Yarrow v Finnigan [2017] NZHC 1755 (27 July 2017)

Last Updated: 6 September 2017

IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY

CIV-2011-443-330 [2017] NZHC 1755

BETWEEN	PAUL STEVEN YARROW Plaintiff
AND	MICHAEL CHANEL FINNIGAN Defendant

Hearing:	23 November 2016
Counsel:	P S Yarrow in person (with McKenzie Friend, Ms D Matsuda) L J Taylor QC and J B Orpin for the Defendant
Judgment:	27 July 2017

_{JUDGMENT OF WILLIAMS J}

Introduction

[1] This is a proceeding by the plaintiff against an adviser, co-director and business associate arising out of the collapse of the Yarrow group of companies in

2011. The proceeding has been on foot since June 2011. The relief sought is damages in the order of $90 million and other remedies.

[2] The application before me is an application by the defendant to strike-out the proceeding either as an abuse of process or for want of prosecution.

Background

[3] Although the plaintiff had the assistance of counsel until April 2016, he is now self-represented due, I infer, to a lack of resources. The matter was set down for an estimated five week trial commencing on 10 October 2016, but the plaintiff’s failure to file evidence in accordance with timetabling directions meant the trial had to be abandoned. This failure was part of a consistent series of breaches of

_{timetabling and other directions reflecting the fact that, while the plaintiff harbours a}

YARROW v FINNIGAN [2017] NZHC 1755 [27 July 2017]

burning sense of injustice with respect to the alleged actions of the defendant, he has lacked the skill and application necessary to translate that into timely despatch of his case.

[4] In a minute on 12 August 2016, Woodhouse J recorded the history of the file from the making of timetabling orders in February last year as follows:

(a) 16 February 2016: timetable requiring plaintiff’s briefs by 27 June, defendants briefs by 25 July, plaintiff’s reply briefs by 15 August and a common bundle of documents to be prepared, filed and served by the plaintiff by 5 September. The plaintiff’s briefs have not been served to date and, in consequence, the defendant has not been required, or able, to serve briefs.

(b) 14 April 2016: an order was made declaring that Mr Yarrow’s former solicitor, Mr Dukeson, had ceased to be the solicitor on the record for Mr Yarrow. The Associate Judge’s minute records that there was an affidavit from Mr Yarrow supporting Mr Dukeson’s application and recording that Mr Yarrow intended to represent himself.

(c) 29 April 2016: Heath J issued a minute directing the registrar to set the proceeding down for a face to face case management conference on the first available date after 13 May 29016. The first steps taken in that regard are as recorded above, following the memorandum for the defendant of 15 July 2016.

(d) 3 August 2016: advice to the parties of the conference on

11 August.

(e) 8 August 2016: Mr Yarrow filed a brief memorandum requesting adjournment of the conference because he was in the process of instructing counsel and had approached Mr Illingworth QC to provide a review of the proceedings. That application was declined.

(f) 11 August 2016: Mr Yarrow filed a reasonably detailed memorandum, dated 10 August, which I received on the morning of this conference. This sets matters out from Mr Yarrow’s perspective, including various steps he has taken and the fact that he has been engaged in other proceedings. It was apparent from the memorandum, although not stated in express terms, that Mr Yarrow was seeking more time. It was also apparent from what he said that there was unlikely to be any realistic prospect that the proceeding would be properly ready for hearing on 10 October, or within any reasonable period after 10 October.

[5] The Judge abandoned the October fixture and granted leave to the defendant to re-apply (there had been an earlier application in 2014) for an order striking out the proceeding, together with costs. The plaintiff’s response to this application was

to be filed and served by 23 September 2016. The Judge also directed the plaintiff to advise of steps he had taken to engage other counsel and the plaintiff’s proposals for getting the proceeding back on track.

