TVNZ V GLOSS COSMETIC SUPPLIES LIMITED (IN LIQ) HC AK CIV 2003-404-003928

TVNZ V GLOSS COSMETIC SUPPLIES LIMITED (IN LIQ) HC AK CIV 2003-404-003928 25 August 2006IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV 2003-404-003928BETWEEN TELEVISION NEW ZEALAND LIMITED Plaintiff AND GLOSS COSMETIC SUPPLIES LIMITED (IN LIQUIDATION) Defendant Hearing: 11, 12 April 2006 Appearances: C Elliott for the plaintiff G M Illingworth Q.C. for the defendant Judgment: 25 August 2006JUDGMENT OF COOPER JThis judgment was delivered by Justice Cooper on 25 August 2006 at 3.30 p.m., pursuant to r 540(4) of the High Court Rules Registrar/Deputy Registrar Date: Solicitors: P J McDonald, P O Box 1495, Auckland J Thomson, TVNZ, P O Box 3819, Auckland Copy to: C Elliott, P O Box 4338, Auckland G M Illingworth Q.C, P O Box 7205, Auckland[1] On 3 July 1997 Morris J granted an application that had been made by the defendant striking out the plaintiff's claim for want of prosecution, discharging an interlocutory injunction that had earlier been made in the plaintiff's favour and directing that the defendant was entitled to an inquiry into the damages and loss suffered by it as a result of the granting of the interlocutory injunction. [2] The plaintiff now applies for an order striking out and dismissing the defendant's claim for damages, under rules 478 and 186 of the High Court Rules. It alleges that there has been inordinate and inexcusable delay by the defendant and that it has been seriously prejudiced as a consequence. [3] Mr Illingworth Q.C. who argued the matter for the defendant, did not suggest that one or the other of the rules would not give jurisdiction to make the order that the plaintiff seeks. However, the wording of neither rule 478 nor 186 appears to meet exactly the requirements of the present circumstances. In terms of the former rule, the defendant has not strictly failed to prosecute its "counterclaim" to trial and judgment. The relief that Morris J granted was based on an application that the defendant had made. In terms of the latter rule there is no pleading that can be characterised as an "abuse of the process of the Court". [4] The application, however, is also advanced under r 477(c), which enables the Court "in relation to the proceeding generally or in relation to any claim for relief in the proceeding" to order that the proceeding be stayed or dismissed if it is, amongst other things, an abuse of the process of the Court. I am satisfied that, at least under that provision, there is jurisdiction to make an order of the kind sought by the plaintiff. If that conclusion is wrong, the matter would need to be approached under r 9 as a case not provided for. [5] The real question is whether, on the merits of the matter, the order sought by the plaintiff should be made. In approaching that issue, it seems to me that the relevant principles are those which are customarily applied to an application advanced to dismiss claims for want of prosecution. That is the substantive nature ofthe application that the plaintiff now makes, even if, in formal terms, the application falls to be considered under r 477, or under r 9. [6] Although Mr Elliott referred me to a considerable number of cases in which the exercise of the power to strike out had been discussed, on the question of the general approach to be adopted, it is unnecessary to go past what was said in Lovie v Medical Assurance Society New Zealand Ltd [1992] 2 NZLR 244. At 248, Eichelbaum CJ said:Turning to the principles applicable to the substantive issue, the applicant must show that the plaintiff has been guilty of inordinate delay, that such delay is inexcusable, and that it has seriously prejudiced the defendant. Although these considerations are not necessarily exclusive, and at the end one must always stand back and have regard to the interests of justice, in this country, ever since New Zealand Industrial Gases Ltd v Andersons Ltd[1970] NZLR 58 it has been accepted that if the application is to be successful, the applicant must commence by proving the three factors listed.History[7] The proceeding is a remarkable one, both for the length of time that it has been on the books and for the lack of progress that has been made. A brief history was given in the judgment that I delivered on 3 May 2005 dealing with other interlocutory issues that had been raised by the plaintiff: Television New Zealand Limited v Gloss Cosmetic Supplies Ltd (In Liq) (HC AK CIV 2003-404-3928, 3 May 2005). The relevant background was summarised in that judgment, and for ease of reference I repeat now what I said at [2]-[11]:[2] Notwithstanding its antiquity it is possible to describe the milestones of its "progress" quite shortly. On 8 May 1989 Robertson J granted an interim injunction "pending trial of the action", against the defendant restraining it from manufacturing, distributing, advertising, offering to sell or selling any cosmetic or personal care products or providing any related services under the name or mark "Gloss". The plaintiff had commenced the proceeding as presenter of the television programme "Gloss", later described by Morris J as a "soap opera". An appeal from Robertson J's decision was filed in the Court of Appeal, but it was dismissed on 5 July 1989. [3] On 25-27 September 1989 Robertson J heard an application for a writ of sequestration by the plaintiff arising out of alleged breaches of the injunction by the defendant. At the conclusion of the hearing he held that a clear breach of the injunction had been established. Inthe written reasons for judgment, which he delivered on 4 October 1989, Robertson J described what had occurred as a "blatant and deliberate breach by the defendant of the Court's clear injunction". However, following a further hearing on 6 October 1989 Robertson