South Pacific Industrial Limited v United Telecoms Limited

[2012] NZHC 711

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

CIV 2012-488-202 [2012] NZHC 711

BETWEEN  SOUTH PACIFIC INDUSTRIAL LIMITED

Plaintiff

ANDUNITED TELECOMS LIMITED Defendant

Hearing:         17 April 2012

Counsel:         P F Dalkie for Plaintiff

D M Hughes and R J Brown for Defendant

Judgment:      17 April 2012

(ORAL) JUDGMENT (NO. 3) OF HEATH J

Solicitors:

Hazelton Law, PO Box 5639, Wellington Kensington Swan, Private Bag 92101, Auckland Counsel:

P F Dalkie, PO Box 392, Shortland Street, Auckland

SOUTH PACIFIC INDUSTRIAL LIMITED V UNITED TELECOMS LIMITED HC WHA CIV 2012-488-202 [17 April 2012]

[1]      A further hearing took place today in the aftermath of the judgments I gave on 13 and 16 April 2012.  As indicated in the judgment I gave yesterday afternoon, problems had arisen with regard to the nature of evidence provided by Mr Rao, a director of UTL on the freezing order application.  The subsequent information with which I had been provided seemed to be at odds with quite critical evidence given by Mr Rao in affidavit form and on which I had relied on reaching my judgment.

[2]      Having made sterling efforts overnight to contact and obtain an affidavit from Mr Rao, Mr Hughes for UTL, provided a draft affidavit to me.  Because Mr Rao is in India and is returning to New Zealand shortly, it has not been possible for the affidavit to be sworn.  It is fair to say, however, that I have some reservations about the explanations that Mr Rao has given and whether they are truly credible.  In the absence of some very clear explanation that is credible, I am losing trust in UTL’s evidence which is likely to have a significant impact on any final decision I make in relation to the form of a freezing order to be made.

[3]      It will be necessary to hold the position until a sworn affidavit from Mr Rao is available and the original of an affidavit sworn by Mr Stevenson, on behalf of UTL,  is  filed  and  served.    Mr  Stevenson  is  the  National  Project  Manager  of Macaulay Metals Ltd and gives evidence as to the arrangements reached with UTL from that company’s perspective.

[4]      Having regard to the additional material I have now seen and what I have been told by counsel, I consider steps should be taken now to prevent assets being removed  from  the  jurisdiction  until  such  time  as  I have  had  an  opportunity to consider carefully Mr Rao’s additional evidence.

[5]      I make an order preventing shipment of any goods that have been dismantled from the Marsden B power station to India pending further order of the Court.   I have been told to date that any shipment would take place between 1 and 15 May

2012 and the order I have just made is intended to hold the position until matters are resolved and should not affect the ability to ship after that date if the order is not continued.

[6]      In terms of costs on the original application for a freezing order, I adhere to the preliminary view expressed in my judgment of 13 April 2012.  I award costs on a

2B basis together with reasonable disbursements (both to be fixed by the Registrar), in favour of South Pacific Industrial Ltd.  I certify for second counsel.  Those costs shall be paid to the solicitors for SPI no later than 10am on Monday 23 April 2012.

[7]      From SPI’s perspective, the costs of yesterday’s and today’s hearings have been wasted.   The intention was to finalise an order at yesterday’s hearing.   Any costs in relation to that would have been incorporated within the order made in respect of the original application.  However, all that has been rendered wasteful by the  information  that  came  to  hand  yesterday  indicating  that  I  had  been  given incorrect evidence on material aspects of the case.  So far as yesterday’s hearing and today’s hearing are concerned, I order that UTL pay the costs and disbursements of SPI on an indemnity basis.  The solicitors for UTL and SPI shall confer and fix a reasonable sum in that regard. That too shall be paid by 10am on 23 April 2012.

[8]      The additional affidavit of Mr Rao and Mr Stevenson shall be filed and served by 5pm on Friday 20 April 2012.  Leave is given for Mr Hughes, on behalf of UTL, to file additional evidence if he so wishes.  A telephone conference will be convened at 1.15pm on 23 April 2012 to discuss how matters should proceed in light of the additional  evidence.    I will  be sitting in  Rotorua at  that  time.   If, after considering the evidence, I consider it is necessary for Mr Rao to give evidence orally, I will make a direction to that effect but it is likely that any hearing will need to be in Rotorua, either that week or the following week.

[9]      A sum  of $350,000  (reflecting  the maximum amount,  for  freezing order purposes that I indicated in my judgment of 13 April 2012) has been paid by UTL into the trust account of its solicitors, Kensington Swan.  Mr Hughes undertakes that the  $350,000  paid  into  Kensington  Swan’s  trust  account  will  not  be  disbursed,

pending further order of the Court.

P R Heath J