POLICY MANAGEMENT LIMITED V THE COLONIAL MUTUAL LIFE ASSURANCE SOCIETY LIMITED HC WN CIV-1996-485-1

POLICY MANAGEMENT LIMITED V THE COLONIAL MUTUAL LIFE ASSURANCE SOCIETY LIMITED HC WN CIV-1996-485-1 21 December 2005IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY CIV-1996-485-1BETWEEN POLICY MANAGEMENT LIMITED Plaintiff AND THE COLONIAL MUTUAL LIFE ASSURANCE SOCIETY LIMITED Defendant Hearing: 13 October 2005 Appearances: K.J. Crossland for Plaintiff J.L. Land and P.P. Buetow for Defendant Judgment: 21 December 2005 In accordance with r540(4) I direct the Registrar to endorse this judgment with a delivery time of 3.15pm on the 21st day of December 2005.JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL Introduction[1] The defendant applies to strike out the plaintiff's Statement of Claim for want of prosecution and/or failure to pay a security for costs award. The application is made pursuant to Rule 478 High Court Rules. [2] The stated grounds for the application are:a. There has been an inordinate delay by the plaintiff in the prosecution of its claim, there having been no step taken in the proceedings since the proceedings were stayed in May 1997. b. The delay is inexcusable.c. The defendant has been seriously prejudiced by the delay. d. The plaintiff did not comply with Master Thomson's order dated 27 May 1997 to pay security for costs of $60,000 into Court within 14 days and has at no time since paid such security for costs. e. In his order dated 27 May 1997 Master Thomson directed that the order for security was not to inhibit the defendant's right to apply for the plaintiff's claim to be dismissed if security was not paid within the 14 day time limit. f. It is in the interests of justice that the claim be dismissed.[3] The application is opposed by the plaintiff.Background[4] These proceedings arise out of the sale and marketing of life insurance policies by two of the defendant's insurance agents, Jason Investments Limited ("Jason") and Lindale Financial Services Limited ("Lindale") between 1990 and 1995. [5] During that period the defendant issued a considerable amount of life insurance through Jason (whose principal was a Mr Alan Lambourne)("Mr Lambourne") and Lindale (whose principal was Mr John Handley) ("Mr Handley"). [6] The policies were written pursuant to certain Agency Agreements. Lindale's obligations under these Agency Agreements were guaranteed by Mr Handley. Jason's obligations were guaranteed by Mr Lambourne. [7] The particular life insurance policies marketed and sold by Jason and Lindale included Whole of Life Policies and Life Wise Policies which were sold to a number of employer companies. The insurance was over the lives of employees of the employer companies under "Group Employee Schemes".[8] Under the Agency Agreements the insurance products sold by Jason and Lindale attracted high upfront commissions and bonuses. The defendant was obviously concerned about the nature, funding and sustainability of this insurance business, and it states that it required the business to be long term so that it could reduce its exposure to a loss in the early years of the policies in the event of mass surrenders. [9] The defendant states that it was advised by Jason and Lindale that the business was long term. Further information was provided by them which the defendant said gave it the initial comfort that the business was sustainable on a long term basis. The defendant complains, however, that the full position was never disclosed to it. [10] The insurance business written by Jason and Lindale apparently grew at an exponential rate. By August 1995 apparently in excess of 3,500 policies had been sold. [11] In late 1994 and early 1995 the defendant states that it became concerned about the business and requested from Mr Handley information about the arrangements behind the policies, and an explanation as to why the insurance was proving so popular. [12] The defendant states that Mr Handley's response was limited and unsatisfactory. In August 1995 the defendant terminated the Agency Agreements with Jason and Lindale. [13] Immediately following this termination, apparently all premium payments ceased on the huge number of insurance policies sold by Lindale and Jason. [14] It was only then that the defendant says it discovered more information about how the policies sold by Jason and Lindale were marketed and funded. [15] The defendant says it thought that the insurance being sold was on the lives of individual employees with their employers being the policyholders and paying thepremiums. The defendant also thought that the business was long term, and that there was sustainable funding, but this was clearly not the case. [16] Unknown to the defendant, it says at