Goodall v Sovereign Assurance Company Limited HC Wellington CIV-2010-485-2300 [2011] NZHC 1314 (20 July 2011)

Last Updated: 3 November 2011

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

_{CIV-2010-485-2300}

BETWEEN GRAHAM BRUCE GOODALL, WILLIAM FRANK GOODALL, ADRIAN STANLEY HODGSON AND GEOFFREY CHARGE BENGE

Plaintiffs

AND SOVEREIGN ASSURANCE COMPANY LIMITED

First Defendant

AND POLICE WELFARE FUND LIMITED Second Defendant

Counsel: C. Skagen - Counsel for Plaintiff

J.R. Parker - Counsel for Second Defendant

Judgment: 20 July 2011 at 3:30 PM

_{JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL}

This judgment was delivered by Associate Judge Gendall on 20th day of July 2011 at

3.30 pm under r 11.5 of the High Court Rules.

Solicitors: Kevin Smith, Solicitors, 335 Willis Street, Wellington 6011

_{Morrison Kent, Solicitors, PO Box 10035, Wellington}

GB GOODALL, WF GOODALL, AS HODGSON AND GC BENGE V SOVEREIGN ASSURANCE COMPANY LIMITED HC WN CIV-2010-485-2300 20 July 2011

Introduction

[1] The second defendant in these proceedings, the Police Welfare Fund Ltd, has applied for the amended statement of claim of the plaintiffs filed 5 April 2011 to be struck out due to the plaintiffs’ non-compliance with an “unless order”, made in this Court by me on 10 May 2011. The plaintiffs oppose the application for strike out.

[2] That “unless order” stated:

Unless the plaintiffs by 5.00 pm on 16 May 2011 complete discovery b y filing and serving their verified lists of documents then the plaintiffs present proceeding will be struck out.

Background

[3] These proceedings were originally instituted by a notice of proceeding filed in the High Court on 19 November 2010. They were originally filed in respect of the present second defendant and a different first defendant. By the amended statement of claim dated 5 April 2011, the original first defendant was replaced with the current first defendant.

[4] The statement of claim sets out seven causes of action against the first and second defendants. Those causes of action essentially concern the alleged failure by the defendants to take certain actions with respect to insurance policies in favour of the plaintiffs. Those insurance policies were originally issued by New Zealand Insurance Life Ltd, and it is alleged that through transfers they came to be held by the first defendant. The second defendant was apparently an agent for either the insurance company or the police officers who had cover under the policies, and acted as a go between for the police officers and the insurance company concerned. Those policies gave insurance to members of the New Zealand Police, and the insurance included cover for permanent and temporary disabilities (at varying times). The essence of the complaint in this case is that when the plaintiffs were disengaged from the police (in 1985, 1990, 1992 and 1993 respectively) they were not adequately informed that their insurance policies covered such disabilities, and therefore they did not have the opportunity to make claims under those policies.

[5] The claims are opposed by the defendants. The second defendant also puts forward three affirmative defences. Two of those defences, against the fifth and

sixth causes of action, rely on delay by the plaintiffs in bringing their claim. The third affirmative defence alleges contributory negligence on the part of the plaintiffs.

[6] By way of background, in the present proceedings to date, there have been a number of procedural defaults by the plaintiffs. These are noted by the second defendant in support of its strike-out application, as follows:

a. The original statement of claim was served on the second defendant, but not the originally named first defendant;

b. The amended statement of claim was not served on the second defendant;

c. The plaintiffs have repeatedly failed to provide details as to their financial means to enable the defendants to consider whether a security for costs application is warranted here, namely they have:

i. Failed to respond to two requests from counsel for the second

defendant for details of the plaintiffs’ financial means in late

2010;

ii. Failed to comply with a Court Minute issued by me on 26

January 2011 which required the plaintiffs to provide details of their financial means by 9 February 2011;

