AUCKLAND TROTTING CLUB INCORPORATED v CANAM GROUP LTD (now MEDWAY LTD) [2023] NZHC 713

AUCKLAND TROTTING CLUB INCORPORATED v CANAM GROUP LTD (now MEDWAY LTD) [2023]NZHC 713 [3 April 2023]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2022-404-1110[2023] NZHC 713IN THE MATTER of the Companies Act 1993 ss 148(1)(c),135, 136, 271 and 301 in the liquidation ofCANAM CONSTRUCTION LIMITED(now TRIBOLA767 LIMITED)AND IN THE MATTER of the Property Law Act 2007, ss 344 to 350,Subpart 6: setting aside of dispositions thatprejudice creditorsBETWEEN AUCKLAND TROTTING CLUBINCORPORATEDPlaintiffAND CANAM GROUP LIMITED (nowMEDWAY LIMITED)First DefendantContinuedHearing: 29 March 2023Appearances: M C Black and L M Wallace for the PlaintiffD J Chisholm KC and MBE Morrison for the First Defendant,Second Defendants, First-Named Third Defendant and FourthDefendantsJudgment: 3 April 2023JUDGMENT OF GAULT JThis judgment was delivered by me on 3 April 2023 at 2:30 pmpursuant to r 11.5 of the High Court Rules 2016.Registrar/Deputy RegistrarContinued AND CANAM VENTURES LIMITED, CANAMINDUSTRIAL LIMITED)Second DefendantsLOUKAS SOTERI PETROU, NICHOLASARTHUR PAGE, and ANDREW CROSBIECLARKThird DefendantsCABINETRY INVESTMENTS LIMITED,CANAM BUILDING LIMITED (now1962TREES LIMITED), CANAMMANAGEMENT SERVICES LIMITEDand CANAM BUILDING SOLUTIONSLIMITEDFourth Defendants[1] The first defendant, second defendants, first-named third defendant and fourthdefendants apply to change the allocated trial date in this proceeding – a five weekfixture commencing on 29 October 2024. The application is supported by the second-named third defendant.[2] The plaintiff, Auckland Trotting Club Inc (ATC), opposes a change.Background[3] The dispute arises out of a large apartment complex development project bythe ATC on its land at the Alexandra Park horse racing venue in Epsom, Auckland.On 23 October 2015 ATC and Canam Construction Ltd (Canam) entered into aconstruction contract in relation to the project. The construction contract price wasapproximately $78 million excluding GST.[4] On 19 July 2018 ATC gave notice terminating the construction contract.Canam subsequently commenced proceedings in this Court seeking injunctive reliefto restrain ATC from calling up the contractor's performance bond. The matterproceeded to a hearing in November 2018 but was adjourned part-heard and the partiesagreed to proceed to arbitration.[5] The arbitral proceedings commenced in 2018 before the Hon Rodney HansenKC. Canam's primary claim was that ATC's termination of the construction contractwas unlawful. ATC argued it was entitled to cancel the construction contract and alsoadvanced a counterclaim.[6] Over three substantive awards issued between May 2021 and March 2022,the arbitrator found in favour of ATC and awarded it approximately $85.6 million indamages and arbitration costs.[7] Following the arbitration, ATC commenced this proceeding in July 2022.In essence, it seeks to recover from the defendants the amount awarded to it in thearbitration. The pleadings include claims under s 301 and related sections of theCompanies Act 1993, including a contribution against related Canam entities. ATC'scauses of action against the defendant directors focus upon s 135 and 136 for breachof directors' duties.[8] Following Canam's liquidation in 2021, the Canam related companiesrestructured. ATC seeks creditor remedies for the accounting and disposal of propertyand the setting aside of dispositions of transfers under ss 344 to 350 of the PropertyLaw Act 2007. ATC also seeks recovery of costs expended in the arbitration by itagainst non-parties.Trial date[9] By minute dated 17 November 2022, (then) Associate Judge Andrew directedthis proceeding be set down for a five week trial at a time to be set by the registry inconsultation with counsel.[10] The following day, the registry contacted counsel advising that the Court wasnearing the end of 2024 for available trial dates. The same day, counsel conferred.Mr Chisholm KC, counsel for the corporate defendants and the first-named thirddefendant director, was unavailable for periods in July and August 2024, and betweenmid-September and mid-October 2024. Thus, in late 2024, counsel were availablefrom mid-October. Counsel's unavailable dates were provided to the registry the sameday.[11] It appears a fixture was not allocated at that time. On 23 January 2023,Mr Chisholm received notice of a two week trial in another proceeding allocated tocommence on 4 November 2024. That proceeding commenced earlier than thisproceeding.[12] On 25 January 2023, the registry notified counsel that this proceeding had beenallocated a five week fixture commencing on 29 October 2024. That same day,Mr Chisholm alerted the registry to this scheduling conflict and noted that he was nownot available for a trial in this proceeding commencing on 29 October 2024.He requested that a new trial date be set commencing after 18 November 2024.