[6] The defendant’s application was duly filed and served. The plaintiff did not comply with the directions relating to him. Rather, seven days after the date upon which his opposition was due, he sought an adjournment of the next timetabled case management conference (to be held on 5 October) and an extension for filing his opposition. In a minute on 3 October, the Judge refused to adjourn the conference. Following the 5 October telephone conference, Woodhouse J issued a comprehensive minute in which he recorded the plaintiff’s timetabling breaches, noted that no delays could be attributed to the defendant and then re-timetabled the filing of the plaintiff’s opposition to the strike-out application as a further and final indulgence. Directions included the following:

If Mr Yarrow wishes to oppose the application he must file and serve a notice of opposition, which may be contained in a memorandum which records his submissions in opposition together with any affidavit in support of the opposition by 4pm on 28 October 2016. The documents must be filed in the Wellington Registry with copies served at the defendant’s address for service. ...

Mr Yarrow may not apply for any further extension of time. No document may be filed or served after 4pm on 28 October 2016. If a notice of opposition, with or without affidavits, has not been filed and served by 4pm on 28 October, the defendant’s application will proceed by way of formal proof on the papers.

[7] The plaintiff did not comply with these directions either. His opposition was filed at the Auckland Registry with a request that it be forwarded electronically to Wellington (he said the Wellington Registrar advised this was acceptable). Due it seems to an oversight on the part of the plaintiff, the notice of opposition and affidavit in support were not actually served on the defendant until 16 November

2016 – 19 days late. The explanation had to do with electronic files and compressed attachments. Sixty-seven pages of supplementary documents were sought to be filed and served in a supplementary affidavit dated 10 November. The plaintiff said he did not realise, and was not advised until 9 November, that an affidavit was required in order for the documents to be put in.

[8] Defence counsel pointed out the non-compliance to the Court and called for the matter to be dealt with by way of formal proof in accordance with Woodhouse J’s direction of 5 October, and sought confirmation of the same. This material, which would otherwise have come to me promptly for consideration, did not because of the earthquake shortly after midnight on the morning of Monday, 14 November 2016. The parties therefore appeared when the matter was called in New Plymouth and the plaintiff filed brief submissions. In the circumstances, and on a de bene esse basis, I agreed to hear those submissions despite Woodhouse J’s direction.

Principles applicable to strike-out applications

[9] The defendant advances two grounds in support of his application: abuse of process and want of prosecution.

[10] Rule 15.1(1)(d) of the High Court Rules entitles the Court to strike-out a proceeding for abuse of process, although there is also inherent jurisdiction to that effect.¹ There are a number of categories of abuse of process but there are two relevant ones: a deliberate failure to comply with court orders (intentional and contumelious default) and continuing litigation without any intention of bringing it to a conclusion – in a sense, the use of litigation for a collateral purpose unrelated to resolution of the dispute.

[11] Consistent failure to comply with court orders can amount to an abuse.²

While the long-established principle is that failure must be deliberate, a pattern of breach can, in some circumstances, amount to such failure. For example, in Culbert v Stephen G Westwell & Co Ltd, the Court of Appeal of England and Wales said:³

Conduct is in the ordinary way only regarded as contumelious where there is a deliberate failure to comply with the specific order of the Court. In my view however a series of separate inordinate and inexcusable delays in complete disregard of the rules of court and with full awareness of the consequences can also properly be regarded as contumelious conduct or, if not that, to an abuse of process of the court.

¹ Reid v New Zealand Trotting Conference [1984] 1 NZLR 8 (CA) and Grovit v Doctor [1997]

_{1 WLR 640 (HL).}

² _{Day v Mead [1985] 1 NZLR 100 (CA) at 105.}

³ Culbert v Stephen G Westwell & Co Ltd [1993] PIQR (CA) 54 at 65–66.

[12] One way of interpreting this principle is that consistent failure in the face of repeated warnings can properly be interpreted as wilful. Excuses offered for the first few breaches will be entertained, but quickly wear thin.

