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IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY CIV 2001 409 000842 BETWEEN DAVID STANLEY HEENAN AND ROBERTA JANE HEENAN Plaintiffs AND OSCAR THORWALD ALPERS AND OTHERS IN PARTNERSHIP AS WESTON WARD & LASCELLES Defendants Hearing: 18 May 2009 Appearances: D S Heenan in Person K Foley for Defendants Judgment: 3 June 2009 at 2PM JUDGMENT OF ASSOCIATE JUDGE OSBORNE As to a Stay Descriptions [1] Mr D S Heenan is a co-plaintiff with his former wife, Mrs R J M Heenan. I will refer to Mrs Heenan for convenience as Mr Heenan's "wife". [2] The proceeding was commenced by Mr Heenan and his wife in 2001 "for themselves and as trustees for the Heenan Family Trust". [3] Mr Heenan is an undischarged bankrupt, adjudicated on 11 December 2000. The only capacity in which he may appear in this proceeding is as trustee of the Heenan Family Trust. DAVID STANLEY HEENAN AND ROBERTA JANE HEENAN V OSCAR THORWALD ALPERS AND OTHERS IN PARTNERSHIP AS WESTON WARD & LASCELLES HC CHCH CIV 2001 409 000842 3 June 2009 Introduction [4] Mr Heenan and his wife were disastrously affected by frauds committed by one Michael Anderson and others. An advance of $900,000.00 made to the Anderson interests was lost. One of the defendants (partners at one time or another of Weston Ward & Lascelles) acted for the Anderson interests. In this proceeding the plaintiffs claimed against the defendants, in negligence, damages on account of the lost monies together with additional sums for exemplary and general damages. [5] The way in which the plaintiffs' substantive case has been put is set out in more detail in the interlocutory judgment of Panckhurst J dated 21 November 2002 in this proceeding (paragraphs [3] to [10]). The stay [6] In July 2002 the defendants applied for a stay of the proceeding, having regard to Mr Heenan's bankruptcy. In his 21 November 2002 judgment Panckhurst J found that the loan documents involved in the Anderson advance referred to the lenders as Mr and Mrs Heenan with nothing to indicate that the investment was made to them in a trustee capacity, either in whole or in part. His Honour ordered that the proceeding be stayed until such time as affidavit evidence was provided sufficient to establish who advanced the loan funds of $900,000.00. The Court required proof by documentary evidence as opposed to assertions. The Court ordered that the lifting of the stay would be conditional on payment of the costs of the application on a 2B basis. Such costs amounted to $2,470.00. [7] Mr and Mrs Heenan applied to remove the stay. Each filed affidavit evidence. The defendants opposed the application. The hearing of the application took place in June 2003. At that hearing Mrs Heenan, the defendants and the Official Assignee in the bankruptcy of Mr Heenan were represented by counsel. Mr Heenan appeared for himself as a trustee of the Heenan Family Trust 1960. In a judgment dated 7 August 2003 Panckhurst J fully reviewed the evidence as to the Anderson advance and consequently the ownership of the chose in action which is the subject of this litigation. The Court held (a) A family trust was not involved in the Anderson advance (paragraph [29]). (b) The original beneficial interests of Mr and Mrs Heenan respectively in the advance were equal (paragraph [30]). (c) With the Official Assignee neither asserting nor assigning that part of the cause of action which formerly belonged to Mr Heenan in his personal capacity, Mrs Heenan had no right other than to the extent of her half share in the Anderson advance. (d) Mrs Heenan was excused from responsibility to meet payment of the ($2,470.00) costs, but the costs order remained extant and Mr Heenan was the party liable to make payment (paragraph [40]). (e) The Court directed that the stay be lifted as against Mrs Heenan (paragraph [36]) but the Court found that it was appropriate that the stay remain in relation to the Official Assignee's interest in the cause of action (paragraph [37]). [8] This judgment was not appealed. Mr Heenan's interlocutory application filed 21 April 2009 [9] Mr Heenan filed the present application as "trustee of the Heenan Family Trust 1960". The application is grossly defective in its non-compliance with r 7.19 High Court Rules and Form G31. It is in parts extremely difficult to understand. However, what it does do under a heading "Parties to be Added or Deleted are as Follows" is indicate that the following orders were sought: (a) The addition of "Heenan Family Trust 1960 through David Stanley Heenan" as a second plaintiff. (b) The deletion of Mrs Heenan as a plaintiff. (c) The addition or renaming of fifteen persons or entities as defendants (the first nine being the defendants already named in this proceeding, with the additional entities being the firm Weston Ward & Lascelles, the valuer involved in the Andersons' frauds B.P. Roberts, and four members of the Anderson family). (d) Removal of the stay of proceeding. (e) Retention of the existing proceeding and repetition of the original statement of claim in the proceeding. [10] Mr Heenan filed an affidavit in support. It contained some material in the nature of evidence. At the same time it contained to a gross extent matters of submission together with allegations and language of a scandalous nature. [11] On the day of the hearing Mr Heenan provided to the Court an additional document dated 16 May 2009 