Perriam v Wilkes

[2013] NZHC 2257

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2009-425-284 [2013] NZHC 2257

BETWEEN  WENDY JOY PERRIAM Plaintiff

ANDLAWRENCE ERNEST WILKES First Defendant

ANDSTEPHEN JOHN BRADSHAW Second Defendant

ANDALEXANDER MCLENNAN WILSON Third Defendant

ANDLESLIE MARGARET INSTONE Fourth Defendant

ANDJUDITH ELEANOR FLETT Fifth Defendant

ANDQBE INSURANCE (INTERNATIONAL) LIMITED

Third Party

Hearing:                   17 April 2013

Appearances:           S J Callinan for Plaintiff

P B Churchman for Defendants
P J Shamy for Third Party

Judgment:                2 September 2013

JUDGMENT OF KEANE J

This judgment was delivered by  on 2 September 2013 at 10am pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar

Date:

Solicitors:

Lewis Callanan, Auckland

M R Burrowes, Auckland

Raymond Donnelly, Christchurch

PERRIAM v WILKES [2013] NZHC 2257 [2 September 2013]

[1]      On  13  June  2012  Gendall AJ  struck  our  Ms  Perriam’s  fourth  amended

statement of claim. On 19 June 2012 she applied for review of that order. On 31

August 2012 the defendants, all members of the firm of solicitors Ms Perriam seeks to hold to account, then filed an application for security for costs. On 22 February

2013, Doogue AJ required Ms Perriam to pay $10,000 security for costs.

[2]      On 27 February 2013 Ms Perriam filed this application for review of that second decision, contending that the Associate Judge could not require her to pay security on her first review application. Any ‘proceeding’ to which that order could relate had ceased when her fourth statement of claim was struck out. All applications since have been interlocutory. They cannot constitute a ‘proceeding’.

[3]      As   a  second   ground   of  review,   she  contends,   the  Judge   concluded unreasonably, that she lacked the ability to meet an award of costs, an essential precondition to the order he made.   She had received $270,000 in related Family Court proceedings not long before and had other means of support. The defendants have not shown otherwise.

Jurisdiction issue

[4]      In his decision, dated 22 February 2013, Doogue AJ was entirely alive to Ms Perriam’s first point. As he said, it was he who had identified it and asked for submissions on it.

[5]      He accepted that to make an order for security for costs under r 5.45 there had  to  be a  ‘proceeding’ and,  under  r 1.3  an  interlocutory application  is  not  a proceeding. As against that, he held, the strike-out order was susceptible of review under s 26P of the Judicature Act 1908. There was no rule requiring that it be brought under r 19.2 by fresh originating application. It was for an order or direction interlocutory in nature in terms of r 1.3 . It was for an order or direction for ancillary relief, which could extend to rescinding an interlocutory order including a strike out order.

[6]      An order on an application for review of a strike out order, he held, had to be interlocutory. It could not go substantively to the issues pleaded  in the statement of

claim struck out. It could only go to whether they might be permitted to go to trial. It had to be ancillary or subsidiary. Thus, he concluded, there had to be a proceeding to which it was ancillary or subsidiary. The proceeding continued to exist until the application for review was disposed of. Thus he had jurisdiction to require security for costs be paid under r 5.45.

[7]      Ms Perriam says that the Judge did not refer explicitly to r 2.3(1) which says,

‘An application for a review, under section 26P(1) of the Act, of an order or a decision made by an Associate Judge must be by interlocutory application’. But that does not detract from the Judge’s analysis. Whether, on the strike-out, the proceeding ceased to exist depended on the validity of that order; and if, as is the case, that order is susceptible of review the proceeding has to continue, albeit in a suspended state, until the review is complete.

[8]      It would also be incongruous if, on an appeal from an Associate Judge’s decision to the Court of Appeal, that Court has the ability to order security for costs, but on a review this Court does not have that ability. In neither case no injustice can result. An order requiring security involves an exercise of discretion in the interests of justice.

Discretion issue

[9]      As to the error of discretion contended, the Judge first assumed that Ms Perriam’s application for review would take one and a half days and that she might be exposed, if she were unsuccessful, to a category 2C award in the vicinity of

$13,000 or at most an indemnity award of $20,000.

[10]     The Judge then accepted that Ms Perriam had received a payment $270,000 in the related Family Court proceedings. But, he said, she also had responsibility for children. It was not clear to him whether she had any support. He assumed she had incurred large costs. She appeared to have a position with the Plunket Society. He concluded she was likely to have difficulty meeting the award he had identified.

[11]     Quite independently, the Judge held, Ms Perriam’s inability to meet costs

could not be attributed necessarily to the defendants’ failure to protect her when

acting for her former husband. Her claims had not survived two strike-outs and she still contended for very wide duties of care. Her losses might have resulted from commercial risks she and her husband had exposed themselves to.

[12]     This analysis, it seems to me, was generally within the Judge’s discretion except that he did not take sufficient account of the $270,000 payment made not long before. That is a very substantial sum. The offsets he set against it were not established by evidence. On that basis alone, it seems to me, his order must be set aside.

[13]     I  grant  Ms  Perriam’s  application.  She  is  now  entitled  to  costs  on  this application which I set at scale 2B and any disbursements as fixed by the Registrar.

P.J. Keane J