SIEMER AND ANOR V FARDELL NO.2 HC AK CIV.2003-404-5782

SIEMER AND ANOR V FARDELL NO.2 HC AK CIV.2003-404-5782 18 July 2006IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV.2003-404-5782BETWEEN VINCENT ROSS SIEMER AND JANE CHAPMAN SIEMER First Plaintiffs AND PARAGON SERVICES LTD (FORMERLY KNOWN AS PARAGON OIL SYSTEMS LTD) Second Plaintiff AND KATHLEEN MARY FARDELL AS EXECUTRIX OF THE ESTATE OF JOHN ROBERT FORTESCUE FARDELL Defendant AND MICHAEL PETER STIASSNY AND FERRIER HODGSON Non-Parties Hearing: 26 June 2006 Counsel: Mr Siemer for plaintiffs A A Lusk QC and Helen Rice for defendant Judgment: 18 July 2006 at 10:00amRESERVED JUDGMENT OF WILLIAMS J [Re: Application for rescission of stay issued on 28 September 2005]This judgment was delivered by Hon. Justice Williams on18 July 2006 at 10:00ampursuant to Rule 540(4) of the High Court Rules..Registrar/Deputy Registrar Date: ... at am/pmA. There will be an order rescinding stay of this proceeding issued on 28 September 2005. B. The Registrar is requested to allocate a 2 week fixture for the hearing of this proceeding. C. There will be a telephone conference on 3 August 2006 at 9:00am.TABLE OF CONTENTS Paragraph Issue and Background [1] Pleadings and Other Litigation [5] Submissions [13] Discussion and Decision [19]____________________________________________________________________Issue and Background[1] On 28 September 2005 a temporary stay of this proceeding was ordered, largely on the ground that the plaintiffs had been unable to obtain legal representation despite Mr and Mrs Siemer's wish so to do and their being ordered by the Court to instruct solicitors and counsel to act for their company, Paragon Services Ltd. To be more precise, the claim was stayed until the plaintiffs obtained legal representation, identified who would be acting and counsel's availability for afurther fixture, the then substantive fixture fixed to begin on 7 November 2005 being vacated during the conference that day. [2] The claim was then against Mr Fardell QC personally. However, on 11 December 2005, Mr Fardell died and on 9 March 2006 an order was made, without objection on the part of the plaintiffs, substituting his widow as executrix of his estate as defendant. [3] On 22 February 2006, the defendant applied for an order that the stay be made permanent or, alternatively, rescinding the stay and directing that the claim be set down for hearing together with the usual consequential timetabling and similar directions. [4] This judgment deals with that application.Pleadings and Other Litigation[5] The case revolves around the affairs of Paragon Services (then known as Paragon Oil Systems) and a dispute between the directors of that company in October/November 2000. [6] As a result of the dispute, Mr Fardell was instructed to act for Mr and Mrs Siemer. The plaintiffs plead he advised them to issue oppression proceedings under the Companies Act 1993 s 174 and seek the appointment of a Mr Stiassny as Paragon's receiver. They claim that, for a variety of reasons, the advice was negligent and in breach of Mr Fardell's duty of care to the plaintiffs and seek damages of $750,000 for the loss of technology, receivers' and other fees, refund of Mr Fardell's fees, plus company expenses and interest. [7] They also plead Mr Fardell was in an undisclosed conflict of interest capacity as regards the receiver and failed to disclose information to them to the detriment of their interests. In a statement of claim lodged on 7 November 2005 – but not "filed" because of the stay – the plaintiffs also claim Mr Fardell failed to inform them he was simultaneously representing Mr Stiassny and advised Paragon to sign acompromise agreement with the receiver which was disadvantageous to Paragon and that Mr Fardell advised Paragon to confirm the settlement agreement some six months later. That statement of claim particularised matters said to support that plea. [8] The latest claim also asserts that Mr Stiassny sued Mr and Mrs Siemer on 11 April 2005 claiming approximately $1m in damages plus costs as a result of a claimed breach by those plaintiffs of the compromise agreement. [9] In his submissions in relation to the present matter, Mr Siemer advised that there has been a judgment in the receiver's claim including an allowance of solicitor- and-client costs, which, he said, totals about $200,000. However, he advised that an appeal on a number of grounds has been lodged against that judgment. [10] Mr Siemer has also, he said during submissions, been involved in the inquest into Mr Fardell's death. He said the Coroner recently made a finding in that regard and would issue reasons within a brief period. Mr Siemer hopes, he said, to be able to gain access to some of the inquest evidence when the reasons are released. [11] It should also be noted that the amendments to the claim in this proceeding result, at least in part, from discovery. Discovery has been a source of continuing difficulties throughout the history of this claim both as regards discovery by Mr Fardell and as regards discovery by Mr Stiassny and his firm, Ferrier Hodgson, as non-parties to this claim. [12] As regards the former, there have been disputes