McKay v Johnson - [2016] NZHC 410

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-2511 [2016] NZHC 410

UNDER
Part 19 of the High Court Rules and

section 34 of the Receivers Act 1993

IN THE MATTER

of H.B. Garments Limited (in Liquidation and in receivership) and HAD Garments Limited (in liquidation and in receivership)

BETWEEN

ANDREW JOHN MCKAY Applicant

AND

CLIVE ASHLEY JOHNSON First Respondent

GEOFF MARTIN SMITH Second Respondent

Hearing: 10 March 2016

Appearances:

R B Stewart QC and J Caird for the Applicant
First Respondent discontinued
Second Respondent in person

Judgment:

10 March 2016

ORAL JUDGMENT OF MUIR J (Application for leave to file affidavit out of time)

Counsel:
R B Stewart QC, Barrister, Auckland

Solicitors:
J C Caird, Simpson Grierson, Auckland

Copy to: Second Respondent

MCKAY v JOHNSON & SMITH [2016] NZHC 410 [10 March 2016]

[1] Mr Smith applies for leave to file an affidavit in opposition to the liquidator’s compensation claims. Such affidavit, which was substantial and accompanied by in excess of 20 exhibits, was filed with this Court at 4.04 pm on the eve of the trial.

Background

[2] The background is conveniently recorded in the decision of Whata J dated

2 March 2016 (for which reasons followed1).

[3] For present purposes I need refer only to the orders made by Toogood J on 9

November 2015 and the subsequent orders made by Duffy J on 17 December 2015.

[4] When the matter came before Toogood J on 9 November it was in the context of a hearing allocated later that month. The applicant had settled against the first respondent and both the applicant and the second respondent sought to adjourn the hearing.

[5] The orders made by Toogood J required, inter alia, that Mr Smith was to file and serve any further affidavits by 5 pm on 2 December 2015.

[6] The order also recognised in [3(c)] Mr Smith’s consent to the applicant obtaining copies of all bank accounts with the Bank of New Zealand (BNZ) in the name of the relevant companies, Geoff Smith Liquidations Limited, or similar account names. The liquidator had previously identified the absence of such information as frustrating his attempts adequately to quantify his claims against Mr Smith. Access to those documents was subsequently given.

[7] When the matter came before Duffy J on 17 December 2015 she made orders relevant both to Mr Smith’s intended challenge to the inspection orders made by Brewer J on 10 December 2015 and in respect of the substantive (monetary) claims. She ordered that the “forensic expert’s report” and the evidence of Mr McKay (which I take to be a reference to evidence emerging from consideration of the BNZ accounts), be filed and served by 5 pm on 5 February 2016. She further ordered that
Mr Smith was to file his affidavit evidence “in response (if any)” (which must be

1 McKay v Johnson [2016] NZHC 357.

intended to be a reference to any response either to the forensic expert’s report or Mr

McKay’s evidence),…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading McKay v Johnson

Details

AGLC: McKay v Johnson [2016] NZHC 410
Case: [2016] NZHC 410
Decision Date: 10 March 2016

CaseChat Overview and Summary

The case of McKay v Johnson & Smith involves an application for leave to file an affidavit out of time, with Andrew John McKay being the applicant and Clive Ashley Johnson and Geoff Martin Smith being the respondents. The dispute revolves around the liquidator's compensation claims against Mr Smith, with Mr Smith applying for leave to file an affidavit in opposition to these claims, which was filed late on the eve of the trial. The High Court of New Zealand, Auckland Registry, heard the matter on 10 March 2016.

The legal issues before the court were whether Mr Smith should be granted leave to file his affidavit out of time and, if so, whether this would result in a just adjournment of the case. The court had to balance the interests of justice with the need to maintain the efficient administration of justice and adhere to the court's timetable orders.

The court, in its judgment, granted Mr Smith leave to file his affidavit out of time, recognising the substantial nature of the claim against him and the potential injustice of not allowing his defence to be fully ventilated. The court, however, also ordered an adjournment part heard to allow the applicant to respond to the new evidence and set new timetables for further submissions and evidence. The court further awarded costs to the applicant, recognising the additional costs incurred due to the late filing of the affidavit.

The court's final orders included provisions for the filing and serving of further affidavits by both parties, the allocation of a further fixture date for the case, and an "unless" order for the payment of costs to prevent the respondent from further defending the claims. The court encouraged discussions between the parties for a possible resolution of the claims, while making it clear that the orders were not to be regarded as suspended.

Orders