Supercharge Batteries Pty Limited v Patterson

[2017] NZHC 1731

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2017-409-000082 [2017] NZHC 1731

BETWEEN

SUPERCHARGE BATTERIES PTY

LIMITED Plaintiff

AND

MARTIN MCKAY PATTERSON Defendant

Hearing:	24 July 2017
Appearances:	K J Crossland for Plaintiff M M Patterson (Defendant) in person
Judgment:	25 July 2017

JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

[1]      Supercharge  Batteries  Pty  Limited  (SBL)  applies  for  summary  judgment against Mr Patterson under one or other of two guarantees given by Mr Patterson of the indebtedness of either Mainland Batteries Limited (Mainland), a former customer of SBL, now in liquidation, or MB Limited (MBL) another company owned by Mr Patterson.

[2]      Mr Patterson filed a notice of opposition to the application for summary judgment on 31 March 2017.  This document is in Mr Patterson’s personal name and is signed by him personally.  It makes no reference to a firm of solicitors, nor to an affidavit being filed in opposition.  It states that Mr Patterson relies on the affidavit of Mr S Sylvester sworn on behalf of SBL.  Mr Patterson had, however, consulted a solicitor and it seems that the notice of opposition was prepared and filed by that solicitor.

[3]      Rule 12.9 of the High Court Rules provides that a party who intends to oppose an application for summary judgment must file a notice of opposition and an

SUPERCHARGE BATTERIES PTY LTD v PATTERSON [2017] NZHC 1731 [25 July 2017]

affidavit in answer to the affidavit filed on behalf of the other party, within a certain time limit.  Rule 12.9(3) provides that if a party does not file and serve both a notice of  opposition  and  an  affidavit  in  opposition,  that  party  may  not  be  heard  in opposition to the application without the leave of the Court.

[4]      On 5 April a consent memorandum dated 4 April was filed in the court.  This was  signed  by  Mr  Crossland,  counsel  for  the  plaintiff  and  by  Mr  Patterson personally.  It referred to the fact that the Court would need to decide under r 12.9 whether to grant Mr Patterson leave to be heard.

[5]      Responding to this memorandum, and to enable him to comply with r 12.9, the Court granted Mr Patterson leave to file and serve an affidavit in opposition, by minute dated 6 April 2017.  The deadline was 20 working days from the date of the minute.  The case officer was directed to allocate a fixture and on 2 May the Court allocated a fixture at 2.15 pm on Monday, 24 July.

[6]      On 20 July Mr Patterson tendered some documents to the Court, though not an affidavit.  They were not accepted for filing.  In a Minute dated 21 July the Court ordered that these documents not be accepted for filing, pointing out that evidence on a summary judgment application is required to be by affidavit.

[7]      The Court went on to note that any submissions by the defendant had been due  by  17  July  and  none  had  been  filed.    The  Court  noted  that  a  possible consequence of the lack of evidence and the lack of submissions was that the Court may refuse to hear Mr Patterson at the fixture.

[8]      Mr Patterson appeared on his own behalf.  In answer to questions from the Court he said that he had sworn an affidavit at his former solicitor’s office.  He did not appear to know why it had not been filed.  He asked for leave to be heard.

[9]      Mr  Crossland  in  his  written  submissions  opposed  leave  being  granted, pointing out that as Mr Patterson represents himself he would in effect be giving evidence from the bar which Mr Crossland’s client would not have an opportunity to respond to.

[10]     The  High  Court  Rules  set  a  procedural  format  to  ensure  that  cases  are conducted efficiently and fairly.  Rule 1.2 expressly provides that the objective of the Rules is to secure the just, speedy and inexpensive determination of any proceeding or interlocutory application.  With those objectives in mind the Rules provide that where an application for summary judgment is made, but the defendant considers that he has a defence, notice of that defence must be given in a notice of opposition, and any evidence supporting the position in the notice of opposition is to be filed and served at the same time.  Consistent with this, the rules provide that a defendant will not be heard without the leave of the Court if those steps are not taken.   This is intended to ensure that a plaintiff has ample opportunity to consider a defence put forward by a defendant, proffer evidence by way of an affidavit in reply if necessary or desirable, prepare submissions to present to the Court which take into account the defendant’s position, and indeed to review whether to proceed with the application for summary judgment, given the evidentiary position which has emerged.  When a defendant does not proffer evidence, none of those courses is available to a plaintiff. Rather, a plaintiff is entitled to prepare for a hearing on the basis that the evidence is as presented only for the plaintiff, and that unless reasons can be shown for leave to be granted, a defendant will not present argument.

