Jones v Hawkins
[2022] NZHC 1965
•10 August 2022
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2020-419-329
[2022] NZHC 1965
BETWEEN GREGORY JOHN JONES
Applicant
AND
JANET HAWKINS, AMANDA JANE VOSPER and DESMOND DAVID HAWKINS
Respondents
Hearing: 2 August 2022 Appearances:
G J Jones in person
D O’Neill for Respondents
Judgment:
10 August 2022
JUDGMENT OF WYLIE J
(Application for leave to issue third and subsequent party notices)
This judgment was delivered by Justice Wylie On 10 August 2022 at 10.00 am
Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar
Date:…………………………
Solicitors/counsel:
Vosper Law, Cambridge/D M O’Neill, Hamilton
Copy to: G J Jones
JONES v HAWKINS [2022] NZHC 1965 [10 August 2022]
Introduction
[1] The applicant, Gregory Jones, is the defendant in a proceeding brought by the respondents, Janet Hawkins, Amanda Vosper and Desmond Hawkins. He has filed an interlocutory application in the proceeding seeking leave to issue third and subsequent party notices against 11 individuals/entities. The application is opposed by the respondents.
The background
[2] Mr Jones is a barrister based in Auckland. For many years he was also involved in the bloodstock industry – breeding, racing and trading in thoroughbred horses.
[3] The respondents are the trustees of two trusts which together trade as the Llanhennock Trust Partnership. At all relevant times, the Llanhennock Trust Partnership carried on business as agisters and horse breeders under the name Wentwood Grange.
[4] In November 2018, the respondents commenced the proceeding in the District Court at Hamilton. They alleged that:
(a)from May 2011, Mr Jones placed a number of horses with them “for breeding and caring purposes and agistment”;
(b)there was an agreement between them and Mr Jones pursuant to which they would care for his horses and provide agistment, storage and stud services as required. Mr Jones would be charged agistment fees and for other costs associated with the care of his horses and he would pay invoices rendered by the 20th of the month following;
(c)Mr Jones fell behind in the payments due to be made by him;
(d)various assurances were given to them by Mr Jones that payment would be made but he failed to honour these assurances;
(e)they have not been paid by Mr Jones. They seek judgment against him in the sum of $165,949.53 (together with interest).
[5]Mr Jones has filed a statement of defence and a counterclaim.
[6]In his statement of defence, Mr Jones:
(a)accepted that he and the respondents entered into an agreement;
(b)alleged that, pursuant to the agreement, the respondents were to carry out:
… thoroughbred agistment services and … provide [him] with advice in relation to the health and welfare of his horses together with advice in relation to all of the logistics of the thoroughbred breeding enterprise owned by [the first respondents].
(c)admitted that he has not paid various invoices sent to him by the respondents;
(d)said that sometime after May 2008, he became aware that the respondents were not acting in good faith and in his best interests. He claimed that the agistment agreement was entered into:
… with the intent of causing … financial harm to [him].
He asserted that various services provided by the respondents were not carried out in good faith, that care for his horses was provided “dishonestly” and that the respondents did not make reasonable endeavours to promote his financial interests. He also asserted that the respondents caused the death of various of his horses;
(e)he claimed “equitable set-off” in respect of the moneys claimed by the respondents.
[7]By way of counterclaim Mr Jones asserted as follows:
The actions of the [respondents] referred to above were carried out not only in bad faith but illegally and with the sinister intention; the [respondents] making a conscious decision to do so by assessing the detriment [they were] likely to suffer as a result of any discovered wrongdoing and the fact that that detriment would not be outweighed by the benefit to be obtained from acting with others from whom it obtained business opportunities in order to cause loss, stress and inconvenience to [him].
He seeks judgment in the sum of $750,000 for “repayment of services rendered” as well as $370,000 for an alleged loss of sales. He also seeks an account of the financial benefits obtained by the respondents from their bloodstock ventures and judgment for a sum equivalent to those benefits, as well as an award of exemplary damages.
[8] Given the amounts claimed by Mr Jones in his counterclaim, by consent the proceedings have been transferred to this Court.
