Malley & Co v Burgess
[2015] NZHC 841
•28 April 2015
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
CIV-2010-009-2712 [2015] NZHC 841
BETWEEN MALLEY & CO
Plaintiff
AND
GARY OWEN BURGESS Defendant
Hearing: 28 April 2015 (On the papers) Appearances:
M Cowan for Plaintiff
Defendant in personJudgment:
28 April 2015
JUDGMENT OF DUNNINGHAM J
[1] This decision records the outcome of a further battle in the ongoing litigation between Mr Burgess and his former lawyers, Malley & Co.
[2] Malley & Co have sued Mr Burgess seeking payment of their fees for the work they did for Mr Burgess on his relationship property dispute. Mr Burgess counterclaimed asserting seven causes of action which include that Malley & Co were in breach of various duties owed to him as his legal advisers and have caused him losses, which are not all quantified, but which vastly exceed the firm’s claim for unpaid fees.
[3] Malley & Co’s proceedings were originally brought in the District Court under matter number 2010-009-2712, and then as 2013-009-596. The matter has since by agreement, been transferred to this Court, where it had been hoped to progress Malley & Co’s claim for payment of fees, and Mr Burgess’s counterclaim for damages. However, at the case management conference on 23 February 2015,
the Court received an interlocutory application seeking strike-out of the plaintiff’s
MALLEY & CO v BURGESS [2015] NZHC 841 [28 April 2015]
defence to Mr Burgess’s counterclaim, or in the alternative, an unless order requiring the plaintiff to provide further and better particulars, as sought in a notice requesting the same that had been served on Malley & Co but not complied with (“the application”).
[4] Malley & Co, having received the application prior to the conference, filed a memorandum in advance of the conference responding to the application. I therefore made timetabling directions which included giving Mr Burgess an opportunity to respond to the comprehensive submissions filed by Malley & Co in opposition to his application.
[5] For completeness, I noted that Mr Burgess had not paid fees on the application and it would not be dealt with until that matter had been resolved. I am now advised by Registry staff that it has been.
Mr Burgess’s application for strike-out
[6] Mr Burgess’s application sought to strike-out Malley & Co’s statement of defence to his counterclaim saying it has failed to provide “proper and complete and explicit” particulars. He also claims that Malley & Co should be required to provide “further, better and more explicit particulars” of its claims against him in contract or quantum meruit.
[7] In the alternative, Mr Burgess has sought that Malley & Co be given five working days to provide an amended statement of defence to his counterclaim containing the further particulars he requests.
[8] Mr Burgess relies on r 5.48(2) of the High Court Rules to support his application. This sets out the requirement of a statement of defence:
(2) A denial of an allegation of fact in the statement of claim must not be evasive. Points must be answered in substance. If for example, it is alleged that the defendant received money, it is not sufficient to deny receipt of the particular amount. Rather, the defendant must deny receipt of that sum or any part of it, or set out how much was received. When a matter is alleged with circumstances it is not sufficient to deny it as alleged with those circumstances. In all cases a fair and substantial answer must be given.
…
[9] Mr Burgess asserts that Malley & Co has not provided any particulars of the debt that Mr Burgess has incurred to the firm. This includes the failure to provide particulars of the steps taken to progress Mr Burgess’s legal affairs including what instructions the firm received, what actions it took, what advice was given, and what filing and litigation it undertook on his behalf.
[10] These claims were extended in a subsequent memorandum filed by Mr Burgess on 14 March 2014, to include striking out Malley & Co’s statement of claim, but I accept that he is constrained to the relief sought in his application dated
22 February 2015.
Malley & Co’s position
[11] Malley & Co objects to the application for the strike-out or, in the alternative, for an unless order requiring further and better particulars.
[12] The firm says it has not and does not intend to respond to the notice Mr Burgess served requesting further or better particulars, nor does it consider the Court should require it to because:
(a) the notice did not comply with the relevant procedural requirements;
and
(b)the substance of the information requested has no merit and will not assist either the Court or the parties to the litigation.
