PARKING NEW ZEALAND LIMITED V ABD TRUSTEES LIMITED AND ANOR HC AK CIV-2005-404-007397

PARKING NEW ZEALAND LIMITED V ABD TRUSTEES LIMITED AND ANOR HC AK CIV-2005-404- 007397 27 August 2007IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV-2005-404-007397BETWEEN PARKING NEW ZEALAND LIMITED Plaintiff AND ABD TRUSTEES LIMITED First Defendant AND PETER JOHN KENNEDY Second Defendant Hearing: 27 August 2007 Counsel: R A Smith for plaintiff P A Morten for defendant Judgment: 27 August 2007 at 12.32pmORAL JUDGMENT OF ASSOCIATE JUDGE ABBOTTSolicitors: Hesketh Henry, Private Bag 92093, Auckland Mail Centre Treadwells, PO Box 859, Wellington R A Smith, PO Box 911109, Auckland Mail Centre[1] The defendants have applied to strike-out the plaintiff's claim and or dismiss it for want of prosecution. The grounds are that the plaintiff has failed to comply with Court orders for bringing this matter to trial on three occasions, and general delay with the proceeding which is prejudicial to the defendants. [2] At the commencement of the hearing Mr Morten sought amendment to his client's application to rely on r258 of the High Court Rules (in addition to rr186 and 478). Mr Smith very appropriately acknowledged that the grounds set out in the application supported an application under r258. I made an order amending the application accordingly. [3] The plaintiff opposes the application on the ground that the plaintiff has a good arguable case and that it is in the interests of justice that it be heard.Background[4] This proceeding was commenced in December 2005. The statement of defence was filed in February 2006. The first case management conference was held on 30 March 2006. Counsel agreed at that conference that the proceeding could be given a hearing date. It was listed for a trial in the week commencing 16 October 2006. The setting down and pre-trial directions were expressly stated to be in accordance with the default provisions of the High Court Rules. These required the proceeding to be set down on 16 August 2006 and the plaintiff to file its briefs three weeks after that. [5] The plaintiff did not file its briefs in accordance with those directions. Counsel filed a joint memorandum in the first week of October 2006 asking that the trial date be vacated. Two particular reasons were put forward. One was that a judicial settlement conference which had been part held could not be resumed ahead of the trial date. The second was that the plaintiff was in breach of the timetable for provision of its evidence, and that was prejudicing the preparation of the defendants' evidence in response. The request for vacation of the trial was put before Williams J. In his minute of a telephone conference to deal with the request, he recorded that counsel for the plaintiff accepted the principal default in preparing for trial was thatof the plaintiff, and that it was not realistically possible to finalise and serve briefs of evidence in time for the trial (which at that point was only a week away). The Judge also recorded counsel's advice that one of the plaintiff's briefs had been prepared but two others were not yet complete. [6] Understandably Williams J accepted that the trial could not proceed. He vacated it and directed that a further three day fixture be allocated as soon as practicable. In his directions he also stipulated:The parties are to comply with the rules concerning the service of briefs and preparation for trial in accordance with the new fixture date. [7] A further trial was scheduled to take place in the week commencing 14 May 2007. On 12 April 2007 the solicitors acting for the plaintiff applied for leave to withdraw as solicitors. The grounds were that they were unable to obtain instructions. At that time the plaintiff was again in breach of timetable for delivery of its briefs. [8] Immediately after being served with that application the defendants applied for an order striking out the plaintiff's claim. The grounds included failure to prosecute so as to bring the matter to trial on the re-scheduled trial date, prejudice and embarrassment to the defendants in preparation of their defence and likelihood of a further adjournment, and the failure to comply with the direction of Williams J at the time of vacating the previous trial. [9] An order was made on 20 April 2007 that the plaintiff's previous solicitors ceased to be solicitors on the record as at that date. Shortly afterwards the defendants filed a memorandum requesting a vacation of the trial scheduled to commence in the week of 14 May 2007 on the grounds that the plaintiff's briefs had still not been served, and there was inadequate time for the defendants to respond. The memorandum noted that the plaintiff's briefs should have been filed on or before 9 February 2007 in accordance with the default provisions (under r441B) of the High Court Rules. The defendants' memorandum also recorded that the defendants wished to proceed with their application to strike-out.[10] On 27 April 2007 the List Judge, Potter J, directed that the trial in the week of 14 May 2007 be vacated. She recorded in her minute that the briefs were due to be filed by 9 February 2007, and noted the evidence provided by the second defendants (in an affidavit sworn in support of their application to strike-out) that they were prejudiced by the failure to serve briefs and to prosecute the claim. The trial was adjourned to the week commencing 17 September 2007. The defendants' strike-out application was listed for call in a Chambers List on 25 May 2007 and the plaintiff's attention was drawn to the need to file notice of opposition and any affidavit supporting it. [11] On 24 May 2007, the day before the Chambers List hearing, the plaintiff filed its notice of opposition (to an amended application to strike-out that had been filed on 15 May 2007). The grounds for opposition, as I have already mentioned, were that the plaintiff had a good arguable case and that it was in the interest of justice that it be heard. The grounds also included the fact that the plaintiff had instructed new solicitors and counsel, was in a position to serve its briefs of evidence at short notice. The notice added that