3. Failed to comply with a further Court Minute, directing compliance with the Minute of 26 January 2011 by 28 February

2011. That information was not provided until 8 March 2011, and it is said it was incomplete. No response it seems was received by counsel for the second defendant who requested additional details on 10 March 2011;

d. The plaintiffs failed to serve the amended statement of claim on time:

i. In the Minute of 26 January 2011, I directed the plaintiffs to file their amended statement of claim within five working days. The plaintiff’s did not comply with that Minute;

ii. In a further Minute dated 21 February 2011, I directed that the amended statement of claim was to be filed and served by 21

March 2011. The second defendant says that it received a draft amended statement of claim in the interim, but the amended statement of claim was not filed until 5 April 2011, and was only served on the second defendant, after counsel’s request on 15

April 2011.

e. The plaintiffs failed to complete discovery:

i. A Minute I issued on 26 January 2011 directed the plaintiffs to file and serve a verified list of documents by 21 February 2011. The plaintiffs did not comply with that direction;

ii. By 10 May 2011, verified lists of documents still had not been filed or served. On that date I made the “unless order”, requiring the plaintiffs to file and serve their verified lists of documents by

16 May 2011.

iii. On 16 May 2011, a list of documents was filed in this Court but not served. On 18 May 2011 it appears that list of documents was sent to counsel for the second defendant, accompanied by an email from counsel for the plaintiffs which acknowledged that the list was incomplete.

iv. A further list was sworn on 25 May 2011, and filed on 26 May

2011. According to the second defendant, that list is still incomplete. It says that a complete list is yet to be filed or served.

Counsels’ Submissions and My Decision

[7] The second defendant submits that, under all the circumstances here, its present application for strike out should be granted, given especially the long history of delays in these proceedings, as outlined above. Counsel also points out that on 10

May 2011 the plaintiffs accepted an “unless order” was appropriate in the

circumstance and submits that the order was appropriately made in this case. There is no question that in this case the plaintiffs were at least technically in default. The order required the plaintiffs to “complete discovery” by both “filing and serving” (emphasis added) their “verified lists of documents” by 5.00 pm on the named date,

16 May 2011. Clearly a verified list of some documents had been “filed” by 16 May

2011, but this was not “served” until 18 May 2011. Also, it would seem that the plaintiffs had not “completed discovery” by 16 May 2011 in terms of the order, in the sense that the further list of documents filed later on 26 May 2011 was required. Furthermore, despite not being able to comply in the specified time with the “unless order”, counsel for the plaintiffs did not apply here for any extension of time under the order.

[8] On all of this, the second defendant submits that it is not required to show specific injustice to it in order for strike out here to be justified. Rather, it relies on the following passage from Hytec Information Systems Ltd v Council of City of Coventry:1

The interests of justice require that justice be shown to the injured party for the procedural inefficiencies caused by the twin scourges of delay and wasted costs. The public interest in the administration of justice to contain those two blights upon it also weighs very heavily. Any injustice to the defaulting party, though never to be ignored, comes a long way behind the other two...

[9] In response, the plaintiffs contend that they, through their counsel, attempted in good faith to comply with the “unless order”. They accept that their attempted compliance fell short in two respects: that the initial list of documents, although filed in this Court, was not served on the defendants within the allotted time; and that this list of documents was incomplete. However, counsel for the plaintiffs seeks to minimise that non-compliance by arguing that some of the documents which were not initially included were already in the control of the defendants and that the other material that was not included “were pleadings and a few extraneous letters.”

[10] The specific reasons given for non-compliance with the “unless order”

_{specified in the memorandum dated 3 June 2011 filed herein by counsel for the}

1 Hytec Information Systems Ltd v Council of City of Coventry [1996] EWCA Civ 1099.

plaintiffs were that first, he had misread the order as to the date by which compliance was required and that secondly, at the time counsel was required to seek medical attention, thereby obstructing compliance with the order. Counsel submitted that the non-compliance with the order was not “a deliberate flouting”, and nor he suggested had there been a long history of delays in this case. In addition, he contended that here, no harm was caused to the second defendant by the short delay that occurred, but there would be a clear injustice to the plaintiffs if their claim was to be struck out.