[13] While I acknowledge the procedural deficiencies in the notice, including the various allegations of defective requests, it is the substantive reasons for resisting the request for the particulars that I choose to focus on. In this regard the plaintiff contends that:
(a) the statement of defence to the counterclaim fulfils the criteria of r 5.48(2) and (5) of the High Court Rules in that it gives fair notice of the grounds of defence and adequate particulars;
(b) any defect in the defence to Mr Burgess’s counterclaim is as a direct
result of the shortcomings in the pleading of the counterclaim; and
(c) to require further and better particulars would be contrary to the objective of the rules set out in r 1.2.
[14] In relation to the first contention, Malley & Co put particular emphasis on the already extensive history of this litigation. It has been the subject of various pre-trial determinations in the District Court, there have been three disciplinary complaints against the plaintiff, there has been a judicial review of the decisions of the Legal Complaints Review Officer, as well as further appeal proceedings which are still live. The issues in dispute have already been thoroughly articulated in those stages of the litigation and are well-known to the parties.
[15] Secondly, the assertions of deficiencies in the counterclaim emphasise the failure of Mr Burgess to comply with r 5.17(1).1 His pleading was not logical, failed to particularise the relevant breaches of duty and raised numerous matters of evidence, law or submissions. Malley & Co did its best to respond to the counterclaim when faced with that lack of clarity.
[16] Finally, Malley & Co asserts the objectives stated in r 1.2 are not being met. One of those is to secure speedy and inexpensive determination of proceedings. However, the work undertaken in pursuit of the original claim has already well exceeded the judgment sum sought by the plaintiff because of Mr Burgess’s conduct.
[17] Malley & Co also note that Mr Burgess’s further submissions filed on
14 March 2015 raised additional points, including seeking to strike-out the plaintiff’s
amended statement of claim, but noted that was simply not within the scope of the
22 February 2015 application.
1 High Court Rules, r 5.17(1): “Distinct causes of action and distinct grounds of defence, founded
on separate and distinct facts, must if possible be stated separately and clearly”.
[18] In summary, Malley & Co submits that the Court should: (a) dismiss the defendant’s application;
(b) allow the plaintiff’s defence to the counterclaim to stand; and
(c) award costs of the application in the plaintiff’s favour.
Applicable principles
Objective of the High Court Rules
[19] Rule 1.2 of the High Court Rules sets out their objectives. It states:
The objective of these rules is to secure the just, speedy, and inexpensive determination of any proceeding or interlocutory application.
[20] McGechan on Procedure describes this as the “governing yardstick” by
which all the High Court Rules are to be interpreted.2
[21] In Schmidt v BNZ Ltd, Jeffries J stated:3
Procedural rules are the servants of Court proceedings to achieve just, speedy and at the least cost, expedition of cases. The construction of Court rules should always be approached with care but with a readiness to apply them to meet the justice of the case which is manifest before a Court … Procedural rules are to a very significant degree generalised in their words, for they are to cover all situations for which they are to be applied.
[22] The rules, therefore, should be interpreted and applied in a way that ensures that Court proceedings are not overly burdensome, costly or drawn out. They should also be applied to meet the justice of the case and not to be an impediment to achieving that end.
5.21 Order for further particulars
[23] An order for further and better particulars can be made pursuant to r 5.21 of the High Court Rules:
2 McGechan on Procedure (online looseleaf ed, Brookers) at HR1.2.01.
3 Schmidt v BNZ Ltd [1991] 2 NZLR 60 at 63.
5.21 Notice requiring further particulars or more explicit pleading
…
(3) If the party on whom a notice is served neglects or refuses to comply with the notice within 5 working days after its service, the court may, if it considers that the pleading objected to is defective or does not give particulars properly required by the notice, order a more explicit pleading to be filed and served.
(4) Even if no notice has been given under this rule, the court may on its own initiative order a more explicit pleading to be filed and served.
