McNaughton v McNaughton

[2022] NZHC 1424

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

I TE KŌTI MATUA O AOTEAROA TE PAPAIOEA ROHE

CIV-2022-454-26

[2022] NZHC 1424

BETWEEN

RICHARD MCNAUGHTON

Plaintiff

AND

JANET MCNAUGHTON

First Defendant

JAMES MCNAUGHTON

Second Defendant

Hearing:

16 June 2022

Appearances:

Plaintiff in person

M B Ryan for Defendants

Judgment:

16 June 2022

JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[1]    On 31 May 2021 the plaintiff in this proceeding, Mr Richard McNaughton, commenced a proceeding under CIV-2021-454-33.

[2]    Mr McNaughton discontinued that proceeding on 5 October 2021, filing and serving a notice of discontinuance that he had executed.

[3]    The respondents in that proceeding, Mr McNaughton’s parents, Mr James and Mrs Janet McNaughton, who are also the respondents in this proceeding, sought costs. Costs were resisted by Mr McNaughton. In a judgment dated 22 November 2022 the Court ordered Mr McNaughton to pay costs and disbursements totalling $8,455.50.

[4]Those costs have not been paid.

MCNAUGHTON v MCNAUGHTON [2022] NZHC 1424 [16 June 2022]

[5]    Subsequently, Mr McNaughton applied for an order “setting aside” his discontinuance. That application was dismissed in a judgment dated 28 April 2022.

[6]    Mr McNaughton has now commenced this proceeding in which his statement of claim is in more or less exactly the same terms as in the earlier proceeding.

[7]Rule 15.24 of the High Court Rules 2016 provides:

A plaintiff who discontinues a proceeding (proceeding A) against a defendant may not commence another proceeding (proceeding B) against the defendant if proceeding B arises out of facts that are the same or substantially the same as those relating to proceeding A, unless the plaintiff has paid any costs ordered to be paid to the defendant under rule 15.23 relating to proceeding A.

[8]There can be no doubt whatsoever that r 15.24 applies.

[9]    When this matter was called in the Associate Judge’s list earlier today, Mr Ryan for the respondents moved for an order striking the claim out on the basis that it should not have been commenced. Mr McNaughton resisted any such order.

[10]   Mr McNaughton first argued that he was proposing to add two causes of action in an amended statement of claim. On this basis he sought to distinguish this proceeding from the earlier proceeding. That is beside the point. The focus of r 15.24 is the factual foundation for the two proceedings, not the causes of action pleaded.

[11]   Mr McNaughton then reminded me that both proceedings were commenced pursuant to pt 18 of the High Court Rules 2016, and therefore that the Court was exercising its equitable jurisdiction. He went on to describe the circumstances in which he and his wife had acquired the property that is the subject matter of this proceeding, which they subsequently transferred to Mr McNaughton’s parents. The substantive issue is whether that was a conventional sale and purchase transaction as the respondents say, or, as Mr McNaughton says, a way for he and his wife to raise some money on terms which entitled them to reacquire the property when they could for the amount his parents had paid. Apparently, when the land in question was originally  subdivided,  the   Masterton   District   Council   took   a   bond   from   Mr McNaughton and his wife of $20,700 to ensure that they completed a driveway. Since then Mr McNaughton and his wife sold the property to his parents, they have

not carried out the necessary work. Accordingly, the Masterton District Council will not release the bond. Mr McNaughton contends that the Court should make some sort of order requiring the respondents to carry out that work so that the bond can be released to him which would then enable him to pay the costs that he was ordered to pay on the discontinuance of the earlier proceeding. In the meantime, he says that he should be allowed to continue to prosecute this proceeding.

[12]   Although I asked Mr McNaughton to explain this, I can see no link between the matters dealt with in the last paragraph and the issue before the Court (other than the obvious but irrelevant link that without the bond money Mr McNaughton cannot afford to pay the costs order).

[13]   In my assessment, Mr Ryan’s submission that Mr McNaughton was not entitled to commence this proceeding until he had paid the costs ordered against him in the earlier proceeding is unanswerable.

[14]   However, the fact of the matter is that the proceeding has been issued and the Registrar has accepted it for filing. In those circumstances, it seems to me that substantial justice will be done if I make an order pursuant  to  r 15.1(3)  of  the  High Court Rules staying this proceeding until such time as Mr McNaughton pays the costs awarded against him in the earlier proceeding. I approach matters in that way so as to avoid Mr McNaughton having to file and serve yet another duplicate set of papers and pay a further substantial filing fee.

[15]Costs are reserved and will be costs in the cause.

Associate Judge Johnston

Solicitors:

M V Ryan, Palmerston North for first and second respondents