Perriam v Wilkes HC Auckland CIV 2009-425-284

[2010] NZHC 1842

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2009-425-000284

BETWEEN  WENDY JOY PERRIAM Plaintiff

ANDLAWRENCE ERNEST WILKES First Defendant

ANDSTEPHEN JOHN BRADSHAW Second Defendant

ANDALEXANDER MCLENNAN WILSON Third Defendant

ANDLESLEY MARGARET INSTONE Fourth Defendant

ANDJUDITH ELEANOR FLETT Fifth Defendant

ANDQBE INSURANCE (INTERNATIONAL) LIMITED

Third Party

Hearing:         1 October 2010

Counsel:         SJ Callanan for plaintiff

PB Churchman for defendants

Judgment:      6 October 2010 at 2:30pm

JUDGMENT OF ASSOCIATE JUDGE FAIRE [on application to strike out plaintiff’s claims]

Solicitors:           Lewis Callanan, PO Box 35 361, Auckland 0753

Burrowes & Company, PO Box 24 515, Wellington 6011

PERRIAM V  WILKES AND ORS HC AK CIV 2009-425-000284  6 October 2010

[1]      The defendants are, or were, solicitors practising in Invercargill and other places as partners in the firm known as McAllistairs.

[2]      The plaintiff pleads seven causes of action alleging:

a)        Breaches  of  various  fiduciary  and  equitable  duties  owed  to  the plaintiff;

b)        Negligence;

c)        Breach of contract; and

d)Acting  fraudulently  or  in  collusion  with  the  plaintiff’s  former husband.

The application

[3]      The defendants apply to strike out the whole or, alternatively, those causes of action which the court considers cannot be made out.  As a further alternative the defendants seek further particulars.

[4]      The general grounds advanced in support of the application are:

a)        That the second amended statement of claim discloses no reasonably arguable cause; or

b)        Is frivolous or vexatious or is otherwise an abuse of process.

The notice of opposition

[5]      The notice of opposition expresses broad general grounds in opposition. They do not focus on the basis for the two principle attacks made on the second amended statement of claim.  The grounds advanced in opposition are:

a)        The court is required to assume that the facts pleaded are true;

b)        The pleadings are not speculative or without foundation;

c)        The causes of action are tenable and can succeed;

d)Such jurisdiction is to be exercised sparingly and only in clear cases where the court is satisfied that it has the requisite material;

e)       One of the plaintiff’s causes of action seeks equitable relief for the breach of fiduciary duty and, therefore, the Statute of Limitations does not apply;

f)        Another of the plaintiff’s causes of action is based on fraud and, therefore, the limitation period is postponed;

g)        It is unjust in all the circumstances.

Background

[6]      Prior to the plaintiff and her former husband marrying on 9 March 1991 the defendants acted for the plaintiff’s former husband on general conveyancing matters and in the preparation of his will.

[7]      Subsequent to the plaintiff and her former husband marrying the defendants acted for the plaintiff and her former husband  jointly on a number of property purchases  and  sales  and  on  the  establishment  of  the  Cairns  Family  Trust  on

5 January 1996  and in  relation to estate planning matters.   LE Wilkes, the first defendant, the plaintiff and her former husband were trustees of this trust.   The plaintiff and her former husband and their children were the beneficiaries of the trust.

[8]      The defendants have continued to act for the plaintiff and her former husband as trustees of the Cairns Family Trust.

[9]      The defendants acted for the plaintiff’s former husband and his business partner in setting up a company to run the business which included the incorporation of companies and the formation of trusts from 2000 onwards.  The initial company was Markham Developments Ltd.  The business was known as the Perriam Group.

[10]     The business structure set up by the defendants on the instructions of the plaintiff’s former husband and his partner included a series of trusts and companies and included a corporate trustee.  The corporate trustee had one shareholder, the first defendant, LE Wilkes.  Its sole director was the plaintiff’s former husband.  A mirror scheme was set up in respect of the plaintiff’s former husband’s business partner. The corporate trustee companies were the trustees of the respective trusts.   The Perriam corporate trustee would own 45 per cent and the plaintiff’s former husband’s partner’s corporate trustee owned another 45 per cent.  Each of the business partners had 5 per cent ownership personally.  The corporate trustees were a bare shell and did not trade.

