Re Collier HC Christchurch CIV 1998-409-000993
[2008] NZHC 2691
•12 February 2008
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IN THE HIGH COURT OF NEW ZEALAND
CHRISTCHURCH REGISTRY
CIV 1998-409-000993 FORMERLY CP57/98
| UNDER IN THE MATTER OF | Section 88B of the Judicature Act 1908 An application to commence proceedings against the Attorney-General on behalf of the Official Assignee in bankruptcy, Christchurch |
JOHN MICHAEL COLLIER Applicant
Hearing: 22 November 2007
Appearances: J M Collier in Person
G S Caro for Official Assignee
Judgment: 12 February 2008
RESERVED JUDGMENT OF RANDERSON J
This judgment was delivered by me on 12 February 2008
at 2.30 pm, pursuant to r 540(4) of the High Court Rules
Registrar/Deputy Registrar
Solicitors: G Caro, Ministry of Economic Development, Private Bag 92 513, Wellesley Street,
Auckland
Crown Law, PO Box 2858, Wellington 6140
Copy to: J M Collier, 236 Imes Road, Christchurch
Introduction
On 31 March 2000, the applicant Mr Collier was declared to be a vexatious
litigant under s 88B(1) Judicature Act 1908: Attorney-General v Collier [2001] NZAR 137. The Court comprised Elias CJ and the late Heron J. The formal orders of the Court were:
[1] No civil proceedings shall without the leave of the Court, be instituted by Mr Collier himself or by his agent.
[2] All civil proceedings instituted by Mr Collier are stayed and may not be continued by him or by his agent without leave.
At the time the orders were made against Mr Collier, he had a number of civil
proceedings outstanding, including a claim for negligence against a firm of Christchurch solicitors named Cavell Leitch Pringle & Boyle. In those proceedings, Mr Collier alleged that the firm had failed, when acting on his behalf, to protect his interests in relation to the purchase of a substantial property in Christchurch. In particular, he alleged that the firm had been negligent in failing to sustain a caveat he had lodged and in otherwise failing to protect his interests after the vendor cancelled the contract for sale and purchase.
Mr Collier's claim against Cavell Leitch was instituted in 1988 under the file
number CP131/88. However, progress of the claim was interrupted by Mr Collier's adjudication as a bankrupt on 15 July 1991. As a result of his adjudication, the cause of action vested in the Official Assignee who, upon investigation, concluded that the claim appeared to have some merit. On 6 July 1992 the Official Assignee was granted leave to continue the claim against Cavell Leitch.
For reasons which it will be necessary to discuss in some detail, there were
lengthy delays in prosecuting the claim against Cavell Leitch and, eventually, the firm applied on 2 July 1999 to have the claim against it struck out. In a reserved judgment delivered on 8 December 2000, William Young J declined to strike out the claim but his decision in that respect was reversed by a decision of the Court of Appeal delivered on 6 June 2001, with the result that Mr Collier's claim against Cavell Leitch was struck out.
Just short of six years from the date the Court of Appeal struck out his claim against Cavell Leitch, Mr Collier applied for leave under s 88B(2) Judicature Act for leave to bring a claim in negligence against the Official Assignee in relation to aspects of the handling of the claim against Cavell Leitch. He also sought leave to continue a claim against the Official Assignee which he had filed on 22 November 1996 (CP192/96) but never pursued. This claim too alleged negligence by the Official Assignee in relation to confined aspects of the claim against Cavell Leitch and also alleged negligence in failing to sue the vendor of the property under the 1986 agreement for sale and purchase.
On 30 May 2007, John Hansen J granted leave to Mr Collier for the limited purpose of filing a proceeding against the Official Assignee and directed that the Attorney-General and Official Assignee be served with a copy of the application for leave and the proceeding to be filed. Mr Collier complied with those directions, filing and serving a fresh claim against the Attorney-General on behalf of the Official Assignee (CIV 2007-409-1270). A copy of the statement of claim is attached to this judgment as an appendix.
The approach to granting leave under s 88B Judicature Act
Section 88B provides:
88B Restriction on institution of vexatious actions
(1) If, on an application made by the Attorney-General under this section, the High Court is satisfied that any person has persistently and without any reasonable ground instituted vexatious legal proceedings, whether in the High Court or in any inferior Court, and whether against the same person or against different persons, the Court may, after hearing that person or giving him an opportunity of being heard, order that no civil proceeding or no civil proceeding against any particular person or persons shall without the leave of the High Court or a Judge thereof be instituted by him in any Court and that any civil proceeding instituted
by him in any Court before the making of the order shall not be continued by him without such leave.
(2) Leave may be granted subject to such conditions (if any) as the Court or Judge thinks fit and shall not be granted unless the Court or Judge is satisfied that the proceeding is not an abuse of the process of the Court and that there is prima facie ground for the proceeding.
(3) No appeal shall lie from an order granting or refusing such leave.
The key requirements are that the Court must be satisfied that the proposed
proceeding is not an abuse of the process of the Court and that there is prima facie ground for the proceeding.It is well settled that the discretion to grant leave to institute or continue
proceedings by a vexatious litigant is a jurisdiction to be exercised very carefully since, as Davies LJ said in writing for the English Court of Appeal in Becker v Teale [1971] 3 All ER 715 at 716:Ex hypothesi the person has already 'habitually and persistently and without any reasonable ground instituted vexatious proceedings' ...
Davies LJ added that there is a "high onus" cast on such a person seeking leave under the English statute which was, at that time, in terms virtually identical to s 88B Judicature Act.
There are however, competing interests to be considered, including the fact that a refusal to grant leave amounts to a denial of every citizen's usual right of access to the Courts. As Staughton LJ said in Attorney-General v Jones [1991] WLR 859 at 865:
The power to restrain someone from commencing or continuing legal proceedings is no doubt a drastic restriction of his civil rights, and is still a restriction if it is subject to the grant of leave by a High Court Judge. But there must come a time when it is right to exercise that power for at least two reasons. First, the opponents who are harassed by the worry and expense of vexatious litigation are entitled to protection; secondly the resources of the judicial system are barely sufficient to afford justice without unreasonable delay to those who do have genuine grievances, and should not be squandered on those who do not.
In England, the previous legislation considered in Becker v Teale has been replaced by s 42 Supreme Court Act 1981 (UK). The term "prima facie ground" has been replaced with "reasonable ground". But in Re C (The Times, 14 November 1989), Brooke J (as he then was) sitting in the Queen's Bench Division, did not consider there to be a material difference between the two terms.
In New Zealand, there is relatively little authority on the threshold prescribed by the expression "prima facie ground". In Black, White and Grey Cabs Ltd v Hill (unreported, HC AK CP1013/91 10 December 1993), Barker J discussed Becker v Teale (above) and stated at 10:
The requirement of a prima facie case is higher than the current test for the grant of an interim injunction; i.e. a serious question to be tried. Authorities on a prima facie case show that the plaintiff must show "probable cause for relief at the hearing"; Republic of Peru v Dreyfus Brothers & Co [1888] 38 Ch D 348, 362, or "it is likely to succeed"; Harman Pictures v Osborne [1967] 2 All ER 324, 336. Add to that the views expressed in Becker v Teale that this particular jurisdiction should be "very carefully exercised" with "a high onus" cast on the applicant.
