Mather v O'Keeffe

[2012] NZHC 2240

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

CIV 2010-470-0175 [2012] NZHC 2240

BETWEEN  SUSANNE DOROTHY MATHER Plaintiff

ANDJOANNE MAREE O'KEEFFE AND JUDITH FAYE OXNAM

Defendants

Hearing:         31 August 2012

Counsel:         P F Gorringe for Plaintiff

No appearance by, or on behalf of Defendants

Judgment:      31 August 2012

(ORAL) JUDGMENT OF HEATH J

Solicitors:

O’Sheas, PO Box 460, Hamilton
J K Hamilton, PO Box 201, Seventh Avenue, Tauranga
Counsel:

P F Gorringe, PO Box 7098, Hamilton

MATHER V O'KEEFFE HC TAU CIV 2010-470-0175 [31 August 2012]

The application

[1]      Ms Mather applies for judgment on an admission of claim that was signed by

both defendants, Ms O’Keeffe and Ms Oxnam.

[2]      The application was made on 28 August 2012.  It was served that day on the address for service of the two defendants, showing that the application would be called in this Court at 2.15pm today.  The solicitor acting for Ms O’Keeffe and Ms Oxnam has indicated by email to counsel for Ms Mather that there is no opposition to the application.

[3]      No appearance has been entered.   An affidavit of service has been filed. Notwithstanding that, I propose to give a short judgment today with reasons for my decision to grant the application, should any issues arise as to the correctness of the order later.

Introduction

[4]      In  June  2005,  Ms  O’Keeffe  and  Ms  Oxnam  were  in  need  of  money  to refinance  a  business  that  they  operated  through  their  company,  Ridge  Country Retreat Ltd.  They discussed this with Ms Mather.  She did not possess funds from which a loan could be made.   However, she offered her property at 10 Hanwood Way, Pyes Pa, Tauranga as security to a third party that may be prepared to advance funds on mortgage.

[5]      Ms O’Keeffe and Ms Oxnam arranged a loan of $342,400.  The money was obtained from TEA Custodians (Bluestone) Ltd (TEA).  It was secured against Ms Mather’s property.  Contemporaneously, Ms O’Keefe and Ms Oxnam entered into a written agreement with Ms Mather, in their capacity as trustees of the Ridge Horticulture Trust. They had borrowed from TEA in that capacity.

[6]      Ms  O’Keeffe  and  Ms  Oxnam,  in  both  their  capacities  as  trustees  and personally, promised Ms Mather to make all payments to TEA as they fell due and, in the event of default, to grant a first mortgage over a property owned by the Trust

at 300 Rocky Cutting Road, Tauranga.   That agreement was signed on 25 August

2005, about 10 days after TEA had advanced  moneys to Ms O’Keeffe and Ms

Oxnam.

[7]      That   mortgage   has   subsequently   been   rendered   worthless   through   a mortgagee sale conducted by the first mortgagee.  There were insufficient funds to meet the first mortgagee’s debt and no balance to pay to Ms Mather.

The proceeding

[8]      This proceeding was commenced so that Ms Mather could recover from Ms

O’Keeffe and Ms Oxnam losses that she suffered when the loan fell into default.

[9]      The TEA mortgage was registered over Ms Mather’s property on 21 July

2005.   Between December 2008 and February 2010 arrears totalling $46,155.26 were incurred.   TEA took steps to collect the debt by threatening to call up the mortgage over Ms Mather’s property.   In order to prevent a mortgagee sale, Ms Mather  paid  those  arrears.    She  now  seeks  judgment  to  recover  those  moneys together with the principal outstanding and any other costs that might be secured by the mortgage.  On payment to TEA she would be entitled to call for a discharge of the mortgage.

The application for judgment on admission

[10]     As indicated earlier, Ms Mather seeks judgment on an admission signed by Ms O’Keefe and Ms Oxnam that was tendered to her on or about 13 October 2010, as part of an agreement to settle the proceeding.   The proceeding itself had been issued on 15 March 2010.   On the face of the document, if the application were granted, Ms  Mather  would  be entitled  to  judgment  in  the  sum  of $422,833.88. However, Ms Mather accepts that Ms O’Keeffe and Ms Oxnam have subsequently made payments that should be subtracted from that sum.   The amount for which judgment is sought today is $386,281.98.

[11]     The application came before me initially on 19 July 2012 on the papers.  I declined to enter judgment because of doubts about the jurisdiction to do so.   I established a timetable for a formal proof hearing.   Instead,  the application for judgment on admission has been renewed, with Mr Gorringe making submissions on behalf of Ms Mather on her entitlement to have judgment entered on the admission on a basis that is slightly different to that made earlier.

[12]     The jurisdictional question that I raised turned on the way in which r 15.16 of the High Court Rules is expressed.  In particular, whether it was open to a plaintiff to file an admission to obtain judgment.  Rule 15.16 provides:

15.16  Admission of cause of action

(1)   At any time after a party has been served with a notice of proceeding, that party may file and serve (separately from the party's pleadings) an admission of all, some, or part of the alleged causes of action on all other parties to the proceeding.

