|
|
Home
| Databases
| WorldLII
| Search
| Feedback
High Court of New Zealand Decisions |
Last Updated: 20 March 2012
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV-2011-485-1942 [2012] NZHC 132
BETWEEN MAREE JOAN BRADY Plaintiff
AND ANZ NATIONAL BANK LIMITED Defendant
Hearing: 7 February 2012 (Heard at Wellington)
Counsel: M.J. Wallace - Counsel for Plaintiff
R. Pinny - Counsel for Defendant
Judgment: 14 February 2012
JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL
This judgment of Associate Judge Gendall was delivered on 14 February 2012 at
3.00 pm under r 11.5 of the High Court Rules.
Solicitors: Brett Norris, Solicitor, PO Box 34 442, Birkenhead, Auckland
Bell Gully, Solicitors, PO Box 1291, Wellington
MJ BRADY V ANZ NATIONAL BANK LIMITED HC WN CIV-2011-485-1942 [14 February 2012]
Introduction
[1] Before me is an application brought by the defendant, ANZ National Bank Limited, to transfer these proceedings from the High Court to the District Court (Wellington Registry). The plaintiff commenced these proceedings in the High Court by filing a statement of claim on 23 September 2011. The defendant now seeks to have the proceeding transferred to the District Court under s 46 of the District Courts Act 1947.
Background
[2] The plaintiff and her husband, Mr Dodd, were trustees of the Dodd Family Trust (“the Trust”). In their capacity as trustees of the Trust the plaintiffs were customers of the defendant bank. Between May 2003 and April 2008 the Trust entered into a series of loan arrangements with the defendant to finance the development of certain property.
[3] While all loan agreements save for one were apparently signed by both trustees, the plaintiff is claiming that her husband Mr Dodd had forged the plaintiff’s signature on some of the agreements recording these loan arrangements. The plaintiff alleges that only four of the ten loan agreements with the defendant were authorised by her and bear her real signature, and the other loans went ahead without her knowledge and consent. The defendant disputes however that the plaintiff did not authorise these loans.
[4] But, in an effort to resolve the customer complaint issue, the defendant then transferred $76,000, the amount owing under the allegedly forged loan agreements, into the name of Mr Dodd alone. This absolved the plaintiff and the Trust of liability for the amounts stated.
[5] Subsequently, the plaintiff and Mr Dodd separated. The plaintiff commenced the present proceedings on the basis that she says the defendant Bank breached its duty of care by failing to obtain her signature and consent for the loan agreements in question. As a result, she claims to have suffered loss in four respects:
(a) damages of $42,000.00 are sought, being the amounts paid by the plaintiff to Mr Dodd in accordance with settlement of a relationship property claim between them;
(b) further damages of $40,000.00 are sought, being increased legal and accounting costs in resolving the relationship property claim;
(c) further damages of $70,000.00 are sought by way of income allegedly lost during the relevant period, as the plaintiff says she was unable to work due to stress and anxiety.
(d) general damages of $35,000.00 are sought for alleged stress and anxiety.
[6] The total damages sought here therefore amount to $187,000.00. [7] The defendant defends this proceeding on the following basis:
(a) It disputes that the plaintiff did not authorise or otherwise consent to the loans in question, as the loan agreements all bear her signature;
(b) It disputes that the losses claimed were caused by the defendant’s actions and says there is an insufficient causal link between the defendant’s actions and the plaintiff’s loss;
(c) The dispute was settled when the loans were transferred solely into
Mr Dodd’s name by the defendant.
(d) The plaintiff has been contributorily negligent as it is alleged regular statements for the disputed loans were sent to her residential address but it seems she simply chose to delegate all loan correspondence with the defendant addressed to the Trust to Mr Dodd.
Present Application
[8] The defendant is seeking to have the present proceedings transferred to the
District Court. It relies on s 46 of the District Courts Act 1947, which allows a High
Court Judge to order that a proceeding be transferred to the District Court. It can
only do so if the matter falls within the District Court’s jurisdiction.