J found that he was prepared to accept that there had been a change of attitude and dealt with the breach by ordering the defendant to pay the sum of $2,200 towards the plaintiff's costs. [4] The plaintiff did not take steps to bring the substantive proceeding on to trial. On 10 March 1997 the defendant applied for orders that the plaintiff's claim be struck out for want of prosecution, that the interlocutory injunction granted on 8 May 1989 be discharged and for an inquiry into the damage and loss suffered by it as a result of the granting of the interlocutory injunction. [5] On 3 July 1997, Morris J made the orders that the defendant had sought. His judgment referred to affidavits establishing that since the Court of Appeal had dismissed the appeal, a principal of the defendant company, Mr Mayes, had been gravely ill. He also referred to evidence that the defendant had suffered considerable financial loss as a result of the interim injunction and that Mr Mayes himself had been put in a difficult financial position. The amount of the loss was suggested at the time to be in the vicinity of $800,000. The judgment recorded the plaintiff's position challenging whether any loss such as was suffered or claimed, was as a result of the granting of the interim injunction. His Honour continued: I am unable to make a firm finding either way on the material before me. In other words, I am unable, on the material before me to say there is no merit whatsoever in the defendant's claim. [6] Having referred to negotiations that had taken place between the parties in a "desultory fashion" since the last programme of Gloss had been shown on television in 1990, Morris J said that the sole contested issue that he was required to decide was whether he should make an order under r 384 of the High Court Rules for an inquiry into damages. Having referred to the various authorities which had been the subject of the argument before him he continued: The interim injunction having been in effect set aside at the plaintiff's request, I can if I see fit, make the order sought. Should I do so? I appreciate TVNZ's concern this may enable the defendant to avoid having to demonstrate the injunction should not have been granted, but TVNZ has brought the situation on itself to a large part by failing to pursue the proceedings which it saw fit to commence and in respect of which its undertaking was given. Nor do I consider it necessarily follows delay or inactivity of the defendant disentitles it to the order sought. Where there is inexcusable delay it may well be the position relief should be refused, but here the delay has been explained by ill health, lack of money to undertake further prosecution of thecase and initially to some degree, the negotiations between the parties. I asked myself what course will be best to ensure justice is done to both the parties in the circumstances. The answer is, taking into account the material I have referred to in the affidavits and the lack of prejudice to TVNZ who really have had the answer in their own hands all along, is to grant the application. For completion I record neither counsel addressed me on the provisions of r 426A. I simply mention, had I had to consider the matter, I would have considered there was a sufficient justification of issue in law for the matter to proceed under that Rule. There will be an order accordingly. There will be costs to the defendant in the sum of $1,750 together with disbursements . [7] No further action was then taken by either party until 2 July 2003. On that day the defendant (which in the meantime had been placed in liquidation) made application to the Court for an order "giving such directions as may be appropriate to enable the Court to dispose of the inquiry into damages ordered in this proceeding on 3 July 1997". [8] The defendant's application prompted an application by the plaintiff for orders: (a) that the defendant provide particular discovery by way of a verified list of documents. That order related first to documents concerning the business affairs of and dealings between past or present officers or agents of the defendant and the liquidator of Gloss Cosmetic Supplies Ltd, Gloss Australasia Ltd and Cade Beauty Care Ltd or any entities with which Mr Mayes had had a commercial or financial interest between 1989 and 2003. The second class of documents in respect of which discovery was sought concerned documents relating to the operation of the defendant company before and after its liquidation including (without limitation) documents relating to the alleged reasons for its liquidation, its borrowings, profits, indebtedness, expenditure and marketing costs, whether contained in correspondence, financial statements, company accounts or otherwise and whether in New Zealand or elsewhere; (b) that Mr Mayes provide discovery by way of a verified list of documents relating to all dealings between him and the companies earlier referred to, suppliers, customers, financiers or other entities associated with Mr Mayes and those companies between 1989 and 2003; any entities with which Mr Mayes had had a commercial or financial interest between 1989 and 2003, and documents concerning hishealth, medical condition, ACC claims "and life style" between those years; (c) making directions and a time-table for hearing of the plaintiff's application for discovery and other orders; (d) striking out and dismissing the defendant's claim for damages; (e) staying the defendant's application for directions and its claim for damages until all outstanding Court costs and disbursements have been paid to the plaintiff; and (f) that the defendant pay security for costs in the amount of $20,000 or such other amount as the Court might consider sufficient to the plaintiff. [9] Before the plaintiff's application