Wilkins v Housing New Zealand Corporation [2014] NZHC 507 (19 March 2014)

Last Updated: 16 April 2014

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2013-404-004885 [2014] NZHC 507

UNDER	the Judicature Amendment Act 1972
BETWEEN	ALLAN KENITH WILKINS Applicant
AND	HOUSING NEW ZEALAND CORPORATION Respondent

Hearing:	24 February 2014
Appearances:	A Wilkins (Applicant) in person F Cuncannon for Respondent
Judgment:	19 March 2014 at 2.30pm

_{(RESERVED) JUDGMENT OF ANDREWS J}

This judgment is delivered by me on 19 March 2014 at 2:30pm pursuant to r 11.5 of the High Court Rules.

..................................................... Registrar / Deputy Registrar

Solicitors:

Meredith Connell, Auckland

Copy to:

Applicant

WILKINS v HOUSING NZ CORP [2014] NZHC 507 [19 March 2014]

Introduction

[1] Mr Wilkins has applied for judicial review of three alleged decisions made by Housing New Zealand (“HNZ”). I am required to determine the following applications:

(a) An application by HNZ to strike out Mr Wilkins’ statement of claim

for judicial review; and

(b) Applications by Mr Wilkins for:

(i) an order restraining Meredith Connell from acting for HNZ in the judicial review proceeding;

(ii) an order for HNZ to give particular discovery; (iii) leave to cross-examine certain witnesses; and (iv) leave to issue interrogatories.

[2] At the hearing of the applications, Mr Wilkins confirmed that the Court does not need to deal with his applications for particular discovery, leave to issue interrogatories, and leave to cross-examine witnesses. Further, Mr Wilkins accepted, in the course of the hearing before me, that if this proceeding were to continue, none of the solicitors who had acted for HNZ in the District Court criminal proceedings would have access to this proceeding. Accordingly, this judgment deals only with the application by HNZ to strike out Mr Wilkins’ statement of claim for judicial review.

Background

[3] Mr Wilkins applied to become an HNZ tenant in March 2004. He attended needs assessment interviews in March 2004 and March 2005, and completed

applications for income-related rent on 21 March 2005, 15 November 2005, 21 July

2006, 8 February 2007, and 7 March 2008.¹

[4] A tenant seeking income-related rent must declare his or her income from all sources, the principal value of savings, bonds, investments, shares and stocks etc; the value of non-monetary benefits he or she receives; payments by boarders, etc, and income from any odd jobs. It is also a requirement that the tenant keep HNZ informed of any changes in his or her circumstances.² IRR applications are (necessarily) processed on the basis of information provided by tenants, and the tenant is required to sign a declaration that all the information given is true and complete.

[5] As a result of concerns regarding information provided by Mr Wilkins, an investigator employed by HNZ, Ms Ngatai, commenced an investigation in December 2007. In August 2008 Ms Ngatai submitted a report to HNZ’s Acting Investigations Manager, Mr Patena. Mr Patena was at that time a solicitor employed by HNZ’s solicitors, Meredith Connell, on secondment to HNZ. Ms Ngatai was subsequently asked to, and did, make further inquiries and submit a further report. HNZ has not been able to locate a copy of that report.

[6] In September 2008, HNZ’s investigation committee decided that the matter would be referred to Meredith Connell for criminal prosecution. In April 2009, Mr Wilkins was charged in the District Court at Auckland, with a number of offences of using a document to obtain a pecuniary advantage. Each charge related to IRR applications submitted by Mr Wilkins to HNZ. After initially pleading not guilty to each charge, Mr Wilkins pleaded guilty on 30 June 2009 to a single representative charge of using a document.

[7] Mr Wilkins first appeared for sentencing on 7 October 2009. On that day, sentencing was adjourned to give Mr Wilkins an opportunity to consider whether he

¹ HNZ provides social housing, in respect of which tenants pay rent assessed on their needs and ability to pay. While all properties in HNZ’s housing portfolio have an assessed market rent, tenants are charged rent on the basis of their needs and assessed ability to pay, pursuant to the Housing Restructuring and Tenancy Matters Act 1992. HNZ is reimbursed the difference between the market rent and the income-related rent from the consolidated fund.

