Kingston Village Limited v Prudential Mortgage Nominees Limited HC Dunedin CIV 2011-412-000421

[2011] NZHC 808

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

CIV 2011-412-000421

BETWEEN  KINGSTON VILLAGE LIMITED Plaintiff

AND  PRUDENTIAL MORTGAGE NOMINEES LIMITED

Defendant

Hearing:         4 July 2011

(Heard at Dunedin)

Appearances: R Smith for Applicant

Ms Judd for Respondent

Judgment:      7 July 2011 at 9:00 AM

REASONS FOR JUDGMENT OF ASSOCIATE JUDGE OSBORNE (AS TO DISCOVERY)

[1]      I heard argument and in fact delivered an oral judgment in Court immediately following.   For technological reasons which may relate to the aftermath of communications within Christchurch following the earthquakes, the dictation has not been retrieved.  The intention of this minute is therefore to address the findings and directions made without being able to exactly replicate the judgment delivered.

This proceeding

[2]      This proceeding involves Kingston Village’s application for an order that a caveat not lapse.  The Court on 15 June 2011 made an interim order that the caveat not lapse pending further order of the Court.

[3]      In the meantime, the applicant has by memorandum requested the Court to order discovery by the respondent.

KINGSTON VILLAGE LIMITED V PRUDENTIAL MORTGAGE NOMINEES LIMITED HC DUN CIV

2011-412-000421 7 July 2011

[4]      Mr Smith for the applicant accepts that a discovery order in relation to an originating  application  such  as  the  present  would  be  exceptional.     Without suggesting that the case is completely out of the ordinary, Mr Smith suggests that there is a need for the applicant to have access to the respondent’s documents in order to test properly the case against the respondent.

[5]      Briefly, the background to that submission is this.  The applicant wants title to land which it agreed to purchase from the registered proprietor of the fee simple. The respondent is mortgagee from the registered proprietor, with the mortgages pre - dating the applicant’s agreement to purchase the land.   In the normal event, the respondent would therefore have had the right to exercise its power of sale in the event the registered proprietor defaulted in its obligations.  The respondent says that the registered proprietor did default in its obligations and that the respondent has exercised its power of sale and has unconditionally sold the land.

[6]      Central to the grounds relied upon by the applicant in this proceeding is an allegation  that  the  respondent  had  knowledge  of  the  applicant’s  agreement  to purchase the land and that there has been some form of estoppel created by the respondent’s knowledge or acquiescence.

[7]      Mr Smith’s submission was that particular discovery of the respondent’s documents such as applications for mortgaged funds or associated documents and notes relating to plan changes and resource consents affecting the land would be relevant to issues before the Court.

Discussion

[8]      Mr Smith accepted that the High Court rules provide no right of general discovery or  of  particular  discovery in  a  proceeding commenced  by originating application.

[9]      Both counsel accepted that the Court has under the High Court Rules a discretion nevertheless to order discovery in appropriate cases.

[10]     Counsel in the time available had not been able to identify and refer me to any particular authorities.

[11]     During a brief adjournment which I took, research counsel was able to refer me to a decision of this Court in Hong Kong and Shanghai Banking Corporation Ltd v  Erceg  CIV 2010-404-2835  High  Court  Auckland  23  July 2010  (Asher  J).    I referred that authority to counsel and neither sought to make further submissions arising from it.

[12]     I consider the observations of Asher J in the Erceg case to represent an applicable  statement  of  general  principle  (not  withstanding  that  the  particular situation in the Erceg case was different).

[13]     In particular at [26] His Honour said in relation to the originating application procedure this, namely that –

[i]t is limited to cases where it is not necessary in the interests of justice for there to be the usual particularised pleadings, or interlocutory steps such as discovery, for the proper determination of the issues.   While the types of proceeding where the originating application procedure can be used as a right under r 19.2 have been expanded,  and  can  include  the  determination  of  substantive  and  personal  and property rights, this expansion does not create a carte blanche to commence any urgent matter by way of originating application.   If a party wishes to obtain an urgent hearing in a truncated procedure in such a circumstance, it should file a standard proceeding in the usual way and seek priority, or allocation to the Fast Track, or some other step within the ambit of the standard procedure that will reduce time limits.  A party should not treat the originating application procedure as a short cut for urgent cases.

[14]     In the present case, the applicant has proceeded by originating application. Such procedure is appropriate.  Affidavit evidence has been filed and the parties will have their right to give notice requiring cross examination if a deponent’s evidence needs to be tested (as, for instance, in relation to any issues of knowledge).

[15]     The  Court  has  available  hearing  time  in  early  August  to  deal  with  the application  in  a  timely  manner  for  the  benefit  of  both  parties.    Appropriate timetabling directions will have the proceeding ready for a hearing then.

[16]     I  therefore  declined  the  application  for  discovery  (whether  general  or particular).

Timetable

I adjourn the proceeding to a hearing of the application at 2.15pm 29 August 2011 at

Dunedin. (Counsel please note later date).

I direct:

[17]     Any further evidence to be filed by the respondent in opposition is to be filed and served by 11 July 2011.

[18]     The applicant shall file and serve not later than ten working days before the hearing:

(a)      Applicant’s submissions (Court’s copy to be in duplicate).

(b)       A chronology. (Court’s copy to be filed in duplicate).

(c)      An  assembly  of  the  relevant  Court  documents  in  two  segments, indexed and with each page numbered, Bundle 1 including pleadings, application, notice of opposition and the narrative part of affidavits and Bundle 2 being limited to the exhibits to affidavits.

(d)      The applicant’s submissions must contain:

i.         Reference (by bundle page number) to any specific passage in the evidence the applicant will refer to at the hearing; and

ii.        A list of the names and correct citations of any authorities mentioned.

[19]     The respondent shall file and serve not later than five working days before the hearing:

(a)      Submissions that meet the requirements of the applicant’s submissions (Court’s copy to be in duplicate); and

(b)If the respondent disagrees with the applicant’s chronology, a separate chronology noting areas of disagreement.   (Court’s copy to be filed in duplicate).

[20]     The applicant shall prepare and produce at the hearing of the application a bundle of all the authorities referred to in the submissions (excluding any authorities

referred to for straightforward and uncontentious propositions).

Associate Judge Osborne

Solicitors:

Wilkinson Adams, PO Box 803, Dunedin
Corcoran French, PO Box 15, Kaiapoi 7644 (M S Henderson)