More recently, Fogarty J considered another application for leave by the present applicant Mr Collier in a proposed proceeding against five named defendants. Fogarty J granted leave in a reserved judgment: Re Collier [2004] NZAR 472. Fogarty J found on the facts of the case before him that there was a material difference between the standard identified by Barker J in Black, White and Grey Cabs Ltd v Hill and the standard of "prima facie ground" (at [7]). Fogarty J stated at [6]:
... I interpret the prima facie test in the traditional way of the Court being satisfied, without hearing the other side, that the plaintiff has a good reason to start or continue a proceeding.
I agree with Fogarty J that the tests of "probable cause for relief' or "likely to succeed" referred to by Barker J in Black, White and Grey Cabs Ltd are not apt in the context of s 88B(2). The expression "prima facie ground" must be applied to the facts of the case in accordance with its usual meaning. Spiller Butterworths New Zealand Law Dictionary (6ed 2005) defines "prima facie case" as:
A serious, as opposed to a speculative case.
A litigating party is said to have a prima facie case when the evidence in his or her favour is sufficiently strong for his or her opponent to be called on to answer it.
This definition adequately captures the flavour of the expression "prima facie ground" in s 88B(2), focusing on the strength of the evidence which must reach a sufficiently high threshold to require the potential defendant to respond to it. But the
threshold to be established before leave may be given under s 88B(2) is not to be confused with the level of scrutiny required in respect of the claim. The "careful scrutiny" text remains apposite and the Court is not bound to accept uncritically the assertions made by the vexatious litigant seeking leave. Where relevant, the background leading to the making of the order declaring the applicant a vexatious litigant is to be considered. The Court may also require the applicant to produce appropriate evidence in support of the claim as Fogarty J did in connection with the application Mr Collier made in 2004.
Does the intended defendant have a right of appearance at the hearing of the application for leave?
An issue arose in the present case as to the entitlement of the Attorney-General to appear, either in his capacity as the senior law officer of the Crown responsible for obtaining the order declaring Mr Collier a vexatious litigant or as the representive of the proposed defendant, the Official Assignee. To some extent, this issue was pre-empted by the order made by John Hansen J directing the Attorney-General and the Official Assignee to be served with a copy of the application along with a timetable for notices of opposition and affidavits.
Nevertheless, I heard argument on this point because it raises an issue of procedure of some significance. At a telephone conference on 14 November 2007 I was informed that the Attorney-General took the position that the Official Assignee was much better placed to deal with any opposition to the application since the Crown Law Office had not, until that point, been directly involved in the matters at issue. Accordingly, I informed counsel for the Attorney-General that she need not appear at the hearing of the application and that I would deal with the issue of the Official Assignee's entitlement to appear at the commencement of the hearing.
Neither the Judicature Act nor the High Court Rules contain any express rules as to whether the potential defendant is entitled to be served with a copy of the application and to appear at the hearing of an application for leave. Until relatively recently, the position in England was that an application by a person declared to be a vexatious litigant for leave to bring proceedings was dealt with on an ex parte basis,
subject to a judicial discretion to direct that notice be given to the Attorney-General. As Davies LJ stated in Becker v Teale at 716:
...it is to be remembered that the application, in the first instance at any rate, is ex parte, though the judge may cause notice of the application to be given to the Attorney-General so that he may be represented.
In Jones v Vans Colina [1997] 1 All ER 768 the Court of Appeal confirmed that a proposed defendant had no standing to appear on the application. Nourse LJ explained at 772 that the Attorney-General was in a different position since he or she had brought the proceeding in which the applicant had been declared a vexatious litigant and had an interest in that capacity rather than as a defendant.
However, the Civil Procedure Rules established under the Civil Procedure Act 1997 (UK) authorised the making of practice directions. Under that authority a practice direction supplementing CPR r 3.4 relevantly provides in relation to applications for leave under s 42(1) Supreme Court Act 1981 (UK):
7.6 The application notice, together with any written evidence, will be placed before a High Court judge who may: (1) without the attendance of the applicant make an order giving the permission sought; (2) give directions for further written evidence to be supplied by the litigant before an order is made on the application; (3) make an order dismissing the application without a hearing; or (4) give directions for the hearing of the application.
7.7 Directions given under paragraph 7.6(4) may include an order that the application notice be served on the Attorney-General and on any person against whom the litigant desires to bring the proceedings for which permission is being sought.
7.8 A person may apply to set aside the grant of permission if: (1) the permission allowed the litigant to bring or continue proceedings against that person or to make any application against him, and (2) the permission was granted other than at a hearing of which that person was given notice under paragraph 7.
In terms of the practice direction, the Judge considering an application for leave has discretion to direct that the application be served on the Attorney-General and upon the proposed defendant. The practice direction also permits the proposed defendant to apply to set aside an order granting leave if it is made without notice.
The Court of Appeal in England gave some guidance as to the application of the practice direction in R (Ewing) v Deputy Prime Minister [2006] 1 WLR 1260. Delivering the judgment of the Court, Camwath LJ stated at [34]:
The Practice Direction supplementing CPR r 3.4 relating to vexatious litigants is clearly designed to give the judge a wide discretion to tailor the procedure to the requirements of the particular case. In many cases it will be apparent from the papers whether the application is wholly unmeritorious, or on the other hand it raises a genuine case for which permission should be given. In others the judge may wish for further help from the applicant, either by way of written evidence or an oral hearing of the applicant alone. Often such a hearing may appear to the judge the simplest way of assessing the genuineness of the applicant's case. However, that should not necessarily involve the other parties. Since one of the objects of the procedure is to protect other parties from unnecessary costs in vexatious litigant cases, the judge should think carefully before directing service of the application notice on other parties, or inviting their attendance at a hearing. He may bear in mind that under the present rules, his grant of permission is not necessarily final; if something has gone wrong (for example, if the court has been misled by the applicant), other parties can apply to set aside the grant of permission: paragraph 7.9 of the practice direction.
While I accept the need for caution before directing service on a proposed defendant, I have some sympathy with the view expressed by Davis J in an earlier judgment involving an application by Mr Ewing, Re Ewing (unreported, [2002] EWHC 3169 (QB), 20 December 2002. After referring to certain observations by members of the Court of Appeal in Johnson v Valks [2000] 1 WLR 1502 (which referred to the practice direction having reversed the previous approach under Jones v Vans Colina), Davis J stated at [23]:
I add this. It sometimes can be a relatively straightforward task for a Judge to assess whether or not leave should be given on an application under s 42(3). Some claims are demonstrably based on reasonable grounds. Other proposed claims are self-evidently incoherent, misconceived or simply dressed up versions of former claims which have previously been dismissed. But many vexatious litigants are knowledgeable and resourceful. They may well be able to present a case which at first sight seems of arguable substance: but which even a limited amount of informed adversarial argument could reveal to be of no true substance at all. The Attorney-General is not always well placed to identify all relevant points. Further, a prospective Defendant, when faced with proceedings for which leave has been given and in respect of which he has been given no prior opportunity to object or to nip in the bud, then may be required to apply to strike out or for summary judgment under whatever procedures are available to him. That can be cumbersome and expensive. Moreover it is a practical reality that it is usually difficult, if not impossible, to recover costs from persons declared vexatious litigants. In such circumstances, the new powers and procedures set out in the Practice Direction relating to applications under s 42 (3) are, in
my view, plainly consistent with the overriding objective; and accord with
the principle of securing an accessible, fair and efficient civil justice system.
So far as my researches reveal, the practice in Australia is for applications for leave to be dealt with strictly on an ex parte basis: see for example, the decision of the Victorian Court of Appeal in Phillip Morris Ltd v Attorney-General for the State of Victoria and Lindsey [2006] VSCA 21 at [61].
