Property Funding Securities Limited v Hussain

[2024] NZHC 1759

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-1769 [2024] NZHC 1759

BETWEEN

PROPERTY FUNDING SECURITIES LIMITED

Plaintiff

AND

SABER HUSSAIN, SAMUT TRUSTEE COMPANY LIMITED and SHAMAILA PERVAIZ

First Defendants

SABER HUSSAIN

Second Defendant

SHAMAILA PERVAIZ

Third Defendant

MARIAM CHEEMA

Fourth Defendant

LEGAL ASSOCIATES LIMITED

First Third Party

RAJ PARDEEP SINGH and ASHIMA SINGH

Second Third Parties

Hearing:

27 June 2024

Appearances:

K Quinn for the plaintiff

S S Khan and M G Orange for the first and second defendants J N Bierre and B R Webster for the third parties

Decision:

27 June 2024

Reasons:

1 July 2024

REASONS FOR JUDGMENT OF CAMPBELL J

These reasons for judgment were delivered by me on 1 July 2024 at 4.00 pm pursuant to Rule 11.5 of the High

Court Rules Registrar/Deputy Registrar

PROPERTY FUNDING SECURITIES LTD v HUSSAIN and OTHERS [2024] NZHC 1759 [27 June 2024]

[1]                  On 27 June 2024, I heard an application  by the first  and second defendants  to adjourn the three-week trial of this proceeding, scheduled to commence on 8 July 2024. After hearing from counsel, I declined the application, with reasons to follow. These are my reasons.

Background

[2]                  The proceeding concerns a loan of $1 million that the plaintiff, Property Funding Securities Ltd (PFS), alleges it made to the first defendants, as trustees of the Cheema Family Trust (the Trust), in September 2019. The trustees include Mr Saber Hussain (who is also the second defendant) and Ms Chamaila Pervaiz (the third defendant).

[3]                  At the time, Mr Hussain was resident in Pakistan. Ms Pervaiz dealt with PFS. In obtaining the loan from PFS, Ms Pervaiz relied on two documents that purported to be powers of attorney granted by Mr Hussain. The first power of attorney was purportedly executed in 2018 and appointed Ms Pervaiz as Mr Hussain’s attorney (the 2018 power of attorney). The second was purportedly executed in 2019 and appointed Ms Mariam Cheema, the fourth defendant, as Mr Hussain’s attorney (the 2019 power of attorney). Ms Cheema is the daughter of Ms Pervaiz and Mr Hussain.

[4]                  The two powers of attorney bear what are said to be Mr Hussain’s signatures. The 2018 power of attorney is purportedly witnessed and notarised by a Notary Public in Pakistan named Basharat Ali Choudhary (Mr Choudhary). The 2019 power of attorney is purportedly witnessed and notarised by another Notary Public in Pakistan named Nazam Jumshed Azam (Mr Azam).

[5]                  Mr Hussain denies that he signed either power of attorney. He says they are forged. He therefore denies PFS’s claim against him and the Trust.

[6]                  Mr Hussain has also brought a third-party claim against Legal Associates and its directors. Legal Associates was the firm engaged by Ms Pervaiz on the loan transaction.  Mr  Hussain  claims  that  Legal  Associates  was  negligent  in  failing to ensure he was aware of, and consented to, the loan.

[7]                  Whether the powers of attorney are forgeries will be a significant issue in the trial, both between PFS and Mr Hussain and between Mr Hussain and the third parties.

The basis of the application for adjournment

[8]  In the course of this proceeding, Mr Hussain has obtained signed statements or briefs from persons purporting to be Mr Choudhary and Mr Azam (the two Notaries) saying that they had never met Mr Hussain and never witnessed the powers of attorney.

[9]                  On 4 June 2024, Legal Associates served its briefs of evidence. These included briefs from persons purporting to be Mr Choudhary and Mr Nazam. They said that representatives of Legal Associates had gone to Pakistan to brief them in 2022. They said they had met with Mr Hussain in 2018 and 2019 respectively and had notarised the two powers of attorney. They each denied having previously signed contrary statements.

