Siemer v Heron
[2013] NZHC 1604
•28 June 2013
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2012-404-6587 [2013] NZHC 1604
BETWEEN VINCENT ROSS SIEMER Plaintiff
ANDMICHAEL RICHARD HERON First Defendant
ANDMICHAEL PETER STAIASSNY Second Defendant
ANDRUSSELL MCVEAGH Third Defendant
ANDSIONE TANAKI Fourth Defendant
AND PIO SAMI
Fifth Defendant
Hearing: 18 April 2013
Appearances: Plaintiff in Person
T Clarke for First and Third Defendants
D Salmon and D Nilsson for Second Defendant
P Wicks for Fourth and Fifth Defendants
Judgment: 28 June 2013
RESERVED JUDGMENT OF ASSOCIATE JUDGE SARGISSON (Strike out/security for costs application)
This judgment was delivered by me on 28 June 2013 at 4.30 pm pursuant to
Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar
Date ..........................
SIEMER v HERON [2013] NZHC 1604 [28 June 2013]
[1] In this proceeding, commenced on 5 November 2012 the plaintiff, Mr Siemer, sues five defendants. His statement of claim relies on two causes of action, the first alleges assault and battery and the second alleges breaches of directors’ duties under the Companies Act 1993.
[2] The first and third defendants, Mr Heron and Russell McVeagh respectively, apply to strike out Mr Siemer’s claim in so far as it relates to them. By similar applications, the second, fourth and fifth defendants, Messrs Stiassny, Tanaki and Sami respectively, seek identical relief. In the event that Mr Siemer’s claim survives, Mr Heron, Russell McVeagh and Mr Stiassny apply for orders for security for costs against him. In their written submissions, Mr Heron and Russell McVeagh also “seek an order debarring Mr Siemer from filing any further court documents in connection with this proceeding without the leave of the Court”.
[3] Mr Siemer opposes the making of such orders.
Preliminary
[4] At the commencement of the hearing, Mr Siemer raised as a preliminary issue that the defendants’ strike out applications should be heard in open court and not in chambers to allow members of the public to attend should they so choose.
[5] After discussion with Mr Siemer and counsel I directed that the hearing proceed in open court for chambers to accommodate, as far as I am able within the limits of an Associate Judge’s jurisdiction, Mr Siemer’s request that the hearing be in open court. The direction was made with the consent of all of the defendants’ counsel.
[6] Mr Siemer has asked that I record that the above direction was made after 10 am. As I understand his concern, any members of the public who may have wished to attend the hearing would have left by the time the decision to sit in open court for chambers had been made.
[7] It is also appropriate to record that I am exercising the court’s chambers’ jurisdiction in dealing with the present applications. The parties’ rights of review are not therefore intended to be affected.
Defendants’ applications: procedural context
[8] The strike out applications, filed in December 2012, arise in the context of a broader litigation history than is not immediately apparent from Mr Siemer’s statement of claim. The claim is concerned with events said to have occurred on 19
October 2007. Before describing those events, which I do shortly,1 I first discuss the
litigation’s procedural history.
[9] The litigation began with a proceeding that Mr Siemer commenced in the District Court on 11 March 2008 (CIV-2008-404-479 which I refer to as the first District Court proceeding). That was eventually followed by a second District Court proceeding commenced on 28 September 2011 (CIV-2011-004-2079 which I refer to as the second District Court proceeding). The pleadings in the first and second District Court proceedings are similar to those in the current proceeding. A notable point of difference is that Mr Stiassney was not a named party in the two District Court proceedings. Further points of difference will emerge in the course of this decision.
Procedural history and current status of the first District Court proceeding
[10] Wylie J provided a helpful summary of the first District Court proceeding’s
procedural history in his judgement on 16 August 2012:2
[9] As I understand it, in 2008 Mr Siemer brought an action in the District Court seeking damages from Russell McVeagh, one of its then partners, Mr Heron, Force 1 Security Limited and two of its employees, Mr Tanaki and Mr Sami. Mr Siemer alleged an assault, and asserted that each of the identified respondents was actually or vicariously liable.
1 At [24].
2 Siemer v Heron [2012] NZHC 2073.
[10] On 6 November 2008, Mr Siemer was adjudicated bankrupt. The Official Assignee accepted that the claim is personal to him, and that it is not precluded by his bankruptcy.
[11] On [4 December 2008], Judge Joyce QC ordered Mr Siemer to pay into Court $20,000 by way of security for costs. He stayed Mr Siemer’s claim until that payment was made.
[12] Mr Siemer appealed Judge Joyce’s decision to this Court. On 27
March 2009, he was ordered to pay security in the sum of $1,880 on the appeal. That date was subsequently extended, but Mr Siemer did not comply with the order. The result was that under s 74(2) of the District Courts Act 1947, Mr Siemer’s appeal was deemed to have been abandoned.
