Wyllie v Firmin
[2023] NZHC 1489
•16 June 2023
IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY
I TE KŌTI MATUA O AOTEAROA
TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE
CIV-2021-463-46
CIV-2021-463-56 [2023] NZHC 1489
BETWEEN CORNELIA WYLLIE and ABIGAIL JUTTA LATHAM
Plaintiffs
AND
TIMOTHY RICHARD FIRMIN
Defendant
Hearing: 11 May 2023 Appearances:
Howard Thompson for the Plaintiffs Stephen Iorns for the Defendant
Judgment:
16 June 2023
JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR
Application for leave to appeal, further and better particulars, and security for costs
This judgment was delivered by me on 16 June 2023 at 3:00pm
pursuant to Rule 11.5 of the High Court Rules
…………………………. Registrar/Deputy Registrar
Solicitors:
McMahon Butterworth Thompson (Howard Thompson), Auckland, for the Plaintiffs
Copy for:
Stephen Iorns, Barrister, Upper Hutt, for the Defendant.
WYLLIE and LATHAM v FIRMIN [2023] NZHC 1489 [16 June 2023]
TABLE OF CONTENTS
Paragraph
Introduction [1]
Background [2]
Cornelia and Abigail’s application on notice for leave to appeal [6]
Timothy’s opposition [8]
Cornelia and Abigail’s application for further and better
particulars and security for costs [9]
Affidavit of Abigail Jutta Latham dated 12 September 2022 [11]
Timothy’s opposition [17]
Affidavit of Timothy Richard Firmin dated 30 September 2022 [18]
Legal principles [22]
Leave to appeal [22]
Further and better particulars [24]
Security for costs [28]
Analysis [36]
Should Cornelia and Abigail be granted leave to appeal the Recall Judgment? [38]
The natural justice argument [39]
The jurisdiction argument [41]
Prejudice and the interests of justice [42]
Timothy’s submissions [45]
Conclusion in relation to granting leave to appeal [48]
Should Timothy be required to provide further and better particulars in relation to the breach of contract claim in his amended statement of claim dated 18 July 2022? [50]
Conclusion in relation to further particulars [55]
Should Timothy be ordered to provide security for costs? [56]
Conclusion in relation to security for costs [59]
Result [61]
Orders [62]
Introduction
[1] This judgment concerns applications in two related proceedings, CIV-2021- 463-46 (the 46 proceeding) and CIV-2021-463-56 (the 56 proceeding). In the 46 proceeding, Cornelia Wyllie (Cornelia) and Abigail Latham (Abigail),1 the plaintiffs, are seeking leave to appeal a 12 August 2022 judgment of Associate Judge Sussock in relation to recall and costs (the Recall Judgment).2 In the 56 proceedings, Cornelia and Abigail, the defendants, are seeking further and better particulars of the amended statement of claim and security for costs. The defendant in the 46 proceeding and plaintiff in the 56 proceeding is Timothy Firmin (Timothy).
Background
[2] These proceedings relate to ongoing disputes arising out of the estate of Anthony Lawrence Firmin (Anthony), the most substantial asset of which is a Whakatāne Orchard and winemaking business (the Orchard) on which Anthony and his wife resided until their deaths.
[3] Initially, Cornelia and Abigail, two of Anthony’s daughters, were appointed executors of his estate. Timothy, one of Anthony’s sons, had lodged a caveat over the Orchard property, which Cornelia and Abigail sought to lapse and to obtain orders for vacant possession, with the intent of moving Timothy from the Orchard property. Timothy opposed the application to lapse and applied for summary judgment seeking Cornelia and Abigail to be removed as executors and replaced by an independent executor. In a judgment dated 21 March 2022, (the Substantive Judgment), Associate Judge Sussock ordered that the caveat not lapse, issued summary judgment on the removal of the executors, and dismissed the vacant possession application on the basis of her decision that the caveat not lapse.3 Cornelia and Abigail did not appeal that decision.
1 For convenience and clarity, and meaning no disrespect, given the commonality of names, I will generally refer to each family member by their given name.
2 Wyllie v Firmin [2022] NZHC 1994.
3 Wyllie v Firmin [2022] NZHC 527.
[4] However, Cornelia and Abigail sought recall of the Substantive Judgment on the grounds the Associate Judge had not afforded them natural justice rights by deciding the caveat application on grounds apparently not pleaded nor argued by their counsel, and further had determined their application for vacant possession despite lacking jurisdiction in her position to do so. In the Recall Judgment, Associate Judge Sussock refused to recall the Substantive Judgment and awarded two-third of costs against Cornelia and Abigail personally and one-third from the estate.4
[5] Cornelia and Abigail now apply further for leave to appeal against the Recall Judgment. As a consequence of the Associate Judge’s findings in relation to the caveat in her Substantive Judgment, Timothy filed an amended statement of claim including a breach of contract as an alternative ground to his testamentary promise claim on the estate. Cornelia and Abigail now seek further and better particulars in relation to that amended statement of claim, and for security for costs against Timothy. This judgment determines their three applications.