the time the policies were written: a) The life insurance policies were sold to employer companies on the basis that they were "free" to those companies and to the persons whose lives were insured. The arrangement was that there was no need for either employer companies or the lives insured to pay any premiums. b) Instead the great bulk of the commissions paid by the defendant to Lindale and Jason were used for the payment of premiums. (Jason and Lindale apparently paid the commissions to South Pacific Treasury Limited who in turn paid a large portion on to the plaintiff for the funding of the premiums). c) The employer companies who employed the lives insured were not the policyholders. The policyholders instead were separate companies who often had company names similar to the names of the employer companies. But they were in fact "shelf companies" in which a Mr Manu Bhanabhai, the then sole director of the plaintiff company, was the principal shareholder. The policies were thus beneficially owned by the plaintiff company or entities related to it. [17] The defendant states it was not told the policies were all part of one scheme in which the plaintiff was the beneficial owner of all policies, and that the different employer companies (or their employees) were not the owners. On the contrary, the defendant contends that it was given the clear impression that there were separate arrangements for separate employer companies. The defendant says it was also not told that the great bulk of commissions were being used to pay premiums, and that the lives insured and employer companies were paying nothing. It says that if it had been told this, it would have had concerns first, as to the sustainability of premiumpayments, and secondly, because what was being done was quite against acceptable practice. [18] When the premium payments on the policies ceased in August 1995, the defendant was entitled to lapse those policies and under its agency contracts with Lindale and Jason to claim back commission paid to the agents. [19] In January 1996 lapse notices were sent out on approximately 2,900 of the 3,518 policies. [20] In February 1996 the defendant issued summary judgment proceedings against Lindale and Mr Handley for the payment of commissions previously paid by the defendant to Lindale under the Agency Agreements ("the Lindale proceedings"). The amount claimed was approximately $30M (including interest). [21] At about the same time the defendant issued summary judgment proceedings against Jason and Mr Lambourne also for repayment of commissions previously paid by the defendant to Jason under the Agency Agreements ("the Jason proceedings"). [22] Shortly after the defendant had issued these proceedings for the recovery of commission paid to Lindale and Jason, the plaintiff issued the present proceedings as summary judgment proceedings against the defendant. [23] These proceedings comprise three claims by the plaintiff for: (1) Breaches of the Life Insurance Act 1908 by the defendant, including alleged non-appointment by the defendant of a general agent under s34 of that Act. The plaintiff has sought a declaration that the defendant was unable to lapse the plaintiff's policies (being a block of 3,500 policies sold by Lindale and Jason) for non-payment of premiums, and a declaration that those policies are valid and binding. (2) Money had and received. Following on from the Life Insurance Act 1908 claims, the plaintiff contends that premiums were paid bypolicyholders under a mistaken belief that the defendant was entitled to recover the premium payments. (3) Misleading and deceptive conduct, particularly in relation to the operation of clauses in the life insurance policies sold by Jason and Lindale relating to Early Reduction Fees and partial cash withdrawals. [24] Immediately thereafter, in May 1996, the defendant applied for security for costs against the plaintiff. [25] In a judgment given on 27 May 1997 on the security for costs application Master Thomson ordered that the plaintiff within 14 days pay the sum of $60,000.00 for security for costs up to the trial date, that the proceedings be stayed until the order was complied with, and that the order for security for costs was not to inhibit the defendant's right to apply for the plaintiff's claim to be dismissed if security was not paid. Security for costs was not paid within the 14 day period, and since that time it remains unpaid. [26] In the meantime, the Lindale proceedings and the Jason proceedings had been the subject of further applications before Master Thomson, and in part an appeal to the Court of Appeal. This culminated in a judgment of Master Thomson in March 1997 granting the defendant summary judgment against Lindale and Mr Handley. This judgment was appealed to the Court of Appeal and the appeal heard in December 1997. The Court of Appeal dismissed Lindale's appeal against liability, but allowed the appeal in respect of quantum. [27] In 1997 the Jason proceedings were settled. [28] No steps have been taken on the present proceedings brought by the plaintiff since May 1997. [29] From 1997 onwards, various steps were taken, however, on the Lindale proceedings (primarily related to discovery by the defendant and Lindale, and non- party discovery against the plaintiff and others).