[13] This idea is reflected in Parking New Zealand Ltd v ABD Trustees Ltd, Associate Judge Abbott struck out a claim in which non-compliance with exchange of evidence directions led to the vacation of a fixture.⁴ A single brief was filed, but it was late. In terms somewhat reflective of the case before me, Associate Judge Abbott said this:⁵

If the recent failure was the first, or even the second, occasion of default I may have been prepared to have accepted that it was not wilful, but a consequence of bad management, capable of being answered in costs. However, when it is the third occasion, and committed against a background where a party has said expressly that it is fully appraised of the consequences of timetabling, I am led to the view that the proper inference to be drawn is that the plaintiff was conscious of the breach and chose to do nothing. That inference is supported, in my view, by the lack of any approach to the court for extension to the timetable, or any updating affidavit.

[14] On the other hand, in Lees Trading Co (NZ) Ltd v Loveday, wilful default for the purpose of striking out was held to require more than knowledge plus non- compliance.⁶ A genuine but insufficient attempt will not satisfy the high standard required for strike-out.

[15] An alternative basis for a finding of abuse of process is where the plaintiff lacks any intention of bringing the proceeding to a conclusion in a timely way. In Grovit v Doctor, a long period of inactivity in the proceeding was explained by the plaintiff as being the result of the need to devote his resources to other related High Court litigation. Lord Woolf in the House of Lords confirmed that commencing and continuing litigation where there is no intention of bringing it to a conclusion can

amount to an abuse of the Court’s process.⁷ In a later decision in Arbuthnot Latham

Bank Ltd v Trafalgar Holdings Ltd, Lord Woolf, then as Master of the Rolls, described the warehousing of proceedings – that is, commencing a series of actions

⁴ Parking New Zealand Ltd v ABD Trustees Ltd HC Auckland CIV-2005-404-7397, 27 August

_2007.

⁵ _{At [26].}

⁶ _{Lees Trading Co (NZ) Ltd v Loveday HC Christchurch CP70/96, 3 June 1998 at 12.}

⁷ Grovit v Doctor, above n 1, at 647-648.

and then selecting which one to pursue (a practice that, it appeared, banks were engaging in with respect to debtors) was an abuse of process and had to cease.⁸

[16] In the case before me, the defendant suggested that the general principle from these authorities is that the courts exist to resolve disputes and litigants are expected to pursue their litigation in a timely way to conclusion to avoid inordinate delay bringing the system itself into disrepute. Plaintiffs, the defendant argued, risk being struck out if they do not. Within limits, I agree with that proposition. The courts must not be used for collateral purposes (whether conscious or unconscious) as this will be oppressive on defendants and tends to undermine the system of judicial adjudication of disputes between parties. The flip side, however, is that the Court’s power to strike-out proceedings on this basis is not to be used lightly because the effect of over-vigorous intervention in this area will be to oppress plaintiffs who may well deserve their day in court, whatever the quality of their proceeding and their knowledge of judicial process. Non-compliances, even multiple ones, and especially by lay litigants, will not always be deliberate or otherwise for wrongful reasons. They may be the result of ignorance, disorganisation, anxiety or a combination of these. The Court will tend to be tolerant of these things, but not endlessly so.

[17] I turn now to the second of the defendant’s alternative grounds. The want of prosecution ground for strike-out is contained in r 15.2(a) of the High Court Rules. It is well settled that there are three requirements:⁹

(a) the plaintiff must have been guilty of inordinate delay; (b) the delay must have been inexcusable; and

(c) it must have seriously prejudiced the defendant.

_{[18] Eichelbaum CJ summarised the relevant principles in these terms:}¹⁰

⁸ _{Arbuthnot Latham Bank Ltd v Trafalgar Holdings Ltd [1997] EWCA Civ 2999; [1998] 1 WLR 1426 (CA).}

⁹ _{Lovie v Medical Assurance Society New Zealand Ltd [1992] 2 NZLR 244 (HC) at 248.}

¹⁰ At 253.