[9] Section 29 of the District Courts Act 1947 sets out the District Court’s jurisdiction in proceedings where a damages claim does not exceed $200,000. In respect of claims greater than $50,000 and less than $200,000, the District Court and High Court have concurrent jurisdiction. However, the High Court will only hear such cases in certain circumstances.
[10] Where the District Court does have jurisdiction, it will ordinarily be favoured as the primary Court of first instance.[1] In Moodie v Lane, Thomas J outlined the factors a judge should consider when deciding the appropriate first instance Court as:
a. The nature of the case;
c. General or public importance of the case;
d. The amount in issue;
e. The likely length of hearing; and f. Financial resources of the parties.
[11] It is also important to note the wording of s 46(2) of the District Courts Act
1947, which states that the power to transfer may be exercised unless an important question of fact or law is likely to arise in the proceedings.
Counsels’ Submissions and My Decision
[12] In support of its application to transfer proceedings, the defendant alleges that the High Court is not the appropriate Court of first instance here when one considers the factors outlined in Moodie v Lane.[3]
[13] First, the defendant maintains that the size of the claim is overstated, and the plaintiff is unlikely to recover the full amounts specified. The plaintiff claims damages for indirect loss, outlined in paragraph 5 above. This raises questions as to whether the defendant, even if it committed the alleged breach, could reasonably have foreseen the kinds of loss that the plaintiff suffered, these being the relationship property claim by Mr Dodd, the loss of the plaintiff’s employment and the psychological harm she says she suffered.
[14] The defendant states that the difficulties in proving foreseeable damage would significantly reduce the size of any claim here. It refers to the general reluctance of the Courts to award large sums for purely psychological harm in tort actions. It claims that the amount of damages stated for this kind of loss, effectively
$105,000, is both unrealistic and unprecedented.
[15] I am satisfied that in reality here the size of the plaintiff’s present claim is well below the $200,000 threshold for the High Court’s jurisdiction.[4] There is a reasonable argument in my view that, at best, the plaintiff’s possible claim is likely to amount to no more than about $40,000-$50,000. It is essentially a minor claim which as I see it would not warrant the attention of the High Court, unless it raises special issues.
[16] The defendant further submits that this proceeding does not raise any complex issues of fact or law. It claims that the District Court routinely and properly
deals with the well established principles of causation, remoteness and contributory
negligence, and that the Court’s reasoning in this case would be fact specific rather than having some wider, more general application.
[17] In response, the plaintiff contends that the complexity of the legal issues here renders this case more appropriate for the High Court. She argues that the District Court is not equipped to deal with what she says is the complexity of the Trust’s borrowing arrangements here and the legal issues associated with this proceeding. The plaintiff submits that the causation and foreseeability issues in this case are not straightforward. The transfer of liability from the Trust to Mr Dodd did not render loss unforeseeable here, according to the plaintiff, as any debts advanced to the couple were joint debts for relationship property purposes.
[18] On this, the plaintiff relies on the decision of the Court in Appeal in ASB Bank Ltd v Davidson as an indication of the complex legal issues that she says are likely to arise.[5] That case concerned a letter of credit to a trust where the trustees were not acting unanimously. It involved discernment of trustees obligations where one trustee purports to act on behalf of all of the Trustees. The plaintiff submits that the Court of Appeal’s discussion illustrates the difficulty that Courts face in addressing these kinds of complex lending arrangements. Due to the complexity of issues addressed in cases such as ASB Bank v Davidson and the present case, the
plaintiff submits that the High Court must be the appropriate first instance Court.
[19] With respect, I disagree. As I see the position, the legal issues in ASB Bank Ltd v Davidson are more complex and not particularly analogous to the issues which arise in the present case. The defendant bank in the present case is not attempting to recover loans that were the subject of alleged forgery. Indeed, the defendant stated throughout that it would not seek to recover from the plaintiff those loans that it transferred into Mr Dodd’s name. The determination of this proceeding is likely to turn on issues of causation and remoteness, and the Courts’ willingness to award damages for stress and anxiety. Accordingly, the claim does not involve any important questions of fact or law that should be reserved for the High Court.