[11] The general principles applicable to strike out where there has been non- compliance with an “unless order” are set out in Hytec. That case provides that generally where an “unless order” has not been complied with the sanction of strike out will apply. A non-complying party cannot expect mercy when they have deliberately or intentionally failed to comply. In order for strike out not to be ordered, the non-complying party will usually need to show that something beyond his or her control has caused the default.

[12] Here, there were two specific reasons for non-compliance which are put forward by counsel for the plaintiffs. As noted above, the first is that he misread the order as to the date by which the list of documents was required to be filed. That submission does not seem to relate to the actual terms of the order. Counsel maintains that he misread how the five days were to be counted. But the order did not refer to five days, instead providing:

Unless the plaintiffs by 5.00 pm on 16 May 2011 complete discovery ................ (emphasis added)

[13] There can be no argument that the time frames were not sufficiently specified, and it seems hardly possible that counsel misread the order. This ground of exoneration therefore does not assist here.

[14] The second specific reason for non-compliance advanced was that counsel required medical attention in the final two days prior to the list of documents being due. But, it is not clear here what steps, if any, were taken to ensure compliance despite the required medical attention. And finally, the fact that medical attention was required does not mean that counsel was unable to apply for an extension of

time in relation to the “unless order”, when it became apparent, as it must have, that the list of documents was not going to be complete. In the absence of any evidence, or any further explanation of why the list was not complete, it is hard to accept that counsel for the plaintiffs has done enough here to show that non-compliance was due to something beyond his control.

[15] The further point for consideration is whether the non-compliance here was intentional or deliberate. Counsel for the plaintiffs has submitted that there was no deliberate flouting of the order by initially filing an incomplete list and then failing to serve that list on the second defendants. It is hard to see, however, under the circumstances here that such non-compliance was not intentional or deliberate. Counsel was aware that the order was an “unless order”, having earlier consented to it being made. The time frames set out in the order were clear, and counsel must have been aware of them. In my view, no compelling explanation for non- compliance has been provided.

[16] In similar circumstances to the present case, in the decision of this Court in

Ko v Ko (Review) (2000) 14 PRNZ 362 Paterson J. stated at [18]:

[18] An “unless order” is an order of last resort. Case management principles should not in ordinary circumstances override the justice of the situation but in a situation where a judicial officer has felt compelled to make an “unless order”, unless it can be established that there were no grounds for making such an order or that reasons beyond the party’s control caused non-compliance, the order should be upheld. An “unless order” is a last chance order and counsel must be aware that non-compliance with it will in normal circumstances bring the proceedings to an end. It is only in extreme circumstances, which will normally require evidence that the non- compliance was caused by something beyond the control of the party, that a Court should intervene and set aside the order. This is particularly so in a case such as the present one where counsel, knowing that the order was an “unless order”, did not apply before the expiry of that order for an extension of time to comply with it. In the circumstances of this case, such an extension may not have been granted but the failure to apply may arguably in this case be another example of the manner in which the plaintiff has treated Court orders. It would seriously reduce the value of “unless orders” if the defaulting party could without adequate explanation and without evidence of intervening extraneous circumstances have such orders set aside.

[17] Taking all these matters into account, I am of the view that, as the “unless order” has not been complied with in the present case (and indeed there is still some question as to whether, in any event, discovery has still not as yet been “completed” by the plaintiffs), and no reasonable excuse for non-compliance that relies on

extraneous matters has been put forward, there is no alternative but for the plaintiff’s claim here to be struck out. In reaching this conclusion, however, I say nothing about the acknowledged jurisdiction this Court retains as noted in McGechan on Procedure at HR 1.19.05 in appropriate cases to reinstate a proceeding after it has been struck out under an “unless order” – on this see also Jarden v Lawlor (1998) 12

PRNZ 516.

Conclusion

[18] For all the reasons outlined above, the application before me succeeds.

[19] An order is now made striking out the plaintiff’s amended statement of claim

filed 5 April 2011.

[20] As to costs, the second defendant has succeeded in its present application and is entitled to an award of costs on the present application, which are now ordered against the plaintiffs on a category 2B basis together with disbursements as fixed by the Registrar.

‘Associate Judge D.I. Gendall’