The Town of Jupiter, Florida v Endeavour Capital Limited

[2021] NZHC 95

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV 2020-485-566

[2021] NZHC 95

BETWEEN

THE TOWN OF JUPITER, FLORIDA

Plaintiff

AND

ENDEAVOUR CAPITAL LIMITED

First Defendant

NEVILLE JORDAN

Second Defendant

On the papers
Judgment:	4 February 2021

JUDGMENT OF MALLON J

[1]                 The plaintiff has filed a statement of claim dated 16 October 2020 alleging that the first defendant is indebted to the plaintiff in the sum of $206,550.52 plus interest and costs pursuant to a Settlement Agreement entered into between the plaintiff and the first defendant in 2014. The statement of claim also alleges that the second defendant is indebted to the plaintiff in the same amount pursuant to a guarantee he provided under the settlement agreement.

[2]                 Initially the plaintiff sought that judgment be entered under r 15.16 of the High Court Rules. That provides a procedure for judgment to be sealed when an admission on a cause of action has been filed. The Registrar declined to enter judgment on this basis because the supporting documents annexed to the memorandum seeking the entry of judgment were unsigned copies of those documents. The Registrar noted that either the plaintiff could file further documents or the matter would have to wait until 9 December 2020 when the period for filing a statement of defence would expire.

THE TOWN OF JUPITER, FLORIDA v ENDEAVOUR CAPITAL LIMITED [2021] NZHC 95

[4 February 2021]

[3]                 On 4 December 2020, at the plaintiff’s request, the Registrar referred the file to a Duty Judge (Doogue J) for consideration. On 7 December 2020 the Judge determined:

I am not prepared to enter judgment today. The Registrar’s position on the matter is entirely proper.

[4]                 On 18 December 2020 the plaintiff filed a further memorandum. This sought that judgment be entered by default pursuant to r 15.7 of the High Court Rules. This was referred to Doogue J on 18 December 2020, who noted that the matter “needs proper consideration and cannot be dealt with before the break”.

[5]                 The memorandum seeking the entry of judgment by default has now been referred to me for consideration as Duty Judge in the Court’s first week of the resumption of usual court sittings for 2021.

[6]Rule 15.7 provides that:

15.7     Liquidated demand

(1)If the relief claimed by the plaintiff is payment of a liquidated demand in money and the defendant does not file a statement of defence within the number of working days required by the notice of proceeding, the plaintiff may seal judgment in accordance with this rule for a sum not exceeding the sum claimed in the statement of claim and—

(a)interest (if any) payable as of right calculated up to the date of judgment (if interest has been specifically claimed in the statement of claim); and

(b)costs and disbursements as fixed by the Registrar.

(2)If the plaintiff claims costs and disbursements, the plaintiff must file a memorandum setting out the amount claimed and how that amount is calculated, together with any submissions in support of the claim.

(3)A Judge or a Registrar may authorise the sealing of a judgment under subclause (1) if satisfied that the relief claimed by the plaintiff falls within this rule.

(4)A Registrar has the jurisdiction and powers of the court under these rules to fix costs and disbursements under subclause (1)(b).

(5)For the purpose of this rule and rule 15.9, liquidated demand means a sum that—

(a)has been quantified in, or can be precisely calculated on the basis of, a contract relied on by the plaintiff; …

[7]                 I am satisfied that the relief claimed is for the payment of a liquidated demand in money. I am also satisfied that the first and second defendants have not filed a statement of defence in the required time frame. However, I decline to enter judgment by default at this stage. I agree with the commentary in McGechan on Procedure that the “may” in the rule means that there is an element of discretion retained by the Registrar or Judge.1

[8]                 I decline to do so for two reasons. The first is that the affidavit of service indicates that, although the statement of claim was accepted for service at the second defendant’s home on 4 November 2020, the initial disclosure was accepted for service by the second defendant at Wellington Regional Hospital on 11 November 2020. That raises a question about why service at the hospital was necessary and whether the second defendant has been in a position to respond to the statement of claim. The statement of claim pleads that the second defendant is the sole shareholder and director of the first defendant and so this may impact on the first defendant’s ability to respond as well.

[9]                 Secondly, the claim against the second defendant is based upon a guarantee. The settlement agreement provides that the second defendant “concurrently with the execution of this Agreement … shall execute and deliver the Unconditional Guaranty of Payment and Performance in the form attached hereto as Exhibit ‘D’”. However the plaintiff’s memorandum of 18 November 2020 states that the second defendant “did not sign any of the exhibits to the Settlement Agreement, such as the guarantee and the admission of claim”. It is contended that, because the second defendant signed the Settlement Agreement in his personal capacity, this “clearly indicated that he was agreeing to be bound personally as guarantor”. That is a submission that needs elaboration particularly because the documents that have been filed are not originals or certified copies of originals and it appears that none of the exhibits to the Settlement Agreement intended to be signed were in fact signed.

1      McGechan on Procedure (online ed, Thomson Reuters) at [HR15.7.01(2)].

[10]              I consider that, in light of these matters, the application for a default judgment will need to go to a formal proof hearing before the Associate Judge. Counsel for the plaintiff will need to liaise with the Registry to set a date for that hearing. Any affidavit evidence relied on in support of the entry of judgment and submissions will need to be filed five working days before that hearing.

Mallon J