[20] In addition, the plaintiff’s notice of opposition to the present application appears to suggest that allegations of fraud render the matter inappropriate to be heard in the District Court. With respect however, I disagree. As I see the position, the District Court is well equipped to deal with matters of fraud or forgery and does so on a regular basis. This is evidenced by s 6 of the Summary Proceedings Act
1957, which gives the District Court summary criminal jurisdiction to deal with various specified indictable offences. Forgery, using a forged document and various other fraud related offences under the Crimes Act 1961 are specified as being subject to the District Court’s summary jurisdiction. Given that Parliament considers that the District Court is an appropriate forum to hear criminal proceedings relating to fraud, I do not accept that the District Court would not be an appropriate Court to hear a civil claim which arose to some extent out of an allegation of fraud.
[21] The plaintiff’s notice of opposition here also appears to claim that the present proceeding relates directly to matters of public interest, namely public confidence in the banker/customer relationship, and this renders the present dispute as one that is inappropriate to be heard in the District Court.
[22] I disagree. The essential issues in the present case in my view are quite fact specific and will be determined on the basis of existing and well established principles of contract law and tort. As I see it, this case will not have any impact on third parties’ relationships or dealings with their banks and will likely have limited (if any) precedent value.
[23] I am satisfied here that the mere fact that this is a claim by a customer against her bank does not render it a matter of public interest, nor is it likely to have any impact on public confidence in the banker/customer relationship generally. In my view, there are therefore no issues of general public importance or public interest that would justify making the proceeding more appropriate for a High Court hearing.
[24] Finally, the defendant suggests here that the plaintiff’s claim would be likely
to be heard more expeditiously and in a cost effective way in the District Court.[6] It
submits that the case might even proceed as a simplified trial in the District Court, which would result in an earlier hearing and determination. The plaintiff disputes that the matters can be addressed in a simplified trial, and even if they were, she suggests it would not take place any earlier than a High Court trial.
[25] On all of this, I am not satisfied here that the present matter would necessarily proceed as a simplified trial in the District Court. This matter is difficult to determine when the claim is not particularised however. The proceedings here are at a very early stage, as only statement of claim and defence have been filed. But in any event, I am satisfied first, that the process of transferring this matter to the District Court would not cause any greater delay than if the case were heard in the High Court, and secondly, that given particularly the amounts at issue, it would be more cost effective for this claim to be heard in the District Court.
Conclusion
[26] For all the reasons I have outlined above, the present transfer application by the defendant must succeed.
[27] An order is now made pursuant to s 46 District Courts Act 1947 transferring the present proceeding to the District Court, Wellington Registry.
Costs
[28] In its application, the defendant also seeks costs on an increased or indemnity basis.
[29] On this aspect, s 48 of the District Courts Act 1947 provides that where a proceeding is transferred from the High Court to the District Court, the costs of the whole proceeding both before and after the transfer shall, subject to any order made by the Court ordering the transfer, be at the discretion of the District Court. If the Court (in this case the High Court) ordering the transfer chooses to exercise its discretion to make an order as to costs, any decision on costs in any event is subject
to the High Court Rules.[7]
[30] Before me, the defendant contended that the High Court should exercise this residual discretion it holds to award costs here. And, in doing so, the defendant argues that this Court should award indemnity costs, as the present proceedings were brought by the plaintiff in the High Court when clearly they ought to have been brought in the District Court.
[31] Rule 14.6 (4) of the High Court Rules deals with indemnity costs and provides:
14.6 Increased costs and indemnity costs
..........................
(4) The court may order a party to pay indemnity costs if—
(a) the party has acted vexatiously, frivolously, improperly, or unnecessarily in commencing, continuing, or defending a proceeding or a step in a proceeding; or
(b) the party has ignored or disobeyed an order or direction of the court or breached an undertaking given to the court or another party; or
(c) costs are payable from a fund, the party claiming costs is a necessary party to the proceeding affecting the fund, and the party claiming costs has acted reasonably in the proceeding; or
(d) the person in whose favour the order of costs is made was not a party to the proceeding and has acted reasonably in relation to it; or
(e) the party claiming costs is entitled to indemnity costs under a contract or deed; or
(f) some other reason exists which justifies the court making an order for indemnity costs despite the principle that the determination of costs should be predictable and expeditious.
