IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH] REGISTRY

CIV 2009-409-000741 [2013] NZHC 1802

BETWEEN	NAMGEUN JO AND SOON HEE KWON
Plaintiffs

AND	BERNARD JOHNSTON First Defendant

SOUTHERN HOSPITALITY LIMITED Second Defendant

MAINTENANCE UNLIMITED LIMITED

Hearing:	(On Papers)

Judgment:	17 July 2013

JUDGMENT OF WHATA J

Introduction

[1]       The plaintiffs have not had counsel since October last year.   One of the plaintiffs, Mr Namgeun Jo, is now residing in Korea.  The other plaintiff does not feel able to represent their interests because of language difficulties.  In any event the plaintiffs have sought a stay of the proceedings so that they can appoint counsel. The hearing had been set down for 1 July.   That was the third trial date.   The defendants have had enough of the delay.  Matters came to a head in April.  I made the following directions:

(a)	The plaintiffs have until 5 pm on 17 May 2013 to appoint counsel;

(b)	The plaintiffs must pay security for costs by no later than 5 pm, Friday, 24 May;

JO AND KWON v JOHNSTON [2013] NZHC 1802 [17 July 2013]

(c)        Counsel for the plaintiffs must file a case management memorandum addressing all matters raised by the defendants in their memorandum dated 19 April 2013 by 5 pm Friday, 24 May;

[2]       I also noted that:

[7]	Unless  the  abovementioned  orders  are  complied  with,  the
plaintiffs’ proceedings will be struck out.

[3]       The plaintiffs did not comply with those orders.  A further conference was called.    Neither  plaintiff  attended  or  was  represented  by  counsel.    Mr  Kwon, however, repeated his request for a stay given Mr Jo’s difficulties and the need still to appoint counsel.

[4]       Following the conference I issued a minute (dated 30 May 2013) advising that I wanted to be satisfied as to the full extent of non-compliances by the plaintiff before confirming my unless order.  Ms Morgan agreed to prepare a memorandum addressing those non-compliances.   I also directed that the memoranda are to be served on the plaintiffs and that the plaintiffs would have to five working days to respond.

[5]       I now have the memorandum of the defendants.   No response has been received from the plaintiffs.  I must now decide whether to confirm my unless order.

Litigation history

[6]       The  first  defendant  was  retained  by  the  plaintiffs  to  apply  for  resource consents and building permits in relation to a proposed modification of the ground floor of the building located on the corner of High and Lichfield Streets.   The plaintiffs say they also entered into an agreement with the second defendant whereby the second defendant agreed that it would install an internal and external ventilation ducting unit, make plans for the ducting route and deal with the Council for the required process.   The relevant consents were applied for.   The applications for consents referred to a ducting plan completed by the second defendant.   It later became apparent that this ducting plan was not feasible.   The second defendant changed the ducting plan and it was constructed without either resource consent or building consent from the Christchurch City Council.   The plaintiffs entered into

various leases of three years duration to the building.   However, the Christchurch City Council informed the plaintiffs that they were not authorised under the resource consent or the building consent that they had obtained because no consent had been given to the revised ducting plan. A retrospective consent was also refused.

[7]       On 16 April 2009 the plaintiffs made claim against the first and second defendants in breach of contract, namely that the first defendant failed to use reasonable skill and care for the purposes of making the applications and that the second defendant failed to take all reasonable care in the design and construction of the ducting system.  There are also claims under the Fair Trading Act 1986 and in negligence arising out of the same facts.

[8]       An application for summary judgment by the first defendant was dismissed on 15 October 2009.  This was followed by numerous case management conferences (and adjournments) on 27 November 2009, 3 March 2010 and 12 March 2010.  A further   scheduled   conference   on   29   June   2010   was   overtaken   by   a   joint memorandum specifying agreed timetabling orders.   The next conference on 14
September 2010 addressed timetabling for a summary judgment application by the second defendant.   This was successfully defended, and a judgment issued on 16
November 2010.   This was followed by another case management conference on

24 November 2010, with timetabling to a trial on 28 November 2011.

[9]       There was then an application for security for costs lodged in October 2011 and a further case management conference on 4 November 2011.  At the request of the first and second defendant the trial date was adjourned to a date after February
2012.  Apparently the plaintiffs had failed to comply with timetabling orders as to briefs (attributable in part to the consequence of the earthquakes) which could give rise to prejudice to the defendants in relation to the expert evidence.

[10]     It also appeared that the third party might be withdrawing, with implications for evidence production.  Further timetabling orders were made requiring the service of  the  plaintiffs’  briefs  by  21  November  2011  and  the  defendants’  briefs  by
21 February 2012.