was set down for hearing, the defendant applied for an order declaring that the provisions of r 426A of the High Court Rules did not apply in the present circumstances of the proceeding or in the alternative, granting leave under that rule for the taking of further steps. Affidavits were filed in support of both applications, and both applications were opposed. After various mentions in the Duty Judge's List it was directed that the plaintiff's application for security for costs, together with its application for discovery and the defendant's application under R426A should be dealt with as preliminary issues. A fixture was allocated for those matters to be determined on 8 July 2004 before Keane J. [10] On that day, Keane J referred the parties to an issue which was apparent to him on the papers, but not amongst those matters raised by the applications before him. He described the position as follows, in a minute that he issued on 9 July: [4] An issue not canvassed in Morris J's decision or amongst those presently to be argued, was and remains more fundamental; and that is whether Gloss is pursuing this inquiry into damages in compliance with the Companies Act 1993. [5] Gloss is a company in liquidation. That has been its status since 11 February 1993. The liquidator is Mr Jeffrey Meltzer, who was appointed shortly afterwards. But this inquiry is, on the face of it, being pursued solely on the initiative of Mr Mayes, an original shareholder and director. Much of the affidavit evidence goes to the question whether, in the last several years, he has been fit to pursue these proceedings. There is no suggestion that the liquidator has played any active part. [6] I inquired at the outset of the hearing, therefore, whether there was any document on file, which confirmed that the liquidator was pursuing these proceedings himself. I was assured by Mr Illingworth that a document, confirming thathe was, does exist. He invited me to hear argument on the issues, and to allow him to file a memorandum. I said that I was not willing to do so. The issue seemed to me to be fundamental. [11] Keane J directed the liquidator to confirm by memorandum that as liquidator he was pursuing the inquiry into damages, relying on the decision of Morris J in 1997, and that he would assume responsibility for the conduct of the proceedings. The applications were adjourned accordingly. It was not until 22 September 2004 that an affidavit by Mr Meltzer, sworn on 20 September 2004, was filed. That affidavit occupied no more than a page. In it, Mr Meltzer recorded that he was an experienced liquidator, that he had read Keane J's minute and having done so confirmed that he wished to proceed with the application for damages by the defendant on the basis that he had the usual responsibility for the conduct of the litigation, including obligations as to costs. The last two paragraphs of his affidavit read as follows: I appreciate that the defendant's application has been delayed for a long period, however the company has had no funds with which to secure representation and I have been dependant upon the major shareholder Mr Mayes for funding. As Mr Mayes was seriously ill for a long period, I was not able to proceed until Mr Mayes secured the necessary funding to enable the damages claim to be reactivated.[8] As can be seen from [9] in the extract that I have just quoted, the plaintiff's claim for orders striking out or dismissing the defendant's claim for damages was deferred for consideration at a subsequent hearing. For reasons that I gave in the judgment, I held that r 426A of the High Court Rules did not apply in the circumstances of this case, so that the defendant did not require leave to take further steps in respect of the inquiry into damages ordered by Morris J, notwithstanding the delays that had occurred. I directed that both the company and Mr Mays personally should give discovery. I also held that there was no power under the rule to grant the plaintiff's application for an order that the defendant give security for costs. [9] On the issue of discovery, part of my reasoning was that if discovery were ordered, as the plaintiff sought, then that would afford it an opportunity to refer to any particular evidentiary issues arising from the documents discovered for the purpose of its claim to prejudice in the context of the application to strike out. At [30] I said:More importantly, I think the delay that has ensued since July 1997 makes it desirable, in the interests of a fair resolution of this dispute, that the plaintiff receive early notice of the documents upon which the defendant will rely not only in respect of the plaintiff's strike out application, but also on the substantive issue as to damages. The plaintiff should have a proper opportunity to consider and if necessary investigate the relevant documents and pursue any inquiries that they might suggest. The fact that many of the documents must now be quite old militates against Mr Illingworth's submission that the parties should proceed straight to the service of briefs of evidence.Inordinate delay[10] There can be little doubt that there has been inordinate delay in the present case. Sensibly, Mr Illingworth did not press an argument to the contrary. The history of the matter, set out above, shows that between 3 July 1997 and 2 July 2003 no formal step was taken by either party. Throughout that period, however, it was the defendant who was notionally in the position of a plaintiff responsible for maintaining the momentum of the proceeding: Allen v Sir Alfred McAlpine & Sons Ltd [1968] 2 QB 229 at 258, per Diplock L.J.:It is thus inherent in an adversary system which relies exclusively upon the parties to an action to take whatever procedural steps appear to them to be expedient to advance their own case, that 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 is a substantial risk that a fair trial of the issues will not be possible.