In New Zealand, there is little authority on the point. In Black, White and Grey Cabs Ltd, it appears from the judgment that the application for leave was opposed by counsel for the plaintiffs (as the proposed counterclaim defendants). In the earlier application by Mr Collier dealt with by Fogarty J, it was decided there was no need to serve notice of the application on the Attorney-General and that it was inappropriate to serve the application on the intended defendants. Fogarty J cited the statutory purpose of avoiding bringing defendants into court over claims at the leave stage. Fogarty J appeared to assume there was jurisdiction to direct service on the intended defendants but does not appear to have received any argument on the point.
While I am of the view that applications under s 88B(2) should, in general, be dealt with on an ex parte basis, I am satisfied that the Court has inherent jurisdiction to direct that the Attorney-General and, if appropriate, the proposed defendants be served with the application and that those parties have the opportunity to appear and adduce evidence and argument in opposition to the application if they see fit. The discretion to serve the Attorney-General is in his or her capacity as the applicant for the order declaring the party seeking leave a vexatious litigant. In some cases, the Attorney-General may also have a role as the potential defendant.
The Court should nevertheless exercise with care its discretion to direct service of the application. Neither the Attorney-General nor the intended defendants should lightly be troubled by the application. In some cases, the merits of the case will be obvious on the papers while, in others, for the reasons which found favour with Davis J in Re Ewing, some limited argument in opposition will be useful in helping the Court to identify where the merits of the application lie. This may
particularly apply where there has been substantial prior litigation and evidence presented on issues relevant to the application.
At the same time, I accept Mr Collier's submission that an application for leave should not be effectively converted into a substantive determination of the proposed proceeding.
In reaching my conclusion on the procedural issues, I have taken into account that s 88B(3) precludes any appeal from the grant or refusal of an application for leave under s 88B(2) and that it is at least doubtful that a proposed defendant who is not served with a copy of the application could then apply to set aside the order. The only remedies available to the defendant where leave is granted would be to apply to strike out or to seek summary judgment. Those consequences could be avoided if, where appropriate, service on the Attorney-General and/or the proposed defendant were directed.
In the present case, I permitted Mr Caro to make submissions on behalf of the Official Assignee who, I am satisfied, is the correct defendant in terms of s 17(1) Insolvency Act 1967 (now s 401(1) Insolvency Act 2006) and s 14(2) Crown Proceedings Act 1950. I concluded I should exercise my discretion to permit the Official Assignee to present evidence and make submissions, having regard to the intimate involvement of the Official Assignee in conducting the proceeding against Cavell Leitch over the period 1992 to 2001 when the claim was struck out by the Court of Appeal. Mr Caro has been able to draw to my attention the salient features of the extensive affidavit evidence filed in connection with the strike-out application in the Cavell Leitch proceedings. That evidence was introduced by order of John Hansen J made prior to the hearing before me.
Is there a prima facie ground for Mr Collier's proposed proceeding?
Mr Collier's pleading and his submissions had a strong focus on alleged conflicts of interest on the part of the Official Assignee and the solicitors and counsel engaged by them. He also drew attention to the lengthy delays in prosecuting the claim against Cavell Leitch which, he said, were so long as to clearly establish a
prima facie case of negligence. Mr Collier's submission is that the delay led to his claim against Cavell Leitch being struck out.
Mr Caro accepted a duty of care was owed by the Official Assignee to Mr Collier but submitted that the delay resulted from Mr Collier's lack of cooperation in the prosecution of the claim.
In approaching this issue it is appropriate first to identify some relevant aspects of the decision of the Full Court and then to analyse the decisions of William Young J and the Court of Appeal in the strike-out proceedings.
The decision of the Full Court declaring Mr Collier to be a vexatious litigant
The decision of the Full Court declaring Mr Collier to be a vexatious litigant cites some 20 proceedings filed in the Christchurch registry of this Court in which Mr Collier was a party. It is unnecessary to consider all of these in detail but two are of particular significance to the present application.
The first is Collier v Official Assignee (CP192/96), which is the proceeding Mr Collier seeks leave to continue in this present application. The Full Court noted that this proceeding had not been progressed since it was filed. Specific reference was made to CP192/96 at [49] of the decision of the Full Court:
Although it will not always be possible in respect of proceedings filed and not pursued to draw a confident inference that thy are vexatious, the number of proceedings instituted by Mr Collier in that category, together with the extravagance of the claimed relief and the lack of particulars of serious allegations, principally against professional people, permits us to draw the inference that the proceedings instituted which have not been progressed by the respondent, are vexatious. There are six in that category identified above, including those number as 4-8 and more recently, Collier v Official Assignee (CP 192/96).
The second proceeding relevant to the present application to which specific reference was made by the Full Court is Collier v Jones CP190/96, which the Court noted was part of a group of proceedings instituted by Mr Collier as a result of his dissatisfaction with the conduct of other proceedings instituted by him (Collier v Creighton (CP13/89)). Upon Mr Collier's bankruptcy, the Official Assignee had
taken over the conduct of an appeal to the Court of Appeal in the Collier v Creighton proceedings. CP190/96 was a claim by Mr Collier against a Mr Jones, the first barrister instructed by the Official Assignee in relation to the Collier bankrupt estate. Mr Collier claimed breach of fiduciary duty arising out of Mr Jones' conduct of the Collier v Creighton proceedings. General and exemplary damages of $220,000 were claimed.
The central allegations made by Mr Collier against Mr Jones in relation to his conduct of the Creighton proceedings were that he was a participant in a conspiracy against Mr Collier and that he had a conflict of interest in relation to claimed relationships with Mr Creighton, Cavell Leitch, Young Hunter solicitors, the Official Assignee's wife and the insurers of both Cavell Leitch and Mr Creighton. In the proposed proceeding for which leave is now sought, Mr Collier seeks, in part, to resurrect similar allegations in relation to the conduct of the proceedings against Cavell Leitch.
The findings of the Full Court in relation to Collier v Jones and some related proceedings are recorded at [50] of the judgment:
In two other proceedings, while strike-out may not have been appropriate, the hearing on the merits resulted in such comprehensive rejection of Mr Collier's claims that the proceedings are properly to be characterised as vexatious. They are Collier v Equitable Life and General Insurance Ltd (CP265/89), where the claim was found to be wholly unmeritorious despite an immaterial technical non-disclosure not raised in the statement of claim and Collier v Jones (CP190/96) where the claim was held to be totally without merit.
Aspects of the decisions of William Young J and the Court of Appeal in the strike-out proceedings which are relevant to the allegation of delay.
The judgment of William Young J issued on 8 December 2000 helpfully sets out a comprehensive history of the proceedings brought by Mr Collier against Cavell Leitch in relation to their conduct on Mr Collier's behalf of his dispute over the agreement for sale and purchase.
It is to be remembered however that both William Young J and the Court of Appeal were not directly considering the extent and nature of any duties owed by the
Official Assignee to Mr Collier. Rather, they were considering the overall effects of delay upon Cavell Leitch as the defendant in those proceedings and the related issues of potential prejudice to Cavell Leitch in consequence of the delay and the ability to do justice despite the delay. William Young J and the Court of Appeal each made certain observations on the relative responsibilities of the Official Assignee and Mr Collier for the delays in advancing the proceeding, but both William Young J and the Court of Appeal proceeded on the basis that, for the purposes of the strike-out application, it was their collective conduct which mattered.