² Housing Restructuring and Tenancy Matters Act 1992, s 56.

wished to vacate his guilty plea. He was sentenced on 22 December 2009, to five

months’ home detention and 100 hours of community work.³

[8] Pursuant to s 60 of the Housing Restructuring and Tenancy Matters Act, HNZ may recover from a tenant the difference between rent that has been paid and the rent that should have been paid (the “Crown debt”), where income-related rent has been calculated on the basis of incorrect or incomplete information. On 25 August 2010, HNZ issued proceedings in the District Court at Auckland, claiming the sum of

$68,410 from Mr Wilkins, as being the difference between the rent he paid, and the rent he should have paid.

[9] The claim was heard at a defended hearing in the District Court at Auckland, before Judge A A Sinclair, between 15 and 20 October 2012. Written submissions were filed after the hearing, and the Judge’s decision was delivered on 19 December

2012.⁴ The Judge found Mr Wilkins liable to HNZ for the Crown debt, and entered

judgment for $68,410 in favour of HNZ, together with interest pursuant to s 62B of the District Courts Act 1947. On 21 February 2013, Judge Sinclair delivered a further judgment, ordering Mr Wilkins to pay costs to HNZ in the total sum of

$36,100, and to pay disbursements in the further sum of $12,678.24.⁵ No appeal was

filed against the judgment, and the judgment was sealed on 4 March 2013.

[10] On behalf of HNZ, Meredith Connell subsequently demanded payment from

Mr Wilkins, then issued a bankruptcy notice on 4 June 2013. On 2 August 2013

HNZ filed an application in this Court for an order adjudicating Mr Wilkins bankrupt. The bankruptcy proceedings were adjourned on 25 September 2013, following an indication that Mr Wilkins intended to issue proceedings against HNZ. Mr Wilkins filed the application for judicial review on 15 November 2013.

Application for judicial review

_{[11] Mr Wilkins seeks judicial review of three decisions:}

³ Housing New Zealand Corporation v Wilkins DC Auckland CRI 2007-004-14842, 22 December

_2009.

⁴ Housing New Zealand Corporation v Wilkins DC Auckland CIV-2010-004-1904, 19 December

_2012.

⁵ Housing New Zealand Corporation v Wilkins DC Auckland CIV-2010-004-1904, 21 February

2013.

(a) Decision of the HNZ investigations committee to refer its investigation of Mr Wilkins to Meredith Connell for prosecution: Mr Wilkins alleges that there was a breach of natural justice, irrelevant considerations were taken into account and relevant considerations were not taken into account.

(b) “Plea bargain arrangement”: Mr Wilkins alleges that a plea bargain arrangement was entered into whereby if he pleaded guilty to a representative charge, HNZ would not seek reparation or issue civil proceedings against him. He alleges that the “plea bargain” arrangement was contrary to natural justice, in that it led to his having a legitimate expectation as to a fair procedure, if he agreed to the arrangement, which was not met.

(c) HNZ’s decision to pursue civil recovery: Mr Wilkins alleges that HNZ’s civil proceedings in the District Court were procedurally unfair, having been commenced contrary to his belief that there would be no such proceeding. Mr Wilkins also alleges that the amount claimed in the proceeding was calculated on the basis of irrelevant considerations taken into account by the investigations committee before the prosecution was commenced.

[12] Mr Wilkins claims relief by way of:

(a) Quashing the decisions of the investigations committee and re-investigating and re-deciding the matter; and if the decision is quashed;

(b) Overturning the criminal conviction and the finding that he is liable to

HNZ for the Crown debt; or

(c) Quashing the decision of the District Court in the civil proceeding.

Application to strike out

[13] In its application for orders striking out Mr Wilkins’ statement of claim, HNZ alleges that no reasonably arguable cause of action is disclosed in respect of any of the alleged decisions. HNZ also says that the relief sought in Mr Wilkins’ statement of claim is not relief that could reasonably arguably be granted in this Court. HNZ further claims that the judicial review proceeding is an abuse of process, in being a collateral attack on decisions of the District Court in its criminal and civil jurisdictions.

Strike out principles

[14] The approach to be taken to applications to strike out pleadings on the ground that no reasonably arguable cause of action is disclosed (High Court Rules r 15.1(a)) is well-established by the judgments of the Court of Appeal in Attorney-General v Prince & Gardner,⁶ the Supreme Court in Couch v Attorney-General,⁷ and in North Shore City Council v Attorney-General.⁸ Briefly summarised, the principles are:

(a) Pleaded facts are assumed to be true. This does not extend to pleaded allegations which are entirely speculative and without foundation.

(b) The pleaded cause or causes of action must be clearly untenable.

A claim should not be struck out summarily unless the Court can be certain that it cannot succeed.