[11] A complicating factor in respect of some issues arising out of the present application is that the defendant is in liquidation. A winding-up order was made on 11 February 1993, and the company went into liquidation on 23 February. The Deputy Official Assignee was appointed as the provisional liquidator, and Mr Jeffrey Meltzer was appointed shortly after that. [12] It was because of concern about inactivity by the liquidator that Keane J adjourned the plaintiff's interlocutory applications when they initially came before him on 8 July 2004. It is not suggested, however, that the fact of the liquidation has been a material contributor to the delay that has occurred since Morris J's judgmentof 3 July 1997. In his affidavit of 20 September 2004, Mr Meltzer deposed as follows:(4) I have read the minute issued by Hon Justice Keane on 9 July 2004. Having read that minute I confirm that I do wish to proceed with the application for damages by the defendant on the basis that I have the usual responsibility for the conduct of the litigation, including obligations as to costs. (5) I appreciate that the defendant's application has been delayed for a long period, however the company has had no funds with which to secure representation and I have been dependant upon the major shareholder Mr Mayes for funding. (6) As Mr Mayes was seriously ill for a long period, I was not able to proceed until Mr Mayes secured the necessary funding to enable the damages claim to be re-activated.[13] There is nothing in his affidavit, nor in the affidavits sworn by Mr Mayes (sworn on 2 July and 3 December 2003 and 10 April 2006) which suggests that the liquidation has of itself been a cause for delay. Given the lack of progress that has been made overall, I am in no doubt there has been inordinate delay in this case and I find accordingly.Inexcusable delay[14] The question then is whether it can be maintained by the defendant that the delay is excusable. In this respect, the defendant relies, almost exclusively, on the impecuniosity and ill health of Mr Mayes. In his affidavit of 2 July 2003 Mr Mayes deposed:4. Since 3 July 1997 I have been unable to pursue the matter further. This has been caused by a number of contributing factors. The principal reason is that I have been in very poor health since then. I have 3 major health problems, described below. Relevant medical documentation is attached marked "A". 5. I have a serious liver complaint. This originates from a motor vehicle accident I suffered in 1985. As a result of the accident I had a blood transfusion from which I contracted hepatitis C. I regained my health after approximately a year but the condition later returned. Since the early 1990s I have had an ongoing battle with this condition and it has affected me very significantly over the last six years.6. I also have a serious hip problem. I suffered a rugby injury in about 1980. It appears that the hip became infected with septic arthritis. This causes the hip to wear out more quickly than normal and I am now in need of a hip replacement. I have had a long battle with ACC over this issue but an operation has now been arranged and that is due to take place in August 2003. 7. Because of the stress of the failure of my business, combined with these other problems, I have contracted a serious skin condition known as psoriasis. 8. The combined effect of these health difficulties has been that except for limited periods I have been unable to work during the period since July 1997. For most of that time I have been on a sickness benefit. I have consequently had no funds to enable the compensation claim to be brought back before the Court.[15] Somewhat optimistically, Mr Mayes concluded that affidavit by referring to a gradual improvement that had set in over the past few months, with the result that he now wished to bring the matter to a conclusion by arranging for a final hearing to take place. [16] The plaintiff did not accept Mr Mayes' claims of ill health at face value. It took advice from a medical expert, Professor Gorman. Professor Gorman swore an affidavit on 16 October 2003 in which he said that it was impossible on the basis of the information conveyed in Mr Mayes' affidavit to assess the effect that the hip problem would have had on his overall health and functional ability. Insofar as the hepatitis C was concerned, he expressed a similar view. He doubted whether the psoriasis described by Mr Mayes would have caused significant health difficulties. He expressed the overall opinion that it was not possible to conclude that Mr Mayes was suffering from any medical condition that prevented him from pursuing the claim against TVNZ from 1997 to the present day, or indeed before that. On the contrary, he thought that the statements made by Mr Mayes were such that they should be treated with real caution. [17] Mr Mayes swore a further affidavit on 3 December 2003. He gave further details of his medical complaints. He attached a letter from the general practitioner who was then caring for him. That letter confirmed that Mr Mayes had been experiencing considerable stress "over the past few years". The doctor was inclined to attribute that "at least in part" to "some legal uncertainties". He observed that thestress had caused significant deterioration in the clinical condition of several chronic diseases from which Mr Mayes suffered. Of more significance perhaps was a letter written by Professor Clifford Tasman-Jones, a specialist gastroenterologist and hepatologist practising in Auckland. According to Professor Tasman-Jones, whom Mr Mayes had first consulted in 1993:Mr Mayes has chronic progressive hepatitis C which failed to respond to treatment with interferon. Liver damage tests have continued to indicate ongoing and progressive disease with increasing evidence of cirrhosis and liver failure. The disease is serious, progressive and heading to consideration for liver transplantation. The physical and cognitive effects of this progression are significant and must be given due recognition.