[11]     The plaintiff pleads that a number of the trusts, namely the Colorado Property Trust, the Mark Perriam Trust, the Naval Storage Trust, the Perriam Queenstown Trust and the Rural Property Trust did not provide for the plaintiff as a beneficiary.

[12]     The  plaintiff  and  her  former  husband  separated  on  4 April  2004.    The plaintiff’s former husband was declared a bankrupt on 28 June 2010.  The Perriam Group has a substantial deficiency recorded in the papers as exceeding $146,000,000 to both secured and unsecured creditors.   In a proposal to creditors the deficiency was said to be approximately $130,000,000.

[13]     The plaintiff issued proceedings in the Family Court.   Those proceedings have not been resolved.  No advice has been provided to this court as to whether the trusts and companies which are the basis for the plaintiff bringing this proceeding have been involved in the relationship property proceeding, whether pursuant to the Property (Relationships) Act 1976, ss 43 or 44 or otherwise.  In addition, no material has been placed before the court indicating whether any of these trusts or companies have any assets at all.

[14]     The foundation for the plaintiff’s seven causes of action appear in paragraphs

19, 20, 21 and 22 of the second amended statement of claim.  Accordingly, I now set out those paragraphs.

19.During the course of completing the incorporation of the associated companies and the documentation for the Trusts, the first, second, third and fourth defendants and fifth defendant (up until February

2004) received instructions from the plaintiff’s husband that the beneficial owners of the associated companies and trusts were to be the plaintiff’s husband and his children to the exclusion of the plaintiff.

20.At  all  material  times  between  1995  and  2009,  and  without  the plaintiff’s knowledge, or consent, the first, second, third and fourth defendants and fifth defendant (up until February 2004) accepted instructions  from the  plaintiff’s  husband  to  create  the  associated companies and the trusts.  By accepting these instructions the first, second, third and fourth defendants and fifth defendant (up until February 2004) ought to have known that dispositions of relationship property would be made to those associated companies and trusts thus alienating relationship property from the plaintiff.    All particulars of the same, including dispositions, are within the first, second, third and fourth defendants’ and fifth defendant’s (up until February 2004) knowledge not the plaintiff’s.

21.At all material times between 1995 and 2009, the first, second, third and fourth defendants and fifth defendant (up until February 2004) knew, or ought to have known, that by accepting instructions from the plaintiff’s husband to create the associated companies and the trusts without the knowledge or consent of the plaintiff, that dispositions  of  relationship  property  would  be  made  with  the purpose of and/or would result in defeating the rights and interests of the plaintiff pursuant to the Property (Relationships) Act 1976.

22.At  all  material  times  various  property/dividends/advances/loans/ shares were paid to and from and/or transferred between the various trusts  and  associated  companies  to  the  effect  that  relationship property assets were diminished and/or alienated from the plaintiff by a minimum of  FOUR MILLION DOLLARS ($4,000,000.00) causing her to suffer damage.   All particulars of the same, are within the first, second, third and fourth defendants’ and fifth defendant’s (up until February 2004) knowledge not the plaintiff’s.

[15]     The  general  principles  to  be  applied  in  a  strike  out  application  are  well known.  They were confirmed in Attorney-General v Prince and Gardner[1] where the court said:

A striking-out application proceeds on the assumption that the facts pleaded in the statement of claim are true.  That is so even although they are not or may not be admitted.  It is well settled that before the Court may strike out proceedings the causes of action must be so clearly untenable that they cannot possibly succeed (R Lucas & Son (Nelson Mail) Ltd v O’Brien [1978] 2 NZLR 289 at pp 294-295; Takaro Properties Ltd (in receivership) v Rowling [1978] 2 NZLR

314 at pp 316-317); the jurisdiction is one to be exercised sparingly, and only in a clear case where the Court is satisfied it has the requisite material (Gartside v Sheffield, Young & Ellis [1983] NZLR 37 at p 45; Electricity Corporation Ltd v Geotherm Energy Ltd [1992] 2 NZLR
641);  but  the  fact  that  applications  to  strike  out  raise difficult questions of law, and require extensive argument does not exclude jurisdiction (Gartside v Sheffield, Young & Ellis).