1. By itself, delay prior to the issue of proceedings cannot constitute inordinate and inexcusable delay for purposes of a striking out application.

2. If such delay has occurred, further delay after issue of proceedings will be looked at more critically by the Court, and will be regarded more readily as inordinate and inexcusable than if the proceeding had been commenced earlier.

3. The defendant must show prejudice caused by the post-issue delay.

If, however, the defendant has suffered prejudice as a result of pre- issue delay, he will need to show only something more than minimal

additional prejudice to justify striking out the proceeding.

4. An overriding consideration is whether justice can be done despite the delay. As to that, all factors, including pre-issue prejudice and delay, have to be taken into account.

[19] Before addressing the arguments and ruling on whether the plaintiff’s

opposition will be heard, I will briefly summarise the proceeding.

A brief summary of the proceeding

[20] The plaintiff essentially blames the defendant for the failure of the Yarrow Group and the consequent loss of the value of his interest in it. He commenced his proceeding in June 2011. The claim at that stage was for damages of $4 million in personal losses and $7 million in benefits forgone. The claim pleaded that the defendant was the plaintiff’s adviser and agent in relation to the operation of the Yarrow group of companies in which, either directly or through trusts, he was a shareholder and director. It was alleged that the defendant had a central role in the operation of the group as he was the plaintiff’s father’s close confidante, accountant and, ultimately, business associate. In due course, he came to play these same roles with respect to the plaintiff. It was alleged that from September 2000 he had the plaintiff’s power of attorney and that the plaintiff relied upon his advice with respect to concerns over financial management and governance of the group. It was alleged that from around 2006, the defendant oversaw the operation of the group and following the plaintiff ’s purchase of a controlling interest in it, the plaintiff became almost entirely reliant on the defendant’s advice and counsel.

[21] In relation to various transactions entered into within the group, the plaintiff claims that the defendant had fundamental conflicts of interest, kept crucial

information from the plaintiff and, effectively, defrauded him for the defendant’s own gain and the gain of the defendant’s associates. Duties were claimed in tort, contract and equity (the last-mentioned as the plaintiff’s fiduciary).

[22] The plaintiff alleged that the Yarrow group was effectively insolvent at the time he was duped by the defendant into entering into a deed of family arrangement, following litigation against his brother, John, by which he took over control of the group from his brother. The withholding of this information, he alleged, caused the plaintiff to forgo other benefits to which he might have been entitled and to lose the entire value of his investment in the Yarrow group. The plaintiff challenged as effectively fraudulent the means by which he was brought into a land purchase in Australia known as the “Minto Transaction”.

[23] In a 2012 decision on a (successful) application for security for costs by the defendant, Associate Judge Christiansen noted that claims of dishonesty and fraud would require “an appropriate[ly] high level of proof in due course”.¹¹ The Judge

said:¹²

[T]he Court cannot ignore the nature of the claims or the magnitude of the consequences claimed as a result. When, as here, those claims involve allegations of dishonesty and fraud the Court is entitled to expect the plaintiff to accept the burden and responsibility of proof because of the size of the task to meet those claims.

... [I]n this case the Court is some considerable distance from being in a

position to accept appropriate proof exists.

The merits of the case are far from clear. The documentary evidence initially suggests a contractual arrangement rather more limited than Mr Yarrow suggests.

[24] Clearly the plaintiff faces an uphill battle in terms of proof.

