concluded with Mr Baird having to identify when the remaining evidence could be filed. Mr Baird filed a memorandum for the resumed telephone conference on 13 September 2021 and the directions made for the exchange of evidence that were recorded in a 14 September 2021 Minute largely reflected the timetable he and Mr Wigley nominated for the provision of Maria’s evidence. That evidence being largely comprised of the “cut and paste” composite document and expert evidence. On 10 September 2021, I was advised that Maria’s expert evidence for the relationship property proceeding was under way. The proposed timetable advanced on behalf of Maria sought for her expert evidence to be filed and served on 1 October 2021. When I queried if that date could be pulled back by a week, I was told that 1 October was realistic and an attempt to truncate that time would likely result in an extension being sought. Accordingly, the “pitch” presented to me was that the preparation of the expert evidence was well in hand.
[18] Mr Wigley is co-operating in the handover of files, which is consistent with the advice that he did not want to withdraw as counsel but felt he had a professional obligation to do so. I agree with Mr Stevens, counsel for Craig, that Mr Wigley has an obligation to so co-operate. Indeed, I do not see any professional reason why Mr Wigley could not participate in a comprehensive briefing exercise to Mr Baird and/or the new instructing solicitor on the state of the files and the state of the evidence preparation as part of that handover.
[19] While Mr Baird said his legal team could not trust the work done to date by Mr Wigley, I do not understand that submission. Maria had not lost confidence in
3 Johnson v Johnson HC Wellington CIV-2018-454-144, 12 July 2021.
Mr Wigley. She did not “fire” him. It was Mr Wigley who reluctantly withdrew. Nonetheless, Maria’s new legal team say that without Mr Wigley’s institutional knowledge, he being described as “Director of Operations”, and with this being characterised as a complex case, an adjournment is necessary.
Guiding principles
[20] Mr Jaques, counsel for Johnson Preschool Ltd and assisting the Court, in a memorandum dated 21 September 2021, set out the principles that apply when an adjournment is sought. All counsel were in agreement with Mr Jaques’ summary of the principles.
[21] Under r 10.2 of the High Court Rules 2016 (the Rules), the main criteria for granting an adjournment is whether it is in the interests of justice.
[22] In Shanghai Neuhof Trade Co Ltd v Zespri International Ltd, the Court identified the following considerations as relevant to the exercise of the discretion:4
(a)whether the applicant has acted reasonably and done everything practical to avoid the need for an adjournment;
(b)the right of the parties to a fair trial and the need for resolution of the proceedings, including the likely impact of further delay on the quality of the evidence, the difficulties of reorganising witnesses for a later trial date, and the like;
(c)the prejudice likely to be caused to each party as a result of the exercise of the discretion the one way or the other; and
(d)the public interest in the efficient administration of justice.
[23] In conducting the balancing exercise, the Court is also entitled to consider the effect of an adjournment on court resources and the competing claims by litigants in
4 Shanghai Neuhof Trade Co Ltd v Zespri International Ltd [2019] NZHC 3479 at [15].
other cases awaiting hearing in the Court.5 In that regard, I note this eight day hearing date has been set down since October 2020.
Discussion
[24] While I can understand the impact of the withdrawal of Mr Wigley, I am not satisfied in all the circumstances that an adjournment is appropriate. I have reached that conclusion for the following reasons:
(a)The evidence in this proceeding has been by way of affidavit with numerous affidavits having been filed in the various proceedings over the years – hence the direction that a composite of the evidence be prepared, that is, the “cut and paste” document. The material is in, it just needs to be collated.
(b)Maria’s evidence on key issues in the relationship property proceeding, referred to at [17] above, is already filed and served. This is the key evidence in the hearing dealing with why Maria says Craig alone should be responsible for the advance which is the subject of the claim in the Abel Trust proceeding and why other advances made by Abel Trust of
$3.6 million are not debts in the relationship property proceedings. As noted, I was informed at the telephone conference on 13 September 2021 that Maria’s expert evidence for the relationship property proceedings was well advanced and could be filed on 1 October 2021. There is no evidence to contradict that advice.
(c)Mr Wigley remains co-operative and there is no reason why he cannot assist in the collation, sorting and other administrative tasks involved in the orderly handover of the file and in explaining the state of the evidence. Up until receipt of Gwyn J’s Judgment on 16 September 2021,6 both Mr Wigley and Mr Baird, then instructed,
5 Shanghai Neuhof Trade Co Ltd, above n 4, at [14]; Lygnet Farms Ltd v ANZ Bank New Zealand Ltd
[2016] NZHC 1945 at [8].
6 Johnson v Johnson, above n 1.
must have been putting all their energies into the preparation of evidence given the tight timetable.
(d)While Ms Wademan’s position as counsel for Maria on the relationship property claim is unclear, the Court was told she had been instructed so the resources to allow that to happen existed or arrangements suitable to Ms Wademan were made.
(e)From my background with the proceedings, the issues are not as complicated as the volume of material confronting Maria’s legal team may suggest. As Ms Greenhough summarised in the relationship property proceedings, the issue is whether the $3.6 million advanced by the Abel Trust is a loan or a gift or otherwise not recoverable. The evidence on that issue from Maria is in, as is the affidavit from Mr Lawrence, the parties’ accountant. While Maria’s evidence on a diminution of value claim is not in, the claim in that regard is focused.
