Heenan v Attorney-General [2014] NZHC 1911 (14 August 2014)

Last Updated: 27 August 2014

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2013-409-788 [2014] NZHC 1911

BETWEEN	DAVID STANLEY HEENAN Applicant
AND	ATTORNEY-GENERAL Respondent

Hearing:	12 December 2013, 28 and 29 July 2014
Counsel:	D Heenan in Person D M Lester as Amicus Curiae D Harris for Respondent
Judgment:	14 August 2014

_{JUDGMENT OF FOGARTY J}

This judgment was delivered by me on 14 August 2014 at 4.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

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

Solicitors:

Crown Law, Wellington

HEENAN v ATTORNEY-GENERAL [2014] NZHC 1911 [14 August 2014]

Introduction

[1] Mr Heenan has the status of a vexatious litigant. He was given leave to file a notice of motion in this Court, seeking leave to apply to set aside the judgment of Judge Saunders on the basis that it was obtained by fraud.¹ Mr Heenan has argued for some time that it was. The principal leave issue identified at the outset was:

...whether or not there is a binding judgment on the issue as to whether or not the judgment of Judge Saunders was obtained by fraud, by reason of the Judge receiving fraudulent evidence.

[2] The Attorney-General opposed the application. There were five grounds of opposition:

1 The allegation that Judge Saunders’ decision in Gore v Heenan was obtained by fraud by reason the judge receiving fraudulent evidence has been the subject of judicial consideration on multiple occasions and has been determined conclusively against the applicant. Therefore the application is res judicata and is precluded by issue estoppel.

2 The applicant has raised no new or fresh evidence to support his application. Therefore, there is no justification for re-opening an issue that has already been conclusively determined by competent courts.

3 The original decision of Judge Saunders was founded on the debt Mr Heenan was found to owe Mrs De Vella Gore. The status of the cheque was irrelevant to the finding that Mr Heenan was found to pay to Ms Gore $20,000.

4 Even if the status of the cheque itself was relevant, on Mr Heenan’s evidence he had stopped the cheque prior to the date it was to become enforceable. Therefore, regardless of whether or not the date was changed, and by whom, the cheque had already been stopped and was not able to be enforced.

5 The proceeding is an attempt to mount a collateral attack on the judicial determinations of competent Courts in previous proceedings, as such it is an abuse of process.

[3] The Attorney-General did not formally withdraw his opposition. However, in the course of the hearings, Ms Harris modified the Crown’s position.

¹ Gore v Heenan DC Alexandra NP25/99, 20 March 2000.

Background

[4] The background to this matter dates back to May 1998, when Ms Gore invested $20,000 in an investment scheme, known as the MHT Fund (No 2). This investment took place through Mr Heenan, though it would appear that he was not a contracting party with Ms Gore.

[5] Mr Heenan was, however, involved in some way as an intermediary. He appears to have been associated with a group of investors, known as “The Group”. On 2 June 1998, Mr Heenan wrote a letter to members of The Group, stating that the MHT Fund had let them down (Mr Heenan was an investor as well), and was unlikely to honour their contracts. Ms Gore requested her $20,000 back. On

14 June 1998, Mr Heenan drew a cheque for $20,000 on his personal account in favour of Ms Gore. This cheque was post-dated at the time by Mr Heenan to 27 July

1998.

[6] It is clear that there was, at the least, an agreement between Ms Gore and Mr Heenan that the cheque would not be banked until notification was received from Mr Heenan. Words to that effect were written on the back of the cheque.

[7] On 23 July 1998, four days before the cheque became enforceable Mr Heenan contacted his bank and stopped the cheque. The next day he wrote to Ms Gore informing her that the money he was expecting has not come through and so he cancelled the cheque. He also requested its return. Ms Gore never returned the cheque.

[8] At some date unknown, the “July” date of the cheque was overwritten as “August” by taking advantage of some strokes of ink used to write “July”. The cheque now appeared to be dated 27 August 1998. On 26 February 1999 the cheque was presented for payment, but was dishonoured because it had been stopped.

[9] In May 1999 Ms Gore issued proceedings in the District Court claiming that

Mr Heenan owed her $20,000. Judge Saunders awarded the sum to her alongside

$2,500 in damages for stress plus costs.

[10] The statement of claim before the District Court is dated 20 May 1999 and it pleads:

1. The Defendant is the drawer of a cheque for $20,000 dated 27 August 1998 drawn upon the Invercargill branch of the Westpac Trustbank.

2. The said cheque was payable to the Plaintiff and given to her by the

Defendant.

3. The cheque was duly presented for payment on the 26^th day of February

1999 and was dishonoured.

4. The Defendant has had due notice of the dishonouring of the cheque.

5. The Defendant has not paid the said cheque. Wherefore the Plaintiff claims from the Defendant: (a) Judgment in the sum of $20,000.00

(b) Damages for stress and inconvenience

(c) Interest

(d) Costs

And for a further cause of action the Plaintiff repeats paragraphs 1 to 5 above and says:

6. On or about 12 May 1998 the Plaintiff gave the Defendant $1,886.56, at the Defendant’s request, in order to obtain a refund of $20,000.00 previously given to the Defendant by the Plaintiff.

7. Due to the dishonouring of the cheque referred to above such refund was not obtained.

8. The said sum of $1,886.56 are moneys had and received without consideration.

9. The Plaintiff is entitled to a refund of the $1,886.56

Wherefore the Plaintiff claims from the Defendant:

(a) Judgment in the sum of $1,886.56

(b) Damages for stress and inconvenience

(c) Interest

(d) Costs.

[11] We do not have the statement of defence from the 1999 proceeding, but it is recorded by the Judge as containing a plea of duress in signing the cheque.

[12] The hearing began on 20 March 2000, before Judge Saunders. The Judge dealt first with an application as to whether or not the proceedings should be struck out on the basis of the failure of the plaintiff to supply certain documents as requested. The Judge refused to strike out the claim, and the trial began.

[13] Mr Napier, the plaintiff’s counsel at the time, opened as follows:

Sir, the matter is straightforward. Application primarily there’s two parts to it. The first and major part is suing on a cheque. That is a cheque for $20,000. It represents monies that the plaintiff gave to Mr Heenan, the defendant, to invest on her behalf. She asked for the money back. She was given the money back in the form of a post- dated cheque which was then dishonoured and from the plaintiff ’s point of view this is a straightforward claim upon the cheque which, of course, she’s entitled to when a cheque is dishonoured except in very limited circumstances such as duress, fraud, total failure of consideration. It’s the plaintiff ’s case, of course, that there are no such circumstances and it is up to the defendant to make them out. Failing his doing so then the plaintiff is entitled to judgment.