[25] This proceeding is in fact the first of a cluster of proceedings. The plaintiff also brought proceedings in contract, tort and equity against his parents’ charitable

_{trust and the executors of his father’s estate,}¹³ _{testamentary promises and family}

¹¹ _{Yarrow v Finnigan [2012] NZHC 2281 at [26].}

¹² _{At [29]–[31].}

¹³ Yarrow v Noel & Melva Yarrow Charitable Trust HC New Plymouth CIV-2016-443-022.

protection proceedings against both the estates of his parents,¹⁴ and proceedings in Queensland against the parents’ charitable trust, the defendant Mr Finnigan, a Paul Dovico, and two companies (One Magnum Place Pty Ltd and Duncan Dovico Pty Ltd).¹⁵ The plaintiff also brought proceedings against a Mr Pettigrew, but this has been stayed pending payment of security for costs of $20,000 as ordered by Associate Judge Sargisson.¹⁶ I will have cause to refer in a little more detail below the proceeding against the parents’ charity and their estates because they too focus on the actions of the defendant in this proceeding.

[26] For completeness, I also note there are proceedings against the plaintiff in Jacquet v Yarrow¹⁷ (although the summary judgment entered against the plaintiff in the High Court in that proceeding was overturned on appeal),¹⁸ and bankruptcy proceedings initiated by the Bank of New Zealand but into which the charitable trust was substituted, its debt discharged, and Westpac was then substituted.¹⁹

[27] Mr Yarrow attributes many of the breaches in timetabling orders in this proceeding to the burden of complying with similar and multiple orders in other proceedings within the cluster.

[28] This proceeding was re-pleaded on 21 November 2011 following an unless order issued by Associate Judge Abbott on 26 October 2011 and then underwent a further major expansion in a second amended statement of claim in December 2014. Associate Judge Sargisson described the expansion as containing “wide ranging factual allegations that are highly contentious”.²⁰ That re-pleading too was filed in the face of an unless order made by Associate Judge Sargisson in November 2014. As the Judge noted in her judgment, counsel for the plaintiff accepted he would be “hard pressed to resist” the unless order because of the already extensive delay on

_{his part.}²¹

¹⁴ _{Yarrow v Tennent HC New Plymouth CIV-2015-443-067.}

¹⁵ _{Walsh v One Magnum Place Pty Ltd Supreme Court of Queensland, Brisbane Registry, C332/15.}

¹⁶ _{Yarrow v Pettigrew [2013] NZHC 1901.}

¹⁷ _{Jacquet v Yarrow [2015] NZHC 2873.}

¹⁸ _{Yarrow v Jacquet [2016] NZCA 345.}

¹⁹ _{I was not provided with a citation for these proceedings.}

²⁰ _{Yarrow v Finnigan [2015] NZHC 1468 at [5].}

²¹ At n 4.

[29] The amended claim expanded the proceeding from four to 10 causes of action, spanned an 11 year period, increased quantum from $11 million to

$91 million and more than doubled the length of the statement of claim. The causes of action now cover:

(a) the failure to exercise an option which expired in November 2008;

(b) negligence and breach of contract in relation to the purchase of shares in May 2003;

(c) negligence and breach of contract in relation to the purchase of shares in May 2005;

(d) negligence and breach of contract in relation to purchase of the

“Minto Land” in Australia in May 2007;

(e) negligence and breach of contract in relation to dealings with Westpac between 2005 and 2011;

(f) negligence and breach of contract in relation to the purchase of

Volumex Limited in 2009;

(g) negligence and breach of contract in relation to the plaintiff entering a deed of family arrangement in 2009;

(h) negligence and breach of contract in relation to the contents of a “side deed” in 2010;

(i) fraud on the power, breach of equitable duty and breach of fiduciary obligation in relation to all the foregoing causes of action;

(j) negligence and breach of contract in relation to a series of payments and transactions made or entered into to the plaintiff’s detriment; and

(k) deceit and false representation in respect of all of the foregoing heads of claim.

[30] The essence of the claim was described by Associate Judge Sargisson in these terms:²²

At the heart of the amended claim is Mr Yarrow’s belief that Mr Finnigan negligently or fraudulently valued the worth of a company in the Yarrow group of companies in the course of acting as professional adviser to Mr Yarrow over a lengthy period. The overarching premise is that Mr Yarrow’s business interests are currently worth next to nothing, and that but for Mr Finnigan’s negligence and dishonesty they would be worth over

$90 million.