[11]     There was then a further case management conference on 16 August 2012. The minute of that conference records:

I will not burden this minute with a detailed chronology of the background. It is sufficient to state that the plaintiffs are woefully non-compliant with numerous timetabling orders.   The defendants are naturally anxious that there will be no further non-compliances so that the matter can properly proceed  to  trial  without  further  prejudice  to  them.    As  discussed  with Mr Shamy,  I  consider  that  this  is  a  case  where  there  must  be  some consequence for the plaintiffs in the event of any further non-compliance with the orders that I am about to make.  In addition, the plaintiffs’ belated request for further evidence is a matter that will need to be dealt with in a proper way, on application with a draft affidavit.  Only then can the Court and   the   defendants   properly   assess   whether   the   new   evidence   is objectionable.

[12]     There was an additional complication, namely that the DD Architects’ file had not been produced and needed to be. Accordingly, timetabling orders were made with the result that all evidence had to be in together with an index of documents by
5 September 2012.

[13]     The next key step was a reapplication for security for costs and a stay of the proceedings if security was not paid.   This was opposed by the plaintiffs.   In a telephone conference minute of 25 September 2012, I directed that the plaintiffs are to file any evidence in support of their position by 5 pm, Wednesday, 26 September
2012.  A further telephone conference was then set down for the following Thursday at 9.30 am.   Then, in a telephone conference minute of 28 September 2012 I confirmed that I had resolved that there be security for costs in the sum of $40,000 to be paid within one month of the date of this minute, and the proceedings were stayed pending the payment of the security.

[14]     The reasons for that order were then set out in the judgment dated 2 October

2012.   I indicated in that judgment that if security was paid by 5 pm Wednesday,

3 October 2012, the hearing that had been set down would not be vacated.  However, if it was not paid by 5 pm Monday, 29 October 2012, the proceedings were to be stayed.

[15]     Ultimately security was received on 26 October 2012.  The proceedings by that stage had been stayed.  The matter then came before Associate Judge Matthews

on 14 November 2012.   A new trial date was allocated.   In his minute the Judge notes:

[5]        It  is  now  necessary  to  allocate  a  new  trial  date.    In  doing  so, however, the parties are to take careful note of the following observation. No fewer than three fixtures of this case have been vacated, for various reasons.  This causes considerable inconvenience to the court, and no doubt to the parties and witnesses for the side which, on any occasion, is not responsible for the fixture being lost.   The parties and their solicitors are asked to note that this is not acceptable.  If this case is to continue to trial, as is presently the situation, every effort is to be made to ensure that it is ready for trial on the stipulated commencement date, and does in fact proceed unless settled.  I note that observations have been made previously by other Judges about the desirability of this case settling, for other reasons, and I cannot add anything beyond noting the responsibility of counsel to ensure that settlement is kept in view at all times, and the need to observe the objective of the rules set out in r 1.2.

[16]     The trial was then set down for Monday, 1 July 2013.   Associate Judge

Matthews also observed at paragraph 8:

[8]        By Minute issued on 24 November 2010 Associate Judge Doherty gave directions for the trial based on statements given to the Court about the number of witnesses to be called.  Reference should be made to paragraphs [6] to [11] inclusive.  In view of the history of this proceeding it is essential that there is a very clear track marked out for any steps that may be required between now and trial.   As recently as 16 August 2012, just two months before the then stipulated trial date, evidentiary issues had to be dealt with. It  appears  to  me,  from  the  file,  that  briefs  of  evidence  have  all  been exchanged but I may be wrong in that conclusion.

[17]     The matter then came before Associate Judge Matthews again on 30 January

2013.   The second defendant had made its own application for security for costs. The matter was then subject to further case management and in a minute dated
4 February 2013 a timetable was fixed to deal with the application for security.  A

fixture was set down for Tuesday 19 March 2013.

[18]     An urgent telephone conference was then heard on 18 March 2013.  At this stage Mr Withers was nominally the solicitor acting for the plaintiffs but had no instructions.  The first named plaintiff, Namgeun Jo sought an extension of time of two weeks to enable him to retain a barrister.

[19]     Associate Judge Osborne responded as follows:

[2]        The difficulty faced by the defendants in relation to representation was dealt with in the Court’s Minute of 4 February 2013 when this hearing was allocated and a timetable put in place.  It is not appropriate to further adjourn an application of this kind when the case has a six-day fixture allocated to commence 1 July 2013.

[3]        I  direct  that  the  interlocutory  hearing  will  proceed  tomorrow  at
10.00 am.  I note that Mr Guest confirms he has arrangements to attend (in
Christchurch).