[18] In his third affidavit of 10 April 2006, Mr Mayes addressed delays that had taken place since my judgment of 3 May 2005. As I have mentioned, the terms of that judgment required (amongst other things) that both the defendant and Mr Mayes personally give particular discovery. In his affidavit of 10 April, Mr Mayes deposed that at the time the judgment was delivered he was once again having severe health difficulties and on 10 June 2005 had had a liver transplant. He continued:I was completely incapable of complying with my responsibilities under the discovery order for several weeks, but as soon as I was able to do so I gathered all documents in my possession or power and delivered them to my counsel. I understand that at my counsel's request, the period for complying with the discovery orders was extended due to my ill health. Gathering all the documents together was an extremely difficult exercise for me in the wake of my liver transplant operation. I had company related documents stored at various places, including Whangamata (at my sister's residence and at a factory there), my residence in Glendowie, and my mother's residence in St Heliers.[19] In addition, on 12 April 2006 during the hearing, I allowed Mr Illingworth to hand up a letter signed by Associate Professor Gane, another hepatologist, employed in the New Zealand Liver Transplant Unit at Auckland Hospital. Mr Gane stated that Mr Mayes had been under his care for the past two years. He had undergone a liver transplantation on 10 June 2005, since when he had made a "slow and steady recovery". He stated:Prior to liver transplantation John had all the complications of end stage liver disease, including encephalopathy with moderate confusion and daytimesomnolence. There is no doubt that John's encephalopathy would have interfered with the ability to present his court case at that time.[20] Mr Elliott, although he did not object to my taking that letter into account, nevertheless criticised the vagueness of the last sentence, with its reference to "at that time". [21] Mr Thomson is a barrister and solicitor employed as the office solicitor for the plaintiff. With the benefit of discovery of documents (although the material was not organised in a way which made it very accessible), he was able to swear an affidavit to which he attached copies of a large number of the documents that he had inspected. Mr Thomson recorded his "clear impression" that from 1989 (when the interim injunction was granted on the plaintiff's application) until 2003 (there was no subsequent documentation, other than medical documents):Mr Mayes has been engaged in a wide range of business and quasi-business activities. It is also apparent to me that Mr Mayes, quite apart from his direct business activities, has been engaged in a range of disputed/contentious matters with customers, suppliers, Government Departments, lawyers and landlords.[22] Further, again as a result of considering the discovered documents, it was Mr Thomson's view that Mr Meltzer, apart from initial activity in 1993 in connection with the liquidation of the defendant, had done "almost nothing at all in relation to these proceedings". I observe that there was no assertion from Mr Meltzer to the contrary. [23] In his affidavit of 10 April 2006 Mr Mayes disputed the relevance of some of the documents upon which Mr Thomson had relied because they had arisen in the period between 1989 and 1997. He suggested that that time period was not relevant, and Mr Illingworth adopted the same stance in argument. In essence, it is contended that the plaintiff should bear responsibility for any delays that occurred prior to Morris J's judgment on 3 July 1997. The plaintiff's claim had itself then been struck out for want of prosecution. It was only at that point that the defendant obtained relief in the form of the order made for an inquiry into damages. As Mr Illingworth put it, Morris J had considered the history of the matter, observing that the plaintiff "appears to accept from the affidavits it has indeed had no interests to protect for avery considerable time indeed", and it was after considering the history of the matter down to that point, that he granted the defendant's application. [24] I accept that for the purposes of considering whether there has been excusable delay, it is appropriate in the circumstances to confine attention to the period since Morris J's order. However, even if the matter is approached on that basis, Mr Thomson's affidavit still shows that Mr Mayes was active from time to time in pursuing business interests in the period from July 1997 onwards. His activities also included discussions with accountants and lawyers about his claim against TVNZ and possible means of funding it, as well as pursuing commercial business interests in respect of other matters. In particular, he was involved in operating a company called Cade Beauty Care Ltd. Copy invoices disclosed as having been issued by that company were totalled by Mr Elliott in the amounts of $28,781.59 for 1996, $69,461.82 for 1997, $4,005.03 for 1998, $1,263.14 for 1999, $22,324.70 for 2001, $64,831.55 for 2002, $32,789.14 for 2003, $1,366.89 for 2004 and $2,531.26 for 2005. [25] It should be noted also, however, that during this period Mr Mayes was a beneficiary. In his affidavit of 10 April 2006 he said that over the relevant period he was receiving a social welfare benefit. He deposed that the Department of Social Welfare was aware of his involvement in Cade Beauty Care Ltd's affairs, and had no objection to that involvement because it was not making a profit. As he put it at paragraph 15 of the affidavit:My ability to participate in the business activities of Cade Beauty Care Ltd depended upon the state of my health at any given time. Sometimes I would be able to put in 3 or 4 days a week. At other times I would be able to put in only 1 or 2 days a week. The company had an employee who did most of the donkey work. She was initially paid a reasonable wage but later voluntarily accepted a pay cut in order to try to keep things going. In addition, several members of my family contributed time and effort to try to help me to keep Cade Beauty Care Limited going.