Reid and Hale as Trustee of the Frederick Frank Trust v Caterton Auto Court Limited T/A McKenzie Motors HC Masterton CIV 2010-435-120

[2010] NZHC 1668

IN THE HIGH COURT OF NEW ZEALAND MASTERTON REGISTRY

CIV 2010-435-120

UNDERthe Judicature Act 1908, the Judicature Amendment Act 1972, the Declaratory Judgments Act 1908, the Credit (Repossession) Act 1997, the Land Transfer Act 1952 and the New Zealand Bill of Rights Act 1990

IN THE MATTER OF     the judicial review of judgments of the Masterton District Court Registrar and the Masterton High Court Sheriff

BETWEEN  JAMES ROBERT REID AND GRAEME FREDERICK HALE AS TRUSTEE OF THE FREDERICK FRANK TRUST Applicants

ANDCARTERTON AUTO COURT LIMITED TRADING AS MCKENZIE MOTORS First Respondent

ANDMASTERTON DISTRICT COURT Second Respondent

ANDMASTERTON HIGH COURT Third Respondent

Hearing:         15 September 2010 (Heard at Wellington)

Counsel:         Applicants in Person

A M Hewton for First Respondent
D M Consedine and T Warburton for Second and Third Respondents

Judgment:      15 September 2010

JUDGMENT OF RONALD YOUNG J

JAMES ROBERT REID AND GRAEME FREDERICK HALE AS TRUSTEE OF THE FREDERICK FRANK TRUST V CARTERTON AUTO COURT LIMITED TRADING AS MCKENZIE MOTORS AND ORS HC MAS CIV 2010-435-120  15 September 2010

Introduction

[1]      On  28 June 2010  the  named  applicants  filed  these  proceedings.     The proceedings seek five declarations and an order.   All the orders sought and the essence of the proceedings apparently relate to the failure of a credit contract for the purchase of a car from the first respondent by the Frederick Frank Trust.

[2]      The plaintiffs’ case seems to be that the car was wrongly repossessed and disposed of by the first respondent contrary to the interest of the Frederick Frank Trust.   It seems the first respondent obtained judgment in the Masterton District Court for  the  unpaid  capital  and  interest  on  the  loan  made  with  respect  to  the purchase of the vehicle.  When the sum remained outstanding the plaintiffs say the first respondent wrongly, through the Masterton High Court, obtained a writ of sale and sold the property owned by the Trust to pay for the outstanding debt.

[3]      The declarations and orders sought in the statement of claim are as follows:

A.         A DECLARATION that Carterton Auto Court Limited fraudulently claimed that Frederick Frank Trust was indebted to it pursuant to a credit contract.

B. A DECLARATION that the Registrar  of the Masterton District Court breached his/her statutory obligations by entering a default judgment  in  favour  of  Carterton  Auto  Court  Limited  against Frederick  Frank  Trust  on  19 January 2007  without  evidence  of indebtedness.

C. A DECLARATION that the Wairarapa Sheriff of the Masterton High Court breached his statutory obligations by issuing a Writ of Sale for 74 McLean Street, Woodville, being property owned by Frederick Frank Trust, without evidence of indebtedness.

D.         A DECLARATION that the Wairarapa Sheriff of the Masterton High Court breached his statutory obligations by retaining the services of Ainslie Hewton, solicitor for Carterton Auto Court Limited, to execute the Writ of Sale in circumstances resulting in a clear conflict of interest.

E. A DECLARATION that the transfer of title of 74 McLean Street, Woodville, was executed as a consequence of fraud by Carterton Auto Court Limited and therefore is invalid in terms of the Land Transfer Act 1952.

F.AN  ORDER  that  the  respondents  pay  to  Frederick  Frank  Trust sufficient  damages  and  compensation  to  enable  it  to  repurchase

74 McLean Street, Woodville.

[4]      Although not directly pleaded (but asserted in some of the intituling) as I understand the position Mr Graeme Frederick Hale is said to be the sole trustee of the Frederick Frank Trust and therefore sues as trustee.

[5]      The original proceedings were intituled as being in the Palmerston North Registry of  the  High  Court.    However  they were  rejected  at  that  Registry and directed to be filed in the Masterton Registry given the first respondent was resident in Masterton.

[6]      I  have  before  me  a  series  of  interlocutory  applications  both  by  the respondents and the applicants.

Standing of Mr Reid

[7]      The first point to be dealt with is the claim of Mr Reid to be an applicant that is whether he has standing to bring these proceedings.  He cannot be an applicant in these proceedings.   He has no interest whatsoever in the outcome of these proceedings.  He is neither a trustee nor beneficiary of the trust nor has he suffered, as alleged in the statement of claim, any harm or any interference with his rights arising from the facts of this case.  As HCR 4.1(a) notes, those who are to be parties to the proceedings are those:

“whose presence before the Court is necessary to justly determine the issues arising”.

[8]      Mr Reid’s presence is not necessary to determine the issues in this case.

[9]      He claims that any interested citizen can ask for a declaration on any matter whatsoever.  That is not the law.  Mr Reid has no interest in this private law action. This may be contrasted with litigation involving public issues.   However even in such litigation the plaintiff/applicant must have some interest beyond the general

public (Finnigan v NZRFU [1985] 2 NZLR 159). Mr Reid therefore should be removed as one of the applicants. I so order.

Claim to be lay advocate

[10]      Mr Reid has, independent of his claim to be an applicant, made application for an order that he be recognised as “representing” the applicant trust.  Mr Reid is neither a barrister nor a solicitor.

[11]     To date Mr Reid, from time to time together with Mr Hale, seems to have been responsible for this litigation.  He has filed the original proceedings and many of  the  subsequent  documents.    For  example the most  recent  application  by the applicants for orders transferring the proceedings to the Palmerston North Registry was signed by Mr Reid alone.

