Secure Financial Services Limited v Nguy [2018] NZHC 950 (4 May 2018)

Last Updated: 21 May 2018

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

CIV 2015-404-1534 [2018] NZHC 950

BETWEEN	SECURE FINANCIAL SERVICES LIMITED Plaintiff
AND	JESSE SEANG TY NGUY First Defendant
	MARLI INVESTMENTS LIMITED Second Defendant

Hearing:	03 May 2018
Appearances:	S Grant for the Plantiff P J Napier for the First Defendant No appearance for the Second Defendant
Judgment:	4 May 2018

JUDGMENT OF VAN BOHEMEN J

Solicitors: Bruce Dell Law, Auckland

Keegan Alexander, Auckland

Counsel: S Grant

SECURE FINANCIAL SERVICES LIMITED v NGUY [2018] NZHC 950 [4 May 2018]

[1] Following a hearing before me on 14 November 2017, on 14 February 2018 I delivered a judgment:

(a) granting the application by the first defendant, Jesse Nguy, for an order for further discovery by the plaintiff, Secure Financial Services Ltd (Secure) of any material, including Secure’s solicitor’s files, relating to the sale by Secure of Units 3A5 and 3A6, at 160 Grafton Road;

(b) declining the application by Secure for an unless order directing Mr Nguy be debarred from defending the substantive proceeding unless, within 21 days of the Court’s order, Mr Nguy complies fully with an order for further discovery made by Fogarty J on 4 July 2017;

(c) awarding costs on both applications in favour of Mr Nguy.

[2] On 19 February 2018, Secure applied for leave to appeal my decision or, in the alternative, for recall or rescission of the judgment or variation of the orders made, including the orders as to costs pursuant to r. 7.49 of the High Court Rules

[3] As explained in my Minute dated 24 April 2018, because of a breakdown of systems in the Court Registry, Secure’s application, Mr Nguy’s notice of opposition in response, Mr Nguy’s application for costs, and related memoranda from Ms Grant for Secure and Mr Napier for Mr Nguy were not brought to my attention until 22 April 2018.

[4] As also recorded in that Minute, at a telephone conference on 24 April 2018:

(a) I noted that Secure has a statutory right of appeal to the Court of Appeal against my judgment and there is no requirement or jurisdiction for this Court to grant leave to appeal;

(b) I agreed to provide Ms Grant with an opportunity to address me on her application for recall or rescission of the judgment or variation of the orders made.
[5] Ms Grant and Mr Napier filed and served submissions in accordance with the timetable agreed at the telephone conference on 24 April 2018. I heard Secure’s application for recall on 3 May 2018.

Contentions of parties

[6] In her written and oral submissions, Mr Grant sought to persuade me that I had overlooked important aspects of the evidence that had been advanced by Secure in support of its application for an unless order and, as a result, a miscarriage of justice had occurred. Ms Grant submitted that the fundamental consideration when deciding to exercise the power of recall in r.7.49 is the need to do justice and referred to decision of Hansen J in Proprietors of Hiruharama Ponui Block Inc v Attorney-General.¹

[7] Ms Grant took me briefly through the history of the proceeding following the order of 4 July 2017 made by Fogarty J for further discovery against Mr Nguy. Ms Grant’s stated purpose was to demonstrate the scope of that order, which was for discovery as sought by Secure in accordance with the High Court Rules, and to show:

(a) what Ms Grant described as Mr Nguy’s serial non-compliance with the order;

(b) why evidence about the relationship of Mr Nguy and Mr Kelly and their

modus operandi are so important to the case;

(c) that Mr Nguy had not discovered any documents relating to one of the transactions referred to in the written submissions of counsel for Secure at the hearing on 14 November 2017;

(d) that Mr Nguy’s affidavit that he did not possess any more correspondence between himself and Mr Kelly should not have been accepted;

¹ Hiruharama Ponui Block Inc v Attorney-General [2004] 1 NZLR

(e) that Mr Nguy had not discovered any electronic communications between himself and Mr Kelly, or explained whether he had searched his computers for such documents and if not, why not;

(f) that Mr Nguy had failed to comply with the listing and exchange protocol in Schedule 9 of the High Court Rules with respect to the documents that Mr Nguy had made available but which he had initially not listed and had then bulk listed. She noted that she had now almost completed inspection of these documents and had ascertained those files contain emails between Mr Kelly and Mr Nguy and other relevant documents.

[8] Ms Grant said these were all failures to comply with Fogarty J’s order for discovery “as moved”. She expressed regret that another commitment had prevented her from appearing at the hearing on 14 November 2018 and that perhaps the counsel who had stepped in for her had not brought these matters sufficiently to my attention.

[9] With regard to my decision granting Mr Nguy’s order for further discovery, Ms Grant said I had overlooked evidence from Secure’s director, Mr Thompson, on the relevance of the documents regarding Units 3A5 and 3A6 and contrasted the credence which I appeared to give to Mr Thomson’s affidavit and that I ascribed to Mr Nguy’s affidavit. Ms Grant also argued that the costs orders did not reflect the reality that Mr Nguy had failed to comply with Fogarty J’s order until Secure had made its application for an unless order.

