P H PURDIE V T A MIKKELSEN AKA TERRY MIKKELSEN HC AK CIV 2008-404-000036 [2009] NZHC 756 (6 July 2009)

IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY
                                                                     CIV 2008-404-000036



               BETWEEN                         PHILLIP HUGH PURDIE
                                               Plaintiff


              AND                             TERENCE ALEXANDER MIKKELSEN
                                               AKA TERRY
MIKKELSEN
                                               Defendant


Hearing:       24 June 2009

Appearances: J Ussher for Plaintiff
             D J Chisholm for Defendant

Judgment:      6 July 2009 at 4:30 pm


              JUDGMENT OF ASSOCIATE JUDGE ROBINSON


              This judgment was delivered by me on 6 July 2009 at 4:30 pm
                      pursuant to Rule 11.5 of the High
Court Rules.

                                Registrar/Deputy Registrar


                                Date: ......................




Solicitors:    J Ussher, Barrister, PO Box 44 325, Pt Chevalier, Auckland
               D J Chisholm, Barrister, Shortland Street,
Auckland



P H PURDIE V T A MIKKELSEN AKA TERRY MIKKELSEN HC AK CIV 2008-404-000036 6 July 2009

[1]    On 1 November 2007 the
plaintiff obtained judgment in the County Court at
Law, 1 Dallas County, Texas, United States of America against the defendant for
payment of a total sum of $88,016.61 USD. The plaintiff now seeks judgment in this
Court against the defendant for the amount of
the judgment entered in the County
Court at Dallas County, Texas together with interest thereon at 8.25% per annum
from 1 November
2007 until payment.


[2]    The plaintiff's application for summary judgment came on for hearing on
23 September 2008. In late December
2007 the defendant filed an appeal from the
decision of the Dallas County Court. Counsel anticipated at that time that the appeal
would be argued before the Texas Court of Appeals prior to the end of the year with
the decision being delivered shortly thereafter.
Consequently, for reasons I gave at
that time, I granted the defendant's application for an adjournment to await the
outcome of the
defendant's appeal on the basis that if the appeal was successful, the
plaintiff's application for summary judgment would need to
be dismissed.


[3]    The Texas Court of Appeals has now heard the appeal and, in a decision
issued on 18 February 2009, dismissed
the defendant's appeal and upheld the
decision of the Dallas County Court. The defendant now seeks leave to appeal the
decision of
the Texas Court of Appeals to the Texas Supreme Court. His application
for leave is likely to be heard within three months. If leave
is granted it is unlikely
that the appeal will come on for hearing within the next two years. Consequently, the
plaintiff wishes
to proceed with his application for summary judgment to enforce the
decision of the Dallas County Court. Counsel for the defendant
conceded there to be
little merit in any further application for an adjournment. The basis of the
defendant's defence is that it
is contrary to public policy for the Courts in New
Zealand to enforce the decision of the Dallas County Court. Such defence applies
even if the Dallas Supreme Court dismisses the defendant's appeal. Consequently, I
have concluded that it would be inappropriate
to adjourn the plaintiff's application
for summary judgment to await the outcome of an appeal which could take up to two
years to
be heard in circumstances where the dismissal of the appeal will have no
relevance to the defendant's defence to these proceedings.

Background


[4]    In April 2004 the plaintiff issued proceedings against the defendant in the
Dallas County Court to recover
payment of the balance of $26,500 with interest
thereon at 6% per annum, being the sum the plaintiff claims to have advanced to the
defendant on 28 July 1992. At the time of the advance both the plaintiff and the
defendant were residing in Texas and the plaintiff
claims the advance to have been
made in Texas. In 1994 the defendant left Texas for New Zealand where he has
remained ever since.


[5]    In opposing the application for summary
judgment against him in the Dallas
County Court, the defendant raised the following defences:


       a)     That any advances were
not by the plaintiff personally to the
              defendant but were advances by the plaintiff to the defendant's
           
  company, Zea-Tex Investments Incorporated.


       b)     That the plaintiff's claim could not succeed because the plaintiff

             failed to perform a condition precedent under the loan agreement.


       c)     That because the advances were from
the plaintiff's company and not
              the plaintiff personally, the plaintiff had no right to seek repayment.


       d)
    That the cause of action was statute barred. In terms of the law in
              Texas such a claim had to be brought within
four years of the date of
              the cause of action. In this respect it was submitted that a provision in
              the
Texas legislation to the effect that absence by the defendant from
              the State of Texas suspended the running of the
Statute of Limitations
              for the period of his absence was discriminatory and unconstitutional.
              It was
submitted that such statutes, known as Temporary Action
              Tolling Statutes, had been held to be unconstitutional by the
United
              States Supreme Court in Bendix Autolight Corp v Midwesco
              Enterprises Inc 486 US 888 (1988).

