Young v Ross
[2023] NZHC 212
•17 February 2023
IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY
I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE
CIV-2022-441-059
[2023] NZHC 212
BETWEEN PHILIP ROGER YOUNG
Appellant
AND
PHILIP NICHOLAS ROSS
Respondent
CIV-2022-441-060 BETWEEN
PROGRESSIVE ACCOUNTANTS LIMITED
Appellant
AND
PHILIP NICHOLAS ROSS
Respondent
Hearing: 8 February 2023 Appearances:
P R Young in person and, by leave, for Progressive Accountants Limited
P N Ross in person
Judgment:
17 February 2023
JUDGMENT OF CHURCHMAN J
[1]Mr Young appeals two decisions of Judge Kelly in the District Court at Napier.1
[2] Leave to appeal was required in relation to the earlier decision because it was out of time. Such leave was granted unopposed by Isac J in a minute of 17 October 2022.2
1 Ross v Young [2021] NZDC 22297; and Ross v Progressive Accountants Ltd [2022] NZDC 13340.
2 Young v Progressive Accountants Ltd HC Napier CIV-2022-441-059, 17 October 2022 (Minute of Isac J) at [5].
YOUNG v ROSS [2023] NZHC 212 [17 February 2023]
[3] In the same minute Isac J also granted Mr Young leave to represent the appellant in CIV-2022-441-060.3
[4] Although the two separate appeals have not been formally consolidated, they are inextricably intertwined and this joint judgment will address both of them.
History
[5] Mr Young and Mr Ross have had dealings going back more than 30 years. Mr Young bought defamation proceedings against Mr Ross in the High Court at Hamilton in February 1997. As he has done in this case, Mr Young, who is not a lawyer, represented himself in those proceedings. According to the amended statement of claim dated 18 February 2000, the defamation proceedings related to statements that Mr Ross had made about Mr Young in the nature of a “credit alert” to various parties. The events upon which the claims were based appeared to have occurred in 1995 and 1996.
[6] In addition to being communicated directly, it appears that some of the matters said to amount to defamation were posted on an internet site.
[7] The proceedings were terminated when a notice of discontinuance (prepared by Mr Young) dated 4 September 2000 was filed in the High Court.
[8] As the terms of that notice are significant to many of the arguments raised by Mr Young in relation to the appeals, I set them out in full:
TAKE NOTICE that both parties agree to discontinue these proceedings, and that the parties agree that:
1.Both parties bear their own costs.
2.That all publicity, including the Internet sites of the defendant, be stopped forthwith and forever.
3.That any publicity in relation to these proceedings is prohibited.
4.That no attempt will be made to relitigate any of the causes of action of these proceedings.
3 At [13].
[9] In accordance with the notice of discontinuance, Mr Ross removed the internet posts that had been referred to.
Subsequent events
[10] Several significant events occurred in Mr Young’s life subsequent to the conclusion of the defamation proceedings. A number of these events are relevant to matters raised by Mr Young in these appeals.
[11] Mr Young appeared before the Disciplinary Tribunal of the Institute of Chartered Accountants in New Zealand. On 31 July 2003, that body found that he had been guilty of: misconduct in a professional capacity; negligence or incompetence in a professional capacity; conduct unbecoming an accountant; and breaching the relevant code of ethics. The charges included matters related to Mr Young’s activities with a number of finance companies, including allowing a finance company to receive money from the public without having issued a current prospectus as required by the Securities Act 1978. As a result he was struck off the register of Chartered Accountants.4
[12]On 9 October 2003, he was adjudicated bankrupt.
[13] On 7 January 2006, Mr Young was convicted in the Hamilton District Court of assaulting a Court security officer in the execution of his duty, and sentenced to 80 hours’ community work. The assault had occurred during the course of a depositions hearing before a Community Magistrate. Mr Young had shouted down the Community Magistrate and had been remanded in custody. He had assaulted the Court security guard attempting to take him into custody. Mr Young appealed the conviction and sentence but the appeal was dismissed on 21 November 2006.5
[14] On or about 1 September 2018, an article about Mr Young was published on the Wiki site “RationalWiki.org”. Among other things, the article referred to the
4 “Disciplinary Tribunal of the Institute of Chartered Accountants of New Zealand-Notice of Decision (Member Guilty of Misconduct in a Professional Capacity, Negligence or Incompetence in a Professional Capacity, Conduct Unbecoming and Breaching the Code of Ethics)” (14 August 2003) 101 New Zealand Gazette 2672.
