Krzanic v Sullivan
[2015] NZHC 2974
•26 November 2015
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2013-404-005275 [2015] NZHC 2974
BETWEEN MARINA ZELKA KRZANIC
First Plaintiff
AND
DRAGI PETER KRZANIC AND LUTKA KRZANIC AND MARINA ZELKA KRZANIC Second Plaintiffs
AND
TIMOTHY PETER SULLIVAN Defendant
Hearing: 18 November 2015 (via audiovisual conference) Appearances:
H N McIntosh for the Plaintiffs
No appearance for the DefendantJudgment:
26 November 2015
JUDGMENT OF NATION J
Introduction
[1] On 6 August 2015, the first plaintiff obtained judgment against her former partner in respect of undisputed loans together with interest and costs. The second plaintiffs obtained judgment for $200,000 in respect of another undisputed loan together with interest and costs. At the same time, I stayed those judgments until the further order of the Court on terms. Those terms essentially required Mr Sullivan to diligently and efficiently prosecute in the Family Court applications he said he intended to make under the Property (Relationships) Act 1976.
[2] After Mr Sullivan had failed to meet the terms of the stay with regard to the prosecution of relationship property applications, on 16 September 2015 the
plaintiffs filed an interlocutory application for an order lifting the stay supported by
KRZANIC v SULLIVAN [2015] NZHC 2974 [26 November 2015]
an affidavit. That application was initially dealt with in a telephone conference on
20 October 2015 but was adjourned for hearing on 18 November 2015 at 2.15 pm. The hearing was to proceed by way of an audiovisual link with Mr Sullivan or his counsel and counsel for the plaintiffs to attend at the High Court at Auckland with my sitting in Christchurch. As it transpired, the audiovisual link took place with my sitting in the High Court in Dunedin.
[3] Mr McIntosh appeared as counsel for the plaintiffs. There was no appearance by Mr Sullivan or by counsel on his behalf. The hearing proceeded in his absence. This judgment follows on from that hearing.
Request for adjournment
[4] By a memorandum of 16 November 2015, Mr Sullivan personally, through a
16 paragraph typed memorandum, sought an adjournment of the hearing advising the Court that he assumed the matter had been adjourned until a time when he would be “well enough to participate”. With the memorandum was a letter from a Dr Gerald Young. That letter referred to the injuries Mr Sullivan had suffered in a serious motorcycle accident on 14 October 2015 and the fact that he was “on strong analgesia” while fractures were healing. The doctor said:
As a result of these injuries and a strong analgesia, he is not able to attend to the preparation for the hearing scheduled for 27 November 2015.
He is unlikely to be medically fit to attend any hearing for a minimum of two months.
[5] In his memorandum, Mr Sullivan said that, other than receiving an email from the case manager in the High Court at Auckland, Ms Wong, he “had no advice from the Court of a hearing date, a hearing notice or reminder”. He made statements as to being on “huge amounts of medication” and being “unable to work”. He said he was required to sleep during the day. He asked that the matter be adjourned until February “when I am fit to participate and complete the large amount of work and preparation that is required for both this matter and the relationship property matter”.
[6] On 16 November 2015, counsel for the plaintiffs filed a memorandum in response opposing any adjournment, advising that he intended to appear at the
scheduled hearing and confirming that he would be travelling to Auckland to attend the hearing. In that memorandum, Mr McIntosh also referred to the fact that there had been clear notice to Mr Sullivan of the hearing scheduled for 18 November 2015 in my minute of 28 October 2015 which was issued after the telephone conference of
20 October 2015, a minute which was sent to Mr Sullivan by the Registrar (Ms Wong) with an email of 28 October 2015. That email and minute was emailed to Mr Sullivan’s email address which he has used throughout the proceedings. Mr McIntosh’s memorandum referred to the fact that Mr Sullivan had been able to draft and sign his memorandum and had been driving his car and attending social functions for some time. It also suggested Mr Sullivan would have been able to instruct counsel and there had been no appeal from the Family Court’s decision striking out relationship property proceedings, such as they were, in that Court.
[7] On 17 November 2015 the plaintiff, Ms Krzanic, swore an affidavit. In that affidavit she said the solicitor she had engaged with regard to relationship property proceedings had not received any notice of appeal from the Family Court’s decision of 14 October 2015 striking out Mr Sullivan’s relationship property application nor any other documents relating to such proceedings. She also referred to seeing Mr Sullivan driving his car on three different occasions during the day, on 7 November,
10 November and 12 November 2015, and again at a supermarket which it appeared he had driven to in Devonport on 16 November 2015.