[14] The hearing was contentious, with constant interruptions by Mr Heenan, which the Judge endeavoured to control. At the trial Mr Heenan endeavoured to open up the contractual context of the investment of Ms Gore. Plainly, Mr Napier was not prepared to argue the contractual context, it appears that he did not know about it, as he opened on the basis that his client had paid monies to Mr Heenan to invest on her behalf.

[15] Eventually, Mr Heenan got in a letter from Ms Gore, which allegedly recorded MHT Fund’s rule that allowed investors to withdraw their funds. At that point the transcript records Mr Napier saying, “I am just reading it having never seen it before.” In this context, only a couple of minutes later, Mr Napier is recorded as saying:

I wonder if at this stage I could make an application about the cross-examination. This has taken an awful lot of time and as Your Honour is aware this is an application the claim is on a cheque. All of this is really entirely irrelevant. The background is given for Your Honour’s understanding, but it’s taking a great amount of time and I make an application that unless the cross-examination is particularly relevant to the cheque and the matters that flow therefrom such as any possible defence, although there is no affirmative defence pleaded, and for those reasons I would say none could be raised, then it is entirely irrelevant and for that reason I do

–

(Emphasis added).

[16] Mr Heenan pursued with a question:

Ms Gore, is it true that after you’d made the investment with MHT that your son you said kept pestering you and ringing you about every two, three and four times a week?

_{THE COURT}

Just pause there.

_{MR NAPIER}

Your Honour, I object to this line of questioning, it has nothing to do with the cheque. This is a claim on the cheque, all that is relevant is the cheque itself and perhaps any defence as to why it shouldn’t be honoured. I formally make an application that any other questions be barred from being asked and that should the defendant persist with asking that he be barred from continuing his cross- examination. (Emphasis added.)

_{THE COURT}

You’re on warning now, Mr Heenan, that the line of cross-examination –

_{MR HEENAN}

Sir, this is a very relevant question point.

_{The COURT}

Why is it relevant, tell me why?

_{MR HEENAN}

Because De Vella Gore admitted to me that because she was being pressured by her son that he wanted the money, not her, and he was questioning her two and three and four times a week, pressuring her and pestering her to do something about it and this is what I’m bringing – coming to the point of the cheque.

_{THE COURT}

The issue, Mr Heenan, is that you issued a cheque in repayment of the monies that she claimed back. The question is why you should now not be required to honour the cheque that you gave her.

...

_{THE COURT}

I have a responsibility to see that the questions are relevant to the issue that is before the Court.

_{MR HEENAN}

They are relevant if you’d let me put them.

_{THE COURT}

I rule it irrelevant.

[17] In the course of the trial, Mr Heenan cross-examined Ms Gore. The following notes of evidence indicate that Ms Gore knew the cheque was originally dated July, but at the time of the trial did not know it had been altered:

Questions from Mr Hennan to Ms Gore

Q Is it true that the cheque was issued to you dated the 27^th of August 1998? A Sorry, could you repeat that?

Q Is it true that the cheque which was issued to you was dated 27^th of August

1998?

A 27^th of July 1998.

Q So did you alter it to August? A I beg your pardon?

Q Did you alter it to August? A Did I alter it?

Q Did you make that alteration on the cheque? A No, I did not.

Q Who made the alteration on the cheque then? A Where is the alteration on the cheque?

Q On the date.

A I didn’t do that.

It is apparent from the second answer in that chain of questions that Ms Gore recalled that the original date of the cheque was 27 July 1998.

[18] The first judgment of Judge Saunders records a history of Ms Gore’s investment with the MHT Fund, but does not make any conclusions about any contractual relationship between the parties, nor about the nature of the relationship between Mr Heenan and the MHT Fund or between Mr Heenan and the Group. The Judge admitted the cheque and rejected the claim of duress.

[19] Following Judge Saunders’ decision in favour of Ms Gore, Mr Heenan applied for a rehearing. That application was also heard by Judge Saunders. In a reserved decision he declined the application and no rehearing was held.²

[20] The judgment on the rehearing application confirms that the ratio of the first decision concerned the following issues:

The real issues are, firstly, did the defendant issue the cheque as part of an agreement he reached with the plaintiff over the repayment of her $20,000; and, secondly, if the defendant did issue the cheque, was this done under “pressure and duress” as he claimed in his statement of defence.

Those matters were squarely in issue before the Court and findings of fact were made based on the evidence that Mr Heenan had given the plaintiff a cheque for $20,000 and that was not undertaken under pressure or duress.

High Court Proceedings

[21] Since then a further twelve proceedings followed. These included a High

Court judicial review of Judge Saunder’s initial decision by William Young J.³

Following William Young J’s decision, there were two proceedings before Master Venning in which Mr Heenan was adjudicated bankrupt⁴ and then sought to annul that adjudication.⁵

[22] In the initial bankruptcy proceeding Mr Heenan raised the issue of the alteration of the cheque in an attempt to stay the bankruptcy proceedings on the grounds there was no reasonable debt owed by him. Master Venning found that issue had been determined in the two proceedings before the District Court and there were no grounds for a stay. Therefore Ms Gore was entitled to an order adjudicating Mr Heenan bankrupt.

[23] In the application for annulment of the bankruptcy adjudication, Mr Heenan contended the Court had erred in its decision to declare him bankrupt on the grounds the order should not have been made because the District Court decision was wrong,

_{being obtained by fraud. Master Venning, however, found that Mr Heenan had not}

² _{Gore v Heenan DC Alexandra NP125/99, 3 August 2000.}

³ _{Heenan v Gore HC Invercargill CP6/00, 1 December 2000.}

⁴ _{Heenan v Gore HC Invercargill B55/00, 11 December 2000.}

⁵ Heenan v Gore HC Invercargill B55/00, 31 January 2001.

put any new evidence before the Court that was not heard on 11 December 2000 bankruptcy hearing and as there were no grounds to annul the bankruptcy order, Mr Heenan’s application was dismissed.⁶ At this application for annulment, Ms Gore is cited as the judgment creditor. Counsel who appeared were Mr Heenan, as judgment debtor, and Mr Kane, for the Official Assignee. At the hearing Mr Heenan sought discovery orders from Ms Gore and her son and her solicitors.

[24] Master Venning held:

At the outset of the hearing I explained to Mr Heenan that there was no jurisdiction on this annulment application or to Ms Gore, let alone any other named parties, to comply with his request and that the focus of the hearing was his application for annulment.

[25] The fraud argument was raised before Master Venning but he considered this matter should have been raised in the District Court⁷ and that, in any event, even accepting that the date of the cheque was altered, it does not mean the District Court judgment was obtained by fraud.⁸

[26] I do not consider that this decision gives rise to any res judicata or estoppel on fraud as between Mr Heenan and Ms Gore. Essentially she was not a party to these proceedings.

