Yingling v Gifford
[2019] NZHC 2342
•17 September 2019
IN THE HIGH COURT OF NEW ZEALAND GISBORNE REGISTRY
I TE KŌTI MATUA O AOTEAROA TŪRANGANUI-A-KIWA ROHE
CIV-2015-416-26
[2019] NZHC 2342
BETWEEN RANDY YINGLING
Plaintiff
AND
KEN JOHN GIFFORD (aka KENNETH JOHN GIFFORD)
First Defendant
AND
DEAN JOHN WITTERS (aka DEAN JOHN WITTERS)
Second Defendant
Teleconference: 16 September 2019 Counsel:
G J Thwaite for Plaintiff
G R Webb for First Defendant
Judgment:
17 September 2019
JUDGMENT OF CHURCHMAN J
Background
[1] On 30 June 2015, the plaintiff filed a statement of claim against the first and second defendants in the High Court at Gisborne.
[2] The statement of claim had five causes of action. The first and second causes of action sought enforcement of a judgment of the Superior Court of the State of California. After a hearing in California on 9 April 2012, at which neither the first or second defendants in these proceedings appeared, judgment was given for the plaintiff in the sum of US$232,500 compensatory damages, US$150,000 exemplary damages, and costs in the sum of US$395.
YINGLING v GIFFORD & ANOR [2019] NZHC 2342 [17 September 2019]
[3] The third cause of action was a claim against the first and second defendants for breach of contract seeking judgment for commission in the sum of US$232,500, and the fourth cause of action sought the same sum as compensatory damages although the cause of action was pleaded as being “Common Counts”. Both the third and fourth causes of action pleaded that the judgment of the Superior Court in California created an estoppel against the first and second defendants.
[4] The fifth cause of action was said to be “fraud under the law of California” and sought compensatory damages in the sum of US$232,500, and punitive damages of US$150,000 plus interest and costs.
[5] The plaintiff also filed an application for summary judgment at the same time as the statement of claim was filed.
[6] On 9 February 2016, Associate Judge Sargisson, on the first call of these proceedings, made a timetable order.
[7] On 11 July 2016, following a hearing in the High Court at Gisborne on 3 May 2016, Associate Judge Sargisson dismissed the plaintiff’s application for summary judgment.
[8] One of the ways by which a party can avoid the entry of a foreign judgment against them in a New Zealand court is to establish that the judgment was obtained by fraud. While the New Zealand courts are not able to re-examine the merits of a foreign judgment sought to be enforced here, where fraud is pleaded, effectively a defendant has an opportunity to invite the New Zealand court to examine the evidence upon which the foreign judgment was obtained.1
[9] Here, the defendants had put in issue, the question of whether the Californian Court had been advised that the commission being claimed by the plaintiff related to sales which had not in fact occurred. As no evidence had been tendered by the plaintiff on this point, Associate Judge Sargisson found that the defendants had an arguable defence of fraud and declined to enter summary judgment.
1 See Jet Holdings Inc v Patel [1990] 1 QB335.
[10] Mr Thwaite, solicitor for the plaintiff, obtained from the court stenographer in California, a copy of the transcript of the proceedings. He then sought, a second time, to obtain summary judgment.
[11] That second summary judgment application was heard on 15 August 2017 and rejected by Associate Judge Sargisson in a reserved judgment dated 5 February 2018.2
[12] Associate Judge Sargisson left open the question of whether the Court had jurisdiction to entertain a second summary judgment application in the same proceedings and decided the matter on the merits. The Court noted that there was conflicting evidence as to whether an agreement was entered into between the parties in July or August 2010 and was not prepared to discount this as a potential ground for a defence of fraud. The Court therefore declined both the summary judgment application and the plaintiff’s application to strike out the defendants’ defence.
[13] I have mentioned the history of the proceedings to this point because it is relevant to the point of who is responsible for the delays. Mr Thwaite suggested that the defendants were. However, given that over two and a half years were taken up with his unsuccessful summary judgment and strike-out applications, at least until 5 February 2018, the defendants cannot be blamed for any delay to this point.
[14] For the sake of completeness, I note that the second defendant died in September 2017 after the hearing of the second summary judgment application but before the decision was released.
Setting down for hearing
[15] On 29 May 2018, Associate Judge Johnston issued a minute granting the then solicitors for the first defendant, leave to withdraw. These proceedings were then set down for what was anticipated to be a hearing by way of formal proof on 13 November 2018.
2 Yingling v Gifford & Witters [2018] NZHC 053.
[16] On 13 November 2018, Associate Judge Johnston issued a minute recording that the first defendant had appeared in person to defend the application and that Mr Thwaite, the plaintiff’s solicitor, accepted that the matter was therefore unable to proceed that day and required a special fixture.