[6]    In the decision delivered on 8 December 2007 the Court concluded that none
of the defences raised by the defendant could succeed.
In particular, the Court held
the advances to have been made by the plaintiff in person to the defendant, that the
defendant had
from time to time paid instalments in reduction of the advances and,
in particular, had on 3 September 2002 paid $500 in reduction
of the outstanding
amount, and on 7 August 2002 paid a further $2000 in reduction of the outstanding
amount. The Court also concluded
that the plaintiff's right to collect payment of the
money owing was not barred by any Statute of Limitations.


[7]    The amount
for which the plaintiff now seeks judgment is made up as
follows:


       a)     Principal sum                                 $36,441.97
USD


       b)     Attorneys fees                                $18,000 USD


       c)     Court costs                       
           $1,544 USD


       d)     Pre-judgment interest at 6% per annum         $32,030.64


       e)     Total USD        
                            $88,016.61


Case for plaintiff


[8]    Counsel for the plaintiff submits that the plaintiff is prima
facie entitled to
judgment in New Zealand as the judgment of the Dallas County Court satisfies well
settled criteria for obtaining
judgment on foreign judgments from jurisdictions not
included in the Reciprocal Enforcement of Judgments Act 1934. Those criteria,
it is
submitted, are:


       a)     The Court in which the judgment was given had jurisdiction over the
              defendant
when the judgment was entered.


       b)     The judgment is for a definite sum of money.

       c)      The judgment is final
and conclusive.


[9]    Counsel for the plaintiff accepted that had the defendant taken advantage of
the opportunity available in
the Texas jurisdiction to either pay a supersedas bond
(effectively the full amount of the judgment, plus costs and interest for
the estimated
duration of the appeal) which would automatically stay execution in Texas or apply
to the Trial Court in Texas for
a stay with a lesser bond, then the plaintiff would not
have a final judgment that could be enforced in New Zealand.


[10]   Counsel
for the plaintiff correctly anticipated the defendant would submit it
to be contrary to public policy for the Court in New Zealand
to enforce the judgment
of the Dallas County Court in Texas and in this respect submitted that, in the
circumstances, it would not be contrary to public policy. Relying on decisions such
as Reeves
v One World Challenge LLC  [2006] 2 NZLR 184 and Bankque Indosuez v
Bourgogne HC AK 662-89 12 January 1990 Wylie J and Bank of Kiribati Ltd v
Harrison  (1990) 3 PRNZ 111, counsel for the plaintiff pointed out the public policy
exception is a narrow one and not available unless to enforce the judgment
would be
to shock the conscience of the reasonable New Zealander or contrary to the Court's
view of basic morality. In the circumstances
of this case, it was emphasised that the
Court's decision was not based on enforcing a temporary absence tolling statute,
which has
the effect of discriminating against foreigners whilst they are absent from
Texas, but on the basis that payments in reduction of
the debt had been made within
the four year period prior to the issue of the proceedings. It was pointed out that
legislation in
New Zealand would permit enforcement of payment of a debt in
similar circumstances. Section 25(4) provides that in cases where a
borrower makes
any payment in respect of the loan, the right to recover is deemed to have accrued on
and not before the date of the
last payment. Thus, in New Zealand, payment by the
defendant of $2,000 on 7 August 2002 in reduction of a debt incurred in 1994,
results in the lender being able to recover the balance of the debt notwithstanding
that the Statute of Limitations would prevent
the lender from recovering the debt
immediately prior to that payment.

The defendant's submissions


[11]      Counsel for the
defendant submitted that to enforce the judgment of the
Dallas County Court in New Zealand would be contrary to public policy. It
was
submitted that a debt incurred in 1994 was clearly statute barred when proceedings
were brought to enforce payment in April 2004
­ ten years later. It was submitted
that to enforce the Dallas County Court judgment was so offensive to those in New
Zealand as
to justify the New Zealand Court's declining to enforce the judgment.


[12]      Counsel for the defendant also submitted that the
discriminatory effect of the
Tolling Statute in Texas, which places people outside America at a disadvantage
when calculating the
limitation period, should not be enforced in New Zealand as
being repugnant to New Zealand notions and ideals.