[27] Mr Heenan then sought to have the decision of Master Venning reheard, reviewed or rescinded and Hansen J, in the High Court, treated the application as a review and found that none of the matters raised by Mr Heenan were new. Ms Gore is named as a defendant and was represented at that hearing by Mr WR Gore, appearing for his mother. Hansen J relied on William Young J’s analysis. That was not a consideration of the fraud issue. It refers, however, to an investigation by the

police as to whether there was fraud. Hansen J found it: ⁹

... of particular significance [that] the matter relating to the alleged forgery, the date of the cheque, was never raised in the review proceeding before Willing Young J when Mr Heenan was represented by counsel”.

⁶ _{At [26] and [31].}

⁷ _{At [19].}

⁸ _{At [20].}

⁹ Heenan v Gore HC Invercargill M18/01, 12 June 2001.

[28] In the Crown’s supplementary submissions, Ms Harris submits many of the preceding judgments concerning Mr Heenan discussed:

The evidential questions of responsibility for the alteration and, more specifically, whether Ms Gore or her son or agents fraudulently altered the cheque; and

The legal consequences of an alteration in terms of s 64 of the Act. None of the past judgments expressed these questions exhaustively.

[29] Thereafter, the Crown counsel’s analysis reviews the decisions covering the decisions that I have already referred to and goes on to later decisions, being an application by the Official Assignee for committal.¹⁰ In this case Chisholm J ordered that the cheque be delivered to the Registrar for analysis to work out who altered it but it subsequently transpired the cheque had been destroyed or was lost. Mr Heenan applied to annul the bankruptcy again in 2005. The High Court found there was nothing new and the Court of Appeal struck it out as an abuse of procedure.¹¹

[30] Mr Heenan kept applying to annul the bankruptcy and there were later proceedings in 2008 and in 2009, one of these decisions was by Heath J. Later in this judgment I set out his analysis. The Crown submitted this was the most comprehensive analysis of the significance of the cheque being altered.

[31] The question of fraud was considered again in the application to have

Mr Heenan declared a vexatious litigant by a full Court.¹² That Court found:

[62] ... Any alteration to the cheque was not material to the outcome of the claim before Judge Saunders. Mr Heenan’s liability on the cheque arose solely as a result of his own action in prematurely cancelling the cheque on 23 July 1998. Any alteration of the date thereafter could not affect his liability. His single-minded pursuit ever since of allegations of fraud and forgery in relation to the alteration of the cheque has therefore been completely misguided.

[63] Section 64 Bills of Exchange Act renders void a cheque which has been materially altered without consent of the drawer of the cheque. The possible relevance to this provision was not considered at the

¹⁰ _{Official Assignee v Heenan HC Invercargill CP2/00, 20 December 2002.}

¹¹ Heenan v Gore HC Invercargill CIV-2005-425-76, 27 June 2005 and Heenan v Gore CA201/05,

_{23 February 2006.}

¹² Attorney-General v Heenan [2009] NZHC 1070; [2009] NZAR 763 (HC).

time Judge Saunders heard Ms Gore’s claim. But the application of s 64 is immaterial to the outcome of Ms Gore’s claim on the cheque for the same reasons discussed in the previous paragraph.

[32] The law of Res Judicata is ancient. It divides between issue estoppel and a cause of action estoppel. There is no issue estoppel between Mr Heenan and Ms Gore. The Crown did not submit that any Court, before whom the parties were Ms Gore and Mr Heenan, squarely examined whether or not the judgment of Judge Saunders was obtained by fraud.

[33] Is there a cause of action estoppel? It is a basic rule of the common law that a party should bring all their causes of action to the one hearing. In this case there is no doubt that in the first hearing before Judge Saunders, Mr Heenan tried to open up the issues. It was not a case of him knowing he had a cause of action in fraud and tucking it away for another day.

[34] No one can complain that Mr Heenan has not tried to squarely place the question of fraud before the courts. But as the Crown submissions fairly concede, the question has never been thoroughly examined and adjudicated upon by any court.

[35] In the leading textbook of Spencer Bower Handley, Res Judicata, ¹³ in the first chapter and under the heading “Rationale of Doctrine”, the learned authors say:

1.10 The principles behind the requirement for finality were lucidly explained by Lord Wilberforce in The Ampthill Peerage Case:

‘English law, and it is safe to say, all comparable legal systems, place high in the category of essential principles that which requires that limits be placed on the right of citizens to ... reopen disputes. ... Any determination of disputable fact may, the law recognizes, be imperfect: the law aims at providing the best and safest solution compatible with human fallibility and having reached that solution it closes the book. The law knows, and we all know, that sometimes fresh material may be found, which might perhaps lead to a different result, but in the interests of peace, certainty and security it prevents further inquiry. It is said that in doing this, the law is preferring justice to truth. That may be so: these values cannot always coincide. The law does its best to reduce the gap. But there are cases where the certainty of justice prevails over the possibility of truth, ... and these are cases where the law insists on finality. For a policy of closure to be compatible with justice, it must be attended

¹³ Spencer, Bower and Handley, Res Judicata (4^th ed, LexisNexis, 2009).

with safeguards: so the law allows appeals [and] ... allows judgments to be attacked on the ground of fraud ...

[36] Paragraph 1.11 reads:

The principles governing res judicata estoppel reflect the attempts of courts to achieve finality in litigation on principled and predictable grounds while allowing some flexibility in special cases. ... The tension arises, because, as Lord Goff said res judicata is founded upon the public interest in the finality of litigation rather than the achievement of justice as between the individual litigants.

[37] In my view, this is a case in which it would be a miscarriage of justice to contend that the previous efforts of Mr Heenan to argue fraud and their dismissal by the courts, mainly in the context of applications to annul the bankruptcy, should be regarded as a res judicata between Mr Heenan, Ms Gore and her son, and Mr Heenan and the Crown. Therefore I reject the first two grounds of opposition to the application.

[38] I address now the third and fourth grounds.¹⁴ These are the contentions that the status of the cheque was irrelevant to the judgment in the District Court, and, even if it was relevant, because Mr Heenan had stopped the cheque prior to the date, it did not matter that the date of the cheque was changed.

Discussion

[39] A cheque is a bill of exchange. It is not necessary for the holder of the cheque to prove the presence of an underlying contract between the holder and the drawer of the cheque. The essence of bills of exchange is that they are negotiable instruments. They can be assigned to other persons and are the equivalent of cash. It is for this reason that defences to an action on a cheque are very limited.

[40] The circumstances in which a party who has dishonoured a bill of exchange can avoid summary judgment for the amount of the bill are generally restricted to cases of fraud, illegality, invalidity, or total failure of consideration.¹⁵ The dictum of

Cooke P in International Ore & Fertilizer Corp v East Coast Fertiliser Co Ltd is pertinent:¹⁶

Generally speaking, even between the immediate parties bills of exchange are to be treated as the equivalent of cash. Except for a total or liquidated partial failure of consideration, a breach of a background or underlying contract by the plaintiff does not afford the defendant a defence to an action on a bill, even when the action is between immediate parties.

