Smith v Noble Investments Ltd - [2017] NZHC 477

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2014-409-000549 [2017] NZHC 477

BETWEEN
GREGORY ROBERT SMITH AND

COLIN PETER STOKES Plaintiffs

AND

NOBLE INVESTMENTS LIMITED Defendant

AND

APPLEFIELDS LIMITED
Second Defendant and Counterclaim
Plaintiff

AND

JUSTIN WILLIAM PRAIN Third Defendant

AND

CARDNO (NZ) LIMITED Fourth Defendant

AND

GOLD BAND FINANCE LIMITED Fifth Defendant

AND

DELTA UTILITY SERVICES LIMITED Sixth Defendant

AND

SHAYNE PHILPOTT, NEW ZEALAND TRUSTEE SERVICES LIMITED, FAY EUNICE RICHARDSON, AND BURNSIDE TRUSTEES LIMITED Second Counterclaim Defendants

AND

STUART ELLESMERE LINDSAY AND JULIE IVONNE LINDSAY

Third Counterclaim Defendants

Hearing:
(by telephone)

28 February 2017

Appearances:

G R Smith and C P Stokes (Plaintiffs) in person
P J Woods for Gold Band Finance Ltd
R J M Sim for Delta Utility Services Ltd
(other counsel excused)

Judgment:

16 March 2017

SMITH v NOBLE INVESTMENTS LIMITED [2017] NZHC 477 [16 March 2017]

RULING OF ASSOCIATE JUDGE OSBORNE
[as to relation to joinder of fifth and sixth defendants]

Introduction

[1] A question has arisen in the course of the case management of this proceeding as to whether there has been an effective joinder of Gold Band Finance Limited (Gold Band) and Delta Utility Services Limited (Delta) as fifth and sixth defendants respectively.

The pleadings to date

[2] In March 2015 the plaintiffs commenced this proceeding by naming four defendants (all of whom remain as defendants).

[3] The plaintiffs subsequently amended their statement of claim twice, each time only naming the same four defendants.

[4] On 29 July 2016 the plaintiffs filed a fourth amended statement of claim, on this occasion naming Gold Band and Delta as defendants and including pleadings in relation to them.

[5] I subsequently made case management directions upon the assumption that the plaintiffs had exercised a procedural right to join the fifth and sixth defendants.

The first issue – the need for an order of joinder

The procedural issue

[6] Counsel for Gold Band and Delta assert that the plaintiffs could not join those entities as parties simply by filing an amended statement of claim naming Gold Band and Delta as defendants. They say that an order for joinder is required to be made under r 4.56 High Court Rules. Mr Sim and Mr Woods submit that the procedural

rights and requirements are accurately summarised in Andrew Beck’s Civil

Procedure – A to Z of New Zealand Law in the following passage:1

3.6.5 Procedure relating to joinder

Where plaintiffs are entitled to join under r 4.2 HCR and wish to commence action together, they can simply cite themselves as plaintiffs. Similarly, where defendants fall within the ambit of r 4.3 HCR they may be cited and served as defendants without any formality when proceedings are instituted. If a potential party falls outside these rules, or is sought to be added some time after the commencement of proceedings, it will be necessary to make an interlocutory application to court under r 4.56 HCR, where the court has a discretion to allow the joinder.

The rules

[7] In considering…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2017] NZHC 477
Decision Date: 16 March 2017

CaseChat Overview and Summary

In the High Court of New Zealand, Gregory Robert Smith and Colin Peter Stokes brought an action against Noble Investments Limited, with additional claims against several other entities. The core issue in this proceeding was whether the plaintiffs had effectively joined Gold Band Finance Limited and Delta Utility Services Limited as defendants in the case. Initially, the plaintiffs had only named four defendants in their claim, but later sought to add Gold Band and Delta. Counsel for the proposed new defendants argued that an order for joinder was necessary under the High Court Rules. The plaintiffs contended that they could join these entities by filing an amended statement of claim, relying on the principle that defendants can be cited and served without formality if they fall within the ambit of certain rules.

The court examined the relevant High Court Rules, particularly rules 4.1 to 4.56, and concluded that the joinder of parties after the commencement of proceedings requires an order under rule 4.56. The court noted that while the early rules (4.1 to 4.3) establish the principles for identifying who may be joined, rule 4.56 governs the addition of parties once proceedings have been initiated. The plaintiffs' argument that they could join the additional defendants by consent was also rejected because not all parties had consented, and the process for "automatic" joinder under rule 1.8 had not been satisfied.

The court found that it had the discretion to order the joinder of the additional defendants under rule 4.56, considering factors such as the necessity for their presence to settle all questions involved in the proceeding. Given the complexity of the case and the self-representation of the plaintiffs, the court decided to join the intended defendants but allowed them a set period to apply for discharge of the order or for striking out the claim against them. Consequently, Gold Band Finance Limited and Delta Utility Services Limited were added as the fifth and sixth defendants respectively, with any objections to be filed within ten working days of the judgment.

Orders