[9] After various other interlocutory matters had been attended to (discussed below), Mr Jones filed an interlocutory application seeking leave to add various persons/entities as third and subsequent parties to the proceeding. That application has since been amended. Mr Jones now seeks to issue third and subsequent party notices against the following:
(a)David Ellis (according to Mr Jones, a farmer and a “horse syndicator”);
(b)Peter Vela (indirectly a shareholder in New Zealand Bloodstock Ltd and New Zealand Bloodstock Finance & Leasing Ltd);
(c)New Zealand Bloodstock Ltd (a thoroughbred sales auction house);
(d)New Zealand Bloodstock Finance & Leasing Ltd (a financier involved in the purchase of thoroughbred horses);
(e)Daniel Rolston (a sales manager employed by New Zealand Bloodstock Ltd);
(f)Dean Hawkins (a farmer, a thoroughbred breeder and an employee of the first respondents);
(g)Sean Hawkins (also a farmer, a thoroughbred breeder and an employee of the first respondents);
(h)Cambridge Veterinary Services 1980 Ltd (an equine veterinary business);
(i)Craig Lawrence (a veterinarian employed by Cambridge Veterinary Services 1980 Ltd);
(j)Bruce Gray QC (a Queen’s Counsel);
(k)Christine Meechan (also a Queen’s Counsel and Mr Jones’ former wife).
(jointly “the proposed third parties”)
[10] In his notice of interlocutory application, Mr Jones asserted that he is entitled to a contribution or indemnity from each of the proposed third parties, that there are questions or issues in the proceeding which ought to be determined not only as between him and the respondents but also as between him, the respondents and the proposed third parties, and that questions or issues arising between him and the proposed third parties are substantially the same as questions or issues arising as between him and the respondents.
Relevant law
[11] Rule 4.4 of the High Court Rules 2016 provides for the issue of third (and subsequent) party notices. They can be issued as of right within 10 working days after the expiry of the time for filing the defendant’s statement of defence or within “a longer time given by leave of the court”.1
[12] Underlying applications to issue third party notices and join third parties to proceedings is the common-sense proposition that all persons potentially responsible
1 High Court Rules 2016, r 4.4(2).
for a loss should be parties to and present in the same action and at the same hearing.2 To this end, r 4.4(1) provides as follows:
4.4 Third parties
(1)A defendant may issue a third party notice if the defendant claims any or all of the following:
(a)that the defendant is entitled to a contribution or an indemnity from a person who is not a party to the proceeding (a third party):
(b)that the defendant is entitled to relief or a remedy relating to, or connected with, the subject matter of the proceeding from a third party and the relief or remedy is substantially the same as that claimed by the plaintiff against the defendant:
(c)that a question or issue in the proceeding ought to be determined not only between the plaintiff and the defendant but also between—
(i)the plaintiff, the defendant, and the third party; or
(ii)the defendant and the third party; or
(iii)the plaintiff and the third party:
(d)that there is a question or an issue between the defendant and the third party relating to, or connected with, the subject matter of the proceeding that is substantially the same as a question or an issue arising between the plaintiff and the defendant.
[13] The general principles relevant to the application of r 4.4 have been discussed in a number of cases. They have been summarised as follows:3
…
(a)The defendant’s claim against the third party must be covered by one of the four grounds set out in r 4.4(1). …
(b)Where leave is sought, the Court must consider firstly [sic] whether one of the grounds in r 4.4(1) exists and secondly whether to exercise its discretion to join the third party: …
(c)In exercising its discretion, the Court must have regard to all relevant circumstances, including delay to the plaintiff (r 4.8).
2 See Body Corporate 76712 v Thompson Wentworth Ltd [2021] NZHC 693 at [18]; and Turpin v Direct Transport Ltd [1975] 2 NZLR 172 (SC) at 175.
3 Westwood Group Holdings Ltd v Rilean Construction (South Island) Ltd [2013] NZHC 1739 at [15]; and see Body Corporate 76712 v Thompson Wentworth Ltd, above n 2, at [19].
(d)The interest[s] of justice between all parties, however, is paramount. While any delay to the plaintiff is regrettable, the attainment of justice by the most efficient means is an overriding consideration: …
(e)Where the defendant has not been guilty of unreasonable delay, a factor in favour of exercising the discretion will be whether the defendant could have joined the third party as of right if it had applied within the time limit: …
(f)Equally, unexplained or unacceptable delay by the defendant may result in leave being refused: …
(g)In cases of serious delay that risk prejudicing the plaintiff, the court may be prepared to make an order for joinder on conditions designed to preserve the hearing date for the plaintiff's claim against the defendant: …
(h)Avoiding duplicity of proceedings and preventing the same question being tried with different results militate in favour of allowing the application. The overriding purpose of the third party rules is to enable all the issues to be dealt with in one action: …
(i)There is, however, a need to strike a balance between all the parties’ interests. The extent to which the plaintiff is necessarily involved in the issues between the defendant and the third party is a consideration. Equally, it can be oppressive and unjust to involve a third party in a proceeding where much of the proceeding will not involve that third party.
