Purdie v Mikkelsen HC Auckland CIV 2008-404-000036

[2008] NZHC 2594

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2008-404-000036

BETWEEN  PHILLIP HUGH PURDIE Plaintiff

ANDTERENCE ALEXANDER MIKKELSEN AKA TERRY MIKKELSEN

Defendant

Hearing:         23 September 2008

Appearances: J Ussher for Plaintiff

D J Chisholm for Defendants

Judgment:      24 September 2008

ORAL DECISION OF ASSOCIATE JUDGE ROBINSON

Solicitors:           J Ussher, Solicitor, PO Box 44 325, Pt Chevalier, Auckland

Russell McVeagh, PO Box 8, Auckland

PHILLIP HUGH PURDIE V TERENCE ALEXANDER MIKKELSEN AKA TERRY MIKKELSEN HC AK CIV 2008-404-000036  24 September 2008

[1]      The plaintiff brings these proceedings to enforce a judgment obtained by the plaintiff in Texas. In terms of that judgment, the defendant is required to pay the plaintiff $88,016.61 USD with interest at 8.25% per annum from the date of the judgment being 1 November 2007.

[2]      The defendant in late December 2007 appealed the decision of the Texas Court. That appeal is still pending. Counsel advise that oral argument will be presented with regard to the appeal before the Texas appeal courts by the end of this year and it is anticipated that the appeal will have been determined early next year.

[3]      These proceedings are by way of summary judgment . The judgment in Texas does not qualify for enforcement in New Zealand under the Reciprocal of Enforcement of Judgments Act.

[4]      No application has been made by the defendant to stay execution of the judgment either in New Zealand or in Texas. There is a simple procedure in Texas whereby the defendant need merely post a bond for the amount of the judgment. On posting that bond the judgment would be automatically stayed.

[5]      Amongst the suggestions advanced by counsel for the defendant, is that this application for summary judgment be adjourned pending the outcome of the appeal in Texas. Consequently, I decided to deal with the application for an adjournment before embarking upon the merits of the application to enforce the judgment by entering summary judgment.

[6]      The defence raises an issue of whether it is in accordance with public policy of the Court to order enforcement of the Texas judgment in New Zealand. Reference is made to the limitation provision in Texas. That provision suspends the time to be calculated in determining the limitation period whilst the person against whom the cause of action is maintained is overseas. According to the defendant’s evidence the judgment is based on alleged advances by the plaintiff to the defendant that occurred in the 1990s. But for that suspension provision, the defendant maintains that the claim would be statute barred.

[7]      The suspension provision in this statute is known as a tolling statute and according to counsel for the defendant has been ruled unconstitutional as that statute discriminates against those who reside overseas. Reference has  been  made to  a number of decisions of superior Courts in the United States to the effect that such a statute is unconstitutional and cannot be enforced. If the matter proceeded to hearing before me, one of the grounds advanced by the defendant is that it would be contrary to public policy for this Court to enforce a judgment that may gave effect to such a discriminatory statute.

[8]      In opposing the application for adjournment, counsel for the plaintiff points out that the defendant could very easily have avoided this procedure by providing the necessary bond in Texas which would automatically have stayed the judgment thus making it impossible for the plaintiff to obtain an order of this Court giving effect to the judgment.

[9]      In considering this application for adjournment, I take into account the fact that the defendant has prosecuted his appeal in Texas with due diligence and as a result the appeal is likely to be heard within the next few months. I accept that s 7 of the Reciprocal Enforcement of Judgments Act does not apply. That section provides that an application to set aside registration of a judgment under that Act may be adjourned while an appeal is pending.

[10]     In Hunt v BP Exploration Company Libya Ltd [1980] 1 NZLR 104 at 114, it was held that jurisdiction to adjourn was appropriate where an appeal with merit was pending. The appeal in that case had complex points of law and fact which would, it is estimated, involve appellant’s argument lasting at least six weeks. In Questnet Limited v Lane 2008 NZAR 495, Asher J refused to adjourn or stay an application to enforce judgment from the Hong Kong Court concluding that although an appeal was pending in Hong Kong, there was no obvious substance in that appeal.

[11]     Although this case does not involve a judgment that was registered under the Reciprocal Enforcement of Judgments Act, I do obtain some assistance from the decisions in Hunt v BP Exploration and Questnet Limited v Lane in determining whether it is appropriate to adjourn these proceedings.

[12]     I certainly could not conclude that the appeal lodged by the defendant in this case lacks obvious substance having regard to the issues raised on appeal which involve whether the tolling statute is unconstitutional. There clearly is a substantive issue with some merit for determination by the Appeal Court in Texas.

[13]     If I proceed today and deal with this application to give effect to the Texas judgment and the defendant’s appeal is successful, then further inconvenience, expense and delays will occur because the defendant will need to apply to have my judgment set aside. It is possible that the appeal will finally determine the issue between the parties because if the defendant’s appeal is successful then the plaintiff could not proceed. On the other hand if the defendant’s appeal is unsuccessful then such a result must have some effect on the merits of the defendant’s defence to these proceedings. A practical consideration is that if the matter proceeds before me today there is inevitably going to be the costs for two arguments; namely the argument before me and the argument to be presented in Texas on appeal. If I adjourn the proceedings, I could possibly be avoiding the costs of one argument and one hearing.

[14]    Consequently, for the reasons I have given, I have concluded that it is appropriate to grant the defendant’s application to adjourn these proceedings pending the outcome of the Appeal pending in Texas.

[15]     The plaintiff sought as a condition of any adjournment that was granted that the defendant provide security for the full amount of the judgment. If the defendant was going to make away with his assets, then he has had plenty of time since the issue of these proceedings to do precisely that. If there is any evidence to the effect that the Court should make an order for security,  then  I would  be  prepared  to consider such evidence. In the absence of such evidence I have concluded that at this stage, it is not appropriate to require the defendant to give security. Leave is reserved to the plaintiff to apply for such order if the plaintiff considers such order to be necessary.

[16]     In the meantime, I will simply adjourn these proceedings to a date to be fixed by the registrar in late February 2009 in anticipation of the appeal being concluded by that date. The hearing in February 2009 should be by telephone for the purpose of

determining progress with regard to the appeal. Depending upon the result of the appeal or progress at that date, I will consider directing a fixture or directing any further orders that may be required if the appeal has in fact been determined.

[17]     The issue of costs will be reserved as clearly a decision with regard to those costs must involve a consideration of the merits. It is more appropriate to make an

order for costs once these proceedings have been concluded.

Associate Judge Robinson