[31] The Judge continued:²³

The first to third causes of action warrant particular mention. They are new. They seek damages in excess of $43 million: the first for an alleged failure to exercise an option that expired in November 2008; and the second and third for damages in connection with recommendations that Mr Finnigan is said to have made at least 9 years ago. They raise contentious issues not only of fact, but of law. Contentious limitation issues arise.

[32] I agree with Associate Judge Sargisson’s summation.

[33] Because it is necessary context, I also note the plaintiff’s separate proceedings against his parents’ charity²⁴ and their individual estates. Both proceedings are relevant because they too are actions against Mr Finnigan in substance in his role either as trustee or executor. The proceedings allege that Mr Finnigan, while conflicted between his duties to the trust and the plaintiff, abused his position to the plaintiff’s disadvantage and the trust’s (and Mr Finnigan’s own) advantage. That litigation seeks to impute Mr Finnigan’s knowledge and unlawful actions to the trust and the estates. In some respects that litigation is a mirror image

_{of this proceeding against the defendant directly.}

²² _{At [6].}

²³ _{At [8].}

²⁴ Noel and Melva Yarrow Charitable Trust.

Procedural delay

[34] It is common ground that this proceeding, now six years old, is a sorry tale of delay and breached timetabling orders. The defendant identified the “most egregious examples” of procedural delay. He said the plaintiff:

(a) was 14 weeks late in serving his amended statement of claim –

timetabled for 12 August 2011 but not filed until 21 November 2011;

(b) was two weeks late in paying the first tranche of security for costs – timetabled for 4 December 2012 but paid following the issue of an unless order on 14 December 2012;

(c) obtained two extensions from the Court amounting to nine months to complete inspection of documents – completion date 23 July 2013 but extended to 9 April 2014;

(d) was 17 weeks late in serving the second amended statement of claim –

ordered to be filed by 8 August 2014 but not filed until 3 December

2014;

(e) was 10 days late in paying the second tranche of security for costs –

ordered to be paid by 28 July 2015, but paid on 7 August 2015; and

(f) had still not served his evidence which was to be exchanged at the end of June 2016.

[35] As the defendant noted (unchallenged by the plaintiff), the plaintiff ’s defaults and delays accounted for about 20 months of the five and half year life of this proceeding. That, as the defendant was at pains to point out, is in addition to the delay in initiating the proceeding in the first place: as much as eight years, given that the earliest cause of action arose in 2003.

[36] I turn now to the question of whether, in the face of Woodhouse J’s most

recent directions, the plaintiff is entitled to be heard in the application before me.

Formal proof?

[37] Defence says the matter should be heard as directed by Woodhouse J in consequence of the breach of his timetabling direction at [7](b) of his 5 October minute. Failure to fill and serve notice of opposition and submissions and affidavits in opposition by 4pm on 28 October 2016 meant the defendant’s application would be dealt with on the papers by way of formal proof. The defendant says Woodhouse J’s directions were substantially breached and the consequence signalled should follow.

[38] The 5 October direction related only to opposition to the strike-out application. It did not address the other matters referred to in Woodhouse J’s

12 August minute in relation to steps taken to instruct other counsel and proposed further steps to get the proceeding back on track. But Mr Yarrow seemed to be aware of the jeopardy he was in. He said he tried to comply but seemed unable to do so. The plaintiff explained that he asked the Registrar in Wellington whether filing in Auckland (where he lives) would be acceptable and was advised that it would. His memorandum and affidavit were filed in Auckland on 28 October, but not served until 16 November, 19 days after the deadline. The plaintiff also made an implied application to file a supplementary affidavit. The affidavit was dated 10 November,

13 days after the deadline.

