Wright Asset Management Limited

[2022] NZHC 1611

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2022-409-000237

[2022] NZHC 1611

UNDER	Part 19 of the High Court Rules
IN THE MATTER	of an application by WRIGHT ASSET MANAGEMENT LIMITED as trustee of THE VERONA TRUST

Hearing:	On the papers
Counsel:	Lady Deborah Chambers QC for Applicant
Judgment:	7 July 2022

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 7 July 2022 at 3.30 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

RE WRIGHT ASSET MANAGEMENT LTD [2022] NZHC 1611 [7 July 2022]

[1]The applicant wishes to file an application seeking orders:

(a)releasing and discharging an undertaking given by David Lang of Saunders & Co, Solicitors, on 7 May 2021 to Claymore Partners acting on behalf of Patrizia Marchi; and

(b)authorising payment of the funds subject to the undertaking to the applicant.

Background

[2]By way of background to the application:

(a)Gary Wright and Patrizia Marchi are former de facto partners.

(b)In early 2021, Mr Wright and Ms Marchi were negotiating the terms of a s 21A Property (Relationships) Act 1976 agreement.

(c)On 6 May 2021, the applicant sold a property to facilitate payment to Ms Marchi under a draft s 21A agreement. The same day, Claymore Partners, who act for Ms Marchi, asked Mr Lang to confirm that the sale proceeds would be held in Saunders & Co’s trust account.

(d)On 7 May 2021, Mr Lang gave an undertaking to Claymore Partners “to hold the sale proceeds in our trust account undisbursed until such time as [Ms Marchi] agrees to them being paid out, or a court order is made in relation to the sale proceeds”.

(e)Settlement negotiations have broken down and the funds remain in Saunders & Co’s trust account. It will be said by the applicant that the purpose of the undertaking has been frustrated.

(f)Claymore Partners have refused to release the undertaking.

The application before me

[3]        The application that is before me is a without notice interlocutory application seeking directions:

(a)Granting leave to commence the proceeding by way of originating application.

(b)As to service.

(c)That Ms Marchi is to file any opposition to the application within     10 working days of service.

[4]        In a minute dated 15 June 2022, I directed that a supporting affidavit and memorandum of counsel should be provided, particularly for the application for directions as to service. I have now received a detailed and helpful memorandum with an affidavit of Lisa Jean Godwin, sworn 30 June 2022.

Commencement by way of originating application

[5]        There is no standard procedural approach for applications to discharge solicitors’ undertakings.

[6]The applicant relies upon r 19.5 of the High Court Rules 2016 which provides:

19.5Court may permit proceeding to be commenced by originating application

(1)The court may, in the interests of justice, permit any proceeding not mentioned in rules 19.2 to 19.4 to be commenced by originating application.

(2)The court’s permission may be sought without notice.

(3)The proposed originating application must be filed with an application for permission under this rule.

[7]        The applicant has sought permission to proceed by way of originating application without notice in accordance with r 19.5(2).

[8]        The overarching test is whether it is in the interests of justice that a proceeding be allowed to be brought under pt 19. The interests of justice mean that the Court must secure the just, speedy and inexpensive determination of the proceeding.1

[9]In Hong Kong and Shanghai Banking Corporation Ltd v Erceg , Asher J said:2

[25] These cases show that the type of proceeding suited to the originating application procedure is a straightforward application, not requiring detailed pleadings or interlocutory orders for its fair resolution. Such a type of proceeding tends to be an application under a specific statutory provision, where the issue that arises can be clearly defined, and the issues confined. The procedure is not well suited to the determination of substantive rights involving the application of common law doctrines as distinct from statutory tests. It is not well suited to cases involving multiple parties, and cases where there is the possibility of cross claims or counterclaims.

[10]      The cases show that close attention must be given to the facts of each case in which leave is sought to use the pt 19 procedure, including the issues likely to arise, the complexity of the facts and issues, and the course the proceeding is likely to take on its way to a hearing.3

[11]      I am satisfied that it is appropriate to grant the applicant leave to proceed under pt 19 in this instance for these reasons:

(a)The main issue is the interpretation of a short solicitor’s undertaking. Any wider relationship property issues, while relevant as context, are separate and discrete considerations that will not need to be finally determined in this proceeding.

(b)There is no need for detailed pleadings or interlocutory orders or discovery.

(c)This case does not involve several parties.

(d)Any evidence can effectively be presented by affidavit.

1      Solar Bright Ltd v Martin [2019] NZHC 300 at [18].

2      Hong Kong and Shanghai Banking Corporation Ltd v Erceg (2010) 20 PRNZ 652 (HC)

3      Gallagher v Grant [2021] NZHC 1907.

(e)The originating procedure would not cause any unfairness or prejudice to any party.

(f)There have been other cases where the Courts have followed this approach.4

[12]I permit this proceeding to be commenced by way of originating application.

Service

[13]The applicant initially sought orders:

(a)That the application be served by email on Claymore Partners, to whom the undertaking was given and who act for Patrizia Marchi and Patrizia Marchi.

(b)That service on Claymore Partners is deemed to be service on Patrizia Marchi.

(c)That if Patrizia Marchi or Claymore Partners wish to oppose this application, they are to file a notice of opposition within 10 working days of service being effected on Claymore Partners.

[14]      Since the filing of this application Claymore Partners have now confirmed they are authorised to accept service of this proceeding on behalf of Ms Marchi. Accordingly, there shall be an order that the proceeding is to be served on Claymore Partners on behalf of Ms Marchi.

Time to oppose

[15]      The final issue is how long Ms Marchi should have to respond to the application. Rule 19.10 provides that the High Court Rules concerning interlocutory applications generally apply to proceedings commenced by originating application. Rule 19.10 relevantly provides:

4      Re AWS Legal Solicitors [2015] NZHC 2086.

19.10 Applications of rules relating to interlocutory applications

(1)The following rules concerning interlocutory applications apply with all necessary modifications to proceedings commenced by originating application:

…

(f)rule 7.24 (notice of opposition to application):

(g)rule 7.25 (affidavit to be filed with notice of opposition):

(h)rule 7.26 (affidavit in reply):

[16]Rule 7.24 of the High Court Rules relevantly provides:

7.24     Notice of opposition to application

(1)A respondent who intends to oppose an application must file and serve on every other party a notice of opposition to the application

(a)before the end of the tenth working day after being served with the application; and

(b)no less than 3 working days before the hearing date.

[17]      There shall be a direction that Ms Marchi is to file and serve any notice of opposition within 10 working days after being served with the originating application.

Result

[18]I make the following directions:

(a)The applicant is granted leave to commence its proceeding under pt 19 of the High Court Rules 2016.

(b)The applicant shall serve the application upon Claymore Partners and Patrizia Marchi.

(c)Service upon Claymore Partners shall be deemed to also be service upon Patrizia Marchi.

(d)Any opposition to the application shall be filed within 10 working days of service.

(e)In the event that the application is opposed, it should be listed for a telephone case management teleconference at 2.00 pm on 4 August 2022 before Judge Lester to timetable it to a hearing, and counsel should file memoranda at least two working days prior to the teleconference with any proposed timetable directions.

(f)In the event the application is not opposed, the applicant may request the Registrar set the matter down in a Duty Judge List for hearing.

O G Paulsen Associate Judge

Solicitors:

Dallison Stone (BJJ Stone), Christchurch (Counsel: Lady Deborah Chambers QC)