Mills v Dalzell

[2024] NZHC 581

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE

CIV-2024-441-22

[2024] NZHC 581

BETWEEN

LYNETTE JOY MILLS

First Plaintiff

CARL JAMES PETERSON
Second Plaintiff

THE PETERSON/MILLS PARTNERSHIP
Third Plaintiff

AND

KELLY DALZELL

First Defendant

TRACY HOWARD LEVENBACH

Second Defendant

THE ASB BANK LIMITED, AUCKLAND
Third Defendant

GRAHAM HOWARD-MILLS
Fourth Defendant

JOHN LEVENBACH
Fifth Defendant

CAROL KRAMMER
Sixth Defendant

HOLLAND BECKETT
Seventh Defendant

… continued

Hearing:	On the papers
Judgment:	18 March 2024

JUDGMENT OF RADICH J

MILLS v DALZELL [2024] NZHC 581 [18 March 2024]

… continued

MINTER ELLISON RUDD WATTS
Eighth Defendant

MORGAN COAKLE
Ninth Defendant

A J JOHNSTON

Tenth Defendant

JEREMY SPARROW
Eleventh Defendant

SEBASTIAN HARTLEY
Twelfth Defendant

STACEY MICHELSEN
Thirteenth Defendant

SEAN GOLLIN

Fourteenth Defendant

BRIAR WEBSTER
Fifteenth Defendant

K PERRET
Sixteenth Defendant

WALDO ABRIE
Seventeenth Defendant

[1]    On 11 March 2024, Ms Mills and Mr Peterson, the plaintiffs, filed this proceeding naming 17 defendants. A Registrar has referred the proceeding to me under r 5.35A of the High Court Rules 2016 on the basis of a belief that, on the face of the proceeding, it is plainly an abuse of the process of the Court.

[2]    If, in terms of r 5.35B, I am satisfied that the proceeding is plainly an abuse of the process of the Court, then I may, of my own initiative, make an order or give directions to ensure that the proceeding is disposed of or, as the case may be, proceeds

in a way that complies with the rules including an order under r 15.1 that the proceeding be struck out or stayed.

[3]    The nature of the powers conferred under r 5.35B were described recently by the Court of Appeal in Te Wakaminenga o Nga Hapu Ki Waitangi v Waitangi National Trust Board in the following terms:1

[14]      The powers conferred under r 5.35B reflect the inherent power all courts have to prevent their own procedures from being misused, for example as a means of oppression or otherwise in a way that is manifestly unfair such that the administration of justice will be brought into disrepute. Lord Bingham described abuse of process as simply being “a use of the court process for a purpose or in a way which is significantly different from the ordinary and proper use of the court process”. Courts have a duty to prevent such abuse.

[15]      The powers under r 5.35B must be exercised sparingly, and only in the clearest of cases. Given that the rule contemplates a litigant being denied the fundamental right of access to the courts, with the possibility of the proceeding being halted before it is even served, the abuse must be clear beyond doubt from reading the claim.

[4]    The Court made the point that the power should not be used in cases in which a claim sought to be advanced may later be shown to be untenable as a matter of law, particularly in circumstances where, as there, certain key factual and legal issues were not clear at that early point in the proceedings.2 Rather, as the Court emphasised, it must be clear that plaintiffs are seeking to use the processes of the Court for some ulterior or improper purpose.3

[5]    When considering the application of r 5.35B, the broad public interest and the private interests of individuals who may otherwise be drawn into entirely unmeritorious proceedings are to be considered and must be weighed against the right of a litigant to bring proceedings.4

[6]    It will be an abuse of process if a plaintiff endeavours to relitigate claims that have already been determined, including through a proceeding that brings collateral challenges to claims that had been already determined. For example, in Young v Ross,

1      Te Wakaminenga o Nga Hapu Ki Waitangi v Waitangi National Trust Board [2023] NZCA 63.

2 At [16].

3 At [17].

4      Jones v New Zealand Bloodstock Finance and Leasing Ltd [2021] NZHC 3220 at [20].

an attempt to use a judicial review proceeding to resurrect claims that had been dealt with conclusively, with all rights of appeal exhausted, was struck out.5 Similarly, in Re McNab, it was found that a proposed proceeding was plainly an abuse of process as it sought to challenge collaterally, and raise issues that had been dealt with already in, previous decisions of the Court.6 The proceeding was struck out under r 5.35B(2).

[7]    The allegations made, and the causes of action, in the statement of claim in this proceeding show clearly that it is an attempt to relitigate matters that had been determined conclusively already. Previously, the same plaintiffs7 brought proceedings against the parties that are now cited as the first to sixth defendants. The “new” parties, cited as the seventh to seventeenth defendants in this proceeding, are, in all but one case, solicitors or counsel for the first to sixth defendants. The exception is  Associate Judge Johnston who gave a decision in which he struck out the previous proceeding.

[8]    The subject matter in this proceeding, in all relevant ways, mirrors that in the previous proceeding. Ms Mills, the first plaintiff, and Mr Howard-Mills, the fourth defendant, had been in a relatively long-term relationship. In the initial proceeding and in this proceeding, the first and second plaintiffs allege that banking facilities with the ASB Bank were entered into fraudulently by Mr Howard-Mills through his use of the surname of the first plaintiff Ms Mills. It is said that by using Ms Mills’ surname, instead of his own, when entering into arrangements with the bank, fraud was committed in relation to a range of transactions. It is pleaded that ASB Bank managers and employees are complicit in the fraud. The claims in both cases include allegations of a breach by the ASB Bank of its fiduciary obligations to the plaintiffs and claims under the Credit Contracts and Consumer Finance Act 2003.