[8] Mr Sullivan filed a document dated 17 November 2015 in response to this affidavit. In that document he acknowledged the occasions on which the plaintiff had seen him although he referred to the observations made by Ms Krzanic as evidence of the way she was harassing him. He confirmed that he does drive as he was permitted to for “appointments etc”.
[9] I am quite satisfied that Mr Sullivan was fully aware of the hearing which was scheduled for 2.15 pm on 18 November 2015 and for the need for him to either appear or be represented at that hearing. He had previously advised the Court that he had received advice from counsel in relation to these proceedings. Given the background to the present situation, despite his injuries, Mr Sullivan could and should have recognised the importance of the scheduled hearing through either
appearing himself or by arranging counsel to appear for him, if only to demonstrate to the Court that he was genuinely seeking to advance matters in the way that had been clearly required of him when the judgments were stayed.
[10] Against that background and against the further background which is outlined in this judgment, I did not adjourn the hearing.
Request for lifting of the stay
[11] Appearing for the plaintiffs, Mr McIntosh asked for an immediate lifting of the stay. He submitted, as is apparent from the documents which have been provided to the High Court from the Family Court, that Mr Sullivan had failed to comply with the directions of the Family Court with regard to the steps needed to advance a relationship property application in that Court and such proceedings as he had filed had been struck out before he suffered injuries in his motorcycle accident. Mr McIntosh submitted that, given the documents he had filed with the High Court, it would have been possible for him to arrange for the filing of a notice of appeal in relation to the Family Court decision striking out the application but he had not taken this step and the time for appealing that decision had now passed. He pointed out that no substantive documents had been filed in support of relationship property claims, despite Mr Sullivan telling this Court at the hearing on 3 August 2015 that he was ready to file immediately all the documents required to pursue such a claim.
[12] Mr McIntosh submitted that, because of Mr Sullivan’s failure to take the steps required of him before he had his motorcycle accident, the Court would have been justified in lifting the stay when the application to lift the stay was first dealt with at the hearing on 20 October 2015. The High Court, however, had given Mr Sullivan one last opportunity to oppose the application and to demonstrate that he was genuinely going to pursue the relationship property proceedings which he had told the Court in August 2015 that he was ready to file.
[13] Mr McIntosh submitted that, if the stay remained in place, there would be an injustice to the plaintiffs because of the indefinite delay and continuing uncertainty as to when they would be able to enforce the judgments which they had obtained against Mr Sullivan.
[14] I have had regard to those submissions in considering whether or not I should lift the stay which I granted with the judgment of 6 August 2015.
[15] I have also had regard to the information which Mr Sullivan has provided to the Court with regard to the injuries he sustained in his motorcycle accident and the opinions which have been expressed by doctors who have been treating him. I accept that his injuries and the medication he is receiving connected with those injuries may be making it more difficult for him to deal with the relationship property proceedings.
[16] However, in a memorandum to the Family Court, in anticipation of a conference in that Court scheduled for 14 October 2015, Mr Sullivan said he had intended to appoint counsel and had arranged an appointment for 13 October 2015, although that appointment had not taken place. Mr Sullivan’s communications with the Court, both in relation to the hearing scheduled for 20 October 2015 and this last hearing of 18 November 2015, demonstrate that he was able to communicate clearly with the Court and would have been able to give instructions to counsel.
[17] I do not consider his accident, his injuries or the medication he is taking would have prevented Mr Sullivan from showing his commitment to the steps required of him through, at the very least, instructing counsel to appear before me and to assist him with any proceedings he genuinely intended to pursue in the Family Court.
[18] The background to the plaintiffs obtaining judgment against Mr Sullivan is set out in my judgment of 6 August 2015. Mr Sullivan must have been aware of the need to pursue any claim arising out of his relationship with Ms Krzanic since at least May 2011 when she first commenced relationship property proceedings in the Family Court at North Shore. The proceedings in which the plaintiffs sought judgment in the High Court against Mr Sullivan were filed in December 2013. Mr Sullivan filed detailed statements of defence on 11 August 2014 but ultimately, on the eve of the hearing in relation to those proceedings, acknowledged that he had no defence to the claims.