reasons for the delay in providing its briefs had been given in an affidavit of the general manager of the plaintiff, Mr Tolley. An affidavit by Mr Tolley, sworn on 24 May 2007, was filed in support. Mr Tolley referred to miscommunication between himself and his previous solicitors as to finalising an expert's brief of evidence, but stated that that brief and his own were "substantially completed and only require a small amount of work to be complete". He took issue with the evidence in support of the application by his former solicitors to be removed from the record that they have been unable to obtain instructions, and commented that although they had informed the plaintiff that its briefs of evidence were due (on 21 March 2007) they had not informed him of the potential consequences of not meeting that date. He went on to say that the plaintiff had instructed new solicitors, wished to proceed with his claim, and was "fully appraised of the consequences of meeting Court timetabling". [12] The only evidence since has been an affidavit filed on behalf of the defendants, taking issue with Mr Tolley's view on the reasons for the adjournment of the earlier trial. The point made was that although reference had been made to that trial being adjourned because of the inability to complete the judicial settlementconference, the primary reason for the defendants consenting to vacation of the earlier trial was that they had been forced to do so as they were otherwise prejudiced in the preparation of their defence. [13] The defendants' application for strike-out was scheduled for hearing today. No further documents have been filed in relation to this application other than a synopsis of argument on behalf of the defendants filed last Thursday. Counsel for the plaintiff has not filed a synopsis. However, the plaintiff served a brief of evidence by Mr Tolley late on Friday. Counsel for the plaintiff informed me in the hearing that the plaintiff is no longer intending to call expert evidence. [14] The third scheduled trial of this proceeding is due to commence in the week of 17 September 2007. The defendants say that they will not be in a position to prepare briefs in time for that trial.Principles[15] Counsel are agreed on the basic principles on this application (regardless of the rule under which the application is brought). They are that the Court must have regard to the interest of justice. The plaintiff has to be guilty of inordinate and inexcusable delay, which has prejudiced the defendants (although this latter aspect applies differently depending on the basis for the application). [16] As mentioned, at the outset counsel for the defendants sought amendment of the grounds for the application to include r258 of the High Court Rules. The relevant parts of that rule read :258 Enforcement of interlocutory order (1) If a party fails to comply (the party in default) with an interlocutory order, the Court may, subject to any express provision of these rules, make any order that it thinks just. (2) The Court may, for example,— (a) if the party in default is a plaintiff, order that the proceeding be stayed or dismissed as to the whole or any part of the relief claimed by the plaintiff in the proceeding:(b) if the party in default is a defendant, order that the defence be struck out and that judgment be sealed accordingly: (c) order that the party in default be committed: (d) if any property in dispute is in the possession or control of the party in default, order that the property be sequestered: (e) order that any fund in dispute be paid into Court: (f) appoint a receiver of any property or of any fund in dispute.The application and issue arising[17] The significance of seeking this amendment can be seen in the two pronged argument put forward by counsel for the defendants. The general principles to which I have just referred apply more particularly to rr186 and 478. However, counsel argued that there was also a compelling argument in this case for failure to comply with Court orders. He referred to tension between case management rules as a means to an end or an end in itself, but argued that, however one looked at that, in the present case the plaintiff's behaviour had to be regarded as a wilful or contumelious disregard of procedure sufficient to warrant striking out under r258. As I understand his argument, he recognised that the prejudice which the defendants rely upon (the continuing Sword of Damocles of these proceedings) was potentially answerable by the fact that the plaintiff's single briefs of evidence was served late last Friday. However, he argued that that was not an answer to principles that have developed in cases regarding the failure to comply with Court orders. [18] The issue in the present case, in my view, is whether the plaintiff can be said to have wilfully disregarded the Court orders.What amounts to wilful disregard?[19] Counsel referred me to slightly differing authority as to the approach that the Court takes to non-compliance with timetabling orders. The first of these approaches, can perhaps be regarded as the "hard line" approach. It can be found in the decision Butler v Li (1997) 12 PRNZ 23. In that case Giles J pointed out that these orders, notwithstanding their procedural nature, are orders of the Court whichcounsel and parties are expected to comply with. The purpose of the orders, and other case management processes such as directions conferences, is to ensure that opposing parties receive prompt compliance with directions in the interlocutory stages, so that the Court can get to the real merits of the case. He pointed out that r277 (the precursor to r258) was designed to deal with deliberate default. The following passage is of particular relevance for the present application:All judicial officers are conscious of the need to keep the interests of justice paramount, but justice delayed is justice denied and the procedural requirements of the Rules have as their very purpose the object of ensuring that the substantive merits are addressed sooner rather than later. Where a party is unable, for good and proper reason, to comply with a Court ordered timetable, then professional courtesy requires that opposing counsel be informed as to the reasons and that a formal application supported by affidavit evidence be put before the Court seeking an indulgence.