[26] As mentioned earlier, the defendant's stance on the question of inexcusable delay is one that has been based primarily on Mr Mayes' impecuniosity and ill health. The liquidator was entirely reliant on Mr Mayes as a source of funding. MrMayes' impecuniosity and ill health has meant that there has been insufficient funds to pursue the litigation. [27] I am satisfied that Mr Mayes has suffered badly from ill health at various times over the period since July 1997, but more particularly after the proceedings were reactivated by the application that the defendant made for directions on 2 July 2003. I am not satisfied, however, that his ill health has been such as would excuse the delay that has occurred. [28] Although the process was attended by delays, he was in fact able to comply with the orders for discovery that I made on 3 May 2005. All of the documents had been put in his possession by the liquidator much earlier, to the extent that he had not retained them. As will shortly be explained, the claim is to be advanced now only on the basis of seeking recovery of wasted start-up costs in respect of the defendant's business, and there is to be no claim for loss of profits. But that is a decision that could have been made much earlier, and had that occurred it might have simplified the task of progressing the litigation at an earlier point in time. These are essentially decisions that the liquidator left to Mr Mayes, but I do not think that he can now be heard to complain about the consequences of having done so. [29] I infer that much of the work that had been done to assemble the relevant documents had been done by Mr Mayes himself. There would not have been a significant cost. It would have been a necessary exercise to advance the claim even if discovery had not been ordered. His impecuniosity cannot explain why it was not done earlier. [30] Further, I do not understand why lack of funds should have prevented other steps being taken. It was Mr Mayes personally who was involved in the establishment of the defendant, and he was its principal. He is uniquely well placed to progress a claim based on wasted costs from that time. It has not been adequately explained why he did not do so, given that he was able to devote time to other business affairs, albeit on a limited basis.[31] The impression created by the chronology in this matter is that possibly because of a perception that the claim might conceivably be barred if six years elapsed after Morris J's judgment, action was belatedly taken to revive the claim in July 2003. There has been no satisfactory explanation of why steps could not have been taken earlier than that. Nor has there been a full statement of Mr Mayes' financial position. In the circumstances, I do not think that the delay can be excused. On the contrary, I consider it has been inexcusable.Prejudice[32] In order to succeed on its present application it is necessary for the plaintiff, notwithstanding the conclusions already reached about the nature of the delay, to establish that it has been seriously prejudiced as a consequence of it. [33] Mr Elliott pointed out that if there was a proper basis for claiming damages, the alleged losses would have to be proved going back a period of some 18 years. He pointed out that notwithstanding requests made as long ago as 1993, particulars of the loss allegedly sustained have never been provided. I understood that Mr Illingworth accepts that this is so, although he argues that before the matter goes to trial particulars would necessarily need to be provided. [34] In my judgment of 3 May 2005 I recorded Mr Illingworth's advice that the only damages sought would be reimbursement in respect of the expenses incurred in the setting up and running of the "Gloss" project down to the date that the company went into receivership, that the defendant would have to prove each item of expenditure incurred and produce its records accordingly. [35] At the hearing of the present application Mr Illingworth, responding to a question that I had posed, referred to a folder that he thought contained most of the documents relevant to the proposed claim for wasted expenditure. Having checked the position overnight, he handed up a memorandum in which he recorded that:There is in fact a folder that contains a number of documents related to the proposed claim for wasted expenditure, and including some preliminary losscalculations apparently prepared several years ago by former counsel. The folder was discovered and inspected. The schedule of file descriptions provided to the plaintiff does not specifically identify the folder in question, but it is prominently marked on the spine "Gloss Damages". The schedule of file descriptions provided to the plaintiff identifies the folder in question as item "N". In answer to a further question from Your Honour, counsel for the defendant attempted to provide a "ball park" figure in relation to the proposed claim for wasted expenditure. In fact the approximate figure mentioned by counsel