[19] In a memorandum to the High Court of 29 July 2015, Mr Sullivan said “for the removal of doubt, I am happy to undertake to prosecute the relationship property claim expeditiously”. During the hearing on 3 August 2015, Mr Sullivan assured the Court and the plaintiffs’ counsel that he would be able to file all the documents required to pursue relationship property claims in the Family Court almost
immediately. My judgment of 6 August 2015 records his telling the Court that he:1
… was ready to file a new relationship property application with full supporting affidavits within days, was committed to pursuing those proceedings efficiently and would accept terms of a stay that required him to do so. He was able to pay the filing fees required by the Family Court in relation to these proceedings and was contemplating engaging counsel again to assist him with those proceedings.
[20] In granting a stay of the judgments that had been obtained by the plaintiffs, I made it clear that Mr Sullivan would be expected to abide by the assurances which he had given the Court as to pursuing any relationship property claims in the Family Court expeditiously. I also assisted Mr Sullivan by setting out my tentative impression of the sort of issues that would have to be dealt with in those proceedings. I set out the documents which would have to be filed in the Family Court and made it clear that he must comply with all directions of the Family Court.
[21] On 14 October 2015, Judge Partridge in the Family Court at North Shore
issued a minute. She recorded that a registrar’s conference had been set for 14
October 2015 to monitor compliance with directions which she made on 26 August
2015 with regard to steps Mr Sullivan had to take in relation to relationship property claims in that Court. She noted that the directions had been made with Mr Sullivan present and with his agreement and that she had recorded in her minute that, if the directions were not complied with in the timeframe indicated, the matter would be reconsidered by a Judge with a view to striking out the application which Mr Sullivan had filed earlier with that Court. The Judge noted that the 21 days’ time period for Mr Sullivan to take the directed steps had well lapsed. Mr Sullivan had not complied with her earlier directions. His application, such as it was, was struck
out for want of prosecution. This happened on 14 October 2015.
1 Krzanic v Sullivan [2015] NZHC 1861 at [27](c).
[22] Mr Sullivan had been on notice, since my judgment in the High Court of 6
August 2015, that he must comply with directions of the Family Court and pursue any relationship property claim efficiently as he had assured the Court he would do.
[23] What happened in the Family Court before Mr Sullivan’s motorcycle accident means that I must proceed now on the basis that Mr Sullivan’s statements as to his intent should not be accepted at face value, especially so when assessed against the full history of the proceedings before this High Court and various assertions he made or relied upon without evidence to support them.
[24] I am concerned that, in a number of his communications with this Court and the Family Court, rather than concentrate on what he needed to do if he was to pursue a relationship property claim, Mr Sullivan has made general statements as to how the plaintiffs’ pursuit of the debts due to them is unfair. Those statements, including statements contained in his most recent correspondence with the Court, strongly suggest to me that, rather than genuinely wanting to pursue claims under the Property (Relationships) Act in the Family Court, Mr Sullivan simply wants to put off paying the plaintiffs what is due to them because of a belief that they do not need the money and payment would be hard on him and his new family.
[25] During the hearing on 3 August 2015, counsel for the plaintiffs argued that, given the history of the proceedings to that date, any possible stay should be left for determination at a later date. Then, it was submitted the Court would be able to consider the merit of a possible stay against the actual evidence which Mr Sullivan was relying on with regard to potential relationship property claims, rather than mere statements as to what he was intending to do. Events since 6 August 2015 show that there was significant merit in that submission.
Conclusion
[26] Given this background, I consider a point has been reached where the plaintiffs are entitled to certainty as to when the stay will be lifted so that, from that point on, they will know they are able to take steps to enforce the judgments which they obtained on 6 August 2015. That ability will be subject to any rights which Mr
Sullivan may have to seek a stay or some other remedy in the circumstances that then apply.
[27] I am, however, taking into consideration the injuries which Mr Sullivan suffered in the motorcycle accident on 14 August 2015.
[28] In respect of the plaintiffs’ application to lift the stay, I direct as follows:
The order for stay of the judgment for the plaintiffs against the defendant on the terms set out in the judgment of 6 August 2015 is varied. That stay is now to be only on terms that it will continue to 28 February 2016. The stay will cease as from that date.
[29] The plaintiffs are entitled to costs on their interlocutory application for the lifting of the stay on a 2B basis together with disbursements as approved by the Registrar.
[30] With the stay to be lifted on 28 February 2016, any future steps that may be taken in relation to the judgments of 6 August 2015 will be managed through the High Court at Auckland.
Solicitors:
Greg Kelly Law Limited, Wellington
Kevin McDonald, Takapuna.
Copy to Hamish N McIntosh, Wellington
Copy to defendant
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