headed "Notice of Oppositions, against these Defendants who are Opposing the Joining of Other Persons and Making All of these Judgment Orders, on Applications 17.4.09". The defendant had filed no application so the document in question had no function as a notice of opposition. I treated it for the purposes of hearing as a document in the nature of a written submission. [12] The document was accompanied by a further affidavit of Mr Heenan sworn 18 May 2009. Ms Foley for the defendants did not object to the affidavit's late production, notwithstanding that again there were gross aspects of submission and scandalous language and allegations within it. Mr Heenan was therefore able at the hearing to speak to that affidavit also. Background other proceedings [13] Within the evidence or in the course of submissions, I was referred by Mr Heenan and counsel for the defendants to some of the other proceedings which have involved Mr Heenan. I note particularly these in chronological order: (a) A judgment of Chisholm J (HC Dunedin CIV-2002-425-15 hearing dated 1 July, 16 October 2003). Mr Heenan takes Chisholm J to have found (amongst other findings) that Mr Heenan had suffered an injustice. A reading of the judgment indicates that what was in fact said was that Mr Heenan had pleaded with the Court to annul his bankruptcy and remedy the injustice he had suffered. The Court was quoting Mr Heenan's submissions. The Court went on to uphold the bankruptcy. (b) A judgment of the District Court (DC Dunedin 1 December 2006, Judge Somerville) in which Mr Heenan was described by the Judge as a broken man who had lost everything including all of his household chattels and personal effects. (c) A judgment of Panckhurst J (CIV 2002-425-15) dated 20 December 2006, dealing with a dispute between the Official Assignee and Mr Heenan as to ownership of two Buick cars. The Court was satisfied on the balance of probabilities that Mr Heenan (and not the Heenan Family Trust 1960) was the owner of the cars when Mr Heenan was adjudicated bankrupt. The Court found no evidence that the 1960 trust existed let alone that it had owned the subject vehicles. (d) A judgment of Associate Judge Gendall (CIV 2006 412 1023 and CIV 2006 412 1031) dated 8 October 2007. In those proceedings Mr Heenan for three trusts identified as the Heenan Family Trust 1960, The Amended Heenan Family Trust 1960 and the Amended Heenan Family Trust No.2, sued thirty one defendants. The Associate Judge was dealing with a defendants' strike out application. The Court concluded (paragraph [89]) that the three trusts named as plaintiffs did not exist. The claims were struck out. (e) A judgment of Heath J (CIV 2005 - 425 - 76) dated 12 May 2009 in a proceeding between Mr Heenan and the Official Assignee. The Court was dealing with Mr Heenan's application to review a decision to refuse him an annulment of his bankruptcy and an application to join fifty seven parties to the bankruptcy proceeding. Heath J refrained from finding that the 1960 Trust did not exist. After a detailed review of the history of Mr Heenan's bankruptcy, the various property issues involved and Judgments which had been given in that context, Heath J held both that the Court had no power to review, rescind or vary the refusal and that on the facts no order of annulment could be made under the Insolvency Act 1967. The application to join fifty seven defendants, which had been sought on the basis of their alleged complicity in criminal activity designed to lock Mr Heenan into a fraudulently obtained bankruptcy and to prevent him from recovering what is rightfully the property of the 1960 Trust, was dismissed in its entirety. The Court urged Mr Heenan to accept the Court's decision and to co-operate with the Official Assignee in attempting to resolve bankruptcy issue. The judgment of Heath J was delivered in the week immediately preceding the hearing of the present application. The hearing before me oral joinder application [14] At the commencement of the hearing I noted that the "Notice of Oppositions" document handed to me by Mr Heenan contained a request that the Court join as additional defendants not only those named in the previous notice of application but also "Kerry Graeme Smith and Others (who are Parties to these serious offence's see sec 66 [Crimes Act 1961]". [15] When I asked Mr Heenan to clarify exactly what the reference to "Kerry Graeme Smith and Others" was intended to request, he indicated that the following persons or offices were intended to be joined: (a) Official Assignee of New Zealand. (b) Rhys Cain. (c) Megan Johnstone. (d) William Todd of Todds Car Auction. (e) Her Majesty the Queen. (f) The Attorney-General ("as employer of the Official Assignee and the Police"). [16] I understood from Mr Heenan that the reasoning behind this application was in effect parallel to that referred by Heath J in his judgment, namely the complicity of the intended defendants in criminal activity designed to prevent Mr Heenan establishing that the Heenan Family Trust 1960 owned the chose in action which gave rise to the present proceeding. Present applications removal of Mrs Heenan as a party [17] From 7 August 2003, when the stay was lifted as regards Mrs Heenan, Mrs Heenan in her personal capacity has had all the rights of any litigant. [18] Mr Heenan applies to have Mrs Heenan removed as a plaintiff. He has produced in evidence a letter dated 