(c) The jurisdiction is to be exercised sparingly, and only in clear cases.

(d) The jurisdiction is not excluded by the need to decide difficult issues of law.

(e) The Court should be particularly slow to strike out a claim in any developing area of the law.

⁶ _{Attorney-General v Prince & Gardner [1998] 1 NZLR 262 (CA) at 267.}

⁷ _{Couch v Attorney-General [2008] NZSC 45, [2008] 3 NZLR 725 (SC) at [33].}

⁸ North Shore City Council v Attorney-General [2012] NZSC 49, [2012] 3 NZLR 341 at [146].

[15] Regarding striking out a statement of claim on the ground that it is otherwise an abuse of process (r 15.1(d)), the Court of Appeal in Commissioner of Inland Revenue v Chesterfields Preschools Limited observed that this ground is intended to prevent the improper use of the Court’s machinery.⁹ It extends beyond the grounds set out in r 15.1(b) (“likely to cause prejudice or delay”) and r 15.1(c) (“is frivolous or vexatious”). The ground of being “otherwise an abuse of process of the Court”

captures all other instances of misuse of the Court’s processes, such as a proceeding that has been brought with an improper motive or is an attempt to obtain a collateral benefit. The Court in Chesterfields also noted that the power to strike out on this ground is to be used properly and for bona fide purposes and if a defect in the pleadings can be cured, then the Court would normally order an amendment of the

statement of claim.¹⁰

[16] The considerations applying to strike out applications in the context of a proceeding seeking a judicial review are no different from those applied in ordinary proceedings.¹¹

[17] I turn first to the HNZ’s application to strike out Mr Wilkins’ application for judicial review. If that application succeeds, it will not be necessary to deal with Mr Wilkins’ applications.

The decision to prosecute

[18] In Polynesian Spa Ltd v Osbourne, Randerson J observed that the Court will not lightly interfere with this type of decision, and set out the relevant principles, as follows:¹²

[61] Traditionally, the courts have shown a marked reluctance to interfere with the exercise of a discretion to prosecute. In some cases, it is said that such powers are not reviewable at all.

[61] There are a number of sound reasons for the court’s reluctance to

_interfere:

⁹ Commissioner of Inland Revenue v Chesterfields Preschools Limited [2013] NZCA 53, [2013] 2

_{NZLR 679 (CA) at [87]–[89].}

¹⁰ _Ibid.

¹¹ See Southern Ocean Trawlers Ltd v Director-General of Agriculture and Fisheries [1993]

_{2 NZLR 53 (CA) at 63.}

¹² Polynesian Spa Ltd v Osbourne [2005] NZAR 408 (HC) at [61]–[62].

(a) It is important that the proper constitutional boundaries be observed. The discretion to prosecute on behalf of the state is a function of executive government rather than the courts whose function is to ensure the proper and fair conduct of trials: ...

(b) Criminal proceedings should not generally be subject to collateral challenge. Entertaining challenges of this kind outside the trial and appeal process is likely seriously to disrupt the criminal justice system: ...

(c) ... Decisions to initiate and continue prosecutions generally involve a high content of judgment and discretion in the decisions reached.

(d) Where a prosecution ensues, the courts possess an inherent power to stay or dismiss a prosecution for abuse of process.

...

(e) The conclusion on behalf of a prosecuting authority that an offence has been committed is merely an expression of opinion which is capable of being challenged in court: ...

(f) If factual errors are made in an investigation by a prosecuting authority or if there is further or other material which a defendant considers ought to have been weighed by the prosecuting authority, there is an opportunity to explore and test such issues at trial and to bring such further evidence as the defendant sees fit.

(References omitted)

[19] Ms Cuncannon submitted that, in this case, the decision to prosecute should not be interfered with. First, she submitted, the decision was made five and a half years ago, and Mr Wilkins has not reasonably explained his delay in bringing this proceeding. Secondly, Ms Cuncannon submitted that any order to reconsider the prosecution would be futile as Mr Wilkins did not defend the criminal charges, but pleaded guilty and has served his sentence of home detention. Thirdly, Ms Cuncannon submitted that any alleged mistake of fact or failure to consult could and should have been dealt with at trial.

[20] Ms Cuncannon further submitted that even if Mr Wilkins were to succeed in his claim that irrelevant matters were taken into account, and relevant matters not taken into account, that would not have materially altered the decision, as there was significant other evidence on which the decision to prosecute was based.