Cornelia and Abigail’s application on notice for leave to appeal
[6] Cornelia and Abigail seek an order for leave to appeal against the Recall Judgment of Associate Judge Sussock.5
[7]The grounds on which the order is sought are:6
The basis of the decision
(a) The learned Associate Judge refused the applicants’ application to recall her judgment in Wyllie v Firmin [2022] NZHC 527, essentially for two reasons:
(i) There was no breach of natural justice because the possibility of the defendant supporting his caveat on the grounds of a contract were apparent from the wording of the caveat itself and were, in any event, canvassed at the hearing.
(ii)Although the Associate Judge did not have jurisdiction to hear and determine the application for an order for possession of land, the fact that she refused the application did not affect the substance of her decision and is therefore not a ground for a recall.
4 Wyllie v Firmin, above n 2, at [61].
5 Interlocutory application on notice for leave to appeal dated 9 September 2022 at [1].
6 At [2].
Breach of natural justice
(b) The applicants accept that their counsel made the submission referred to at [14] of the Judgment. It was made in the context of an argument to the effect that if the respondent had intended to support his caveat on contractual grounds, one would expect him to have plead a claim in contract and to have argued, at the hearing, that his caveat could be sustained on the basis of a contract.
(c) The respondent, however, did not plead a claim in contract he sought to justify his caveat on the grounds of his allegation (and pleaded claim) of a testamentary promise, alternatively a claim that his father’s will should be amended.
(d) If the Associate Judge had advised counsel for the applicants that she was considering sustaining the caveat on the basis of a contract that was neither pleaded nor argued by the respondent, invoking the doctrine of part performance, counsel would have sought an opportunity to consider and make further submissions on those points.
(e) The Associate Judge did not afford counsel that opportunity, which was a breach of natural justice.
Lack of jurisdiction
(f) Despite counsel raising the lack of jurisdiction point with the court before the hearing, the Associate Judge sat, heard and determined an application which she had no jurisdiction to determine.
(g) That is a clear miscarriage of justice and a reason for a recall.
There is prejudice to the applicants but none to the respondent
(h) The flawed judgment, arrived at by an unfair process, unfairly influenced the outcome of the respondent's costs application.
(i) It is unusual for the court to make final costs orders, including an order disentitling executors from reimbursement for their costs, in a summary context, and the applicants are appealing, as of right, against that order.
(j) Alternatively, if leave is required, they seek leave to appeal in relation to costs.
(k) There would be no prejudice to the respondent if leave to appeal against the order refusing to recall the earlier judgment is allowed because the grounds of appeal would substantially overlap with the grounds of appeal in relation to costs.
Prospects of success on appeal
(l) The proposed appeal raises questions of law or fact capable of bona fide and serious argument in a case involving public and private interests of sufficient importance to outweigh the cost and delay of the appeal and has reasonable and realistic prospects of success.
Timothy’s opposition
[8]Timothy opposes the application for leave to appeal on the following grounds:7
a. The high threshold which exists for the granting of leave has not been met.
b. The circumstances do not warrant incurring further delay.
c. There is insufficient private interest:
i. The ultimate points the applicant takes are essentially moot. They filed applications seeking to lapse a caveat and obtain vacant possession as executors. They are no longer executors. The current executor is taking the appropriate step of simply abiding the decision of the Court, which will require a substantive hearing to determine the right to Mr Firmin to the property in issue.
ii. The applicants claim no prejudice would be suffered by the respondent, but ignore the significant cost and delay that a moot appeal would create, in litigation that has already been delayed by the unreasonable refusal of the applicants to concede the related application to remove them as executors of the estate which holds the land in question.
iii.The applicants rely on an allegation of a breach of the right to natural justice, but does not raise any prospect of being able to dispel the threshold of arguable case (in order to sustain the caveat) and thus alter the decision. While no breach is accepted, even if it was, remedy would not alter the result.
iv. The applicants allege that justice miscarried as a result of the lack of jurisdiction in relation to the order for vacant possession, but essentially created the situation in the manner in which they chose to proceed (by originating application as opposed to Summary Judgment) and acquiesced to the situation by failing to raise it with the Court at hearing.
v. The applicants assert that this ought to be granted as they have filed a separate appeal on costs which they may do so as of right. A timely appeal on costs as of right cannot be a vehicle to justify the granting of leave on an otherwise meritless leave application.
vi. This is simply a further misguided attempt to mitigate the applicants’ cost exposure.
d. There is insufficient public interest:
i. The particular nuanced point regarding an alleged breach of the right to natural justice does not require clarification from the Court of Appeal. These cases are fact specific and a precedent is unlikely to be valuable in the circumstances.
7 Notice of opposition to application for leave to appeal dated 9 September 2022 at [1]–[3].
ii. Clarification is simply not required in respect of the jurisdictional point. Parties ought not be able to fail to raise a point at hearing, see out the appeal period, then file an application for recall (after receiving cost submissions). This is an abuse of process.
e. The applicants claim that the “proposed appeal raises questions of law or fact capable of bona fide and serious argument in a case involving public and private interests of sufficient importance to outweigh the cost and delay of the appeal and has reasonable and realistic prospects of success”. Given the history of this matter, this is unlikely. The respondent ought to be entitled to focus on the substantive claim, rather than dedicate further resources to an interlocutory appeal on a moot point.