[30] In April 2001 the defendant issued separate proceedings in the Auckland High Court against Lindale, Mr Handley, South Pacific Treasury Limited, Mr Henderson, the plaintiff, and Mr Bhanabhai for unlawful means conspiracy ("the conspiracy proceedings"). [31] From 2001 to 2004 the Lindale proceedings and the conspiracy proceedings were subject to case management by the Auckland High Court, and a number of interlocutory applications were filed. [32] In June 2004 a Settlement Conference was held in the Auckland High Court in relation to these proceedings, but it did not result in either proceeding being settled. [33] In August 2004 the Auckland High Court directed that both the Lindale proceeding and the conspiracy proceeding were to be heard consecutively on a date after 1 March 2005, and timetable orders were made in preparation for trial. [34] In late September/early October 2004 discussions took place between the parties which culminated in the defendant discontinuing the conspiracy proceedings on an agreed basis with the defendants, and in October 2004 the Lindale proceedings were settled. The defendant contends that it did this against the backdrop of no steps having been taken on the present proceedings since 1997, and there being no suggestion or indication that the plaintiff would be taking any further steps on these proceedings. [35] In late March 2005 the defendant filed the present application to strike out the plaintiff's claim for want of prosecution. [36] In April 2005 the plaintiff opposed this strike out application. After eight years of what appears to have been complete inaction on the present proceeding, the plaintiff said that it was now in a position to take further steps. In fact it seems no further steps other than preparation for the hearing of this strike out application have been taken up to the hearing of this matter in the seven months since April 2005.[37] At the hearing of the present application, however, Mr Crossland for the plaintiff stated that "the plaintiff has now arranged to secure the needed security". According to Mr Crossland, this amount was to be deposited into his firm's solicitor's Trust Account, although at paragraph 6.5 of his submissions before me he stated:Counsel will advise when funds (the $60,000) are cleared in Stace Hammond's account and any order can made (sic) conditional on this being confirmed within a few days.[38] It is clear that notwithstanding the impending hearing of the defendant's strike out application, the plaintiff has still not been in a position to confirm that the order for security for costs made by Master Thomson in May 1997 had been complied with. [39] In summary, the defendant's position is that the plaintiff: a) Has failed to provide further particulars of its claim which were requested nearly nine years ago on 16 December 1996. b) Has not complied with the order for security for costs of $60,000 made on 27 May 1997. c) Has taken no further steps on these proceedings since May 1997 (other than its response to the defendant's present strike out application).Discussion[40] The present application is made pursuant to Rule 478 High Court Rules which states:478. Application to dismiss for want of prosecutionWhere the plaintiff fails to prosecute his proceeding or any part thereof, or the defendant fails to prosecute his counterclaim or any part thereof, to trial and judgment, any opposite party may apply to have the proceeding orcounterclaim, or such part thereof as aforesaid, dismissed, and the Court may, on such application, make such order as may be just.[41] The basic principles under Rule 478 are well settled. The applicant must show: (1) The plaintiff has been guilty of inordinate delay. (2) Such delay is inexcusable. (3) The delay has seriously prejudiced the defendant. [42] In considering these matters, the Court is to look at the overall justice of the case – New Zealand Industrial Gases Ltd v Andersons Ltd [1990] NZLR 53(CA). And the overriding consideration must always be whether justice can be done at trial despite the delay – Fitzgerald v Beattie [1976] 1 NZLR 265 (CA) and Commerce Commission v Giltrap City Limited (1997) 11 PRNZ 573 (CA).Inordinate Delay[43] Whether delay is inordinate must always depend upon the facts of each case – McGechan HR478.02. [44] In Tabata v Hetherington (1983) TLR 764 the English Court of Appeal stated:Inordinate meant a period of time which had elapsed which was materially longer than the time which was usually regarded by the Courts and the profession as an acceptable period of time.