[42] William Young J's judgment records that on 11 June 1996, Mr Collier entered into an agreement with Andersons Engineering to buy a property in Christchurch along with an engineering library and sundry items of engineering supplies and plant for a total of $1,932,200. Mr Collier took possession of part of the property pending settlement. Andersons Engineering was a subsidiary of
· Ceramco Corporation Limited. Andersons Engineering had ceased trading and Ceramco was in the process of liquidating its assets including the subject property and equipment.
Mr Collier's intention was to sell at profit the library, engineering supplies and plant. His brother's company was a potential buyer or tenant of part of the property. His ambitions for other parts of the property included subdivision, development, refurbishment and tenanting. He envisaged selling off sufficient of the property to reduce the debt he would incur on acquisition and then either retaining the balance on a tenanted basis, or selling that as well.
Mr Collier did not settle on the settlement date (7 August 1986). In fact, by that date he had made comparatively little progress towards obtaining the funds necessary for settlement, according to William Young J. A series of disputes developed relating to conduct on the part of Andersons Engineering which Mr Collier regarded as warranting him not settling.
In August and October 1986, Andersons Engineering issued settlement notices. Mr Collier's response included lodging a caveat on 26 August 1986. On or about 17 October 1986, Andersons Engineering purported to cancel the contract and
then lodged a dummy mortgage. The result was that, on or about 3 November 1986, the District Land Registrar issued a notice to Mr Collier to the effect that the caveat would lapse unless an order to the contrary was obtained from the High Court.
Although Cavell Leitch filed an application on Mr Collier's behalf for an order that the caveat not lapse, the application was struck out by Holland J on 12 December 1986 due to procedural irregularities. For the purposes of the strike-out application, and for the purposes of the present application, it has been accepted that Cavell Leitch was negligent in failing to sustain the caveat. However, as William Young J observed at [10]:
The failure of the caveat proceedings would not have prevented the commencement by Mr Collier of a claim against Andersons Engineering seeking specific performance. Had such a claim been commenced an interim injunction could have been sought preventing the on-sale of the land in the meantime. So there is no obvious reason why the failure, on procedural grounds, of the proceedings to sustain the caveat should have been seen as excluding Mr Collier's underlying claim against Andersons Engineering.
There is a dispute about when, or if, Cavell Leitch advised Mr Collier of the reasons why the application to sustain the caveat failed. But Cavell Leitch's advice to Mr Collier was that he did not have grounds for challenging the cancellation of the contract. In October 1987 Mr Collier uplifted the file from Cavell Leitch and, in March 1988, issued the proceedings (CP131/88) against Cavell Leitch seeking damages for negligence.
William Young J recorded that the affidavits did not explain why Mr Collier did not sue Andersons Engineering. Mr Collier still has not explained why he did not do so. However, I now have evidence that the company was dissolved under s 336 of the Companies Act 1955 with effect from 25 March 1992. That was the date upon which notice was published in the Gazette. That notification was preceded by a letter dated 12 December 1990 from the company's secretary to the Registrar of Companies stating that the company had no assets or liabilities, was no longer operating, and requesting that the company be struck off the register. These events preceded any involvement by the Official Assignee.
William Young J found that there had been inordinate delay over the period of over twelve years which had elapsed between the commencement of the proceeding and the date of the hearing before him Plainly, the Official Assignee could not be responsible for the delay of over four years which occurred between the date of commencement of the proceedings in March 1988 and the grant of leave to the Official Assignee to continue the proceedings in July 1992.
However, the Judge noted that between July 1991 (the date of Mr Collier's adjudication) and October 1997, nothing of any moment happened as between the plaintiff and defendant other than the substitution of the Official Assignee as plaintiff and the filing of an amended statement of claim in September 1992. The Judge accepted however that there had been "extraordinary difficulties" in securing Mr Collier's co-operation, which did not finally become available until October 1998. William Young J observed at [30]:
It may be that Mr Collier does, indeed, have legal rights vis-a-vis the Official Assignee, see for instance Ord v Upton [2000] 1 All ER 1993. Mr Collier has been entitled to express his view about choice of counsel or as to the conduct of the case. But there can be no doubt that Mr Collier's view that he is a "residuary beneficiary" with the right to review the conduct of the claim, his tendency to see conflicts of interest everywhere and his litigiousness have combined to make very difficult the Official Assignee's task in advancing the litigation against the defendant.
At [68] William Young J accepted that these difficulties were a partial explanation for much of the delay but did not explain all the delays. He was satisfied that between July 1992 and October 1998, there were periods of time when the Official Assignee "did lose momentum". As the Judge recorded, however, from a realistic point of view, the Official Assignee could only prosecute the case effectively with the actual co-operation of Mr Collier. He nevertheless considered (at [72]) that "Mr Collier could probably have been brought into line earlier by the Official Assignee saying that unless full co-operation was provided, the Official Assignee would settle the case on the best possible terms then available". The Judge considered that if Mr Collier had not then co-operated, the Official Assignee would have been free to settle the case on the best possible terms.
The Judge then summed up the issue for the purposes of a strike-out application at [73]:
The long and the short of it is that the Official Assignee has, no doubt, very reluctantly and unwillingly, acquiesced in a management process for this litigation in which Mr Collier has been a very significant player. For that reason, and for the reasons which I have generally given, I think that for the purposes of the usual strike-out principles, the prosecution in this case must be treated as having been a team effort between Mr Collier and the Official Assignee with the result that the Official Assignee cannot fairly be permitted to excuse the inordinate delay by pointing to the behaviour of Mr Collier whom he has permitted to be his, in substance, co-plaintiff.
As earlier indicated, it is important to distinguish the issues which were before William Young J and the Court of Appeal from those relevant to the present application. For the reasons he gave, the Judge was not obliged to reach any final views as to the relative responsibilities of Mr Collier and the Official Assignee for the delay which occurred. Nevertheless, the assessment made by William Young J was that much of the delay was due to the difficulties in securing Mr Collier's cooperation ([68]). That view was reiterated by the Court of Appeal in its decision of 6 June 2001 at [4]:
The major reason for the delay was that there were ongoing difficulties between Mr Collier and the Official Assignee. It is unnecessary to discuss them in any detail, save to say that most of the blame appears to lie with Mr Collier.
My own assessment of the extensive affidavit evidence filed in connection with the strike-out application supports that view. In an affidavit sworn on 20 September 1994, Mr R A MacDuff, a senior investigating solicitor then employed by the Official Assignee in Christchurch, detailed the difficulties in securing Mr Collier's co-operation over the period from July 1992 until the date of the affidavit. Correspondence with Mr Collier is exhibited to the affidavit. Amongst other things, Mr Collier objected to the Official Assignee instructing Mr Jones as counsel on the basis that he was alleged to have an involvement with Mr Collier's claim against Creighton. Mr MacDuff deposed in his affidavit to the failure or refusal of Mr Collier to provide evidence required for the claim against Cavell Leitch despite repeated requests from the Official Assignee in 1993 and 1994. Mr MacDuff concluded:
18. I have formed the opinion that the bankrupt has no present intention of providing that information; and will continue to object to any steps I may take in the conduct of the proceedings. In my opinion his objective in this is to regain control of proceedings which he originally brought as litigant in person, and conduct them himself. This is not acceptable to the Official Assignee as in my opinion the proceedings are an asset which he should administer and make a recovery for the bankrupt's creditors.