[24] Rule 5.21(3) provides the Court with three options:
(a) If the Court considers that the pleading objected to is defective or does not give particulars properly required by the notice, the Court can make an order for a more explicit pleading to be filed and served; or
(b)If the Court considers that the pleading objected to is defective or does not give particulars properly required by the notice, the Court may apply its discretion to not made an order for a more explicit pleading to be filed and served; or
(c) If the Court concludes that the pleading objected to is not defective and does give particulars properly, there would be no need to make an order.
[25] The main point is that even if the Court finds that the pleading objected to is defective, the use of the word “may” affords the Court a discretion to not make an order. This allows the Court to make or decline to make orders in line with the stated objectives of the rules set out above.
[26] Rule 5.21 also needs to be read in light of the purpose of pleadings. In BNZ Investments Ltd v CIR, the High Court articulated:4
The temptation to insist upon excessively refined pleadings is to be resisted as unnecessary and wasteful of costs and Court time. That is particularly so
4 BNZ Investments Ltd v Commissioner of Inland Revenue (2008) 23 NZTC 21,821 at [45].
in complex cases, where over-pleading can obscure rather than clarify the issues. Case management should ensure that each side is fairly informed of the case that must be met.
[27] Pleadings are not required to be overly detailed or to deal with evidential matters. Rather:5
[T]he primary purpose of pleadings … is to define the issues and thereby to inform the parties in advance of the case they have to meet and so enable them to take steps to deal with it.
Anything beyond this is reserved for later on in the proceedings.
[28] The following discussion proceeds with these principles in mind.
Strike out of statement of defence
[29] Rule 15.1 deals with the dismissal of proceedings:
(1) The court may strike out all or part of a pleading if it—
(a) discloses no reasonably arguable cause of action, defence, or case appropriate to the nature of the pleading; or
(b) is likely to cause prejudice or delay; or
(c) is frivolous or vexatious; or
(d) is otherwise an abuse of the process of the court.
(2) If the court strikes out a statement of claim or a counterclaim under subclause (1), it may by the same or a subsequent order dismiss the proceeding or the counterclaim.
(3) Instead of striking out all or part of a pleading under subclause (1), the court may stay all or part of the proceeding on such conditions as are considered just.
(4) This rule does not affect the court’s inherent jurisdiction.
[30] Mr Burgess’s claims that the statement of defence contains inadequate particulars and lacks sufficient evidence are encompassed by r 15.1(1)(a), but again, I must consider whether the claims have any substance and, even if they do, whether
I should exercise any discretion to strike-out the pleadings.
5 Farrell v Secretary of State [1980] 1 All ER 166 (HL) at 173,
Discussion
Application for Further and Better Particulars
(a) Statement of claim
[31] Although sought in Mr Burgess’s subsequent submissions,6 the notice requesting further particulars did not seek further particulars of the plaintiff’s amended statement of claim. Furthermore, he has already filed a statement of defence to that statement of claim, prior to which no application for further particularisation was made.
[32] Even if the notice had sought such further particulars, I would still refuse to make an order. The particulars provided are adequate and compliant with the High Court Rules. Mr Burgess was able to respond to the allegations. There is no reason for the Court to apply its discretion under r 5.21(4) to require further particulars.
(b) The statement of counterclaim
[33] In respect of the alleged deficiencies in the statement of defence to the counterclaim, I consider that any such deficiencies are a direct consequence of deficiencies in Mr Burgess’s statement of counterclaim. In particular, Mr Burgess has consistently failed to comply with r 5.17(1) which states that, “[d]istinct causes of action … founded on separate and distinct facts, must if possible be stated separately and clearly”.
[34] The Court of Appeal, in Commissioner of Inland Revenue v Chesterfield
Preschools Ltd, has considered what is required of a statement of claim:7
· The pleading must be accurate, clear and intelligible.
·Sufficient particulars must be given to enable the defendant to be fairly informed of the case to be met.
6 Dated 14 March 2015.
7 Commissioner of Inland Revenue v Chesterfield Preschools Ltd [2013] NZCA 53, [2013] 2
NZLR 679 at [84].
·While adequate particulars are required, the statement of claim must not stray into setting out the evidence relied upon.
