Paterson v Lepionka & Company Investments Limited

[2020] NZHC 530

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE

CIV-2019-441-78

[2020] NZHC 530

BETWEEN

GARTH BOWKETT PATERSON

Plaintiff

AND

LEPIONKA & COMPANY INVESTMENTS LIMITED

First Defendant

STEFAN JOZEF JOHN LEPIONKA, JOE DUNCAN and

GREGORY BERNARD HORTON as
trustees of the Lepionka Business Trust Second Defendants

LEPIONKA AND COMPANY LIMITED
Third Defendant

STEFAN JOZEF JOHN LEPIONKA and NIGEL WARREN HUGHES

Fourth Defendants as trustees of the S J Lepionka Family Trust

STEFAN JOZEF JOHN LEPIONKA

Fifth Defendant

Counsel:

Plaintiff in person

M Colson and S Leslie for defendants

Judgment:

17 March 2020

INTERLOCUTORY JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[On the papers]

[1]                 The plaintiff, Mr Garth Paterson, in his capacity  as  the  trustee  of  the  Garth Paterson Family Trust, commenced this proceeding by notice of proceeding and statement of claim in November 2019. It concerns a property in Hawkes Bay, and its

PATERSON v LEPIONKA & COMPANY INVESTMENTS LIMITED [2020] NZHC 530 [17 March 2020]

development. The first to fifth defendants are all persons or entities with whom or which the plaintiff dealt in relation to the development. Essentially, the plaintiff says that the defendants, acting individually or in concert, have breached obligations owed to him, and that the net outcome of their actions is that he, and the beneficiaries of the trust, have suffered loss. He claims various remedies, including substantial damages.

[2]                 The defendants are all represented by the same solicitors and counsel. They have not entered a defence. Instead, in January 2020, they filed and served an interlocutory application for various orders ultimately designed to have the proceeding disposed of in their favour on a summary basis.

[3]                 Also in January 2020, the plaintiff filed a notice of opposition. It is expressed in the most intemporate language. All that it is necessary to say is that he opposes the orders sought by the defendants.

[4]                 The first order sought by the defendants is for the transfer of this proceeding from Napier to Auckland. The matter was listed for mention in the Associate Judge’s list on 12 February 2020. Prior to that, the parties filed a joint memorandum in which they consented to the application for a change of venue being dealt with on the papers. That is what this judgment addresses.

[5]Rule 5.1 of the High Court Rules provides:

5.1      Identification of proper registry

(1)The proper registry of the court, for the purposes of rules

5.25 and 19.7, is,—

(a)when a sole defendant is resident or has a principal place of business in New Zealand, the registry of the court nearest to the residence or principal place of business of the defendant, but when there are 2 or more defendants, the proper registry is determined by reference to the first-named defendant who is  resident  or  has  a  principal  place  of   business   in   New Zealand:

…

(2)Despite subclause (1)(a), if the place where the cause of action sued on, or some material part of it, arose is nearer to the place where the plaintiff or the plaintiff first-named in the statement of claim resides than to the place where the defendant resides, the proper registry of

the court for the purposes of subclause (1) is, at the option of the plaintiff or the plaintiff first-named, as the case may be, the registry nearest to the residence of the plaintiff or the plaintiff first-named, as the case may be.

(3)If a plaintiff proposes to exercise the option conferred by subclause (2), the plaintiff must file with the statement of claim and notice of proceeding an affidavit by the plaintiff or the plaintiff’s solicitor stating the place where the cause of action or the material part of it arose, and that that place is nearer to the place where the plaintiff or the plaintiff first-named in the statement of claim resides than to the place where the defendant resides.

(4)If it appears to a Judge, on application made, that the statement of claim has been filed in the wrong registry of the court, he or she may direct that the statement of claim or all documents filed in the proceeding be transferred to the proper registry.

(5)If it appears to a Judge, on application made, that a different registry of the court would be more convenient to the parties, he or she may direct that the statement of claim or all documents be transferred to that registry and that registry becomes the proper registry.

[6]                 The first-named defendant, Lepionka and Company Investments Ltd, is a company, the registered office of which is in Auckland. Accordingly, on the face of it, in terms of rule 15.1(1)(a), this proceeding should have been commenced in Auckland.

[7]                 However, Mr Paterson has sought to take advantage of r 15.1(2) on the basis that he resides in Hawkes Bay, and that a material part of one or more of his causes of action arose in Hawkes Bay, and filed his proceeding in Napier.

