Rutherford v Sovereign Assurance Company Limited

[2016] NZHC 1312

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV-2014-419-000282 [2016] NZHC 1312

IN THE MATTER

of the Contractual Remedies Act 1979

BETWEEN

ROSS RUTHERFORD Plaintiff

AND

SOVEREIGN ASSURANCE COMPANY LIMITED

Defendant

Hearing:	10 June 2016
Counsel:	AD Banbrook for Plaintiff AS Ross and PMC Gibbs for Defendant
Judgment:	16 June 2016

JUDGMENT OF ASHER J (Staying proceedings)

This judgment was delivered by me on Thursday, 16 June 2016 at 4.30 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:

Clyde Law Ltd, Hamilton.

Chapman Tripp, Auckland. A D Banbrook, Auckland.

RUTHERFORD v SOVEREIGN ASSURANCE COMPANY LTD [2016] NZHC 1312 [16 June 2016]

Introduction

[1]      This case is set down for hearing in September 2016.   While I have been Duty Judge  at  Hamilton  I have  presided  over  three  conferences  relating  to  the conduct of this file. Those conferences arose immediately out of a minute of Heath J where, after a long history of defaults, his Honour made an unless order against Mr Rutherford.  In a minute of 6 April 2016 following a conference at which there had been a failure to attend on behalf of the plaintiff, or his counsel Mr Banbrook, he directed:

[6]   I make an order that unless Mr Rutherford files and serves, on or before

13 May 2016, an affidavit and makes available for inspection the listed categories of documents, his claim shall be struck out.

He also stated:

[8]   Having regard to the history to the application for particular discovery and the time that has passed since it was filed, I consider costs should be awarded in favour of Sovereign on the interlocutory application.  I make an order for costs against Mr Rutherford on a 2B basis, together with reasonable disbursements.   Those costs and disbursements shall be quantified by the Registrar.   If compliance has been made with the “unless” order but costs have not been paid, counsel for Sovereign may make an oral application at the next call for an order striking out the proceeding for non-compliance with the direction to pay costs.

[9]   For the purpose of making further procedural directions to ensure the September hearing date is not lost, I adjourn the proceeding for mention in the Chambers List at 9am on 1 June 2016.  The conference will be held by telephone, immediately following call of other proceedings in the List in Court.  Memoranda shall be filed and served no later than 27 May 2016 for that conference.   The memoranda should set out the directions each party seeks.   In the event there has been no compliance with the “unless” order made today, Sovereign may make submissions on questions of costs at that time.

[2]      The defaults of the plaintiff worked at two levels.   On the one hand there were the interlocutory/discovery defaults referred to by Heath J.   However, in the meantime there was also a failure by the plaintiff to file his briefs of evidence for the pending trial, as required by the trial directions.

[3]      No memorandum was filed by or on behalf of the plaintiff.   However, an affidavit of Mr Rutherford sworn on 13 May 2016 was filed.

[4]     Before the 2 June 2016 conference, Mr Ross for the defendant filed a memorandum submitting that the affidavit of 13 May 2016 did not comply with the order and that there were more documents to be discovered.   He specified those documents.  He applied for an order that the unless order applied and to strike out the proceeding.  In addition, he pointed out that the costs of $6,348 had not been paid in breach of the order.

[5]      At  the  telephone  conference  on  2  June  2016  it  was  apparent  that  the discovery was incomplete and no costs had been paid.  I gave the plaintiff a further chance.  The minute was dictated in the presence of Mr Banbrook for the plaintiff, and Mr Ross and Ms Gibbs for the defendant.  Mr Banbrook consented to the orders being made, and indeed had appeared to ensure the costs were paid.  Having set out the background I directed as follows:

[12]  I therefore in summary make the following orders:

(a)   There will be a telephone conference at 2.15 pm on Thursday,

9 June 2016.

(b)   Before that telephone conference Mr Rutherford is to:

(i)   File a further affidavit disclosing the April 2011 court file and the file from the Lyttelton  rehabilitation  centre.   This will involve  Mr  Rutherford  contacting  both  the  court  and  the centre and obtaining copies of the documents.  Obviously this must   be   pursued   immediately  if  there   is   going  to   be compliance within a week.

(ii)  The costs and disbursements of $6,348 are to be paid before that conference.

(c)   The plaintiff’s briefs and bundle nominations are to be filed also

before that conference.

[6]      In the days that followed none of these orders were complied with.   No memorandum was filed on or behalf of the plaintiff.  The costs were not paid.  When the telephone conference took place at 2.15 pm on Thursday, 9 June 2016 Mr Ross again urged me to strike out the proceeding.