as to relevance having regard to the width of the plaintiffs' discovery requests plus allegations of inadequacy and partial discovery. Some of those issues have also arisen in relation to discovery by the non-parties, that topic being addressed by a judgment delivered contemporaneously with this.Submissions[13] For the defendant, Mr Lusk QC, its senior counsel, had, prior to the hearing, abandoned the application for permanent stay. The present stay should, however, hesubmitted, be rescinded and the case set down for hearing as soon as a 10-day fixture could be arranged. The defendant, he said, wished to have this long-standing claim determined without delay and could see no prejudice in so doing either to the plaintiffs or despite a lack of the defendant who would ordinarily be expected to be the defendant's principal witness. [14] He submitted that the issues raised by Mr Siemer in an opposing affidavit – final resolution of the inquest, further discovery and complaints concerning earlier interlocutory decisions - were all matters which could be satisfactorily dealt with before formal setting-down and trial, particularly when the case could probably not be heard until early 2007. [15] As an alternative, he submitted the stay should be rescinded as far as Mr and Mrs Siemer were concerned, even if it remained in place for Paragon unless it obtained legal representation prior to trial. [16] He sought orders to that effect and a conference once a fixture had been tentatively allocated in order to make the necessary timetable orders. [17] Mr Siemer's submissions dealt with a number of factual issues including settlement negotiations in which the plaintiffs apparently engaged after Mr Fardell's death out of "considerable sympathy for the defendant's family". He submitted that with other proceedings ongoing, further discovery was likely to emerge which would assist the plaintiffs in this case and, possibly, justify an increase in damages or joinder of at least one additional defendant. [18] He acknowledged that while most plaintiffs would welcome rescission of a stay against them in order to obtain a hearing to vindicate their claim, they, nonetheless, submitted this application should not be resolved for at least a month, partly because Mr and Mrs Siemer were about to depart overseas immediately following the hearing and partly because they wished to try to obtain the services of counsel who acted for them in the receiver's claim.Discussion and Decision[19] In most cases, death of a defendant's principal witness might be invoked to prolong a stay. However, such is not the case here since it is the defendant who seeks trial. [20] One of the principal underlying tenets of the High Court Rules is to ensure disputes and litigation can be resolved as swiftly and efficiently as possible. Here, as both Mr Siemer and Mr Lusk agreed, though for various reasons, the Case Management System has not served any of the parties well. The combination of those two points firmly in the direction of the stay being dissolved and the case being set down. [21] Mr Siemer's principal objections were based on extra discovery he was sure would come to light in this and other cognate litigation in which he is involved and lack of legal representation. [22] There is no basis in either of those grounds not to rescind the stay or set this long-standing case down for hearing particularly when, as discussed during the hearing, pressure of business at the Auckland Registry of this Court means, unfortunately, that it is likely to be a number of months, probably well into 2007, before a 2 week fixture can be arranged. It gives the plaintiffs ample time to deal with any outstanding interlocutory matters and arrange representation for Paragon and, if they wish, for themselves. [23] In any event, the possibility of additional documents of advantage to the plaintiffs becoming available in other litigation gives no ground for deferring the hearing of this case. [24] On that basis there will be orders : a) Rescinding the stay of this proceeding issued on 28 September 2005. b) Requesting the Registrar to arrange a 2-week fixture for the hearing of this case as soon as can practicably be arranged.c) There will be a telephone conference to deal with the costs of this application, timetabling and other procedural matters on Thursday, 3 August 2006 at 9:00am. Williams J will be on circuit in Whangarei that week and accordingly arrangements need to be made via the registry for him to join the conference from that location [25] As discussed during the hearing, delivery of this judgment was delayed to 18 July 2006 so as not to disadvantage Mr and Mrs Siemer through their absence overseas from 27 June 2006-21 July 2006. ..WILLIAMS JSolicitors: Heaney & Co (David Heaney/Helen Rice) P O Box 105-391 Auckland (Email: djh@heaneyco.com / hmr@heaneyco.com) McElroys, P O Box 835 Auckland (Email: peter.hunt@mcelroys.co.nz)Copy for:A A Lusk QC, P O Box 1379 Auckland (Email: aalusk@xtra.co.nz )Mr and Mrs V R Siemer, 27 Clansman Terrace, Gulf Harbour, Auckland – Fax: 09 428 2521( Email: vsiemer@hotmail.com )Tanusha Iyengar, High Court Auckland (Email : Tanusha.Iyengar@justice.govt.nz