5 Young v Police HC Hamilton CRI-2006-419-114, 21 November 2006.
various events that Mr Young had been involved in since 4 September 2000 detailed at [9]–[13] above.
[15] Since the time of the defamation case, Mr Ross has qualified as a lawyer and now practises in Hawkes Bay.
[16] Unhappy with the 1 September 2018 article on the RationalWiki.org site, and convinced that Mr Ross had been the author, on or about 30 March 2019, Mr Young complained to the Standards Committee of the New Zealand Law Society alleging that Mr Ross had republished defamatory material originally published in the late 1990s.
[17] Mr Young also complained that the publication of the article breached an order made by Potter J during the defamation proceedings.
[18] On 17 July 2019, the Standards Committee determined that no further action on Mr Young’s complaint was necessary or appropriate.
[19] On or about 6 August 2019, Mr Young then applied to the Legal Complaints Review Officer (LCRO) for a review of the Standards Committee’s decision.
[20] On or about 30 April 2020, the LCRO confirmed the decision of the Standards Committee.
[21] Mr Young then issued the proceedings that are the subject of the appeal CIV-2022-441-059. In the proceedings, he alleged that the terms of the notice of discontinuance amounted to a contract between himself and Mr Ross, that the contract had been breached and that he was entitled to remedies including:
(a)an order that Mr Ross remove the 2018 article from wherever he had caused it to be published;
(b)compensatory damages of $50,000 or such other amount as the Court considered just;
(c)interest on compensatory damages from 1 September 2018 to the date of payment in accordance with the Interest on Money Claims Act 2016;
(d)exemplary damages of $50,000 or such other amount as the Court considered just;
(e)costs; and
(f)interest on those exemplary damages and on the costs from the date of such awards, in accordance with the Interest on Money Claims Act.
[22] There were three causes of action pleaded by Mr Young: firstly, that the contractual provision set out at cl 2 of the notice of discontinuance, namely “[t]hat all publicity, including the Internet sites of the defendant, be stopped forthwith and forever” had been breached; and in respect of the second and third causes of action, that the Court was entitled to make a finding that the Standards Committee and the LCRO had reached a wrong decision because they were allegedly misled and that this justified the remedy of an award of exemplary damages.
[23]Mr Ross moved to strike out the statement of claim in its entirety.
Strike out decision — CIV-2022-441-059
[24] This strike out decision was decided on relatively narrow grounds. In relation to the first cause of action, based in contract, the Judge noted that on 14 October 2003 Mr Young was adjudicated bankrupt, and that the effect of being adjudicated bankrupt pursuant to s 42 of the Insolvency Act 1967 was that all of Mr Young’s property, including any choses in action, vested in the Official Assignee.6
[25] The Judge specifically accepted that while a claim in contract based on the settlement agreement evidenced in the terms of the notice of discontinuance was “not so clearly bad that in itself it should be precluded from going forward”, the claim itself was “untenable because of a legal impediment”.7
6 Ross v Young, above n 1, at [41], [95] and [97].
7 At [96].
[26] The legal impediment was the fact that the contractual rights arising from the notice of discontinuance had vested in the Official Assignee on Mr Young’s bankruptcy. The Judge noted that the definition of term “property” in the 1967 Act included things in action.8 He noted that the definition had changed in the current (2006) Act but that a chose in action remains property for the purposes of the current legislative scheme.9 He referred to the comments of Master Williams in Official Assignee v Probert, where it was held in relation to choses in action:10
… There is no section divesting the Official Assignee of such property at any stage, certainly not on the bankrupt’s discharge, whether automatic or following application …
[27] The Judge also referred to the decision in Edmonds Judd v Hobbs, but noted that, unlike that case, there was no suggestion that the Official Assignee had abandoned any choses in action.11 He also referred to Hull v Official Assignee for the proposition that “abandonment” is a question of fact.12 He noted there was no evidence that there had been any abandonment here.
[28]At [103], he concluded:
… there must be some positive act which removes, or assign[s] the choses in action (the settlement agreement), from the Official Assignee to Mr Young in order for it to have returned to Mr Young. Discharge alone is not that act. As a consequence, Mr Young does not possess the right upon which he is seeking to rely.
[29] Although not required to, due to his finding as to the effect of Mr Young’s insolvency, the Judge went on to make the following finding:
[105] Further, Mr Young has acknowledged that in 2000 Mr Ross took down the relevant wiki posts. In relation to the 2018 wiki, Mr Young acknowledges that even if Mr Ross published the wiki, it was taken down on 29 April 2019 and republished by someone other than Mr Ross. Mr Ross cannot be responsible for a publication made by a third party.