[13] Mr Siemer sought leave in this Court to appeal the order made to the Court of Appeal. Leave was declined. As I understand it, a further application for leave was made to the Supreme Court. I presume that that application was also declined.
[14] On 22 December 2010, Judge Harvey declined an application that Mr Siemer had by then made in the District Court, seeking to rescind or vary the security for costs earlier ordered by Judge Joyce. Inter alia, Judge Harvey concluded, relying on the record in other cases in which Mr and Mrs Siemer were parties, that Mr Siemer had effectively elected to be adjudicated bankrupt. He considered that Mr Siemer and his wife had shifted assets offshore to avoid exposure to claims in New Zealand, and opined that if Mr Siemer was unable to meet the costs fixed by way of security, that was his choice. He considered that although Mr Siemer was bankrupt, there was no evidence that he was impecunious.
[15] Mr Siemer then brought a second appeal to this Court, contending that on the review Judge Harvey had erred in fact and that he had discounted evidence that he was impecunious.
[16] At the first case management conference in relation to this second appeal, the issue of security for costs on the appeal was raised. Keane J directed Mr Siemer to pay security in the sum of $940 on behalf of the first and second respondents, and $940 on behalf of the third, fourth and fifth respondents.
[17] Mr Siemer then sought leave to appeal Keane J’s decision to the Court of Appeal, and as I understand it, subsequently to the Supreme Court. Again, I assume that those applications were unsuccessful.
[18] Mr Siemer then sought a further review of the District Court order fixing security for costs. There was then an application for variation of the security order in June 2011.
[11] It is not necessary to traverse the first District Court proceeding’s history following June 2011. Ultimately however, every attempt to overturn Judge Joyce’s 4
December 2008 security for costs order failed.3
[12] The effect of Mr Siemer’s failure to pay security as ordered by Judge Joyce was that the first District Court proceeding was stayed against all of the named defendants. Judge Joyce had ordered security as follows:4
[25] There will accordingly be an order fixing security in favour of the first and second defendants in the sum of $10,000 and in favour of the third, fourth and fifth defendants in the same (but, of course, the additional) sum of $10,000 - $20,000 in all.
[26] The plaintiff is to give security accordingly by payment into this Court of $20,000 and this proceeding is stayed until such payment is made.
[13] At the time Judge Joyce heard the applications for security for costs, Mr Siemer’s causes of action were for assault and for misfeasance by an officer of the Court. Judge Joyce noted:
[8] This latter ‘cause of action’ is almost certainly bereft of legal substance. But, and no doubt for pragmatic reasons, the first and second defendants have not at this point sought a strikeout in that respect.
[14] There is nothing to indicate that Mr Siemer ever withdrew the misfeasance action.5
[15] The first District Court proceeding remained stayed until Mr Siemer discontinued it on 24 December 2012 by filing a notice of discontinuance in the District Court. It is a matter of indisputable fact that he discontinued after numerous failed attempts to appeal or overturn Judge Joyce’s security orders. Mr Seimer says
no adverse inference can be drawn from those failed attempts.6
3 Attempts to appeal came to a halt because Mr Siemer refused to pay security orders attached to the appeals and they were deemed abandoned. See Siemer v Heron [2011] NZSC 133, [2012] 1 NZLR
309.
4 Siemer v Heron DC Auckland CIV-2008-004-479, 4 December 2008.
5 The Supreme Court made mention of the action in the 2011 decision Siemer v Heron [2011] NZSC
133, [2012] 1 NZLR 309 at [4].
6 In Mr Siemer’s “post hearing memorandum” dated 19 April 2013, he suggests that an appeal based on the first and second District Court proceedings may be live but that is a matter of uncertainty. However, any appeal based on the first District Court proceeding can no longer be live because Mr
Procedural history and current status of the second District Court proceeding
[16] Judge Bouchier struck out Mr Siemer’s second District Court proceeding on
4 June 2012, concluding:7
[35] So therefore, in my view, not only is this a vexatious claim it is an abuse of the process of the Court by the most clear means possible. The law is clear. … my view is that the second notice of claim is clearly attempting to subvert the order for security for costs made by Judge Joyce in this Court and also the order of Judge Harvey directing the Court to refuse to accept a second claim in that particular proceeding. Accordingly, I strike out the notice of claim as an abuse of process and being vexatious.
[17] Mr Siemer appealed that decision and the defendants sought an order for security for costs on Mr Siemer’s appeal. Wylie J’s 16 August 2012 decision addressed the defendants’ application:8
[19] Mr Siemer then commenced a second action, CIV 2011-004-2079, in the District Court on 28 September 2011. Judge Bouchier’s decision the subject of the present appeal was made in these proceedings. Although there is no copy of Judge Bouchier’s decision on the file, as I understand Mr Siemer’s notice of appeal, the Judge struck out Mr Siemer’s second action. It appears that she concluded that his claim was a deliberate attempt to circumvent the earlier security for costs order, and that it was made without foundation.
