Sanson t/a Unique Drinks v Parval Marketing Ltd HC Auckland CIV 2006-404-7231

[2007] NZHC 2022

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2006-404-7231

BETWEEN  CHRIS ALEXANDER SANSON TRADING AS UNIQUE DRINKS Plaintiff

AND  PARVAL MARKETING LTD First Defendant

AND  HYPE ENERGY LTD Second Defendant

AND  RAZZMATTAZ PTY LTD Third Defendant

AND  RYBU PTY LTD Fourth Defendant

AND  HMM INTERNATIONAL LTD Fifth Defendant

AND  BERTRAND JEAN LOUIS GACHOT Sixth Defendant

Hearing:         22 August 2007

Appearances: David Chisholm for Plaintiff

Ian Finch and Claire Tompkins for Defendants

Judgment:      22 August 2007

JUDGMENT OF HARRISON J

SOLICITORS

Blackwells (Auckland) for Plaintiff
James & Wells (Auckland) for Defendants

COUNSEL

David J Chisholm

SANSON T/A UNIQUE DRINKS V PARVAL MARKETING LTD AND ORS HC AK CIV 2006-404-7231  22

August 2007

[1]      The  plaintiff,  Mr  Christopher  Sanson,  formerly  known  as  Gate,  is  the registered proprietor in New Zealand of the Hype trademark which he purchased in October 2006.  He has filed this proceeding seeking relief on two grounds: first, that some of the defendants have infringed against his registered trademark; second, that other defendants are liable on a deed or guarantee of indebtedness following an assignment of debt.

[2]      HMM International Ltd, which is associated with the defendants in this proceeding, has issued a separate proceeding effectively against Mr Sanson under CIV 2006-404-7791.  HMM has applied for a declaration of invalidity and to remove the Hype trademark from the register.  Both proceedings are to be tried together.

[3]      Without going into details, the proceedings have a tortured history.   That history is chronicled very fully in a synopsis of submissions by Mr David Chisholm, Mr Sanson’s counsel, in support of the applications presently before the Court.  On

7 March  2007  Potter J  allocated  the  proceedings  a  two  week  fixture  for  trial commencing on 12 November 2007.  Mr Sanson complains, with some justification, about the defendants’ delays and other tactics in the period leading up to and following 7 March.

[4]      The defendants were previously represented by two different sets of solicitors and counsel.  In July they instructed Mr Ian Finch of James & Wells.  Mr Chisholm accepts that Mr Finch’s appearance has bought about a constructive change in the way these proceedings have been conducted.  It is not my function to apportion any blame between the defendants and their previous solicitors and counsel.  That issue may be for resolution elsewhere if necessary.  But the end result is that the present application for striking out and other orders can be resolved by agreement.

[5]      By  consent  I  make  orders  in  terms  of  para  8.1(c)  of  Mr Chisholm’s memorandum  dated  21 August  2007,  except  for  these  changes.     First,  both proceedings will be tried in the fortnight commencing 12 November 2007 on the basis that HMM and the other defendants in CIV 2006-404-7791 will abandon their counterclaims in CIV 2006-404-7231.   That will enable the trial to focus on the substantive claim by HMM relating to the validity of the original registration.

[6]      Second, both parties have agreed to a simultaneous exchange of evidence.  In terms of para 8.1(c)(iii) of Mr Chisholm’s memorandum, they are to exchange their originating briefs in both proceedings on 5 October 2007; in terms of para 8.1.(c)(iv), they are to exchange their briefs in answer by 26 October 2007.  Leave is reserved to serve supplementary (not reply) briefs to cover the contingency of evidence being given by the other party in terms of the existing briefs.  Otherwise I make orders in terms of para 8.1(c)(i), (ii), (iii), (iv), (v).

[7]      By consent also, I order that the details of HMM in both proceedings be amended to those sought in the defendants’ interlocutory application dated 25 July

2007.

[8]      That  leaves costs  for  determination.    Mr Sanson  seeks  costs  in  terms  of para 8.1(c)(vi) and (viii) relating to various interlocutory applications.  Mr Chisholm says Mr Sanson has been put to unnecessary and wasted costs on those applications. I am not in a position to determine them today.  The complexity of this case requires that they be resolved within the final orders made by the trial Judge on both proceedings.   However, I record that Mr Chisholm will seek indemnity costs for wasted expenditure.

[9]      Only  HMM’s  application  for  an  order  for  security  against  Mr Sanson remains.  It sought this remedy on 9 August 2007, some five months after the fixture was allocated and three months before trial.   I have read the application and the affidavits in support and opposition.  I have no doubt that HMM has made out a case that Mr Sanson is unlikely to be able to meet an order for costs in the event that HMM is successful at trial.  However, its delays are fatal.

[10]     I shall briefly explain my reasons.  Jurisdiction is not in issue.  As I have said, the question is whether there is reason to believe that a plaintiff will be unable to pay the other side’s costs if unsuccessful.  The Court is entitled to give security in such sum as it considers fit.  It may either stay the proceeding until payment is made or, as Mr Finch submits today, simply order payment leaving the other side to exercise its remedies in the event of default.

[11]     HMM has provided affidavits from Mr Stephen Hogg, a private investigator, and Mr Murray Lazelle, a highly qualified and respected accountancy expert.  Both raise  real  reservations  about  Mr Sanson’s  financial  circumstances.     They  are summarised in para 66 of Mr Finch’s synopsis.   It is unnecessary to repeat them here.

[12]     Mr Finch  emphasises  two  other  factors.    One  is  Mr Sanson’s  previous convictions for crimes of dishonesty, raising questions about the  veracity of his assertions even though made on oath.   The other is Mr Sanson’s involvement in previous  litigation exhibiting  a  pattern of behaviour  which  may  give  rise  to  an inference of abusing the processes of this Court by issuing proceedings, regardless of the merits, as a means of exerting pressure on parties to settle simply for financial purposes.   Doubtless those factors will be to the forefront of HMM’s defence and will form the subject of relevant cross-examination at trial.  Both would have been relevant if the application for security had been made even as late as 28 February

2007.

[13]     But in my judgment HMM’s subsequent delays are decisive.  It says that it did not receive advice on its rights to apply for security until it briefed James & Wells in July.  It is unnecessary for me to consider that issue, except to record that in this area the omissions or otherwise of a party’s legal advisors must be attributed to the party itself.   Here Mr Sanson has acted on the basis that  no  application for security is made and changed his position accordingly.

[14]     Accordingly, I dismiss HMM’s application.  Costs on that application will be reserved for determination along with all other applications.

Rhys Harrison J