[30] As to the second and third causes of action (the claims that Mr Ross had misled the Standards Committee and the LCRO), the Judge concluded that Mr Young was
8 At [98].
9 At [98].
10 At [100], citing Official Assignee v Probert [2001] 2 NZLR 506 (HC) at 506.
11 At [102], citing Edmonds Judd v Hobbs [2000] 2 NZLR 135 (CA).
12 At [102], citing Hull v Official Assignee HC Auckland HC 13/96, 12 December 1997.
inviting the Court to go behind the statutory regime set out in the Lawyers and Conveyancers Act 2006 and make a finding that the Standards Committee and the LCRO reached a wrong decision because they were allegedly misled by Mr Ross and that the appropriate remedy was an award of exemplary damages.13
[31] The Judge noted that a review by the LCRO of a decision of the Standards Committee was final, pursuant to s 152(4) of the Lawyers and Conveyancers Act, and that Mr Young had accepted that.14 The Judge therefore concluded that the Court lacked jurisdiction to reopen and reconsider Mr Young’s complaints in this regard.15
Strike out decision — CIV-2022-441-060
[32] Mr Young’s response to the Judge’s decision of 18 November 2021 was not to appeal that decision, but to issue fresh proceedings. These proceedings were issued in the name of Progressive Accountants Ltd (PAL), the company that was formed by Mr Young on 7 February 2001 and through which he conducted an accountancy practice.
[33]Mr Ross moved to strike out these proceedings as well.
[34]In a decision of 19 July 2022, Judge Kelly struck these proceedings out.16
[35] The new statement of claim alleged three causes of action. The first was that Mr Ross had committed contempt of court by publishing the blog article on RationalWiki.org on 1 and 2 September 2018 because he had breached an undertaking said to have been given to the High Court on or around 4 September 2000.
[36] The second cause of action alleged a breach of contract. Although the plaintiff in those proceedings had not been a party to the defamation proceedings or the notice of discontinuance, and in fact did not exist as a legal entity at that time, it was claimed that as a beneficiary to the notice of continuance it could take advantage of s 12(1) of
13 At [107].
14 At [108].
15 At [109].
16 Ross v Progressive Accountants Ltd, above n 1.
the Contract and Commercial Law Act 2017 (CCLA) and was accordingly able to enforce the terms of the notice of discontinuance.
[37] The third cause of action alleged that Mr Ross had misled the Standards Committee and the LCRO in relation to a complaint made by Mr Young.
[38] Similar relief was sought as that which had been sought by Mr Young in the earlier proceedings, including “compensatory damages pursuant to the Contempt of Court Act 2019 and the CCLA” and exemplary damages of $50,000.
[39] The Judge held that PAL, not being a party to a proceeding in respect of which the notice of discontinuance was filed, had no standing to bring an action in respect of the promise contained in the agreement.17 He noted that the notice of discontinuance did not confer, or purport to confer, a benefit on PAL by designating PAL by name, description, or reference to a class.18
[40] In respect of the claim for relief under the Contempt of Court Act 2019, the Judge noted that the Act did not have a retrospective effect.19 It did not become operative until after the time when the events pleaded as giving rise to the cause of action occurred.
[41] As to the third cause of action, for the same reasons in his earlier decision, the Judge held that a decision of the Standards Committee was final, and that the Court lacked jurisdiction in respect of the complaints of PAL.20
[42] The Judge concluded by noting that Mr Young’s action in bringing the claim against Mr Ross in the name of the company after the proceedings brought by him in a personal capacity were struck out was bordering on being vexatious or otherwise an abuse of the process of the Court.21 He noted that “[a]ny further proceedings bought
17 At [44].
18 At [44].
19 At [43].
20 At [45].
21 At [48].
in respect of the same subject matter” were “likely to risk” being found to be vexatious or otherwise an abuse of the process of the Court.22
Mr Young’s argument
[43] In both his written and oral submissions, Mr Young traversed many matters that were irrelevant to the appeal. There are, in fact, only four legal issues that fall for determination:
(a)What was the effect of Mr Young’s bankruptcy on his ability to sue on the terms of the contract evidenced by the notice of discontinuance?
(b)Whether this Court has jurisdiction in these proceedings to make the findings sought in respect of the Standards Committee and LCRO decisions.
