Schmidt v Ebada Property Investments Limited

[2019] NZHC 2253

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2011-404-4752

[2019] NZHC 2253

BETWEEN

TAYLOR JADE SCHMIDT

First Plaintiff

ANTHONY MIKHAL SCHMIDT
Second Plaintiff

AND

EBADA PROPERTY INVESTMENTS LIMITED

First Defendant

BRIAN PATRICK GARRITY

Second Defendant

Hearing:

9 September 2019

Appearances:

A J Woodhouse for First Plaintiff Second Plaintiff in person

N Scampion for Defendants

Judgment:

9 September 2019

JUDGMENT OF LANG J

[on application for leave to file amended pleading]

This judgment was delivered by me on 9 September 2019 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date……………

SCHMIDT v EBADA PROPERTY INVESTMENTS LIMITED [2019] NZHC 2253 [9 September 2019]

[1]        This judgment records the outcome of a hearing conducted this morning to determine the application dated 27 August 2019 by the first plaintiff for leave to file and serve an amended statement of claim after the close of pleadings date. The close of pleadings date in the present case was 12 July 2019.

Background

[2]        The proceeding is to be the subject of a trial of seven days duration scheduled to commence on 7 October 2019. On 27 August 2019, the first plaintiff filed an application for leave to file and serve an amended statement of claim containing the following substantive amendments:

(a)Pleadings alleging that, if the trust assets referred to in paragraph 2 of the existing statement of claim are not beneficially held for the four trusts referred to in that paragraph, those assets are held on trust for two entities referred to as “the Schmidt Trusts”;

(b)Additional particulars relating to a claim for damages as a result of anxiety and distress caused by the defendant’s actions;

(c)Claims for alternative relief in the form of equitable damages in each cause of action;

(d)The addition of two further particulars pleaded in support of paragraph 41(a) of the existing statement of claim.

Decision

[3]        It is imperative that the application be determined, so far as it can be, at this stage so that counsel can concentrate on trial preparation. I therefore now give my decision, together with brief reasons in support of each proposed amendment.

(a)Pleadings alleging that, if the trust assets referred to in paragraph 2 of the existing statement of claim are not beneficially held for the four trusts referred to in that paragraph, those assets are held on trust for two entities referred to as “the Schmidt Trusts”

[4]        Mr Woodhouse explains that he wishes to cover the position that may arise if the trial Judge is not satisfied that the trust assets are held for the beneficiaries under the four trusts pleaded in the existing version of paragraph 2 of the statement of claim. He is concerned that the Judge may in that event find that the assets are held on trust for the beneficiaries of the two trusts referred to in the proposed amended statement of claim at paragraph 2(e) and 2(f). He considers it would be appropriate for the Court to amend the statement of claim at this point to cater for that possibility.

[5]        Mr Scampion for the defendants points out that this proceeding has now been on foot for eight years and the plaintiffs have now served their evidence. He considers there will be prejudice to the defendants if they are now required to respond to the amended pleading.

[6]        I propose to decline this aspect of the application because the issue has been raised so late and I am concerned it may raise discovery issues that have the potential to jeopardise the scheduled trial date. Furthermore, on my understanding of the position, the plaintiffs’ evidence does not provide a realistic foundation for a finding that the assets may be held for the beneficiaries of the Schmidt trusts. I record, however, that the position may be different as a result of the evidence given at trial. It remains open to the plaintiffs to seek leave at trial to file an amended pleading relating to the Schmidt trusts. The defendants are on notice that this may occur at that point, but I do not consider it appropriate to grant the amendment now. This aspect of the application is accordingly declined.

(b)                 Additional particulars in support of claims for damages as a result of anxiety and distress caused by the defendants’ actions

[7]        Mr Scampion’s concern is that these proposed amendments are made late. He acknowledges, however, that he was not surprised by them and could not point to specific prejudice arising if the particulars are included. In the absence of unfair

prejudice, I grant leave for the statement of claim to be amended to include these particulars in paragraphs 29, 33, 43 and 48.

(c)Claims for alternative relief in the form of equitable damages in each cause of action

[8]        Mr Scampion opposes the addition of these claims on the basis that the defendants need to give careful consideration to how the amendment may affect their position at trial.

[9]        I see no unfair prejudice to the defendants in this aspect of the application. I therefore propose to provisionally allow the additional claims for relief. If necessary, the issue of whether they unfairly prejudice the defendants can be finally determined at trial.

(d)The addition of two further particulars pleaded in support of paragraph 41(a) of the existing statement of claim.

[10]      Mr Scampion does not object to these proposed amendments. I grant leave for the statement of claim to be amended in this respect.

Directions

[11]      The plaintiffs have leave to file and serve an amended statement of claim to the extent permitted by this judgment provided they do so no later than 5 pm on Thursday 12 September 2019. The amended statement of claim is to refer to the first plaintiff as “the first plaintiff” rather than “the plaintiff” as is currently the case.

[12]      The defendants have leave (but are not obliged) to file and serve a statement of defence to the amended statement of claim provided they do so not later than 19 September 2019.

Costs

[13]      Both parties have succeeded to some extent. Costs in relation to the present application are therefore to lie where they fall.

Lang J

Solicitors / Counsel: Woodhouse Law, Auckland Smith & Partners, Waitakere

N J Scampion, Barrister, Auckland