Willigers v Churchill Fishing International Limited

[2021] NZHC 565

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2020-409-000190

[2021] NZHC 565

BETWEEN

TERRY WILLIGERS

Plaintiff

AND

CHURCHILL FISHING INTERNATIONAL LIMITED

First Defendant

AND

TERRY REX BROWN

Second Defendant

Hearing:	16 March 2021
Appearances:	No appearance for the Plaintiff J Moss for Defendants
Judgment:	19 March 2021

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 19 March 2021 at 3.30 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

WILLIGERS v CHURCHILL FISHING INTERNATIONAL LTD [2021] NZHC 565 [19 March 2021]

[1]        There are before the Court effectively three applications by the defendants as follows:

(a)that the plaintiff pay security for costs;

(b)to strike out the plaintiff’s amended statement of claim; and

(c)for an order that caveat 11588426.1 lodged by the plaintiff over Certificate of Title MB59/162 lapse.

[2]        The defendants’ application for security for costs (para [1](a)) was opposed by the plaintiff in the circumstances I describe below.

[3]        The applications for strike out and the lapse of the caveat (paras [1](b) and (c)) are not opposed. As I will make orders in terms of them, it is not necessary to deal with the security for costs application.

Background

[4]        The plaintiff (Mr Willigers) and the second defendant (Mr Brown) have known each other for many years.   This proceeding has its genesis in an offer made by     Mr Brown to Mr Willigers in 2017 that Mr Willigers and his family could live in a house now owned by the first defendant, Churchill Fishing International Ltd (Churchill Fishing), at 264 State Highway 1, Picton (the property).

[5]        Relations between the parties deteriorated and Churchill Fishing made an application to the Tenancy Tribunal for possession of the property. On 8 November 2019, the Tenancy Tribunal granted Churchill Fishing possession. Mr Willigers applied for a rehearing which was declined on 9 December 2019. Mr Willigers then appealed that decision to the District Court.

[6]        On 6 November 2019, Mr Willigers lodged a caveat (11588426.1) against the property claiming an equitable interest under a resulting trust said to have arisen from funds and other consideration paid by him to Churchill Fishing to acquire an interest

in the property. On 17 December 2019, Mr Willigers commenced proceedings to sustain his caveat.1

[7]        Mr Willigers’ application to sustain the caveat was set down to be heard  on  3 March 2020, but prior to the hearing the parties agreed to resolve the application on terms which were recorded in a minute of 26 February 2020. They included a requirement that Mr Willigers was to diligently pursue substantive proceedings to establish the interest claimed by the caveat. Specifically, the orders made included the following:2

[2]By consent I order as follows:

(a)      there shall be an order that caveat no. 11588426.1 registered on Identifier MB59/162 shall not lapse pending further order of the Court;

…

(c) within 28 days the applicant shall file and serve his statement of claim for the restoration of the title, or for a declaration that he has a beneficial interest in the property and that Churchill Fishing International Ltd holds an equivalent share in a resulting trust;

…

(g)     leave is reserved to the respondent to apply on two days’ notice by way of memorandum for an order to vary or rescind the above orders made if:

(i)the applicant’s substantive proceeding is not filed within 28 days or not thereafter prosecuted with due diligence;

(ii)there are changes in circumstances justifying a review of the order.

[8]        It was not until 12 May 2020 that Mr Willigers filed these proceedings against Churchill Fisheries and Mr Brown and, amongst other things, he sought a declaration that Churchill Fishing held the property on trust for it and Mr Willigers in equal shares under a resulting trust.

[9]        There were various case management steps then taken which are not directly relevant to the current applications.

1      Willigers v Churchill Fishing International Ltd HC Christchurch, CIV-2019-409-717.

2      Willigers v Churchill Fishing International Ltd, above n 1, 26 February 2020.

[10]      On 17 August 2020, Mr Willigers’ appeal to the District Court from the Tenancy Tribunal decision was dismissed by Judge Barkle.3 In his decision, Judge Barkle determined a stay that had been in place pending the outcome of the appeal was to be lifted and immediate possession of the property given to Churchill Fishing.4

[11]      On 19 August 2020, Mr Willigers applied for a stay of the orders made by Judge Barkle. That application was heard by Cooke J on 27 August 2020 who dismissed the application with costs. Relevant in the present context, the Judge found that Mr Willigers’ claim to an interest in the property did not appear to be strong. Following on from this decision, on 3 September 2020 Mr Willigers was evicted from the property.

[12]      On 24 August 2020, Churchill Fishing and Mr Brown applied for security for costs against Mr Willigers in this  proceeding.  The  application  was  opposed  by Mr Willigers and set down for hearing on 22 September 2020.

[13]      The application for security for costs did not proceed on 22 September 2020 because, belatedly, Mr Willigers advised he intended to apply for legal aid and instruct new counsel. The application was adjourned on the basis that Mr Willigers was to pay into Court any contribution as directed by the Legal Services Agency, would give notice within 5 working days of confirmation of the grant of legal aid and would pay Churchill Fishing and Mr Brown scale costs.

[14]      Contrary to the basis upon which the adjournment of the security for costs application was sought and granted, Mr Willigers did not apply for legal aid.

[15]      Mr Willigers’ appeal from the decision of Judge Barkle came before Ellis J on 23 November 2020 where her Honour recorded that Mr Willigers’ counsel had advised the Court that she was unable to obtain instructions from him and unable to progress his applications for legal aid. The Judge directed that unless Mr Willigers advised the Court within five working days of his wish to pursue the appeal it would be dismissed without the need for a further call.