[8]                 The defendants invite the Court to examine the legitimacy of the plaintiff’s claim to be entitled to commence his proceeding in Napier. They question whether he is a Hawkes Bay resident, and suggest that he lives abroad. I do not regard it as necessary to review the various assertions and counter assertions made about this in the affidavits sworn by Mr Lepionka and Mr Paterson. I accept that, when he is in this country, Mr Paterson resides in Hawkes Bay, and that he spends a substantial proportion of his time here. That is enough to dispose of this issue.  On that basis,  Mr Paterson was entitled to proceed pursuant to r 15.1(2), provided he can establish that a material part of one or more of his causes of action occurred in Hawkes Bay.

[9]                 The land at the centre of this dispute is in Hawkes Bay. It appears to me from the pleadings that many of the events about which Mr Paterson complains took place

— at very least in part — in Hawkes Bay. I am satisfied that a material part — or, rather, material parts — of the causes of action relied on by Mr Paterson took place in Hawkes Bay.

[10]              On those bases, I am prepared to accept that Mr Paterson was entitled to file in Napier.

[11]              However, that does not dispose of the defendants’ application altogether. The Court always has a residual discretion to transfer a proceeding if on balance the proceeding can be more appropriately or conveniently dealt with in a centre other than the one in which it was filed.

[12]              The points Mr Colson refers to as justifying a transfer of this proceeding in the exercise of the Court’s discretion are as follows.

[13]              First, he says that, aside from the second-named fourth defendant, Mr Nigel Hughes, the defendants are all Auckland based. That is relevant, but not decisive. It is often the case that parties become involved in litigation based outside their residence or registered office. Even if Napier is inconvenient from the point of view of the defendants, the perspective of the plaintiff must also be considered. As already said, Napier is obviously the most convenient venue from Mr Paterson’s perspective.

[14]              Second, Mr Colson says that leading counsel for the defendants is Auckland based. I can find no evidence for this. In his submissions Mr Colson refers to an affidavit sworn by Mr Lepionka dated 22 January 2020. I can find no such affidavit. In any event, whilst counsel’s convenience is not altogether irrelevant, it is never a decisive factor.

[15]              Third, Mr Colson mentions that earlier litigation between Mr Paterson and the first defendant has been heard and determined in Auckland and he refers to several defended hearings. He goes on to say that given the nature of the defendants’ other interlocutory applications, for an order striking out the proceeding and the like, it

would be preferable for this proceeding to be heard in Auckland so that a judge who is already familiar with the background to the case might be able to deal with it. That is not the way the system works. This is a new proceeding, and will be listed according to available judicial resources. There is no particular reason to think that if the proceeding were transferred to Auckland it would be listed before a judge who has dealt with any of the matters referred to by Mr Colson.

[16]              Fourth, Mr Paterson has apparently commenced winding up proceedings against the first defendant that are opposed. Mr Colson suggests that there is a degree of factual cross-over between those winding up proceedings and this proceeding, and that it would be “unnecessarily duplicative” if two separate proceedings were required to consider the same facts and issues and more convenient if both applications could be heard together. He adds that the defendants intend to seek consolidation of these two proceedings. There is some force in this point.

[17]              Fifth and finally, Mr Colson says that there are other considerations involved and concludes in the following terms:

13. The defendants have already had to engage  in  a  number  of  proceedings brought by or against Mr Paterson and entities related to him. LCIL has had to seek the removal of five caveats lodged over the Land by him and his family members and has obtained orders restraining them from lodging further caveats. In almost all cases, Mr Paterson’s actions, evidence and conduct of litigation have been criticised. Against that background, they submit that it is in the interests of justice to have the proceeding transferred to Auckland where their strikeout application can be dealt with by a Judge already familiar with the issues that Mr Paterson seeks to raise (again).

[18]              There is little in Mr Paterson’s submission in reply to which it would be useful to refer.

[19]              Whilst I can see some force in some of the points raised by Mr Colson in relation to the most convenient venue for the disposal of this proceeding, in the end, the view I take is that they do not out-weight the entitlement of the plaintiff to have it heard and disposed of in Napier.

[20]I decline the application for a change of venue.

[21]              What is now important is that the balance of the defendants’ interlocutory applications be set down as soon as possible.

[22]              I invite Mr Paterson and counsel for the defendants to confer and file a joint memorandum as to the likely duration of any interlocutory hearing for dealing with these, and whether any particular pre-hearing timetabling is required.

[23]              In anticipation of receipt of a joint memorandum (or memoranda) within the next fortnight or so, I request the Registrar to consider when the defendants’ application might be heard, assuming, for the time being at least, until such time as the Court hears from the plaintiff and counsel for the defendants, that at least a day’s hearing time will be required.

Associate Judge Johnston

Solicitors:
Bell Gully, Wellington for defendants