[11]     At the hearing I declined leave for Mr Patterson to appear.  Mr Patterson had had ample opportunity, some three months, to prepare, file and serve any affidavit evidence he wished to present, and was in receipt of legal advice at the time that he first  responded  to  this  case.    Indeed  it  was  clear  to  me  from  discussion  with Mr Patterson that he was well aware of the need to file an affidavit in opposition as well as his notice of opposition, as he informed me that he had sworn an affidavit in his solicitor’s office.  Accepting that to be the case, there is no apparent reason why an affidavit was not filed and served with the notice of opposition or later pursuant to the leave granted on 6 April.  The plaintiff had prepared its case for the hearing on the basis of the evidence as it stood, and I accept there was a real risk of Mr Patterson attempting to give evidence orally, as he set out on this course when seeking leave to appear.

[12]     Further, this is not a case where, in my judgment, the justice of the case could be met by adjourning to allow Mr Patterson to file evidence, with an award for

wasted costs to SBL.  SBL is based in Auckland and has Auckland counsel who had attended in Christchurch for the hearing.  Wasted costs would include a significant amount of time for preparation of submissions and for travel, as well as travel costs. The evidence indicates that a number of promises to pay the long outstanding current account claimed by SBL have not been fulfilled.   There does not seem to be any basis to have any confidence that any adverse costs award would be met.

The basis of the claim

[13]     In June 2004 Mainland applied to open a credit account with SBL, and in due course  the  application  was  granted.     Mr Patterson  signed  a  guarantee  of  the indebtedness of Mainland to SBL.  The account operated for some years but then fell into arrears. Various negotiations ensued, resulting in repayment arrangements being made.   These  were not  honoured,  however,  and  Mainland  eventually  went  into liquidation.

[14]     SBL claims against Mr Patterson not only under the original 2004 guarantee, but also under a second guarantee given as part of a repayment agreement entered in

2016.

[15]     So far as liability under the 2004 guarantee is concerned, there is no apparent defence.    It  is  established  that  the indebtedness  claimed  by SBL was  owed  by Mainland when it went into liquidation, and there is nothing before the Court to show that the guarantee given by Mr Patterson may be invalid or unenforceable. That is sufficient for judgment to be given for SBL.

[16]     So far as the guarantee given under the repayment arrangement is concerned, Mr Patterson maintains in his opposition that this was a guarantee of indebtedness of MBL which is also owned and operated by him.  The document does refer to the indebtedness of that company.  The case for SBL is that the reference to MBL in this document was a mistake made by SBL at the time the final version of the agreement was  drafted,  with  both  correspondence  and  earlier drafts  having referred  to  the liability  of  Mainland.    It  says  the  mistake  made  by  SBL came  about  because Mr Patterson said the correct name of the debtor was MBL and this was accepted by a staff member of SBL without being checked.  SBL relies on there having been a

mistake in terms of ss 6 and 7 of the Contractual Mistakes Act 1977, which was common to both SBL and to Mr Patterson.  SBL says it should be entitled to relief under the Act because this mistake resulted in a substantially unequal exchange of values, in that the guarantee given by Mr Patterson in the repayment agreement was a guarantee of the indebtedness of a company (MBL) which did not owe anything to SBL.

[17]     As I understand it, it was on this point that Mr Patterson maintains he would have given evidence.  In the course of discussing whether he should be given leave to appear, he indicated that in his opinion there was no mistake.  This is not evidence before the Court, however, and in any event it need not be considered further for the purposes of reaching the outcome of this case, as Mr Patterson’s liability is established under the 2004 guarantee in any event.

Outcome

[18]     The Court enters judgment for SBL: (a)          In the sum of $563,281.44;

(b)     For interest on that amount at 13.5 per cent per annum from 30 October

2016 to the date of payment ($208.34 per day);

(c)     For  costs  in  the  sum  of  $14,272  together  with  disbursements  of

$1,770.34.

J G Matthews

Associate Judge

Solicitors:

Shieff Angland, Auckland

Mr M M Patterson, in person