[45] The delay by the plaintiff here is over eight years. [46] The order for security for costs was made in May 1997, and has still not been complied with. Nor since then has the plaintiff taken any specific step in this particular proceeding until its response to this strike out application in April 2005.[47] Interestingly, as long ago as May 1997, delay on the part of the plaintiff at that time was noted. Master Thomson in his decision of 27 May 1997 on the security for costs application commented (at page 4):PML (the plaintiff) has not shown any enthusiasm to get on with the claim and as noted earlier, has failed to provide particulars of its Statement of Claim which were requested by the defendant as far back as December of last year. It appears that if the defendant is to obtain satisfaction it will have to make a formal order to the Court for such particulars to be supplied.[48] The events which are the subject of this proceeding occurred some ten to fourteen years ago. A delay here of over eight years since the last step in this proceeding is clearly inordinate. Mr Crossland, counsel for the plaintiff, in his written submissions on this application acknowledged as much when he conceded (at para 1.7) that:There has been very considerable delay.[49] I find, therefore, that the delay which has occurred here has been inordinate.Such Delay is Inexcusable[50] The defendant contends that the plaintiff's delay in this matter is clearly inexcusable. [51] As to this aspect, before me Mr Crossland again at paragraph 1.7 of his written submissions encapsulates the plaintiff's principal argument in opposition detailing why its delay in the matter should not be considered as inexcusable. This submission states:1.7 There has been very considerable delay. Looked at in isolation first impressions suggest PML is solely to blame for all the delay. But that is wrong. This wrong impression arises because CML's supporting affidavit (Lim) makes insufficient reference to this proceeding's part in the suite of proceedings of which it became a bit player, nor to other very extensive dialogue outside of the Court.[52] In response, the defendant contends that whilst the present proceedings arise out of the same factual matrix (the events that occurred between 1991 and 1995) as the Lindale proceedings, the Jason proceedings and the conspiracy proceedings, theyare clearly separate and different proceedings involving different claims and different parties in different Courts. [53] The Lindale and Jason proceedings were commenced in February 1996 to recover commissions previously paid by the defendant to each agent under the Agency Agreements. Judgment for liability was given in the High Court in March 1997 and the Court of Appeal in December 1997. [54] The conspiracy proceedings issued by the defendant in 2001 involved a claim for unlawful means conspiracy. There were no counterclaims by way of set-off by the plaintiff. The defences raised were similar to the defences raised in the Lindale proceedings. [55] Counsel for the defendant notes that around July 2001 the defendant agreed to a deferment of the Lindale and conspiracy proceedings to allow settlement discussions to take place at the time. He contends that these proceedings, however, were quite separate from the present proceeding. [56] Other reasons which the plaintiff appears to put forward to indicate that the delay here should be seen as excusable include: a) There was a delay while more evidence was gathered. The events concerned, however, took place between 1991 and 1995 and the plaintiff has at no time taken steps to obtain discovery from the defendant in this proceeding specifically. Further, given that this is a claim in part alleging misleading and deceptive conduct, the evidence in question presumably would already have been gathered when proceedings were issued. b) The plaintiff wanted to await the outcome of the Court of Appeal proceedings. As to this, the appeal was brought by Lindale and Mr Handley only and it related to a judgment of Master Thomson dated March 1997 which did not involve the plaintiff or the issues that are the subject of the plaintiff's claim. In addition, the Court of Appealproceedings were heard in December 1997 and a decision given in March 1998. Over 7 ½ years have passed since that date without the plaintiff having taken any further steps. c) The