[9]    Associate Judge Johnston struck all of the claims out.8 In addressing the cause of action for fraud, the Associate Judge said:9

5      Young v Ross [2023] NZHC 2795.

6      Re McNab [2018] NZHC 1817, (2018) 24 PRNZ 224.

7      With the exception of the third plaintiff in this proceeding, which is a partnership between the first and second plaintiffs.

8      Mills & Anor v Dalzell & Ors [2022] NZHC 2439.

9 At [51].

In this case, not only is the pleading opaque in the extreme, but there is no evidence at all to support the allegations of fraud made by Mr Peterson and Ms Mills against ASB and its officers (a Mr Mills). They are merely allegations.

[10]   The Associate Judge found, in addition, that the proceeding was an abuse of process having regard to the terms of a settlement deed (enforceable also by the first and second defendants cited in this proceeding as employees of the ASB Bank) and that the claims to which the proceeding related were time-barred.10

[11]   The plaintiffs appealed to the Court of Appeal. They were unsuccessful in seeking an order dispensing with security for costs.11 Then, having sought and obtained certain extensions of time, ultimately, the appeal was deemed to be abandoned under r 43(1) of the Court of Appeal (Civil) Rules 2005 following which the Court of Appeal declined an application for an extension of time.12 In declining the application, the Court of Appeal considered the underlying causes of action and agreed with Associate Judge Johnston’s assessment that the plaintiffs’ case was “hopeless”.13

[12]   The plaintiffs applied to the Supreme Court for leave to appeal. The application was dismissed.14 The Supreme Court said:15

Nothing raised by the applicants indicates evident error in the assessment of merits made in the High Court in light of the contents of the settlement deed, and endorsed by the Court of Appeal or in the Court of Appeal’s application of the principles stated by this Court in Almond v Read”.

[13]   The statement of claim the plaintiffs have now filed, just a month after the Supreme Court’s decision, is quite clearly an attempt to relitigate the same issues. It is centred upon the same underlying factual allegations and the same allegations of fraud. In the statement of claim itself, the plaintiffs have said that “although many of the claims held herein mirror the claims in the above proceeding relating to the fictional Graham Mills, the fact that they are directed at a real legal person rather than

10     At [61] and [85].

11     Mills v Dalzell [2023[ NZCA 68.

12     Mills & Anor v Dalzell & Ors [2023] NZCA 458.

13 At [27].

14     Mills & Peterson v Dalzell [2024] NZSC 6.

15     At [6], referring to Almond v Read [2017] NZSC 80, [2017] 1 NZLR 801 at [36–[40].

a legal fiction preclude any notion of estoppel”. This point is a reference to the plaintiffs’ view that because a named plaintiff in the previous proceeding was Graham Mills – regarded by the plaintiffs now as a fictional name – and because they have cited him in the present proceeding as Graham Howard-Mills, the allegations of fraud can be brought again despite the decisions of the High Court, the Court of Appeal and the Supreme Court that I have mentioned.

[14]   New defendants are added to this proceeding. As I have observed already, they are all solicitors who have been involved in some way or another with the first to sixth defendants. In some cases they are counsel for those parties in the previous proceedings. It is alleged that the solicitors and counsel involved knew about the alleged fraud and so committed fraud themselves, or, alternatively, breached fiduciary duties. And allegations are made against the Associate Judge who gave the decision in the previous proceeding for having, through that decision, “conspired with the defendants and the defendants’ attorneys to ignore the Graham Howard-Mills frauds against the Court and against these plaintiffs, making him complicit in the crime and the frauds resulting”.

[15]   This Court has already held that there is no basis at all to support the allegations of fraud made by Mr Peterson and Ms Mills against the first to sixth defendants. Equally, therefore, there is no basis to say that their solicitors or counsel were complicit or that the Judge who made the relevant findings could somehow have furthered the fraud.

[16]   The allegations made in the causes of action in this proceeding are based upon the same underlying issues that have been struck out by the High Court and in circumstances where both the Court of Appeal and the Supreme Court have expressed their support for that finding. Plainly in my view the proceeding is an abuse of process. This is, in the sense described by the Court of Appeal in Te Wakaminenga o Nga Hapu Ki Waitangi, a case in which the abuse is clear beyond doubt from reading the claim.

Result

[17]   Accordingly, the pleading is struck out and the proceeding is dismissed. Under r 5.35B(4), a copy of this decision is, if practicable, to be served on the defendants.

[18]   Under r 5.35B(3) if, as is the case here, an order is made on the Judge’s own initiative, without giving the plaintiffs an opportunity to be heard, the order is to contain a statement of the rights that the person who filed the proceeding has to appeal against the decision. Under s 56 of the Senior Courts Act 2016, the plaintiffs have a right to appeal against this decision to the Court of Appeal. That right may be exercised through the application of relevant rules in the Court of appeal (Civil) Rules 2005.

Radich J

Solicitors:

Minter Ellison Rudd Watts, Auckland for First and Third Defendants Holland Beckett, Tauranga for Fourth Defendant

Morgan Coakle, Auckland for Fifth and Sixth Defendants