yesterday related to a different calculation on the file. It does not represent an estimated total for the proposed wasted expenditure claim. It is also accepted that counsel for the defendant was in error in suggesting that the folder contains a complete or near complete picture of the defendant's proposed wasted expenditure claim in relation to the Gloss project. If the matter proceeds, an assessment of quantum will therefore have to be completed in the usual way. But although the defendant is not immediately able to quantify the proposed claim, it accepts that the plaintiff is entitled to full particulars, either in the form of a notice of particulars or a detailed brief of evidence or both. Accordingly, if Your Honour permits the defendant's claim to proceed the defendant would consent to an order requiring full particulars to be provided within a reasonable time thereafter.[36] It is now over nine years since Morris J held that the defendant was entitled to an inquiry as to damages. It is extraordinary that after so much time has elapsed, even now the defendant cannot quantify its claim. In my view, Mr Elliott was justified in emphasising the absence of any particulars of the claim and maintaining that the age of the events that would need to be the subject of evidence if the matter went to trial would inevitably prejudice the defendant. He referred in that regard to the decision of the Court of Appeal in Reid v New Zealand Trotting Conference[1984] 1 NZLR 8. In that case evidence would have been necessary in respect of events which happened between 10 and 20 years previously. Plainly, that was one of the considerations which influenced the Court to strike out the proceedings, that degree of delay being seen as necessarily causing witnesses as to the facts serious difficulty in remembering events "with any clarity and reliability" (ibid., at p14).[37] To some extent, some evidence that the plaintiff relied on to establish prejudice was made less relevant by Mr Illingworth's advice that only wasted start- up costs would be pursued. For example, in an affidavit sworn on 14 October 2003, a Mr McQuilter, who is a licensed private investigator had referred to difficulty in obtaining the co-operation of some witnesses, and to another witness who had committed suicide. Mr Illingworth submitted that those witnesses would not be relevant because of the way that the defendant's claim was now to be confined. Be that as it may, there must inevitably be substantial prejudice for the plaintiff in having to respond to facts as old as those upon which the defendant will seek to rely at the substantive hearing. [38] I observe in this connection that Mr Illingworth's argument that the nature of the factual inquiry would be confined was based upon the defendant's assertion that there was no doubt that the reason the second defendant's business had failed was because of the interim injunction the plaintiff obtained. He argued that was an issue that was effectively determined when Morris J decided that the defendant was entitled to an inquiry as to damages. I have already set out the relevant extracts from Morris J's decision, which I quoted at [6] of my judgment of 3 May 2005. Mr Illingworth referred to the fact that the interim injunction, originally granted by Robertson J on 8 May 1989, had been made: pending trial of the action, against the defendant, its servants, agents, contractors or otherwise howsoever, restraining them from manufacturing, distributing, advertising, offering to sell or selling any cosmetic or personal care products or providing any related services under the name or mark Gloss or any name or mark substantially similar to Gloss as from May 12, 1989.[39] I do not consider that the position at trial would be as clear cut as Mr Illingworth asserts. I would have thought it open to the plaintiff at the trial to argue that notwithstanding Morris J's decision, the failure of the company might be attributable (to a greater or lesser extent) to causes in addition to the injunction that was made by Robertson J. All that has been decided to date is that there should be an inquiry as to damages. The plaintiff's ability to mount an argument along these lines and to brief appropriate evidence about it, must inevitably have been severely curtailed by the delays that have occurred. As Mr Elliott pointed out, the problem might not necessarily arise in relation to documents that the defendant has nowbelatedly discovered. At this distance in time it is relevant to consider what other documents might have been in existence and available to the plaintiff at times closer to the relevant events, that would have enabled the plaintiff to cast doubt on or question elements of the defendant's claim. [40] A conclusion that the plaintiff has been prejudiced is I think also inevitable having regard, amongst other things, to what was said by chartered accountants retained by Mr Mayes to advise in relation to the claim in 2000. In a letter to Mr Mayes dated 19 March 2001 Horwath Porter Wigglesworth Limited set out a number of issues affecting the litigation which they described as "problematic", and that would affect the chances of achieving a successful outcome against the plaintiff. They included observations as to the age of the events, with inevitable impact on the availability of evidence, recollection of witnesses, and the credibility of projections and/or forecasts made at the time, the possibility that counsel for the plaintiff would exploit issues concerning the initial capitalisation of the defendant, the fact that only general information was available to them and that:Commercial reality is such that the financial success of a start-up venture (such as Gloss was at the time) is never assured. The risk that the venture might have failed in any event is, in our opinion, particularly pertinent in this matter.