(j)The Court may have regard to the relative strengths and weaknesses of the parties’ cases, including the case against the proposed third party and the likelihood of recovery: …
(citations omitted)
[14] I agree with and adopt these observations. There is an additional principle that is relevant in this case, namely the fact that a defendant has brought a counterclaim against a plaintiff is not a bar to the issue of third party proceedings.
Analysis
[15] Here, Mr Jones has issued a counterclaim against the respondents. However, as noted above, this is no bar to the issue of third party notices nor to the Court granting leave for the issue of third party notices outside the time limit prescribed in r 4.4(2)(a).
[16] Further, it was common ground that Mr Jones requires an extension of time before any third or subsequent party notices can be issued. He is well outside the 10 working day window within which such notices can be issued as of right.
[17] Mr Jones relied on each of the grounds set out in r 4.4(1)(a) to (d). I consider each in turn.
Rule 4.4(1)(a) – contributions/indemnity
[18] Mr Jones has filed draft statements of claim against all but one of the proposed third parties (the exception being Ms Meechan). I discuss these drafts in more detail below. Broadly, he alleges that each of the proposed third parties was a party to either an unlawful means conspiracy and/or that each was a party to a conspiracy, the predominant purpose of which was to cause harm and financial loss to him. Although the pleadings in the respondents’ proceeding and in the draft statements of claim against the proposed third parties are not particularly clear, as I understand it, Mr Jones is alleging that the respondents and the proposed third parties conspired to cause damage to his interests.
[19] Conspiracy to injure the business interests of another, whether by unlawful means or by lawful means but with intention, is a tort.
[20] Mr Jones explained that he wishes to issue the third and subsequent party notices because he is seeking a contribution and/or indemnity in respect of such liability as he may be under to the respondents. He submitted that a review of the allegations against each of the proposed third parties makes the application of r 4.4(1)(a) clear, because, on his theory of the case, the proposed third parties either involved themselves in unlawful acts with the intention of injuring him, or involved themselves in lawful acts but with the predominant purpose of injuring him, or stood by and refused to intervene when they had the power to put a halt to the alleged conspiracy.4
[21]In my judgment, Mr Jones’ reliance on r 4.4(1)(a) is flawed.
4 Relying on McIntyre v Bianchi [1992] 3 ERNZ 1057 (HC).
[22] The respondents have sued Mr Jones in contract. In his statement of defence Mr Jones admitted the agreement but went on to allege that the respondents failed to honour their obligations to him under the agreement. He pleaded (in effect) that he is entitled to damages against the respondents for their breaches and that he is entitled to set off these damages against any liability he may have to the respondents. In his counterclaim, he went further. He raised the tort of conspiracy against the respondents. By his application for leave and an extension of time with which to issue the third and subsequent party notices, he seeks to add additional alleged conspirators to the proceeding.
[23] That there may be liability under a contract does not preclude concurrent liability in tort.5 Nevertheless, I am not persuaded that r 4.4(1)(a) is engaged because I do not consider that Mr Jones is entitled to either contribution or indemnity from the proposed third parties.
[24] The essence of a right to contribution lies in the liability of the proposed third party to a common demand.6 Mr Jones is sued in contract, not tort; he seeks to sue the additional parties in tort. He and the proposed third parties are not however liable to a common demand from the respondents. Before Mr Jones could invoke r 4.4(1)(a) and claim a contribution from the proposed third parties, he would have to show (or admit) that the respondents have suffered damage, that he is liable in respect of that damage and that the proposed third parties (as joint tortfeasors)7 are liable in respect of that same damage. Further, the damage caused by the proposed third parties would have to be the same as that caused to the respondents by Mr Jones.8 The damage is not however the same and Mr Jones cannot be entitled to a contribution from the proposed third parties to such liability as he may be under to the respondents. Rather, Mr Jones, at best, has a separate cause of action against the respondents and the proposed third parties as joint tortfeasors. The proposed third parties are not liable to any demand from the respondents.
5 Price Waterhouse v Kwan [2000] 3 NZLR 39 (CA) at [17], declining to follow McLaren Maycroft & Co v Fletcher Development Co Ltd [1973] 2 NZLR 100 (CA).
6 Halsbury’s Law of England (4th ed, reissue, 1998) vol 9(1) Contract at [1116] as cited in Robert Osborne (ed) McGechan on Procedure (online ed, Thomson Reuters) at [HR4.4.01].