[1] Attorney-General v Prince and Gardner [1998] 1 NZLR 262 (CA) at 267.

[16]     The  principles  referred  to  above  were  endorsed  in  Couch  v  Attorney- General.[2]

[2] Couch v Attorney-General [2008] NZSC 45, [2008] 3 NZLR 725.

[17]     The court can have regard to evidence either put forward in opposition or support of the application provided it does not contradict that which is pleaded in the statement  of  claim:  Attorney-General  v  McVeagh.[3]      Although  r 15.1  permits  a striking out of part of a pleading the court discourages partial strike out applications: Apple Fields Ltd v New Zealand Apple and Pear Marketing Board[4] and Whitman v

Airways Corporation of New Zealand Ltd.[5]

[3] Attorney-General v McVeagh [1995] 1 NZLR 558 (CA) at 566.

[4] Apple Fields Ltd v New Zealand Apple and Pear Marketing Board HC Wellington CP35/94, 21 April 1994. 

[5] Whitman v Airways Corporation of New Zealand Ltd (1994) 8 PRNZ 155 (HC) at 158.

[18]     A partial strike out of a pleading may be justified where the portions to be struck out support a cause of action which relies on different facts to the remaining causes of action in the claim.  That is because both the preparation for trial and the

time of the trial itself may be substantially reduced thus justifying the benefit of the interlocutory examination.

[19]     For reasons which I will explain later in this judgment the defendants rely on the Limitation Act 1950 and principle of equitable bar by analogy.    The court takes a different approach for strike out applications made based on these matters.

[20]     In Matai Industries Ltd v Jensen[6] the decision of the English Court of Appeal in Ronex Properties Ltd v John Laing Construction Ltd & Ors[7] was referred to.  In summary it was observed:

[6] Matai Industries Ltd v Jensen [1989] 1 NZLR 525 (HC) at 531 per Tipping J.

[7] Ronex Properties Ltd v John Laing Construction Ltd & Ors [1983] QB 398.

a)       That a defendant could never apply to strike out a claim against him as disclosing no reasonable cause of action merely because he might have a good limitation defence;

b)A defendant who believes he has a good  limitation defence may, however, either plead the defence and seek trial of the defence as a preliminary issue, or, in a clear case, apply to strike out the plaintiff’s claim on the grounds that it is frivolous, vexatious and an abuse of process;

c)       The onus is on the defendant to show that the plaintiff’s claim is statute-barred;

d)       Evidence can be tendered by affidavit; and

e)The court should be slow to strike out a claim, or cause of action altogether in limine, but against that, if the position is quite clear, then the defendant should not be vexed by having to go to full trial when the answer is obvious and inevitable.

[21]     The position summarised in Matai Industries Ltd v Jensen[8] was endorsed by the Supreme Court in Murray v Morel & Co Ltd.[9]

[8] Matai Industries Ltd v Jensen, above n 6. 

[9] Murray v Morel & Co Ltd [2007] NZSC 27, [2007] 3 NZLR 721 at [33].

[22]     The defendants submit that all seven causes of action disclose no reasonably arguable cause of action.   In the alternative, the defendants submit that causes of action 1, 2, 3, 4 and 6 are barred either by the Limitation Act 1950 or in reliance on the principle of equitable bar by analogy.

General observations on the statement of claim

[23]     The second amended statement of claim is unsatisfactory.  In several places the pleadings refer to particulars being within the defendants’ knowledge.   When counsel was pressed on this point counsel's response was that there is an outstanding application for particular discovery.  Until that application is resolved the particulars cannot be given.  Implicit in the reply is the understanding that the particulars would be given if that application were determined.

[24]     There are gaps which make it impossible to identify the action complained of as being causative of the loss which is said to have occurred.   How the loss is calculated is not explained.   What assets are said to have been put beyond the plaintiff’s reach through Property (Relationship) Act proceedings because of the acts of the defendants have simply not been dealt with in the pleading at all.