[13]      It was
also submitted on behalf of the defendant that the decision of the
Texas Court of Appeals to the effect that the defendant's appeal
cannot succeed
because the defendant had failed to prove the Statute of Limitations applied, was
patently confused and wrong. It
was pointed out that claims for recovery of debt in
Texas had to be commenced within four years and could only be revived by an
acknowledgement
in writing signed by the borrower (in this case the defendant).
There is no evidence of such acknowledgement in writing. Consequently,
it was
submitted that there was no basis for the Texas Court of Appeals decision.


[14]      The County Court's decision that there
had been payments made in reduction
of the debt by the defendant on 3 September 2000 and 7 August 2002 was, it is
submitted, based
on the plaintiff's evidence and not on any concession by the
defendant. In this respect, counsel for the defendant relied on Surrendra
Overseas
Ltd v Government of Sri Lanka  [1977] 1 WLR 565 at p 576 to the effect that
payment of an amount in reduction of a debt by the borrower does not by itself
reactivate the limitation
period. The lender cannot, without the borrower's consent,
treat the payment as an acknowledgement of debt that reactivates the limitation
period.

Decision


[15]   In upholding the decision of the Dallas County Court the Texas Court of
Appeal in the judgment delivered
on 18 February 2009 stated:

       The evidence at trial showed, and the trial court found, the last payment
       made by Mikkelsen
to Purdie was on August 7, 2002 in the amount of
       $2000. Likewise, the trial court found suit was filed by Purdie against

      Mikkelsen on April 29, 2004. Mikkelsen does not attack either of these
       findings of fact. The trial court concluded Purdie's
"right to collection of
       such indebtedness is not barred by any statute of limitations". The trial court
       made no mention
of any exceptions to the statute of limitations, nor does
       Mikkelsen explain on appeal why any exception must apply in this
case.
       Because Purdie filed suit against Mikkelsen within fifteen months of the date
       of the last payment was remitted,
we cannot conclude the trial court erred in
       finding Purdie's claims were not barred by the four-year statute of
       limitations.

       In reaching this conclusion, we reject Mikkelsen's argument, made in a
       footnote, that "the claim accrued" August 26,
1992. Mikkelsen cites no
       evidence in the record to support this contention, nor does he discuss the
       applicable law
to support this date as the accrual date. Thus, his argument is
       inadequately briefed. See TEX.R.APP>P>38.1. Because Mikkelsen
failed to
       carry his burden on appeal, we cannot conclude the trial court erred. We
       overrule Mikkelsen's third issue.

       We affirm the trial court's judgment.

[16]   Thus, in dismissing the defendant's appeal, the Texas Court of Appeal did
not
take into account the discriminatory effect of the tolling statute but held that the
defendant had not shown the County Court's decision
to the effect that payment of
$2000 15 months prior to the issue of the proceedings resulted in the plaintiff's claim
not being statute-barred.
The defendant cannot claim that enforcement of a debt in
these circumstances offends against the average New Zealander's sense of
fair play,
particularly where part-payment in reduction of a debt in New Zealand revives the
claim and brings to an end the limitation
period.


[17]   The defendant is really attempting to establish that there was no evidence to
justify the conclusions of the County
Court affirmed by the Texas Court of Appeals.
Even if the case would have been decided in a different way in New Zealand, the
decision
of the County Court in Dallas must still be enforced:              see Burchell v
Burchell  [1926] 2 DLR 595, Beales v Saldanha 2003 SCC 72;  [2003] 3 SCR 416, Boardwalk

Regency Corp v Maalouf  (1992) 88 DLR (4th) 612 and Reeves v One World
Challenge LLC.


[18]   Consequently, I conclude that to enforce the Dallas County Court judgment
in this
case would not offend some moral social or economic principle so sacrosanct
in New Zealand eyes as to require the Court to refuse
to enforce that judgment. In
the circumstances, therefore, I conclude the defendant has no valid defence and that
the plaintiff is
entitled to summary judgment. Accordingly, therefore, judgment will
now be entered against the defendant in favour of the plaintiff
for the amount set
forth in the statement of claim, including interest at 8.25% p.a. on the total judgment
from the date of judgment,
namely 1 November 2007, until payment.


[19]   As the plaintiff has been successful, the plaintiff is entitled to costs on a 2B
basis with disbursements as fixed by the Registrar unless counsel or either of them
seek to be heard on the question of costs. If
counsel wish to be heard on the question
of costs, they must advise the Registrar within seven days of the date of delivery of
this
judgment. In the absence of any memorandum from counsel, costs will be on a
2B basis with disbursements as fixed by the Registrar.
If they wish to be heard on
the question of costs, the Registrar should arrange a fixture before me for an hour for
that purpose.




______________________
MD Robinson
Associate Judge