Deliu v Hong

JurisdictionNew Zealand
CourtHigh Court
JudgeCourtney J
Judgment Date21 December 2011
Docket NumberCIV-2010-404-006349

IN THE HIGH COURT OF NEW ZEALAND

AUCKLAND REGISTRY

CIV-2010-404-006349

Between
Francisc Catalin Deliu
First Plaintiff

and

Andamicus Lawyers Limited
Second Plaintiff
and
Boon Gunn Hong
Defendant
Appearances:

First Plaintiff in Person

A D Banbrook for Defendant

A Banbrook, POBox 105870, Auckland 1143 Fax: (09) 377-0762 — Email: tony@tonybanrookco.nz

Application for review of associate judge's decision to strike out plaintiffs' claims — cross-application to strike out plaintiffs' applications together with order that first plaintiff could not appeal decision in present case — application by defendant for costs on earlier unsuccessful injunction proceeding — dispute between solicitors — exchange of letters and complaints laid with Law Society lead to claim for abuse of process, malicious prosecution and defamation/injurious falsehood — associate judge struck out claims on own motion as being frivolous and not tenable — whether there was jurisdiction to strike out the claim without giving plaintiffs sufficient opportunity to be heard as required by r7.43(3) High Court Rules (making of interlocutory order on judge's own initiative) — whether associate judge erred in striking out claims as being frivolous or no tenable cause of action — whether application should be struck out as mis-founded, causing prejudice and delay, frivolous and was an abuse of process — whether defendant entitled to costs on earlier failed injunction proceedings.

Held: Under r7.43(3) HCR an interlocutory order could not be made on a judge's initiative unless the judge had first given the parties an opportunity to be heard. D was not given the opportunity to be heard and his claim should not have been struck out.

The associate judge's view that the claim and counter-claim were frivolous was entirely understandable. The causes of action by Amicus were not tenable and should properly have been struck out on that ground without the need to consider the motivation of the parties.

The associate judge had rightly concluded that there was no tenable cause of action to the abuse of process claim. While it would have been an abuse of process to lodge a complaint with LCS for an ulterior purpose, in this case H complained as part of his response to an earlier complaint by D about H. Subsequent complaints were part of the ongoing and escalating war of words between D and H.

The associate judge correctly ruled that the tort of malicious prosecution was not available in civil proceedings save for very specific exceptions which did not apply in this case. The House of Lords had specifically rejected any extension of the tort to quasi-criminal disciplinary proceedings ( Gregory v Portsmouth City Council).

With one exception, the associate judge was wrong to say that the defamation/malicious falsehood causes of action were tenable. These were based on a series of emails and court documents. Most of the emails were privileged, as was the information capsule and a memorandum, both filed in the District Court. One email was capable of supporting the pleaded cause of action by D, but there was no mention of Amicus and it therefore could not support a claim by Amicus.

H's cross-application to strike out the current application failed in the light of the conclusions reached. It was not appropriate to make an order that this appeal was determinative of the application for review. Such an order would do no more than state the effect of s26P Judicature Act (review of decisions of associate judges) that the High Court's findings on a review from a decision of an associate judge were final unless leave to appeal was granted.

There was no basis for reading into the associate judge's decision an intention that costs should lie where they fell in respect of the injunction proceeding, merely because he had ruled they should do so in the strike out decision. H had offered an undertaking to D, and D had not accepted it and pursued his application for an injunction. While D could not be criticised for applying for the injunction, H's undertaking following counsel's advice should have been sufficient and it was unnecessary for D to maintain his application in the face of that offer. Costs awarded to H on 2B basis in respect of injunction proceeding.

JUDGMENT OF Courtney J

Introduction
1

Mr Hong is a solicitor in sole practice in Auckland. In 2009 he acted for Mr and Mrs Ma on the purchase of a house. They subsequently commenced proceedings against him alleging negligence and breach of fiduciary duty. 1 When Mr Hong was first served with the proceedings he directed an angry response to the solicitor acting for the Mas, Mr Baker, and their counsel, Messrs Zhao and Ram. That started a chain of events that resulted in these proceedings.