[41] From the pleading and objections of Mr Napier, set out above, acceded to by the trial Judge, I am satisfied that Mr Heenan made efforts to widen the enquiry of the Court to an investigation of whether there was any prior or existing obligation to pay the amount to Ms Gore. From the excerpts set out above I am also satisfied that despite Mr Heenan’s efforts, the trial proceeded and was decided substantially as an action on a cheque. Mr Heenan was on the back foot: faced with the onus to oppose judgment on a cheque; rather than the plaintiff having the onus to prove a breach of contract, or other common law remedy. Accordingly, the Crown’s third ground of opposition is not made out. The valid status of the cheque was essential to Judge Saunders’ perception of the burden of proof, and limited scope of enquiry. This brings me to the Crown’s fourth ground of opposition.

The ability to sue on a cheque that has been altered

[42] The Crown’s fourth ground of opposition is most clearly expounded by

Heath J in his review of the bankruptcy of Mr Heenan:¹⁷

[16] Mr Heenan became involved in a business venture in which various individuals deposited moneys in the expectation of receiving high yield returns. Ms Gore was one of those who invested in the scheme, known as the MHT Fund (No 2). Leaving to one side the nature of the investment scheme, it appears that one of the terms of investment was that investors would not seek return of their principal until after 30 June 1998.

[17] Ms Gore paid $20,000 into a bank account that she had discussed with Mr Heenan. Subsequently, Ms Gore received a letter, dated 2 June

1998, from an entity described as “The Group”. As a result, Ms Gore sought return of her investment. She did so by a facsimile that she forwarded to Mr Heenan on 4 June 1998.

[18] Ms Gore visited Mr Heenan at his home. Mr Heenan’s position was

that Ms Gore could not recover her funds until after 30 June 1998 and, in

any event, he was not responsible for repaying the money to her. Mr Heenan’s position has always been that there was no relationship of debtor and creditor between himself and Ms Gore. Nevertheless, because he was expecting some money himself within a certain period of time, Mr Heenan decided (he says, under duress) to write a cheque on his personal account in favour of Ms Gore in the sum of $20,000. Mr Heenan post dated the cheque to 27 July 1998.

[19] There is contemporaneous evidence to support Mr Heenan’s contention that the cheque was handed over to Ms Gore on the condition that it would not be presented until he had confirmed his obligation was unconditional. Subsequently, there was correspondence between Mr Heenan and Ms Gore, in which he advised that the condition had not been met. On

23 July 1998, four days before the cheque was due to be banked, Mr Heenan took steps to cancel the cheque. That is evidenced by a letter from Mr Heenan to Ms Gore dated 24 July 1998.

[20] At some point, the date on the cheque was changed to 27 August

1998. Mr Heenan says that he did not have possession of the cheque from the time it was handed to Ms Gore and the time it was ultimately banked in February 1999. He denies making any alteration to the date. On Mr Heenan’s case, the only people who could have altered the cheque were Ms Gore or her son, Wayne, to whom she forwarded the cheque. Wayne Gore lived in Auckland.

[21] Because Mr Heenan did not consent to the date being altered, he contends that the cheque could not be sued upon, as a result of s 64 of the Bills of Exchange Act 1908.

[22] To date, all parties appear to have proceeded on the premise that the alteration of the date gave an extra month within which Ms Gore could bank the cheque. The proposition is that if the date of the cheque had remained 27

July 1998, it would have become stale after six months, that is by 27 January

1999. If the cheque were dated 27 August 1998, an additional month was available for banking. The cheque was presented for payment in February

1999. However, it was dishonoured because Mr Heenan had cancelled it in

July 1998.

...

[99] Mr Heenan is right to submit that any judgment may be overturned if procured by fraud. An example is a case to which he referred me: Shannon v Shannon (2002) 16 PRNZ 420. As Potter J observed (at paras [47], [48] and [50]), the principle of finality in litigation does not apply to judgments obtained by fraud.

[100] The circumstances in which the date of the cheque was altered are suspicious. Only three people had an opportunity to change the date: Mr Heenan, Ms Gore and her son. On Mr Heenan’s case, the cheque left his possession early on, so, he submits, the only two people who could have changed the date were Ms Gore or her son. In those circumstances, Mr Heenan relies on s 64 of the Bills of Exchange Act to support his view that the alteration to the cheque without his authority avoided the need for payment to be made on the cheque.

[101] The cheque is no longer available for forensic examination. While, like Chisholm J, I have some “unease” about the circumstances in which the cheque was altered, on reflection I do not consider that the possibility of fraud justifies the Court in overturning an adjudication order made on the basis of what appeared, at the time, to be a judgment validly obtained, not subjected to appeal and upheld in judicial review proceedings.

[102] First, I do not consider that there was a “material” alteration which engaged s 64. While much emphasis was placed on the cheque becoming stale after six months, that is not the position at law. Until 1985, no proceeding could be brought on a bill of exchange (including a cheque) unless it was commenced within six months after the cheque became due and payable: r 490 of the Code of Civil Procedure. However, the “bill writ” procedure (r 490) was repealed when the High Court Rules came into force in 1986. Since then, an action on a cheque has been brought in ordinary proceedings (including summary judgment), with no limitation on the time within which the proceeding must be issued.

[103] Indeed, ss 36(3) and 74 of the Bills of Exchange Act 1908 both indicate that a cheque can be presented within a “reasonable time”. Only if the cheque has been “in circulation for an unreasonable length of time” will it be regarded as not capable of being sued upon. What amounts to an unreasonable length of time is a question of fact: s 36(3).

[104] Without making any factual finding to this effect, even if an alteration to the date had been made by Ms Gore or her son, it was not material to the ability to present the cheque for payment at the time it was done. That being so, as Mr Guest observed, the question of forgery was one for the criminal law, not the civil law: see para [32] above. It is not part of the Court’s function to determine whether criminal charges should be brought; those are issues for prosecution authorities, the Court’s role being adjudicative in nature.

[105] Another problem arises from the timing of the cancellation. The bank was not allowed to make payment on the cheque because Mr Heenan had cancelled it at a time that predated the date for payment. Accordingly any post cancellation alteration to the date made no difference to whether the cheque could validly be paid. Whether the cheque had been presented by Ms Gore on due date or seven months later, it would have been dishonoured.