(2)  An admission can be withdrawn only with the leave of the court.

(3)   When an admission is filed and served under subclause (1), a party on whom the admission is served may seal judgment on the cause of action admitted, without prejudice to that party's right (if any) to proceed on any other cause of action.

(4)    An admission under subclause (1) relating to any cause of action in which a sum of money is claimed must state the exact amount admitted.

(5)  Any judgment entered on an admission filed and served under subclause

(1) may, upon application, be set aside by the court if—

(a)       the  plaintiff,  being  under  a  duty  or  obligation  to  the defendant  not  to  enter judgment  on  the  admission,  acted contrary to that duty or obligation in entering judgment; or

(b)      the plaintiff, in entering judgment, acted fraudulently, unconscionably, or in wilful or reckless disregard of the defendant's rights.

(6)    Upon an application under subclause (5), the court may direct that a proceeding be brought to determine whether judgment was wrongfully entered.

(7)  This rule does not affect rule 8.15. (Emphasis added)

[13]     I expressed those concerns, notwithstanding what is said in the commentary to McGechan on Procedure.[1]     In paragraph HC 15.16.01A of that text there is a suggestion that jurisdiction to seek judgment may be made in such circumstances. The relevant part of the commentary states:

[1] McGechan on Procedure (LexisNexis, looseleaf) HC 15.16.

It is common practice for an admission to be signed by the party served and held by the party serving for the party serving to file in the event that the party served defaults on the terms of a settlement.  Even though that is not strictly  in  accordance  with  the  words  of   HCR 15.16  such  filing  is nevertheless permitted by the rule.

[14]     One  basis  on  which  that  might  be  sustained  is  that  an  admission  made available  to  a  plaintiff  is  effectively  held  in  escrow,  pending  completion  of settlement.  It might be said that the plaintiff is then filing the document in an agency role.  However, given the way in which the application is now pursued, I do not need to determine that point.

[15]     Mr Gorringe now puts his case on the terms of r 15.15 of the High Court

Rules. That rule states:

15.15   Judgment on admission of facts

(1)   If a party admits facts (in the party's pleadings or otherwise), any other party to the proceeding may apply to the court for any judgment or order upon those admissions the other party may be entitled to, without waiting for the determination of any other question between the parties, and the court may give any judgment or order on the application as it thinks just.

(2)  This rule is not affected by rules 15.16 and 15.17.

[16]     By analogy, Mr Gorringe has referred me to a judgment of Doogue J in Sealord Charters Ltd v The Ship “Efim Gorbenko”,[2]  as an example of entry of judgment on the basis of facts acknowledged in a settlement agreement.   In the course of his judgment, Doogue J made some general observations about the breadth of the predecessor to r 15.15, r 292 of the High Court Rules.  His Honour said:

[2] Sealord Charters Ltd v The Ship “Efim Gorbenko” HC Wellington AD369/96, 9 December

1996.

Rule 292 expressly provides that “Where admissions of fact are made by a party to a proceeding either by his pleadings or otherwise ...” [my emphasis] there can be an application for judgment.   It is true that the Court has a discretion  as  to  whether  judgment  is  entered,  and  it  is  not  suggested

otherwise.   On the face of it, however, there is an acknowledgement that entitles Sealord to judgment and not one limited to a judgment in personam as suggested for A/O Novorossiyskyrbprom.

[17]     I  am  satisfied,  on  the  basis  of  Mr  Gorringe’s  submissions,  that  r 15.15 provides a source of jurisdiction for the application.  The admission of claim, I am satisfied, was signed by Ms O’Keeffe and Ms Oxnam in respect of each cause of action.  It also admitted Ms Mather’s ground of defence to their counterclaim.

[18]     I am also satisfied that the original of the admission of claim has been lost.  I treat the photocopy of the signed admission as the best evidence available and act on it.

[19]     Also while Ms O’Keeffe’s name is wrongly spelt as  “McKeeffe” on the intitulment to the admission, it is plain that it relates to this proceeding and is shown to have been signed by Ms O’Keeffe in the body of the document.

Result

[20]     For those reasons,

(a)      Judgment is entered on admission in the sum of $386,281.98 in favour of Ms Mather against Ms O’Keefe and Ms Oxnam, on a joint and several basis.

(b)      Judgment is also entered for Ms Mather on the counterclaim brought

by Ms O’Keeffe and Ms Oxnam.

(c)      One  set  of  costs  are  awarded.    They  are  awarded  against  each defendant  on  a  2B  basis  together  with  reasonable  disbursements. Both costs and disbursements shall be fixed by the Registrar.

[21]     Earlier, I had scheduled a hearing for this proceeding on 24 September 2012.

That hearing is vacated and appearances are excused.

P R Heath J