[21] Mr Wilkins submitted that the decision in Polynesian Spa does not confirm that there is an absolute bar to judicial review of a decision to prosecute, and that the Court may intervene if the prosecuting authority acted in bad faith. He submitted that such bad faith is shown in the fact that HNZ had failed to produce a copy of Ms Ngatai’s second report, and that HNZ failed to ensure he was given an opportunity to provide “full and accurate accounts”. Mr Wilkins further submitted that his delay in bringing this proceeding was properly explained.

[22] Essentially for the reasons put forward by Ms Cuncannon, I accept that this cause of action cannot succeed. In the course of the prosecution, Mr Wilkins had the opportunity to challenge the HNZ case, both on the basis that Ms Ngatai’s second report had not been made available, and in reliance of any further information he wanted to put before the Court. He did not do so, but pleaded guilty to the charges.

[23] I am satisfied that Mr Wilkins’ application for judicial review of HNZ’s decision to prosecute is untenable, and must be struck out for the reason that it is not reasonably arguable.

The “plea bargain arrangement”

[24] Ms Cuncannon submitted that Mr Wilkins is estopped from arguing that there was an agreement reached on 30 June 2009 that if he pleaded guilty, HNZ would not seek reparation, or issue civil proceedings against him. Ms Cuncannon submitted that the estoppel arises from Judge Sinclair’s judgment in which she said:¹³

[35] I found Mr Wilkins’ explanation of events lacked credibility and in all respects I preferred the evidence of Ms Paterson, Mr Dufty, Mr Patena and Mr Coughlan which was entirely consistent with the status hearing transcript and with subsequent events. I am satisfied on the evidence that no agreement was reached between HNZ and Mr Wilkins not to issue civil proceedings. Furthermore, I am of the view that Mr Wilkins could not have been left in any doubt from what was said during the course of both the status and sentencing hearings and also at the meetings with HNZ counsel, that HNZ intended to issue civil proceedings.

[25] Mr Wilkins submitted that he was not arguing that an agreement was reached regarding his guilty plea, rather he is submitting that he was labouring under a

¹³ Housing New Zealand Corporation v Wilkins, above n 4, at [35].

“special disadvantage” when the decision to plead guilty was reached between his then counsel, and counsel for HNZ. However, he went on to submit that he disagreed with the Judge’s assessment of the facts of what occurred. He submitted that he had been approached by HNZ just minutes before commencing his defence, and was told there would be no claim for reparation if he changed his plea to guilty. He says he was reassured that this would be honoured, and was never told or notified that HNZ would pursue him in civil proceedings. He further said that it was not until after he had completed his sentence that HNZ began civil proceedings.

[26] I accept Ms Cuncannon’s submissions. Judge Sinclair’s conclusion, set out at [24], above, followed a lengthy examination of Mr Wilkins’ claim that he had agreed to a deal offered on behalf of HNZ whereby if he pleaded guilty, HNZ would not seek reparation or issue civil proceedings. The Judge reviewed the evidence given by counsel for HNZ, and by counsel acting for Mr Wilkins. The Judge also noted that at the status hearing which followed that meeting, there was discussion between the presiding Judge and both counsel, as to the amount owed for rent as recorded by HNZ. The Judge noted that the Court had been told that reparation was not being sought, as part of the criminal proceeding, but that it was clear that civil proceedings to recover the Crown debt were likely. The Judge at the status hearing referred to proposed civil proceedings.

[27] The Judge also noted that, when Mr Wilkins first appeared for sentencing, the presiding Judge adjourned the hearing and gave Mr Wilkins an opportunity to consider whether he wished to vacate his guilty plea. Mr Wilkins did not seek to do so. Judge Sinclair also noted that the fact that HNZ was intending to sue for recovery for rent had been recorded in HNZ’s submissions for sentencing.

[28] Mr Wilkins’ sentencing was in fact adjourned for some two months. During the course of his sentencing, the sentencing Judge recorded that no reparation was sought, because HNZ would be seeking that from Mr Wilkins by way of civil proceedings.

[29] I am satisfied that any question as to whether a “plea bargain” was made in

the terms alleged by Mr Wilkins was determined by Judge Sinclair, following her

examination of the evidence. No appeal was filed against her decision, and it cannot be challenged in this Court.