[20] Mr Siemer now seeks to appeal that decision to this Court.
[18] Wylie J ordered Mr Siemer to pay a total of $1,900 into the Court by way of security on his appeal of the Judge Bouchier’s decision, emphasising that: 9
[33] If Mr Siemer does not pay those sums into court within 10 working days of the date of issue of this decision, s 74(2) of the District Courts Act will come into play, and the appeal will be deemed to be abandoned. The respondents will not then be called upon to take any further step on this appeal.
[19] Mr Siemer failed to pay the security for costs order within the 10 working days allowed by Wylie J and the appeal was deemed to have been abandoned. The
result was that Judge Bouchier’s strike out order remained in force. Mr Siemer
Siemer discontinued that proceeding. Likewise, any appeals based on the second District Court proceeding can no longer be live as they have been deemed abandoned. See below at [21] and [22].
7 Siemer v Heron DC Auckland CIV-2011-004-2079, 4 July 2012.
8 Siemer v Heron, above n 2.
9 Ibid.
unsuccessfully applied to have Wylie J’s decision of 16 August 2012 recalled. Wylie
J refused to recall that decision in a judgement dated 24 October 2012, saying: 10
[10] Once the rule [in s 74(2) of the District Courts Act] comes into play, the consequence is that the underlying appeal in which the security for costs order was made, no longer exists. There is then nothing left to form the foundation for any appeal to the Court of Appeal. In this regard, I note that the Registrar of the Court of Appeal, in a letter sent to Mr Siemer dated 29 September 2012, has confirmed that he is unable to accept Mr Siemer's notice of appeal for filing, because the underlying High Court appeal had been abandoned. Similarly, there is no basis on which an aggrieved litigant can seek to recall a security for costs judgment. A judgment fixing security is inextricably linked with the underlying appeal. Once the underlying appeal has been deemed to be abandoned, there is no subsisting appeal to the High Court. There is nothing before the Court which can be amended or otherwise dealt with by way of a recall application, and this Court has no power to resurrect the appeal by a retrospective extension of time, or variation or cancellation of the orders made by me on 16 August 2012.
[11] While that is enough to dispose of this application, I also record that in my judgment, there are no “special circumstances” sufficient to require that my judgment be recalled. … It was and remains my view, that Mr Siemer was simply trying to avoid the numerous security for costs decisions which have gone against him over the four years that the underlying matters at issue in the proceedings have been before the Courts.
(footnotes not included)
[20] As Wylie J mentioned in the above quoted paragraphs, Mr Siemer also attempted to appeal Wylie J’s 16 August 2012 decision to the Court of Appeal. The Registrar did not accept the appeal for filing on the ground that the Court of Appeal lacked jurisdiction because there was no longer an existing appeal in the High Court, and therefore nothing to appeal from. Mr Siemer sought, unsuccessfully, to review the Registrar’s decision.11
[21] On 31 October 2012, Mr Siemer filed a further appeal in the Court of Appeal, the purpose of which was to appeal Wylie J’s 24 October 2012 decision to recall. As I understand it, the Court of Appeal’s Registrar accepted Mr Siemer’s appeal for filing but fixed a security for costs order and refused Mr Siemer’s subsequent request
to dispense with security. Mr Siemer then applied, unsuccessfully, for a review of
10 Siemer v Heron [2012] NZHC 2802.
11 Siemer v Heron [2013] NZCA 204.
the Registrar’s decision to dispense with security. In a judgement dated 6 June 2013,
the Court of Appeal determined that:12
[13] … If there could be no appeal from Wylie J’s 16 August 2012 judgement because there was no longer any appeal before the High Court, then I do not consider there can be a right of appeal from Wylie J’s 24 October 2012 judgement. …
[14] I therefore consider that this Court lacks jurisdiction to entertain this appeal, and should not have accepted Mr Siemer’s notice of appeal. That renders the Registrar’s decision declining to dispense with security for the costs of the appeal a nullity, meaning that there is nothing for me to review.
[22] The status of the second District Court proceeding is that Judge Bouchier’s order striking out the notice of claim remains in force and any appeal is deemed abandoned and cannot be, to use Wylie J’s phrase, resurrected.
A comparison between the pleadings in the first and second District Court proceedings and this proceeding
[23] The essential events alleged in the first District Court proceeding, the second District Court proceeding and the current proceeding relate to the same incident alleged to have taken place on 19 October 2007.