[32] Rule 14.6(3) of the High Court Rules deals with increased costs and provides:
14.6 Increased costs and indemnity costs
..........
(3) The court may order a party to pay increased costs if—
(a) the nature of the proceeding or the step in it is such that the time required by the party claiming costs would substantially exceed the time allocated under band C; or
(b) the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by—
(i) failing to comply with these rules or with a direction of the court;
or
(ii) taking or pursuing an unnecessary step or an argument that lacks merit; or
(iii) failing, without reasonable justification, to admit facts, evidence, documents, or accept a legal argument; or
(iv) failing, without reasonable justification, to comply with an order for discovery, a notice for further particulars, a notice for interrogatories, or other similar requirement under these rules; or
(v) failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under rule 14.10 or some other offer to settle or dispose of the proceeding; or
(c) the proceeding is of general importance to persons other than just the parties and it was reasonably necessary for the party claiming costs to bring it or participate in it in the interests of those affected; or
(d) some other reason exists which justifies the court making an order for increased costs despite the principle that the determination of costs should be predictable and expeditious.
[33] The Court of Appeal in Bradbury v Westpac Banking Corp [2009] NZCA
234, [2009] 3 NZLR 400 summarised the situations where increased or indemnity costs will be appropriate at [27] in the following way:
(a) increased costs may be ordered where there is failure by the paying party to act reasonably; and
(b) indemnity costs may be awarded where a party has behaved either badly or very unreasonably.
[34] Under the circumstances prevailing in the present case, I need to say at the outset that I am not satisfied that any of the criteria in Rule 14.6 (3) or (4) are applicable, so as to entitle the defendant to an award of increased or indemnity costs here. The defendant claims that the plaintiff’s resistance to the transfer of this proceeding at an earlier stage justifies an elevated award of costs here. It relies on
Moodie v Lane, where Thomas J considered that:[8]
The fact that a proceeding which is neither complex nor involves a question of general importance or public interest has been brought and pursued in this Court will or may bear on the Court’s discretion in awarding cost...conversely, a defendant who has not made the necessary inquiries or who resists a matter being transferred into the District Court where that would be wholly appropriate, may be faced with a significant award of costs.
[35] It is always important that counsel select the appropriate Court in which to bring proceedings. Failure to do so will bear on decisions to award costs. However, I am not satisfied in the circumstances of the present case that refusing to consent to a transfer amounts to a satisfactory reason for an elevated costs award for the purposes of r 14.6 (3) or (4). Electing to wait for a hearing on the issue of transfer is not the kind of unreasonable behaviour envisaged by r 14.6(4) nor in my view has it significantly been entirely wasted effort in terms of both time or costs here to trigger r 14.6(3). Moreover and in any event here, the defendant has not provided information on the amount of increased or indemnity costs sought, and the plaintiff has had no opportunity to respond.
[36] Accordingly, I find that the defendant is entitled to costs as the successful party here, both on its present transfer application and all steps taken up to this point in the High Court, but only on the usual category 2B basis plus disbursements as fixed by the Registrar.
‘Associate Judge D.I. Gendall’
[1] Tapp v Elders Real Estate HC Whangarei CP70/90, 15 October 1990,
[2] Moodie v Lane HC Auckland CP1484/87, 18 September 1990 at 4.
[3] At 4.
[4] District Courts Act 1947, s 29.
[5] ASB Bank Ltd v
Davidson (2005) 8 NZBLC
101
[6] Tapp v
Elders Real Estate, above n
1
[7] District Courts
Act 1947, s 48(1)(d).
[8] Moodie v Lane, above n 2 at 6.
NZLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.nzlii.org/nz/cases/NZHC/2012/132.html