[25]     I suspect that the plaintiff’s pleading arises from a misunderstanding by her counsel as to the nature of rights which arise under the Property (Relationships) Act

1976 itself.   Ms Callanan submitted to me, without any authority, that rights to property arose without any action being taken on the plaintiff’s part to secure either an agreement providing ownership of the assets or an order of the court.

[26]     That  issue  is  the  subject  of  comment  in  Fisher  on  Matrimonial  and

Relationship Property:[10]

[10] Robert Fisher (ed) Fisher on Matrimonial and Relationship Property (looseleaf ed, Lexis Nexis) at [1.26].

1.26Property  rights  without  invoking  the  statutory  relationship property regime

The property regime instituted by the 1976 Act is one of deferred sharing in the sense that conventional property principles are retained as the fundamental source of property rights within marriage, civil union or de facto relationship unless and until the statutory relationship property regime is invoked by Court order or agreement. When the statutory regime is invoked, new property rights operate from the date of the Court order or agreement. They are not retrospective.

[27]     In Walker v Walker:[11]

It seems to me therefore that the Act does not evince an intention that when the marriage partnership has ended the parties can only be declared to have interests in such matrimonial property as is still owned by them or one of them at the date of the hearing.  We recognised in Commissioner of Inland Revenue v Van Doorne [1983] NZLR 495 the obvious truth that the rights given by the Act to share in specific matrimonial property when the marriage partnership ends (or earlier in some cases) are valuable rights, though it was not necessary to define their precise juristic nature. What is clear is that they are statutory rights and that unless one of the provisions affecting third parties applies (such as s 42 [sic 43] or s 44) they apply only between the parties to the marriage; they are not equitable estates or interests. It is no less clear that they can be seen as relating to specific property.

[11] Walker v Walker [1983] NZLR 560 (CA) at 567.

[28]     It follows, therefore, if the effect of the business venture failures is the loss of the assets owned by the various trusts and companies that were set up, it would not have mattered to the plaintiff’s position whether the husband used companies and trusts to carry on his business or held the assets in his own name.   In short, there would be no property that could be the subject to the claim.  This aspect has another important feature to it.  It is not pleaded anywhere, or suggested anywhere, that the structures themselves were the cause of business failure.

[29]     The deficiencies in the second amended statement of claim are such that I cannot determine if there is a juristic basis for the claim.  Not surprisingly, when it comes to analysing whether there are limitation issues involved, the inquiry becomes practically impossible.   A lack of precision in the pleading as to when a cause of action arose simply highlights the problem.  That could well be critical in this case. That is illustrated by the decision in Davys Burton v Thom,[12]  a case pleaded in negligence against a firm of solicitors arising out of the preparation of a pre-nuptial

agreement.   The court determined that time for limitation purposes ran from the execution of the pre-nuptial agreement because the person concerned suffers an immediate loss in that he did not get what he bargained for at that time.  The court’s opinion was qualified, however, to the extent[13] it did not have to make a final ruling on the point.  Suffice to say that the actual loss would have occurred at the time the plaintiff entered into a purchase agreement in reliance on the pre-nuptial agreement.

That needs to be compared with the other possibility, which was that time did not run until a separation or some other specific challenge to the validity of the pre- nuptial agreement was made by the plaintiff’s spouse.

[12] Davys Burton v Thom [2007] NZCA 215, [2008] 1 NZLR 193.

[13] Ibid, at [72].

[30]     Because the majority of the causes of action pleaded allege the existence of a fiduciary duty and a breach of it, it is necessary to briefly consider the scope of the fiduciary obligation and the issue of breach.

[31]     In Bank of New Zealand v New Zealand Guardian Trust Co Ltd[14] breaches of duty by fiduciaries were divided into three categories, namely:

First, there are breaches leading directly to damage to or loss of the trust property; second, there are breaches involving an element of infidelity or disloyalty which engage the conscience of the fiduciary; third, there are breaches involving a lack of appropriate skill or care.

[14] Bank of New Zealand v New Zealand Guardian Trust Co Ltd [1999] 1 NZLR 664 (CA) at 687 per Tipping J.

