SPAK (1996) Ltd v LeRoy
[2021] NZHC 2398
•14 September 2021
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2020-404-1483
[2021] NZHC 2398
BETWEEN SPAK (1996) LIMITED
Plaintiff
AND
REECE LEROY
Defendant
BODY CORPORATE 407404
Third Party
Hearing: 10 August 2021 Appearances:
Edwin Boshier for the Plaintiff
Edwin Morrison and Cameron Fraser for the Defendant J Zhang for the Third Party
Judgment:
14 September 2021
JUDGMENT OF ASSOCIATE JUDGE R M BELL
This judgment was delivered by me on 14 September 2020 at 3:00pm
pursuant to Rule 11.5 of the High Court Rules
………………………….
Registrar/Deputy Registrar
Solicitors:
Duncan Cotterill (E Boshier/R Coltman), Auckland, for the Plaintiff K3 Legal Ltd (E Morrison/C Fraser), Auckland, for the Defendant
Wotton & Kearney Ltd (M Lucas/K Bates/J Zhang), Auckland for the Third Party
SPAK (1996) LIMITED v REECE LEROY [2021] NZHC 2398 [14 September 2021]
[1] In June 2020 the Stamford Plaza Hotel in Albert Street, Auckland, became a managed isolation facility during the COVID-19 pandemic. It took in travellers arriving from overseas who stayed in the hotel in isolation for two weeks, until they were tested for the virus and cleared to leave. One aspect the hotel had to deal with is that it is not the only occupier of its building. The upper floors are private apartments owned in unit titles under the Unit Titles Act 2010. Those living in the apartments have rights of access over parts of the hotel. Their rights of access had to be preserved, while keeping hotel guests in isolation. That required working out arrangements with the body corporate. It had a building manager, Mr LeRoy, the defendant. Unfortunately the hotel had a grudge against Mr LeRoy. It did not like the way that he went about looking after the interests of the body corporate and its residents. It says that he went onto the hotel premises when he ought not to have. It has sued him in trespass to land and has obtained an interim injunction to stop him trespassing.
[2]I heard four applications:
(a)The hotel seeks an order that Mr LeRoy be held in contempt for breaching the interim injunction.
(b)The hotel seeks an unless order debarring Mr LeRoy from defending the proceeding.
(c)Mr LeRoy applies for summary judgment.
(d)Mr LeRoy applies for the plaintiff’s claim to be struck out as an abuse of process, frivolous and vexatious.
[3] Mr LeRoy succeeds on his applications. He did not trespass because he had rights of passage over parts of the hotel subject to registered easements in favour of the body corporate. The hotel could not bar him by declaring him a trespasser. The hotel says that it is seeking a vindication of its property rights, but that does not stand up. The matter is trivial and should not have been brought in this court. The easements have sensible alternative dispute resolution provisions, which the hotel should have
used if its concerns were genuine. The hotel however wanted Mr LeRoy removed as the body corporate building manager and it used this proceeding as one way to bring that about. Its case is an abuse of process.
[4] I decline to deal with the contempt application as it is outside the jurisdiction of an associate judge. A justice will need to hear it. The application for an unless order is now resolved, barring a question of costs. That can be addressed at the same time as the contempt application.
Background
[5] Originally there was only a hotel on the Albert St site. The landowner is Stamford Auckland (1996) Ltd, a subsidiary of Stamford Land Corporation, a Singapore company. SPAK (1996) Ltd, the plaintiff in this case, does not own the land but operates the hotel. It is also a subsidiary of Stamford Land Corporation. The evidence includes correspondence from Stamford Land Corporation’s in-house lawyer in Singapore. He was clearly acting on behalf of SPAK (1996) Ltd. When I refer to the “hotel” I mean SPAK (1996) Ltd and anyone acting on its behalf.
[6] New floors were added to the building with apartments owned as unit titles under the Unit Titles Act. They were originally called Stamford Residences, but as relations with the hotel have soured, the “Stamford” has been dropped. They are now “The Residences”. The body corporate is the third party. It does not need to and has not taken any part in these applications.
[7] The site is in two titles. Lot 1 is the hotel and Lot 2 is the body corporate. The hotel has to use some parts of the body corporate’s premises and the body corporate has to use some parts of the hotel premises. Each has given easements over its premises to the other for this. There are nine easements: right of way and pedestrian right of way; fire egress; rubbish and loading facilities; gas services; power; goods and plant lift; parking; maintenance access; rights to convey electricity, telecommunications, gas, water, stormwater, sewage, fire services, security and alarm systems, building management systems, water tank, fuel and water storage; structural
support; and electricity. They run to over 140 pages. In addition, there is a shared facilities agreement and a land covenant protecting the right to operate a hotel.
[8] The relevant easement instrument for this case is 7919315.5, which gives pedestrian rights of way both ways. The hotel is the dominant land for easements in its favour and the body corporate the dominant land for easements in its favour. The hotel and the body corporate are accordingly both grantee and grantor. There is a schedule listing 22 areas subject to the rights of way and identifying the respective dominant and servient tenements. Just reading the schedule will not tell you whether a particular part of the building is subject to a right of way easement. It is also necessary to consult the plans in the unit title plan. I went by the plans in exhibit B of Mr LeRoy’s affidavit of 23 April 2021: digital title plan DP 403303. The hotel put in evidence digital title plan DP 407404, which shows common property, units and auxiliary units for the body corporate, but not easements.
[9]The easement includes these provisions:
1.1 In this Easement instrument, unless the context requires otherwise:
…
Building 2 Manager means the person (including its employee, contractor and agent) appointed by the Body Corporate or Lot 2 Owner to represent and act for the Lot 2 Owner in the day-to-day management of the building erected (including any extensions or alterations subsequently made to the building) or to be erected on Lot 2.
…
Grantee means
(a)the registered proprietor or registered proprietors of the Dominant Land; or
(b)…; and
includes their agents, employees, contractors, tenants, licensees, and other invitees of the Grantee as well as:
(c)…; or
(d)The Building 2 Manager if the Dominant Land is Lot 2.
…
3.2Pedestrian Right of Way
(a)A pedestrian right of way includes the full free and uninterrupted right at all times, to enter onto, go over and along the Easement Facility… on foot for purposes of:
(i)gaining access by the Grantee in common with the Grantor and other persons to whom the Grantor may grant similar rights, to the Dominant Land or the Servient Land or any of the other easement areas marked…
(ii)gaining access to the Passenger Lift by the Lot 2 Owner;
(iii)fire egress
…
(b) A right to enter onto, go over and along the Easement Facility includes the right to enter onto, go over and along the Easement Facility with or without any kind of permitted personal and household items. …
(d)
A right to use an Easement Facility includes a right to have the Easement Facility kept clear at all times of obstructions (whether caused by deposit of materials or unreasonable impediment) to the use and enjoyment of the Easement
Facility …
…
4.4In furtherance of the rights and powers granted by the Grantor to the Grantee under this Easement Instrument,
…
(b)The Grantor and the Grantee must not do or allow to be done on the Servient Land… anything that may interfere with or restrict the rights of either party or interfere with the efficient operation of the Easement Facility.
…
4.5The Grantee acknowledges that the Grantor may at its election or costs at any time install and maintain security access in or on the Stipulated Area shown marked “D3” on DP403303 … as deemed appropriate by the Grantor PROVIDED THAT the Grantor shall provide reasonable access to the Grantee in accordance with clause 3.2 of this Easement Instrument.