[41] I agree that some of the matters referred to in that letter may not be significant given the abandonment of any intention to seek the recovery of lost profits. However, confining the claim to the start-up costs would not make irrelevant evidence that the failure of the company might have been contributed to by events other than the grant of the injunction. [42] The plaintiff, in addition, relied on evidence in an affidavit by Mr Gerald Rea, a chartered accountant specialising in liquidations and receiverships. Mr Rea referred to the contents of a document headed "Checklist for Liquidation" that he said would have formed part of the notice to creditors of the company, that had just been placed in liquidation. It was dated 13 February 1993. In that document four reasons were given "by the Directors" for the failure of the defendant company. The first related to the litigation, and concerned the fact that it had not been advanced with expedition. There were also references to breaches of fiduciary duty by anofficer and partner of a business that had been owned by the defendant, and fraud and theft carried out by that person. The other identified causes were unspecified failures by the Justice Department to address "issues of utmost importance" and difficulties that had been experienced concerning the building from which the company had been operating. There was mention of asbestos, water leaks and drainage. Mr Rea swore his affidavit on 14 October 2003. His opinion expressed at that time must be even more appropriate today:I have also no doubt whatsoever that difficult as the task might have been in 1993, it would have been easier than it is now. I regard the passage of time of a decade to be a huge practical difficulty and even with the best will in the world I have no doubt that the ability to get to the truth of the matter this long after the event has been severely diminished.[43] There was no effective reply to that evidence. Mr Illingworth nevertheless pointed out that the plaintiff had only been able to refer to prejudice in general terms. He referred to the decision of the House of Lords in Grovit & Ors v Doctor & Ors[1997] 1 WLR 640 in which Lord Woolf said that in order to establish prejudice, a defendant would be required to demonstrate, for example, that his witness' recollection had been adversely affected. I accept that in the present case, the plaintiff has not been able to refer to any particular witness whose evidence might be affected in that way. However, I think there is merit in Mr Elliott's response that that is essentially because of the inchoate nature of the claim the plaintiff has to face, the lack of any particulars provided and generally, the state of ignorance in which the plaintiff has been left by the defendant. These issues could be mitigated by further procedural directions, although it is unsatisfactory that the defendant has not taken any initiative of its own even though faced with the present application. The fact would remain, however, that at the time there would need to be an inquiry into facts approximately 17 years old, and possibly even older than that. [44] In my view, in all the circumstances of this case there must inevitably be prejudice and I consider it is sufficient for the matter to be addressed in the general terms that I have discussed.Overall[45] In Commerce Commission v Giltrap City Ltd (1997) 11 PRNZ 573, Tipping J, writing for the Court of Appeal, observed that in cases such as the present, the right of citizens to have access to the Courts for the determination of the issues that they have raised:should be denied only if that important right is outweighed by a stronger right vested in the defendant to have the case dismissed because justice can no longer be done in the light of the delay. (at 579)[46] This is of similar effect to Eichelbaum CJ's observation in Lovie v Medical Assurance Society NZ Limited, supra that:at the end one must always stand back and have regard to the interests of justice [47] Mr Illingworth emphasised that in the present case the defendant's financial position was, it maintains, due to the action of the plaintiff in obtaining an interim injunction against it. He referred to the long period of delay for which the plaintiff itself had been responsible after the interim injunction had been obtained and the fact that in this case, the defendant had already obtained the benefit of Morris J's judgment. Quantum might still be at large, but the defendant was not in the normal position of plaintiffs who still need to establish liability when seeking to resist applications that their claims be struck out. [48] Those are all points that can legitimately be made in the defendant's favour. Ultimately, however, they do not persuade me that the claim should be allowed to continue. I have held that there has been inordinate and inexcusable delay. A trial would involve inquiring into events that occurred as long ago as 1989, and perhaps even earlier. Although because of the inchoate nature of the defendant's claim, the issue of prejudice has only been able to be addressed in general terms, I am satisfied that such prejudice must exist, and that its effect on the plaintiff at the trial would be likely to be very significant. In the result, justice can no longer be done to the plaintiff.[49] This matter has simply languished for too long, and I am satisfied that the appropriate course now is to direct it be struck out.Result[50] The plaintiff's application is accordingly granted. If there is any issue as to costs, I will receive memoranda from the parties, from the plaintiff within one month of delivery of this judgment, and from the defendant within two weeks after receipt of the plaintiff's memorandum.