Statement of claim in the first District Court proceeding
[24] The statement of claim in the first District Court proceeding is dated 11
March 2008 and names all of the defendants who are named in this proceeding save
Mr Stiassny.13 The incident that gave rise to Mr Siemer’s claim occurred on 19
October 2007 when Mr Siemer attempted to attend Vector Ltd’s annual general shareholder meeting at the Ellerslie Event Centre. Mr Siemer’s underlying concern in issuing the claim was that the “physical removal of [him] from the Centre violated [his] lawful right” to attend the meeting as a shareholder of Vector Ltd. The causes of action included in his statement of claim are two-fold. The first is based on
common assault and alleges that the defendants assaulted Mr Siemer upon his
12 Siemer v Heron [2013] NZCA 202.
13 In addition the Statement of Claim names Force 1 Security, the security firm that Messrs Tanaki and
Sami were employed by, as a party.
entering the Centre. Mr Siemer claims that he was physically removed by Messrs Tanaki and Sami on the orders of Mr Heron and that Mr Heron ordered the assault as “agent and/or servant” of Russell McVeagh. By way of relief, the claim seeks from all defendants: damages of $30,000, including $18,000 for loss of reputation; exemplary damages of $20,000; interest; and costs.
[25] In the second cause of action, Mr Siemer sues Mr Heron and Russell McVeagh for misfeasance by an officer of the Court flowing from the factual allegations upon which the first cause of action is based. He alleges that Mr Heron, as an officer of the Court, must have known that his removal was unlawful. He seeks damages against those two defendants of: $30,000 including $18,000 for loss to reputation; exemplary damages of $40,000; interest; and costs.
Notice of claim in the second District Court proceeding
[26] The notice of claim in the second District Court proceeding was filed on 28
September 2011. It lists Mr Heron, Russell McVeagh, Force 1 Security, Mr Tanaki and Mr Sami as defendants. It emerges from the notice of claim that Mr Siemer’s underlying concern was that he had a “lawful right to enter the Centre” and attend Vector Ltd’s 2007 annual general meeting, but that he was deprived of that right and
assaulted in the process. The only difference of significance for present purposes14
between this notice of claim that the first District Court proceeding’s statement of claim is that there is only one cause of action. That cause of action is common assault arising from the same set of circumstances on 19 October 2007. The remedies that Mr Siemer seeks are: damages in the sum of $30,000 including
$25,000 for loss of reputation; exemplary damages in the sum of $12,000; interest;
and expenses related to the proceedings.
Statement of claim in the present proceeding
[27] In the current proceeding, Mr Siemer relies on two causes of action. They both stem from the same factual circumstances alleged in the first and second
14 Judge Bouchier discussed the differences between the notice of claim that the first District Court
proceeding’s statement of claim’s decision in Siemer v Heron, above n 7, at [8] to [14].
District Court proceedings. The first action comprises assault and battery and essentially duplicates the assault allegation in the first and second District Court proceedings. Though there are some differences, they are immaterial. In the current proceeding, Mr Siemer alleges that the Messrs Tanaki and Sami carried out the assault on Mr Heron’s instructions who acted as agent or servant of Mr Stiassny and/or Russell McVeagh. He seeks as relief from all of the defendants: damages in the sum of $30,000 including $25,000 for loss to reputation; exemplary damages in the sum of $12,000; interest; and costs.
[28] The second cause of action pleads breaches of the Companies Act flowing from the same factual allegations upon which the first cause of action is based. It is founded on s 169 which allows for “Personal actions by shareholders against directors”. The action relies on s 134 which obliges “Directors to comply with the Act and constitution”. It pleads that Mr Siemer had the legal right under s 125 of the Act to attend and vote on any resolution tabled at Vector Ltd’s annual general meeting on 19 October 2007 and that the defendants had a duty to allow him to exercise that right. It claims that Mr Heron, acting on the instructions of Mr Stiassny and as partner of Russell McVeagh, deliberately and intentionally breached the duty to comply with ss 125 and 134 of the Act by preventing him, Mr Siemer, from attending and exercising his vote as a shareholder at the annual general meeting. The action identifies “the First, Second and Third defendants” in particular, but then seeks relief against “the Defendants”. I will err on the side of caution and assume for present purposes that Mr Siemer intends for this action to apply to all of the defendants. Mr Siemer claims as relief against them: damages in the sum of
$30,000; aggravated damages in the sum of $15,000; exemplary or punitive damages in the sum of $15,000; and expenses. He also seeks a declaration against the first and second defendants that they wantonly breached his rights under s 125 and their obligations under s 134.
[29] As earlier noted, Mr Stiassny is named as a party to the events of 19 October
2007 for the first time in this proceeding and is not named in the two District Court proceedings.
The present applications – the grounds upon which each defendant relies and
Mr Siemer’s response
[30] I outline below the individual grounds upon which each defendant relies for their strike out applications. As will emerge, the common submission presented by each defendant is that this proceeding is an abuse of process.
The first and third defendants- Mr Heron and Russell McVeagh
[31] In their notice of application dated 14 December 2012, Mr Heron and Russell McVeagh apply for orders striking out Mr Siemer’s statement of claim on the grounds that, as against them:
(a) The first cause of action is vexatious and an abuse of process in that it duplicates allegations already made ... in another proceeding in the District Court (Sieimer v Heron & Ors CIV2008-004-0479). That proceeding is currently stayed pending the payment of security for costs.
