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Siemer v Heron [2014] NZHC 1639 (14 July 2014)

Last Updated: 17 July 2014

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-006587 [2014] NZHC 1639

_{JUDGMENT OF ASHER J}

This judgment was delivered by me on Monday, 14 July 2014 at 1pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:

Bell Gully, Auckland.

Copy to:

V Siemer, Gulf Harbour.

SIEMER v HERON [2014] NZHC 1639 [14 July 2014]

Introduction

[1] Vincent Ross Siemer has been declared a vexatious litigant pursuant to s 88B(1) of the Judicature Act 1908. ¹ That section provides that a vexatious litigant may not commence or continue proceedings except by leave of the High Court. Mr Siemer seeks such leave in these proceedings. The test for leave is set out in s 88B(2) which provides:

88B Restriction on institution of vexatious actions

...

(2) Leave may be granted subject to such conditions (if any) as the Court or Judge thinks fit and shall not be granted unless the Court or Judge is satisfied that the proceeding is not an abuse of the process of the Court and that there is prima facie ground for the proceeding.

[2] It follows that leave may be granted only if:

(a) The proceeding is not an abuse of the process of the Courts; and

(b) There is a prima facie ground for the proceeding.

[3] The jurisdiction has been carefully considered in two decisions of Re Collier.² I gratefully adopt the summary in McGechan on Procedure which elicits from those cases the principles that apply to this application, two of which I set out:³

While the application should generally be dealt with on a without notice basis, the Court has inherent jurisdiction to direct service on the Attorney-General and the proposed defendant. However, neither the Attorney nor the intended defendant should lightly be troubled by the application.

The discretion to grant leave is to be exercised very carefully because,

ex hypothesi, the applicant is a vexatious litigant.

District Court proceedings

[4] The current proceedings arise from an incident that is alleged to have occurred in October 2007. Mr Siemer, who was a shareholder of Vector Ltd at the

¹ _{Attorney-General v Siemer [2014] NZHC 859 at [198].}

² _{Re Collier [2004] NZAR 472 (HC), and Re Collier [2008] 2 NZLR 505 (HC).}

³ McGechan on Procedure (online looseleaf ed, Brookers) at [J88B.08].

time, claims that he was prevented from attending a shareholder meeting of that company.

[5] Following this incident, he brought a claim in the District Court on 11 March

2008. Mr Siemer sought damages for assault against a variety of defendants he claimed were either personally or vicariously responsible. However, an order was made that Mr Siemer pay $20,000 for security for costs. This order was appealed all the way to the Supreme Court, who ultimately upheld the order.

[6] On 22 December 2010, Mr Siemer applied to the District Court to rescind the order for security for costs. This application was declined. This decision was also appealed to the High Court. In the High Court, Keane J ordered Mr Siemer to pay security for costs on the appeal. That further decision was then unsuccessfully appealed to the Supreme Court.

[7] Further applications for review and variation were then made in the District Court. These applications failed. The District Court proceedings remained stayed pending payment of security for costs until they were discontinued in December

2012.

[8] On 4 June 2012 the District Court struck out a second set of proceedings dealing with the same claims. That decision was also appealed but the appeal was deemed abandoned after Mr Siemer was ordered to pay further security for costs, and failed to do so.

The strike out decision

[9] On 5 November 2012, Mr Siemer filed fresh proceedings in the High Court. These proceedings made the same allegations of assault but also included Mr Stiassny as a defendant. A claim was also made alleging a breach of directors duties by several of the defendants whom Mr Siemer claimed were shadow directors. Mr Stiassny and the other defendants applied for strike out on the basis that the applications were vexatious or an abuse of process.

[10] On 28 June 2013, Associate Judge Sargisson struck out the claim as an abuse of process. She concluded that the assault claims, notwithstanding the additional defendant, were an attempt to relitigate the earlier District Court proceedings. While these proceedings had technically been withdrawn by Mr Siemer, it was apparent that this was only done to avoid the proceedings being stayed permanently after Mr Siemer failed to provide security for costs.

[11] With regard to the Companies Act claim, Associate Judge Sargisson accepted that this was not strictly a res judicata issue, but considered that similar principles were applicable. In particular, she considered that it was incumbent on Mr Siemer to bring the claim as part of his original proceedings in the District Court.

[12] Associate Judge Sargisson therefore considered that the proceedings were an abuse of the processes of the Court and struck out Mr Siemer’s claim.⁴

The present application

[13] The application alleges six errors in the decision of Associate Judge Sargisson. This application was automatically stayed when Mr Siemer was declared a vexatious litigant on 3 April 2014. He now seeks leave to continue that claim.

[14] A copy of Mr Siemer’s application for leave was sent by the Court to the defendants. They have filed a memorandum in response. Mr Siemer has argued in his memorandum of 2 July 2014 that the application should proceed as a without notice application. I am prepared to treat it in that way and have not read the defendants memoranda, which I put to one side. I see no need to direct service on the Attorney-General.⁵

The issue

[15] The decision which Mr Siemer seeks to review is the decision of Associate

_{Judge Sargisson in these proceedings. The “proceeding” to which the leave relates is}

⁴ _{Siemer v Heron [2013] NZHC 1604.}

⁵ Re Collier [2008] 2 NZLR 505 (HC).

not defined in the Judicature Act, but is defined in the High Court Rules, which are a schedule to that Act, as meaning:⁶

... any application to the Court for the exercise of a civil jurisdiction of a

Court other than an interlocutory application.

[16] An “interlocutory application” means an application made in accordance with r 7.19 and 7.41.⁷ The following definition is also provided for “interlocutory order”:

interlocutory order—

(a) means an order or a direction of the court that—

(i) is made or given for the purposes of a proceeding or an intended proceeding; and

(ii) concerns a matter of procedure or grants some relief ancillary to that claimed in a pleading; and

...

[17] The “proceeding” in s 88B(2) is the substantive claim brought by Mr Siemer, not this interlocutory application. I consider that the issue to be determined is not whether this particular application by Mr Siemer is an abuse of the process of the Court, but rather whether the proceeding as a whole is an abuse. Thus, I must be satisfied by Mr Siemer that the proceeding commenced by the statement of claim is not an abuse of the process of the Court.

[18] I look at the issue from a different perspective than Associate Judge Sargisson. Essentially what Mr Siemer has to do first is to show under s 88B(1) that the proceedings were not an abuse of the process of the Court.

Has it been shown that this proceeding is not an abuse of the process of the

Court?

[19] I do not propose setting out the lengthy procedural history. It is covered in earlier judgments.⁸ This is the third attempt by Mr Siemer to bring proceedings

⁶ _{High Court Rules, r 1.3, definition of “proceeding”.}

⁷ _{Rule 1.3, definition of “interlocutory application”.}

⁸ Siemer v Heron [2012] NZHC 2073 at [9]–[18], and Siemer v Heron [2013] NZHC 1604 at

[10]–[22].

relating to alleged wrongs done to him at the annual general shareholders meeting of

Vector Ltd on 19 October 2007.

[20] There is a change in this proceeding in that Michael Stiassny is added as a defendant. The first cause of action is assault and battery by the fourth and fifth defendants on the authority of the first defendant. Damages of $30,000 are claimed, including $25,000 for loss to reputation together with exemplary damages in the sum of $12,000. It is similar to the earlier assault causes of action. The second cause of action is directed against the first, second and third defendants. It focuses on a duty that is different from that relied on in the earlier proceedings. It is claimed that the first defendant while acting on instructions from the second defendant and as a partner of the third defendant, deliberately and intentionally breached the duty to comply with ss 125 and 134 of the Companies Act by preventing Mr Siemer from attending and exercising his vote as a shareholder at the annual general meeting.

[21] As in the earlier causes of action, it is claimed that the first and second defendants’ actions were spiteful and outrageous and motivated by malice. Overall slightly different sums are claimed as damages and aggravated damages from those claimed in the earlier proceedings. Nevertheless, the incident that lies at the heart of the claim is the same. Mr Siemer says he was unlawfully removed from the annual general meeting and that the actions constituted an abuse of power and were outrageous.

[22] It can be an abuse of process to seek to relitigate matters already determined.⁹

It was stated in Moevao v Department of Labour:¹⁰

The concern is with conduct on the part of a litigant in relation to the case which unchecked would strike at the public confidence in the Court’s processes and so diminish the Court’s ability to fulfil its function as a Court of law. As it was put by Frankfurter J in Sherman v United States 356 US

369, 380 (1958):

Public confidence in the fair and honourable administration of justice, upon which ultimately depends the rule of law, is the transcending value at stake.

⁹ Hunter v Chief Constable of the West Midlands Police [1981] UKHL 13; [1982] AC 529 at 541, and Barber v

_{Green Cabs Ltd HC Wellington CIV-2010-485-2221, 16 February 2011 at [33].}

¹⁰ Moevao v Department of Labour [1980] 1 NZLR 464 (CA) at 482.

[23] Attempts to relitigate damage the court system. They place continued expenses and stress on the parties. They place work with the court system that will displace other causes which are brought for proper purposes. They are an abuse of procedure. Lord Halsbury LC put it this way inn Reichel v Magrath:¹¹

... I think it would be a scandal to the administration of justice if, the same question having been disposed of by one case, the litigant were to be permitted by changing the form of the proceedings to set up the same case again.

[24] The issues here have not been disposed of in a substantive decision but they have been disposed of procedurally by Mr Siemer discontinuing or abandoning them in the face of orders to pay security for costs. He chose to let those proceedings end rather than pay that security. Now, again without offering security, he starts for a third time.

[25] Mr Siemer as a vexatious litigant has the burden of showing these proceedings are not an abuse of procedure. He has failed to discharge it. These proceedings are a third attempt to litigate the same issue and an attempt to sidestep costs orders, and as such an abuse of the court process.

Result

[26] Mr Siemer’s application for leave to proceed with the review is declined.

...................................

_{Asher J}

¹¹ Reichel v Magrath (1889) 14 App Cas 665 at 668.