7 Law Reform Act 1936, s 17(1)(c).
8 Westwood Group Holdings Ltd v Rilean Construction (South Island) Ltd, above n 3, at [18(d)].
[25] The counterclaim is an independent proceeding.9 Mr Jones cannot, as plaintiff in the counterclaim, seek to use the third party notice rules to seek a contribution from entities and individuals he could have sued himself. Given the allegations made in the counterclaim, the respondents, as alleged tortfeasors, could seek contribution from the proposed third parties as joint tortfeasors (on Mr Jones’ theory of the case) but they do not seek to do so. They are content to deny Mr Jones’ allegations.
[26] Still less is Mr Jones entitled to an indemnity. An indemnity is a legal right to be indemnified by another and Mr Jones did not point to anything which obliges the proposed third parties to hold him harmless against such liability as he may be under to the respondents under the agreement he acknowledges was in place.
Rule 4.4(1)(b) – common relief
[27] Mr Jones submitted that there is a “clear” connection between the respondents’ claims against him and the alleged acts of the proposed third parties. He argued that the proposed third party claims will enable the Court to determine whether he or the proposed third parties should ultimately bear the respondents’ loss and that when the proceeding is heard, it will be open to the Court to find either that he is liable to the respondents or that the proposed third parties are liable:
for the provision of services by [the respondents] which the [additional] parties knew to be worthless and part of a conspiracy to cause [him] loss.
[28] I had difficulty in following this argument. There is no connection between the respondents’ claim in contract and Mr Jones’ assertions in tort in his counterclaim and in the draft statements of claim against the proposed third parties. I accept that there is a broad factual similarity in the underlying allegations. Indeed, as I understand it, Mr Jones is saying that the respondents and the proposed additional parties were all parties to the same conspiracy. Nevertheless, and notwithstanding that r 4.4(1)(b) is of wide ambit, I struggle to see that the relief or remedy claimed by Mr Jones against the proposed third parties is substantially the same as the relief claimed against him by the respondents. I am not persuaded that r 4.4(1)(b) is engaged.
9 High Court Rules, r 5.58(3).
Rule 4.4(1)(c) – common issues
[29] I accept however that r 4.4(1)(c) is engaged. The Courts have demonstrated a liberal trend in its application and I accept that the issues which Mr Jones seeks to raise in his statement of defence, his counterclaim and in his proposed third party proceedings ought, on his theory of the case, to be determined not only between the first respondents and Mr Jones but also between the first respondents, Mr Jones and the proposed third parties.
[30] I note that the subrule uses the words “ought to be determined”. I am entitled to consider the strengths and weaknesses of the parties’ cases, including Mr Jones’ claims against the proposed third parties, at the second stage of the enquiry when considering the exercise of the discretion. The words “ought to be determined” overlap with the exercise of this discretion. I return to this issue shortly.
Rule 4.4(1)(d) – issues substantially the same
[31] Again, I accept that r 4.4(1)(d) is engaged. The claims which Mr Jones wishes to raise against the proposed third parties are, on Mr Jones’ theory of the case, connected, albeit broadly, with the overall subject matter of the proceeding brought by the respondents. Given the statement of defence and the counterclaim, common questions and issues are likely to arise.
[32] Accordingly, I accept that r 4.4(1)(c) and (d) are engaged. I now turn to consider the exercise of the discretion.
Discretion
[33] The interests of justice between all parties, including the proposed additional parties, are paramount. Avoiding duplicity of proceedings and preventing the same questions being tried in different Courts with potentially different results are important considerations. They are not however overarching. In exercising the discretion I must have regard to all relevant circumstances.10
10 High Court Rules, r 4.8(1).
[34]I consider first the interests of justice from the perspective of the respondents.
[35] The respondents commenced their proceeding as long ago as November 2018. It was a straightforward proceeding, based on an alleged agreement with Mr Jones. Statements of defence were not filed promptly. Rather, Mr Jones (and a second defendant partnership involving Mr Jones and another individual separately sued by the respondents) filed an interlocutory application seeking that the proceeding should be stayed or alternatively, struck out. This application was dismissed by Judge R L B Spear in the District Court at Hamilton on 19 March 2019.11
[36] The other party in the second defendant partnership then made an open offer to settle the respondents’ proceeding against the partnership. Mr Jones expressly disassociated himself from this offer. He characterised it as one made personally by his partner. He sought and was granted time to consider his position. The other partner nevertheless settled the claim against the second defendant partnership. Mr Jones challenged the form of the nature of discontinuance filed by the respondents but this issue was promptly resolved. Once the notice had been filed, only the claim against Mr Jones was left outstanding.