(b) The second cause of action fails to disclose a reasonably arguable cause of action ... as [Mr Heron and Russell McVeagh] are not (nor have ever been) directors of Vector Ltd and therefore do not owe any director’s duties.
Second Defendant – Mr Stiassney
[32] As to Mr Siemer’s first cause of action, Mr Stiassny relies on the ground that it is not a tenable cause of action against him and on the alternative ground that it is in any event:
... vexatious and an abuse of process in that it duplicates allegations already made by the plaintiff in [the first District Court proceeding]. That proceeding is currently stayed pending the payment by the plaintiff of security for costs.
[33] In respect of the second cause of action, Mr Stiassny relies on these grounds:
(iii) The plaintiff has no standing to bring the second cause of action as any right to do so was vested absolutely in the Official Assignee on his adjudication on 6 November 2008.
(iv) The second defendant at no time owed any duties to the plaintiff capable of supporting the second cause of action.
(v) ...The plaintiff has suffered no loss.
(vi) The second cause of action is vexatious and an abuse of process in that it arises from the same factual circumstances as the first cause of action and which are subject to the [first] District Court Proceeding, in a context where it would be unreasonable for the plaintiff not to bring the second cause of action in the context of that proceeding.
Fourth and Fifth Defendants – Messrs Tanake and Sami
[34] The grounds upon which the fourth and fifth defendants rely for orders striking out the claim against them are:
(a) The causes of action … [are] vexatious and an abuse of process in that it duplicates the allegations already made by the plaintiff against the fourth and fifth defendants in the [first District Court proceeding]. That proceeding is currently stayed pending the payment of security for costs.
(b) The statement of claim is an abuse of process in that it is an attempt by the plaintiff to circumvent the previous orders of this Court and the stay of the proceeding currently in place in relation to the [first District Court proceeding].
Mr Siemer’s opposition
[35] Mr Siemer opposes the applications for orders striking out his claim and the applications for security for costs orders. He submits that the statement of claim is not frivolous, vexatious or otherwise an abuse of the process of the Court.
Legal Principles – strike out
[36] The application is made under r 15.1 of the High Court Rules. Relevantly it states that:
15.1 Dismissing or staying all or part of proceeding
(1) The court may strike out all or part of a pleading if it-
…
(c) is frivolous or vexatious; or
(d) is otherwise an abuse of the process of the court.
[37] The abuse of process category in r 15.1 captures all instances of misuse of the court’s processes that are not captured elsewhere. In Commissioner of Inland Revenue v Chesterfields Preschools Ltd, the Court of Appeal said:15
[89] The grounds of strike out listed in r 15.1(1)(b)–(d) concern the misuse of the court’s processes … Rule 15.1(1)(d) – “otherwise an abuse of process of the court” – extends beyond the other grounds and captures all other instances of misuse of the court’s processes, such as a proceedings [sic] that has been brought with an improper motive or are an attempt to obtain a collateral benefit.
(footnotes not included)
[38] The general principles applying to strike out applications are well settled:16
(a) Pleaded facts are assumed to be true.
(b)The cause of action must be clearly untenable. The court must be certain that it cannot succeed.
(c) The jurisdiction is to be exercised sparingly and only in clear cases, reflecting the courts reluctant to terminate a claim short of trial.
(d)The jurisdiction is not excluded by the need to decide difficult questions of law, requiring extensive argument.
(e) The court should be particularly slow to strike out a claim in any developing area of the law.
[39] As is usual in a strike out applications, this application proceeds on the basis that pleaded facts, whether or not admitted, are assumed to be true. Equally however, documents the status of which is incontestable can be exhibited.17
Relevantly to this application, the defendants have helpfully exhibited inter alia
judgements, Mr Siemer’s notice of discontinuance and copies of the Companies
Register. They are incontestable documents.
15 Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2013] NZCA 53.
16 Attorney-General v Prince [1998] 1 NZLR 262 (CA) at 267 and Couch v A-G [2008] NZSC 45 at
[33].
17 NZ Guardian Trust Company Ltd v Peat Marwick (1990) 3 PRNZ 423.
Discussion
[40] I have decided to grant the defendants’ applications to strike out Mr Siemer’s current proceeding because I am satisfied that it constitutes an abuse of the process of the Court. I put to one side momentarily the claims against Mr Stiassny who was not listed as a defendant in the first and second District Court proceedings. I first discuss Mr Siemer’s cause of action for assault and battery against all defendants other than Mr Stiassny. I then discuss Mr Siemer’s cause of action under the Companies Act against all defendants other than Mr Stiassny. I then discuss Mr Siemer’s causes of action as they relate specifically to Mr Stiassny.