9 November 2007 from Anderson Lloyd, in which that firm states, in response to an apparent query from Mr Heenan as to whether Mrs Heenan is pursuing her claim in this proceeding, that "she does not want to be involved in these Court proceedings any further". [19] Mr Heenan's application is misconceived. It is for Mrs Heenan, not Mr Heenan, to take such steps as she wishes in relation to here involvement in the proceeding. If Mrs Heenan wishes to have no further part in the proceeding she has the right to do so by discontinuing her claim. That is for her. Mr Heenan's other applications the principles [20] The stay of proceeding precludes the parties to the proceeding from taking any further step in the proceeding. I must therefore deal first with the application to lift the stay. My consideration of the application to join additional defendants will be required only in the event the stay is lifted. Lifting of stay the principles [21] I adopt as a correct statement of principle the following passage from Halsbury's Laws of England 4th ed., (reissue) Vol.37, Practice and Procedure para 927, as approved by Allan J in Kidd v van Heeren [2006] 1 NZLR 393 at 404: [43] As to general principle, Halsbury's Laws of England (4th ed, reissue) vol 37, para 927 observes that: "A stay of proceedings is not the equivalent of a judgment or of a discontinuance, and may be removed if proper grounds are shown, even if the stay is imposed by a consent order. In contrast with a judgment for the defendant or the dismissal or continuance of a claim, in the case of a stay of proceedings, whether conditional or absolute, the claim still subsists; it is still `pending', and the stay is therefore always potentially capable of being removed. A stay may be removed if good cause or proper grounds are shown or the continuance of the stay could cause or produce injustice or prejudice or where there has been a change in the law." This statement of the legal principles was in turn approved by the Court of Appeal as the appropriate test on whether a stay should be lifted: see Kidd v van Heeren (CA 191/05, 23 March 2006, at paragraphs [3] and [9] decision reported at [2006] 3 NZLR 520n, but not on this point). [22] The concept that the stay is always potentially capable of being removed is subject to the following reservation, set out as a footnote (4) to the same paragraph in Halsbury's Laws of England (above paragraph [21]) In some cases, however, the restrictions or conditions imposed by the order to stay have the effect of bringing the entire proceedings to an end, in which event the stay will operate as a dismissal; and it may thereafter be necessary to examine closely the form of the order to determine whether the stay was intended to be permanent in the sense that no proper grounds can be adduced for its removal. [23] Some situations giving rise to a stay are inherently changeable and are subject to fresh developments which may alter the justice of the stay stays of proceeding issued pending arbitration or in relation to forum conveniens are of this nature. In Ghose v Ghose (1997) 12 PRNZ 149 at 157, Paterson J in granting a stay made this comment as to the change of circumstances which might justify the lifting of a stay: I am therefore prepared to stay these proceedings. However, the stay should not necessarily be permanent. If for any reason it is not possible to resolve all the outstanding issues between the parties in Wales, or if there is a change of circumstances which makes it more appropriate for the matter to be resolved in this country, then either party should have the right to apply to this Court to revoke the stay. A revocation however is unlikely to be considered unless circumstances arise after the date of this judgment which make it appropriate to revoke the stay. [24] Even in cases where there has not been a change in circumstances after the issuing of a stay, the Court has power to remove a stay in the interests of justice. The decision of the English Court of Appeal in Cooper v Williams [1963] 2 QB 567 is an example of the exercise of that jurisdiction. An infant's negligence claim under the Fatal Accidents Act 1846 (UK) in relation to her father's death was settled by a Tomlin Order. By virtue of the regime of the Fatal Accidents Act, which deemed the infant's and the widow's actions to be "one action", the effect of the consent order was to stay the widow's action. The Court unanimously upheld the decision of Megaw J allowing the widow to proceed. The circumstances identified by those members of the Court were put variously as mistakes by the widow's and the infant's separate solicitors; a risk taken by the defendants in taking a consent order without the presence of the widow; a breach of natural justice; and deficiencies and irregularities in the action. Davies LJ was of the view that a sufficient case for interfering with the stay had not been made out but his views were not sufficiently strong to lead him to dissent. [25] Cooper v Williams confirms the jurisdiction of the Court in special circumstances to revisit a stay. It is not, however, a charter for the parties or the Court to take a second view akin to an appeal from a judgment following a hearing which was regularly conducted. [26] The footnote (1) to Halbury's Laws of England, paragraph 927 (above [21]) cites Cooper v Williams as authority for the proposition that "an order for the stay of