Cornelia and Abigail’s application for further and better particulars and security for costs
[9]Cornelia and Abigail seek orders:8
(a) That the plaintiff, Timothy Richard Firmin, file an amended statement of claim within five working days of the date of the order, providing the following further and better particulars of the fifth (alternative) cause of action pleaded in the plaintiff’s second amended statement of claim dated 18 July 2022:
(i) When and where the alleged agreement was entered into;
(ii)All of its material terms; and
(iii)Particulars of the breach or breaches on which the plaintiff relies.
(iv)If the plaintiff relies on the doctrine of part-performance, particulars of the circumstances on which he relies.
(b) That the plaintiff, Timothy Richard Firmin, provide security for the applicants’ costs of this proceeding in a sum of $52,102.00 and that this proceeding be stayed pending provision of security.
(c) That the plaintiff pay their costs of this application.
[10]The grounds on which the orders are sought are:9
Application for further and better particulars
(a) The plaintiff’s fifth cause of action was introduced in the amended statement of claim dated 18 July 2022. It is framed as a claim, in the alternative (presumably to the plaintiff’s claim to enforce an alleged testamentary promise), for breach of contract.
8 Notice of interlocutory application by parties directed to be served for 1) further and better particulars of amended statement of claim 2) security for costs dated 12 September 2022 at [1].
9 At [2].
(b) The applicants require the particulars sought to properly inform them of the nature of the case which they must meet, as they are entitled to know what the plaintiff says about:
(i) When and where the plaintiff and his late father entered into the alleged oral contract;
(ii)The precise terms of the alleged contract, including the parties to it (given that the plaintiff seeks relief including the transfer of assets of a company, White Goose Company Limited);
(iii)Particulars of breach, in that the pleading that the late Tony Firmin “failed to fulfil his agreement during his lifetime” suggests without specifically saying that it is alleged that a “triggering event” occurred during Tony Firmin’s lifetime but that, in breach of his agreement with the plaintiff, Tony Firmin failed to offer the property to him on occurrence of the triggering event.
(iv)The basis on which it is (impliedly) alleged that the plaintiff may enforce an alleged oral contract to purchase land.
(c) By letter dated 12 August 2022, from their solicitor to the plaintiff’s counsel (copied by email to his instructing solicitor), the applicants gave notice to the plaintiff in terms of HCR 5.21(1)(b) to file and serve a more explicit statement of claim within 5 working days but the plaintiff has not done so.
Application for security for costs
(d) There is reason to believe that the plaintiff will be unable to pay the costs of the applicants if he is unsuccessful in his proceeding:
(i) The plaintiff is 62 years old, is not employed and is not involved in any formal business;
(ii)The applicants have invited the plaintiff to provide information as to his means, but he has not done so.
(e) Likely costs, payable by the plaintiff, on a 2B basis, assuming he is unsuccessful would be in the order of $52,102.00 calculated according to the attached schedule.
Costs
(f) Costs should follow the event, in the usual way.
Affidavit of Abigail Jutta Latham dated 12 September 2022
[11] Abigail has made an affidavit in support of her and Cornelia’s application for further and better particulars and security for costs.10 She deposes she is authorised to make the affidavit on her behalf as well as Cornelia’s.
[12] Abigail deposes that on 18 July 2022, Timothy filed an amended statement of claim pleading as the “Fifth (alternate) Cause of action” a claim based on an alleged contract between himself and Anthony. He alleges an oral agreement made in late 2019 that he be given the right of first refusal to acquire the Orchard at market value, an agreement which he relied on when working 18 months without drawing a wage, and which Anthony failed to fulfil whilst alive.
[13] Abigail deposes that in order to know what Timothy’s case is, she and Cornelia must know:
(a)When and where Timothy says that he made his oral agreement with our father.
(b)What Timothy says the terms of that agreement were.
(c)The basis on which Timothy says he is able to enforce an alleged oral agreement giving him the right to purchase land.
(d)An explanation of what Timothy means when he says that our father failed to fulfil the agreement during his lifetime.
[14] Abigail further says that as currently pleaded the amended statement of claim is unclear with regards to what obligations Anthony had when alive, what the breach of contract was and the basis on which Timothy claims he has the right to buy the Orchard’s assets.
10 Affidavit of Abigail Jutta Latham in support of notice of interlocutory application by parties directed to be served for 1) further and better particulars of amended statement of claim 2) security for costs dated 12 September 2022.
[15] On security for costs, Abigail deposes that she has no reason to believe that Timothy would be able to meet a costs order against him, which their lawyer estimates as $52,102 on a 2B basis for a five-day hearing. She annexes a letter their lawyer sent to Timothy’s which notes their belief that Timothy has no formal employment or reliable income and has no means to purchase the estate’s property, and hence they believe he will be unable to pay costs.
[16] Consequently, Cornelia and Abigail seek that their application for further and better particulars and security for costs be granted.