[39] The breach of the filing deadline might be seen as technical. Although filing in Auckland was not what was directed, I am prepared to accept that the plaintiff thought he was complying with the terms of advice he received from the Registry. Of course service was late, and no real excuse was given for that non-compliance, but I am prepared to accept that overall, the plaintiff made a genuine attempt at compliance. The failure, however, will have costs implications. Directions in the nature of Woodhouse J’s directions of 5 October are always able to be revisited in light of subsequent events. I am minded to hear the plaintiff’s opposition on the basis that although he did not comply with the Judge’s directions, he was trying to do so.

Submissions

[40] The defendant argued that when leave was granted to the plaintiff’s counsel to withdraw in April last year, the plaintiff nonetheless averred:²⁵

I am aware of the timetabled steps that the Court has ordered be taken from this point on. I have access to all Court documents and all documents that I have listed in discovery. I intend to meet the required timetable and represent myself.

[41] The defendant argued that the plaintiff, on his own evidence, demonstrated he made no serious attempt to prepare briefs of evidence for the timetabled October trial. He was busy trying to obtain the assistance of Messrs Dale and Illingworth. The plaintiff, the defendant says, never sought an extension of timetabling deadlines, there is still no evidence, nor any indication that preparation is in train. Continued non-compliances since that date demonstrate that the only inference available is that the non-compliance is intentional and the plaintiff has been consistently abusing the Court’s processes and will continue to do so.

[42] The defendant submitted that the relevant test for abuse of process was met on those facts.

[43] The defendant submitted that extensive delays in this litigation by the plaintiff were inexcusable and this satisfied the alternative ground of want of prosecution. The plaintiff had failed to secure the assistance of counsel; failed to secure the funds necessary to prosecute his case; and seemed only to be moved to progress matters under threat of serial unless orders. Meanwhile, the defendant argued, he continued to suffer significant prejudice to his defence: memories were dimming; and an important witness (Dennis King, solicitor) had died. Meanwhile, the defendant argued, he also faced the unfairness of litigation hanging over him and his elderly wife, particularly given the fact that the claim is weak.

[44] The plaintiff responded by arguing that although there had been consistent timetable breaches, he had always complied with unless orders and in fact the

_{directions of Woodhouse J on 5 October were not strictly speaking, unless orders.}

²⁵ Affidavit of Paul Steven Yarrow in support of interlocutory application, sworn 12 April 2016 at

As to the most recent late filing and service, the plaintiff’s written submissions argued:

There was much activity around the filing and serving of this memorandum, and all activity documented and recorded by the Court. Mr Yarrow acknowledges that while being extremely conscious of and concerned that he meet the deadline given by Woodhouse J, he realises that he may have unconsciously over-compensated in his efforts to file and serve his documents, and in so doing, unintentionally inconvenienced the defendant. Mr Yarrow apologises to the Court and to Mr Finnigan in this regard.

[45] The plaintiff argued that although he may have caused unsanctioned delays for 33 per cent of the life of the file, he had, by definition, achieved required deadlines 67 per cent of the time.

[46] The plaintiff argued further that he had not merely sat on his hands in the period leading up to Woodhouse J’s October minute. He had worked diligently to secure the services of senior counsel following the withdrawal in April 2016 of his then counsel, but, in the event, had failed in that objective. While he had struggled to comply with deadlines, he had acted bona fides throughout the proceeding. It was not his intention to flout deadlines, or refuse to comply with Court directions.

[47] The plaintiff submitted:²⁶

While not a seasoned professional in legal matters and the law, the plaintiff has always given his best effort to respect the court process and court directions. His standard may have fallen short of the requirements of the court on many occasions but he cannot be faulted for his honest intentions, however naive or inadequate they may be. Where the plaintiff has fallen short of those standards, he has relied on the judgment of the Court to direct him accordingly and then he has acted to satisfy those directions within his capacity to do so.