[32]     In Kilkelly v Arthur Watson Savage Legal[15]  the court dealt with a situation where the plaintiff  and  her husband  had consulted a lawyer for the  purpose of forming a family trust.  When the trust was created assets were transferred to it.  The particular allegation made against the lawyer arose from the fact that the power of appointment of trustees was given to the husband only and it was said that that comprised the plaintiff wife’s ability to secure a settlement of property rights.  The court found there was a breach of fiduciary duty in that case.   The court assessed damages and awarded them in favour of the plaintiff.   That decision held that the facts fell within the second category of cases referred to in Bank of New Zealand v

New Zealand Guardian Trust Co Ltd.[16]

[15] Kilkelly v Arthur Watson Savage Legal HC Invercargill CIV 2006-425-148, 23 July 2007. 

[16] Bank of New Zealand v New Zealand Guardian Trust Co Ltd, above n 14.

[33]     If this case can be appropriately pleaded, it might also fall into the second category of cases referred to[17]  in [31] above.   There may well be, in this case, a proper basis for pleading that there was a significant degree of trust and confidence imposed in the first defendant acting as a partner of the firm of all defendants, for the plaintiff.

[17] Ibid.

[34]     I do not propose to discuss this aspect further in this judgment.  Counsel’s submissions also covered causation and remoteness and what became clear was that one could not make a clear determination because the second amended statement of claim  itself  simply  does  not  plead  a  sufficient  connection  between  the  acts complained  of  and  the  loss.    Nevertheless,  the  plaintiff’s  position  may well  be arguable.  That is why I record the reservation I do in the judgment and indicate that, although I do analyse each cause of action, I conclude that it is premature to strike out the second amended statement of claim and that the opportunity to replead should be given following discovery.

[35]     Limitation difficulties are recognised in the second amended statement of claim.   There is an obvious attempt to overcome those problems by a very loose fraud pleading.  That appears to be an attempt to invoke the Limitation Act 1950, s 28.

[36]     The Limitation Act 1950, s 28 provides:

28       Postponement of limitation period in case of fraud or mistake

Where,  in  the  case  of  any  action  for  which  a  period  of  limitation  is prescribed by this Act, either—

(a)The action is based upon the fraud of the defendant or his agent or of any person through whom he claims or his agent; or

(b)The right of action is concealed by the fraud of any such person as aforesaid; or

(c)       The action is for relief from the consequences of a mistake,—

the  period  of  limitation  shall  not  begin  to  run  until  the  plaintiff  has discovered the fraud or the mistake, as the case may be, or could with reasonable diligence have discovered it:

Provided that nothing in this section shall enable any action to be brought to recover, or enforce any charge against, or set aside any transaction affecting, any property which—

(d)In the case of fraud, has been purchased for valuable consideration by a person who was not a party to the fraud and did not at the time of the purchase know or have reason to believe that any fraud had been committed; or

(e)In   the   case   of   mistake,   has   been   purchased   for   valuable consideration, subsequently to the transaction in which the mistake was made, by a person who did not know or have reason to believe that the mistake had been made.

[37]     There are many examples in the authorities of the need for precision and clear pleading where fraud is alleged.[18]     It was said in Paper Reclaim Ltd v Aotearoa International Ltd:[19]

In a proceeding such as this, I consider it is appropriate on a strike-out application for the plaintiff to produce some probative evidence to support its allegations.

[18] RA McGechan McGechan on Procedure (looseleaf ed, Brookers) at [HR5.26.08].

[19] Paper Reclaim Ltd v Aotearoa International Ltd HC Auckland CIV 2004-404-4728, 6 December

2004 at [15] per Randerson J

[38]     And,  in  the  application  which  followed  the  entry  of  judgment  when  an attempt was made to set the judgment aside on the grounds of fraud: Paper Reclaim Ltd v Aotearoa International Ltd:[20]

[20] Paper Reclaim Ltd v Aotearoa International Ltd HC Auckland CIV 2004-404-4728, 14 February

2005 at [24] per Harrison J.