Timothy’s opposition
[17] Timothy opposes the application for further and better particulars and security for costs on the following grounds:11
a. The pleadings are sufficiently clear for the applicants to prepare their defence. The primary claim relates to a testamentary promise. The alternate cause of action based in contract relies on the same facts as pleaded for the promise; date ranges and parties are clear.
b. There is no basis whatsoever to doubt the ability of the plaintiff to meet a cost award. He has both savings and a business, as well as a considerable interest in the estate the subject of these proceedings, whatever the outcome.
Affidavit of Timothy Richard Firmin dated 30 September 2022
[18] Timothy has made an affidavit in opposition to the application for further and better particulars and security for costs.12 He begins by espousing his view that this application is simply an unnecessary, time consuming and pointless application in which Abigail and Cornelia take unreasonable positions and refuse to accept the Court’s decision.
[19] On further and better particulars, Timothy deposes he is clear in his evidence which is supported by the existing pleadings. He acknowledges his primary case is one of testamentary promise, but notes that the Court has accepted the facts he relies
11 Notice of opposition dated 30 September 2022 at [1]–[3].
12 Second affidavit of Timothy Richard Firmin in support of notice of opposition dated 30 September 2022.
upon are capable of supporting a contractual claim, which he according raises in the alternative. He will elaborate in evidence at trial but does not accept further pleadings are required at further cost.
[20] On security for costs, Timothy deposes he runs a successful breeding kennel business. He further deposes that when he made the offer to purchase the Orchard he had pre-approved finance exceeding the purchase price. Consequently, there is no basis to suggest he will not be able to pay the costs award, if it were to fail. He further notes he will have an interest in Anthony’s estate which will also be available.
[21]Consequently, he asks the Court to decline these applications.
Legal principles
Leave to appeal
[22] Section 56(3) of the Senior Court Act 2016 requires a party to apply for leave to appeal any order or decision of the High Court made on an interlocutory application in respect of any civil proceeding except a successful summary judgment or strike out.
[23]The Court of Appeal in Greendrake v District Court of New Zealand, adopting
Finewood Upholstery Ltd v Vaughan, set out the test as follows:13
(a)a high threshold exists;
(b)the applicant must identify an arguable error of law or fact;
(c)the alleged error should be of general or public importance warranting determination, or otherwise of sufficient importance to the applicant to outweigh the lack of general or precedential value;
(d)the circumstances must warrant incurring further delay; and
13 Greendrake v District Court of New Zealand [2020] NZCA 122 at [6] citing Finewood Upholstery Ltd v Vaughan [2017] NZHC 1679 at [13].
(e)the ultimate question is whether the interests of justice are served by granting leave.
Further and better particulars
[24]Rule 5.26 of the High Court Rules 2016 provides, so far as is relevant:
5.26 Statement of claim to show nature of claim
The statement of claim —
(a)must show the general nature of the plaintiff’s claim to the relief sought; and
(b)must give sufficient particulars of time, place, amounts, names of persons, nature and dates of instruments, and other circumstances to inform the court and the party or parties against whom relief is sought of the plaintiff’s cause of action; and
…
[25] In Platt v Porirua City Council, Kós J held that particulars of pleadings are important to:14
(a)inform defendants as to the case they have to meet;
(b)limit the scope of matters the plaintiff may put in issue at trial (or in pre-trial settlement discussions);
(c)enable defendants to know what witnesses they will need to retain and enable them to start preparing evidence ahead of the formal exchange of evidence; and
(d)provide an opportunity for defendants to seek summary determination on the basis that the claim as pleaded is untenable.
[26] The ultimate touchstone is whether the pleading is sufficiently particularised to give fair notice of the pleaded case, and to prevent trial by ambush.15
14 Platt v Porirua City Council [2012] NZHC 2445 at [19].
15 Body Corporate 74246 v QBE Insurance (International) Ltd [2015] NZHC 1360 at [18(h)].
[27] The Court of Appeal cautioned in PriceWaterhouse v Fortex Group Ltd that the view that an exchange of briefs of evidence before trial might be seen as curing any lack of particularity in the pleadings is misguided.16 That Court continued however that the level of particularity required is “not an area for mechanical approaches or pedantry”.17 In summary, a pleading:18
… does not require the full detail which later will be contained in a brief of evidence. Nor does the modern requirement for pre-trial exchange of briefs dilute the earlier and differently based requirement for sufficiently particular pleading. What is required is an assessment based on the principle that a pleading must, in the individual circumstances of the case, state the issue and inform the opposite party of the case to be met. As so often is the case in procedural matters, in the end a common-sense and balanced judgment based on experience as to how cases are prepared and trials work is required.
Security for costs
[28]Rule 5.45 of the High Court Rules provides:
5.45 Order for security of costs
(1)Subclause (2) applies if a Judge is satisfied, on the application of a defendant,—
(a)that a plaintiff—
(i)is resident out of New Zealand; or
(ii)is a corporation incorporated outside New Zealand; or
(iii) is a subsidiary (within the meaning of section 5 of the Companies Act 1993) of a corporation incorporated outside New Zealand; or
(b)that there is reason to believe that a plaintiff will be unable to pay the costs of the defendant if the plaintiff is unsuccessful in the plaintiff’s proceeding.
(2)A Judge may, if the Judge thinks it is just in all the circumstances, order the giving of security for costs.
