P (SC 87/2012) v Bridgecorp Limited - [2013] NZSC 152

NOTE: EXTANT HIGH COURT ORDER PROHIBITING PUBLICATION OF NAME, ADDRESS OR IDENTIFYING PARTICULARS OF APPELLANT

IN THE SUPREME COURT OF NEW ZEALAND

SC 87/2012
[2013] NZSC 152

BETWEEN	P (SC 87/2012) Appellant
AND	BRIDGECORP LIMITED (IN RECEIVERSHIP AND IN LIQUIDATION) Respondent

Hearing:	25 July 2013
Court:	Elias CJ, McGrath, William Young, Glazebrook and Arnold JJ
Counsel:	C R Pidgeon QC and R S Pidgeon for Appellant No appearance by or for the Respondent
Judgment:	19 December 2013

JUDGMENT OF THE COURT

AThe appeal is dismissed.
BThere is no order for costs.

____________________________________________________________________

REASONS

Elias CJ [1]
McGrath, William Young, Glazebrook and Arnold JJ [64]

ELIAS CJ

Bridgecorp Limited claimed judgment against the appellant for a debt due under a deed of settlement of 21 September 2010.[1] Filed in the High Court at the same time as the notice of proceeding and statement of claim on 18 March 2011 were an affidavit by the receiver of Bridgecorp (certifying the unpaid debt), an undated admission of claim signed by the appellant at the time the settlement of 21 September 2010 had been entered into, and a draft judgment by admission.
[1]The exact date on which the deed of settlement was executed is unclear. I have adopted the date recorded in Bridgecorp Ltd v P HC Auckland CIV-2011-404-1573, 14 October 2011 at [11], but the precise date is not material.
By paragraph 1 of the terms of the undated admission of claim the appellant admitted the claim by Bridgecorp for the sum of $58,173.99, “together with”:
1.1interest at the rate of 10% per annum from 8 July 2010 to the date of judgment and from the date of judgment to the date of payment by the defendant;
1.2real estate agents’ charges incurred in relation to the plaintiff’s sale of XYZ Street, Auckland; and
1.3the plaintiff’s legal expenses, on a solicitor and own client basis,
as certified by the plaintiff’s receivers (or either of them).

Paragraph 2 of the admission of claim also provided that the appellant:

… consents to judgment being entered and enforced for the amounts set out at paragraph 1 above, and authorises the plaintiff to file this admission on his behalf pursuant to Rule 15.16 of the High Court Rules.

Clause 11 of the settlement deed provided:
In the event that [the appellant] fails to make any payment strictly in accordance with clause 3 above, time being of the essence, Bridgecorp may (without any further notice) file the admission of claim together with a statement of claim in the form annexed to this deed, and immediately enter and enforce judgment, and may seal judgment under the High Court Rules, against [the appellant] for the amount of the Debt then outstanding, plus interest in accordance with clause 6.2 above, less all payments made by [the appellant] pursuant to clause 3 above.
Bridgecorp sought to seal judgment for the amount of the claim in the form of the draft judgment supplied, in reliance on r 15.16(3) of the High Court Rules, which…

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.

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Details

Case: [2013] NZSC 152
Decision Date: 19 December 2013

CaseChat Overview and Summary

The case of P (SC 87/2012) v Bridgecorp Limited was heard before the court, which was tasked with deciding on the admissibility of a pre-action admission of fact and its implications under the relevant rules of civil procedure. The dispute arose between the parties in the context of a broader settlement negotiation, where the debtor made an admission of liability based on a draft statement of claim, with an authority to file the admission if the proceedings were to be issued. The debtor sought to rely on this pre-action admission to potentially expedite the resolution of the case and to avoid oppressive conduct by the creditor. The court had to determine whether such a pre-action admission could form the basis for an application for judgment under rule 15.15 of the High Court Rules, and whether it was consistent with the spirit and intent of the rules to allow such admissions to be made without waiting for the formal initiation of proceedings.

The central legal issue before the court was whether a pre-action admission of liability could be considered under rule 15.15 of the High Court Rules and used as the basis for an application for judgment. The court needed to interpret the phrase "admissions of fact (in the party’s pleadings or otherwise)" to ascertain whether it included pre-action admissions. Additionally, the court had to balance the policy considerations underlying the rule, such as the promotion of just and efficient resolution of disputes, against the potential for oppressive conduct by creditors. The court also needed to consider whether the admission, if admitted, could be reconciled with rule 15.16, which deals with the terms of judgment on admissions of liability.

The court found that the language of rule 15.15, which mirrors the former RSC Order 27, r 3, permits the use of pre-action admissions of fact as a basis for an application for judgment. The court noted that the inclusion of the phrase "or otherwise" in the rule suggests that pre-action admissions are intended to be included. Furthermore, the court emphasised that the rule's purpose is to facilitate the just and efficient resolution of disputes, and that pre-action admissions, when appropriately managed, could contribute to this goal. The court also considered the policy considerations that support the wider interpretation of the rule, including the avoidance of unnecessary costs and delays. It concluded that provided the rule 15.16 was otherwise complied with, and there was no oppressive conduct by creditors, the pre-action admission could be validly considered.

Based on the reasoning, the court allowed the pre-action admission to be considered under rule 15.15, facilitating a potentially more efficient and just resolution of the dispute. The court's decision recognised the value of pre-action admissions in the context of broader settlement negotiations and provided clarity on the scope of rule 15.15, ensuring that such admissions could be used effectively in appropriate circumstances.

Orders

Orders of the court

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Background

Background to the litigation

We do not agree with that analysis. It is now accepted that a pre-action admission of fact may provide a proper basis for the entry of judgment under r 15.15. That rule provides:[114]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.[114]Emphasis added. That language is almost identical to the language of RSC Order 27, r 3 (which, as we have said, has been replaced by pt 14 of the Civil Procedure Rules). In England, the words “or otherwise” in the italicised phrase have been interpreted as permitting a pre-action admission to be the basis for an application under r 15.15.[115] Under RSC Order 27, r 3, the English courts did not distinguish between admissions of fact and admissions of liability (there being no equivalent to r 15.16) – both could result in the entry of judgment, even if made pre-action. In interpreting the words “or otherwise” to include pre-action admissions, the English courts were influenced by policy considerations. As the Court of Appeal in Standerwick v Royal Ordnance PC said:[116]The wider reading is consistent with policy. It enables the court in an appropriate case to make orders which dispose of cases more cheaply and expeditiously. The court does not have to make an order, the power is discretionary. The wider reading means that when the admission is made before proceedings are started and the start of proceedings is delayed in the hope of saving costs in reliance on the admission, the situation in which the likelihood of prejudice to the party to whom the admission has been made will be greater and will come within the ambit of Order 27, rule 3 and allow the court, in its discretion, to protect the person to whom the admission has been made. There are significant differences between the relevant English rules, both existing and past, and the New Zealand rules. For example, as we have said, there was (and still is) no direct equivalent to r 15.16.[117] And our focus must, of course, be on the language of the High Court Rules. But in principle, provided that r 15.16 is otherwise complied with, and given r 15.16(2) and (5), we see no reason why the rule should be interpreted as preventing a debtor from giving a pre-action admission of liability on the basis of a draft statement of claim, with authority to file the admission if proceedings are ultimately issued, as part of the settlement of other proceedings (here, Bridgecorp’s mortgagee sale proceedings). Provided that oppressive conduct by creditors can be addressed, giving effect to arrangements of the sort reached in this case facilitates the just and efficient resolution of disputes. [117]Pt 14 of the Civil Procedure Rules (UK) contains a number of rules dealing with admissions in particular contexts.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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