3      Willigers v Churchill Fishing International Ltd [2020] NZDC 15372.

4 At [40].

[16]      The file was then put before Clark J on 4 December 2020 and she issued a minute recording that Mr Willigers’ solicitors had not had any response from him to requests for instructions. She struck out Mr Willigers’ appeal with costs. I understand that Churchill Fishing has sealed costs and is pursuing bankruptcy proceedings against Mr Willigers in respect of them.

[17]      These  developments  led  Mr  Moss,  counsel  for  Churchill  Fishing  and  Mr Brown, to seek an urgent telephone conference in this proceeding which I convened on 2 February 2021. Mr Willigers’ counsel, Mr Gaines, advised the Court Mr Willigers had not applied for legal aid and that he had been without meaningful instructions for four months.  Mr Gaines sought leave to withdraw as counsel for   Mr Willigers. An order was made granting Mr Gaines leave to withdraw but on the basis that his office remains Mr Willigers’ address for service. Mr Gaines undertook to promptly forward to Mr Willigers all documents received by him in respect of the proceeding, which undertaking I understand Mr Gaines to have honoured. Mr Moss advised an application for strike out would be filed and he sought a timetable to a hearing for that application, as well as for the application for security for costs that remained unresolved. Timetabling orders were made and the applications were set down for hearing before me on 16 March 2021.

[18]      In the minute I issued following the conference on 2 February 2021, I recorded for the benefit of Mr Willigers that if he took no steps then the proceeding could be struck out at the hearing on 16 March 2021 with costs and that it was in his interests to immediately seek legal advice.

[19]      Mr Gaines has advised the Court that Mr Willigers was aware of the hearing on 16 March 2021. Mr Willigers took no steps to either oppose the strike out application or to appear in person or by counsel at the hearing.

Strike out application

[20]      The application for strike out is made in reliance on r 15.2 High Court Rules 2016. Under that rule, the Court may strike out all or part of a proceeding if the plaintiff fails to prosecute all or part of the proceeding to trial and judgment. In the

usual case, the applicant would need to show that a plaintiff has been guilty of inexcusable and inordinate delay and that it seriously prejudices the defendant. An overriding consideration is whether justice can be done as between the parties despite delay.5

[21]      The facts of this case do not sit comfortably with these requirements. There has certainly been inexcusable delay but not to an extent where it could be said justice cannot be done between the parties if Mr Willigers was to take steps to prosecute his claims.

[22]      More relevantly, in my view, the Court has the inherent power to strike out or stay proceedings where the justice of the case requires to prevent abuse of its processes, save where the power has been abrogated expressly or by implication.6

[23]      Here, Mr Willigers does not oppose the defendants’ application. He has not, since September 2020, engaged with his counsel or taken any step in the proceeding. This coincides with his eviction from the property and his failure to apply for legal aid or prosecute his appeal from the decision of Judge Barkle. The only inference that can be drawn is that Mr Willigers has no intention of pursuing this proceeding further. In failing to take steps to either pursue or discontinue his claim Mr Willigers is abusing the Court’s processes.

[24]      Mr Willigers’ failure to pursue his claim has and will continue to cause prejudice to the defendants. Mr Willigers was living in the property for more than a year and a half prior to his eviction. There is evidence of contamination by methamphetamine use requiring decontamination or renovation. Mr Brown says that he requires bank lending to perform the work which he cannot get until this matter is resolved. He also says that significant legal fees have and are being incurred which it appears Mr Willigers will be in no position to pay under any costs award made against him.

5      Lovie v Medical Assurance Soc NZ Ltd [1992] 2 NZLR 244 (HC) at 248.

6      Reid v New Zealand Trotting Conference [1984] 1 NZLR 8 (CA); Shafik Makary [2015] NZAR 1596.

[25]      In those circumstances, justice requires I grant the application to strike out Mr Willigers’ claim.

The caveat

[26]      The order made in this Court on 26 February 2020 sustaining Mr Willigers’ caveat was subject to the condition that he would diligently pursue a proceeding to establish his beneficial interest in the property under a resulting trust. Leave was granted to Churchill Fishing to apply to vary or rescind the order sustaining the caveat if Mr Willigers did not pursue his proceeding with due diligence. For reasons that are set out above, Mr Willigers has failed to pursue his proceeding with due diligence. His failure is of such significance and results in such prejudice to Churchill Fishing that I will make an order that the caveat now lapse.

Additional matters

[27]      As noted above, it is not necessary for me to consider the application for security for costs.

[28]      Churchill  Fishing  and  Mr  Brown   have   filed   counterclaims   against   Mr Willigers.   The orders that I will make do not affect the counterclaims which   Mr Moss advises may be pursued if the bankruptcy proceeding that is presently being taken against Mr Willigers does not result in his adjudication. For administrative purposes it is necessary that the counterclaims be given a date for review which is provided for in the orders below.

Result

[29]The orders I make are as follows:

(a)Mr Willigers’ claim against Churchill Fishing and Mr Brown is struck out.

(b)Caveat 11588426.1 lodged in respect of record of title MB59/162 shall hereby lapse.

(c)Churchill Fishing and Mr Brown are entitled to costs in this proceeding on a 2B basis. Mr Moss submitted a schedule of the costs claimed, which is reasonable. I award the defendants costs in the amount of

$18,620.50 plus disbursements of $660.

[30]      The Registrar is to set down the defendants’ counterclaims for case management review by teleconference on a date after 1 June 2021. Mr Willigers is to be given notice of the teleconference. If he wishes to attend, Mr Willigers should provide his telephone contact details to the Registrar forthwith. Counsel shall file a memorandum at least two working days prior to the conference advising the Court whether the counterclaims are to be pursued or discontinued, and if pursued what timetabling directions are required.

O G Paulsen Associate Judge

Solicitors:

Lundons Law, Blenheim

cc: Mr T Willigers, Plaintiff in person