(3)An order under subclause (2)—
(a)requires the plaintiff or plaintiffs against whom the order is made to give security for costs as directed for a sum that the Judge considers sufficient—
16 Price Waterhouse v Fortex Group Ltd CA 179/98, 30 November 1998 at 17.
17 At 19.
18 At 19.
by paying that sum into court; or
(ii)by giving, to the satisfaction of the Judge or the Registrar, security for that sum; and
(b)may stay the proceeding until the sum is paid or the security given.
(4)A Judge may treat a plaintiff as being resident out of New Zealand even though the plaintiff is temporarily resident in New Zealand.
(5)A Judge may make an order under subclause (2) even if the defendant has taken a step in the proceeding before applying for security.
(6)References in this rule to a plaintiff and defendant are references to the person (however described on the record) who, because of a document filed in the proceeding (for example, a counterclaim), is in the position of plaintiff or defendant.
[29] In determining applications under r 5.45, the Court will generally follow these steps:19
(a)Has the applicant satisfied the court of the threshold under r 5.45(1)?
(b)How should the court exercise its discretion under r 5.45(2)?
(c)What amount should security for costs be fixed at?
(d)Should a stay be ordered?
[30] The decision to order security, and the quantum of such security, are at the Court’s discretion. It is generally not to be to be fettered by constructing “principles” from the facts of previous cases.20 But the Court is to balance the competing interests
— being the defendant’s interest in protection from a costs order that is incapable of fulfilment and the plaintiff’s right of access to justice.21 Courts will be slow to make an order for security that will stifle a genuine claim.22 This balancing exercise is the Court’s overriding consideration.23
As above, the Court should assess whether there is:24
19 Busch v Zion Wildlife Gardens Ltd (in rec and in liq) [2012] NZHC 17 at [2].
20 McLachlan Ltd v MEL Network Ltd (2002) 16 PRNZ 747 (CA) at [13] and [14].
21 Clear White Investments Ltd v Otis Trustee Ltd [2016] NZHC 2837 at [4].
22 Reekie v Attorney-General [2014] NZSC 63, [2014] 1 NZLR 737 at [3].
23 Highgate on Broadway Ltd v Devine [2012] NZHC 2288, [2013] NZAR 1017 at [24(c)].
24 Concorde Enterprises Ltd v Anthony Motors (Hutt) Ltd (No 2) [1977] 1 NZLR 516 (SC) at 519; NZ Kiwifruit Marketing Board v Maheatataka Coolpack Ltd (1993) 7 PRNZ 209 (HC) at 212; and Stephenson v Jones [2013] NZHC 638.
… credible (that is, believable) evidence of surrounding circumstances from which it may reasonably be inferred that the [party] will be unable to pay the costs. This does not, of course, amount to proof that the [party] will, in fact, be unable to pay them.
[32] The Court will assess the claim’s merits and prospects of success, to the extent that is possible at an early juncture.25 The Court will also consider the extent to which the plaintiff’s impecuniosity may have been caused by the defendant’s conduct.26
[33] A plaintiff’s unwillingness to pay previous judgment debts weighs in favour of an order for security.27 But whether a plaintiff has been a responsible litigant is secondary to the issue of whether the lack of merit of the claim justifies security that would prevent the claim from proceeding.28
[34] Quantum of security is discretionary and is assessed in the round. It need not be fixed by reference to likely cost awards.29 It is to be what the Court thinks fit in all the circumstances.30
[35]A Court will generally stay a proceeding until the security ordered is given.31
Analysis
[36]The issues to be determined in this judgment are:
(a)Should Cornelia and Abigail be granted leave to appeal the Recall Judgment?
(b)Should Timothy be required to provide further and better particulars in relation to the breach of contract claim in his amended statement of claim dated 18 July 2022?
25 Meates v Taylor (1992) 5 PRNZ 524 (CA); and Lee v Lee [2019] NZCA 345 at [73].
26 Bell-Booth Group Ltd v Attorney-General & BCNZ (1986) 1 PRNZ 457 (HC).
27 Taylor v Adair [2018] NZHC 1975 at [30]–[31], citing Burden v Dixie Cummings New Zealand
[2016] NZHC 729 at [22] and Mawhinney v Auckland Council [2014] NZHC 3207.
28 Wright v Attorney-General [2019] NZHC 3046 at [26].
29 Sharp v Pillay [2017] NZHC 647; and Red 9 Ltd v The Learning Ladder Ltd (in liq) [2021] NZCA 284, (2021) 25 PRNZ 780 at [30].
30 McLachlan Ltd v MEL Network Ltd, above n 20.
31 Tomanovich Holdings Ltd v Gibbston Community Water Co 2014 Ltd [2018] NZHC 990 at [68] and [85].
(c)Should Timothy be ordered to provide security for costs?
[37]I deal with each of these issues in turn.
Should Cornelia and Abigail be granted leave to appeal the Recall Judgment?
[38] Mr Thompson, for Cornelia and Abigail, submits the application for recall of the Substantive Judgment was brought on the grounds that:
(a)in determining the applicants’ application to remove the respondent’s caveat, her Honour had not afforded the applicants with natural justice because she had decided the application on grounds which were neither pleaded nor argued by the respondent; and
(b)Her Honour heard and determined the applicant’s application for an order for possession of the land despite having no power, as an Associate Judge, to do so.