2

Messrs Zhao and Ram are members of legal chambers known as Amicus Lawyers. Mr Deliu, the first plaintiff, is a barrister in these chambers. He is also a director of the second plaintiff, Amicus Lawyers Ltd, which operates the chambers. It was Mr Deliu who replied to Mr Hong's first letter. He did so, he said, as the “head” of Amicus. Mr Deliu's reply was in very strong terms. There followed an exchange of derogatory remarks between Mr Hong and Mr Deliu, complaints by each against the other to the Lawyers Complaints Service of the New Zealand Law Society (LSC) and these proceedings, in which Mr Deliu and Amicus made allegations of abuse of process, malicious prosecution, intentional infliction of emotional distress and defamation/injurious falsehood against Mr Hong, and Mr Hong counterclaimed with similar allegations against Mr Deliu, Amicus and Messrs Zhao and Ram.

3

Mr Deliu applied to strike out Mr Hong's statement of defence and counterclaims, Mr Hong cross-applied to strike out Amicus' claim (but not Mr Deliu's claim). Following a defended hearing Associate Judge Bell gave an oral judgment in which he struck out both the statement of claim and counterclaim in their entirety on the ground that they were frivolous. The Associate Judge refused Mr Deliu's application to recall the judgment. Mr Deliu now applies to review the Associate Judge's decisions under s 26P of the Judicature Act 1908 on the grounds that:

  • (a) There was no jurisdiction to dismiss his claim in the absence of an application before the Court;

  • (b) Striking out the claim amounted to a denial of the principles of natural justice;

  • (c) Striking out the claim amounted to a denial of access to justice; and

  • (d) The Associate Judge erred in declining to recall the judgment.

4

Mr Hong does not seek to review the Associate Judge's decision and accepts that his counterclaim has been properly struck out. He has, however, filed a cross-application seeking to have Mr Deliu's and Amicus' applications struck out, an order that Mr Deliu cannot appeal my decision and for costs in respect of an unsuccessful injunction made by Mr Deliu at the outset of the proceedings.

5

Under s 26P of the Judicature Act 1908 any party to a proceeding affected by the decision of an Associate Judge in chambers may apply for a review of the decision. Where the decision under review involves the exercise of discretion, as both the striking out of pleadings and the awarding of costs do, it must be shown that the Associate Judge acted on a wrong principle or failed to take some relevant matter into account or took some irrelevant matter into account or was plainly wrong. 2

6

Where the decision follows a defended hearing and is supported by documented reasons, the review proceeds as a rehearing. 3 Mr Deliu argued that the review application should be heard on a de novo basis. I do not accept that approaching the matter de novo would be correct in relation to the striking out of the Amicus claim because that order followed a defended hearing and lengthy reasons were given. The striking out of Mr Deliu's claim is different; there was no argument about it because there was no application in respect of it. Therefore it could not be regarded as having been the subject of a defended hearing. Mr Hong's application for costs on the injunction was not dealt with at all. These aspects of the review should therefore be approached on a de novo basis.

Should Mr Deliu's claim have been struck out?
7

I do not need to consider the application regarding the striking out of Mr Deliu's claim in any detail because it is clear that that order must be set aside. An order striking out a pleading is an interlocutory order. Under r 7.43 of the High Court Rules an interlocutory order may be made either on the application of a party or on a judge's own initiative. 4 However, before making an order on his or her own initiative a judge must give the parties an opportunity to be heard. 5 Mr Deliu asserted that the possibility of his claim, as opposed to Amicus' claim, being struck out was not signalled to the parties and not argued. Mr Banbrook, for Mr Hong, had also appeared at the hearing before the Associate Judge and did not refute Mr Deliu's assertion.

8

Whether Mr Deliu's claim might be amenable to being struck out upon application by Mr Hong or on the Court's initiative (following a hearing) is for another day. But clearly the claim should not have been struck out in the circumstances that existed at the time.

9

Mr Deliu's application to recall the Associate Judge's judgment was based primarily on the complaint that the Associate Judge had struck out Mr Deliu's claim without him being heard. Because of my conclusion on that point it is unnecessary to consider the argument regarding the refusal to recall the judgment.

Did the Associate Judge err in striking out Amicus' claim?
10

Mr Hong's application to strike out Amicus' claim was brought on the grounds that the pleading...

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