WILSON V ANZ NATIONAL BANK LIMITED HC AK CIV 2010-404-5025

WILSON V ANZ NATIONAL BANK LIMITED HC AK CIV 2010-404-5025 [13 February 2012]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV 2010-404-5025[2012] NZHC 122BETWEEN WARREN WILSONPlaintiffAND ANZ NATIONAL BANK LIMITEDDefendantHearing: 3 February 2012Appearances: W Wilson in personD J Friar and T A Clark for defendantJudgment: 13 February 2012JUDGMENT OF ALLAN JIn accordance with r 11.5 I direct that the Registrar endorse this judgmentwith the delivery time of 9 am on Monday 13 February 2012.Solicitors/party:W Wilson, 72 Upper Queen St, Auckland waw@ihug.co.nzBell Gully, Auckland david.friar@bellgully.com, tom.clark@bellgully.comIntroduction[1] This is an application by Mr Wilson for review of certain aspects of a judgment delivered by Associate Judge Matthews on 17 May 2011, granting leave to the defendant bank to file a counterclaim out of time, ruling that leave was not required by the bank to file an application for summary judgment on part of that counterclaim out of time, but granting leave in case it was necessary, and grantingsummary judgment on part of the bank's counterclaim.[2] The plaintiff invokes s 26P(1) of the Judicature Act 1908 and High Court Rule 2.3.Background[3] In May 2007 the defendant made two secured loans to the plaintiff of $815,000 and $162,500 respectively. The loans were repayable over a 30 year term. By February 2009 Mr Wilson had fallen into arrears. In April 2009 the bank issued formal demands for repayment of the outstanding sums, and in June 2010 it issued a notice pursuant to the Property Law Act 2007.[4] Mr Wilson responded by filing the present proceedings, in which he challenged the lawfulness of both the demand and the Property Law Act notice. In doing so he relied upon alleged breaches of the Credit Contracts and Consumer Finance Act 2003 (the Act).[5] Counsel for the bank were dissatisfied with the statement of claim. They sought further particulars of it, whilst advising both Mr Wilson and the Court that the bank contemplated filing a counterclaim and an application for summary judgment on that counterclaim. A decision was to be made once further particulars were supplied.[6] Further particulars were furnished. Having considered them, the bank concluded that Mr Wilson's claims did not provide of themselves an impediment to the enforcement of the bank's rights. Accordingly, the bank filed applications for:(a) leave to file a counterclaim five months after the date of filing of its statement of defence;(b) leave to seek summary judgment on part of the counterclaim (should such leave be necessary); and(c) summary judgment on part of the counterclaim.[7] In a reserved decision given on 17 May 2011, Associate Judge Matthews granted all three orders. The present application was filed on 24 May 2011.[8] The application to review Associate Judge Matthews' decision, insofar as itgranted summary judgment, was struck out by Peters J on 22 July 2011, on the ground that there was no right of review from a decision of an Associate Judge granting summary judgment. Mr Wilson's remedy was to appeal to the Court ofAppeal. In her reserved decision, Peters J pointed out to Mr Wilson that the time for appeal was about the expire. Mr Wilson chose not to follow the Judge's advice toappeal at the time; nor has he filed an appeal since.[9] Mr Wilson invited me to go behind the judgment of Peters J and to entertain his challenge to the summary judgment itself, notwithstanding the order of 22 July 2011 striking out the review application, insofar as it concerned the summary judgment. In advancing that approach, he relied upon the judgment of the Court of Appeal in Nottingham v Registered Securities (in liquidation).1[10] I am not prepared to adopt that course for two separate reasons. First, I have no jurisdiction to reverse the conclusion reached by Peters J. If Mr Wilson was dissatisfied with the order striking out his review application in part, then his remedy was to appeal to the Court of Appeal.1 Nottingham v Registered Securities (in liquidation (1998) 12 PRNZ 625.[11] Second, his reliance upon the judgment of the Court of Appeal in Nottinghamis misplaced. There, Mr Nottingham had appealed against a decision given by a Master in chambers. Under the procedural rules as they then stood, there was no such right of appeal. Mr Nottingham's only remedy was to seek a review by a High Court Judge, so the Court of Appeal had no jurisdiction. But all parties before it were agreed that the Court of Appeal ought, if possible, to resolve the issue. Accordingly, by consent the Court constituted itself a Full Court of the High Court, and dealt with the matter as if it were an application for review. Delivering the judgment of the Court, Fisher J, noted that:2This is an exceptional course unlikely to be followed on future occasions. Appellate jurisdiction ought to be specifically checked by both parties on every occasion.[12] Of course, in this case, the Court is faced with the reverse of the position inNottingham. Mr Wilson has applied for review when he should have appealed. The Court has no discretion to treat Mr Wilson's review application as having survived inits entirety and then to deal with it as an appeal. In any event, Nottingham is much more confined in its application than Mr Wilson believes.Leave to file the counterclaim.