The natural justice argument
[39] Mr Thompson submits that in refusing the application, her Honour held that there had been no breach of natural justice because:
(a)counsel was aware that the caveat was framed in contractual terms; and
(b)when asked about it at the hearing, accepted that the contractual basis would have been reasonably arguable and then proceeded to address the Court as to why it was not.
[40] Mr Thompson submits that Associate Judge Sussock mischaracterised the exchange with counsel at the hearing. He submits the position is as follows:
(a)In both written and oral submissions at the hearing, counsel for Cornelia and Abigail drew attention to the wording of the caveat instrument in which Timothy claimed an interest in the land:
Pursuant to an offer to purchase the affected record of title by the Caveator on 16 October 2020 (triggering event), made pursuant to a right of first refusal afforded to the Caveator.
(b)In his written submissions for Cornelia and Abigail he submitted that this description suggested that Timothy’s alleged interest in the land had a contractual source, but Timothy’s notice of opposition did not mention contract but instead relied on the testamentary promise. The proceeding which Timothy had filed to enforce his alleged rights did not plead any claims based on an alleged contract. At the hearing, counsel for Timothy made no written or oral submissions to the effect that he had relied on a contract.
(c)Counsel for Timothy did not submit that Timothy relied on a contract with his father, breached by his father during his lifetime and capable of being specifically performed, but instead made a submission that Cornelia and Abigail’s contention that testamentary promises are not capable of supporting a caveat was wrong in law.
(d)Against that background, it was a breach of natural justice for her Honour to decide, without inviting further submissions on the point, that it was arguable that there had been an oral contract between Timothy and his father which Timothy was arguably able to enforce by reason of the doctrine of part-performance. Her Honour reviewed the relevant authorities in respect of the doctrine of part-performance and applied the test set out by Tipping J in T A Dellaca Limited v PDL Industries Limited.32 The law relating to part-performance is a complex subject and Cornelia and Abigail should have been given the opportunity to make further submissions as to the issue of the caveat being supported by a contract.
(e)At [18] to [21] of his submissions, Mr Thompson canvasses points which could have potentially been argued in rebuttal of the proposition
32 T A Dellaca Limited v PDL Industries Limited [1992] 3 NZLR 88 (HC).
that arguably a contract existed between Anthony and Timothy, established by the doctrine of part-performance.
(f)Accordingly, there was a breach of natural justice in the manner in which the hearing was conducted.
The jurisdiction argument
[41] Mr Thompson submits that the Associate Judge appears to accept she did not have power to determine the application for an order for possession of land but proceeded to do so, and this alone is sufficient to justify a recall of the Substantive Judgment.
Prejudice and the interests of justice
[42] Mr Thompson submits that the Substantive Judgment, arrived at following an unfair process, has had adverse costs consequence for Cornelia and Abigail. Cornelia and Abigail have appealed the cost orders as of right. Mr Thompson submits there would be no prejudice to Timothy and it would accord the interests of justice for the Court to grant Cornelia and Abigail leave to appeal against the Associate Judge’s Recall Decision.
[43] Mr Thompson submits the proposed appeal raises questions of fact and law capable of bona fide and serious argument in a case involving public and private interests of sufficient importance to outweigh the cost and delay of the appeal. In particular:
(a)There is public interest in the questions:
(i)whether a Judge should decide a case on grounds that have not been pleaded or advocated without at least seeking further submissions before doing so, and
(ii)whether an Associate Judge hearing and determining an application which is outside the Judge’s jurisdiction or powers, is of itself, sufficient reason for a recall.
(b)Cornelia and Abigail have a strong private interest, in that one of the knock-on effects of the decision is that they have been ordered to pay costs and disentitled from recovering costs when applying to remove the caveat in circumstances where the basis on which they sought its removal (namely a testamentary promise does not support a caveat) was vindicated by the decision.
[44] Mr Thompson also submits that if leave to appeal is granted, it will not delay finalisation of the litigation as the Court of Appeal has directed that, if Cornelia and Abigail are granted leave, the resultant appeal will be heard together with the costs appeal which Cornelia and Abigail have filed as of right.
Timothy’s submissions
[45] Mr Iorns, for Timothy, on the other hand submits that an appeal against the Recall Judgment is now moot as follows:
(a)Cornelia and Abigail are seeking to recall the decision in respect of the sustaining of a caveat and declining to grant an order for vacant possession. The current executor will not seek to lapse the caveat and evict Timothy. He submits that Cornelia and Abigail’s attempt to lapse the caveat and evict Timothy from the estate property was not a proper act of the executor and was part of the basis for successfully seeking their removal as executors as any objective, well-advised executor would have stepped aside and conceded the caveat matter.