plaintiff was forced to prematurely file because of the Fair Trading Act limitation. The period that has elapsed, however, is now over three times the original Fair Trading Act limitation period and yet no steps have been taken. d) Changes in the law were nigh. I am satisfied that there were no changes in the law that had any impact on the events that occurred between 1991 to 1995 or the plaintiff's claim in relation to those events, and that the allegation that the plaintiff delayed while it sought clarification of the law is without merit. e) The plaintiff was undertaking a forensic analysis on behalf of itself and other policyholders regarding securities market malpractices. In my view, this is irrelevant here. As I have noted, the plaintiff's claim in these proceedings relates to specific events that occurred between 1991 and 1995. It is a claim made privately. The plaintiff is not a watchdog for the public for alleged insurance and security law malpractices. f) The defendant was being restructured. The plaintiff alleges that the present proceedings were directed against the restructure of the defendant and caused the plaintiff prejudice. The defendant's restructure and demutualisation, however, occurred after the present proceedings were brought and I am satisfied it is irrelevant. The plaintiff's causes of action are based on historic acts that occurred earlier. g) The defendant's actions delayed the plaintiff. The plaintiff alleges that it was delayed in taking steps because the defendant:i) Abused obligations of good faith and trust placed on it. ii) Breached fiduciary obligations. iii) Engaged in a litigation burning-off strategy. It seems these allegations are linked to its submissions on alleged security malpractices by the defendant. What is clear, however, is that the plaintiff or any other party could have brought a claim against the defendant if they had believed the defendant's actions over the last eight years breached any law. This has not occurred. There is no claim before this Court for breach of fiduciary duties or obligations of good faith. Further, it seems strange to suggest that the defendant delayed the plaintiff in that it prevented the plaintiff from paying the $60,000.00 security for costs ordered in May 1997, or that it prevented the plaintiff from providing the further particulars of its claim which were sought in December 1996. h) Settlement discussions were occurring. Without prejudice settlement discussions did take place on the Lindale and the conspiracy proceedings, but the defendant contends that there were no settlement discussions on the present proceedings – see Linley Wood affidavit 30 May 2005, para 7. In any event, it is clear that settlement negotiations do not excuse delay in progressing proceedings – NZ Industrial Gases Ltd v Andersons Ltd [1970] NZLR 58 at page 60, and Stewart v Grey River Gold Mining Ltd and West Coast Regional Council (HC CH, 19 December 1991, AS17/78, Master Hansen). [57] Weighing up all these matters, I reach the conclusion that the plaintiff's delay which has occurred here cannot be seen as excusable.Serious Prejudice to the Defendant[58] McGechan on Procedure notes at para HR478.04:HR478.04 Serious prejudiceThis factor is perhaps the most important, as it goes directly to the ultimate consideration of justice. In most if not all cases there is some prejudice arising from mere passage of time, dimming of memories, physical changes, etc. Situations can exist which are so badly affected by mere passage of time that an order can be made on that basis alone, but in 'most cases' Courts look for some 'special prejudice': NZ Industrial Gases Ltd v Andersons Ltd[1970] NZLR 58 (CA) at p63. The absence of serious prejudice was decisive in Commerce Commission v Giltrap City Ltd (1997) 11 PRNZ 573. The importance of delay can depend upon the character of the proceeding. Sufficient prejudice was made out in proceedings seeking relief against forfeiture 7 years after the forfeiture, where the party in possession had spent $150,000 on the property since that time: R H & P L Papps Ltd v Amity Inns Ltd (1997) 11 PRNZ 558.