Kerr v Ecurie Topgear S.A. CA39/98 [1999] NZCA 369 (3 May 1999)

Last Updated: 9 February 2019

IN THE COURT OF APPEAL OF NEW ZEALAND CA39/98


BETWEEN PHILLIP LAWRENCE KERR

Appellant

AND ECURIE TOPGEAR S.A.

Respondent


Hearing: 29 April 1999

Coram: Henry J Gallen J Doogue J

Appearances: G J Judd QC for the Appellant
J R F Fardell and A G W Webb for the Respondent

Judgment: 3 May 1999

JUDGMENT OF THE COURT DELIVERED BY HENRY J

[1] In this proceeding the respondent (Ecurie) is claiming Swiss Francs 429,662, representing funds originating from its bank account in Geneva Switzerland in 1975 and 1976 and alleged to have been wrongfully transferred to the use of the appellant. Ecurie, incorporated under Swiss law, received monies earned by Bruce Leslie McLaren, now deceased, from his motor racing activities. Since being initiated on 24 February 1992, the proceeding, still in its interlocutory stages, has had a long and unenviable history. The appellant now appeals his most recent unsuccessful attempt to have the Court intervene and in effect declare him the winner before the scheduled course has been completed. The strike out application to achieve this was dismissed by Potter J in a judgment delivered on 5 February 1998, which is now appealed. It is now more than seven years since the claim was initiated, the present pleading is contained in a fifth amended statement of claim, and this appeal relates to the third application to stay or dismiss which has been the subject of a Court determination.
The chronology detailing the history since February 1992 demonstrates that case management does not always achieve its objectives.

[2] The first application was made on 3 August 1994, allowed by Master Kennedy-Good in October 1995 but dismissed by Salmon J on review on 30 October 1996. An application for leave to appeal to this Court was dismissed. The second was made on 7 July 1997, and dismissed by Salmon J on 8 August 1997. The present application was made on 21 October 1997, the grounds being that the proceeding is frivolous or vexatious, and an abuse of process. The matters relied on in support are gross delay in issuing the proceeding, failing to disclose documents, permitting material documents to be destroyed, inability or refusal to give proper particulars, and resulting prejudice. It is also claimed by the appellant that two of the four causes of action are statute barred.

Abuse of process

[3] It is convenient to deal with the strike out on an abuse of process approach, as that concept incorporates the various grounds relied upon to support the application and this appeal. Misuse of the judicial process giving occasion for the exercise of the Court’s inherent jurisdiction to strike out is not governed by fixed criteria, nor is it limited to fixed categories. When it is invoked the inquiry is directed to ensuring, for the due administration of justice, that the Court’s processes are being fairly used and are not lending themselves to oppression or injustice (Reid v New Zealand Trotting Conference [1984] 1 NZLR 8). With that general principle in mind we turn to the facts of the present case.

[4] Although the whole history is relevant to the ultimate issue, it is also relevant that two previous similar applications have failed. It is therefore appropriate to assume that at the time of the last of those, namely 8 August 1997, the circumstances then existing did not warrant taking this extreme step. The focus accordingly must be on what has transpired since, placed against the background of earlier relevant circumstances. For the appellant, Mr Judd said that the precipitating event was the location by the appellant in October 1997 of certain documents, including an agreement dated 1 April 1970 to which the deceased Bruce McLaren and the
appellant were parties. The agreement is said to demonstrate the entitlement of the appellant to recover 15% of all monies received by Ecurie from any source whatever. It is submitted that this establishes, or at least supports, the appellant’s contention that he was entitled beneficially to the funds in question, which we understand it is admitted were received to his use.

[5] In essence, the additional factors now relied on are the discovery by the appellant of material documents, coupled with the admission now made in response to Potter J’s order, that Ecurie has in its possession or power five of those documents, including the agreement of 1 April 1970. The absence of any explanation for Ecurie’s failure previously to disclose those documents is also stressed. After due consideration, we do not find these further factors as providing sufficient reason for concluding that the case has now reached the point where justice cannot be done to the parties if it proceeds to trial.

[6] The delay in instituting the proceedings, although very substantial, has not previously been held, or indeed forcefully promoted by the appellant, as sufficient of itself to prevent a fair trial of the issues, notwithstanding the apparent lack of contemporary records, what are said to be shortcomings in the pleadings by way of an absence of adequate particulars, and possible limitation problems. It can be noted that there is no substantive complaint of undue delay on the part of Ecurie since 1992 in prosecuting the claim. The starting point therefore, is that down to October 1997 when the present application was filed delay, even in conjunction with other relevant factors then existing, has not been seen as warranting a stay or dismissal. The question is whether the additional factors we have identified, when linked with those other factors, now require Court intervention to terminate the action. We are satisfied the answer must be in the negative, for reasons which can be stated quite shortly.