…
6Dispute
6.1Clause 14 in the implied rights and powers in Schedule 4 of the Land Transfer Regulations 2002 shall be replaced with the following:
“14 If any dispute arises between the Grantor and the Grantee concerning the rights created by this Easement Instrument, the party initiating the dispute must provide a written notice of the dispute to the other party:
(a)The parties must promptly meet and try to resolve the dispute through good faith negotiations…”1
…
7.2 The Grantor must not surrender, merge, modify, or extinguish the easements created by this Easement Instrument without the prior consent of the Grantee. There is no power for the Grantor to terminate any of the Grantee’s rights due to the Grantee breaching any provisions of the Easement Instrument or for any reason, it being the intention of the Grantor and Grantee that the easements in this Easement Instrument will continue forever unless surrendered.
[10] The particular easement for this case is marked “D3” on Deposited Plan 403303. It is included in the schedule to the easement instrument and is shown on sheets 8 and 9 of DP403303. It is on the third and fourth levels of the building. It gives access between the body corporate lift and lobby area on the Albert Street side of the building and the car parking area on the Mill Lane (rear) side. The hotel is the servient tenement for this easement. D3 is called the “skybridge” egress. Mr Abraham, the hotel’s general manager, acknowledges the convenience for apartment owners of this access over hotel property. Mr LeRoy’s office was in the lift and lobby area. If there were a fire, he would not be able to use the lift. His only way out was over the hotel’s skybridge.
[11] Mr LeRoy worked as building manager under contract to the body corporate, initially through his company, Cityscape Building Management Ltd, and later personally. He says that his job included:
(a)managing the cleaning and maintenance of shared areas at the Residences: hallways, stairwells, elevators, lobbies and carparks;
(b)maintaining the fire safety systems;
1 This provision goes on to provide for mediation and, if that does not work, arbitration.
(c)reporting hazards to the body corporate and taking remedial action;
(d)security control of the Residences;
(e)liaising with and supervising contractors engaged by the body corporate;
(f)inspecting common areas regularly with daily checks of carparks, stairwells and rubbish rooms; and
(g)informing the body corporate of matters relating to the hotel and shared facilities.
At all times before Mr LeRoy made his summary judgment application, the hotel accepted that he was the body corporate’s building manager and treated him as such.
[12] When the hotel became a managed isolation facility, it put up movable barriers the length of D3 creating separate lanes, on one side for the hotel and for the body corporate on the other. Body corporate residents could use their side without coming into contact with people from the hotel. The barriers did not go all the way up to the ceiling. The parties call them hoardings.
[13] Part of the background is that residents were concerned that they were sharing a building with people who might be infected with COVID-19. They also believed that the hotel had not consulted with the body corporate adequately or at all. For this matter I do not have to say whether their concerns were justified or not, but they are part of the context.
The hotel’s claim
[14] The hotel sues Mr LeRoy in trespass for two incidents, one on 4 July 2020 and the other on 22 July for having entered the hotel without justification. It says that the second time he caused a thing to enter the hotel. It pleads that it suffered damage but does not say what damage. It seeks an injunction barring him from entering the hotel.
[15] The hotel also relies on an earlier incident on 21 June 2020. It says that Mr LeRoy vandalised and damaged the rented hoardings on the fourth floor egress of the hotel, tampered with locks connected to the hoardings and tried to break into the hotel. The hotel sent him a notice telling him not to enter the hotel premises.
[16] The hotel says that on 4 July Mr LeRoy disturbed a hotel employee while he was resting in his room in the hotel. It says that on 22 July he entered the hotel and deposited letters addressed to owners of the Residences over the hoarding on the fourth floor and into an area intended for the sole access of people staying in the hotel.
[17] Mr Abraham, the general manager, has given evidence for the hotel. He does not have first-hand knowledge of any of the incidents. For the first and third incidents he has put in evidence stills from CCTV footage. For the second his account is hearsay but includes a photograph of Mr LeRoy standing in a doorway. Mr Abraham did not take the photograph.
Mr LeRoy’s summary judgment application
[18] In applying for summary judgment Mr LeRoy is asking the court to find now that the hotel cannot succeed on its claim. The court has to be confident that if the case went to trial in the normal way the result could not be different, and the merits can be decided now. The principles laid down by the Court of Appeal in Westpac Banking Corp v M M Kembla New Zealand Ltd apply.2 They are so well known that they do not need to be repeated.
[19] A summary judgment application requires a decision on the merits. Mr LeRoy’s defence is that on all three times he was within the D3 easement area of the hotel, did not go outside the terms of the easement and therefore did not trespass. The inquiry here does not go wider than that. The strike-out application involves more extensive matters, but they do not apply here.
2 Westpac Banking Corp v M M Kembla New Zealand Ltd [2001] 2 NZLR 298 (CA) at [58]–[64].
[20] It is a defence to a claim for trespass to land that the defendant was using rights under an easement.3 The question is whether Mr LeRoy’s conduct came within the easement.
[21] All three incidents happened on the D3 easement and on the body corporate’s side of the barrier the hotel installed. Mr LeRoy says so and the hotel does not say otherwise. It has had the opportunity to challenge that part of his evidence but has not. At the start of the proceeding the hotel referred to it as a “shared area”. Mr Abraham’s evidence in support of the application for interim injunction for the 21 June incident refers to Mr LeRoy tampering with the hoardings and that puts the event on the easement. Mr Abraham’s evidence for the 4 July incident does not say where it took place, but the hotel’s complaint about Mr LeRoy to the police refers to him being on the “Residences’ side”. That is consistent with Mr LeRoy’s account. For the 22 July incident the hotel complains about Mr LeRoy putting letters over the barrier onto the hotel side. The CCTV stills show him on the body corporate side of the barrier.
[22] Mr LeRoy has the benefit of the easement. He is within the definition of “grantee” as an agent and contractor of the body corporate and also as the designated building manager (cl 1.1). The hotel submitted that there may be a triable issue whether he was the building manager. It pointed out that Mr LeRoy’s written contract was between his company and the body corporate and the company had since been removed from the register. Notwithstanding that, it is clear that Mr LeRoy was the building manager. The hotel’s statement of claim gives his occupation as building manager. Even though he was not aware of the exact arrangements, Mr Abraham recognises that Mr LeRoy was the building manager for the Residences. Mr LeRoy’s emails with the body corporate chairman, his occupation of the building manager’s office in the building and his actions in seeing to the interests of the body corporate are all consistent with his being the building manager. Besides, even if he were not the building manager, he was still an agent and contractor of the body corporate.
[23]Now for what Mr LeRoy did.
3 Holt v Daw (1851) 16 QB 990. The decision is on the adequacy of the defendants’ pleading but recognises the principle. See also Lakes Edge Developments Ltd v Kawarau Village Holdings Ltd [2017] NZHC 2141, [2017] 2 NZLR 421 at [10].
21 June 2020
[24] Mr LeRoy says that when the hotel put the barriers in, it did not leave a space wide enough on the body corporate side. Owners of one apartment had a child who could only be moved by wheelchair. The passage was too narrow for the wheelchair and they could not take him to the carpark. They asked the body corporate chairman and Mr LeRoy for help. The chairman asked Mr LeRoy to deal with it. In a later email the owners provided a photograph showing that the space was too narrow. Mr LeRoy emailed Mr Abraham on 21 June:
I have had an email from a concerned resident today that the gap left for residents on L3 and L4 is not large enough for them to get their wheelchair through.
Can you please ensure there is a gap of at least 1.2 mtrs minimum. If you could effect immediately so the residents may leave the building,
Many thanks.