[37] In the course of a subsequent case management conference, Mr Jones indicated that he would likely be making application for non-party disclosure against one of the proposed third parties, Cambridge Vet Services Ltd, as well as against its insurer. Mr Jones’ application for discovery by these non-parties was not opposed by the respondents and non-party discovery occurred. Mr Jones was not however satisfied with what was provided. Various timetable directions were then made in the District Court requiring Mr Jones to make an application for further and better discovery and noting that it would be “necessary for him to be far more exact as to exactly what further documents he requires to be disclosed” from the non-parties.12 In the event, Mr Jones made application for further and better discovery and/or for tailored discovery by the non-parties. This application was declined in late November 2019.
11 Llanhennock Trust Partnership v Jones [2019] NZDC 4695.
12 Llanhennock Trust Partnership v Jones DC Hamilton CIV-2018-019-1235, 30 October 2019 (minute of Judge Spear) at [5].
[38] Shortly thereafter, Mr Jones advised the District Court that he had appealed this decision. Enquiry made by the Court however revealed that no appeal had been filed. In the event, an appeal was filed. It was heard by Lang J and dismissed in large part (although, in one respect, further discovery by one of the non-parties was ordered).13
[39] In the course of a further case management telephone conference on 1 October 2020, Mr Jones indicated his intention to take various steps, including to apply for leave to join Cambridge Veterinary Services 1980 Ltd, and perhaps also its insurer, as parties to the respondents’ proceeding. He advised the Court that he would make this application within 21 days. He did not however comply with this timeframe.
[40] In mid to late November 2020 Mr Jones applied for an extension of time to file an amended statement of defence and counterclaim. He also applied for leave to issue third and subsequent party notices on Cambridge Veterinary Services 1980 Ltd and six other entities (New Zealand Bloodstock Ltd, New Zealand Bloodstock Finance & Leasing Ltd, Mr Vela, Mr Rolston, Ms Meechan and Mr Gray). It was also proposed that the proceeding should be transferred to this Court.
[41] The respondents consented to the suggestion that the proceeding should be transferred to this Court. They gave their consent in December 2020.
[42] The proceeding was set down for a telephone conference in this Court early in February 2021 but, at Mr Jones’ request, this conference was vacated. The matter was next called before Muir J on 17 February 2021. He directed Mr Jones to seal the order transferring the proceeding to this Court and to file any application for leave to issue third and subsequent party notices and any supporting affidavits by 1 March 2021.
[43] Mr Jones failed to comply with this direction. He filed his interlocutory application seeking leave on 17 March 2021.
[44] Mr Jones’ application for leave to issue the third and subsequent party notices was scheduled to be heard on 29 March 2021. Mr Jones however requested an
13 Jones v Llanhennock Trust Partnership [2020] NZHC 1409.
adjournment. He indicated that he proposed to seek leave to issue yet further third and subsequent party notices and that he intended to issue a separate proceeding in this Court against the parties against which he was seeking to issue notices. He advised that he expected to commence this new proceeding within a fortnight and submitted that it was appropriate to adjourn any hearing of his application for leave to issue the third and subsequent party notices until the new proceeding had been filed and served.
[45] Up to this point, the respondents had adopted a neutral position and they had been prepared to abide the Court’s decision on the leave application. However, when the request for an adjournment was made, Mr O’Neill, appearing for the first respondents, expressed his clients’ concern at the delays they were encountering in progressing their claim. Davison J nevertheless adjourned the 29 March 2021 hearing.
[46] The leave application next came before Brewer J on 2 June 2021. Notwithstanding the earlier indications he had given to the Court, Mr Jones had not issued a separate proceeding against the proposed third parties. He explained to Brewer J that he had been busy with his own affairs, but that he had also been perfecting the proceeding he proposed to commence. He told the Judge that there would be 15 defendants and that he intended to apply for an injunction against them. Brewer J granted Mr Jones a final adjournment:14
… on the basis that unless Mr Jones makes good on his promise to commence the third party proceedings, his application for leave to bring third party proceedings will be struck out.
He gave Mr Jones until 11 June 2021 to file the new proceeding.