[20]     The Judge also invited Mr Jo to attend by telephone conference.

[21]     The application for security for costs was then heard by Associate Judge Osborne on 19 March 2013.   Mr Withers for the plaintiffs did not appear and his attendance was excused.   In a detailed decision Associate Judge Osborne resolves that security in the sum of $40,000 is an appropriate sum to be paid by the plaintiffs in favour of the second defendant and an order was made accordingly.  There were also additional orders that:

(a)        The  plaintiffs  are  to  provide  security  for  costs  in  favour  of  the second defendant in the sum of $43,300 to the satisfaction of the Registrar within 20 working days from 20 March 2013;

(b)        The plaintiffs are to pay, in any event the costs and disbursements of this application which were fixed at $3,300;

...

(d)        Failing provision of security as above ordered, this proceeding will otherwise be stayed 20 working days from 20 March 2013, but with leave reserved to counsel for the first defendant to have this application brought back before me on two working days notice for reconsideration  of  the  stay  from  the  perspective  of  the  first defendant.

[22]     The matter then came back before me on 30 April 2013.  At the telephone conference Mr Withers appeared for the plaintiffs, Mr Raymond for the first defendant and Mr Guest for the second defendant.  I recorded in that minute that the plaintiffs had not paid the security for costs as required.   The proceedings were therefore stayed.  I noted in that minute:

[5]        It is quite plain to me that this matter has stalled and the plaintiffs are not in a position to make substantive progress to trial.  I agree with the defendants’ basic contention that given the history of this matter they should not be put to the expense of preparing for trial with the risk that the plaintiffs seek an adjournment on the eve of trial.

[23]     Accordingly, I adjourned the trial and I made the following directions as referred to in paragraphs [1] and [2] above.

[24]     Mr Withers, who was not at this stage retained by Mr Jo, indicated that Mr Jo was in some difficulty having been removed from New Zealand.  I indicated to him that Mr Jo had at least since October last year to appoint fresh counsel.  I saw no reason to delay matters still further.   Mr Withers was granted leave to withdraw subject to him ensuring that the minute was served on the plaintiffs.   A further telephone conference was then convened for 30 May 2013.  The plaintiffs did not attend that conference but there was a memorandum for the plaintiffs signed by Mr Kwon stating that he is a plaintiff trustee, that Mr Namgeun Jo is absent from New Zealand due to an immigration matter, that Mr Kwon does not speak English and cannot attend the telephone conference.   He requested a stay.   Ms Morgan appeared for the first defendant and Mr Sim for the second defendant. At this point I indicated that there had been a litany of non-compliances, many of them recorded in the relevant minutes of the various Judges attending to this matter.   As recorded above, I requested a memorandum listing the full extent of the non-compliances and that this memorandum was to be served on the plaintiffs.

A litany of non-compliances

[25]     In a joint memorandum dated 4 June 2013 counsel for the first and second defendant  provided  a  detailed  memorandum   setting  out  the  litany  of  non- compliances and delays.   An opportunity was afforded the plaintiffs to respond. They have not done so.  I do not propose to repeat the material provided by defence counsel.   My narrative above based on the minutes of this Court should serve to illustrate the difficulties presented by the plaintiffs and their failure to comply with orders as to production of evidence and most recently failure to provide security for costs.  I think it can be simply said that this matter has been set down for a fixture and vacated on three occasions due largely to the non-compliances by the plaintiffs. The additional most recent failure to provide security for costs within the requisite time meant that the latest trial date had to be vacated.

[26]     In the foregoing circumstances, and given that the plaintiffs have been given an opportunity to respond to the joint memorandum dealing with the non- compliances, I am confident that striking out is now appropriate and an order is made accordingly.

[27]     The first defendant asks that security for costs held by the Court on its behalf be released to the first defendant in reduction of any costs award.   The second defendants seek a cost order be made in its favour on a 2B basis with disbursements as fixed by the Registrar.

[28]     I have read the first defendant’s memorandum dealing with costs.  In short it

seeks costs on a 2B scale of $33,830.

[29]     It seeks time increases (as explained in counsel memoranda of $11,940).  It seeks costs on the application for security for costs of $3,300 and expert fees of
$30,412.43.

[30]     The application for costs is reasonable in the circumstances and I therefore grant costs as sought and the release of the security for costs in its favour.

[31]     I also make an order for the second defendant on a 2B basis, together with disbursements as fixed by the Registrar.

Solicitors:
Murray Withers & Associates, Christchurch
Duncan Cotterill, Christchurch
Downie Stewart, Dunedin