[25] Because he considered the matter urgent, he moved the barrier himself. He says he moved it slightly to make enough room for the wheelchair. He denies vandalising the barrier and tampering with the locks.
[26] I do not accept the hotel’s version that Mr LeRoy vandalised the barrier and tampered with the locks. The hotel has not given any evidence to rebut Mr LeRoy. In Westpac v Kembla, the Court of Appeal cautioned that except in clear cases, such as a claim upon a simple debt claim where it is reasonable to expect proof to be immediately available, it will not be appropriate to decide by summary procedure the sufficiency of the proof of the plaintiff’s claim.4 This is one of those clear cases. Mr Abraham’s account is not first-hand. If someone really had seen Mr LeRoy vandalising the barrier, there should have been no difficulty in the witness giving an affidavit about it. There are further reasons for not accepting the hotel’s case. Mr Abraham did not put Mr LeRoy’s email of 21 June in his affidavit, although it was clearly relevant. Nor did he respond to it in later evidence. If there were really any damage to the barrier, the hotel would have sued for trespass to chattels as well as trespass to land. Later the hotel filed an affidavit by Mr Abraham for a formal proof
4 Westpac Banking Corp v M M Kembla New Zealand Ltd, above n 2, at [63].
hearing in which evidence was given to support a claim for damages, but there is no evidence about damage to the barrier.
[27] Mr LeRoy was entitled to move the barrier to make enough space for a wheelchair to pass. Moving a person by wheelchair was within the rights under the easement. A wheelchair is a household item under cl 3.2(b) of easement. The hotel was required to keep D3 clear of obstructions: cls 3.2(d) and 4.4(b). Narrowing the passageway so that a wheelchair could not pass was an obstruction of the right of way and a substantial interference with the easement.5 Faced with that obstruction, the body corporate was entitled to move it. It could abate the nuisance. Hinde McMorland & Sim Land Law in New Zealand describes abatement:6
To abate a wrongful disturbance, the owner of the easement may enter the burdened land and remove the obstruction to its exercise, for example, by breaking open a locked gate across a right of way.
However, “the abatement of a nuisance is a remedy which the law does not favour and is not usually advisable”, and its exercise may be limited to clear and simple circumstances which would not justify the expense of legal proceedings, or urgent cases where immediate relief is needed. The benefited owner should exercise reasonable judgment in deciding whether the circumstances come within these criteria and also whether notice of the intended abatement should be given to the burdened owner. For example, if the abatement involves major work on the burdened land, if the burdened owner was not responsible for creating the nuisance, or if the abatement is likely to cause a breach of the peace, it would be appropriate to give notice first, and that might always be appropriate unless there is urgency required.
If resort is had to abatement, the owner of the easement must abate the nuisance in the most reasonable manner available. No more may be done than is necessary actually to remove the interference with the right, and there must be no interference with the rights of the burdened owner, innocent third parties or the public. Unnecessary damage to the burdened land is actionable by the burdened owner.
[28] This case comes comfortably within the text. As the building manager, Mr LeRoy was the appropriate person to abate the nuisance for the body corporate.
5 See Handforth v Kokomoko Farms Ltd (2010) 11 NZCPR 171 (HC), where narrowing a rural right of way to restrict effective use of the easement was held to be substantial interference.
6 DW McMorland Hinde McMorland & Sim Land Law in New Zealand (online looseleaf ed, Lexis Nexis) at [16.088] (citations omitted).
[29] The hotel’s reaction was hostile. On the same day Stamford Land Corporation’s in-house lawyer wrote to Mr LeRoy making claims against him for other matters, but adding;
In the meantime, we wish to also put you on notice that you are not to enter into the Hotel premises. It will be trespass if you are found within the premises of the Hotel, and the appropriate action will be taken.
[30] While the letter does not refer to the Trespass Act 1980, it is helpful to refer to two of its provisions, s 3(1):
Every person commits an offence against this Act who trespasses on any place and, after being warned to leave that place by an occupier of that place, neglects or refuses to do so.
And s 4:
(1)Where any person is trespassing or has trespassed on any place, an occupier of that place may, at the time of the trespass or within a reasonable time thereafter, warn him to stay off that place.
(2)Where an occupier of any place has reasonable cause to suspect that any person is likely to trespass on that place, he may warn that person to stay off that place.
[31] Neither section applies here, mainly because Mr LeRoy’s presence on D3 was not a trespass. He was lawfully there under the pedestrian right of way. Notwithstanding that, from that time the hotel treated Mr LeRoy as banned from using those parts of the hotel where the body corporate had rights of access. That was flawed because it could not take away his rights under the easement (cl 7.2). But that sets the scene for its treating him as a trespasser on 4 and 22 July.
4 July 2020
[32] The hotel pleads that Mr LeRoy disturbed a hotel employee while the employee was resting in his hotel room. Mr LeRoy banged loudly on the employee’s door, retreated when the door was opened, and banged loudly on the door again. When the employee opened the door a second time, Mr LeRoy behaved in a threatening manner. The only evidence is from Mr Abraham, who did not witness the incident. The employee has not given evidence. The hotel does not say that Mr LeRoy entered the room.
[33] Mr LeRoy explains that one of the body corporate’s concerns after the hotel became a managed isolation facility was the potential risk from hotel rooms that faced onto the body corporate’s side of D3 on levels 3 and 4. He understood from discussions with the hotel that that these rooms would not be used. A resident told him that they believed a room on level 3, room 323, was being used. Mr LeRoy checked that out. He knocked on the door and stood back. A hotel employee answered the door. Mr LeRoy says in his affidavit says that he had video footage of the incident. He had recorded the incident on his cell phone. In the hearing I asked if I could see it. Counsel and I were shown it. The footage is consistent with Mr LeRoy’s version, but not the hotel’s. There was nothing to suggest that he was acting in a threatening manner. It is not possible to tell from the footage what expression Mr LeRoy had on his face. But under the easement the right to use D3 does not change according to the expression on your face.
[34] The hotel has not given any evidence to rebut Mr LeRoy. This is another clear case under Westpac v Kembla where the hotel could be expected to respond with evidence of its own, from its employee, if it had an answer.
[35] The hotel room Mr LeRoy went to opened on to D3. The room was part of the hotel property but not subject to the easement. Under the easement Mr LeRoy was entitled to use the easement to access the servient land, that is, hotel property including the room, (cl 3.2(a)(i)). In checking whether there was someone using the hotel room, he was doing his job as the body corporate building manager. He did not trespass.
22 July 2020
[36] The hotel says that Mr LeRoy trespassed on level 4 and put letters addressed to residents over the barrier and onto the hotel’s side. The second aspect is said to involve a trespass by leaving goods on land without consent.
[37] Mr LeRoy says that is what he did, except that it was on level 3. He denies that he did anything wrong. On 13 and 21 July the hotel had delivered letters by courier to residents of the body corporate. The couriers picked the letters up from the hotel and took them to the Residences but did not use personal protective equipment.
He was concerned about the risk of contamination. The body corporate has a policy against unsolicited mail. The mailroom has signs that it is not allowed. A resident alerted him that the hotel’s letters were unsolicited mail. The body corporate chairman authorised him to remove the hotel’s letters. That is recorded in an email of 21 July by the chairman. Mr LeRoy also saw letters on a table in D3 apparently left by the hotel. Out of concern that the letters might pass on contamination, he returned the letters over the barrier.
[38] For summary judgment purposes, I assume that if he were cross-examined, not all his account may be accepted. Later I will deal with the content of the hotel’s letters. Here it is enough to say that Mr LeRoy may have had his own personal interest in seeing that the residents did not read the letters.