Mr Lester’s submission on s 64(2) of the Bills of Exchange Act

[43] Mr Lester submitted that Heath J’s reasoning does not take into account subs (2) of s 64. Section 64 of the Bills of Exchange Act 1908 provides:

64 Alteration of bill

(1) Where a bill or acceptance is materially altered without the assent of all parties liable on the bill, the bill is avoided except as against a party who has himself made, authorised, or assented to the alteration, and subsequent indorsers:

Provided that, where a bill has been materially altered, but the alteration is not apparent, and the bill is in the hands of a holder in due course, such holder may avail himself of the bill as if it had not been altered, and may enforce payment of it according to its original tenor.

(2) In particular the following alterations are material, namely, any alteration of the date, the sum payable, the time of payment, the place of payment, and, where a bill has been accepted generally, the addition of a place of payment without the acceptor's assent

[44] At [102] of Heath J’s reasoning, it is apparent that he is applying the qualifier “materially altered”, as appears in s 64(1), to the date of the cheque. But Mr Lester submits that subs (2), particularly “the following alterations are material”, provides that any alteration of the date will by law be a material alteration. There is therefore no room for judgment on the facts as to whether an altered date is a “material alteration” if made without the authorisation or assent of the party liable on the cheque, here Mr Heenan.

[45] Mr Lester relied in his submissions on Tyree’s Banking Law in New Zealand.¹⁸ It is sufficient to cite [7.18.6] of the most recent edition.¹⁹ As a preface to this citing, it should be recalled that an action on a cheque is an action on a negotiable instrument. Negotiable instruments are designed to be transferable from one “holder” to another. It is obvious that for this trade to retain its integrity, it is critical that the negotiated instrument not be altered by the person who may at any time be in possession of the instrument, if it is to remain negotiable, for ultimately the instrument will be honoured by the person who first drew it, just as a bank note will be honoured by the issuing bank. Section 64 of the Act has to be read in this

context.

[46] Relevantly the law is as stated by Tyree:

To be a holder in due course, the cheque or bill must to all appearances be in order. If there are any apparent unauthorised alterations or additions to the instrument, or if the endorsements are not in order, this amounts to an irregularity and a holder cannot be a holder in due course. ... Arguably, for a bill to be incomplete or irregular, the defect must go to a material part of the bill. This is identified in s 64(2) of the Bills of Exchange Act 1908 for the purposes of discharge by alteration as: ‘any alteration of the date, the sum

¹⁸ _{Tyree and others Tyree’s Banking Law in New Zealand (2nd ed, LexisNexis, Wellington, 2003).}

¹⁹ Tyree and others Tyree’s Banking Law in New Zealand (3rd ed, LexisNexis, Wellington, 2009).

payable, the time of payment, the place of payment, and, where a bill has been accepted generally, the addition of a place of payment without the acceptor’s assent’.

[47] This passage in the latest edition of Tyree does not clarify whether subs (2) is specifically declaring any alteration of date to be material. Section 64 of the New Zealand Bills of Exchange Act follows s 64 of the United Kingdom Bills of Exchange Act 1882. In that regard, Halsbury’s Laws of England says in the opening

sentence:²⁰

Material alterations

The following alterations are specifically declared to be material:²¹ any alteration of: (1) the date²² ...

[48] The same paragraph concludes:

In general terms, a materially altered cheque is a worthless piece of paper and, since it accordingly has no value, no action may be brought in conversion with respect to the face value of the instrument.²³

[49] Mr Lester accepted that Heath J was correct in finding that there is no magic in the six months, so there was no need for the date of cheque to be altered so it could be presented after 28 January 1999. Mr Lester’s point, however, is that the alteration, having been made without the assent of Mr Heenan means that the cheque was voided against Mr Heenan and, indeed, was now a worthless scrap of paper that could not be sued upon in an action upon a cheque. Rather, Ms Gore would have to plead, in an ordinary action, the particulars of why she claimed Mr Heenan owed her

$20,000. These would be particulars of a contract or other common law cause of action. It is plain from Heath J’s findings in [16] and [17], and from the agreement she entered into with the MHT Fund, that there is a significant argument that she never contracted with Mr Heenan or paid him the $20,000. Any claim against Mr Heenan would have to establish a collateral contract, actionable representation or

_guarantee.

²⁰ _{Halsbury’s Laws of England (5th ed, 2008) vol 49 Bills of Exchange at [1560].}

²¹ _{Bills of Exchange Act 1882 (UK) ss 64(2), 89.}

²² See Outhwaite v Luntley (1815) 4 Camp 179; Vance v Lowther (1876) 1 ExD 176; Hirschman v

_{Budd (1873) LR 8 Exch 171.}

²³ Smith v Lloyds TSB Group plc, Harvey Jones Ltd v Woolwich plc [2000] EWCA Civ 240; [2001] QB 541, [2001] 1 All

ER 424 (CA).

[50] Mr Lester’s further point is that had Ms Gore presented the cheque after it had been stopped by Mr Heenan but before any alteration occurred, it would have been dishonoured, and Ms Gore could have then issued proceedings in the same way that she did and been entitled to damages under s 57 of the Act, which provides:

57 Measure of damages against parties to dishonoured bill

Where a bill is dishonoured, the measure of damages, which shall be deemed to be liquidated damages, shall be as follows:

(a) The holder may recover from any party liable on the bill, and the drawer who has been compelled to pay the bill may recover from the acceptor, and an indorser who has been compelled to pay the bill may recover from the acceptor or from the drawer, or from a prior indorser,—

(i) The amount of the bill:

(ii) Interest thereon from the time of presentment for payment if the bill is payable on demand, and from the maturity of the bill in any other case:

(iii) The expenses of noting, or, when protest is necessary and the protest has been extended, the expenses of protest.

...

(c) Where by this Act interest may be recovered as damages, such interest may, if justice requires it, be withheld wholly or in part, and, where a bill is expressed to be payable with interest at a given rate, interest as damages may or may not be given at the same rate as interest proper.

[51] However, the effect of the alteration is that the statutory measure of damages for a dishonoured bill is not available where the cheque has been avoided.

[52] I agree with Mr Lester’s interpretation and application of s 64(2). From the time of the alteration the cheque was a worthless piece of paper. From that time an action on a cheque was impossible. Contrary to the Crown’s submission, it is irrelevant that the cheque was stopped before it became unenforceable, as by the time the action on the cheque was brought, the cheque had become worthless.

[53] The paper might be evidence as some indication of an acknowledgement of liability but that would have to be assessed in an ordinary action. It is clear that the trial was not conducted on this basis. Effectively the burden of proof was on Mr Heenan, not on Ms Gore. A full examination of the merits of the relationship, if

any, between Mr Heenan and Ms Gore was ruled out when the Judge upheld Mr

Napier’s objections to an examination of the nature of the relationship.

Adjournment of the hearing

[54] As a result of Mr Lester identifying the subs (2) of s 64 point, in the hearing on 12 December 2013, I considered that the chances of Mr Heenan’s application succeeding had materially increased. To that end, I considered that procedural justice required Ms Gore and her son, to be given the opportunity to be heard on the application for leave to apply. The hearing was adjourned and notice was given to their last known address.