(b)He submits that Cornelia and Abigail’s submissions do not engage with the mootness of the appeal and refers to the decision of Cull J in Settlers Honey Limited v First Honey Limited where the Court observed:33
[11] The Supreme Court in Gordon-Smith v R confirmed that the Court retains discretion to hear moot appeals but it must be exercised cautiously. Advisory opinions are generally regarded as inappropriate for reasons given by the Court at [18]. However, the Court gave example of circumstances where moot appeals may be appropriate, such as where an issue on appeal involves a public authority and a question of public law; an issue of employment law of general and public importance; or an issue concerning the lawfulness of jury vetting and the use of jury information by prosecutors.
[12] In a subsequent hearing in Baker v Hodder the Supreme Court said further:
… All that can be said is that, in light of the considerations underlying the policy of restraint, a decision to hear a moot appeal should be made only in exceptional circumstances. These might be found in the circumstances of the particular case (for example, serious procedural or unfairness at the first hearing) or the broader public interest (for example, where an important legal point is raised).
[46] Mr Iorns submits that Cornelia and Abigail have not met the high threshold for the granting of leave to appeal which requires exceptional circumstances. He makes the following points:
(a)The points raised Cornelia and Abigail in support of the application for leave to appeal were points in submissions made by their counsel, their counsel did not seek an adjournment, and was aware of the issues raised. No appeal was lodged and the recall application was made after the time for an appeal had expired.
(b)Mr Iorns submits the filing of an appeal on the costs award cannot justify granting leave to appeal the Recall Judgment on a moot point and refers to the decision in Baker v Hodder where the Supreme Court observed that:34
The fact that costs that remain at issue will not, however, necessarily mean an appellate court would hear an otherwise
33 Settlers Honey Limited v First Honey Limited [2021] NZHC 2490 at [11] and [12] (footnotes omitted).
34 Baker v Hodder [2018] NZSC 78, [2019] 1 NZLR 94 at [37] (footnotes omitted).
moot appeal. But an award of costs may be a circumstance that adds weight to the case for hearing a substantive appeal even if the relief originally sought in the proceeding is no longer available.
[47] In summary, Mr Iorns submits that Timothy ought not to be put to the expense of having to engage with a moot appeal on a matter Cornelia and Abigail ought never to have used their role as executors to progress, and the fact that the costs appeal is extant ought not to elevate this to an exceptional circumstance warranting leave to appeal.
Conclusion in relation to granting leave to appeal
[48] In my view, Cornelia and Abigail’s application for leave to appeal should be declined. The reasons for this are as follows:
(a)starting with whether any breach of natural justice has occurred, on the basis that her Honour decided the Substantive Judgment on a possible breach of contract basis rather than on the basis of a testamentary promise, is arguable. Having reviewed her Honour’s judgment at [16] and [17], the issue of a contractual basis for the caveat was clearly raised in the hearing and I accept Mr Iorns’ submission that at that point counsel could have requested an adjournment to be able to address the issue or, failing that, could have appealed the Substantive Judgment within the appeal period.
(b)I also accept Mr Iorns’ submission that the issue is moot in that the current executor has indicated it would abide by the decision of the Court and not attempt to lapse the caveat or evict Timothy from the Orchard.
(c)Caveat proceedings do not determine final rights of the parties, and the issue is whether it is reasonably arguable that the caveator has an interest claimed in the caveat. I agree with her Honour in the Recall Judgment that the requirements of natural justice in the caveat proceedings must be that the party opposing the caveat being sustained
has an opportunity to make submissions on why the interests described in the caveat is either not an interest in land or why it is not reasonably arguable that the caveator has such an interest. She determined, at [26] of her judgment, that counsel for Cornelia and Abigail had the opportunity to make submissions on whether the contractual basis was reasonably arguable and did so, and because the Substantive Judgment did not determine final rights there was no breach of natural justice.
(d)The fact that Cornelia and Abigail have suffered an adverse costs outcome resulting from the Substantive Judgment, which has been appealed in any event, of itself does not justify granting leave to appeal and in this respect I refer to the Court’s statements in Baker v Hodder as set out at [46(b)].
(e)As to the jurisdiction point:
(i)Cornelia an Abigail were aware of the issue prior to the hearing and failed to raise it at the hearing, made submissions on the application for possession, received the decision, did not appeal the decision and then relied on the issue as one of the grounds for recall of the Judgment. In my view, Cornelia and Abigail ‘s method of dealing with this issue has been an inappropriate use of the Court’s processes;
(ii)More importantly, however, I agree with Her Honour’s view in the Recall Judgment (at [32]) that the issue does not affect the substance of the decision as Her Honour had already determined that the caveat should be sustained and accordingly the order for vacant possession naturally fell away.
[49] Accordingly, the application for leave to appeal the Recall Judgment by Cornelia and Abigail should be declined.
Should Timothy be required to provide further and better particulars in relation to the breach of contract claim in his amended statement of claim dated 18 July 2022?
[50] In the application for further and better particulars, Cornelia and Abigail are seeking particulars of the alleged contract between Anthony and Timothy as follows:
(a)when and where the alleged agreement was entered into?
(b)all of its material terms; and
(c)particulars of the breach or breaches on which Timothy relies;
(d)if Timothy relies on the doctrine of part-performance, particulars of the circumstances on which he relies.