[47] This unless order was not complied with. The Court’s register of documents records that the statement of claim was only filed on 16 November 2021. (As I note below, it was then referred by the Registrar to Venning J under r 5.35A of the High Court Rules). On the face of the order made by Brewer J, Mr Jones’ application for leave to issue the third and subsequent party notices on the proposed third parties was struck out as at 11 June 2021, when he failed to comply with the timetable put in place
14 Jones v Llanhennock Trust Partnership HC Hamilton CIV-2020-419-329, 2 June 2021 (minute of Brewer J) at [3].
by the Court. This result however appears to have been overlooked.15 Rather, on 24 June 2021, Lang J directed that the application proceed to hearing on 26 August 2021.
[48] The matter was set down for hearing before Campbell J but he had to recuse himself. The fixture was vacated as a result. Given the constraints resulting from the COVID-19 pandemic, the application only came before the Court on 2 August 2022.
[49] As can be seen, there has been considerable delay to the respondents. Mr Jones appears to have been primarily responsible for much of this delay. On an application to issue a third party notice, the Court must have regard to delay to a plaintiff.16
[50] If leave is granted to Mr Jones permitting him to issue the proposed third and subsequent party notices within a further time fixed by the Court, there will inevitably be yet further delay. The notices would have to be served. The proposed third parties would no doubt seek to defend the claims against them. Discovery would be required. There would likely be other interlocutory applications. As I note below, one of the proposed third parties might seek to argue issue estoppel/res judicata. Others would likely challenge the claims made against them and seek to strike out the pleadings or require further particulars. Given the history of this matter to date, appeals are likely. The respondents’ straightforward contractual claim would be frustrated and put on hold, perhaps for a period of some years. I do not consider that this is in the interests of justice.
[51]I now turn to look at matters from Mr Jones’ perspective.
[52] In my judgment, the interests of justice do not require that leave be given to permit Mr Jones to issue the third party notices out of time.
(a)Mr Jones is in large part responsible for much of the delay that has already occurred. There is, in my view, force in Mr O’Neill’s argument
15 The point was not taken before me and, as a result, I take it no further.
16 High Court Rules, r 4.8(1).
for the respondents that Mr Jones is endeavouring to use the Court’s processes to frustrate a hearing into the respondents’ claim.
(b)I do not consider that Mr Jones is unfairly prejudiced if leave is declined. Mr Jones will not be shut out from defending the respondents’ claim if leave to issue the third and subsequent party notices is declined. There is no dispute between the respondents and Mr Jones that there was an agreement in place between them. Moreover, the scope of that agreement appears, at least in part, to be common ground. Mr Jones can seek to avoid the respondents’ claim by arguing that the respondents breached the agreement, that he is entitled to damages for these breaches and that he is entitled to set off such damages against such sums as may be owing by him to the respondents. As I have noted above, this is the effect of the statement of defence filed by Mr Jones. There is no obvious need for Mr Jones to get into convoluted issues of conspiracy.
(c)As I note below, Mr Jones has already endeavoured to commence separate proceedings against the proposed third parties and others. His endeavours have been unsuccessful. The issue of third and subsequent party notices would undermine judgments already given by this Court (see below).
(d)Mr Jones has raised the same conspiracy issue as a defence to other claims made against him. He has failed on each occasion to make out his allegations of conspiracy, primarily because he has not to date articulated a tenable basis for them.
(e)The conspiracy allegations made by Mr Jones are weak. As already noted, draft statements of claim against all but one of the proposed third parties have been filed. By way of example, the draft statement of claim against Mr Ellis alleges that he was a party to the alleged conspiracy. Particulars are given. The particulars:
(i)refer to the actions committed by the respondents or their servants or agents referred to in Mr Jones’ statement of defence;
(ii)allege that Mr Ellis “fail[ed] to race horses in which [Mr Jones] had shares in accordance with their ability”;
(iii)allege that Mr Ellis became aware of the actions of other parties carrying out acts detrimental to the performance of Mr Jones’ race horses and thoroughbred business generally, and that:
[t]he coincidental nature of acts of similar behaviour by the third parties to this action and other parties unknown to [Mr Jones] entitle [Mr Jones] to properly draw an inference in relation to the existence of a conspiracy between [Mr] Ellis and others.
(iv)refer to “[o]ther acts not yet known to [Mr Jones], particulars for which will be supplied following discovery and interrogatories”.
The draft pleadings against other proposed third parties are in similar non-specific terms. Mr Jones filed an affidavit in support of his application. It seeks to fill out the detail of the alleged conspiracy to which each of the proposed third parties is said to have been a party. There is nothing in that affidavit which supports the allegations made against any of the proposed third parties in the draft statements of claim. Again, by way of example and also in relation to Mr Ellis, the highest that Mr Jones can put it is to allege that:
Mr Ellis advised me that my legal practice had “better start making money by September”. This portentous claim leads me to conclude that Mr Ellis was aware of and remained in knowledge of the actions that have been taken against me.