By this stage, Mr Collier was discharged from his bankruptcy (with effect from 15 July 1994) and he applied in September 1994 to be reinstated as plaintiff The Official Assignee opposed Mr Collier's application and issued a separate application for directions in the bankruptcy proceedings. The respective applications were not heard until 5 February 1996 at which time Fraser J gave an oral decision with written reasons on 9 February 1996. It is unnecessary to review in detail the reasons for delay in hearing the applications filed in September 1994 except to note that they were part-heard on 3 April 1995 but were adjourned given Mr Collier's advice that he intended to appeal against a direction given by Fraser J at the hearing at that time.
In his decision in February 1996, Fraser J refused Mr Collier's application for reinstatement as plaintiff. The Judge noted that Mr Collier's essential point was that there should be a separate item of general damages claimed of $25,000 for worry, stress and strain which he had sustained personally in connection with the dispute with Andersons Engineering. The Judge considered that any right there might be to such damages vested in the Official Assignee and it was not necessary for Mr Collier personally to be a plaintiff in the proceeding. Fraser J also found that there was no basis for an order sought by Mr Collier that Mr Jones be barred from the offices of the Official Assignee.
As to the application for directions by the Official Assignee, Fraser J noted that:
The substantial longstanding difficulty seems to be the quantification of the claim. Mr Collier maintains that it should be on a certain basis. The Official Assignee takes the view that until documentary evidence which has been requested has been made available by Mr Collier, the quantification of the claim ought to be at a different and lower level. This difficulty has been compounded by the difficulties and disagreements I have referred to. The Official Assignee invited Mr Collier to nominate legal representatives that
he would be prepared to co-operate with. Mr Collier has not done that and maintains, inter alia, that he was not prepared to take any such step until the Official Assignee had replied to certain correspondence.
It seems obvious that what is required is the instruction of fresh legal representatives, co-operation from Mr Collier and the prosecution of the claim. It is clearly a case where the Official Assignee would be fully justified and warranted in engaging outside solicitors and counsel.
Fraser J then gave directions setting out a process for the selection of solicitors and counsel acceptable to the Official Assignee and Mr Collier.
Subsequent events were recorded in a further affidavit from Mr MacDuff sworn on 3 July 1998 in support of a further application by the Official Assignee for directions filed on 2 October 1997. Mr MacDuff deposed to the appointment in June 1996 of Mr W Palmer of Buddle Findlay to act as solicitor on behalf of the Official Assignee following the directions given by Fraser J in February of that year. The directions application sought various orders including an order for leave to proceed under the then r 426A, pre-trial directions and an order requiring Mr Collier to provide assistance to the Official Assignee's solicitors.
As with his previous affidavit, Mr MacDuff exhibited correspondence between Buddle Findlay and Mr Collier requesting further documentation and evidence relating to Mr Collier's ability to raise the funds necessary to complete the purchase of the property from Andersons Engineering. An example of the difficulties which arose is recorded in a letter from Buddle Findlay to Mr Collier of 23 October 1997 in which it is stated:
The position to date has been that you have refused to provide such assistance to me on the basis that you first require full access to solicitor/client communications between the Official Assignee and Buddle Findlay.
The Official Assignee's application for leave to proceed was granted on 28 October 1997 and pre-trial directions given. It seems that the application for an order requiring Mr Collier to provide assistance to the Official Assignee's solicitors was withdrawn at the time of the hearing as there were indications Mr Collier would be willing to co-operate. However, it appears further difficulties continued.
In the meantime, the Official Assignee was taking steps through his solicitors intended to advance the claim against Cavell Leitch. Mr MacDuff s affidavit records that there was no response from Mr Collier to letters from Buddle Findlay requesting further information on 19 March, 22 April, 27 May or 16 June 1998. A number of these requests were in response to issues raised by the solicitors then representing Cavell Leitch.
Matters were further detailed in an affidavit sworn by Mr Palmer on 26 October 2000 in opposition to the application by Cavell Leitch to strike out the claim against them. Mr Palmer recorded in his affidavit that during the period July to October 1998, considerable progress was made in improving relations between Mr Collier, the Official Assignee and Buddle Findlay in relation to the proceedings. By 21 October 1998, Mr Collier's co-operation had been obtained in relation to the preparation of a supplementary list of documents which enabled the Official Assignee to comply substantially with an "unless" order made in respect of further discovery and better particulars.
In its decision of 6 June 2001, the Court of Appeal was particularly critical of the failure by the Official Assignee to comply with Court orders made in late 1998 and early 1999 in relation to briefs of evidence. Those briefs were not in the end supplied until April 1999. While the Court of Appeal described the failure to supply the briefs on time as inexcusable (at [16]), that comment must be considered in the light of the view taken that, in relation to the strike-out application, no distinction should be drawn between delay attributable to the Official Assignee or to Mr Collier.
In fact, Mr Palmer gave a detailed explanation in his affidavit of 26 October 2000 of the reasons for the default in compliance with the Court order. He described a telephone conversation with opposing counsel in which he said it was acknowledged that some latitude might be required in relation to the deadline fixed by the Court. Mr Palmer also explained that the task of briefing the evidence to be called for the plaintiff proved much greater than anticipated. For example, he had personally spent some 330 hours briefing the relevant evidence. Faced by a refusal by opposing counsel to extend time, an application was filed for an extension to file the briefs of evidence.
In the end, the Court of Appeal was persuaded that the Cavell Leitch proceedings should be struck out. By then, the case was already 15 years old and "an important oral dimension" had been introduced into the case at a late stage which the Court considered materially disadvantaged Cavell Leitch because a witness of potential importance could not recall the relevant events. The Court considered that point on its own was sufficient to justify striking out the claim but added its expression of concerns about the overall delay. The Court concluded that justice could no longer be done.
Conclusions on the issue of delay
I am conscious of Mr Collier's point that I should not determine the substantive issues in his proposed proceeding in the context of this application for leave. But, in this case, there is a wealth of prior material and Court decisions available to assist an assessment, including correspondence by the Official Assignee and Buddle Findlay with Mr Collier during relevant periods. I am satisfied that this material is sufficient at least to form the broad assessment that, although the delay over the period from 6 July 1992 (when the Official Assignee took over the proceedings) until 2 July 1999 (when Cavell Leitch applied to strike out CP131/88) was lengthy and, indeed, inordinate, the major reason for the delay was the ongoing difficulties between Mr Collier and the Official Assignee as the Court of Appeal found.
I also agree with the observation of the Court of Appeal that most of the blame for the delay lies with Mr Collier. He accepts that he was under an obligation to co-operate with the Official Assignee in the prosecution of the claim against Cavell Leitch. That obligation is necessarily implied where the Official Assignee is granted leave to continue to bring proceedings on behalf of a bankrupt estate. It is confirmed by s 60 Insolvency Act 1967 (now s 138 and ss 139-146 Insolvency Act 2006) which places a statutory obligation on Mr Collier to assist the Official Assignee in the realisation of his property. Section 117 of the 1968 Act (now s 307 Insolvency Act 2006) requires a discharged bankrupt to continue to assist the Assignee.
Mr Collier had a direct personal interest in the pursuit of the claim against Cavell Leitch since he stood to receive any surplus available from the net proceeds of the claim after payment of his unsecured creditors whose claims were valued at approximately $150,000. There were few assets in the bankrupt estate so it was necessary for any judgment or settlement to exceed the amount of the debts plus the legal costs incurred by the Official Assignee in prosecuting the claim. The cost of doing so was being met by the Official Assignee from sources other than the bankrupt estate.