[7]      At the telephone conference on 9 June 2016 Mr Banbrook asserted that he had not seen a copy of my minute.  I have checked and the court records show it was sent to Mr Banbrook at 4.17 pm on Friday, 2 June 2016.  Mr Banbrook said that he

had problems with his emails.  He offered no satisfactory explanation as to why the briefs had not been filed, or the costs not paid.  He did, however, say that he would arrange for this all to be done by 5 pm on that day.

[8]      My minute at that conference recorded:

[5]   At the telephone conference today Mr Banbrook advises that because of a computer failing he had not received a copy of the minute.  He does not address the position of his instructing solicitors.  It seems that today he has endeavoured to contact Phoebe Peters at this court to get a copy.  Ms Peters has been away today.  He says that he will have the cheque and the briefs referred to in my minute of 2 June 2016 delivered to Ms Gibbs at Chapman Tripp by 5 pm today.  He says he has no knowledge of the matters referred to in [12](b)(i) of my minute, which refers to a further affidavit disclosing the April 2011 court file and the file from the Lyttelton Rehabilitation Centre. These matters were discussed extensively at the 2 June conference and the minute I made back then was a consequence of those discussions. Therefore, I cannot understand why Mr Banbrook is now expressing no knowledge about these matters.

[6]   The facts speak for themselves.   It seems to me that the plaintiff has been given every possible opportunity to comply with the various orders that have been made.  The history of default is quite remarkable.  I have decided not, however, to strike out the claim this afternoon.  I will wait to see what transpires later this afternoon.

[7]   There will be another telephone conference at 9 am tomorrow, 10 June

2016.   If there has not been compliance with the directions made in my minute of 2 June 2016 in relation to the briefs and the costs, I will vacate the fixture set down for September 2016 and I will stay the proceedings until further order of the Court.

[9]      Today Mr Ross renews his application for strike out of the proceedings and for full costs.

[10]     A cheque was received for the costs before 5 pm.  It was a cheque signed by Mr Banbrook personally.   Some documents called “statements” have been served. They were statements of Nathan Williams, David Quilliam and Shayne Yates.  They do  not  on  their  face  relate  to  these  proceedings,  having  as  a  heading  “Ross Rutherford – Lumley General Insurance (NZ) Ltd”.   They are dated 7 December

2011.   They appear to be draft statements sent by Mr Banbrook to the stated individuals and designed for proceedings with a different insurer.

Discussion

[11]     Rule 9.7(4) of the High Court Rules sets out the requirements in relation to witness statements.  It provides that every witness statement must be signed by the witness by whom the brief is made.   I do not accept that the documents given to Mr Ross constitute compliance with my minutes.   The documents served are not signed and do not appear to relate to this proceeding, but rather to a dispute with a different insurer, Lumley General Insurance (NZ) Ltd.  They appear to be draft briefs of witnesses to the accident.  The fact of the accident, however, is not the issue in this case.

[12]     The fact that there was an accident and that Mr Rutherford sustained injuries appears to be admitted at para 9 of the statement of defence.  There are issues as to how the accident was caused, but the affirmative defences that are raised allege a breach of the duty of disclosure when the policy commenced, misstatement by the plaintiff in his proposal, and a lapse of the policy.  These are issues that would be expected would be addressed in a brief by Mr Rutherford.   As I have said, there appears to be no brief prepared for him or anyone else for this pending hearing. None have been served.

[13]     The statements provided do not cover the matters at issue in the proceeding. They also do not address the physical and mental injuries allegedly incurred in the accident, or Mr Rutherford’s inability to work since that date.   I accept that these details should be provided in briefs at this point of time because, as Mr Ross asserts, the defendant will wish to investigate the claimed injuries.  They will wish to brief their own experts and indeed they may wish to seek to examine Mr Rutherford under s 100 of the Judicature Act 1908.  They are effectively stalled in their preparation by the non-compliance.

[14]     Mr Banbrook in today’s telephone conference said a number of times that he had difficulty in getting hold of his client.  As Mr Ross pointed out, this is not easily reconciled with the fact that Mr Rutherford signed a detailed affidavit on 13 May

2016.

[15]     The briefs of evidence were to have been served by 29 April 2016.  It seems clear to me that no effort has been made to prepare briefs.  Instead, as I have said, some old witness statements prepared in relation to a different claim, have been delivered in a token attempt to comply with the directions.

[16]   Moreover, although Mr Banbrook orally asserted today that the further discovery that I had directed in my minute of 2 June 2016 was not available because the documents did not exist, there is no document before me indicating that this is so.