(f)In the Life Learning Aotearoa proceeding, the primary issue is the circumstances in which Maria transferred funds from the companies owned/controlled by Craig and Maria to an entity owned only by Maria. The issues in the Simla Crescent proceeding are narrow, concerning exclusive occupation of the house owned by their family trust and more particularly, the circumstances in which another without notice injunction was sought by Maria. In those proceedings, it is Craig’s evidence to come in first. That evidence is already timetabled. As to the Abel Trust proceeding, as Mr Fowler QC, counsel for the plaintiffs in that matter highlighted, the evidence is already in, save for Craig’s evidence.
[25] I am not suggesting that declining an adjournment will not put Maria’s legal team under real pressure. However, Mr Stevens has said Craig is prepared to adjust the timetable for evidence that is in place to preserve the fixture.
[26] I have also taken into account that the prejudice to Craig in the hearing being adjourned is significant. An adjourned fixture will not be available until the second or third quarter of 2022. Craig, who lives in China, cannot be guaranteed an MIQ place (assuming that system is still operating at that time for any adjourned hearing). Craig and Maria’s businesses are under the control of Maria and, as referred to in my judgment of 27 August 2021, there are issues as to the management of those companies.7
[27] I also take into account that this proceeding has been marked by some friction between counsel. Such is evident from the subject matter of Gendall J’s judgment dated 10 June 2021.8 Without in any way attempting to ascribe responsibility for that friction, that any further involvement by Mr Wigley will be limited to doing everything he can behind the scenes to assist in the handover of his files and assisting Maria’s new legal team with understanding the state of the evidence, relations between counsel should now be on a more constructive basis.
[28] I have no doubt that Craig’s legal team will be happy to engage in discussions to identify the true issues to be addressed at the hearing. Certainly, Ms Greenhough, who is instructed by Craig in the relationship property proceeding, on 1 June 2021 filed a memorandum with her summary of the matters in issue in that proceeding.
[29] The various proceedings have been on foot for a long time. They need to be resolved. As I recorded in my Minute of 14 September 2021, all parties at that time wanted the fixture to go ahead. That can only be on the basis that the preparation of Maria’s evidence was at a point that would allow the hearing to proceed. With Mr Wigley remaining co-operative, there is no reason why there cannot be a smooth transition of what is in fact a limited briefing exercise from him to the new legal team. The reasons that compelled Mr Wigley to withdraw do not prevent him from co-operating to the fullest extent possible in the handover. As I have said, I agree with Mr Stevens’ submission that Mr Wigley is obliged to do everything he can to assist.
7 Johnson v Johnson [2021] NZHC 2220.
8 Johnson v Johnson, above n 2.
[30] Mr Mijatov, on behalf of Craig, noted the absence of an affidavit in support of the application for adjournment. While I of course accept what counsel have told me about their own position, evidence would have been of assistance, especially in relation to how advanced the preparation of Maria’s evidence is in fact. The absence of evidence that briefs and the like are not in draft or experts have not been briefed (for example), means the assertions of difficulty in preparation due to the late withdrawal of Mr Wigley can only be made in general terms. When the detail of what has to be done between now and the hearing date is examined, what remains to be done is manageable. The Court has been told briefing is already under way (experts in the relationship property claim) or is not onerous (the “cut and paste” compilation) or is focused, (the diminution of value claim also in the relationship property claim). The lack of specific and detailed evidence in relation to trial preparation means I was left with the situation being described only in general terms such that it was a “disaster” or the like.
[31] A submission that a hearing date allocated over a year ago should be vacated because the applicant for adjournment had been left in a disastrous position must be based on evidence not submissions alone.
[32] I accept Mr Illingworth’s submission that I have a duty to ensure the trial process is fair and there is an even playing field. Mr Illingworth confirmed Maria would like the hearing to proceed if that is possible – there are six full weeks until hearing.
[33] The hearing involves significant sums but I note that Maria was able to engage Mr Baird and Ms Wademan and now has engaged senior counsel. If Maria needs to direct further resources to preparation then such may be a matter between her and Mr Wigley in due course. While it was submitted Craig is better resourced, it was not submitted Maria did not have the resources to properly prepare.
[34] Mr Illingworth confirmed Maria’s team could, despite the difficulties they would encounter, get evidence in for the hearing, albeit they could not do the best job possible. Mr Stevens accepted the hearing may not run as smoothly as it might otherwise have done and gave the examples that some documents may have to be
handed up during the hearing as opposed to being in the bundle. That said, I was told Mr Wigley had been working diligently on the evidence and so the efficient handover I expect to occur, along with the work that must have been undertaken until Gwyn J’s judgment was received and new counsels’ ability to focus on the true issues, will mean that Maria will have a reasonable opportunity to advance her case at trial.
[35] I also note that preparation of the trial bundle – something that has been a time-consuming exercise – is in the hands of Craig’s solicitor.
Orders
[36]The application for an adjournment is declined.
[37] For all these reasons, as I recorded at the conclusion of the telephone conference on 23 September 2021, the unless orders made on 14 September 2021 are suspended. Counsel are to immediately liaise in respect of a new timetable.
[38] Leave is reserved to request a telephone conference at short notice with me, should the need arise. Counsel are to file a joint memorandum as to the new timetable within five working days.
Suppression
[39] Pursuant to s 35A of the Property (Relationships) Act 1976, any report of this proceeding must comply with ss 11B, 11C and 11D of the Family Court Act 1980.
Associate Judge Lester
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