[55] On the hearing reconvening on 28 July, there was no appearance from either or by counsel. Notice had also been given of the hearing to Ms Gore’s solicitor, Mr Napier. He advised the Registry that he had forwarded notice of the hearing to his last known address of Ms Gore. He declined to take any opportunity to participate in this hearing.

Abuse of process

[56] The fifth ground of the Crown’s opposition was that these proceedings are an attempt to mount a collateral attack on the judicial determination of competent courts in previous proceedings and, as such, it is an abuse of process.

[57] This submission is a variant on the res judicata issue. It is seriously arguable that the first and fifth ground merge, as the whole of the law of res judicata is against abuse of process. It is important I think, however, to set out in this judgment some detail consistent with the Crown’s own submission that the question of the alteration of the cheque and the matter of fraud has never been thoroughly considered by the judges, essentially for procedural reasons.

The District Court

[58] One of the grounds in the application for rehearing of Judge Saunders’

decision was improper practice. Mr Heenan submitted that the judgment was

obtained by “totally improper practice” knowingly by the successful party. Judge

Saunders reasoned:²⁴

By that I understand the defendant to refer to the alteration of the date of the cheque from “27 July” to “27 August”. I also refer to the banking of the cheque in February when, according to Mr Heenan, he had advised that the cheque was “stale” and should be returned.

The evidence about the alteration of the cheque and who is responsible for the alteration is a matter which was canvassed at the hearing.

The essential issue at trial was whether the defendant issued a post-dated cheque under duress from the plaintiff.

[59] Judge Saunders went on to reanalyse the question of duress and recorded, as a finding of fact, that on 14 May 1999 Mr Heenan was again prepared to tender a cheque for $20,000 to the plaintiff. This was after the cheque was presented on

26 February 1999.

[60] The initial judgment records, however, that Mr Heenan’s offer to sign another cheque for $20,000 was on condition that Ms Gore sign a document. That document was not before the District Court. The declined application for hearing did not enable a full examination of the merits although in that decision there was some broader consideration of the merits by the Judge, but without the benefit of the relationship between the parties being examined in the normal way in an ordinary action.

[61] In that regard, this Court does not have confidence in the finding of Judge

Saunders on the application for rehearing:²⁵

I cannot accept that if Mr Heenan, knowing of the banking of his “stale” cheque outside the six-month period and after he claims he had cancelled the cheque, that he would make such an offer unless he accepted liability for the principal sum.

[62] Judge Saunders goes on to deal with an issue raised by Mr Heenan framed as:

Ground Number Eight – “The Cheque – The Plaintiff Succeeded by Means

of Dishonest Practices”

[63] The analysis begins with the sentence:²⁶

I am aware that at the heart of this application is the defendant’s belief that the successful party has achieved a result through dishonest practices, in particular the tampering with the date of a cheque which was post-dated.

[64] It is apparent that Judge Saunders accepted that the cheque had been altered. What he did not accept is that it had been shown the cheque was interfered with by the plaintiff or her family. However, the way that the Judge resolved the matter was that it was sufficient for the plaintiff to prove that Mr Heenan had given the plaintiff a cheque and that it was not given under pressure or duress. This is apparent from

the following reasoning:²⁷

Mr Heenan claims that prior to 27 July [1998], being the date he inserted on the cheque in June 1998, the cheque had already been stopped by him. In terms of whether an alteration was then made to the cheque or not, and by whom, it would not make any difference to his liability from 27 July 1998 as he says the validity of the payment had been put to rest on 23 July 1998 and communicated to the plaintiff by his letter of 24 July 1998.

I do not accept that it has been established that the plaintiff did deal dishonestly with the cheque either individually or with the assistance of her family or counsel.

The real issues are, firstly, did the defendant issue the cheque as part of an agreement he reached with the plaintiff over the repayment of her $20,000; and, secondly, if the defendant did issue the cheque, was this done under “pressure and duress” as he claimed in his statement of defence.

Those matters were squarely in issue before the Court and the findings of fact were made based on the evidence that Mr Heenan had given the plaintiff a cheque for $20,000 and that was not undertaken under pressure or duress.

[65] This analysis presumes either that there was still a cheque which could be sued upon, or that it was sufficient that there had been a valid cheque, at least up to

23 July 1998, when Mr Heenan put a stop to it. Further, this analysis takes no account of the fact that during the first trial Mr Heenan tried to open up the factual issues beyond the drawing of the cheque and beyond the issue as to whether the cheque was drawn under duress. But these efforts were opposed by Mr Napier on the grounds it was simply an action on a cheque; objections which were upheld by Judge Saunders, as we have seen.

[66] Both at the trial and in the rehearing application Judge Saunders framed the issues around Mr Heenan’s state of mind at the time he drew the cheque. He confined, in his mind, the issues as to liability as being liability on the cheque at the time that it was drawn. He did not refer to s 64 of the Bills of Exchange Act. He thought the subsequent alteration of the date of the cheque was irrelevant.

[67] However, if Mr Lester’s argument is correct and s 64(2) applies, it follows that from the time the date on the cheque was altered, it was impossible for an action on the cheque to be commenced. Rather, Ms Gore would have had to commence an ordinary action, which would have entailed a full exploration as to whether or not there was any contract at all between Mr Heenan and Ms Gore which led to her investment in the MHT Fund, or any other cause of action that Ms Gore could raise against Mr Heenan, entitling her to judgment independent of the once cheque, now unactionable. She would have the onus of proof.

[68] For these reasons, I do not think that the findings just set out by Judge Saunders amount to a res judicata or an issue estoppel as between Ms Gore and Mr Heenan. Nor was it argued so by counsel for the Crown. And, as I have recorded, an opportunity was given to Ms Gore and her son to participate in the hearing and that opportunity was not taken. Nor do I think Mr Heenan had a fair hearing, as the trial proceeded upon an error of law that the procedure of action upon a cheque was available. It follows his endeavours to reopen the issue were not an abuse of process, unless the issue was fully reviewed later. Mr Lester argues it was not.

The High Court Judicial Review

[69] Mr Heenan did not appeal either of Judge Saunders’ decisions but rather, as we have seen, sought a review of the initial judgment. By the time that was disposed of, he was out of time for an appeal under the provisions of the District Courts Act

1947, as they then were.²⁸ He commenced an action in the High Court for judicial

review where it was heard by William Young J.²⁹

[70] The High Court dismissed this judicial review. On this occasion, for the first time, Mr Heenan was represented by counsel. Neither counsel nor the Court identified Mr Lester’s point, namely that the proceedings were misconceived inasmuch as they were an action upon a cheque. The analysis continued on the underlining assumption that Ms Gore was entitled to bring an action on the cheque even though it had been altered.