(c)Whether PAL has rights, pursuant to the Contempt of Court Act 2019, to the relief sought.
(d)Whether PAL falls within any of the categories of non-party set out in s 12(1) of the Contract and Commercial Law Act 2017.
[44] No challenge was made in either appeal to the Judge’s analysis of the law as to strike out decisions.
Discussion
[45] In both his written and oral arguments, Mr Young advanced a number of propositions that simply are not correct.
[46] Mr Young repeatedly tried to portray the notice of discontinuance as a document for which Potter J was responsible by describing it as an “agreement” made before Potter J or a document which was “supervised and sanctioned by Justice Potter as part of the CP4/97 matters”.
22 At [48].
[47] Notices of discontinuance are dealt with in subpart 4 of part 15 of the High Court Rules 2016. Rule 15.19 provides:
15.19 Right to discontinue proceeding
(1)At any time before the giving of judgment or a verdict, a plaintiff may discontinue a proceeding by—
(a)filing a notice of discontinuance and serving a copy of the notice on every other party to the proceeding; or
(b)orally advising the court at the hearing that the proceeding is discontinued.
[48] Other than in the very limited circumstances detailed in r 15.20, leave is not required to file a notice of discontinuance and the Judge has no role to play in “supervising” or “sanctioning” it.
[49] Notices of discontinuance are not required to be signed by a defendant but commonly are, particularly if there is an agreement that costs are to lie where they fall.
[50] Mr Young also advanced the proposition that Mr Ross was prohibited from referring, even in these proceedings, to matters that had been the subject of the 1997 defamation proceedings. That cannot be the case.
[51] Where, as here, Mr Young is asserting that the agreement evidenced by the contents of the notice of discontinuance is being breached, there is nothing in the notice of discontinuance that prohibits Mr Ross from referring to such matters relating to the 1997 litigation as may be relevant.
[52] Thirdly, Mr Young claims that the agreement was prospective in effect. In other words, it related not only to matters that existed as at 4 September 2000, but meant that any “publicity” by the defendant at any stage in the future about any activities of the plaintiff was also prohibited. That is not an interpretation that can realistically be placed on the wording of the notice of discontinuance.
[53] I also note that the matters which occurred after 4 September 2000 that Mr Young is concerned about all appear to be matters of public record. Again, these are:
(a)the findings of the Disciplinary Committee of the Institute of Chartered Accountants;
(b)the bankruptcy;
(c)his striking off as a Chartered Accountant; and
(d)his criminal conviction.
[54]Referring to these matters therefore cannot amount to defamation.
[55] Mr Young also claims that the terms of the notice of discontinuance meant that “the respondent promised to stop forever all his publicity about both of the appellants”.
[56] In relation to Mr Young, the agreement related to the matters that had been the subject of the defamation proceedings. It did not relate to publicity in the future about matters that had not yet occurred. The notice of discontinuance could not possibly have imposed any obligation on Mr Ross in relation to PAL as that company did not even exist as at 4 September 2000 and was not identified or referred to in any way in the notice of discontinuance.
Effect of bankruptcy
[57] Judge Kelly correctly summarised the law relating to the consequences of an adjudication in bankruptcy at [96]–[105] of the 18 November 2021 decision.
[58]A chose in action is defined in Black’s Law Dictionary as:23
1. A proprietary right in personam, such as a debt owed by another person, a share in a joint-stock company, or a claim for damages in tort.
2. The right to bring an action to recover a debt, money, or thing.
3. Personal property that one person owns but another person possesses, the owner being able to regain possession through a lawsuit. — Also termed thing in action; right in action.
23 Bryan A Garner (ed) Black’s Law Dictionary (11th ed, Thomson Reuters, St Paul, 2019).
[59] Mr Young’s case before Judge Kelly was that a contract existed between himself and Mr Ross on the basis of the terms recorded in the notice of discontinuance. Rights arising from a contract are clearly a chose in action. In accordance with the cases cited by Judge Kelly, such rights are vested in the Official Assignee and, unless specifically abandoned by the Official Assignee, remain with the Official Assignee on the bankrupt’s discharge. Judge Kelly did not err on this point.
Jurisdiction in relation to the Standards Committee and LCRO decisions
[60] The Lawyers and Conveyancers Act is a code which regulates the practice of law in New Zealand. The role and powers of the Standards Committee and the LCRO are circumscribed by the Act. Section 152(4), in relation to the power of the Standards Committee to determine a complaint or matter, provides:
(4) Subject to the right of review conferred by section 193 and to section 156(4), every determination made under subsection (1) and every order made under section 156 or section 157 is final.