proceedings does not have the effect of a res judicata". Care must be taken with that statement. The footnote comment arises in the context of a discussion as to whether a stay is conditional or absolute. Cooper v Williams is authority for the proposition that a stay is not absolute. But it is not authority for the proposition that the judgments of fact reached upon the basis of evidence by a Court before imposing a stay by a regular process are subject to review. The emphasis of the majority in Cooper v Williams was upon the irregularity of the process which had occurred. Application of the principles non-payment of costs [27] Mr Heenan has not paid the costs which he was ordered to pay as a condition of removal of the stay. [28] There was no evidence put before the Court to indicate that after the stay issued there was any development or change of circumstance to justify an interference with that condition. [29] Equally, Mr Heenan's submissions did not identify any irregularity or breach of natural justice in relation to the 25 October 2002 hearing which resulted in the judgment of 21 November 2002 when the payment of the costs was required as a condition of lifting the stay. Mr Heenan failed to produce evidence for the 25 October 2002 hearing. Significantly in the context of the costs order, when Mr Heenan was given further opportunity to produce his evidence that evidence was the subject of the hearing of 4 June 2003 (leading to the 7 August 2003 judgment), in relation to which Panckhurst J made no further order of costs against Mr Heenan. [30] The condition imposed as to payment of the costs was appropriate and modest in its extent. There is no suggestion that Mr Heenan at any time misunderstood the condition. He did not appeal the judgment. There is no reason to interfere with the condition. [31] On this ground the Court must refuse both Mr Heenan's application to remove the stay and therefore his other applications generally. Application of the principles considerations of justice [32] Had Mr Heenan's application not been declined by reason of the non- payment of the cross order, I would still have declined the application upon the basis that he had not shown proper grounds for the lifting of the stay. [33] I first note in this regard that although the fourth aspect of the interlocutory application was for removal of the stay, the subsequent ten pages focused entirely on the identity of the defendants whom Mr Heenan wishes to have in the proceeding. They provide no further grounds for removal of the stay. As best I can summarise Mr Heenan's application, he asked for the stay to be removed immediately because: (a) The stay was illegal. (b) The defendants had been guilty of serious offences including obstructing, perverting and defeating the course of justice, perjury, providing false statements in documents, and other matters of corruption. [34] The affidavit evidence filed by Mr Heenan provides further explanation of the basis of his application in that the first affidavit was headed "Affidavit Evidence to Establish Who Advanced the Loan Funds of $900,000.00.". The affidavit tracks through from 1995 the advances made to the Anderson interests and the nature and activities of the Heenan Family Trust 1960 both in relation to the Anderson advances and in relation to other property. Mr Heenan exhibited a number of documents referring to both the Heenan Family Trust and the Heenan Family Trust 1960. Several of the documents related to certain Buick cars, but there were also items of correspondence, including from the Inland Revenue Department, referring to the Heenan Family Trust 1960. [35] The further affidavit which Mr Heenan handed up at the hearing also dealt with the cars, with particular criticism of Panckhurst J in relation to his 20 December 2006 judgment. It went on to comment upon and develop argument as to the existence of the Heenan Family Trust 1960. [36] This is an application in the context of civil litigation. It asserts negligence upon the part of the defendants in 1996. The proceeding was brought at the outset in the names of both the plaintiffs personally and as trustees of the "Heenan Family Trust" and was issued on 3 August 2001. The defendants filed their defence on 21 September 2001 and their application for a stay of proceedings on 19 July 2002. They challenged the right of Mr Heenan to be bringing the claim. It is that application which was heard by Panckhurst J on 25 October 2002 and is the subject of the 21 November 2002 judgment. It is clear from the judgment that the parties were fully aware that under the then r 477 High Court Rules, central to the issues before the Court was whether any right of action which Mr Heenan may have once had had in fact vested in the Official Assignee. Given Mr Heenan's failure to produce evidence for the hearing, Panckhurst J met the needs of the case by granting the stay (on condition as to payment of costs) but by extending the opportunity to the parties to establish by affidavit evidence who advanced the loan funds of $900,000.00. The parties then had the opportunity provided by the Court at the hearing on 4 June 2003, which resulted in the 7 August 2003 judgment. Mrs Heenan filed her affidavit evidence in February 2003, Mr Heenan responded on 11 March 2003 and Mrs Heenan then filed additional affidavit evidence on 26 May 2003. Affidavit evidence was also filed on behalf of the