I would not wholly discount the possibility that some degree of negligence might be established against the Official Assignee despite the difficulties with Mr Collier which were described by William Young J as "extraordinary". It may be, as the Judge thought, that further action by the Official Assignee at an earlier stage may have enabled a settlement to be reached with Cavell Leitch but, for reasons which I discuss later in relation to damages, there are real difficulties in Mr Collier's way before a conclusion of prima facie ground could be made on this basis.
Does s 85 Insolvency Act 1967 protect the Official Assignee?
Mr Caro submitted that the Official Assignee was protected from any breach of duty by s 85 Insolvency Act 1967 (now s 225 Insolvency Act 2006). Under the provision in the 1967 Act, which was the provision in force at the time of the hearing, the assignee may apply to the Court for directions on any question of administration of the bankrupt's property and, by virtue of s 85(2) any assignee acting under any such direction should be deemed to have discharged his duty as assignee "in the subject matter of the application" notwithstanding that the direction may subsequently be invalidated, set aside, or otherwise rendered of no effect (subject to an exception in relation to fraud, wilful concealment or misrepresentation). Mr Caro submitted that the Official Assignee was generally acting under the Court's direction during the relevant period and that he was therefore protected from responsibility by virtue of s 85(2).
I am not persuaded that the Official Assignee is entitled to rely on this statutory protection to the extent he submits. The directions given by the Court did
not arise until a relatively late stage and, in any event, were limited in scope. In my view, it is going too far to say that the Official Assignee was generally acting in accordance with the directions of the Court. In any event, any protection available under s 85(2) is necessarily limited by the nature and scope of the directions. Protection is available to the Official Assignee only to the extent that he is acting in accordance with the directions given.
Other Aspects of the Plaintiff's claim
Up to this point I have primarily focused on the issue of delay which, on a generous view of the statement of claim, is raised by paragraph 10(a), (d) and, to a very limited extent, by (f).
To the extent that para 10(a) alleges a breach of a duty to act with utmost good faith "by opposing the plaintiff at every opportunity in order to protect himself' and others, I have already dealt with this issue in the context of responsibility for the delays which occurred.
The remaining allegations in para 10(b), (c) and (d) relate to alleged conflicts of interests between the Official Assignee and named individuals and certain further allegations against Buddle Findlay. In relation to those allegations, I expressed my reservations to Mr Collier during the hearing. Three main conflicts are alleged:
a) It is alleged that a partner in Young Hunter, the film that acted for
Cavell Leitch in the claim brought by Mr Collier, was married to Mr Saunders, the Official Assignee in Christchurch.
Mr Jones, a barrister on retainer from the Official Assignee was a friend and former partner of John Creighton, a previous solicitor of Mr Collier whom Mr Collier had sued. The Official Assignee took up that claim as well on Mr Collier's bankruptcy.
c)Buddle Findlay was instructed in respect of CP131/88 when that firm
had previously acted for Cavell Leitch in respect of another negligence claim.
I am satisfied not only that these issues do not raise any prima facie ground but also that it would be an abuse of process to permit them to be effectively relitigated in the proposed proceeding. Both Mr Saunders and Mr Jones disqualified themselves from involvement in the bankruptcy as a matter of precaution and in a judgment dated 21 August 1998 in B28/91, Chisholm J found that there was "not the slightest suggestion that there is any impropriety ...". And, as earlier discussed, Mr Collier sued Mr Jones in respect of the perceived conflict. The claim ultimately failed and was found by the Full Court to have been vexatious.
Buddle Findlay were appointed to act on behalf of the Official Assignee under the directions given by Fraser J on 5 February 1996. Those directions required the Official Assignee to submit a list of three Christchurch solicitors, three Christchurch counsel and three Wellington counsel to Mr Collier who was to notify the Official Assignee within 21 days which, if any, were acceptable to him. The Official Assignee nominated various solicitors and counsel but there was no response from Mr Collier. Nor was there any response from Mr Collier to the Official Assignee's request that he should himself nominate solicitor and counsel acceptable to him. In consequence, the Official Assignee appointed Mr Palmer of Buddle Findlay in June 1996 as solicitor to act on its behalf and Buddle Findlay appointed Mr Weston (now Mr Weston QC) to act as counsel at that stage.
Mr Collier had the opportunity to participate in the choice of solicitors and failed to do so. In those circumstances, there is no basis for his assertion in the statement of claim (para 10(c)(ii)) that Buddle Findlay was appointed "against the protestations of the plaintiff'. Nor is there any evidential basis for the assertion that there was a conflict of interest because Buddle Findlay had previously acted for Cavell Leitch in CP131/88.
The remaining allegations against Buddle Findlay are in para 10(d) and (e) of the statement of claim. They focus on the extent of fees which the Official Assignee is said to have "allowed" Buddle Findlay to charge in relation to the Cavell Leitch claim while acting "for several years without progress". There is no evidential basis for the suggestion that fees of over $500,000 were charged nor for the suggestion that the firm used the proceedings as a "cash cow". These allegations are examples
of the kind of extravagant and baseless allegation in other proceedings which led to Mr Collier being declared a vexatious litigant. None of these allegations reaches the stage of persuading me that there is a prima facie foundation for them.
Causation and Damages Issues
[80] Even if Mr Collier were able to establish some minor degree of negligence on the part of the Official Assignee through failure effectively to prosecute the claim against Cavell Leitch, there are formidable difficulties in relation to causation and damages. These issues were canvassed extensively by William Young J in his decision of 8 December 2000 and his analysis is helpful. At [81], William Young J observed that the case against Cavell Leitch was likely to involve the sort of considerations which arose in Kitchen v Royal Airforce Association [1958] 1 WLR 563. He considered that the case against Cavell Leitch was essentially to be assessed on the basis of a loss of a chance. He saw four particular areas of controversy likely to arise at trial:
a)Whether Mr Collier would have been able to maintain his bargain
with Andersons Engineering if Cavell Leitch had acted diligently and efficiently.b)Whether failures on the part of that firm impeded Mr Collier's ability
to sue Andersons Engineering and make a meaningful recovery.c)Whether Mr Collier could have settled if Andersons Engineering had
been willing (or forced) to do so.d)Whether Mr Collier would have made a profit if he had been able to
force a settlement with Andersons Engineering.
[81] Amongst the key issues discussed were whether Mr Collier would have had the ability to raise the substantial funds necessary to complete the purchase and whether Andersons Engineering was ready, willing and able to settle given the uncertainty as to whether the company was in a position to give vacant possession of the property to Mr Collier (since a tenant was in possession of part of the property). The observations made by William Young J at [120], although made in the context
of the strike-out application, have some bearing on the present application. The Judge said:
Further, it would be highly unsatisfactory if the Court was required to make a damages assessment based on what might have happened fourteen or fifteen years ago if events had panned out differently. As well, it is undeniable that any trial of this claim, as a whole, would now be very artificial with all witnesses other than perhaps Mr Collier (who can genuinely be expected to have a better detailed recall of what happened than anyone else) being in essence required to recreate the events of 1986 by reference to what documents remain available.