[39] There is no duty to receive unsolicited mail. The sender cannot force you to take it. You can decline to receive it and read it. Most times we put it in the rubbish. That is the fate of most junk mail. But another option is to return it to the sender. That way you can make it clear to the sender that you did not want the mail. They may think again about sending unsolicited mail. The sender can have no complaint if its unsolicited mail is returned to it. So the body corporate could decide to return the hotel’s letters to it. And if some residents were upset about not receiving the letters, that was between them and the body corporate. The hotel could not do anything about it. Mr LeRoy could not take the letters back into the hotel. It had banned him from its premises. But he could use the D3 access to go to the barrier to drop the letters on the hotel side. He was lawfully on D3 under the terms of the easement and therefore was not trespassing. Returning unwanted mail to the sender by leaving it on its property does not involve a trespass to land.
[40] The hotel submitted that even if the easement allowed Mr LeRoy to use D3 for access, it was still entitled to restrict him. It did not rely on any express term of the easement. This implied power is said to arise because it is necessary to maintain its rights as the burdened owner and to preserve the effective operation of the easement. Its restrictions on Mr LeRoy were justified because of its concerns about his behaviour, these concerns were heightened because the hotel was running a managed isolation facility and Mr LeRoy had no lawful justification for being on D3.
[41] The hotel cannot have any genuine complaint about what Mr LeRoy did on each occasion. He was properly doing his job as the body corporate’s building manager. The easement was created as part of the development of the building to accommodate both the hotel and the body corporate, under which each would need to use parts of the other’s property. That was done in part by creating easements registered against the titles which were to last in perpetuity unless surrendered. Giving clearly defined rights to the body corporate to allow it to operate effectively was required to make the development successful. The D3 easement is one such instrument creating those rights. It is carefully drawn. Some rights are expressly restricted (although those restrictions are not relevant here). Those using rights under the easement may be under a common law duty not to unreasonably interfere with others also using their rights to use the easement, whether they are in the hotel or from the body corporate. But it is not possible to imply into the easement some additional power in favour of the hotel to cut off access to people who have the benefit of the easement. That would be a derogation from the grant. It is inconsistent with cl 7.2 of the easement. It would introduce uncertainty when the easement is drawn to define rights clearly. It would allow the grantor to act capriciously, as this case shows.
[42] Mr LeRoy also ran an implied licence argument, especially for the 4 July incident, but that argument is not strong enough for summary judgment. The hotel has an argument it revoked any implied licence when it sent him its letter of 21 June.
[43] It was also submitted for him that another reason why the hotel’s claim cannot succeed is that the hotel did not comply with the dispute resolution process under cl 6.1 of the easement. That is however a procedural matter. A summary judgment is a decision on the substantive merits. This issue is instead relevant to Mr LeRoy’s strike- out application. There are difficulties with the argument anyway. Mr LeRoy filed a statement of defence and thereby submitted on the substance of the matter to the court. He then lost the ability to apply to stay the proceeding while the dispute resolution process was followed.
[44] In summary, Mr LeRoy succeeds on his summary judgment application because he has shown that the hotel cannot succeed in its trespass claim against him.
He has a valid defence that he was lawfully on D3 under the easement on each occasion.
The strike-out application
[45] With Mr LeRoy having obtained judgment against the hotel on the merits, it might be thought unnecessary to deal with the strike-out application. It is however relevant as it may go to how costs are decided: whether there should be increased or indemnity costs under r 14.6 of the High Court Rules 2016.
[46] Mr LeRoy says that the hotel’s claim is frivolous, being essentially trivial, and that it is an abuse of process, having been brought for an improper purpose.
[47] I agree that the case is trivial and lacks the seriousness required for a proceeding in this court.7 If Mr LeRoy did trespass, the incidents were insignificant, momentary and part of the normal jostle of everyday life. Most people would let them pass. They were nothing to make a fuss about. But here the abuse of process argument is more important. The triviality is only one aspect of that.
[48] Abuse of process can take a number of forms. Here it is said to involve using the procedures of the court for an improper purpose. In Rafiq v Secretary for the Department of Internal Affairs Asher J said:8
It was stated in the High Court of Australia in Williams v Spautz [quoting Lord Evershed MR in Re Mallory]:9
… court proceedings may not be used or threatened for the purpose of obtaining for the person so using or threatening them some collateral advantage to himself, and not for the purpose for which such restraining orders are properly designed and exist; and a party so using or threatening proceedings will be liable to be held guilty of abusing the process of the court and therefore disqualified from invoking the powers of the court by proceedings he has abused.
Proceedings brought with an improper motive which seek a collateral advantage beyond that which could legitimately be expected from a court
7 Deliu v Hong [2011] NZAR 681 (HC) at [21].
8 Rafiq v Secretary for the Department of Internal Affairs [2014] NZHC 2064 at [23]–[24].
9 Re Mallory [1955] Ch 600 (CA) at 623–624, as quoted in Williams v Spautz (1992) 174 CLR 509 (HCA) at 654.
proceeding may be an abuse of process.10 Nevertheless I accept that a stay will not be granted to debar a litigant from pursuing a genuine cause of action that it seeks to have determined where there is also an ulterior purpose as a desired by-product. The ulterior purpose must dominate to a degree where the proper conduct of the litigation is subsumed. The onus is on the party seeking to show that the proceeding is brought from improper purpose.
[49]Williams v Spautz is authority for these propositions:
(a)The focus is on the purpose of the proceeding rather than the motive of the person starting the proceeding.
(b)The improper purpose must be predominant but need not be the only one.
(c)Proof of an improper act is not required but evidence of an improper act may go to establish improper purpose.
[50] While the proceeding was ostensibly brought to vindicate the hotel’s property rights, Mr LeRoy says that its real purpose was to get back at him for looking after the interests of the body corporate when the hotel became a managed isolation facility and to have him removed as the body corporate’s building manager.
[51] The hotel had no time for Mr LeRoy. It took “Give a dog a bad name” tactics and went out of its way to blacken him.11 If it throws enough mud, some may stick. It brought up past incidents that are irrelevant to this case, including:
(a)In April 2016 Mr LeRoy turned off a hotel chiller;
(b)In January and March 2017 he acted aggressively towards hotel staff;
(c)In April 2020 he spoke aggressively and abusively to two members of the hotel staff.
10 Goldsmith v Sperrings Ltd [1977] 1 WLR 478 (CA); Wallersteiner v Moir [1974] 1 WLR 991 (CA).
11 One of its more extravagant allegations was a claim of “attempted manslaughter” in September 2020.
The evidence about these matters is all hearsay and inadmissible against Mr LeRoy. It is also inadmissible against him under s 8 of the Evidence Act 2006 as its unfairly prejudicial effect outweighs its probative value. It is however admissible against the hotel as showing its purpose. The hotel also pleaded the first two incidents in its statement of claim.12 That pleading was not required to establish the hotel’s trespass cause of action but was intended to have a prejudicial effect.
[52] The hotel’s resentment at Mr LeRoy looking after the body corporate’s interests when the hotel became a managed isolation facility can be seen in two letters of the in-house lawyer. A letter of 20 June 2020 to Mr LeRoy included:
On 20 June 2020, the Ministry of Health had informed our subsidiary, Stamford Hotels and Resorts (“SHR”), that they are not proceeding with the appointment of Stamford Plaza Auckland (the “Hotel”) as a Managed Isolation Facility, due to your wrongful interference by, inter alia, spreading false and misleading information about the purported inadequate safety precautions and measures taken by Hotel.