[17]     It has been said by many Judges, and on many occasions, that a claim based on fraud is extremely serious. It must be properly particularised and proven to a high standard, commensurate with the severity of the allegation. …

[18]     There is no room for a provisional or equivocal claim, based on suspicion, to be bolstered by fishing expeditions through the problematical process of interrogatories and discovery.

[39]     I now consider specifically each cause of action.

The first cause of action

[40]     This cause of action in summary pleads:

a)       That the solicitors acted for the plaintiff and her former husband in respect of their wills and a family trust which owned their family home; and

b)That  the  solicitor  acted  for  the  former  husband  when  trusts  and companies were established dealing with his business interests and where the beneficial interest in those vehicles was reserved for the former husband and the children of the plaintiff and her former husband only.  In short, she was excluded.

[41]     There may be a theoretical basis for this cause of action.  The formation of the trusts and companies, however, must be identified.  There may well be a clear answer to all or part of this cause of action applying limitation principles or the equitable bar by analogy principle.   Until there is particularisation of the precise actions taken by the solicitors a determination cannot be made.   What is clear, however, is that particularisation must be given by the plaintiff.

The second cause of action

[42]    This cause of action pleads allegations of breach of fiduciary duty and negligence and alleges that the actions were wilful, suggesting fraud.  However, the precise allegation again relates to the preparation of the documents as being the founding step for complaint.   It is alleged that the existence of the trusts and companies as the owner of the plaintiff’s former husband’s property, prevented the plaintiff  from  completing  a  matrimonial  property  settlement  of  the  order  of

$1,600,000.00.   Whilst the claim may well be theoretically possible, it lacks particularisation.  If the particulars are provided there is the prospect that they would disclose that the majority of the claim is effectively barred either by the Limitation Act 1950 in respect of the negligence aspect of it, or, if the matter is dealt with on the basis of a breach of fiduciary duty, by the principle of equitable bar by analogy. That follows from the fact that the cause of action would arise when the actual transactions were completed because that is when the damage is likely to have occurred  even  though  it  may  not  have  then  been  reasonably  discoverable.    In

reaching that conclusion I simply apply the law as stated in Murray v Morel & Co

Ltd.[21]

The third cause of action

[21] Murray v Morel & Co Ltd, above n 9.

[43]     This cause of action repeats the core complaint but adds an allegation of failure to disclose the conflict of interest.  It suffers from the same problems in terms of particularisation as do the first and second causes of action.   Mr Churchman invited me to rule that the facts were such that the plaintiff would never be able to satisfy the necessary causation test.  I am not prepared to determine whether that is the position at this stage.  Suffice to say, the authorities have cautioned on ruling on causation at what is a reasonably early interlocutory inquiry as to the appropriateness

of the pleading: Couch v Attorney-General.[22]

The fourth cause of action

[22] Couch v Attorney-General, above n 2 at [39].

[44]     This cause of action repeats all previous paragraphs in the statement of claim. What I have said in the previous paragraphs of this judgment apply.  The plaintiff’s complaint specifically is that she signed an unlimited guarantee in respect of the borrowings of the Cairns Trust.   That was the trust used by the plaintiff and her former husband for the purchase of their family homes.  The latest family home was a property at 40 Godley Lane, Albany.  Counsel advised me from the Bar that the lender had advised that no action would be taken against the plaintiff in respect of the unlimited guarantee.  Mr Churchman invited me to strike this cause of action out without more ado.  I have decided against that course purely and simply to allow the plaintiff the opportunity of pleading properly if, in fact, there is any loss that arises out of the unlimited guarantee.  If there is not, then I would not expect to see a repeat of this cause of action in the subsequent pleading.

The fifth cause of action

[45]     In summary the allegation here is that the defendants received sums of money which they knew were relationship property money.  It is alleged that they paid this money to the plaintiff’s former husband’s father with the result that it defeated the plaintiff’s claim in respect of these funds under the Property (Relationships) Act

1976.  This cause of action is wholly deficient in its particularisation.  Its premise is that the first defendant knew, or ought to have known, that moneys received were relationship property.  It gives no particularisation as to the basis for that allegation. Apart from giving the source of the funds it does not say what they were for, or how they were acquired by the paying party.  My suspicion is that this cause of action would, if the first and second causes of action ultimately survive, be consumed by them anyway.   Clearly, if it is to remain a cause of action it must be fully particularised so that the basis for the allegation of knowledge that the funds were relationship property is set out and the basis for the ultimate recipient of the moneys not being entitled to receive them is also set out.