The allegations of conspiracy are speculative and they do not establish a tenable basis for Mr Jones’ assertion that there was a conspiracy against him. As has been noted by other Judges (see below), allegations such as those made by Mr Jones are serious. Mr Jones is a barrister and as such there is an obligation on him not to raise allegations of
fraud, dishonesty or other reprehensible conduct (such as those alleged against the proposed third parties and the respondents) unless he has taken appropriate steps to ensure that there are reasonable grounds for making the allegations.17 It is clear that Mr Jones has breached this obligation. His draft pleadings lack any tenable basis sufficient to support his allegations of conspiracy.
[53] It is no answer for Mr Jones to assert that the allegations made by him in his affidavit are unchallenged and that the Court is obliged to assume that the same are true. The Court is not obliged to accept uncritically assertions that are inherently lacking in credibility or inherently improbable. Mr Jones’ assertions can be properly so categorised. Further, even if the assertions made by Mr Jones in his affidavit are accepted, there is still nothing to support the alleged conspiracy.
[54] I also consider matters briefly from the perspective of the proposed third parties.
[55] I adopt the comments I have made when considering Mr Jones’ allegations. The allegations of conspiracy are unfounded, frivolous, and on the face of it, vexatious. It would be an abuse to require the proposed third parties to respond to them.
[56] It is also relevant to the exercise of the discretion that similar allegations of a wide-ranging conspiracy in the thoroughbred industry have been raised by Mr Jones in various associated proceedings arising out of the same broad factual matrix. I note the following:
(a)Mr Jones was sued by New Zealand Bloodstock Finance & Leasing Ltd in respect of credit provided to him in connection with his bloodstock business. The proceedings were brought by way of summary judgment. Mr Jones opposed the application on various grounds. The foundation for his opposition was an alleged wide-ranging conspiracy in the thoroughbred industry to harm his bloodstock business. New Zealand Bloodstock’s actions in seeking to enforce Mr Jones’ obligations to it
17 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, r 13.8.
were said to be a part of this conspiracy. This defence was not accepted by Jagose J. He could see nothing in the evidence advanced by Mr Jones to suggest the availability of any defence to New Zealand Bloodstock’s claims. He granted summary judgment in favour of New Zealand Bloodstock.18
(b)Mr Jones (and his partner in the second defendant partnership) instructed solicitors to act for them in regard to the claim brought by the respondents. Ultimately the solicitors and counsel withdrew after Mr Jones made it clear that he wanted to include in his pleadings material that the solicitors (and counsel instructed) considered would put them in breach of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008. The solicitors sent invoices to Mr Jones, which he declined to pay. Ultimately, the solicitors sought summary judgment against Mr Jones. Summary judgment was granted by the District Court.19 Mr Jones appealed this decision to this Court. Van Bohemen J dismissed the appeal in a judgment issued on 27 January 2022.20 In the course of his judgment, van Bohemen J noted that Mr Jones had filed a statement of defence and counterclaim to the solicitors’ statement of claim against him, and that inter alia, Mr Jones had alleged that Cambridge Veterinary Services 1980 Ltd and Mr Ellis (as principal of another stud) had acted in a manner that was intended to cause harm and financial loss to him (Mr Jones). He further alleged that the solicitors were aware of the actions taken by various parties, including Cambridge Veterinary Services 1980 Ltd and Mr Ellis, that their initial acceptance of instructions from him was unethical, and that the solicitors had become co-conspirators with other parties, including Mr Ellis. In the District Court, these allegations of conspiracy were considered to be inherently improbable. In this Court, van Bohemen J
18 New Zealand Bloodstock Finance & Leasing Ltd v Jones [2020] NZHC 1233 at [1], [14], [31] and [36]–[38]. This decision has been appealed. I was advised by Mr Jones that the appeal has been heard but that the Court of Appeal is yet to release its decision.
19 Stace Hammond Lawyers v Jones [2021] NZDC 10376.
20 Jones v Stace Hamond Lawyers [2022] NZHC 47. I note that the correct spelling is “Stace Hammond”.
considered that Mr Jones’ assertions were neither probative of any conspiracy nor otherwise relevant to the appeal.21
(c)As already noted, on 16 November 2021, Mr Jones filed proceedings in this Court citing 16 named defendants, and other “unknown defendants” as a 17th defendant. In his statement of claim, Mr Jones alleged conspiracy against the first to ninth defendants (New Zealand Bloodstock Finance & Leasing Ltd, New Zealand Bloodstock Ltd, Mr Vela, Mr Rolston, Mr Ellis, Dean Hawkins and Sean Hawkins, Cambridge Veterinary Services 1980 Ltd and Craig Lawrence) and harassment and breach of privacy against a number of other defendants, including Mr Gray and Ms Meechan. The Registrar referred the statement of claim to Venning J under r 5.35A of the High Court Rules.