SHR has through your misconduct suffered substantial damages and losses as a result…TAKE NOTICE that we will be seeking from you the full compensation of such damages and losses, including any legal costs.
[53] The lawyer’s letter of 21 June, the one telling him not to enter the hotel premises, repeats the allegation of spreading false and misleading information. It also says:
In addition to the above, it has come to our attention that you had facilitated the spread of these false and misleading information to the residents of The Stamford Residence.
It repeats the complaint about the April 2016 incident, then says:
Clearly you have not taken instructions from what had transpired before and are recalcitrant.
The letter then banned Mr LeRoy from the hotel.
[54] The hotel’s intention to drive a wedge between the body corporate and Mr LeRoy can be seen in the letters of 13 and 21 July 2020, the ones Mr LeRoy returned to the hotel. The letters are signed by Mr Ong on behalf of Stamford
12 Paragraphs 29–32.
Auckland (1996) Ltd as the former owner of eight apartments and are addressed to the owners of the residences. Both are headed “RE: REECE LEROY, BUILDING MANAGER”. Both are on Stamford Plaza Auckland letterhead and represent the views of the hotel, even though sent in the name of a related entity.
[55] The letter of 13 July advised of Stamford Auckland (1996) Ltd’s former ownership of eight apartments. It referred to the April 2016 incident about Mr LeRoy turning off the chiller which caused loss to the hotel. The matter had been settled between the hotel and the body corporate with a payment of $22,560. While the body corporate committee had made the settlement, Mr Ong claimed to be surprised that his company had not been informed of this. While Mr LeRoy directly caused the loss, he was apparently not made to compensate the residents for the payment by the body corporate. The letter went on:
We consider this a serious infringement of the BC committee’s obligations to the TSR residents. We plan to take legal action for such infringements against the responsible persons and Mr LeRoy and we invite you to join us in this class action against them…
The Hotel has further informed us that this is one of many incidents involving Mr LeRoy, and these incidents have damaged the relationship between the TSR and the Hotel.
[56] The letter of 21 July refers to the earlier letter of 13 July. It advises residents that the hotel would be withdrawing all benefits formerly extended to residents. The hotel would also be re-visiting all current arrangements for shared facilities between the hotel and the residences. The reason given for this was:
… the lack of reciprocity of the goodwill extended by SPAK recently and in the past. SPAK feels that such goodwill has been taken advantage of, and such has been wrongly interpreted as rights and obligations to be borne by SPAK.
One example of mistreatment is the misconduct of Mr Reece LeRoy, your building manager. We have also been informed that SPAK had, effective on 21 June 2020, issued a trespass notice against Mr LeRoy, thereby restricting him from entering the hotel premises. This is for, amongst other reasons, Mr LeRoy’s misconduct as stipulated in the Letter [of 13 July], and Mr LeRoy’s history of acting in an abusive and threatening manner towards SPAK’s staff and contractors, which has led SPAK to consider Mr LeRoy as a real threat to the safety and well-being of SPAK’s staff and guests. To the best of our knowledge, no action has been taken to alleviate the situation.
[57] The suggestion that owners and former owners of apartments could sue Mr LeRoy for the $22,000 payment is nonsense. Mr LeRoy’s contract (through his company) was with the body corporate, not with the owners. They could not sue him for breach of his contract with the body corporate. Whether the body corporate sued was a decision for the committee or the body corporate in general meeting, not individual owners. The matter was historic. The hotel knew about the settlement, as it was a party to it, and Stamford Auckland (1996) Ltd must also have known about it. The amounts did not warrant taking proceedings.
[58] But the hotel did not really intend to take any such action against Mr LeRoy. It was making mischief by suggesting to owners that they had a problem with their building manager.
[59] The second letter proposed withdrawing facilities the body corporate had enjoyed and gave Mr LeRoy as the reason for that decision. The implication was that life for the owners’ relations with the hotel would be better if they did without Mr LeRoy. The hotel was also punishing him for his conduct by banning him from its premises.
[60] The email of 21 July by the body corporate chairman,13 authorising Mr LeRoy’s return of the letters, records his concerns that: the 13 July letter had breached the confidentiality of the settlement; and the 21 July letter bordered on harassment and contained factual inaccuracies. He wanted the hotel to stop the behaviour. His email does not suggest any lack of confidence in Mr LeRoy.
[61] So that no-one falls into the “no smoke without fire” fallacy, Mr LeRoy denies the alleged past misconduct. He gives reason to believe that he did not turn off the hotel’s chiller in April 2016. I do not have to decide which side is right. His evidence explains the residents’ concerns over the hotel being used as a managed isolation facility and exhibits an email from the body corporate chairman reflecting these concerns. He says that Mr Abraham was dismissive of the concerns. Mr LeRoy was one of the body corporate’s representatives dealing with the hotel when the facility was set up.
13 See [37] above.
[62] After he received the hotel’s letter of 21 June trespassing him from the hotel, Mr LeRoy consulted a lawyer, who wrote to the hotel on 24 June. As to the complaint of spreading false and misleading information, the letter said:
Mr LeRoy has told me he has no idea whatsoever what you are referring to. He says he has not discussed the situation with anyone at the Ministry or anyone acting on its behalf. He is as you know the Building Manager of the Stamford Residences and in that capacity he has in good faith advised the body corporate, and therefore the residents, of his concerns about the proposed use of the hotel for these purposes. However he has not discussed the matter with anyone else who may have somehow influenced any decision made by the Ministry of Health.
As to trespass, the letter went on:
In your notice of 21st June you have notified Mr LeRoy that he is not allowed to enter into the hotel premises and that action will be taken against him if he does. Leaving aside the reasonableness of that decision, I am instructed that as the Building Manager of the Stamford Residences he will need access to the Residences, including the car park and the Building Manager’s office on the third floor…In addition, if he needs to access any “shared areas” he will be able to do so under the agreement in place between the hotel and the body corporate.
Lastly, Mr LeRoy is bewildered that Stamford Land Corporation or the Stamford Plaza would want to take these measures against him and would welcome discussing with you or anyone on the ground in Auckland what it is that has made you send him these notices and whether the present situation between him and Stamford can be resolved.
[63] That letter drew a response the next day from Auckland lawyers instructed for the hotel. The hotel maintained its allegations and reserved its rights. As to the trespass notice, the hotel did not consider that it had acted unreasonably, but reasonableness was not a factor the hotel had to consider when deciding to trespass someone. The hotel would not withdraw the notice and Mr LeRoy was on notice that the hotel would enforce any breaches. The request for a meeting was declined:
Stamford considers that Mr LeRoy has exhibited an aggressive, destructive and unprofessional pattern of behaviour towards it and its staff over the years. Stamford will raise those concerns with The Stamford Residences Body Corporate, as it is apparent Mr LeRoy has taken those actions as a representative of that entity.
[64] On Friday 28 August the hotel’s Auckland lawyers wrote to the lawyer Mr LeRoy had consulted, recording Mr LeRoy’s return of the hotel’s letters on 22 July. The letter required Mr LeRoy to sign an undertaking, failing which the hotel would
apply for an injunction and seek damages. A response was required by Wednesday 2 September. The undertaking was in the form of a deed, recited the trespass letter of 21 June and the incident of 22 July. In paraphrase Mr LeRoy was required to undertake to the hotel not to enter into the “Premises” (being Stamford Plaza Auckland), not to interfere with any property in or on the premises, and not to threaten, annoy or disturb any persons on the premises. If he was in doubt whether any place was within the premises, he would seek confirmation from the hotel before entering. The undertaking made no provision for Mr LeRoy to use any easements in the hotel. Mr LeRoy did not sign. The hotel began this proceeding on 4 September.