The sixth cause of action

[46]     This cause of action alleges a contract of retainer.   Because there is  no founding particularisation of the claim and the time when a breach occurred, it is not possible to assess whether it should remain and, in particular, whether it would survive a limitation defence.  Suffice to say, any breach prior to 9 June 2003 would be barred by the Limitation Act 1950, s 4:  Matai Industries Ltd v Jensen.[23]

The seventh cause of action

[23] Matai Industries Ltd v Jensen, above n 6 at 534.

[47]     The plaintiff here complains that money held in the Mark Perriam Trust was transferred to a new trust established by the  plaintiff’s former husband through offices of the defendants on 25 June 2007.   The allegation is made that a sum of

$300,000 was paid by the Mark Perriam Trust to the new trust, The Lake House Trust, and that that has defeated the plaintiff’s claims and rights under the Property (Relationships) Act 1976.  Like the earlier causes of action this simply does not have a foundation for the allegations made.  I suspect that if there is a legitimate complaint it would be covered, if in fact the first and second causes of action can be pleaded in a way that they survive, by those causes of action.  No further analysis is required in this judgment because, on its face, the seventh cause of action does not tell the defendants why they have something to answer for.  The position may well change, however, when the particulars that are clearly required in the general section of the statement of claim, and which are repeated for the purposes of this cause of action, are provided.  It is only for that reason that I do not strike this cause of action out at this stage.

Conclusions

[48]     The current statement of claim does not comply with the High Court Rules. Rule 5.26 provides:

5.26     Statement of claim to show nature of claim

The statement of claim—

(a)       must show the general nature of the plaintiff's claim to the relief sought; and

(b)must give sufficient particulars of time, place, amounts, names of persons, nature and dates of instruments, and other circumstances to inform the court and the party or parties against whom relief is sought of the plaintiff's cause of action; and

(c)       must state specifically the basis of any claim for interest and the rate at which interest is claimed; and

[49]     To the extent that the loss is in reality special damage, the statement of claim must comply with r 5.33 which provides:

5.33     Special damages

A  plaintiff  seeking  to  recover  special  damages  must  state  their  nature, particulars, and amount in the statement of claim

[50]     In the course of the hearing I discussed with counsel the possibility of my concluding that the specific discovery and non-party discovery applications should be determined and inspection should take place before this strike out application is finally concluded.  I invited counsel to indicate whether a period of between three and four weeks following release of this judgment might be sufficient time for counsel to determine whether the two discovery applications would be resisted and, if not, whether a workable timetable could then be agreed for that discovery to take place and for an amended pleading then to follow.  Counsel were in agreement with that approach.   As I reached the conclusion I have, I propose to convene a case management conference and to adjourn the strike out application to it, as well as the two discovery applications.

Orders

[51]     I order:

a)        The application is adjourned to a telephone conference at 10:50am on

9 November 2010;

b)Also  adjourned  to  that  date are the following  applications  in  this proceeding, namely:

i)        The plaintiff’s application for discovery against non-party –

court document 54;

ii)The  plaintiff’s  application  for  particular  discovery  –  court document 53;

iii)The defendants’ application challenging the plaintiff’s claim to confidentiality – court document 44; and

iv)The  defendants’  application  for  security  for  costs  –  court document 36.

c)       At  the  case  management  conference  I  expect  counsel  to  advise whether the discovery applications are opposed and, if so, what steps are required to have them made ready for hearing and what time for hearing is  required.    If  they are  not  opposed  I expect  counsel  to indicate what time is required to file the appropriate affidavits of documents and then complete inspection and, ultimately, to replead the statement of claim;

d)Counsel shall file and serve two working days before the conference a memorandum which covers the matters to be discussed at the conference; and

e)        I reserve costs.

JA Faire

Associate Judge