First cause of action - assault
[41] The defendants assert that this proceeding is a duplication of proceedings and rely on the principle that the duplication is a category of conduct which may constitute an abuse of process. Associate Judge Osborne stated the principle in Jo v Park:18
[10] The duplication of proceedings is a well recognised category of conduct which may constitute an abuse of process. Generally it will be viewed as prima facie vexatious and an abuse of process to pursue a second action while a first action is alive: Buckland v Palmer [1984] 3 All ER 554; Otis Elevator Co Ltd v Linnell Builders Limited (1991) 5 PRNZ 72.
[42] Mr Siemer argues that there can be no case based of duplication for two reasons. The first is that he is entitled to initiate fresh proceedings because the first District Court proceeding has been discontinued and the second District Court proceeding is, on his description, defunct. The second is that there can be no case of duplication because the first District Court proceeding’s orders to pay security for costs only covered the misfeasance action, which does not exist in the present proceeding. The claim based on assault and battery, he asserts, has never been determined.
[43] I am not persuaded by Mr Siemer’s argument that there can be no duplication
because the first District Court proceeding is discontinued and the second is
18 Jo v Park HC Christchurch CIV-2009-409-2847, 23 April 2010.
“defunct”. When Mr Siemer filed this proceeding’s statement of claim on 5
November 2012, the first District Court proceeding was stayed and not discontinued. The assault action was therefore a duplication of a stayed proceeding when it was filed and it was abusive. The abuse was not overcome by Mr Siemer’s notice of discontinuance filed on 24 December 2012.
[44] Mr Siemer discontinued only after a prolonged and unsuccessful endeavour challenging a security for costs order. I can only infer that he discontinued the first District Court proceeding in order to bring a fresh claim while avoiding compliance with the earlier security order. Discontinuance for the purpose of avoiding a stay and avoiding an order to pay security is an abuse of process, as is the initiation of a new proceeding addressing the same assault action.
[45] Further, Judge Bouchier struck out the second District Court proceeding’s notice of claim as an abuse of process because she deemed it to be an attempt to “subvert the order for security for costs made by Judge Joyce” in the first District Court proceeding.19 Her summation was that “not only is [the second District Court proceeding] a vexatious claim it is an abuse of the process of the Court by the most clear means possible”.20 The fact that Mr Siemer has issued this assault and battery claim after Judge Bouchier’s finding demonstrates quite clearly that Mr Siemer is abusing the process of this Court and acting vexatiously.
[46] Mr Siemer’s second argument, that the first District Court proceeding’s order to pay security for costs only covered the misfeasance action, is not borne out by the text of Judge Joyce’s decision. The misfeasance action only applied to Mr Heron and Russell McVeagh, yet Judge Joyce issued security in favour of all of the defendants as described above at [12].
[47] Mr Siemer’s assertion that the merits of his claim based on assault and battery have never been determined in Court is quite correct. However that is an outcome for which Mr Siemer is directly responsible. Had he simply followed the
order to pay security for costs in the first District Court proceeding, he could have
19 Siemer v Heron, above n 7, at [35].
20 Ibid.
proceeded to trial (barring any other disqualifying factor of his claim). Also, he had the option of paying security for costs on his appeals to Judge Joyce’s security order. Those were the only obstacles to having his assault claim heard. He chose not to pass those obstacles.21
[48] I am satisfied that the assault and battery cause of action is an abuse of process because it is a duplication of proceedings and an attempt to circumvent orders to pay security for costs.
Second cause of action – Companies Act
[49] Again setting the case against Mr Stiassny aside for the moment, I am satisfied that Mr Siemer’s action under the Companies Act against every other defendant is untenable and constitutes an abuse of the process of the Court.
[50] An extract from the Companies Office file for Vector Ltd demonstrates irrefutably that Messrs Tanaki, Sami and Heron and Russell McVeagh are not directors of Vector Ltd and never have been.22 Of course, it would not be possible for Russell McVeagh, a firm, to be a director. As none of these defendants are or have been directors, any action against them under s 169 of that Act is misguided. To bring an action alleging breaches of directors’ duties against defendants who are
not directors is an abuse of process and the action against each of those defendants is not tenable.
[51] Further, Companies Act action is misguided to the extent that it relies on s
125. That section can only be relied upon as authority that shareholders (whose names are registered in the share register at the relevant time) are entitled to receive notice of a meeting of shareholders. Mr Siemer makes no allegation that he was not
notified of Vector Ltd’s annual general meeting.
21 I acknowledge Mr Siemer’s argument that he could not pay security due to impecuniosity, but that is an argument that was accounted for and dismissed in Mr Siemer’s protests of the security order. I accept of course that access to justice is an essential human right. However, decisions to impose security for costs are always made in light of the consequence that a plaintiff may be unable to pursue the claim if such an order is made and involve a balancing of interests of the parties. “The rule itself contemplates an order for security where the plaintiff will be unable to meet an adverse award of costs.” See McLachlan Ltd v MEL Network Ltd (2002) 16 PRNZ 747 (CA) at [15] to [16].