Venning J issued a decision dealing with the statement of claim.22 In the course of his decision, he referred to the detail of Mr Jones’ claim. He noted that Mr Jones was alleging that various of the defendants had caused him loss in the course of their dealings and interactions with him. The Judge noted that the causes of action pleaded were unlawful conspiracy to cause financial harm, lawful conspiracy, as well as breach of privacy and harassment. The Judge observed that, if misused, the judicial process can produce unfairness which can undermine confidence in the administration of justice. He noted that the public interest and the due administration of justice necessarily extend to ensuring that the Court’s processes are fairly used and that they do not lend themselves to oppression and injustice against others.23 The Judge observed that allegations of unlawful conspiracy are serious. He noted that a lawyer has an obligation not to raise allegations of fraud,
21 Jones v Stace Hamond Lawyers, above n 20, at [47]–[49], [58], [64], [69] and [71]–[77]. Mr Jones sought leave to appeal this decision. It was declined by van Bohemen J: Jones v Stace Hammond Lawyers [2022] NZHC 884. Inter alia the Judge noted that it was not enough for Mr Jones to allege conspiracy and then say that his allegations should be accepted by the Court in the absence of evidence to the contrary: at [56]. The Judge observed that a Court need not accept uncritically evidence that is inherently lacking in credibility or is inherently improbable.
22 Jones v New Zealand Bloodstock Finance and Leasing Ltd [2021] NZHC 3220.
23 At [20]–[21].
dishonesty or other reprehensible conduct unless the lawyer has taken appropriate steps to ensure that reasonable grounds for making the allegations exist. He observed that Mr Jones’ pleadings lacked any apparent basis to support the allegations of conspiracy, whether lawful or unlawful.24 The Judge struck out a number of causes of action as being an abuse of process and stayed the remaining causes of action against a number of defendants pending an amended pleading in proper form being filed. He recorded that before any amended claim was accepted for filing and released for service, it was either to be confirmed by a Queen’s Counsel as being a proper pleading or, if not, it was to be referred to a Judge of this Court to be approved by that Judge. He directed that the stay was to remain in place until 31 March 2022 and that in the event that no amended statement of claim was filed by that date, the claim against a number of defendants was to be struck out.
Mr Jones did not file an amended statement of claim. Rather, he appealed against Venning J’s decision.
The Court of Appeal directed that the case on appeal was to be filed by 19 July 2022. Mr Jones did not comply with this timetable. It appears that, as a result, the appeal has been deemed to be abandoned. Mr Jones advised me that he will be making application to the Court of Appeal for an extension of time and indicated that it is his intention to proceed with the appeal “as part of an attempt to deal with all outstanding litigation as soon as possible”.
[57] Although the issue was not raised before me, it may be arguable that there is issue estoppel or perhaps res judicata as between one of the proposed third parties and Mr Jones. In any event, were I to grant leave to Mr Jones to issue third and subsequent party notices out of time, I would be undercutting the judgment given by Venning J.
24 Jones v New Zealand Bloodstock Finance and Leasing Ltd, above n 22, at [23]–[24] and [32]– [33]. Mr Jones sought a recall of this decision. Venning J declined this application: Jones v New Zealand Bloodstock Finance and Leasing Ltd [2021] NZHC 3371.
That would be inappropriate. In my clear view, the earlier judgments militate strongly against the grant of leave and any extension of time.
[58] For all of the above reasons, I decline to grant leave to Mr Jones to issue third and subsequent party notices on the proposed additional parties out of time. His application is declined. The Registrar is to place the proceeding in the mentions list so that a timetable can be put in place to bring it on for hearing.
Costs
[59] The respondents as the successful parties are entitled to their reasonable costs and disbursements.
[60]I direct as follows:
(a)any application for costs and disbursements is to be advanced by way of memorandum, to be filed and served within 10 working days of the date of release of this judgment;
(b)any memorandum in reply is to be filed and served within a further 10 working days;
(c)memoranda are not to exceed five pages.
I will then deal with the issue of costs and disbursements on the papers unless I require the assistance of counsel and Mr Jones.
Wylie J
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