[65] The two incidents on which the hotel sues are trivial. Most people would not bother suing, even if there really had been a trespass. The rush to law raises a question about the purpose of the proceeding.
[66] The obvious purpose of cl 6.1 of the easement, the alternative dispute provision, is to encourage informal resolution of differences over use of the easement. The parties must try dialogue, then mediate and after that go to arbitration. Disputes are not to be resolved by litigation. When a party ignores these provisions and sues instead, you may wonder about the purpose of the proceeding. Bypassing alternative dispute provisions may involve a misuse of the court process. In this case Mr LeRoy did start down the alternative dispute process when his lawyer wrote proposing a meeting to discuss issues. The hotel spurned that. That suggests that the hotel was not genuinely interested in resolving a problem with the body corporate’s use of the easement over its property.
[67] When the hotel set up the managed isolation facility in June 2020, the hotel had difficulties with the body corporate and its concerns for its owners’ welfare. The hotel’s objection to Mr LeRoy was with steps he took as the body corporate’s building manager in upholding its interests. As the matter concerned relations between the body corporate and the hotel, the hotel could have taken it up directly with the body corporate. As the parties have an ongoing relationship, there were greater chances of a negotiated resolution. Litigation was less likely. The body corporate was already lawyered up, something the hotel referred to in its letter of 21 July. Mr LeRoy on the other hand was an easier target.
[68] Having decided to sue, the hotel brought this proceeding in this Court to decide the merits of a trifling dispute over use of a right of way. The Disputes Tribunal could not hear this case, as it cannot grant injunctions. So the District Court was the obvious court, if there were to be a proceeding. It was also more convenient, being in the same street as the hotel. This Court was not the right place to sue. It should not have to deal with petty matters like this. Its resources are better applied to more serious matters. The choice of court shows the hotel’s intent. It had the resources to fund a case in this Court and was lawyered up. Mr LeRoy with fewer resources would be at a procedural disadvantage. The hotel’s intention was oppressive.
[69] Given the weakness of its case, it is surprising that the hotel obtained an interim injunction against Mr LeRoy. He was served on Friday 2 October 2020 at 3.47 pm but did not take any steps to oppose. The application was heard on Monday 5 October 2020. He says that he felt overwhelmed by the situation and stress, as well as aggrieved by the prospect of having to incur significant legal costs to defend himself for doing his job as building manager. He has supported his evidence with medical reports as to the stress he was under. His doctor said, “The adverse effects of whistleblowing on mental health are well described in the literature and he represents a typical sufferer.” His non-appearance can also be excused because he had hardly enough time to respond. It is not clear why the case was heard so urgently.
[70] Even without opposition from Mr LeRoy, any application for an injunction faced these difficulties:
(a)The case was about a dispute over use of a pedestrian right of way, a minor matter, which ordinarily does not require the attention of this court.
(b)The easement had an alternative dispute procedure which the parties had to follow.
(c)The hotel had rejected Mr LeRoy’s attempts to follow that procedure.
[71] The hotel made it look like something different, a straight-out trespass without any easement issues, with Mr LeRoy portrayed as abusive, aggressive, unwilling to give an undertaking and a danger to the managed isolation facility and the hotel staff.
[72] While the statement of claim has irrelevant allegations against Mr LeRoy for his conduct on other occasions, it does not refer to the easement.
[73] Mr Abraham’s affidavit, in support of the application for the interim injunction, does say that there are easements which allow occupiers to access apartments. He attaches copies of five easements. These run to many pages. The easement in this case is the fourth. It is surrounded by other irrelevant easements: for the goods lift, for maintenance access cleaning, for supply of services including electricity, telecommunications, gas, water and the like. He does not make any particular reference to the right of way easement. He says that it is generally possible to access the residences without going through the hotel and it is possible to access the hotel without going through the residences. The exception is the shared area on the third and fourth floors. While he calls it a shared area, he does not specifically say that it is hotel property subject to a right of way in favour of the body corporate. No-one reading his affidavit or the easement in this case would be able to figure out that the area D3 in the schedule to the easement is the shared area. The written submissions filed in support of the interim injunction application are no more enlightening. The fact that this area is subject to an easement in favour of the body corporate has been left obscure.
[74] Mr Abraham’s description of the incident on 21 June refers to hoardings on the fourth floor egress without saying that there is an easement on that area. His description of the incident on 4 July does not give any location except that it is a hotel room. For the 22 July incident he says that Mr LeRoy was trespassing on level 4, again without saying that the area was subject to the easement.
[75] The hotel’s case in short was that it had given notice to Mr LeRoy that he was not to enter into the hotel premises but despite that, on two later occasions, he entered the hotel without consent. He had been asked to give an undertaking but had not and
therefore should be enjoined. It left out the inconvenient facts about the easement. Its case had half-truths.
[76] It omitted relevant information. Mr Abraham’s account of the incident on 21 June, when Mr LeRoy made the passageway wider for a wheelchair, leaves out Mr LeRoy’s email to him that day asking for the passage to be made wider. Such a mundane request would have detracted from the allegation of vandalism.
[77] Mr LeRoy’s failure to sign the undertaking demanded by the hotel could be used to submit that he should be enjoined. But that submission would not look so strong if it were known that, through his lawyer, Mr LeRoy had earlier proposed a meeting to sort the issues out and the hotel had rejected that. The hotel left out the evidence about the lawyer’s letter and its own lawyer’s response. Mr LeRoy’s lawyer’s reference to the agreement in place between the hotel and the body corporate for the use of shared areas would have given more information about the easement than the hotel had let on. The lawyer who appeared at the interim injunction hearing was the same lawyer who wrote rejecting the meeting.
[78] Davison J accepted the hotel’s simple trespass case.14 His decision would have been different if he had been informed of the easement, but he was not. The hotel’s omissions helped it obtain the injunction. Davison J’s judgment finds facts in terms of Mr Abraham’s affidavit and says:15
…The plaintiff is entitled to prohibit the defendant from entering its hotel premises or to restrict his movement when passing through those parts of the hotel used by people staying at the hotel and moving to and from the Stamford Residences.
The evidence contained in Mr Abraham’s affidavit appears to show the defendant interfering with the temporary hoardings erected to separate people in managed isolation in the hotel from Stamford Residences residents and their guests. There could be no possible justification for the defendant interfering with those hoardings.
The balance of convenience clearly favours the granting of an interim order by way of an injunction to restrain the defendant from entering on to the plaintiff’s hotel premises, they being a part of the hotel building that on the basis of the evidence presented by the plaintiff, he has no right to enter. The defendant has already failed to comply with the plaintiff’s written notice
14 SPAK (1996) Ltd v LeRoy [2020] NZHC 2609.
15 At [11]–[13].
advising him not to enter the hotel premises, and he has not responded to the plaintiff’s solicitors’ request that he undertake not to enter the hotel premises and interfere with the hotel premises. There is therefore a real prospect that he may repeat his past conduct and again enter the hotel premises without the plaintiff’s permission.
[79] The hotel got around the triviality problem by playing on the supposed risk to running the managed isolation facility. Davison J said:16
Should the defendant’s actions compromise the measures being taken by the plaintiff to establish and maintain effective quarantine isolation of people in managed isolation, the risk of Covid-19 contamination and contagion has the potential to have significant public health consequences and cause widespread societal disruption.