[61]Section 193, in relation to a right of review, provides:
A person who is specified in any of the provisions of sections 194 to 197 as a person who may apply under this section for a review may apply to the Legal Complaints Review Officer for that review.
[62] Mr Young elected to exercise his right to refer his complaint about Mr Ross to LCRO. The LCRO elected to take no further action. The Lawyers and Conveyancers Act does not provide a right of appeal against that decision.
[63] There is nothing in the Lawyers and Conveyancers Act that gives a person in Mr Young’s position a right to commence civil proceedings that are effectively a collateral challenge to the findings of the Standards Committee and the LCRO.
[64] An attempt to do so undermines the integrity of the scheme for the regulation of the conduct of lawyers that is established by the Act. The Court has no jurisdiction to effectively reopen and reconsider the complaints already finally determined by the Standards Committee and LCRO. This cause of action is therefore untenable.
Contempt of Court Act
[65] The cause of action in the proceedings bought by PAL which seeks compensatory damages pursuant to the Contempt of Court Act is wholly misconceived. Quite apart from the fact that the Act was not operative as at the date of the claimed breach and is not retrospective, a more fundamental issue is that the remedies available under the Act do not extend to compensatory or exemplary damages.
[66] Section 16 of the Contempt of Court Act restricts its application to certain Court orders. Subsection (1) provides:
16 Certain court orders and undertakings may be enforced
(1)This section applies to—
(a)any interim or final order, decision, decree, direction, or judgment of a court (a court order) to do or abstain from doing something, except as provided in section 17:
(b)any undertaking given to the court if, on the faith of the undertaking, the court has sanctioned a particular cause of action or inaction.
[67] Mr Young relies on the notice of discontinuance as falling within either s 16(1)(a) or (b). For the reasons discussed above, the filing of a notice of discontinuance does not involve a Court order. It is an action initiated by the plaintiff and, as stated above, in this case did not require the leave of the Court or any form of approval by the Court. Neither was there any undertaking given to the Court which resulted in the Court sanctioning a particular cause of action or inaction. The Court was not required to sanction the filing of the notice of discontinuance or any other course of action. I note that the commentary in Sim’s Court Practice notes that the concept of “undertaking” referred to in s 16(1)(b) “excludes undertakings given to an opposite party as well as undertakings which do not result in some action taken by the court.”24 No undertaking of the type covered by s 16(1)(b) was involved in this case.
24 Matthew Casey and others Sim’s Court Practice (NZ) (online looseleaf ed, LexisNexis) at [CC16.3].
[68] Even if there was jurisdiction under the Contempt of Court Act, there is no ability for the Court to award either compensatory or exemplary damages. The Court is entitled, under s 16(4)(a)(ii)(A), to impose a fine not exceeding $25,000 or, under s 16(4)(a)(iii), to order an individual to do community work not exceeding 200 hours. Under s 16(4)(b), the High Court can also make a sequestration order. They are the only remedies available under the Act. The claims under the Contempt of Court Act were therefore properly struck out.
Application of s 12(1) of the Contract and Commercial Law Act 2017
[69]Section 12(1) of the CCLA provides:
12 Deed or contract for benefit of person who is not party to deed or contract
(1) This section applies to a promise contained in a deed or contract that confers, or purports to confer, a benefit on a person, designated by name, description, or reference to a class, who is not a party to the deed or contract.
[70] In order to fall within this definition, a non-party to a contract must therefore be designated by name, description, or reference to a class. In the absence of such a designation, a non-party does not obtain any benefit and cannot sue for breach.
[71] It is apparent on the face of the notice of discontinuance that PAL is not designated by name, description, or reference to a class. It cannot possibly therefore have acquired any rights under s 12 of the CCLA.
Outcome
[72] For the reasons set out above, both appeals are dismissed. All of the causes of action had no prospect of success and were properly struck out.
Costs
[73] I invite the parties to settle costs between themselves by agreement but, if no agreement is possible, Mr Ross shall file a costs memorandum no greater than three pages in length within 14 days from the date of this decision, and Mr Young shall file a memorandum in reply of no greater than three pages in length within 14 days of
service on him of Mr Ross’ memorandum. I will then deal with the matter on the papers.
Churchman J
Solicitors:
Cathedral Lane Law, Napier for Respondent
cc: P R Young
Progressive Accountants Limited
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