22 Mr Siemer alleges only that Mr Heron and Russell McVeagh acted “under an expressed power of attorney for [Mr Stiassny] and other unnamed directors of Vector”.
[52] I also mention Mr Siemer’s obligation to bring forward his whole case to the Court in the first District Court proceeding. Though strictly speaking res judicata estoppel does not arise here because Mr Siemer has never received a final judgment on the merits, an underlying principle or res judicata estoppel is apposite in light of the peculiar circumstances of this case. The principle is that parties subject to litigation in a Court of competent jurisdiction have an obligation to bring their whole case.
[53] Woolford J recently discussed the obligation to bring one’s whole case in Ma v Tay23 and I mention three of the authorities that he relied upon, followed by his summary of the principle. The first authority is this statement of principle in Henderson v Henderson:24
… [W]here a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.
[Emphasis added]
[54] The second authority is Lord Bingham’s statement of principle in Johnson v
Gore Wood & Co (a firm):25
The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse of process if the Court is satisfied … that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all
… It is, however, wrong to hold that because a matter could have been raised in
earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive.
[55] The third authority is Sommervell LJ’s definition of the test for this kind of
abuse in Greenhalgh v Mallard:26
23 Ma v Tay [2013] NZHC 573 at [42] – [47].
24 Henderson v Henderson (1843) 3 Hare 100 per Vice Chancellor Sir James Wigram.
25 Johnson v Gore Wood & Co (a firm) [2002] 2 AC 1 at 31
[Where] issues or facts which are so clearly part of the subject matter of the litigation and so clearly could have been raised that it would be an abuse of process of the court to allow a new proceeding to be started in respect of them.
[56] Woolford J’s summary of the principle is that “a party cannot bring a later claim when the claim ‘properly belonged’ to the earlier litigation”.27
[57] I emphasise again that the doctrine of res judicata estoppel does not apply to Mr Siemer’s case at hand because he has not received a final decision on the merits. However, I am satisfied that Mr Siemer had an obligation to “bring forward [his] whole case” in the first District Court proceeding. What is in issue here, and was also in issue in the first and second District Court proceedings, are particular events that occurred on 19 October 2007 and liability that might flow from them. Mr Siemer’s underlying complaint is that he was denied the right to attend Vector Ltd’s
2007 annual general meeting through an orchestrated attempt to keep him out and in the process an assault occurred. I am satisfied that the Companies Act claim against the defendants should have been raised, if it was to be raised at all, in the first District Court proceeding because that is where it “properly belonged”.28 The Companies Act claim was “so clearly part of the subject matter” of that earlier proceeding, and “so clearly could have been raised” then, that it is abusive to raise it
now in circumstances where the only reason Mr Siemer has not received a decision on the merits is his failure to pay security.
The addition of Mr Stiassny
[58] The principle of bringing forward one’s whole case is also material to the initiation of the claims against Mr Stiassny.
[59] The role that Mr Stiassny is alleged to have played lies at the heart of the allegations made in this and the earlier proceedings, based as they are on the events
on 19 October 2007. I am satisfied, as discussed above, that Mr Siemer had an
26 Greenhalgh v Mallard [1947] 1 All ER 255 at 257.
27 Ma v Tay, above n 23, at [47].
28 Any issues as to the District Court’s jurisdiction to entertain a Companies Act claim would be an obvious basis for an application to transfer the whole proceeding to the High Court.
obligation to bring his whole case in the first District Court proceeding, including that against Mr Stiassny.
[60] The fact that the first and second District Court proceedings did not name Mr Stiassny as a defendant does not, of itself, mean that the obligation to bring one’s whole case is not apposite. That is especially the case when Mr Siemer has refused to pay security in earlier proceedings addressing the same alleged incident at Vector Ltd’s 2007 annual general meeting. I am satisfied that to initiate proceedings against Mr Stiassny in those circumstances is an abuse of process.
[61] Failing that, the appropriate course was for Mr Siemer to pay the first District Court proceeding’s security for costs order and then to join Mr Stiassny as a party as provided for in the District Court Rules.29 Any argument that the option to join Mr Stiassny was never available to Mr Siemer because the first District Court proceeding was stayed is not persuasive because the reason for the stay was Mr Siemer’s failure to comply with security for costs orders.
[62] I am satisfied the assault and battery action against Mr Stiassny is an abuse of process for the same reasons the assault and battery action against the other defendants is an abuse of process.30 The addition of Mr Stiassny as a defendant does not alter the fact that the action is a duplication of earlier proceedings and an attempt to circumvent orders to pay security for costs. The fact that Mr Stiassny was not a party to the earlier District Court proceedings cannot save Mr Siemer’s claims against Mr Stiassny. In Jo v Park, Associate Judge Osborne said: 31
[12] … I am not prepared to attach any weight to the difference in the numbers of defendants, joinder orders or third party notices could very quickly change the position in the District Court.