[10] Once Ms Grant had presented her case, I referred Ms Grant to the decision of Mallon J in Crequer v Chief Executive of the Ministry for Social Development² – a decision referenced by both counsel in their submissions – and in particular the following paragraph:

[3] A review of an order, sought under r 7.49, is in general appropriate only:

• (a) When there was not full argument on the first hearing;
• (b) If some relevant point of evidence was overlooked at the original hearing;

² Crequer v Chief Executive of the Ministry for Social Development [2012] NZHC 3620

(c) There has been some material change of circumstances;
(d) Some other special circumstance has arisen.

[11] I asked which of these factors were engaged on Secure’s application. Ms Grant said that there were special circumstances in that Ms Grant had been unable to be present at the hearing and so the Court had not been taken through the full dimensions of Fogarty J’s order and the application on which it was based, which had not been in the bundle of documents prepared for the hearing. These had meant that the Court had not been explained the full dimensions of the nature of the transactions on which Secure had sought discovery and of the modus operandi of Mr Nguy and Mr Kelly or the need for full compliance with Fogarty J’s order.

[12] At the conclusion of the hearing, Ms Grant said if I was not minded to recall the judgment or vary the orders made, an alternative would be for me to grant Secure leave to make a further application for an unless order requiring Mr Nguy to comply with Fogarty J’s order of 4 July 2017.

[13] Mr Napier for Mr Nguy said counsel unavailability was not a basis for recall. He took issue with Ms Grant’s description and characterisation of Mr Nguy’s performance of his obligations to comply with Fogarty J’s order. On the substance of Secure’s application, Mr Napier said all the issues raised by Ms Grant, including the scope of Fogarty J’s order, had been discussed at the hearing on 14 November 2017 and a recall application was not an opportunity for another argument on the merits if she did not like the result. That was the purpose of an appeal.

[14] With regard to Mr Nguy’s application, Mr Napier pointed to passages in my judgment showing that my decision on that issue had been in relation to the issue of price and relevance. He said my costs orders were standard orders following the event and there was no basis for recall.

[15] With regard to Ms Grant’s submission that the Court grant Secure leave to apply for a second unless order, he asked that Ms Grant be required to apply in the usual manner so his client could respond as appropriate. Mr Napier also sought costs on Secure’s recall application.

Discussion

[16] At the conclusion of the hearing I informed counsel I would not be recalling my judgment and encouraged Ms Grant to proceed with the appeal she had previously signalled if those were her instructions. Because there is the prospect of an appeal, I did not discuss the detail of my judgment with Ms Grant. For the same reason, I do not address the detail of the earlier judgment here.

[17] In substance, Ms Grant has sought to persuade me to reach a different result from that I reached in my earlier judgment, not based on any new evidence but based on Ms Grant’s more focused presentation of the background to and reasons for Secure’s application. All of the issues Ms Grant raised at the recall hearing were raised in the written submissions filed before the hearing and which Ms Grant signed, in Ms Grant’s memorandum of 11 October 2017 to which I referred in my judgment, and in oral submissions made by counsel appearing on Ms Grant’s behalf. Those oral submissions were put competently if not with the focus and vigour that Ms Grant employed at the hearing of the recall application.

[18] With regard to my decision on Mr Nguy’s application, as Mr Napier observed, that decision was taken because of the relevance of price to the determination to be made with regard to the performance of responsibilities under the Property Law Act 2007.

[19] For these reasons, I do not consider that Ms Grant has established that any of the factors identified by Mallon J in Crequer v Chief Executive of the Ministry for Social Development are applicable:

(a) There was full argument at the hearing of 14 November 2017.

(b) I do not accept relevant evidence was overlooked. Whether I evaluated that evidence correctly, gave it appropriate weight, reached the right conclusions and made the appropriate orders, including on costs, are matters for appeal.
(c) There has been no suggestion of a material change in circumstances.

(d) There are no other special circumstances which merit recall. Mr Napier is undoubtedly correct that unavailability of counsel is not a basis for recall.

[20] I do not consider Hansen J’s decision in Hiruharama Ponui Block Inc v Attorney-General to be on point. As Mr Napier noted, the circumstances of that case were very different from the present. It was an application to adduce fresh evidence and was based in part on the fact that relevant statutory provisions had not been brought to the Court’s attention at the earlier hearing.

[21] I do not accept that a miscarriage of justice has occurred from my not granting the unless order sought by Secure. Despite the number and breadth of concerns Ms Grant has raised about the judgment, the focus of the recall application and of the hearing of 14 November 2017 was Mr Nguy’s failure to discover additional emails and correspondence between himself and Mr Kelly. On this issue, Mr Nguy, an officer of the Court, had provided a sworn affidavit attesting that he possesses no further documents. Even if I had been persuaded to look past Mr Nguy’s sworn affidavit and find that he was not to be believed, I would still have been reluctant to issue an order debarring Mr Nguy from defending himself at a hearing where credibility will be a key issue. Furthermore, Mr Napier has confirmed that Mr Nguy, as well as Mr Kelly, will be giving evidence at the hearing of Secure’s case against Mr Nguy. That will provide the opportunity to test the credibility and veracity of those persons and to examine the nature of their relationship.

[22] If Secure wishes to apply for leave to make an application for further discovery, whether or not in the context of an unless order, for example to require Mr Nguy to explain whether he has interrogated his computer and other devices to see if they contain correspondence between Mr Nguy and Mr Kelly and if they do not, why not, that is for Secure to make. I accept Mr Napier’s submission, however, that is not an application I should grant on the basis of an oral submission at a hearing of a recall application.
[23] Lastly, Mr Napier has asked for costs on this application. Mr Nguy is entitled to these on a 2 B basis.











van Bohemen J