[51] Mr Thompson points to the notice of opposition to the application which states that the contractual claim rests on the same facts as the testamentary promises claim. He refers to paragraph [35] of the amended statement of claim that the arrangements described in a file note by Anthony’s lawyer, Peter Marshall, should have been, but were not, reflected in Anthony’s will. He submits this is an entirely different proposition from a claim that Anthony breached the terms of a contract between him and Timothy.
[52] Mr Thompson submits that the pleading in respect of Timothy’s cause of action in contract alleges no facts which can support the claim that Anthony contracted with Timothy to sell the property (or the assets of White Goose Company Limited) to Timothy in Anthony’s lifetime and then breached that contract. He submits that the amended statement of claim does not adequately comply with Associate Judge Sussock’s direction because breach of contract adds nothing at all to the claim based on an alleged testamentary promise. He further submits that Timothy seeks specific performance, but does not make sufficient allegations to support the claim for the specific relief which he claims in his fifth cause of action.
[53] Mr Iorns on the other hand submits Cornelia and Abigail have fair notice of the case they need to reply to. He then points to paragraphs [12] to [17] of the amended
statement of claim and submits that while this is capable of refinement, Timothy’s claim is clear. He submits that Timothy relies primarily on the testamentary promise but in the alternative has pleaded breach of contract, which is not the primary thrust of this case but an ancillary argument to be made.
[54] In conclusion, Mr Iorns submits no orders are required to refine the pleading either for the benefit of the Court or of Cornelia and Abigail.
Conclusion in relation to further particulars
[55] In my view, Cornelia and Abigail’s application for further particulars in respect of Timothy’s fifth cause of action for breach of contract should be declined. Having reviewed paragraphs [12] to [17] of the amended statement of claim, in my view these give sufficient description of the case which Cornelia and Abigail are to reply to, and further elaboration should be a matter for evidence, not further amendment of the pleadings.
Should Timothy be ordered to provide security for costs?
[56] Mr Thompson submits that the Court must be satisfied there is reason to believe that Timothy (as plaintiff in the 56 proceeding) would be unable to pay costs if unsuccessful. He points to the following factors as supporting this proposition:
(a)Timothy is more than 60 years old and is not in full employment;
(b)he has not shown that he has the means to purchase the Orchard when he claims to have a right to purchase;
(c)Timothy’s response is merely a denial, and he does not file details of his financial position.
(d)While Timothy may not wish to provide details to Cornelia and Abigail, details could have been separately provided to the Court on a confidential basis. Accordingly, Mr Thompson submits that it would be reasonable for the Court to infer that Timothy would be unable to
meet a costs order, and relies on the decision in Concorde Enteprrises Ltd v Anthony Motors (Hutt) Ltd No.2.35
(e)It is insufficient for Timothy to point to an interest in Anthony’s estate as, if his claim is unsuccessful, it is likely to take some time for the executor to realise and distribute the assets of the estate.
[57] On the other hand, Mr Iorns submits that given the litigation concerns Anthony’s estate and Timothy is entitled to benefit from the estate whatever the outcome of the proceedings, the application has no merit. He submits the application is founded on pure speculation and there is nothing to give credence to this speculation.
[58] I note that in Timothy’s affidavit of 30 September 2022, he deposed that he has a successful kennel breeding business and that when he made the offer to purchase the Orchard he had pre-approved finance exceeding the purchase price.
Conclusion in relation to security for costs
[59] I am of the view that Cornelia and Abigail’s application for security for costs should be declined. Cornelia and Abigail have not established sufficient reason to doubt Timothy’s ability to meet an adverse costs award. His evidence that he has savings and runs a business is unchallenged and, whatever the outcome of the litigation, he is entitled to benefit from Anthony’s estate. In these circumstances, in my view the Court is not justified in drawing an adverse inference that he will be unable to pay from his failure to provide details of his financial position.
[60]Accordingly, the application for security for costs should be declined.
Result
[61] As a result of the conclusions I have reached at [48], [49], [55] and [59], Cornelia and Abigail’s application:
35 Concorde Enterprises Ltd v Anthony Motors (Hutt) Ltd No.2, above n 24;
Arklow Investments Ltd v McLean (1994) 2 NZPC 220 (HC).
(a)for leave to appeal the Recall Judgment should be dismissed;
(b)for further and better particulars of Timothy’s cause of action in his amended statement of claim should be dismissed;
(c)for security for costs against Timothy should be dismissed.
Orders
[62]I make the following orders:
(a)Cornelia and Abigail’s application for leave to appeal the Recall Judgment is dismissed;
(b)Cornelia and Abigail’s application for further and better particulars of Timothy’s amended statement of claim is dismissed;
(c)Cornelia and Abigail’s application for security for costs against Timothy is dismissed.
(d)My preliminary view is that Timothy, as the successful party, is entitled to costs as against Cornelia and Abigail together with disbursements. Counsel are directed to endeavour to agree costs within 20 working days of the date of this judgment. Failing agreement, counsel for Timothy will file a memorandum as to costs (not exceeding five pages) within 10 working days of the expiry of the 20 working day period, and counsel for Cornelia and Abigail will file a reply (not to exceed 5 pages) within 5 working days of counsel for Timothy’s memorandum. A decision on costs will then be made on the papers.
…………………………….. Associate Judge Taylor
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