[13] The registry advised counsel that the next available five week trial date wouldmost likely be in early 2025 and requested the Canam defendants to file amemorandum. On 26 January 2023, the Canam directors did so.[14] On 4 February 2023, ATC objected to the request for a change of trial date.The registry requested a formal application to adjourn the trial or for counsel todecrease the length of trial to accommodate counsel's unavailability.[15] On 9 February 2023, the application to adjourn was filed with an affidavit insupport. On 13 February 2023, ATC filed a notice of opposition. No affidavit wasfiled in support of the opposition. On 15 February 2023, Lang J directed a hearing ofthe application.Legal principles[16] Rules 10.2 of the High Court Rules 2016 provides that the Court may, beforeor at the trial, if it is in the interests of justice, postpone or adjourn the trial for anytime, to any place, and upon any terms it thinks just. The interests of justice are theoverriding consideration. This includes justice to both parties as well as other litigantsand the ability of the Court to manage and hear matters efficiently and within areasonable timeframe. It is a balancing exercise.Discussion[17] Mr Chisholm submitted this is simply a scheduling conflict and if ATC hadco-operated when the issue arose, the delay would likely have been little more thanthree months. Mr Black, for ATC, submitted that when he was approached to acceptthis instruction he had retired, or at least was winding down his practice, and heaccepted this instruction in the expectation that the proceeding would proceed to trialand be determined by 2024. He advised that if the trial is to be rescheduled into 2025,ATC will need to find alternative counsel.[18] I accept that Mr Chisholm's availability was accurately provided to the registryin late 2022. If the trial date had been allocated then, this fixture would have takenpriority over the fixture allocated on 23 January 2023. If there was communicationbetween the registry and Mr Chisholm immediately after the other fixture wasallocated, the registry would not have allocated this fixture commencing on29 October 2024. It is only because there was no communication between the registryand Mr Chisholm in the meantime that this fixture allocated on 25 January 2023clashed with the other fixture. Given the proximate timing of the allocation of seniorcounsel's fixtures, this is a scheduling conflict and, even though the trial is 18 monthsaway, not a situation where the relevant defendants should be expected to findalternative counsel. I do not consider the application involves tactical delay on theirpart.[19] Mr Chisholm advised that his two week November 2024 fixture remains inplace. As indicated, it was allocated before the fixture in this proceeding and relatesto a proceeding commenced earlier than this proceeding, and I do not consider thatproceeding should be impacted by the scheduling conflict that subsequently arose.[20] I accept that Mr Black's expectation in November 2022 was that the fixturewould be in late 2024 and I accept that, if a late 2024 trial can no longer beaccommodated, ATC will need to find alternative counsel. However, as Mr Chisholmsubmitted, that is a risk ATC took when instructing Mr Black who had retired or atleast was winding down his practice. In any event, it is Mr Black's choice rather thana scheduling conflict that means that if the trial is to be rescheduled into 2025,ATC will need to find alternative counsel.[21] ATC has not filed any evidence indicating specific prejudice. I accept there isgeneral prejudice resulting from delay but in this money claim there is little prejudicegiven that interest accrues. The proceeding is not of an urgent nature. Given therelatively early stage of the proceeding, there is no issue of wasted costs.[22] I consider that the interests of justice favour changing the trial date.[23] Counsel's updated trial estimate remains five weeks although this wouldreduce if the strike out/summary judgment application by the first-named thirddefendant heard by Associate Judge Gardiner on 28 March 2023 is successful.[24] A five week fixture is now not available until May 2025. Mr Chisholm has athree week fixture commencing on 5 May 2025.[25] In relation to costs, in the circumstances I consider that each party bears someresponsibility and I decline to award costs.[26] Mr Black suggested consideration be given to assignment of the proceeding toa Judge. Whether that is appropriate is better considered following determination ofthe strike out/summary judgment application by the first-named third defendant.Result[27] I make the following orders:(a) The five week trial commencing on 29 October 2024 is vacated.(b) A new five week trial is allocated commencing on 3 June 2025.(c) There is no order as to costs.________________________________Gault JSolicitors / Counsel:Mr M C Black, Barrister, AucklandMr G Harford and Ms L M Wallace (plaintiff's instructing solicitors), Dawson Harford, AucklandMr D J Chisholm KC, Barrister, AucklandMr T Lindsay and Ms MBE Morrison (defendants' instructing solicitors), Lindsay & Francis,Auckland