[59] Factors that need to be taken into account are: a) The age of the proceedingsHere the present proceedings commenced over nine years ago in relation to events which occurred up to 15 years ago. This is significant. b) The extent of the delayAs a general rule, the longer the delay the greater the likelihood of serious prejudice at trial – Allen v Sir Alfred McAlpine & Sons (1968) AllER 543 (CA) at 561. In the present case, the delay has been lengthy with almost 8 ½ years having elapsed since the last step in the proceeding was taken. By way of example, in Stewart v Grey River Gold Mining Ltd and West Coast Regional Council Master Hansen struck out proceedings delayed for eight years. c) Discovery and other steps in the proceeding taken by the partiesHere, no discovery has been undertaken and the pleadings are still to be finalised. Further particulars of the plaintiff's claim were requested a considerable time ago but have not been provided. Given the passage of time since the events in question occurred, there must be some risk that documents created over ten years ago may no longer be held. The defendant states that this is particularly so, as all the relevant personnel have left the defendant company and it has been the subject of a take-over in the meantime. d) The availability of witnesses and their need to recall evidenceAs McGechan on Procedure at para HR478.04 notes, this is an obvious but not necessarily decisive factor. The defendant states that unsurprisingly, there is no-one remaining at the defendant with direct knowledge of the events that occurred between 1991 and 1995. The plaintiff says, however, that it appears that no relevant witnesses have died. The defendant in turn counters that it is difficult to determine who the witnesses may be, as particulars are still to be provided of the representations alleged by the plaintiff. Further, according to the defendant, this lack of particulars has meant that witnesses were unable to be briefed in 1996 and contemporaneous documents previously held by any such witnesses may no longer be available. e) The complexity of the issues which witnesses are tending to recallThis ground was referred to in Lougher v Kissling (HC Rotorua, CP10/90, 22 February 1995, Master Kennedy-Grant). In Trill v Sacher (1993) 1 AllER 961 at page 980 Neil LJ noted that the prejudicial effect of delay may depend on the nature of the issues in the case. He said:Thus the evidence of an eye witness or of a witness who will testify to the words used when an oral representation was made is likely to be much more seriously impaired by the lapse of time than the evidence of someone who can rely on contemporaneous documents.Here, both parties accept the issues involved are complex. And given the allegations from the plaintiff relate to misleading and deceptive conduct, it is likely, therefore, that this warning noted in Trill v Sacher has significance here. f) Whether the limitation period has passedA number of cases refer to this as a material factor which often leads to striking out – see for example NZ Industrial Gases Ltd v Andersons Ltd at page 62. The key date in the limitation period relating to the plaintiff's Fair Trading Act claim is the time the conduct complained of occurred. This is likely to be during the period 1991 to 1995. At the latest, therefore, the limitation period for the Fair Trading Act claim expired in 1998, some seven years ago. g) The dimming of memories and the effect it will have on cross- examinationMcGechan on Procedure at para HR478.04(2) states:Delay is particularly important in a prejudicial sense when the case will depend wholly, or to an important extent, on oral evidence based upon recollection, as distinct from business records or other contemporary documentary evidence. The more important the overall evidence, the more critical the delay – Lovie v Medical Assurance Society NZ Ltd [1992] 2 NZLR 244Note Eichelbaum CJ's comments in Lovie at page 254: One needs to guard oneself against the danger of discounting the arguments based on the dimming of memories simply because often they cannot be adequately demonstrated. In Shtun v Zalejska (1996) 1 WLR 1270the English Court of Appeal was able to draw and rely on an inference of more than minimal prejudice to the defendant on impairment of a witness' recollections, caused by the plaintiff's delays.Before me, counsel for the plaintiff contended that with the related Lindale proceedings and the conspiracy proceedings still being on foot as late as 2004, this argument might have less force. Although there may be something in this contention, generally as I see it, the ability here to locate all relevantwitnesses and for those witnesses to recall must be affected by the significant delays which have occurred. h) The length of time the case will take to come to trialHere, pleadings have not been finalised, nor has there been discovery, inspection or other interlocutories. In this respect, the present case differs from those cases where applications to strike out have been made in situations where significant progress has been made in the particular case, and although there have been delays, the case was essentially ready to be set down. It is noteworthy that in Stewart v Grey River Gold Mining Ltd and West Coast Regional Council, Master Hansen struck out the plaintiff's claim for want of prosecution