[17]     In summary, my directions in my minutes of 2 June and 9 June 2016 have not been complied with. The non-compliance is serious. There are no briefs filed for the pending trial, and given this history there can be no confidence that they will be filed.  There remain unanswered gaps in the discovery that has been provided by the plaintiff.

[18]     The position must also be seen in relation to the long history of defaults in this case. These were summarised by Mr Ross in his memorandum of 9 June 2016:

Date:	Counsel memoranda / Court direction:	Due date:
27/11/2014	Joint memorandum of counsel agreeing discovery timetable and categories of relevant documents that the plaintiff will provide.	30/01/2015
1/12/2014	Minute of Associate Judge Doogue making timetable orders by consent.	30/01/2015
30/01/2015	Discovery due:  plaintiff fails to provide documents.  Defendant provides documents.
17/04/2015	Defendant’s memorandum of counsel notifies court of plaintiff ’s non-compliance with discovery timetable and requests extension to discovery timetable.
20/04/2015	Minute of Associate Judge Sargisson making timetable directions.	22/05/2015
22/05/2015	New discovery due date:  plaintiff fails to provide documents.

26/06/2015	Defendant’s memorandum of counsel updating court about the plaintiff’s non- compliance with the discovery timetable.
14/10/2015	Plaintiff provides his affidavit of documents but fails to provide copies of the documents for inspection.
06/11/2015	Joint memorandum of counsel seeking discovery timetable extension.	13/11/2015
13/11/2015	New discovery due date:  plaintiff fails to provide documents.
19/11/2015	Minute of Justice Katz making timetable directions by consent.
20/11/2015	Plaintiff provides CD containing documents (but not comprehensive).
29/01/2016	Defendant files interlocutory application for particular discovery as defendant considers plaintiff’s discovery is incomplete. The plaintiff did not oppose.
6/04/2016	Minute of Heath J makes “unless order” requiring the plaintiff to provide the outstanding discovery and pay Sovereign’s costs by 13 May 2016.	13/05/2016
8/04/2016	Plaintiff informally provides part of the outstanding discovery.
29/04/2016	Plaintiff’s evidence due date:  plaintiff fails to provide any briefs or bundle nominations.
13/05/2016	New discovery due date: plaintiff files an affidavit attaching further (incomplete) discovery. Plaintiff fails to pay Sovereign’s costs.
27/05/2016	Defendant files memorandum updating the court that the plaintiff still has discovery outstanding and has not paid Sovereign’s costs.
2/06/2016	Minute of Asher J orders that before 2:15pm on Thursday 9 June 2016 the plaintiff must: provide remaining outstanding discovery, pay Sovereign’s costs, and file briefs and bundle nominations.	9/06/2016

09/06/2016        New discovery and evidence due date: As at

12:30pm today the plaintiff has failed to provide outstanding discovery, pay Sovereign’s costs and file briefs.

Outcome

[19]     It  is  hard  to  know  what  to  make  of  the  history  of  non-compliance  by Mr Rutherford.  Mr Banbrook has said on a number of occasions that he is unable to get hold of Mr Rutherford, and it may be that Mr Rutherford is just not interested in carrying on with the proceeding.   I have now been informed that Mr Banbrook’s cheque given to meet the costs awarded by Heath J, has not been met.

[20]     However, given that there was an accident and Sovereign Assurance Co Ltd was an insurer, the assumption cannot be made that the proceeding is necessarily frivolous or vexatious.   In the end I have decided that striking the proceeding out may be too severe a remedy, and the best way forward is to stay the proceeding. This seems to me to be the correct remedy as it will leave it open to Mr Rutherford to attempt to reinstate the proceeding should there be more to his defaults than meet the eye.  I am going to vacate the fixture that is set down for 19 September 2016, as given the history of the matter to-date and the serious timetable lag that has already developed, I think it unlikely the case would be ready in time and there is a risk the defendant would be disadvantaged by inadequate discovery and last minute filing of briefs.

Costs

[21]     There  is  already  been  costs  orders  made  and  a  cheque  has  now  been provided.   I am not prepared at this point to order full costs of the proceedings against the plaintiff.  I do, however, order that the plaintiff is to pay the defendant’s scale costs on the three telephone conferences of 2, 9 and 10 June 2016 over which I have presided.

Result

[22]     This proceeding is stayed until further order of the Court.

[23]     The fixture of 19 September 2016 is vacated.

[24]     The plaintiff is to pay the defendant’s costs on the telephone conferences of 2,

9 and 10 June 2016.

……………………………..

Asher J