[63] As to the action under the Companies Act, Mr Stiassny’s position is different
to that of the other defendants because Mr Stiassny was a director of Vector Ltd on
19 October 2007 and remains so today. He therefore owed duties under the
Companies Act. Nonetheless, I am still satisfied that this action against him ought to
29 See District Court Rules 2009, r 3.35.8.
30 Above at [41] to [48].
31 Jo v Park , above n 18.
be struck out as an abuse of the process of the Court. As discussed above, Mr Siemer had an obligation to bring his whole case in the first District Court proceeding. Further, the Companies Act action is misguided to the extent that it relies on s 125, as mentioned above.32 Also, though I make no determinative finding on the issue, there may merit in Mr Stiassny’s argument that, following Mr Siemer’s bankruptcy on 6 November 2008, any right of action arising out of a breach of
director’s duty flowing from a refusal to allow entry to the annual general meeting
vested in the Official Assignee pursuant to s 42 Insolvency Act 1967.
Debarring order
[64] As noted, Mr Heron and Russell McVeagh applied in their written submissions for an order debarring Mr Siemer from filing any further Court documents in connection with this proceeding without the leave of the Court. They point out that they have been put to unreasonable and unjustifiable time and cost through this and the previous proceedings, with no hope of recovering costs from Mr Siemer.
[65] Counsel for Mr Heron and Russell McVeagh pointed to two previous instances in which orders to the effect of a debarring order have been issued against Mr Siemer. The first arose in the context of the first District Court proceeding. Judge Harvey dismissed an application by Mr Siemer for “reconsideration” of Judge Joyce’s security order on 22 September 2010. After Mr Siemer sought to file an amended statement of claim, Judge Joyce issued a minute on 20 October 2010 directing that:
The statement of claim should be rejected. The proceedings are stayed pending the payment of security for costs. No further papers or actions by Plaintiff should take place until the costs security has been paid.
[66] The second instance that Counsel pointed to arose in the context of a separate and unrelated train of defamation litigation that Mr Siemer brought against Mr Stiassny. 22 February 2013 Toogood J issued a judgement that brought the matter to
an end.33 Having dismissed Mr Siemer’s application for an order recalling or setting
aside a judgement, Toogood J said:
This litigation should be brought to an end
[41] I return to Andrews J's recital, at [13] — [21] of the strike-out judgment, of the history of this litigation following the defamation judgment. By my count, including all of the separate unsuccessful applications to this Court; the various applications and appeals to the Court of Appeal on both liability and quantum; and the several failed applications to the Supreme Court for leave to appeal or to recall judgments, this judgment records the 15th unsuccessful attempt by Mr Siemer to mount a challenge to the defamation judgment. An inordinate amount of judicial resource has been expended on proceedings which are devoid of merit and the plaintiffs have suffered an unconscionable level of legal costs in resisting them, without any realistic prospect of recovery from Mr Siemer. Enough is enough.
[42] I consider it appropriate to make an order, in the exercise of the Court's inherent power to prevent abuses of its process, the purpose of which will be to prevent Mr Siemer from continuing to waste the time and resources of this Court and the plaintiffs in respect of this proceeding.
…
[45] I order that the Registrar of this Court shall refuse to receive for filing, except with the leave of a Judge, any document which Mr Siemer may attempt to file in this Court, in this proceeding or any other, the purpose of which is to challenge any aspect of the judgment of Cooper J in this proceeding dated 23 December 2008, or any subsequent judgment, order, or direction of any court related to it, whether under file number CIV-2005-404-1808 or not. To avoid doubt, this order precludes any attempt by Mr Siemer to apply for a recall or the setting aside of this judgment, but it does not limit any right of appeal he may have against it and does not extend to preventing him from filing any memorandum relating to costs on this application.
[67] While I acknowledge the defendants’ common concern that any proceedings that relate to the events of 19 October 2007 come to a complete end, I do not think it appropriate to presently make an order of the nature that counsel for Mr Heron and Russell McVeagh seek. By proposing such an order for the first time in written submissions, the defendants failed, in my opinion, to provide Mr Siemer sufficient notice to prepare for an order of undoubted significance.
Result
[68] To the extent that any of Mr Siemer’s causes of action may be tenable, I express some sympathy for his plight and the frustrations he has experienced in being denied a hearing on the merits for procedural reasons. However, that is a situation for which Mr Siemer must take responsibility. The adjudication of legal rights must be undertaken with due process. All parties are entitled to due process and Mr Siemer cannot reasonably expect the defendants to be subjected to repeated abuses of the Court’s processes.
[69] For the above reasons, I order that Mr Siemer’s statement of claim in this
proceeding is struck out as it is an abuse of the process of the Court.
Costs
[70] In accordance with the statutory costs regime, costs will follow the event. If the defendants seek costs they are to file and serve brief memoranda within 10 working days of the date of this judgment. Mr Siemer has the right to respond by
way of memorandum to be filed and served within a further 10 working days.
Associate Judge Sargisson
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