[80] Mr LeRoy’s actions had nothing to do with compromising the operation of the isolation facility. The hotel’s concern was that, as the building manager, he had been raising concerns how the residents of the body corporate could be protected while the hotel ran the managed isolation facility. It wanted to get back at him for raising these concerns. But the hotel did not tell the court that was its real purpose.
[81]The interim injunction required that:17
1.1pending further order of the Court, the defendant shall:
1.1.1not enter into, remain on or in any way interfere with the premises occupied by the plaintiff at Stamford Plaza Auckland, 22 to 26 Albert Street, except as allowed by law;
1.1.2not interfere with, move or damage any property on or within the premises occupied by the plaintiff at Stamford Plaza Auckland, 22 to 26 Albert Street, being either property attached to or located within those premises or the personal property of any person within those premises, except as allowed by law;
1.1.3if in any doubt as to whether any place constitutes the premises occupied by the plaintiff at Stamford Plaza Auckland, 22 to 26 Albert Street and therefore whether he may enter onto it, seek confirmation from the plaintiff prior to entering those premises.
[82] Two aspects can be noted. First, this was an injunction to restrain trespasses to land. If Mr LeRoy had a proper defence to a claim of trespass, he would not infringe the order. The order recognises this with the saving “except as allowed by law”. As
16 At [11].
17 At [16].
Mr LeRoy was allowed to enter on the easement areas, he would not infringe because that was not a trespass. The hotel did not however see it that way.
[83] Second, the last part of the order (1.1.3) is unusual. The terms of an injunction should be clear on their face, so that the person bound by them is not in any doubt. I am not aware of other injunctions which have given a plaintiff the power to determine the extent of the court’s order. That seems to involve a delegation of judicial power to one party. It also lends itself to abuse.
[84] On 29 October 2020 Mr LeRoy emailed the hotel’s lawyer requesting access to parts of shared areas between SPAK and Body Corporate 407404. The shared areas included “L3 and L4”. The lawyer advised Mr LeRoy that the injunction did not provide for “this type of occasional access”. The hotel did not “agree to the variation of the injunction that you have sought informally and on short notice”.
[85] That was wrong. The injunction did not ban Mr LeRoy from the shared areas with easements. He should not have had to ask but having asked was given the wrong answer. He was not asking for a variation of the injunction, but confirmation that he would not infringe it. This shows the problems with the last provision in the order. At a minimum the hotel should have addressed the request in good faith. It did not.
[86] Mr LeRoy’s contract with the body corporate was to expire on 30 November 2020. On 11 November the body corporate chairman emailed him to renew his contract, subject to conditions. He had to comply with the interim injunction and any permanent injunction, and he had to identify the person who would do his work in the shared area while the injunction was in force. The chairman appreciated that there were grounds to set aside the injunction. On 9 December the chairman emailed Mr LeRoy:
Thanks for your work, it’s been a pleasure working with you in what has been a difficult year for both of us.
[87] While Mr LeRoy was apparently still in good standing with the body corporate, that changed. On 4 December, shortly before the body corporate’s annual general meeting, the hotel had written to all the owners denouncing Mr LeRoy and the body
corporate chairman. The letter professed that the hotel always intended to be a good neighbour and to support the Residences wherever possible. It went on:
Notwithstanding Stamford Plaza’s best efforts, and through no fault of its own, we had to tolerate insufferable abuses from ill-conceived Body Corporate committees, some of whom we understand were influenced by parties having no vested interest in the Residences. Some of these issues include:
(a)Frivolous and false allegations that Stamford Plaza was tapping on the electricity of the Residences to power its chillers.
(b)Allowing the Property Manager to cut-off the power supply of the chillers, resulting in harm to Stamford Plaza’s operations, which the Body Corporate had to make substantial monetary compensation in atonement.
(c)Refusing to take action against the same Property Manager, and thereby condoning his egregious misconduct, despite being complained of by our management of his abuses to Stamford Plaza’s staff and damage to Stamford Plaza’s property.
(d)Continuously abetting the said Property Manager misrepresenting and making false statements as to the residents before, during and after Stamford Plaza’s appointment as an isolation facility ... This has consequently le[d] to damages and losses suffered by Stamford Plaza.
…
Misconduct of the Property Manager
We are convinced that the only reason for the Body Corporate to have condoned the misconduct of the Property Manager is its complicity, and its wilfulness to harm the interest of Stamford Plaza.
Stamford Plaza was compelled to make the necessary police reports and apply for a civil injunction against the Property Manager to protect its staff, and its property.
[88] Other parts of the letter are not directed against Mr LeRoy. Among other things the letter accuses the body corporate chairman of sabotaging the hotel’s appointment as an isolation facility, denied that the hotel had refused to consult on safety issues, complained that the body corporate chairman had made misleading statements to the media in October. The letter ends expressing the hope the new committee will not progress on the same destructive path that the existing body corporate committee had taken.
[89] At the annual general meeting a new committee was voted in. While Mr LeRoy’s contract had been renewed, the new chairman told him that as he did not
have a good relationship with the hotel, he could face agreeing to an “eloquent exit” by resigning or the body corporate would terminate his contract. He resigned, finishing on 31 March 2021.
[90]The hotel had got what it wanted. It had got rid of Mr LeRoy.
[91] This case was not about the hotel seeking vindication of its property rights. If the hotel really were concerned that Mr LeRoy was not using the easement as he should have, it would have used the dispute resolution procedure under the easement. It would have taken up the suggestion of a meeting to resolve matters. The matter would not gone to court, least of all this Court.
[92] The hotel was annoyed with Mr LeRoy because of concerns he had raised for the welfare of the residents when the hotel became a managed isolation facility. It banned him from its premises to teach him a lesson. That was calculated to make it difficult for him to carry on his job as building manager, because it wanted to stop him using the easements in favour of the body corporate (although in law it could not do that). At the same time, it tried to weaken the body corporate’s confidence in him. The incidents on which it sued were trivial but were a pretext to put pressure on him. Its evidence was flimsy. The hotel blackened his name. It misrepresented the facts to the Court. It took advantage of Mr LeRoy procedurally by suing in this Court when he could not match its resources for High Court litigation. It gave him little time to oppose the interim injunction application. It used the interim injunction order improperly by preventing him from using the easements as he was entitled. It used the order against him to put him down in the eyes of the owners. It acted improperly in misrepresenting its case to the court. This was not about upholding its property rights but about oppressing Mr LeRoy.
[93] The case is an abuse of process. If I had not given summary judgment against the hotel, I would have struck out the statement of claim and dismissed the proceeding as an abuse of process.
The contempt application - jurisdiction
[94] In the hearing I gave an oral ruling that I did not have jurisdiction to hear the contempt application. What follows is an edited version of my ruling.
[95] On 24 September 2020, Davison J made an order for an interim injunction against Mr LeRoy. The hotel, in whose favour the order was made, says that Mr LeRoy has breached the order and has applied under s 16 of the Contempt of Court Act 2019 for orders punishing Mr LeRoy. It wants him imprisoned, or, if not, then fined.
[96] At an earlier stage, counsel agreed that an associate judge has jurisdiction to hear applications under s 16 of the Contempt of Court Act. When I looked at the problem I had doubts. I issued a minute saying that I wanted to hear argument on the point.
[97] Counsel for Mr LeRoy accept that an associate judge does not have powers under s 16 of the Contempt of Court Act to punish for non-compliance with court orders. Mr Boshier, for the plaintiff, was not completely of that view but accepted that the arguments against an associate judge having jurisdiction appear to be stronger than the arguments for.