[71] On judicial review Mr Heenan took the point that the judgment was an error of law as there was no consideration for the cheque. The Judge found there was no pleading of absence of consideration in but found that there was consideration in the form of Ms Gore accepting a post-dated cheque. However, the Judge had serious reservations about the trial process.

[72] It is not clear that the Judge found that the consideration was as between Ms Gore and Mr Heenan. He thought that there was an argument that the counterparty to Ms Gore’s transaction, by the documents, Prosper International League Limited, was one and the same entity as Mr Heenan. He said:

[54] If I were hearing an appeal from the decision of the Judge, I would have been very tempted to give Mr Heenan the opportunity of giving, on oath, a full explanation of the relevant transactions. If he was not able (or willing) to do so, that might have supported the inference that he and Prosper International League Limited were one and the same.

[55] Although I am troubled about this aspect of the case, I am firmly of the view that issues associated with it would have been raised by way of appeal and cannot, in all fairness to Mrs Gore, be dealt with by way of review.

[73] William Young J approached judicial review in this way:

[47] ... if I were satisfied that there was a tangible error of real significance in the legal approach adopted by the Judge which must have resulted in the relevant part of the judgment being set aside if an appeal had been brought in a timely way I think that relief ought to be available in these proceedings. On the other hand, if all Mr Eagles can do is point to possible errors of approach which may have resulted in part or all of the evidence being reheard, or the judgment being upheld on other grounds or amended, then failure by Mr Heenan to appeal means it would be unjust to allow him relief in these proceedings.

[74] Mr Heenan was adjudged bankrupt in the High Court in Invercargill on 11 April 2000, on the application of Ms Gore. Over a long period of time Mr Heenan kept challenging the bankruptcy. William Young J’s consideration of the merits was the first in a large number of High Court decisions arising out of various contexts.

[75] Mr Lester points out that Chisholm J, in a decision that concerned applications for committal and a strike out, was not prepared to treat the matter as subject to an estoppel, as he suggested the matter requires further determination:³⁰

... Mr Heenan is attempting to use this proceeding to pursue a fraud claim against Ms Gore and her son based on the alteration to the cheque. By this means he is seeking to have the District Court judgment set aside, presumably by virtue of the alleged fraudulent conduct by Ms Gore and her son ... One way or other this proceedings needs to be determined, preferably by a Judge who has had no prior involvement in these matters.

[76] In this Court the argument as to res judicata or not focused on the judgment of Heath J, delivered on 12 May 2009. This was the most comprehensive, and last significant judgment reviewing Mr Heenan’s arguments. The relevant passages of this judgment have already been set out above. As I have occasion to note, Heath J made no moment of the contention that Mr Heenan and the ostensible counterparty were one and the same.

[77] Mr Lester submitted that the application of s 64 is not, of itself, the fraud issue and so Heath J’s reasoning did not create an issue estoppel. Rather, he submitted, the fraud issue is whether the cheque was altered dishonestly by Ms Gore or by her son in order to keep the cheque alive, in order to sue on the cheque, and so avoid having to engage in an ordinary action.

[78] Whether or not this formulation by Mr Lester is correct, and even if the s 64 issue is at the heart of the fraud issue, it does not create a res judicata or issue estoppel as between Mr Heenan and Ms Gore or her son as neither of these two were

_{parties to the hearing before Heath J, or the other High Court hearings.}

³⁰ Official Assignee v Heenan HC Invercargill CIV-2002-425-76, 27 June 2003 at [13].

[79] It follows from this analysis that the Crown’s fifth ground of opposition does not succeed as this application does not offend the principle of res judicata or is precluded by issue estoppel as between Mr Hennan and Ms Gore, as already found, and is not on the facts an abuse of process, as the District and High Courts have not previously examined the function of s 64(2) and thereby the consequence of taking advantage of the cheque procedurally.

[80] It cannot be said that identification of this new point of law is a collateral attack on judicial determinations to date and so is an abuse of process. One also keeps in mind that it is always open at common law to apply to set aside a judgment on the grounds that it was obtained by fraud.

[81] I turn now to consider whether or not there is a reasonable argument that the judgment might have been obtained by fraud.

Is there a reasonable argument that the judgment was obtained by fraud which would justify granting leave to initiate new proceedings making that allegation?

[82] Fraud has never been defined. This is a deliberate decision of the common law. The essence of fraud is obtaining advantage dishonestly. It is also the character of fraud that it is often identified some considerable time after the event. And it may be identified after formal judgments of the Court have apparently finally resolved relationships between parties. Fraud so undermines the social fabric and the legal system that the common law does not allow it to go unaddressed. Rather, the

fundamental principle is as follows: ³¹

Fraud is an extrinsic, collateral act which vitiates the most solemn proceedings of courts of justice. A judgment obtained by fraud or collusion, even, it seems, a judgment of the House of Lords, may normally be treated as a nullity.

Or, as Denning LJ said memorably in Lazarus Estates Ltd v Beasley “fraud unravels

_{everything”.} ³²

³¹ _{Halsbury’s Laws of England, above n 11, at [1204].}

³² Lazarus Estates Ltd v Beasley [1956] 1 QB 702 (CA) at 712.

[83] There are two competing arguments as to the presence of fraud or not. I assume here that Mr Heenan will prove in any future trial that that alteration was made after he parted possession with the cheque. As already noted, Ms Gore believed down to the trial that it was still dated July.

[84] The two competing arguments can be summarised as follows: (a) Fraud

The cheque was altered by somebody other than Mr Heenan, for a dishonest purpose. The purpose was based on an error of law, with the belief that the alteration was necessary to extend the life of the cheque in order to gain time to present it to the bank where it would be dishonoured, in order to confine an intended law suit against Mr Heenan to an action on a cheque to the procedural advantage of Ms Gore, effectively reversing the onus of proof and limiting available defences. As we have seen, by reason of s 64 of the Bills of Exchange Act, the alteration of the date rendered it “a worthless piece

of paper”,³³ so that it was no longer a cheque. The proceedings

depended for success on confining the issue to an action on a cheque. If successful Ms Gore avoided having to confront the far more complex issues as to whether or not Mr Heenan owed an obligation to her by reason of her investment in the MHT Fund. Whoever altered the cheque intended that a doctored document be the foundation of the cause of action. The 1999 statement of claim relied on the date of the cheque being 27 August 1998 and relied upon it being dishonoured. The claim pleaded the dishonest new date of the “cheque”. Having relied on the altered date, the law will not allow for the plaintiff to contend the dishonesty was not fraud. This is particularly so when at the trial, counsel for the plaintiff vigorously and successfully prevented Mr Heenan from persuading the trial Judge to examine his legal relationship with Ms Gore, independent of the cheque. (I note

_{the transcript of the hearing was available for the hearing of this}

³³ See [48] above.

application and may have been the first time this Court read the vigorous opposition of Ms Gore’s counsel to the trial being anything other than an action on a cheque.) It was a fraud on Mr Heenan, for the plaintiff, to obtain a judgment relying on a doctored document.

