Smith v Albany Power Centre Ltd (in liq) [2011] NZCA 167; (2011) 20 PRNZ 322 (20 April 2011)

Last Updated: 26 April 2011

IN THE COURT OF APPEAL OF NEW ZEALAND

CA236/2011 [2011] NZCA 167

BETWEEN M W SMITH First Appellant

AND S P HODGE Second Appellant

AND W HAWES Third Appellant

AND G THRASHER Fourth Appellant

AND J N HODGE Fifth Appellant

AND B J HODGE Sixth Appellant

AND ALBANY POWER CENTRE LIMITED (IN LIQUIDATION) First Respondent

AND CHAPMAN TRIPP SHEFFIELD & YOUNG Second Respondent

Hearing: 20 April 2011

Court: Glazebrook, Arnold and Randerson JJ

Counsel: M D O'Brien and B S Clarke for Appellants H L Thompson for First Respondent No appearance for Second Respondent

Judgment: 20 April 2011

ORAL JUDGMENT OF THE COURT

A The appeal is dismissed.

2. The appellants are to pay costs to the first respondent as for a standard appeal on a band A basis and usual disbursements.

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REASONS OF THE COURT

(Given by Randerson J)

[1] The appellants appeal against a refusal by Simon France J to adjourn a fixture which is due to commence in the High Court in Wellington on 2 May 2011. The appellants are the first to sixth defendants in proceedings brought by the liquidators of the first respondent – Albany Power Centre Ltd (APC). The seventh defendant in those proceedings, Chapman Tripp, is represented by Mr MA Gilbert SC who has advised through counsel that the seventh defendant abides the decision of the court.
[2] The proceedings in the High Court seek damages of the order of $16 million from the appellants who were directors of APC. APC was formed for the purpose of acquiring land and developing a retail shopping centre at Albany. It was funded by investors and was essentially a property owning syndicate. In 2002, APC agreed to sell the property it owned to Urbus Properties Ltd. The conduct of the directors in relation to that transaction lies at the heart of the proceedings.
[3] The second amended statement of claim includes a number of different causes of action. Chief amongst these are that the appellants breached their duties as directors of APC in various ways. The claim against the seventh defendant is essentially for breach of solicitors’ professional duty. It is clear from the pleadings and from the other materials placed before us that this is a proceeding of some complexity both as to liability and quantum.
[4] It is likely there will be 22 witnesses in all, including nine expert witnesses. The fixture has been set down for three weeks although counsel advise that the defendants consider it may take up to five weeks.
[5] Mr Carruthers QC has been briefed to act for the appellants for some time and has acted for them in related proceedings already determined in the High Court. He is said to be very familiar with the history of the matter. The reason the appellants sought an adjournment of the proceedings was that Mr Carruthers is engaged in another fixture which was anticipated to have concluded prior to Easter. It now appears the prior fixture will not be completed in that timeframe and that Mr Carruthers will not therefore be available to represent the appellants in the present case.
[6] This state of affairs only became apparent in early April and the appellants moved promptly to seek an adjournment on that and other grounds. Before us the only relevant ground is the unavailability of senior counsel for the fixture.
[7] In a ruling delivered on 18 April 2011, Simon France J declined the adjournment.[1] His reasons were briefly stated and are now set out:

[11] Mr O’Brien is the instructing solicitor of record. He would be able to do the trial but also has another trial commitment. It was not intended he be involved and superintendence of the file for the solicitors has been with Mr Cash. He is also an experienced advocate but I accept the applicant’s advice that being lead counsel on a trial of this magnitude ($11 million plus is sought) would be a significant step up on what he has done previously.

[12] The situation is unfortunate but I consider some integrity of trial management and case allocation must be maintained. A firm fixture is allocated for a purpose, and this is not a case of, for example, sudden illness. It is apparent the defendants will be disadvantaged in that long standing counsel of choice cannot do it, but the plaintiff has also to be considered.

[13] The circumstances of the case are not to be ignored. The plaintiff is in liquidation. The liquidators were reluctant to bring this litigation, but on the application of various interested shareholders, came under pressure from this Court to reconsider. Eventually senior advice was received and accepted that the proceedings should be initiated. The liquidators have filed an affidavit setting out the unhappiness of shareholders over the delays in liquidation brought about by the proceedings. A significant proportion of the shareholders did not want them brought.

[14] There will be considerable delays before a three week or longer fixture can be allocated. Balancing the factors, and given that the primary reason for unavailability is a clash of fixtures incurred well after this trial was set down, I consider the plaintiff’s objection should be upheld.

[8] The submission made by Mr O’Brien in support of the appeal is that the Judge erred in the balancing exercise by placing too much weight on administrative convenience and failing to give sufficient weight to the acknowledged disadvantage which would be suffered by the appellants if their counsel of choice was not available. In doing so, it was submitted the Judge reached a conclusion which was demonstrably wrong.
[9] This Court has grappled on previous occasions with its jurisdiction to consider an appeal against an interlocutory decision in relation to adjournments. The authorities were canvassed by this Court in Bevan-Smith v Reed Publishing.[2] The Court adopted the principle that it was prepared to act on the basis that it had jurisdiction to entertain the appeal if the result of the decision was such that the appellant’s rights to a proper evaluation of his case were irretrievably compromised. That is a relatively high threshold which we consider appropriate to adopt in relation to this appeal.
[10] We are not persuaded the appellants have met that standard in this case. Our reasons may be briefly stated. First, the fixture in this matter was allocated in March 2010 and the case is now fully ready for hearing. Secondly, we are advised that a fresh fixture is unlikely to be available until April or May 2012. Thirdly, it is not suggested that the case is not ready for hearing. All interlocutory processes have been completed and briefs of evidence have been exchanged. Fourthly, Mr Cash of the firm of Bell Gully acting for the appellants is thoroughly familiar with this matter and, although we understand he has not previously led a case of this magnitude, we have no reason to suppose he will conduct the proceedings if required in anything other than a competent fashion. He has at least ten years experience and it was always intended he would appear as junior counsel. We are also advised that it is possible, although not definite, that one of the senior litigation partners from the Auckland branch of the firm can be available. Fifthly, the Judge was required to balance any possible disadvantage to the appellants against any prejudice to the respondents. In that respect, the investors in APC are entitled to have an answer to their claim sooner rather than later. We consider that the level of prejudice which might be sustained by the appellants does not justify a delay of more than 12 months in resolving this matter.
[11] The Judge was entitled to consider these matters and factors such as administrative convenience. We are not persuaded that he has erred in the balancing exercise he was required to undertake to determine where the balance of justice lay.
[12] For these reasons the appeal will be dismissed.

Costs

[13] The appellants are to pay costs to the first respondent as for a standard appeal on a band A basis and usual disbursements.

Solicitors:
Bell Gully, Wellington for Appellants
McMahon, Butterworth Thompson for Respondents

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[1] Albany Power Centre Ltd (In Liquidation) v Smith HC Wellington CIV 2008-485-531, 18 April 2011.
[2] Bevan-Smith v Reed Publishing (NZ) Ltd [2006] NZCA 85; (2006) 18 PRNZ 310.