[98] Section 16 appears in Part 2 subpart 4 of the Contempt of Court Act 2019. The section applies, amongst other things, to orders for interim injunctions. It provides that the court may enforce court orders on the application of those who have applied for those orders. Subsections (3), (4) and (5) set out how the jurisdiction is to be exercised. That provision is separate from ss 10, 11 and 12 which appear in Part 2 subpart 2, which deal with another matter – disruptive behaviour relating to court proceedings. Such disruptive behaviour is known in the old terminology as “contempt in the face of the court”.
[99] Also relevant is s 25 of the Contempt of Court Act 2019. Section 25(1) says that the section applies to a number of provisions in the Act including s 10, the disruptive behaviour provision, and s 13 which is about enforcing court orders.
Section 25(2) provides that a Judge, acting under any of the sections in subsection (1), can exercise those powers as often as the judicial officer considers necessary to control the proceedings. The purpose of s 25 is not to confer jurisdiction but to say that if a Judge has powers under ss 10, 11, 13 or 16, those powers may be exercised on more than one occasion.
[100] The Contempt of Court Act itself does not state whether an associate judge can exercise powers when the High Court is dealing with matters under the Contempt of Court Act. The matter is instead dealt with under the Senior Courts Act 2016. Before referring to that Act, I go back to its predecessor, the Judicature Act 1908. That limited the powers of an associate judge to interfere with the liberty of the citizen. Associate judges had a limited jurisdiction. That was effectively only for contempt in the face of the court under s 26K of the Judicature Act 1908. Section 26L of the Judicature Act provided that otherwise an associate judge does not have the power to make an order for the “committal, attachment or arrest of a person”.
[101] The Senior Courts Act 2016, as originally enacted, had similar provisions. Section 23 of the Senior Courts Act took the place of s 26K of the Judicature Act, and s 24 of the Senior Courts Act took the place of s 26L of the Judicature Act. But when the Contempt of Court Act 2019 was passed, there were further changes. Section 23 was amended, and now reads as follows:
23 Application of provisions relating to witnesses and contempt
(1)Sections 42 and 43 (which relate to the power to deal with witnesses) apply to a proceeding before an Associate Judge in the same way as they apply to a proceeding before a High Court Judge.
(2)Subpart 2 of Part 2 of the Contempt of Court Act 2019 (which relates to contempt) applies to a proceeding before an Associate Judge, and references in that subpart to a Judge include an Associate Judge.
[102] Section 23(2) is confined to ss 10 to 12 of the Contempt of Court Act, that is, pt 2 subpt 2, not to s 16 which is in subpt 4 of pt 2.
[103] Under these provisions so far, an associate judge does not have any power under s 16. There is, however, another aspect. When the Contempt of Court Act was
enacted, a new provision was added to s 20 of the Senior Courts Act 2016, which deals with the court powers of an associate judge. Section 20(2)(i) says:18
20 Associate Judge may exercise certain powers of High Court
…
(2)An Associate Judge has the jurisdiction and powers of the court or a High Court Judge under the following enactments:
…
(i)subpart 2 of Part 2 and sections 25 and 26(1) and (2) of the Contempt of Court Act 2019.
[104] The hotel apparently believed that the reference to s 25 gave an associate judge power to deal with contempt under s 16 of the Contempt of Court Act. That is because of the reference in s 25 to s 16. But, with respect, that involves a misreading of s 25 and its purpose. The purpose of s 25, as I have already explained, is only to make it clear that when a power is exercised under ss 10, 11, 13 and 16 it may be exercised more than once. But it does not itself confer a jurisdiction on an associate judge.
[105] I put the matter this way. Section 25 comes into operation only if a judge already has jurisdiction to make orders under ss 10, 11, 13 and 16. An associate judge does not have jurisdiction to make orders under s 16 (see s 23 of the Senior Courts Act). Accordingly, as an associate judge does not have jurisdiction under s 16; s 25 does not give the associate judge any greater power.
[106] The matter can be thought about this way. If Parliament had really intended associate judges to have jurisdiction under s 16 of the Contempt of Court Act, it would have said so directly, rather than by an indirect reference to s 25.
[107] There is one other aspect to the matter, although it was not raised in discussion. Rule 7.48(3) of the High Court Rules 2016 also confers a power to punish for breach of court orders. But that rule cannot stand consistently with s 24 of the Senior Courts Act, which limits the jurisdiction of an Associate Judge to commit, attach or arrest a
18 Senior Courts Act 2016, s 20(2)(i).
person. That means that r 7.48(3) does not give an Associate Judge the power to commit a person to prison, even though a justice might have that power.
[108]Accordingly, I do not have jurisdiction to deal with the contempt application.
The application for an unless order
[109] Mr LeRoy did not file a defence in time and applied for leave to file and serve a statement of defence out of time. Gordon J gave leave but ordered him to pay the hotel costs of $4,780.19 He did not pay. In its contempt application the hotel also sought an order debarring him from defending if he did not pay the costs. He has now paid. In the hearing the hotel no longer sought an unless order but asked for costs on its application.
[110] I do not order costs now. That is better decided when the contempt application is heard. Mr LeRoy will defend the contempt application on the basis that the interim injunction applies only to premises occupied by the hotel. The incident for the alleged contempt happened on the premises of the body corporate, Lot 2, albeit the hotel has an easement over that area. As an easement does not give a right of occupation, the order does not apply outside the hotel’s Lot 1. If Mr LeRoy succeeds in his defence of the contempt application, he will be entitled to costs. With each side claiming costs against each other on the same interlocutory application, it will be tidier to deal with all costs on the application at the same time. Rule 14.8 of the High Court Rules requires that costs on an opposed interlocutory be decided when the application is determined, but it does not require that costs be fixed before all matters in the application have been decided. As Mr Leroy is likely to obtain a substantial award of costs on his applications, any costs to the hotel on its unless application are likely to be a small credit against the hotel’s costs liability. There will be no prejudice to the hotel in the costs being fixed when the contempt application is heard.
19 SPAK (1996) Ltd v LeRoy [2021] NZHC 613.
Outcome
[111] Now that Mr LeRoy has obtained judgment against the hotel, the injunction has expired. As he has succeeded on the merits and as the injunction order ought not to have been made, Mr LeRoy may apply to enforce the hotel’s undertaking as to damages.20 It is desirable to make any such claim promptly.
[112] I am concerned at the conduct of the hotel’s lawyers in misleading the court. I will direct the Registrar to refer this matter to the New Zealand Law Society for consideration.
[113] Provisionally it appears that in light of the hotel’s conduct in this proceeding, ordinary scale costs will not be adequate and that an upward adjustment is appropriate.
[114]I make these orders:
(a)the hotel’s claim against Mr LeRoy is dismissed;
(b)Mr LeRoy has costs against the hotel on his applications. If the parties cannot agree costs, memoranda may be filed, but no later than the end of September 2021;
(c)the Registrar is to set down the hotel’s contempt application for a half day before a Justice. Costs on the unless application will be decided at the same time; and
(d)leave is reserved to Mr LeRoy to apply to enforce the hotel’s undertaking as to costs.
…………………………………….
Associate Judge R M Bell
20 Ushers Brewery Ltd v P S King & Co (Finance) Ltd [1972] Ch 148 Brown v The Bay of Plenty Horticulture and Farming Co Ltd HC Rotorua A136/81, 11 September 1986 at 11.
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