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Waikoro Ltd v Beach Arena Ltd

Waikoro Ltd v Beach Arena Ltd

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-002778

[2021] NZHC 1673

BETWEEN
WAIKORO LIMITED

Plaintiff

AND

BEACH ARENA LIMITED

First Defendant

AND

SAREN LOO

Second Defendant

AND

CON YUEN LU

Third Defendant

AND

WEI YUEN LOO

Fourth Defendant

AND

GEN YUEN LOO

Fifth Defendant

Hearing: 6 May 2021 (by AVL)

Appearances:

D J Chisholm QC and M J W Lenihan for Plaintiff A M Glenie for First Defendant

Judgment:

6 July 2021

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 6 July 2021 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

WAIKORO LTD v BEACH ARENA LTD [2021] NZHC 1673 [6 July 2021]

[1] The plaintiff, Waikoro Ltd (Waikoro) is seeking to recover sums it says are owed to it by the first defendant, Beach Arena Ltd (BAL), under a deed of lease of premises at Auckland (the lease). Waikoro also seeks to recover from the second to fifth defendants (collectively “the guarantors”) under a limited guarantee of the obligations of BAL.

[2] Waikoro and BAL allege the other is abusing the court’s processes; that is, BAL argues Waikoro’s claim and Waikoro argues BAL’s defences and counterclaims are abuses of the court’s processes.

[3]This judgment concerns applications:

(a)by BAL for an order striking out or staying Waikoro’s claim as an abuse of process;

(b)by Waikoro for an order striking out 20 paragraphs of BAL’s amended statement of defence and counterclaim as an abuse of process or, alternatively, because the matters raised by way of defence and counterclaim are time barred; and

(c)by Waikoro for an order BAL pay security for costs in respect of its counterclaims.

[4]The guarantors have taken no part in these matters.

Background

[5] The applications fall to be considered against the backdrop of other litigation Waimauri Ltd v Mahon.1 The relevant factual background is as stated below but can be found in greater detail in the judgment of Muir J in that proceeding.

[6] The leading protagonists in this proceeding and Waimauri Ltd v Mahon are Neville Christopher Mahon and Timothy Laird Edney. Mr Mahon is the sole director

1 Waimauri Ltd v Mahon [2020] NZHC 1170.

of BAL. Mr Edney is the sole director of Waikoro and of Waimauri Ltd (Waimauri). Mr Mahon and Mr Edney have known each other for over thirty years. Although once on good terms, they have fallen out bitterly resulting in litigation between them and their related entities.

[7] Waikoro owned properties at 131 Beach Road and 128 Anzac Avenue, Auckland (the property). On or about 20 December 2012, Waikoro and BAL entered into the lease of the property. The guarantors provided limited guarantees of BAL’s obligations under the lease.

[8] Under the lease, BAL took on maintenance obligations and the property was in need of repairs. In addition, shortly after the commencement of the lease, BAL was presented with a large and unexpected insurance bill.…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2021] NZHC 1673
Decision Date: 6 July 2021

CaseChat Overview and Summary

The plaintiffs, Waikoro Ltd and Waimauri Ltd, brought claims against Beach Arena Ltd (BAL) and others. BAL filed an application to strike out or stay Waikoro’s claim as an abuse of process. Waikoro brought an application to strike out 20 paragraphs of BAL’s amended statement of defence and counterclaim as an abuse of process or, alternatively, because the matters raised by way of defence and counterclaim were time-barred. Waikoro also sought an order that BAL pay security for costs in respect of its counterclaims. The applications were heard on 6 May 2021. BAL argued Waikoro’s claim was an abuse of process. BAL submitted Waikoro’s claim and Waimauri’s claim ought to have been brought together in the one proceeding because they concerned the same subject-matter, the same contracts, the same events and the same parties. BAL also submitted Waikoro’s claim for the Converted Sums was a “second bite at the cherry” to recover them. Waikoro argued its claim was not an abuse of process. It said the Waikoro and Waimauri proceedings involved different plaintiffs claiming against different defendants, involving different subject matter, different contracts and different causes of action. The court found Waikoro’s claim was not an abuse of process. BAL’s application to strike out or stay Waikoro’s claim was dismissed. Waikoro’s application to strike out 20 paragraphs of BAL’s amended statement of defence and counterclaim as an abuse of process was successful to the extent the court struck out all of [14]. Paragraphs [15], [16], [18], [19], [20], [21], [22], [25](b), [26], [33], [34], [36], were struck out to the extent they repeat [14]. The court also struck out BAL’s counterclaims in [53] to [59] (inclusive) to the extent they rely on the allegations in [7](b) and [7](c) of the amended statement of defence and counterclaim. Waikoro’s application for security for costs was dismissed. BAL is to file an amended statement of defence and counterclaim/s within 21 days. Waikoro is to file any reply and statement of defence to counterclaims 14 days thereafter. The case is to be set down for a telephone case management conference before an Associate Judge on the first date available after 23 August 2021.

Orders