[82] The difficulties which William Young J foresaw in 2000 in relation to the prosecution of the Cavell Leitch claim are further compounded by the claim which Mr Collier now seeks to bring against the Official Assignee in relation to his actions and those of the solicitors engaged by him to prosecute the claim against Cavell Leitch. Any Court assessing the proposed claim by Mr Collier against the Official Assignee would, in addition to the considerations identified by William Young J in assessing damages on a loss of a chance basis against Cavell Leitch, have to consider whether:
a)Any negligence established against the Official Assignee had caused
or contributed to the striking out of the claim against Cavell Leitch and the consequent loss of opportunity to pursue that claim;b)The extent to which Mr Collier's own conduct was a contributing
factor;c)If the Cavell Leitch claim had been prosecuted to trial it would have
been successful and, if so, what the net recovery would have been;d)If the Official Assignee had acted with all proper diligence, would a
settlement with Cavell Leitch have been achievable prior to trial; and if so, what would the net recovery have been?
[83] The mere recitation of the issues identifies the difficulties faced by Mr Collier in prosecuting his claim against the Official Assignee and the highly speculative nature of the assessment of causation and damages issues.
[84] In addition, the events at issue now date back more than 20 years and even further time would elapse before any such claim came to a hearing. Concerns in this
respect identified by William Young J and the Court of Appeal in 2000 and 2001 are all the stronger with the lapse of a further seven years since that time. The prospects of litigating such a stale claim are decidedly unattractive. Mr Collier has himself been responsible for substantial delay first in prosecuting CP192/96 and secondly in delaying his application for leave to proceed against the Official Assignee until 2007. As earlier indicated, Mr Collier has taken no steps whatever to prosecute CP192/96 since filing the statement of claim and has allowed a further 11 years to go by before bringing the current application to proceed against the Official Assignee.
Leaving aside any possible issues in relation to the Limitation Act 1950, the delay, by any assessment, is excessive and would lead to very substantial difficulties at trial if leave to proceed were granted.
I also accept Mr Caro's proposition that Mr Collier's allegations of loss set out in para 14 of the statement of claim are misconceived. That is because they are formulated as if they were a claim by Mr Collier (or by the Official Assignee on his behalf) against Cavell Leitch. As already discussed, the claim against the Official Assignee which Mr Collier now proposes is one step removed from the claim against Cavell Leitch. Loss of opportunity in relation to the agreement for sale and purchase, the specific losses claimed in connection with that purchase and the claim for loss of future profits are not recoverable as such against the Official Assignee. Any claim against the Official Assignee would have to be formulated on the basis of the loss of an opportunity successfully to prosecute the claim against Cavell Leitch to judgment or to force a settlement of the claim against Cavell Leitch.
The same criticisms are applicable to the other claims for relief specified in the statement of claim. It is possible that the general damages claim of $25,000 might, if the claim were successful, be viable but that is such a trivial part of the claim that it could not warrant proceedings. The claim for exemplary damages for $200,000 is not demonstrated to be justified even to a prima facie extent.
Summary of conclusions in relation to CIV 2007-409-1270
At best for Mr Collier, there is an outside chance that he could establish a relatively minor degree of negligence against the Official Assignee in the effective prosecution of the claim against Cavell Leitch. There is no other basis upon which to establish any prima facie ground for a successful claim against the Official Assignee. There are major difficulties in Mr Collier's way in the areas of causation and damages. Despite the admitted negligence of Cavell Leitch in relation to their attempts to sustain the caveat, there remained in that proceeding the very real issues and problems identified by William Young J and detailed in [80] above. Any damages available in the Cavell Leitch proceeding would have required assessment on a loss of a chance basis.
Attempting to undertake that assessment over 20 years later would present major and probably insurmountable problems for Mr Collier. Those difficulties are compounded by the further need to address the issues in the proposed proceeding which are identified at [82] above. Mr Collier's failure to initiate the application for leave for some seven years after he was declared a vexatious litigant and some 11 years after he initiated CP192/96 is unexplained and adds significantly to the difficulties in prosecuting claims which were already very stale in 1996.
Even if Mr Collier were able to succeed to a minor degree in establishing negligence against the Official Assignee, his claim for damages as formulated is misconceived for the reasons set out in [86]. It could not succeed on the basis of the current pleading and I am not willing at this juncture to allow it to be reformulated.
I conclude that no prima facie ground is established to enable the proposed claim to proceed and that to allow it to do so would amount to an abuse of process.
Is there a prima facie ground in relation to CP192/96?
[92] I am not willing to grant leave to allow Mr Collier to proceed with CP192/96. This proceeding was concerned with two alleged breaches of duty on the part of the Official Assignee:
a)Failing to include a claim for general damages for worry, stress and
strain in the third amended statement of claim.b)Failing to file and serve a claim against Andersons Engineering in
relation to the agreement for sale and purchase.
[93] First, this claim was found to be vexatious by the Full Court when declaring Mr Collier a vexatious litigant. Secondly, the allegation in relation to general damages is trivial and could not warrant the grant of leave. Thirdly, it was always open to Mr Collier himself to bring a claim against Andersons Engineering if he had wished to do so prior to his bankruptcy. And, so far as the Official Assignee is concerned, that company had been dissolved before the Official Assignee's involvement.
Result
[94] The application by Mr Collier for leave to bring the claim against the Official Assignee under CIV 2007-409-1270 and the application for leave to continue the proceeding CP192/96 is dismissed.
[95] If the Official Assignee seeks costs, a memorandum should be filed and served within four weeks of the date of this judgment.
A P Randerson, J
Chief High Court Judge
APPENDIX
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
No. CIV ...............
BETWEEN JOHN MICHAEL COLLIER, RETIRED, OF CHRISTCHURCH Plaintiff
AND THE ATTORNEY GENERAL, ON BEHALF OF THE OFFICIAL ASSIGNEE
IN BANKRUPTCY, CHRISTCHURCH
Defendant
STATEMENT OF CLAIM
| Feeoll Plaintiff in Person 236 Innes Road Christchurch Telephone 355 4994 | HIGH COURT 3 I MAY 2007 |
Fee waived
THE PLAINTIFF SAYS:
1/ The Plaintiff was adjudicated Bankrupt on 15th July 1991.
2/ Included in the assets passing to the Official Assignee on the
15th July 1991 was a substantial claim in the High Court (CP 131/88) brought by the Plaintiff against his former Solicitors Cavell Leitch Pringle and Boyle.
3/ On 6th July 1992 the Official Assignee was granted Leave by the
High Court to continue Proceeding CP 131/88.
4/ By 6th July 1992 at the latest the Official Assignee was aware
that certain causes of action could be statute barred unless action was taken before 21st September 1992.
5/ The Official Assignee through his Office Solicitor, and a Barrister
(David Jones) working out of his office filed and served a third
Amended Statement of Claim on or about 6th July 1992.
6/ The Third Amended Statement of Claim failed to claim for invalid
cancellation of the Contract by Anderson Engineering Ltd and that action became statute barred.
7/ In 1996 the Plaintiff issued Proceedings (CP 192/96) in the High
Court Christchurch against the Official Assignee for failing to claim for invalid cancellation of the Contract by Anderson's Engineering Ltd and causing that cause of action to become statute barred.
8/ After filing the 3rd Amended Statement of Claim the Official
Assignee instructed Buddle Findlay to conduct the proceedings on behalf of the Official Assignee in CP 131/88.
9/ As Trustee of the Plaintiff's bankrupt estate the Official Assignee
owed the Plaintiff in law and in equity the following obligations:-
(a)To act with the utmost good faith.
(b)Not to allow any conflict of interest between the Official Assignee and the bankrupt's interests to arise.
(c)Not to allow any employee or agent of the Official Assignee to act when there was a conflict of interest re the bankrupt or potential for a conflict of interest to arise during the course of the work or agency.
(d)To attend to all matters affecting the bankrupt's estate in a timely and professional manner.