after an eight year delay, and amongst other things, he said that the trial would be some time off, even if the Court imposed strict timetable orders. i) There is prejudice in having an action hanging over one's head indefinitelyIn Biss v Lambeth Southwark and Lewisham Health Authority [1978] 2 AllER 125 (CA) Denning LJ at page 131 stated:There is much prejudice to a defendant in having an action hanging over his head indefinitely, not knowing when it is going to be brought to trial, like the prejudice to Damocles when the sword was suspended over his head at the banquet.As I see it, there is a strong argument that the circumstances prevailing in this case fit this description. j) Whether there has been any default by the defendantThe defendant contends that there has been no default on its part. Properly, no steps have been taken by the defendant since May 1997 because the present proceeding was stayed consequent upon Master Thomson's security for costs order.As Lord Diplock stated in Allen v Sir Alfred McAlpine & Sons at page 555:the defendant instead of spurring the plaintiff to proceed to trial can with propriety wait until he can successfully apply to the Court to dismiss the plaintiff's action for want of prosecution on the ground that so long a time has elapsed since the events alleged to constitute the cause of action that there will be a substantial risk that a fair trial of the issues will not be possible.Here, the added element of the plaintiff's long-standing failure to comply with orders of this Court exists as well. [60] The plaintiff's first two claims in this proceeding are based on allegations of breaches of the Life Insurance Act 1908. There was a hearing on these matters before Master Thomson on 26 June 1996. In his judgment given on 11 November 1996, Master Thomson indicated that the arguments raised by the plaintiffs on those issues were "completely devoid of merit at law, in equity and morally". Although the Court of Appeal later took issue with the approach Master Thomson had made in this case, those sentiments nevertheless stand. And that decision by Master Thomson on those aspects has not been appealed, nor have any steps been taken by any party on it. The defendant says it would therefore be prejudiced by having to incur the not inconsiderable costs of relitigating a matter that was addressed by this Court almost nine years ago, and which appears to have no substance. [61] As to the plaintiff's third cause of action based upon alleged misleading and deceptive conduct of the defendant under the Fair Trading Act, the defendant argues that bare allegations were made in the plaintiff's Statement of Claim which in breach of the High Court Rules did not provide the defendant with the material facts it needed to properly understand the claim made against it. [62] After Master Thomson's determination of the Life Insurance Act issues, the defendant requested further and better particulars of this Fair Trading Act claim. This was so information could be provided to enable the defendant first, to speak to the people involved and who sent or received the documents in question, and secondly to investigate the circumstances surrounding them. At the time those further particulars were sought, the events involved were relatively fresh.[63] Despite this, the request for further particulars still remains unanswered. As a consequence, in my view, there is a reasonable argument that the defendant has been significantly prejudiced here since some ten/fifteen years have passed after the events in question occurred. [64] The defendant argues that with the related Lindale and conspiracy proceedings still being on foot as recently as 2004, this argument on the part of the defendant has less force, as no doubt the defendant might have briefed appropriate witnesses for those proceedings. [65] Again, although there may be something in this argument, it does not answer the full force of the defendant's complaint, given that the present proceedings are different and separate proceedings of considerable complexity, they involve different parties and in part, different situations which all occurred over a decade ago. [66] The plaintiff's claim that much of this proceeding will turn upon documentary evidence. The defendant notes, however, that historically there were literally thousands of documents involved in this case spanning a four year period, some of which may now be unavailable. And, in any event, the defendant contends first, that this is not likely to be a case determined solely on the documents, and secondly, the prejudice created by the delay which has occurred when the Court comes to consider the oral evidence which will be necessary has reached a level which means that