(b) No fraud

The alteration of the date on the cheque proceeded upon an error of law that the cheque would be stale if not presented to the bank within six months of 27 July 1998, i.e. by 27 January 1999. It was plainly altered to enable presentation within six months from 27 August 1998, that is, before 27 February 1999. As we have seen, it was presented for payment on 26 February 1999. Inasmuch as this was a dishonest alteration of the cheque, it is, however, irrelevant to the liability of Mr Heenan, as the dishonesty proceeded upon an error of law. There had been no need to alter the cheque before presenting it for payment. Had it not been altered, an action on the cheque would have been successful. Therefore the judgment was not obtained dishonestly.

[85] I think that both propositions are arguable. The no fraud argument thus summarised does not, however, justify the judgment. The initial judgment is based on an action on the cheque. As previously found, it was not a trial on the merits. It was a trial with a fatal flaw, namely that there was in fact no cheque before the Court as it had been rendered a worthless scrap of paper. As a result, I am satisfied it was not a just trial. It was not remedied by the review for the reasons explained above.

Judgment in error of law

[86] In the course of oral argument in the second hearing, Ms Harris, Mr Lester and the Court all found difficulty disentangling the fraud point from the s 64(2) point. We did so without identifying a procedural remedy for the s 64(2) point, considered apart from fraud.

[87] There would be merit in examining a potential remedy confined to the failure of the trial Judge to recognise that by application of s 64(2), it was not possible to

bring an action on a cheque. I am satisfied that that was a serious error of law in the

District Court judgment.

[88] I have become convinced that Mr Heenan did not receive a just trial because at the least it proceeded as an action on a cheque and for that reason shifted the onus of proof and confined examination of the legal obligations owed, if any, between Mr Heenan and Mr Gore. The flaw in the judgment of Judge Saunders is at the least an error of law. Error of law is always susceptible to judicial review.

[89] In addition to the remedy of seeking to set aside the judgment on a grounds obtained by fraud, it seems to me there is another way of dealing with the fact that it was an error of law for these proceedings to have been conducted as an action on a cheque. This would be to grant leave to seek leave to appeal the judgment of William Young J. Whatever the lapse of time, the Court of Appeal has jurisdiction to consider giving leave to appeal any High Court judicial review judgment.

[90] I have considered whether it would be a sufficient response to Mr Heenan’s complaints merely to grant leave to apply to appeal the High Court judgment dismissing judicial review. I have decided that that is not sufficient because, even if leave is granted and the appeal succeeds and the District Court judgment is set aside for error of law, the remedy may be limited to setting aside the judgment, and ordering a return of the judgment sum plus interest without requiring a retrial as a

cause of action in contract, or otherwise.³⁴ Whereas if Mr Heenan can establish that

the judgment was obtained by fraud, then he may be able to obtain a judgment for damages.

[91] In respect of granting any leave to pursue this issue of the altered cheque, I have kept in mind the test contained in s 88A of the Judicature Act 1908 which provides:

88A Restriction on institution of vexatious actions

(1) If, on an application made by the Attorney-General under this section, the Supreme Court is satisfied that any person has persistently and without any reasonable ground instituted vexatious

³⁴ See High Court Rules, r 20.19 and 20.20.

legal proceedings, whether in the Supreme Court or in any inferior Court, and whether against the same person or against different persons, the Court may, after hearing that person or giving him an opportunity of being heard, order that no civil proceeding or no civil proceeding against any particular person or persons shall without the leave of the Supreme Court or a Judge thereof be instituted by him in any Court and that any civil proceeding instituted by him in any court before the making of the order shall not be continued by him without such leave.

(2) Leave may be granted subject to such conditions (if any) as the Court or Judge thinks fit and shall not be granted unless the Court or Judge is satisfied that the proceeding is not an abuse of the process of the court and that there is prima facie ground for the proceeding.

(3) No appeal shall lie from an order grating or refusing such leave.

[92] In Re Collier I examined the authorities citing Edmund Davies LJ:³⁵

... the jurisdiction is one which should be very carefully and indeed almost sparingly exercised, and the court should be satisfied, before giving leave, that there is a case of some real substance, or an appeal of some substance, to be argued.

I am satisfied this is such a case. I have hesitated as the question of the cheque being altered has been known and discussed by judges of this Court for many years. But not until Mr Lester’s submission before me, has the application of s 64(2) of the Bills of Exchange Act been identified, and probably, the hearing before me was the first time it has been clearly identified that the trial proceeded as an action on a cheque, avoiding thereby a full examination of the obligations, if any, of Mr Heenan to Ms Gore in dependently of the cheque.

[93] I am satisfied therefore that it is just that Mr Heenan, as a vexatious litigant, be given an opportunity to present these arguments in Court against Ms Gore and her son, even after this length of time.

[94] Accordingly, I grant the application on these terms:

(a) Leave is granted to apply to the Court of Appeal for leave to appeal

_{Heenan v Gore,}³⁶ _{being the High Court judicial review judgment.}

³⁵ _{Re Collier HC Christchurch, CP 1998-409-00057, 21 April 2004 at [5].}

³⁶ Heenan v Gore, HC Invercargill CP6/00, 1 December 2000.

(b) Leave is granted to Mr Heenan to commence new proceedings in the High Court filed in the Invercargill Registry, to seek a judgment against Ms Gore that the District Court judgment, was obtained by fraud.³⁷

(c) Leave is granted to Mr Heenan to commence new proceedings in the High Court, likewise in Invercargill, to seek a declaration against Ms Gore’s son that he altered or caused to be altered the cheque by overwriting “August” over “July”, for the purpose of preserving the life of the cheque to enable it to be sued upon without the need to prove any other liability of Mr Heenan to pay Ms Gore $20,000. The question of leave to pursue any further relief is reserved.

(d) The pleadings in respect of (a), (b) and (c) are to be drawn, in the first instance, by Mr Lester as amicus curiae, and then submitted by Mr Heenan as plaintiff to this Court for prior approval before the claims will be accepted for filing. The reason for this condition of leave, which is unusual, is to avoid irrelevant allegations, Mr Heenan having in the past pleaded extravagantly.

(e) Should Ms Gore and/or her son not file pleadings in opposition, the

Court will consider appointing counsel as a contradictor.

(f) In the meantime, however, the Court continues to retain Mr Lester as amicus curiae.

_{[95] In the circumstances, there is no order for costs.}

³⁷ Gore v Heenan, above n 1.