Ramanaidu v Ciborium Limited [2018] NZHC 1303 (6 June 2018)

Last Updated: 21 June 2018

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-1664 [2018] NZHC 1303

BETWEEN	SANTHARA KUMAR RAMANAIDU Plaintiff
AND	CIBORIUM LIMITED First Defendant FARHAD MOINFAR Second Defendant ANDREW JAMES FAWCET Third Defendant

Hearing:	31 May 2018
Counsel:	D K Wilson for Plaintiff T Herbert for Defendants
Judgment:	6 June 2018

JUDGMENT OF WHATA J

This judgment was delivered by me on 6 June 2018 at 3.00 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date: ...............................

Solicitors: Phillip Wong & Ben Bong Law Office, Auckland Gregory Simon Law, Auckland

RAMANAIDU v CIBORIUM LIMITED [2018] NZHC 1303 [6 June 2018]

[1] This matter has been referred to me on the Duty List. The plaintiff sues the defendants for monies owing pursuant to a mortgage. The plaintiff was granted leave to file out of time a reply to the affirmative defence raised by the defendants in this proceeding. This matter had been set down some time ago for trial commencing on 11 June 2018. The defendants say that they have been prejudiced by the late amendment to the pleadings. They say that they would have organised themselves very differently had the plaintiff sought to defend or otherwise respond to the affirmative defence. The plaintiff says that the issues which the defendant raised as to possible prejudice are not considered to be substantial matters and, to the extent the defendants have difficulty in proceeding with a fixture on 11 June 2018, that would appear to be due to them being late in preparation for trial.

Further background

[2] The relevant affirmative defence contains allegations of fact that will need to be proven at trial, including the following particulars:

(a) On or around 25 March 2013, the property was valued by an independent valuer at $3,500,000;

(b) On or around 27 June 2013, the property was valued by an independent valuer at $4,000,000;

(c) Both valuations were on the basis of resource consents for the property having been approved and not having lapsed;

(d) The plaintiff, through its agents, during the sale process, represented that the resource consents had lapsed;

(e) This was a misrepresentation;

(f) On or around 17 March 2016, the plaintiff’s agents were informed of the misrepresentation by the first defendant;
(g) Despite being informed, the plaintiff by its agents continued to market the property on the basis of the misrepresentation;

(h) As a result, the property was marketed and sold as a property with development potential, rather than as a property ready for development; and

(i) As a result, it obtained a price such that it received only $1,578,441.82 as net proceeds of sale.

[3] Of those particulars, only particulars (a), (c) in part, and (g) are admitted.

[4] The evidence exchanged by the plaintiffs did not expressly deal with the reply, though it set out in detail the steps taken to sell the property.

Assessment

[5] While the plaintiff seeks to explain away the significance of the points of difference, I am unable at this distance to assess their significance and the implications for the defendants of the belated filing of the reply to the affirmative defence. To illustrate, the plaintiff in responding to the issues raised by the defendants, refers to email correspondence purporting to show that the defendants contacted the Council as to possible corrections of the LIM. The broader context of these emails will be important, together with any associated documentation or other correspondence that might be relevant. Conversely, and equally relevantly, I accept the defendants’ position that further particular discovery may be necessary to deal with issues of responsibility for steps taken or not taken with the Council, including phone records that might show that the agent made the relevant contact.

[6] The defendants raise the prospect of the Council being named. I do not put much store on this. The real issue concerns the conduct of the agents acting for the plaintiff. The conduct of the Council appears only tangentially relevant.
[7] In any event, I am satisfied that on the information available to me, the defendants will be unfairly prejudiced if forced to a hearing within two weeks, the plaintiff having only just filed its reply with detailed denials of relevant particulars.

[8] I therefore adjourn this matter to the first available back-up fixture in two months’ time, and make the following timetabling orders:

[a] The defendants are to file their evidence within 4 weeks, by 4 July 2018;

[b] The plaintiff is to file its evidence within three weeks thereafter by

25 July 2018;

[c] A bundle and opening submission for the plaintiff are to be filed 10 workings days out from the hearing (unless a hearing date within that timeframe is available, in which case, the bundle and submission are to be filed as soon as practicable after exchange).

[9] Costs on the adjournment are to lie where they fall. Mr Herbert was forthright about sitting on his hands about the absence of a reply to the affirmative defence. He says that this is consistent with and therefore justified by his duty to do the best by his client. But the first duty of counsel is to this Court, and this Court goes to significant lengths to secure hearing dates. Parties standing on their rights for strategic reasons always run the risk that no adjournment will be granted or if it is granted, costs will be awarded against them for gameplaying. Had the evidence of the plaintiff more overtly addressed the affirmative defence, that may well have been the case. However, I consider the proper outcome, balancing the plaintiff’s late filing against Mr Herbert’s strategic approach to pleadings, that no order as to costs is appropriate.