[30] Mr Wilkins did not refer to any evidence as to the “special disadvantage” he submitted he had been labouring under when he entered his guilty plea. I note that in the transcript of the “in chambers” discussion in the District Court which preceded Mr Wilkins’ entering the guilty plea, Mr Wilkins’ then counsel advised the Court that Mr Wilkins had been “very ill” at the time he first sought assistance from HNZ. Counsel also noted that he had a report which recorded that Mr Wilkins had suffered traumatic brain injury “some years ago” which mitigated against his ability to fully understand some commercial matters. Mr Wilkins continued to be represented by counsel until his sentencing on 22 December 2009. I am satisfied that Mr Wilkins cannot succeed on his claim for judicial review of the “plea bargain arrangement” on the grounds that he was labouring under any “special disadvantage” when his guilty plea was entered.

[31] I am satisfied that Mr Wilkins’ application for judicial review of the “plea bargain arrangement” is untenable, and must be struck out for the reason that it is not reasonably arguable.

The decision to issue civil proceedings

[32] Ms Cuncannon submitted that, like the decision to prosecute, the decision to issue civil proceedings cannot be judicially reviewed, as any alleged errors in respect of the decision can be raised and dealt with in the course of the civil proceeding.

[33] Mr Wilkins submitted that the decision could be reviewed.

[34] This alleged ground of review can be dealt with shortly. Mr Wilkins had the opportunity, in the course of the civil proceeding, to raise any and all matters in relation to HNZ’s claim against him. It is clear from Judge Sinclair’s decision that Mr Wilkins availed himself of that opportunity. As noted earlier, he argued that there had been an agreement not to pursue a civil claim, but he also argued that he had completed the requisite forms correctly, that market rents charged by HNZ (on which the Crown debt was calculated) were above market rates, that HNZ had acted

unfairly and unreasonably in the conduct of its investigation and ongoing processing of his IRR applications, that HNZ had breached s 36 of the Residential Tenancies Act

1986, and that HNZ’s claim was statute-barred under the Limitation Act 1950. Judge

Sinclair considered all of those matters, and rejected each one of them.

[35] It is clear from the transcript of the trial that employees of HNZ, and solicitors for Meredith Connell, were available to give evidence, and were examined or cross-examined by Mr Wilkins. In the circumstances, I accept Ms Cuncannon’s submission that there was no unfairness in the course of the trial, and that all issues were raised and addressed. The Judge was clearly entitled to reach the decision that HNZ succeeded in its claim to recover the Crown debt.

[36] Accordingly, I conclude that Mr Wilkins’ application for judicial review of HNZ’s decision to issue civil proceedings is also untenable, and must be struck out for the reason that it is not reasonably arguable.

Further grounds to strike out

[37] In the light of my conclusion that in respect of each of the decisions on which Mr Wilkins seeks judicial review the application is not reasonably arguable, it is not necessary to consider the further grounds on which HNZ submitted the proceeding should be struck out. For completeness, however, I record as follows:

(a) I accept Mr Cuncannon’s submission that the relief Mr Wilkins seeks cannot be granted by this Court. This is because Mr Wilkins did not appeal against the conviction, or seek to have it set aside, and he did not appeal against Judge Sinclair’s decision. In Fraser v Robertson, the Court of Appeal observed that judicial review will be refused if alternative remedies have not been exhausted.¹⁴

(b) I also accept Ms Cuncannon’s submission that Mr Wilkins’ proceeding for judicial review is an abuse of process, in that it is a collateral attack on decisions of the District Court in its civil and

criminal jurisdictions. The matters raised by Mr Wilkins are ones which have been considered in the District Court. In the words used by Collins J in Rabson v Attorney-General,¹⁵ the High Court hearing the proceeding “would inevitably involve itself in an assessment of the merits of the judgments and decisions” on the District Court. It is an abuse of process to commence a further proceeding which collaterally attacks those decisions.

(c) Further, I accept Ms Cuncannon’s submission that the Court can reasonably conclude that the proceeding for judicial review was brought for the purpose of delaying HNZ’s bankruptcy proceeding against Mr Wilkins. That is a misuse of the Court’s judicial review jurisdiction.

[38] For the above reasons, also, Mr Wilkins’ proceeding for judicial review must

be struck out.

Result

[39] The application by HNZ to strike out Mr Wilkins’ proceeding for judicial

review is granted. The proceeding is struck out.

[40] Although the written submissions for HNZ note that costs were sought, Ms Cuncannon did not make oral submissions on the issue of costs. Should the issue of costs be pursued, then memoranda should be filed: that on behalf of HNZ within

15 days of the date of this judgment, and that by Mr Wilkins within a further

_{15 days. I anticipate then making a decision on the papers.}

Andrews J