· Separate causes of action must be separately stated.
[35] Mr Burgess’s pleadings are neither clear nor readily intelligible. They are also prolix. His counterclaim consists of 112 paragraphs before setting out his seven general causes of action, some of which include subsidiary causes of action, and which stretch across another eight pages. In light of this, even if I were to find that the plaintiff’s pleadings had been deficient in some way, this would serve as a strong reason for the Court not to apply its discretion to make an order for further and better particulars of the pleadings in response. It would also not be in the interests of justice.
Deficiencies of the current application
[36] The same criticisms set out above equally apply to the current application for strikeout, or alternatively, for further and better particulars. The application itself lacks clarity and Mr Burgess’s accompanying memoranda and submissions are of marginal assistance.
[37] More importantly, there are problems with the particulars that were required by Mr Burgess in his notice for further and better particulars. The information he seeks can be broadly categorised as follows:
(a) evidence;
(b) matters of law;
(c) information already known to the defendant; (d) non-essential information;
(e) information of the plaintiff’s state of mind; and
(f) submissions from the plaintiff.
[38] By way of example, paragraph 111 of Mr Burgess’s counterclaim reads:
The firm, or partner, failed to take any action on or consider or respond to my fax about the draft consent orders. He ignored the concerns that the defendant had about the notice of claim. The defendant’s expressed concerns about this s42 notice obliged the firm, or partner, to consider the wisdom of this notice using his professional judgement (sic), and the firm, or partner, owed the defendant a duty of care in this regard. The defendant did not even correct the figure in para 6 from $140,000 to $165,000 as required by the defendant.
[39] Malley & Co deny that claim and the further particulars Mr Burgess sought are as follows:
(a) particulars of what action the firm took on receipt of my fax;
(b)particulars of the response Mr Tait made, to me, after receipt of my fax;
(c) particulars of the duties the firm owed the client on receipt of the fax; (d) particulars of the existence of a duty of care and its details;
(e) particulars of the firm’s actions on correcting the figure in paragraph 6 of the memorandum of consent orders;
(f) particulars of Mr Tait’s reassessment of the advantages and disadvantages of the memorandum of consent orders, following receipt of my fax.
[40] Malley & Co is not required to particularise information which falls into the categories listed above. The above example seeks further particulars which comprise evidence or matters of law. Even if one of the requested particulars possessed some merit, the difficulty would be locating this amongst the abundance of meritless requests.8 If Malley & Co cannot support its defences with the evidence provided in discovery and pre-trial exchanges, that will be reflected in the judgment. It is not for
the Court to pre-judge the case through such interlocutory skirmishing.
8 Noting the requests occupy an entire 10 pages of closely typed material.
[41] Finally, even where Malley & Co did provide detailed particulars in the statement of defence to the counterclaim, the defendant has still requested more. If the Court was to make an order requiring further and better particulars, it seems unlikely this would satisfy Mr Burgess’s demands. In light of the history of the pleadings, it would very likely provoke a complaint that the request was still not adequately fulfilled, and that more information should be provided.
[42] Having regard to the objective of the rules set out at r 1.2 and the current sufficiency of the response to inform the parties, the application for orders requiring the plaintiff to provide further and better particulars is dismissed.
Application for strikeout
[43] It follows from my conclusions on the application for further and better particulars that I am not prepared to strike-out the defence to the counterclaim on the basis that the plaintiff’s pleadings are inadequately particularised.
Outcome
[44] The application is dismissed in its entirety.
[45] The plaintiff seeks costs of the application. While increased or indemnity costs could well be said to be justified, in the exercise of my discretion as to costs I have decided to award costs in favour of Malley & Co on the usual basis. Accordingly, 2B costs are awarded in favour of the plaintiff.
[46] However, if further prolix and unmeritorious interlocutory applications are made by Mr Burgess, he risks an award of indemnity costs. The time has come for the substantive claim and counterclaim to be heard on their merits without further procedural wrangling.
Solicitors:
Parker Cowan Lawyers, Queenstown
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