North Harbour Nominees Limited v Stewart

[2020] NZHC 2292

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-379

[2020] NZHC 2292

BETWEEN

NORTH HARBOUR NOMINEES LIMITED
Plaintiff

AND

MELVIN DOUGLAS STEWART

First Defendant

THATT KIONG SHIM (Discontinued) Second Defendant

Hearing:

On the papers

Counsel:

D A Cowan for the Plaintiff

P J Morris for the First Defendant

Judgment:

4 September 2020

JUDGMENT OF GAULT J

This judgment was delivered by me on 4 September 2020 at 10:00 am pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

……………………………………

Solicitors:

Mr D A Cowan, Doug Cowan, Barrister & Solicitor, Auckland Mr P J Morris, Stace Hammond, Hamilton

NORTH HARBOUR NOMINEES LTD v STEWART [2020] NZHC 2292 [4 September 2020]

[1]                 On 13 May 2020 I entered summary judgment for the plaintiff (North Harbour Nominees Ltd) against the first defendant (Melvin Stewart) unopposed, for:1

(a)$19,127,157.83 (including interest to 12 May 2020).

(b)Interest of 10 per cent continuing to accrue on the $19,127,157.83 on a compounding basis from 12 May 2020.2

(c)Solicitor-client costs of $8,053.15 plus disbursements of $1,499.99.

[2]                 However, Mr Stewart applied on 29 May 2020 for an order setting aside the summary judgment on the primary ground that the plaintiff sought summary judgment as a result of a miscommunication and a miscarriage of justice would occur if the judgment were not set aside.  The plaintiff consents to the judgment being set aside.  I requested further details about the miscommunication as well as clarification as to the basis on which Mr Stewart applied to have the judgment set aside (given reliance was placed upon r 15.10 rather than r 12.14 of the High Court Rules 2016).

[3]                 Mr Stewart’s counsel has provided further details in a memorandum  dated  26 August 2020, with an affidavit of Michael Reeves filed in support. Mr Reeves is a consultant retained by and contracted to the plaintiff, and assists its directors in negotiating with its creditors, debtors and other commercial matters. Mr Reeves says that on or about 28 February 2020, after it seemed as if they were unable to negotiate with the defendant debtors, he and Mr Simunovich (one of the directors of the plaintiff company) instructed solicitors to file this claim and pursue it. The COVID-19 crisis then occurred, and Mr Reeves became distracted by commercial clients under immense financial stress alongside personal matters. As a result, both Mr Reeves and Mr Simunovich did not advise the solicitors engaged that they were dealing with the defendant debtors directly and, importantly, that a commercial agreement was being negotiated which would dispense with the need for these proceedings. Mr Reeves acknowledges the plaintiff continued with the proceedings in error and on behalf of the plaintiff confirms that it does not oppose the order being set aside.

1      Minute dated 13 May 2020.

2      In accordance with the following formula, and on a daily basis: new daily amount = ([previous amount x 0.10/365 x a number of days to be applied] + previous amount).

[4]Counsel now relies on r 12.14 of the High Court Rules 2016:

12.14   Setting aside judgment

A judgment given against a party who does not appear at the hearing of an application for judgment under rule 12.2 or 12.3 may be set aside or varied by the court on any terms it thinks just if it appears to the court that there has been or may have been a miscarriage of justice.

[5]                 Mr Stewart filed no documents in opposition to the summary judgment application and did not  appear  at the hearing.  Accordingly,  the jurisdiction under  r 12.14 is engaged.

[6]                 A Court’s decision as to whether to set aside a summary judgment is discretionary.3 It is not strictly necessary to inquire into the merits of the judgment, as it was irregularly obtained.4 I am satisfied the explanation given by Mr Reeves adequately explains the miscommunication. As indicated, the plaintiff consents to the judgment being set aside.

[7]                 I accordingly grant the application by the first defendant to set aside the summary judgment.

[8]The parties have confirmed there is no issue as to costs.

Gault J

3      Garry v Denning Ltd v Wright [1989] 1 NZLR 45 (HC) at 49.

4      ANZ Banking Group (New Zealand) Ltd v Ord (2000) 14 PRNZ 31 (HC) at 39.