[48] And further:

In spite of the length of time passed from the commencement of this proceeding in 2011 to the present time, 2016, for all intents and purposes, the plaintiff has not set out on this litigation journey to prejudice the defendant or to insult the justice system or the honourable men and women who uphold its principles.

_{On the contrary, the plaintiff’s sole objective is to bring this matter to trial.}

²⁶ Memorandum of plaintiff opposing application for a strike-out by the defendant, 28 October

Over the course of the five years that this proceeding has been in process, as pointed out by counsel for the defendant, there has been a huge amount of legal work undertaken – statements of claim, amended statements of claim, particulars sought, discovery, case management conferences, missed deadlines, varied timetables, joint memorandums, affidavits, time and cost.

Analysis

[49] Despite the plaintiff’s submissions, the history of consistent breach in this case invites the inference that the plaintiff fully understands his obligations but cannot comply with Court directions. His submission that he complied with all unless orders underscores the availability of this inference at least in respect of all other Court directions and, as he accepts, there have been many. The submission implies that Mr Yarrow is of the view that he only needs to comply with unless orders and that other orders are discretionary. The fact seems to be that Mr Yarrow has engaged in complex commercial litigation in which he lacks the skill, resources and, perhaps, character or constitution, to comply with orders designed to bring the matter on for hearing. The best he is able to do is protest that his intentions are good and he has been trying to obtain the assistance of counsel without success. In the meantime, the directions of the Court remain unanswered unless the Court makes its own threats through unless orders. In this sense, his non-compliances are deliberate; that is, he is engaged in complex litigation that he knows he cannot complete without help he cannot obtain.

[50] It is equally an abuse of process in the sense that the plaintiff plainly lacked the practical intention of bringing the matter to a timely conclusion. Either limb of the abuse of process ground will be met. As the defendant says, four years ago Associate Judge Abbott observed that delay in prosecuting the claim was reaching the point where it was “an available inference” that the “proceeding was not issued with the intention of pursuing it”.²⁷ Meanwhile, Associate Judge Sargisson, three years later in November 2014, said it was “difficult to resist the inference that the plaintiff does not intend to pursue this proceeding conscientiously”.²⁸

[51] Persistent, serial and inexcusable non-compliances since that date suggest that the inference is now irresistible. That is why it has taken six years to get to the

²⁷ _{Teleconference minute of Associate Judge Abbott, 26 October 2011 at [2].}

²⁸ Teleconference minute of Associate Judge Sargisson at [3].

current stalemate. In the meantime, the defendant is effectively held to ransom. The courts must be reasonably tolerant of lay litigants who engage in litigation that is not vexatious, even if it raises novel and difficult issues of law and fact. I do not here take the view that Mr Yarrow’s proceedings wholly lack merit. I am not in a position to come to any such view. But the allegations against Mr Finnigan are very serious and as Associate Judge Christiansen noted the seriousness of the allegations will affect the quality of proof required. This is by no means an orthodox case easily capable of proof. But that fact alone does not assist the defendant in his application to strike it out. Rather, the plaintiff’s problem is delay and non-compliance that has become more problematic with the loss of the assistance of legal counsel in April last year. There must come a point where the courts’ tolerance in that regard is unavoidably and regrettably exhausted. After nearly six years, this proceeding has reached that point. It has thus become an abuse of process.

[52] The same facts as discussed above meet the three requirement of the want of prosecution ground. The plaintiff’s delay in this case has been inordinate and inexcusable – indeed in most cases the plaintiff has not even attempted an excuse – and the prejudice to the defendant is obvious. The defendant will be 80 next year. He says this litigation has cast a shadow across his life for the last six years, and, he says, that of his wife, who has suffered mental illness as a result.

[53] The proceeding will be struck out. The defendant will be entitled to costs and security for costs may be disbursed accordingly.

Williams J

Solicitors:

Reeves Middleton Young, New Plymouth for defendant

Copy to: P S Yarrow