[17] Following a further case management conference at 11:00 am on 12 December 2018, Associate Judge Johnston set out a timetable direction. Amongst the directions made were:
(a)the plaintiff to serve briefs of evidence of witnesses he intended to call by 8 March 2019;
(b)the defendant to serve briefs of witnesses by 29 March 2019;
(c)the plaintiff to serve briefs in reply by 5 April 2019;
(d)the plaintiff to serve a draft index for a bundle of documents for trial and draft chronology by 12 April 2019;
(e)the first defendant to provide the plaintiff with a list of any additional documents for inclusion in the bundle of documents for trial and any additional material for the chronology by 23 April 2019;
(f)the plaintiff to file and serve a fully indexed and paginated bundle of documents for trial and a joint chronology, 15 working days prior to trial; and
(g)the plaintiff to file and serve his opening five days prior to trial.
[18] Neither the plaintiff nor defendant complied with this timetable order other than the plaintiff filing an outline of opening submissions and a memorandum as to procedure for trial dated 22 July 2019. The memorandum sought an adjournment of the hearing and transfer of the action to the Auckland Registry for trial.
[19] On receipt of the memorandum, Cooke J, in a minute of 24 July 2019, adjourned the fixture set for 29 July 2019 for a new fixture date to be allocated.
[20]A fixture was allocated for 18 September 2019 to be held in Wellington.
[21] On 10 September 2019, new counsel for the first defendant, Mr G R Webb of Nolans in Gisborne, applied for security for costs.
[22] By decision of 13 September 2019, the Court refused the application for security for costs.
[23] By email of 13 September 2019, Mr Webb, solicitor for the first defendant, sought an urgent teleconference. That occurred at 3:00 pm on 16 September 2019.
[24] Mr Webb essentially sought an adjournment of the 18 September 2019 hearing. He submitted that the timetable directions made by Associate Judge Johnston anticipated a full hearing with evidence. He noted that the plaintiff had not filed any evidence or other documents in accordance with Associate Judge Johnston’s timetable order.
[25] Mr Webb described the statement of defence filed on behalf of the first defendant by his previous solicitor as being “messy” and said that some relevant matters were not pleaded, and that it would be unfair to enter judgment by default against the first defendant on the basis of the drafting inadequacies in that document.
[26] Mr Thwaite opposed the adjournment submitting that some six weeks had passed since Mr Webb had first received instructions. He noted that the first defendant had retained three other counsel previously.
[27] Mr Thwaite submitted that if leave was granted to the first defendant to file an amended statement of defence, then he would wish to have the opportunity to call rebuttal evidence on the issue of fraud in relation to the judgment obtained in the Californian Superior Court.
[28] Regrettably, the Court is, once again, put in the situation where this matter is simply unable to proceed.
[29]Accordingly, I make the following orders:
(a)the hearing set down for 18 September 2019 in this matter is vacated;
(b)the first defendant shall within 10 working days from the date of this order file any amended statement of defence;
(c)the plaintiff shall have 10 working days from service of the amended statement of defence to file any reply;
(d)as the defence to the first cause of action is an affirmative one, the first defendant shall file its evidence in relation to the first cause of action within 10 working days of service of any statement in reply, with the plaintiff to have 15 working days to file evidence in response;
(e)the plaintiff is to advise the Court and the first defendant within 10 working days of the filing of any statement in reply to any amended statement of defence, whether or not it intends to pursue causes of action three and five;
(f)if the plaintiff does wish to pursue causes of action three and five, within 10 working days of notification of that, the defendant shall advise the Court whether it wishes to challenge the jurisdiction of the Court to entertain such causes of action and to apply under r 10.15 of the High Court Rule 2016 for a determination as to whether this Court has jurisdiction in respect of those causes of action;
(g)if no application for a preliminary determination is received, the Registrar shall, after consulting with counsel, allocate a one-day fixture in Wellington for the hearing of the substantive matter; and
(h)if an application for a preliminary hearing on the jurisdiction of the Court to entertain causes of action three and five is received, that shall be allocated a half-day fixture, following consultation between the Registrar and counsel.
[30] Given the lateness of the application by the first defendant for an adjournment, the Court’s preliminary view is that, rather than being reserved, an award of costs may be appropriate.
[31] If the plaintiff seeks an award of costs, he is to file submissions in support, of no greater than three pages in length to be filed and served within five working days of the date of this order, with the first defendant having five working days following service to file and serve any submissions in reply, with the matter then being dealt with on the papers.
Churchman J
Solicitors:
G J Thwaite, Auckland for Plaintiff
Nolans, Solicitors, Gisborne for First Defendant
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