ROONEY EARTHMOVING LIMITED V BMW CONTRACTING LIMITED AND ORS HC TIM CIV 2009-476-000471 [2009] NZHC 1358 (1 October 2009)

IN THE HIGH COURT OF NEW ZEALAND
TIMARU REGISTRY
                                                               CIV 2009-476-000471



               BETWEEN                    ROONEY EARTHMOVING LIMITED
                                          Plaintiff

   
           AND                        BMW CONTRACTING LIMITED
                                          First Defendant

       
       AND                        KELVIN DOUGLAS MCTAGUE
                                          Second Defendant

           
   AND                        KERRY WAYNE BARTLETT
                                          Third Defendant

               AND
                       CLARENCE HENRY WHITING
                                          Fourth Defendant


Hearing:       1 October
2009
               (Heard at Christchurch)

Counsel:       NRW Davidson QC for Plaintiff
               P J Shamy and K T Dalziel
for 1st and 3rd Defendants
               J Costigan for 2nd Defendant
               A Shakespeare for 4th Defendant

Judgment:
     1 October 2009


                          JUDGMENT OF FOGARTY J



[1]    Last week on 23 September I granted an interlocutory
application without
notice for freezing orders but imposed a term on that order that there be a hearing
today at which I would call
on the plaintiff to argue for the merit of the continuation
of the orders. This was because I was concerned as to the potential application
of
doctrine of merger of causes of action in judgment as a consequence of delivery of
the Employment Court judgment. I was also concerned
about the fate of some Trade


ROONEY EARTHMOVING LIMITED V BMW CONTRACTING LIMITED AND ORS HC TIM CIV 2009-
476-000471 1 October
2009

Me auctions in respect of some earthmoving equipment which appear to be intended
to terminate on Saturday, 3 October.


[2]
   As I have already told the parties, having heard argument this morning, I am
satisfied that there is a reasonably arguable basis
for these proceedings to be
commenced in the High Court against BMW Contracting Limited, sufficient to
sustain the continuation of
the freezing order.


[3]    I need to explain a little more of my qualification to that proposition. The
problem which concerned
me was that the subject matter of this dispute was first
litigated in the Employment Court against the employees of the plaintiff,
the 2nd, 3rd
and 4th defendants, but not against the corporate vehicle, BMW Contracting Limited.
The Employment Court, I am satisfied,
did not have jurisdiction to adjudicate on the
liability of BMW, be that in tort or in equity. I was concerned that there may be
some authority which would bind Rooney Earthmoving Limited to the consequences
of commencing litigation in a Court of more limited
jurisdiction than commencing
the litigation in the High Court.


[4]    I am satisfied after hearing argument that there is certainly
no case of direct
relevance to the issue I have just posed which imposes any doctrine of election and
precludes proceedings being
brought in the High Court. I have heard reasonably
extensive argument but I have decided not to record that in this judgment because
I
am not satisfied it would be appropriate to canvas matters given the fact that I have
imposed this hearing on the solicitors and
counsel for the defendants at short notice
and I need to secure to them the opportunity, if they wish to apply for a strike out.
There is a reasonably close relationship between the issue of whether or not there is a
reasonable cause of action, on the one hand,
and whether or not there is a basis for an
action to be struck out on the other. In this unusual circumstance I wish to leave that
opportunity open, particularly in case further research by solicitors and counsel for
the defendants throws up authorities which
they may not have had a chance to find in
the last few days.

[5]    Turning then to the continuation of the freezing order I also
record that leave
is reserved to the defendants to apply on reasonable notice to change the terms of the
freezing order or to even lift the freezing order.


[6]    That then brings
me to the question of the auction of this equipment. I have
received assurances this morning from counsel for the first defendant
that of the
equipment being offered for sale on Trade Me, each one of them is subject to
security so that if they are sold the proceeds
of those sales will be used to pay down
the debt which the securities are securing.


[7]    With that information, naturally enough,
Mr Davidson QC was not in a
position to oppose the continuation of the sale, the substratum of the freezing order
being one which
recognises the interest of all parties at this stage of the litigation for
BMW Contracting to continue to trade solvently.


[8]
   So, for these reasons I confirm the freezing order with the exception that
clause 14, which was directed to the auction is deleted
and in its place:

       14.     Any proposed sale of any land, plant or equipment must be notified
               to the plaintiff
prior to any sale process being commenced together
               with advice as to the intended use of any proceeds of sale.

[9]
   At the risk of repeating myself, but to ensure there is no doubt, I am allowing
the Trade Me auction to continue.


[10]   Costs
are reserved.


[11]   Leave is reserved for the parties to apply on short notice for a telephone
conference on any issues that might
arise in the course of these proceedings. Given
the nature of this litigation it should be actively managed and I ask the Registry
to
deal with the file on that basis.

[12]    Given that all parties are represented here today there is no need to re-serve
the
freezing order as amended. The amendments take effect as of now.




Solicitors:
Meares Williams, Christchurch, for Plaintiff
Raymond
Donnelly & Co, Christchurch, for 1st & 3rd Defendants
J Costigan, Christchurch, for 2nd Defendant
A Shakespeare, Christchurch, for
4th Defendant