justice is unable to be done here. [67] The defendant raises a further argument as to prejudice. It says that it would be prejudiced if this litigation continues, because it would be unable to issue claims against the defendant, Lindale, Mr Handley, Jason, Mr Lambourne, Mr Bhanabhai, SPT and Mr Henderson in relation to the events that occurred between 1991 and 1995 because of the settlement terms upon which earlier discontinuances were reached and Limitation Act issues. As I have noted earlier, in her affidavit for the defendant Linley Wood deposes (at para 9) that the defendant in reaching these settlements:did this against the backdrop of PML not having taken any steps on the PML proceedings since 1997 and there had been no suggestion or indication that PML would be taking any further steps on those proceedings.[68] Because of those earlier settlements and the provisions of the Limitation Act, the defendant says it would be unable now to issue claims against those other parties. [69] Although this is not a telling factor, in my view, it does have some relevance to the issues before me. [70] Although it is true that a Court must be slow to deprive a litigant of its right to substantively prosecute a viable cause of action unless there is a good reason for doing so, in recognising this important right, the Court must of course balance this against the countervailing value of not having defendants unfairly facing stale claims. [71] In considering all the factors I have outlined above and the particular circumstances and the overall justice of the present case, I am satisfied that the defendant has established that it would suffer serious prejudice here if the plaintiff was to continue with this proceeding. In my view, this is a situation which, in the words of Master Hansen in Stewart v Grey River Gold Mining Ltd and West Coast Regional Council, is one where:Justice entitles thedefendant to be freed from the burden and oppression of this stale litigation.[72] In summary, for the reasons I have outlined above, I find that this is a case where: (1) There has been intentional non-compliance by the plaintiff with the Court order of Master Thomson for payment of security for costs. This was an order issued in strong terms, and it reserved the defendant's right to apply to dismiss the claim if the plaintiff did not pay security, which is what it has done here. The security has been outstanding now for over eight years.(2) The delay in this case since a last step was taken has been significant – some eight and a half years. This is in light of the background to this proceeding, which relates to events which are some ten to fifteen years old, and given also that this is a case where oral evidence will clearly be required. The plaintiff's explanations for this delay, in my view, are not convincing. (3) The plaintiff has failed to provide the further and better particulars of the Fair Trading Act claim sought some time ago, and the defendant has to some extent been prejudiced by this failure, given its inability to address these issues, and to find witnesses and relevant documentation. (4) The defendant has settled other related proceedings upon the assumption that this stale proceeding was at an end. Given the terms of those settlements, and issues surrounding the Limitation Act, the defendant's ability to itself take action against parties in relation to the present issues would be compromised. (5) If the defendant's present application was to fail, a trial would be some time off yet, with discovery, inspection and further interlocutories still to be undertaken. (6) Finally, there comes a point when the delay which has occurred in a matter, particularly where Court orders have been ignored, becomes intolerable. In my view, this is such a case. [73] I conclude, therefore, that standing back and having regard to the overall interests of justice, the defendant would suffer serious prejudice if the plaintiff under the circumstances here was to be permitted to continue with this proceeding. [74] Although it is a serious step for the Court to take, I am satisfied that dismissal of the plaintiff's proceeding here is justified.Conclusion[75] For the reasons outlined above, it will be apparent that the defendant's application to dismiss the plaintiff's claim in terms of Rule 478 succeeds. [76] An order is now made that the plaintiff's claim is dismissed. [77] As to costs, the defendant has been successful and is entitled to an award of costs. Costs are awarded against the plaintiff on a category 2B basis, together with disbursements as fixed by the Registrar. _______________________________Associate Judge D.I. GendallSolicitors:Stace Hammond, Hamilton for Plaintiff Kensington Swan, Auckland for Defendant