[13] As earlier recounted, the bank had deliberately refrained from filing acounterclaim until it received further particulars of the plaintiff's claim. The usualperiod for filing a counterclaim is 25 working days after service of the claim.3 When the bank decided to file its counterclaim, it required leave, because some months hadpassed since service of the plaintiff's claim upon it.[14] In seeking leave, the bank relied upon r 1.19, which provides that the Courtmay "in its discretion" extend the time appointed in the Rules for the doing of any act. The Judge set out in his judgment certain established principles relevant to theexercise of the Court's discretion to enlarge time.4 He noted that the discretion is2 Nottingham at 628.3 High Court Rule 5.55.4 Wilson v ANZ National Bank Ltd HC Auckland CIV2010-404-5025, 10 May 2011 at [4].unfettered.5 He noted also that a party seeking the exercise of the Court's discretionmust provide a proper foundation for the order sought.6[15] In exercising his discretion in favour of the bank, and granting leave to file the counterclaim out of time, Associate Judge Matthews took into account the following matters:(a) The bank's delay arose out of the arguably unsatisfactory state ofMr Wilson's statement of claim;(b) Mr Wilson (and the Court) had been on notice throughout that the bank was contemplating filing a counterclaim once further particulars were provided. That notification was first provided at the first case management conference of the proceeding in October 2010;(c) The bank's claims were properly the subject of a counterclaim;(d) The bank could have issued a new proceeding (without the need to seek any leave) rather than file a counterclaim. That would have involved a duplication of proceedings and a consequential increase in costs.[16] Mr Wilson contends that leave ought not to have been granted. As I understand it, he has two principal concerns:(a) There was no sufficient basis in the evidence for the Judge to make an order;(b) The Judge insufficiently took into account the consequential effect of granting leave to file a counterclaim out of time, in that the filing of the counterclaim supported the summary judgment application for which the Judge (wrongly says Mr Wilson) also granted leave.5 Caltex Oil (NZ) Ltd v Hughes (1986) 1 PRNZ 235.6 Spicers Paper (NZ) Ltd v BPK & GA Buckley (1993) 6 PRNZ 16.[17] The Judge's decision to grant leave to file the counterclaim, plainly involvedthe exercise of a discretion. Accordingly, Mr Wilson bears the onus of demonstrating either:(a) an error of law or principle; or(b) that the Judge took into account irrelevant considerations; or(c) that he failed to take into account relevant considerations; or(d) that the decision was plainly wrong.7[18] Mr Wilson supports the first of his arguments by reference to cases such asSpicers Paper8 and Day v Ost (No.2).9 In my view those cases are of no assistance; they deal with situations far removed from the present case in that they involved parties who had blatantly disregarded their obligation to place certain material before the Court.[19] Mr Friar points out that Mr Wilson is not correct in his contention that there was no evidence before the Judge as to the circumstances in which the bank applied for leave to file its counterclaim out of time. In an affidavit sworn on 17 February 2011 by Mr Carl Cumings, an officer of the bank, the deponent explained that:Finally, I note that when Mr Wilson first filed his statement of claim against the Bank in August 2010, the Bank could not sufficiently understand the claim and, in particular, whether or not Mr Wilson had raised an issue thatcould have affected the Bank's ability to enforce the debt due by way ofsummary judgment proceedings. It was only on the filing of an amended statement of claim by Mr Wilson on or about 7 December 2010 that the Bank was able to comprehend that there was no issue raised by Mr Wilson that the Bank believed affected its ability to enforce its lending agreement with Mr Wilson.[20] Moreover, there was before the Court a series of Court minutes and memoranda recording the bank's position, namely that it was deliberately deferringthe filing of a counterclaim pending provision of appropriate particulars of the7 Kacem v Bashir [2011] 2 NZLR 1 and Wilson v Neva Holdings Ltd [1994] 1 NZLR 481 at 491.8 Spicers fn 6.9 Day v Ost (No.2) [1974] 1 NZLR 714.statement of claim. There is accordingly no basis for Mr Wilson's contention thatleave ought not to have been granted because there was insufficient material before the Court.[21] Mr Wilson's second argument is likewise meritless. There is no necessaryconnection between the decision to grant leave to file the counterclaim on the one hand and the bank's application for summary judgment on the other.[22] Quite apart from that, the reasons given by the Judge for his decision to grant leave are all perfectly understandable and cannot be said to have given rise to a reviewable error. Indeed, it might be thought that the consequences of a refusal of leave were virtually determinative in favour of the grant of the application. Had leave been refused, the bank would have been entitled, as the Judge noted, to issue fresh proceedings without the need to seek any leave at all. That would simply have given rise to a duplication of proceedings and resulted in increased costs. The likely outcome would have been consolidation of the proceedings, or at least an order that they be tried together.