(e)To protect the assets of the bankrupt.
(f)As an Officer of the Court to comply with the Rules of the
Court and to ensure any Solicitor or Barrister acting for the Official Assignee acted in accordance with Court Rules and complied with Orders of the Court.
10/ The Official Assignee Christchurch failed to fulfill the obligations in Paragraph 9 above in the following respects:-
(a)Did not act with utmost good faith by opposing the
Plaintiff at every opportunity in order to protect himself, his staff, his contract Barrister and his agent (in particular Buddle Findlay) and to blame the Plaintiff for delays in prosecuting CP 133/88.(b)The Official Assignee was married to Dorothy Saunders,
the Principal in Young Hunter & Co, a Christchurch firm of Barristers and Solicitors who were solicitors defending another of the Plaintiff's cases under control of the Official Assignee (the Creighton case) and also represented Cavell Leitch Pringle and Boyle in CP 131/88.(c)(i) The Official Assignee allowed David Jones, with interests that conflicted with the Plaintiff's, to work on CP 131/88 and also the Creighton case.
(ii) Against the protestations of Plaintiff, appointed
Buddle Findlay to prosecute CP 133/88 on behalf of the Official Assignee when Buddle Findlay had previously acted for the Defendants in CP 131/88 involving negligence by those Defendants.
(d)Allowed Buddle Findlay to use CP 131/88 as a cash cow
for several years without progress and to blame the Plaintiff for the delay.(e)Allowed Buddle Findlay to charge over $500,000 for fees.
(f)Failed to comply with orders of the Court and failed to
ensure Buddle Findlay complied with those orders, resulting in the proceedings being dismissed by the Court of Appeal on 6th June 1991 for lack of prosecution.
11/ The Defendant owed the Plaintiff obligations of a fiduciary nature as contained in Paragraph 9 and failed to fulfill those obligations as particularised in Paragraph 10.
12/ The breaches by the Defendant has caused unnecessary work, worry, stress and strain to the Plaintiff.
13/ The Defendant acted with contumelious disregard to the Plaintiff's rights and the obligations owed by the Defendant in Law and Equity to the Plaintiff.
14/ As a result of the actions and omissions of the Defendant in breach of his fiduciary obligations the Plaintiff suffered loss as follows:-
(a)Loss of the benefit of the caveat to protect the Plaintiff's
interest in the Lane.(b)Loss of opportunity to have the Plaintiff's grievances
under the contract for sale and purchase and the substantive differences between the parties settled by agreement or by the High Court, which still having the Plaintiff's interest in the Land protected by the caveat.(c)Loss of opportunity under item (b) above for the Plaintiff
to obtain specific performance of the contract for sale and purchase.(d)Loss of opportunity for the Plaintiff to complete the
purchase of the Land, plant and other property and to acquire ownership of the Land, plant and other property.(e)Loss of the deposit paid by the Plaintiff pursuant to the
contract for sale and purchase.(f)Loss by way of specific costs incurred by the Plaintiff as
follows:-(i)Surveyors costs 9,059.57
(ii)Valuation costs 12,500.00
(iii)Private Detective costs 1,760.00
(iv)Cleaning Trust costs 600.00
(v)Travelling expenses 440.00
(vi)Telephone expenses 32.00
(vii)Legal expenses 2,500.00
(viii)Financing expenses 4,000.00
(ix)Labour/wages expenses 35,000.00
$65,891.57
(g)Loss by the Plaintiff of future profits totalling at least
$2,300,000.00.(h)Loss of enjoyment of life by the Plaintiff due to very
considerable inconvenience, worry and stress caused by the negligence of the Defendant.(i)Exemplary damages.
APPLICATION FOR RELIEF - FIRST CAUSE OF ACTION: The Plaintiff claims:‑
A. Judgment for special damages as follows:‑
(a)Loss of deposit $50,000.00
(b)Specific costs $65,891.57
(c)Loss of future profits $2,300,000.00
B. Judgment for general damages for inconvenience, worry and
stress to the Plaintiff $25,000.00
C. Judgment for exemplary damages $200,000.00
D. Judgment for GST on any of the above amounts if applicable.
E. Interest on such sums and at such rate as the Court deems just
from 12 December 1986 to the date of judgment.
F. Costs.
OR ALTERNATIVELY the Plaintiff repeats Paragraphs 1-14 and further says:
15/ The Plaintiff also lost the opportunity to claim for the difference between the price he bought the land, buildings and plant at and the value of those assets at that time.
16/ The Plaintiff bought the assets aforementioned in Paragraph 15 for a sum exceeding $800,000.00, less than their value at date of purchase.
Wherefore the Plaintiff claims:‑
A. Judgment for special damages as follows:‑
(a) Loss of deposit $50,000.00
(b) Specific costs $65,891.57
(c) Loss of a bargain $800,000.00
B.Judgment for general damages for inconvenience, worry and
stress to the Plaintiff $25,000.00
C.Judgment for exemplary damages $200,000.00
D.Judgment for GST on any of the above amounts if applicable.
E.Interest on such sums and at such rate as the Court deems just
from 12 December 1986 to the date of judgment.F.Costs.
SECOND AND ADDITIONAL CAUSE OF ACTION - NEGLIGENCE 17/ The Plaintiff repeats Paragraphs 1-16 above.
18/ At all times the Defendant owed the Plaintiff a duty of care in discharge of his duties as Trustee in Bankruptcy.
BREACH OF DUTY
19/ The Defendant was negligent and in breach of the Duty of Care he owed the Plaintiff in the following respects:
(a) The Plaintiff repeats Paragraph 10 above particularly C(ii),
d, e, f.
20/ As a result of the Defendant's negligence the Plaintiff suffered loss as follows:‑
(a) The Plaintiff repeats Paragraph 14 (a) - (i) herein.
APPLICATION FOR RELIEF - SECOND CAUSE OF ACTION The Plaintiff claims:
A. Judgment for special damages as follows:‑
(a) Loss of deposit $50,000.00
(b) Specific costs $65,891.57
(c) Loss of future profits $2,300,000.00
B. Judgment for general damages for inconvenience, worry and
stress to the Plaintiff $25,000.00
C.Judgment for exemplary damages $200,000.00
D.Judgment for GST on any of the above amounts if applicable.
E.Interest on such sums and at such rate as the Court deems just from 12 December 1986 to the date of judgment.
F.Costs.
OR ALTERNATIVELY the Plaintiff repeats Paragraphs 1-20 and further says:-
21/ The negligence of the Defendant caused the Plaintiff to suffer loss of the chance to claim for loss of a bargain between the price the Plaintiff paid for the land, buildings and plant, and the value of those assets at the time he bought them.
22/ That the Plaintiff bought the aforementioned assets for an amount exceeding $800,000 less than what those assets were worth at the date he purchased them.
| Where the Plaintiff claims:‑ A. Judgment for special damages as follows:‑ (a) Loss of deposit (b) Specific costs (c) Loss of a bargain | $50,000.00 $65,891.57 $800,000.00 |
B.Judgment for general damages for inconvenience, worry and
stress to the Plaintiff $25,000.00
C.Judgment for exemplary damages $200,000.00
D.Judgment for GST on any of the above amounts if applicable.
E.Interest on such sums and at such rate as the Court deems just from 12 December 1986 to the date of judgment.
F.Costs.
This Statement of Claim is filed by the Plaintiff, John Michael Collier, acting in person whose address for Service is 236 lnnes Road, Christchurch ‑
Telephone 355 4994.
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