DENIS WILLIAMS BAIRD, BARBARA JOHN BAIRD AND ANDREW OLIVER THOMAS BAIRD V AMP LIFE LIMITED HC WN CIV 2010-485-636

DENIS WILLIAMS BAIRD, BARBARA JOHN BAIRD AND ANDREW OLIVER THOMAS BAIRD V AMP LIFE LIMITED HC WN CIV 2010-485-636 24 February 2011IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYCIV 2010-485-636BETWEEN DENIS WILLIAMS BAIRD, BARBARAJOHN BAIRD AND ANDREW OLIVERTHOMAS BAIRDFirst PlaintiffsAND DENIS WILLIAM BAIRDSecond PlaintiffAND AMP LIFE LIMITEDFirst DefendantAND FLEUR ELIZABETH CHAPMANSecond DefendantAND CHAPMAN TRIPPThird DefendantHearing: 24 February 2011Counsel: [ ] for Applicant[ ] for RespondentJudgment: 24 February 2011JUDGMENT OF RONALD YOUNG J(Application to grant leave to file a statement of defence to amended statement of claim and counterclaim and ancillary orders)Introduction[1] In the existing pleadings in this case the plaintiffs say they are the owners of two AMP Life policies relating to James Baird who died in August 2009. Mrs Chapman, the second defendant, says she is the owner of the policies. A trial is due in early April 2011. Mrs Chapman now seeks orders from this Court to file a statement of defence to the amended statement of claim and to file a counterclaim. The first and third defendants have taken no part in this interlocutory hearing, the third defendant agreeing to abide the order of the Court. These applications have been made now that Mrs Chapman has instructed new lawyers.[2] The plaintiffs do not object to the filing of a statement of defence to the amended statement of claim, nor to the first part of the counterclaim which relates to orders against AMP. This is conditional upon several matters which I will deal with at the end of this Judgment.[3] The real issue is whether I should allow Mrs Chapman to file a counterclaim against the second plaintiff and Mrs Barbara Baird (one of the first plaintiffs) relating to their use of a bank account in James' name.[4] The proposed counterclaim alleges that although Dennis and Barbara Baird had authority to operate this bank account they were doing so as trustees or agents for James. While they were the only signatories on the account prior to James turning 21, after he turned 21, they and James could both access the account. DuringJames' lifetime and for a short time afterwards Mrs Chapman alleges that Mr and Mrs Baird withdrew $58,000 from this account and wrongly converted the money to their use.Submissions and Discussion[5] Mrs Chapman accepts that should I allow her to file this counterclaim then the fixture allocated for three days for the week of 4 April could not proceed. Additional hearing time would be required and it is unlikely that either party wouldhave sufficient time to adequately investigate and prepare briefs covering the new counterclaim before 4 April 2011.[6] Mrs Chapman says, however, that while such a delay is to be regretted there is no prejudice to the plaintiffs. The proceeds from the AMP policies are being held until this litigation is resolved. The litigation itself has had a relatively speedy run, the proceedings were filed in April 2010 and Mrs Chapman served (overseas) in July 2010. This is not a case, therefore, where there has already been substantial delay.[7] Mrs Chapman's case is that the existing proceedings and the proposed counterclaim are inter-related. She says that the way in which the Bairds dealt with the insurance policies is reflected in the way they dealt with the bank account. Although in both they had an obligation to use it for James' benefit and welfare they did not do so.[8] Mr and Mrs Baird reject the claim that there is any inter-relationship between the two claims. They are quite separate. The AMP claim concerns the rightful owner of the proceeds of the insurance policies, the other whether Mr and Mrs Bairdoperated James' bank account for his welfare and benefit.[9] The Bairds say there are other factors against allowing a counterclaim to be filed. If the counterclaim cannot be heard with these proceedings it can be heard separately. The Bairds submit that difficult limitation issues may arise and potentially different limitation issues for some of the alleged 18 withdrawals that make up the $58,000 claim. Resolving these issues may further delay the trial.[10] The Bairds are concerned they could face increased costs especially from Chapman Tripp at an extended trial.[11] Finally the plaintiffs say the applicant has known about the claim for some time and could have made the application earlier.[12] In summary the plaintiffs view is that there is no good reason to allow the counterclaim to be heard as part of this trial and to do so would unfairly hijack these proceedings.[13] I have decided that on balance it better reflects the interests of justice to allow the counterclaim to be filed and heard with these proceedings. The insurance policy and bank account claims are related. They involve common parties and both arisefrom (in part) the actions of the trustees with respect to James' property. They have sufficient in common to make it more efficient to hear the cases together. There is no obvious prejudice to the plaintiffs in the inevitable delay this will bring other than the understandable disappointment of delay. While potentially difficult limitation issues do arise and will have to be resolved with respect to the bank account claim, this is a neutral factor. These issues will have to be resolved between the parties at some time.[14] As to the potential additional costs incurred by Chapman Tripp (if the Bairds lose their claim) which might be payable by the Bairds, if the Bairds succeed against Mrs Chapman and her counterclaim then the Bairds can expect a costs order in their favour against Mrs Chapman which reflects any extra costs faced by them in relation to Chapman Tripp. I am satisfied that there has been no delay on Mrs Chapman'sbelief once she received competent legal advice.[15] While I accept it is a close run decision given the connection between the two cases and the two parties I am satisfied it is in the interests of justice that they be heard together.[16] I therefore make the following orders:(a) leave is granted to Mrs Chapman to file and serve a statement of defence to the amended statement of claim within seven days from the date of this judgment;(b) leave is granted to Mrs Chapman to file and serve the two counterclaims within seven days from the date of this judgment;(c) all documents should comply with the relevant rules as to pleading especially with respect to particulars of defence or claim;(d) as to the counterclaim relating to the insurance policies Mrs Chapman will give particulars of the claim for special damages;(e) the plaintiffs shall file their defence to the counterclaim a further seven days after service of the claim;(f) the plaintiffs have leave to issue a third party notice, arising from the counterclaim, against Chapman Tripp;(g) as a result of these orders the trial to commence 4 April 2011 is adjourned;(h) I approve all necessary consequential steps that need be taken by the parties as a result of these orders. For example, the filing of further briefs and further discovery. Any dispute as to the extent of this order can be referred to the Court;(i) the parties should agree upon a further timetable to trial and an estimate of trial time and advise the Registrar;(j) Mrs Chapman has filed supplementary discovery. I retrospectively approve the filing of such a document;(k) the plaintiff's are entitled to costs on this application in thecircumstances which I fix at $1,500 plus disbursements;(l) leave is reserved to either party to apply further should that be necessary.______________________________Ronald Young JSolicitors:I Millard QC, Barrister, PO Box 1530, Wellington, email: ian.millard@chambers.co.nzG J Thomas, Thomas Dewar Sziranyi Letts, PO box 31240, Wellington, email: