Mason Engineers (Nz) Ltd v Karen Margaret Hodgson

JurisdictionNew Zealand
CourtEmployment Court
JudgeG L Colgan
Judgment Date10 November 2011
Docket NumberARC 50/11
Date10 November 2011

[2011] NZEmpC 147


ARC 50/11

In The Matter Of an application without notice for a freezing order

And In The Matter Of an application for judgment

Mason Engineers (NZ) Limited
Karen Margaret Hodgson

Anthony Russell and Claire Mansell, counsel for plaintiff

No appearance for defendant



There are two matters in this case that I need to deal with today. The first, although only filed as an application earlier this morning, is a further claim, brought without notice to the defendant, for another freezing order. This relates to a bank account of the defendant, the existence of which was discovered by the plaintiff only in the course of preparing detailed evidence to support its claim to judgment, with which I will deal shortly.


In deciding this further without notice application for a freezing order, I intend to rely upon the judgments 1 I have given previously in this case including making freezing orders in respect of two bank accounts in July 2011. In those

circumstances, I can state quite shortly the grounds which have persuaded me to make a further freezing order without notice to Mrs Hodgson.

The evidence establishes that on a number of occasions Mrs Hodgson transferred sums from a Mason Engineers ASB bank account to an account with the ANZ Bank Ltd in her name, which she was not authorised to do. Some of these transfers were made at times when other legitimate payments, including particularly payments of salary to other staff at Mason Engineers, were being made by Mrs Hodgson. The narrations attributed by her to these payments that she made to herself included references such as “Salary”, “Wages” and “Bonus” and I am satisfied from the evidence that she was not entitled to any of those payments so described.


The plaintiff is not yet of course able to ascertain whether the bank account to which the payments were made, continues to contain any of those monies or their equivalent. That will only be able to be achieved once a freezing order is made and the plaintiff's solicitors can make inquiries of the ANZ bank.


I am also satisfied that it is a proper case in which to make a further freezing order because, in addition to the grounds for making the initial freezing orders in July, there is evidence that on at least one occasion since then, Mrs Hodgson has attempted to withdraw monies from accounts which were the subject of those freezing orders.


There will be an order in terms of the draft filed this morning, with the exception that the initial duration of the without notice order should be shorter than had been proposed originally by the plaintiff.


The order will expire at 2 pm on Wednesday 16 November 2011. In those circumstances, the matter will be listed to be called in the Employment Court at Auckland at 10 am on that day, Wednesday 16 November 2011, to enable Mrs Hodgson, if she wishes, to apply to vary or set aside the freezing order or, alternatively, to enable the plaintiff to seek its extension if it wishes to do so.


It is a condition of making the additional freezing order that it, together with a copy of this judgment, be served forthwith on the defendant. The draft order filed also includes at para 6 the usual provision for withdrawal from the otherwise frozen funds of sums for living expenses and legal expenses. I do not propose to allow that in this case and the order to be sealed will need to delete what is now para 6 in the draft. That is because, under the existing freezing orders, Mrs Hodgson has that ability and, I am told by counsel, has exercised it although only in relation to living expenses of $500 per week. To again allow those withdrawals would be to permit double dipping. That is not the intention of the allowance for living costs and I am satisfied that the allowance for living expenses referred to in the earlier freezing orders is sufficient for Mrs Hodgson.


I turn now to the substantive application which was set down for hearing today and which I am satisfied has been served on Mrs Hodgson.


The defendant not having taken any steps to defend this proceeding, the plaintiff seeks judgment against her.


There is, again, no appearance for the defendant. She is not entitled now to defend the substantive proceedings without leave. I am satisfied that Mrs Flodgson has been properly served with a copy of the amended freezing order made on 20 October 2011, a copy of the Court's oral judgment delivered on that date, 2 and notice of today's hearing.


Because the notice of hearing specified another courtroom than we are now in, we began this hearing late to ensure that nobody was waiting at the other courtroom and I am advised by the Registry staff that that is so. Not only is there no appearance for the defendant today, but no step has been taken by her in response to service of those documents on 21 October2011.


When the matter was before the Court on 12 August and again on 20 October 20111 made a number of directions which I am satisfied have been complied with. These include the filing and service of an amended statement of claim and directions

for service of that amended statement of claim. The period of more than 45 days has expired since the amended statement of claim was served in accordance with those directions and no statement of defence or other step has been taken by the defendant.

Neither the Employment Relations Act 2000 (the Act) nor the Employment Court Regulations 2000 (the Regulations) provides what is to happen in cases such as this where a proceeding such as this is not defended. In these circumstances, the Court has recourse to the High Court Rules pursuant to reg 6(2)(a)(ii) of the Regulations. Rule 25.29 of the High Court Rules provides:

  • (2) A plaintiff to an action in personain is entitled to proceed to judgment if the defendant fails, within the period specified …, either to enter an appearance or to file a statement of defence.

  • (3) Judgment under this rule must not exceed the amount endorsed on the notice of proceeding or claimed in the statement of claim concerning the demand for costs.


Rule 15.7 is also applicable. It deals with a liquidated demand which the plaintiff's is. It provides:

  • (1) If the relief claimed by the plaintiff is payment of a liquidated demand in money and the defendant does not file a statement of defence within the number of working days required by the notice of proceeding, the plaintiff may seal judgment for a sum not exceeding the sum claimed in the statement of claim (or less or nothing) and–

    • (a) interest (if any) payable as of right calculated up to the date of judgment (if interest has been specifically claimed in the statement of claim); and

    • (b) costs and disbursements as fixed by the Registrar.

  • (2) If the plaintiff claims costs and disbursements, the plaintiff must file a memorandum setting out the amount claimed and how that amount is calculated, together with any submissions in support of the claim.

  • (3) Every Registrar has the jurisdiction and powers of the court under these rules to fix costs and disbursements under subclause (1)(b).


The plaintiff's amended statement of claim of 26 August 2011 seeks judgment in the sum of $688,457.22 plus interest and costs. For reasons that I will address shortly, that has now been revised slightly downwards but the revised sum, which is about $17,000 less than that originally claimed, represents the plaintiff's proved calculation of its losses as a result of the defendant's fraud and theft of the plaintiff's property in the following circumstances.


The defendant was...

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