[23] In circumstances where there was no identifiable prejudice to Mr Wilson Iregard the Judge's decision as virtually inevitable. Accordingly, this aspect of theapplication for review must fail.Was leave to apply for summary judgment required?[24] An application for summary judgment by a plaintiff may be made either at the time the statement of claim is served on the defendant, or later with the leave of the Court.10 Where there is a counterclaim, the Court must proceed in the same manner as if the defendant had commenced an independent proceeding against the plaintiff.11[25] The Associate Judge held that, as the defendant's application for summaryjudgment on its counterclaim was filed and served at the same time as the10 High Court Rule 12.4(2).11 High Court Rule 5.58(3).counterclaim itself, no further leave was required, once leave had been granted to file the counterclaim out of time.[26] In my view that conclusion is plainly correct. It is the necessary result of r 12.4.2, read along with r 5.58(3). In the present case, the bank filed its application for summary judgment at the same time as its counterclaim. Accordingly, leave was not required in respect of the summary judgment application. That outcome is consistent both with the pattern of the rules themselves and the absence of any requirement for leave had the bank chosen, as was open to it, to commence a fresh proceeding in which it filed its application for summary judgment along with its statement of claim.[27] Mr Wilson's challenge to the Judge's decision on this point fails accordingly.Other matters[28] In the light of my earlier conclusions, it is unnecessary to consider at length Mr Wilson's challenge to the Associate Judge's decision to grant leave to the bank toapply for summary judgment. This was the principal focus of Mr Wilson'ssubmissions, which it is unnecessary to canvass in detail. I will however mention two aspects of his argument. The first concerns the impact of s 99 of the Act, which prohibits the enforcement of any contract or of any security interest taken in connection with that contract before the disclosure required under ss 17 or 22 is given. As I understand it, Mr Wilson's argument is that where there is an assertedfailure to disclose, no lender or holder of a security interest may take any step to enforce the contract (including apparently the taking of any step in any Court proceedings), until a Court has determined whether an allegation of failure to disclose has been made out.[29] Mr Wilson deployed this argument in response to Mr Friar's contention(which I have upheld), that leave was not required for the bank's application forsummary judgment. Mr Wilson argues that the Court ought to imply a leave requirement into the High Court Rules where s 99 is invoked, in order to ensure that the statutory policy underpinning that section is not rendered nugatory.[30] I reject any such contention. As Mr Friar points out, to uphold it would be, in effect, to amend the High Court Rules.[31] Mr Wilson also addresses what he contends to be errors in the summary judgment decision itself. But any such errors are beyond the reach of this Court on the present application. He had the right to appeal from the summary judgment order which he has not exercised (although it appears from his remarks during the hearing of the present application that he may well apply for leave to appeal out of time).[32] I do not propose to address any argument which goes to the substance of the summary judgment itself, rather than to the issues which properly arise on the present application. His challenge to the summary judgment may be advanced only by way of appeal, his application for review of the summary judgment having been struck out by Peters J.[33] It is, however, necessary to mention Mr Wilson's application for a stay of thesummary judgment proceeding. His application for review sought a stay of the summary judgment as an alternative to a successful outcome of the review application. Although he supported his stay application by reference to several partially overlapping matters, all of his arguments amounted to a collateral attack upon the summary judgment itself. To accede to the stay application would be, in effect, to uphold an appeal which Mr Wilson has never filed and which does not fall within the jurisdiction of this Court.[34] The result is that the summary judgment stands, as Peters J pointed out in her earlier decision. The substantive proceeding remains on foot in respect of thoseaspects of the bank's counterclaim (dealing with the bank's entitlement to interest)which did not form the subject of the summary judgment application.[35] Finally, I record receipt of Mr Wilson's memorandum of 7 February, receivedon 8 February, several days after the hearing. Nothing in the memorandum requires an answer from the defendant. Nor does it bear on this judgment.Result[36] For the foregoing reasons, Mr Wilson's application is dismissed in itsentirety.[37] The bank having succeeded, it is entitled to costs. The parties may file memoranda as to costs if agreement cannot be reached between them as to quantum.C J Allan J