[12]     It is only in exception circumstances that a litigant may be represented by a lay person.[1]   This is not such a situation.  There is no evidence before the Court that Mr Hale is for any reason unable to instruct a lawyer or indeed to pursue these proceedings himself.   Given the potential complexity of the claims it would be hugely  advantageous  for  him  to  instruct  a  lawyer.    Mr Hale  has  said,  in  his application for waiver of the filing fee in these proceedings, that he is impecunious.

It is likely therefore he would be granted legal aid subject of course to counsel being prepared to take the case and the legal aid authorities being satisfied that the case has a credible chance of success. (See however my comments at [25].)

[1] See Re GJ Mannix Ltd [1984] 1 NZLR 309 (CA).

[13]     The issues raised in these proceedings by Mr Hale are well beyond the legal skills of Mr Reid.  The drafting of the statement of claim (by Mr Reid) illustrates the point all too well as does the misapprehended attempt to have the proceedings filed in the Palmerston North High Court.   The proceedings raise serious allegations of fraud.  Before such allegations are made careful analysis of the facts and law should be undertaken.  Mr Reid does not have either the necessary skill or knowledge to do so.

[14]     Given the development of these proceedings to date Mr Reid has already incurred significant unnecessary cost to both the respondents and Mr Hale.  It is in part for Mr Hale’s protection that I refuse the order sought.

[15]     I therefore refuse the application by Mr Reid to represent, in a formal sense, Mr Hale.  Of course it is a matter entirely for Mr Hale who he asks to help him with the proceedings.  But Mr Reid cannot file documents and cannot participate in any Court occasion unless a Judge agrees Mr Reid can act as a McKenzie friend assisting Mr Hale.  I strongly urge Mr Hale, however, to get proper legal advice.

Proper Court

[16]     I turn to the next interlocutory application.   Mr Reid filed an application relating to the correct Court for these proceedings.  He did so before this judgment and before it was clear that he could neither be an applicant nor represent Mr Hale. In those circumstances in fairness to Mr Hale I consider the interlocutory application to transfer the proceedings or to declare that the Palmerston North Registry of the High Court is the proper Court.

[17]     This application can be dealt with simply.   Rule 5.1(a) High Court Rules provides as follows:

5.1      Identification of proper registry

(1)      The proper registry of the court, for the purposes of rules 5.25 and

19.7, is,—

(a)       when a sole defendant is resident or has a principal place of business in New Zealand, the registry of the court nearest to the residence or principal place of business of the defendant, but when there are 2 or more defendants, the proper registry is determined by reference to the first-named defendant who is resident or has a principal place of business in New Zealand:

...

[18]     The  Masterton  High  Court  is  clearly  the  Court  nearest  to  the  first respondent’s principal place of business and is therefore the proper Court for the filing of these proceedings.

[19]     Mr Reid now accepts the Masterton High Court is the proper Court for filing in the sense he has filed the proceedings in that Court.  He however says it is in the interests of justice that these proceedings be transferred to the Palmerston North High Court (HCR 5.1(5)).  Mr Reid’s point is that the plaintiff and first respondent all live in an area which is closer to Palmerston North than Wellington and it would therefore be more convenient for the case to be heard in Palmerston North.

[20]     The  second  and  third  respondents  take  a  neutral  position.     The  first respondent opposes the transfer.  It says it is more convenient for its representatives to travel to Wellington than Palmerston North.   In the absence of it clearly being more convenient for the proceedings to be in Palmerston North, which is currently the position, I refuse the application for transfer.

Security for costs

[21]     The first respondent has made an application for security for costs from Mr Hale.  That seems hardly surprising given Mr Hale’s declared impecuniosity.  In fairness to Mr Hale, however, he now needs to consider this application and as I have indicated seek legal advice.  The proper course, therefore, is for me to adjourn the   first   respondent’s   application   for   security   for   costs   until   Mr Hale   can satisfactorily consider the application and as I have said obtain legal advice.

[22]     I   therefore   adjourn   that   application   for   three   weeks   to   Monday,

11 October 2010 at 10.00 a.m. for a further callover on the civil list.

Other matters

[23]     During  the  course  of  discussion  regarding  these  proceedings  Mr Hale’s application for waiver of the filing fee was discussed.

[24]     Two aspects of the application for waiver are of concern.  The application for waiver was made only by Mr Hale.   However at that time Mr Reid was also an applicant.  The Registrar who considered the application should also have required

Mr Reid to complete an application for waiver detailing his financial circumstances given he was a co applicant.  The financial position of both applicants should have been considered before a decision was made on waiver.

[25]     Secondly, some of the pleadings identify Mr Hale as suing as a trustee of the Frederick Frank Trust.  Indeed the content of the statement of claim proceeds on that basis.    In  completing the application  for  waiver  therefore  Mr Hale should  have identified  the  Trust  assets  and  liabilities  not  his  personal  assets  and  liabilities. Mr Hale confirmed in Court the trust assets consist of a $30,000 mortgage and some furniture.

[26]     Mr Hale will therefore need to attend at the Masterton Court, advise the Registrar of the discrepancy and complete the waiver form (assuming it is still sought) based on the trust assets.   The Registrar will then need to reconsider the waiver application given this new information.

[27]     I reserve the question of costs.

Ronald Young J

Solicitors:

J R Reid, 2 Vogel Street, Woodville, email: [email protected]
G F Hale, PO Box 114, Woodville

A M Hewton, Principal, PO Box 382, Masterton, fax: [phone]

D M Consedine, Crown Law, PO Box 2858, Wellington 6140 email:  danielle[email protected]