[10]              Two days later, Legal Associates filed and served a supplementary affidavit of documents. This included documents referenced in the briefs of Mr Choudhary and Mr Nazam. They included:

(a)Copies of a page from each of the registers kept by the Notaries, apparently recording the meetings each Notary had with Mr Hussain.

(b)Photographs and videos of the meetings between the representatives of Legal Associates and the Notaries.

[11]              Mr Khan, counsel for Mr Hussain, said the documents could potentially determine of the case. He said they were extremely prejudicial to Mr Hussain because they cast significant doubt on his position that he did not sign the powers of attorney.

[12]              Mr Khan said these documents were obtained by Legal Associates in 2022 but discovered only in June 2024. He submitted this amounted to trial by ambush. He said Mr Hussain needed to be provided with the original registers held by the Notaries so that they could be provided to forensic document examiners.   He said Mr Hussain

also needed to make enquiries in Pakistan in relation to the apparently contradictory statements now made by Mr Choudhary and Mr Nazam. He said these things could not happen in the time before trial. He therefore sought an adjournment.

It is not in the interests of justice to adjourn the trial

[13]              Under r 10.2 of the High Court Rules 2016, the court may adjourn a trial if it  is in the interests of justice to do so. This requires a balancing of the interests of the parties (and the interests of others who are awaiting hearing time).

[14]              The basis of the adjournment application is  that Mr Hussain has been ambushed by late disclosure of documents by the third parties and as a consequence does not have a fair opportunity  to  prepare  a response  to  what has been disclosed.  If I had been satisfied that that was an accurate characterisation of what happened, I would have had to engage in the balancing exercise to which I have just referred. But, for the reasons that follow, I consider it plain that there has not been any trial by ambush. Mr Hussain has had ample opportunity to prepare his case at trial on this issue. Any difficulties he may be facing in that respect are of his own making.

[15]              Mr Hussain made his allegation that the powers of attorney were forgeries early in this proceeding (which commenced in 2020). In 2020, he purportedly contacted the Notaries. Among other things, he obtained a letter purportedly from Mr Nazam, dated 13 June 2020, saying he had not witnessed the 2019 power of attorney. Mr Hussain has therefore been aware for many years of the need to investigate the Notaries’ position on whether they had witnessed the powers of attorney.

[16]              Further, by early 2022 Mr Hussain was aware that Legal Associates had obtained statements from Mr Choudhary and Mr Nazam in which each had confirmed meeting with Mr Hussain and witnessing  his  signature  on the powers of attorney. In addition, Mr Nazam’s statement said that  he  had  never  written  the  letter  dated 13 June 2020. These statements from  Mr Choudhary and Mr Nazam were provided to Mr Hussain in discovery in February 2022.

[17]              So, for more than two years, Mr Hussain has been aware that the position of the other parties to this litigation is that the Notaries did meet with him and witness his

signature  on  the  powers  of  attorney.  This  reinforced  the need for Mr Hussain to investigate  the  Notaries’ position.  It  was not  a matter  that  could  have  come  as a surprise to Mr Hussain when served with Legal Associates’ briefs on 4 June 2024.

[18]              It is true that Legal Associates did not provide discovery of the extracts from the Notaries’ registers prior to 6 June 2024. But Legal Associates has never had control of the originals of those registers and so had no obligation to discover them. Legal Associates does have control of copies of extracts from the registers, but I am satisfied that it obtained those only during the recent briefing process and discovered them promptly.

[19]              Mr Hussain also complains about the recent disclosure of photos and videos taken during the initial meeting between representatives of Legal Associates and the Notaries in 2022. Legal Associates says those documents were privileged  and that they were disclosed promptly after a recent decision to waive privilege. I do not need to determine whether the privilege claim was valid. Mr Hussain has  not explained how these documents would be determinative of the forgery issue. Further, and as I have explained, Mr Hussain has had ample opportunity to investigate the Notaries and their positions.

[20]              For these reasons, I did not consider there was any basis on which Mr Hussain could say that he was ambushed or that he had not had a fair opportunity to prepare his case at trial on the forgery issue. If he suffers any prejudice from having to proceed with the scheduled trial, that prejudice is because he has not made use of the opportunities that were open to him to investigate the Notaries’ position.  That would be a prejudice of his own making. Accordingly, I declined the adjournment application.

Campbell J