defendants. [37] It must have been clear to all parties that 2003 was the opportunity to file all relevant evidence, including particularly the documentary evidence as opposed to simple assertions on oath. The judgment of Panckhurst J of 21 November 2002, especially at [25], could not have been clearer. [38] Mr Heenan's affidavit of 7 March 2003 was purely a narrative affidavit. It attached no documentary evidence. [39] There followed the hearing of 4 June 2003 and the judgment of 7 August 2003 wherein it was concluded that Mr and Mrs Heenan personally (not a trust) had been the owners of the chose in action. As is made clear by [37] of the judgment not only was the stay to remain in relation to Mr Heenan's interest but it was to remain while the Official Assignee determined what if anything to do with the interest in the cause of action which was vested in the Official Assignee. [40] Mr Heenan appealed neither the findings nor the orders made in that judgment. [41] Against that background I find that Mr Heenan has shown no proper grounds for the removal of the stay: (a) Although the status of the factual findings in the 7 August 2003 judgment may not strictly constitute a res judicata, the parties were on notice that the evidence for that hearing needed to be comprehensive and fully documented. (b) No party could have understood that there would be a continuing right by way of some form of review of the stay from time to time. This Court in the judgment of 21 November 2002 indulgently offered the opportunity for the further hearing which took place in 2003 precisely because Mr Heenan had failed to provide proper evidence in 2002. (c) I take into account the fact that in subsequent years Mr Heenan in other proceedings with other parties has pursued with varying degrees of success and lack of success arguments touching upon, or directly related to the existence of the Heenan Family Trust 1960. Some of that litigation is the subject of various judgments of this Court and of the District Court to which I have referred already. (d) This is not a case, as sometimes may happen with stays in relation to arbitration proceedings or upon a forum conveniens basis, where there has been a change of circumstances after the ordering of stay. Rather, Mr Heenan seeks to adduce further evidence, including documentary evidence, as to matters which by their nature occurred before the 2002 and 2003 judgments. He also seeks to pray in aid aspects of judgments delivered since 2003, but those themselves are the products of the evidence that was produced in Court in those proceeding relating to pre-2003 matters. (e) I also take into account the fact that the judgments to which Mr Heenan and Ms Foley referred me contain findings or point to other Court's rulings which bind Mr Heenan. For instance, the judgment of Panckhurst J dated 20 December 2006 in which it is found that Mr Heenan was the owner of the two Buick cars with the consequence that the Official Assignee was entitled to declarations that Mr Heenan's bankrupt estate was the true owner of those cars. While it is true that the issue estoppel in that case is as between Mr Heenan and the Official Assignee I cannot ignore the effect of the judgment in the context of the application before me. The evidence as to the ownership of the motorcars is raised by Mr Heenan as a very significant part of his present argument for indicating that he should be able to open for exploration in the present proceeding the ownership of property which is not in issue in the present proceeding. Yet he is bound by the finding of this Court in the Official Assignee's proceeding where the ownership of the cars in question was directly in issue. (f) When issues of justice or injustice for the applicant are raised, they are not to be considered in a vacuum. They are to be considered against the interests of the other parties to the litigation. By applying to have the stay lifted in 2009, Mr Heenan seeks to bring back to active life a proceeding which is more than seven years old in relation to a cause of action which is more than twelve years old. I cannot ignore the fact that the application for removal of the stay now made by Mr Heenan is in reality an exercise in revisiting the 2002 and 2003 judgments without having brought an appeal (whether or not involving an application for leave to adduce further evidence). [42] In considering all matters, I find that Mr Heenan has not established proper grounds for lifting the stay. I would decline the application on this basis also. Joinder of additional parties [43] Mr Heenan is not entitled to apply for the joinder of additional parties or other interlocutory orders while the proceeding is stayed. To the extent that there are other applications filed I therefore decline those applications also. Result [44] For the reasons given, all applications filed by Mr Heenan are dismissed. [45] The defendants are entitled to costs. My present view is that they should be on a 2B basis. I direct that the defendants file and serve a memorandum as to costs within 5 working days, and I direct that Mr Heenan file and serve any memorandum in reply within 5 working days thereafter, following which I will issue a judgment as to costs. _________________________ Solicitors D S Heenan in Person Buddle Findlay, Christchurch
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URL: http://www.nzlii.org/nz/cases/NZHC/2009/663.html