[20] The less harsh view of the rule can be found in the approach of (William) Young J in Prokofyev v Karelrybflot (1998) 12 PRNZ 510. The critical part of the judgment in that case for the purpose of the present application reads:For my part I continue to think that judges should regard the procedures of the Court as a means to an end and not as an end in itself. On that basis I propose to deal with the present application on the conventional basis that, leaving aside the special case of an unless order, the jurisdiction to strike out for non-compliance with interlocutory orders is exercisable where there is wilful (or contumacious) default or where there is serious prejudice.[21] The Judge went on to address what was meant by contumaciousness, by referring to his earlier decision in Lees Trading Co (NZ) Ltd v Loveday, Young J, HC Christchurch CP70/96 3/6/98 where he said that wilful default meant more than just knowing there was an order and not in fact complying with it. In the Lees case he found that there had been an attempt to comply with the order although insufficient time and resources had been committed to the task to ensure that it was done within the specified time. [22] In both these cases the Court found that the conduct complained about was insufficient to warrant striking out. This was notwithstanding the view taken inProkofyev v Karelrybflot that failure to comply with the timetable order in that case was "quite extraordinary given the background". The background was in essence a very tight timetable leading to trial, and little or no evidence of a real attempt to comply with a deadline set by the Court.[23] Counsel for the defendants also referred me to two other decisions on applications to strike-out for failure to comply with discovery orders:Commonwealth Reserves LC v Chodar & Ors [2001] 2 NZLR 374 and Hopman v Peka High Court Auckland, CP 132/94, 24 April 1998, Cartwright J. InCommonwealth Reserves Glazebrook J noted that a case had either to be within the category of contumaciousness or contumelious conduct as identified in Lees, or there had to be some substantial prejudice through the non-compliance. She noted that in many cases the first step should be an "unless" order. She also noted the comments by Cartwright J in Hopman v Peka that there was an increased willingness to strike- out defaulting parties over recent times. Glazebrook J made an order striking out on the basis of clear disregard for processes of the Court, persistent failure to provide any explanation of failure to comply, and no evidence of any attempt to comply with the order (as well as on the basis of a prima facie case against the struck out party).Application of facts to the principles[24] The plaintiff's failure to provide its brief of evidence until last Friday can only be described as extraordinary in light of the very clear direction of Williams J on 9 October 2006 and the statements made on behalf of the plaintiff when that failure again came under the spotlight in April of this year. Its notice of opposition to the present application was put explicitly on the basis it was in a position to serve its briefs of evidence at short notice. That was in the context that it was seriously in breach of the direction given by Williams J, in turn after an earlier breach. In his affidavit in support of that notice of opposition Mr Tolley noted that both his own brief, and that of an expert, were substantially complete with only a small amount of work still to do. As I have already mentioned, Mr Tolley stated that the plaintiff was now fully appraised of the consequences of not meeting Court timetabling. [25] The lack of action since then is unexplained, and inexplicable. It is open to question whether Mr Tolley's explanation of delay up to that point was sufficient, but it was likely to have been found to be so had the briefs been provided. Circumstances can change, but if so it is to be expected that there would at the very least have been an updating affidavit explaining those difficulties. Counsel alsohave an obligation to approach the Court and seek extension if a timetable cannot be met. There has been nothing done under either head. [26] I have to consider whether this amounts to wilful disregard of Court orders, being first the express order of Williams J on 9 October 2006, and then the "default" orders under the High Court Rules. If the recent failure was the first, or even the second, occasion of default I may have been prepared to have accepted that it was not wilful, but a consequence of bad management, capable of being answered in costs. However, when it is the third occasion, and committed against a background where a party has said expressly that it is fully appraised of consequences of timetabling, I am led to the view that the proper inference to be drawn is that the plaintiff was conscious of the breach and chose to do nothing. That inference is supported, in my view, by the lack of any approach to the Court for extension to the timetable, or any updating affidavit. [27] In the particular circumstances of this case I find that there has been wilful disregard of the Court orders sufficient to warrant striking out of the claim.Decision[28] I make an order under r258 of the High Court Rules striking out the plaintiff's claim.Costs[29] The defendants seek costs. Counsel for the plaintiff has indicated that his client is likely to seek review of this decision. Certainly he will want an opportunity to consider that. Rather than fix costs now, or call for early delivery of memoranda in light of that, I propose deferring filing of memoranda until time for any application for review has expired. [30] The defendants are to file and serve any memorandum seeking costs within twenty-one days of today. The plaintiff is to respond within a further fourteen days.These directions will be suspended if the plaintiff applies for review of this decision, pending determination of any such application. _________________________Associate Judge Abbott