[7] The agreement of 1 April 1970, although supportive of the defence does not make Ecurie’s claim appear to be untenable. The existence of the agreement does not add to any prejudice that may arise to the appellant from the absence of contemporary records, some of which have now been destroyed. Neither does it hinder the investigation or presentation of matters by way of defence. In the course
of argument, Mr Judd responsibly acknowledged that in the end the real thrust of his present argument was that against the background earlier summarised, the conduct of the plaintiff is now shown to be such that it should not be permitted to continue prosecution of its case. This, it is said, is highlighted by the failure to disclose the new documents, and also the complete lack of any explanation for that failure. Those matters will of course be relevant and possibly significant at trial, but in our view do not in all the circumstances render continuation of the proceeding to trial an abuse. We therefore agree with Potter J’s conclusion.

Third and fourth causes of action

[8] Mr Judd submitted that these two causes of action are, on their face as pleaded, statute barred. All causes of action relate to the same transfers of funds out of Ecurie’s bank account. The first is that the funds were subject to an implied or resulting trust in favour of Ecurie, and wrongful conversion of these funds. The second is framed as a fraudulent breach of them by conversion. The third is breach or breaches of fiduciary duty as constructive trustee. The fourth is framed as a fraudulent breach of trust by the appellant as a constructive trustee.

[9] The practical consequences of striking out the third and fourth causes of action would appear to be minimal, and of little benefit to the parties or the Court in achieving an expeditious disposal of this proceeding. At best, these claims are variations of a common theme, which is the wrongful conversion by the appellant of the same funds, in respect of which it is claimed under one legal head or another, he was a trustee or fiduciary for Ecurie.

[10] The breach or breaches of trust having occurred in 1975 and 1976, and the proceeding not having been commenced until 1992, Ecurie must rely on s21 of the Limitation Act 1950 to avoid the limitation defence. Mr Judd submitted the section was not available under these two heads of claim.

[11] The issue of s21 was considered in some detail but rejected by Salmon J in his judgment of 21 February 1997 apparently in respect of all causes of action pleaded in this present statement of claim. In her judgment Potter J dealt briefly
with the submission made to her that the bar applied to the third and fourth causes of action. She found nothing which had not been the subject of careful argument before, and a considered decision by, Salmon J. Potter J concluded that further consideration would be appropriate only in the context of a full trial – a conclusion which with respect seems to us eminently sensible and appropriate to the circumstances. The facts are common to all causes of action. The precise legal concept into which they may or may not fall is clearly better able to be decided at trial. Whether the ensuing result is that a claim is statute barred can be determined at that stage. The refined argument that s21(1) does not apply to these aspects of the pleading is better addressed at trial, should that be necessary. To ensure the issue does remain open, we make it clear that this ground of the appellant’s application is not being decided by this Court, and the limitation plea in respect of these two causes of action remains extant.

Further and better particulars

[12] We find it unnecessary to traverse this aspect of the appeal in any detail. In general the pleading adequately informs the appellant of the case he has to meet. As the argument in this Court progressed, it became possible to identify those aspects which did require to be addressed. They are resolved in the following way, the references being to the paragraphs as they are numbered in the fifth amended statement of claim.

Paragraph 8

[13] The requests were made orally to one or other of Mr Patrick Lier or Mr Chauvet, which of whom it is not now known. The dates of the requests cannot be specified with any more accuracy.

Paragraph 12

[14] The source of Mr Kerr’s knowledge is that set out in the letters from Russell McVeagh McKenzie Bartleet & Co to Mr Judd of 21 June 1994 and 14 March 1995.

Paragraph 14

[15] The representation was by way of oral advice from Mr Kerr to Mr Rennie on or about the respective dates of receipt of the funds.

Paragraph 15(b)

[16] The directions were given orally by Mr Kerr to Mr Rennie on or about the dates of the respective withdrawals.

[17] The Court observes that the above particulars will be binding on Ecurie at trial.

Conclusion

[18] The appeal against the refusal to strike out the fifth amended statement of claim for abuse of process is dismissed. The appeal against the refusal to strike out the third and fourth causes of action contained in the pleading is dismissed, but without prejudice to the appellant’s right at trial to plead the limitation bar. The appeal against the refusal to order further particulars is allowed, but only to the extent recorded in this judgment.

[19] The stage has long passed since this protracted litigation should have been brought to finality. We respectfully suggest that it be referred to the Executive Judge, Auckland, for consideration of such appropriate timetabling orders which may still be necessary, and the allocation of a trial date.

[20] The respondent is entitled to costs in the sum of $3,000, together with disbursements including reasonable travelling and accommodation expenses for one counsel as fixed by the Registrar.

Solicitors

Beckerleg Cockle, Auckland, for appellant
Russell McVeagh McKenzie Bartleet & Co, Auckland, for respondent