Keemati Limited v Mr Civil Limited

[2021] NZHC 917

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-000967

[2021] NZHC 917

BETWEEN

KEEMATI LIMITED

Plaintiff/First Counterclaim Defendant

AND

MR CIVIL LIMITED

First Defendant/First Counterclaim Plaintiff

AND

JIE GAO

Second Defendant

AND

QNZ LIITED

Third Defendant/Second Counterclaim Plaintiff

AND

KEEMATI LAL ANGURALA

Second Counterclaim Defendant

Hearing:

(On the papers)

Counsel:

Keemati Angurala in Person for the Plaintiff/First Counterclaim Defendant

William Cheyne and Zared Wall-Manning for the Defendants and Counterclaim Plaintiffs

Judgment Date:

28 April 2021

JUDGMENT OF MOORE J

This judgment was delivered by me on 28 April 2021 at 4:00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar / Deputy Registrar Date:

KEEMATI LIMITED v MR CIVIL LIMITED & ORS [2021] NZHC 917 [28 April 2021]

Introduction

[1]                These proceedings were commenced in May 2019. The plaintiff Keemati Ltd (“Keemati”) has obtained significant security through freezing orders, but the defendants submit it has failed to progress the substantive proceeding. The defendant seeks orders timetabling steps for:

(a)the plaintiff to pay security for costs and to appoint counsel;

(b)the defendants’ hearing for further particulars; and

(c)a timetable to trial.

Security for costs and appointment of counsel

[2]                On 22 December 2020, I granted the defendants’ application for security for costs.1 Keemati had approximately $10,000 in assets, meaning that there were reasonable grounds to believe that it would be unable to pay the defendants’ costs if it succeeded. I found that it was just in all the circumstances to make an order for security for costs. Keemati pointed to three forms of asset through which it could provide security:

(a)the bulldozer and roller owned by Keemati with a combined valuation of $151,000;

(b)the residential property owned by Mr Angurala which he advises is on the market, which when sold is expected to realise equity of $700,000; and

(c)jewellery owned by Mr Angurala valued at $132,500.

1      Keemati Ltd v MR Civil Ltd [2020] NZHC 3496 at [63].

[3]                I considered that these classes of assets did not provide sufficient certainty to form the basis for security for costs. There were a number of secured creditors which had registered security interests over Keemati’s present and after-acquired property. The defendants would rank behind those secured creditors.

[4]                The parties were invited to file a joint memorandum as to the form of security, or in the event of a disagreement, separate memoranda addressing the issue. The parties filed separate memoranda. Director, Mr Angurala filed on behalf of Keemati a memorandum dated 19 February 2021 proposing the following security:

(a) a caterpillar (Serial 9TC01297 and sakai #VSW27-30147) belong to Keemati. The report from Turners indicates the total value of the machines as over $150,000.

(b)   a bucket owned by Keemati and valued at about $21,000.

(c)    a Bomag BW120AD roller, which has an estimated value at about $15,000.

[5]                The concerns expressed in my 22 December 2020 judgment maintain. The defendants continue to object to this form of security.

[6]                The plaintiff has since filed a memorandum dated 16 April 2021 in which it advised it is in the process of selling its residential property. Settlement is expected to take place in the first week of May. The plaintiff says it will use the funds to appoint counsel, pay security and progress the proceeding. It proposes updating the Court on 7 May 2021 as to its funds availability, and requests timetabling orders be made after appointment of counsel.

[7]                The defendants request an order instructing payment of security in cash to be made by 23 April 2021. This date has passed and so is now redundant. Even so, I acknowledge the defendants’ emphasis on the importance of gaining traction with this proceeding.

[8]                With regard to the plaintiff appointing counsel, on 8 March 2021 Associate Judge Lester declined an application by Mr Angulara to represent the plaintiff in the

proceedings.2 On 31 March 2021 counsel for the defendants wrote to Mr Angulara concerning the steps required for the continuation of Keemati’s claim. That letter requested Mr Angulara inform them whom he had instructed by 9 April 2021. To this date Mr Angulara still has not appointed counsel.

[9]                I consider it appropriate to make timetabling orders for the payment of security and appointment of counsel:

(a)security must be paid to the Court in cash by  5:00 pm on  Friday,  21 May 2021; and

(b)the plaintiff must appoint counsel by 5:00 pm on Friday, 28 May 2021. A memorandum informing the Court and the defendants of the appointment must be filed by the same date.

Further particulars hearing

[10]            The defendants have an application dated 1 September 2020 for further particulars which is still outstanding. The application was scheduled to be heard on 17 November 2020, along with the security for costs application. I deferred it by way of Minute dated 17 November 2020 until the plaintiff’s application to be represented by Mr Angulara had been heard and determined.

[11]            The defendants request it be scheduled for a two hour hearing as soon as possible after 23 April 2021.

[12]            As detailed above, Mr Angulara is not permitted to represent the defendant in the proceedings. I have ordered the plaintiff must appoint counsel by 28 May 2020. It is only fair that the counsel appointed have an opportunity to familiarise themselves with the proceedings before representing the plaintiff in any contested hearings.

[13]            I decline to make timetabling orders for the further particulars hearing at this point.

2      Keemati Ltd v Mr Civil Ltd [2021] NZHC 538.

Further timetabling

[14]            The defendants also request further timetabling orders for the filing of affidavits, interlocutory applications arising from discovery, and if no further interlocutory applications are filed, for orders as to the plaintiff’s proposed evidence, the defendants’ proposed evidence, and a trial date.

[15]            Again, I decline to make such orders at this stage. To do so without the plaintiff being represented by counsel would be pointless. Undoubtedly variations in any orders would need to be made following appointment. Further, there can be no certainty as to whether more interlocutory applications will emerge once counsel is involved. I appreciate the need for timely progression, but to make such orders in the present circumstances would be pointless and, arguably, counter-productive.

[16]            Instead, the Registrar is to set a date for the first case management conference after counsel for the plaintiff is appointed. The conference will be scheduled with a view to setting a date for the further particulars hearing, addressing any other interlocutory matters, making related timetabling orders and setting a trial date.

Result

[17]I make the following orders:

(a)the plaintiff must pay the security of $27,404 to the Court in cash by

5:00 pm on Friday, 21 May 2021;

(b)the plaintiff must appoint counsel by 5:00 pm on Friday 28, May 2021 if it wishes to pursue its claim. A memorandum informing the Court and the defendants of the appointment must be filed by the same date; and

(c)the first case management conference is to be listed by the Registrar after counsel is appointed for the plaintiff.

Moore J

Solicitors:
Chapman Tripp, Auckland

Copy to:
The Plaintiff