Yoshinari Tomita v The Unnamed Vessel
Formerly Known as "Amami Taiki Go" and Also Known as "Intrepid" (No 2)

IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY
AD.36/00

 BETWEEN YOSHINARI TOMITA
Plaintiff

AND
THE UNNAMED VESSEL FORMERLY KNOWN AS "AMAMI TAIKI GO" AND ALSO KNOWN AS "INTREPID"
Defendant

Hearing: 15 March 2001

Counsel: AN Tetley & SJ Park for Plaintiff
JR Gresson for Defendant

Judgment: 15 March 2001

ORAL JUDGMENT OF RODNEY HANSEN J

Solicitors: Russell McVeagh, DX CX10085, Auckland for Plaintiff
Norton White, P O Box 6623, Wellesley Street, Auckland for Defendant

[1] The plaintiff applies, pursuant to r 774(2) of the High Court Rules, for leave to file and serve a statement of claim. The plaintiff brought the proceeding in rem in the admiralty jurisdiction on 9 August 2000 and obtained and executed a warrant of arrest over the vessel, now known as "Intrepid", which had been bought in Japan in 1999 by a New Zealand boat builder, Mr Boyd Smith. The circumstances in which Mr Smith acquired the vessel and the somewhat complex history of its ownership are detailed in my judgment of 8 December which determined an application brought by the defendant to stay the proceeding.

[2] The plaintiff’s claim is based on the alleged grant of a form of security known to Japanese law as a neteitoken. It is in the nature of a mortgage over the vessel. The plaintiff claims that he is entitled to enforce the mortgage over the vessel. That is disputed by the vessel's owner, Mr Smith, who has filed a conditional appearance.

[3] In terms of r 774(2), the plaintiff in an admiralty action is required, unless the Court or a Judge gives leave to the contrary, to file in Court and serve a full and explicit statement of claim either when the notice of proceeding is served on the defendant or at any time after service of the proceeding on the defendant, but in no case later than fourteen days after the defendant enters an appearance. The defendant in this case having entered an appearance on 23 August, the plaintiff should have filed and served his statement of claim by 7 September. Mr Tetley, for the plaintiff, says that a statement of claim was not filed because the defendant had, by that time, filed the application to stay the proceeding. He says that the plaintiff took the approach that until that application was disposed of, it was both unnecessary and potentially an exercise in futility to file a statement of claim.

[4] The application for stay was heard on 29 November and determined on 8 December. No application for leave to file a statement of claim was, however, made or mentioned until memoranda were filed by counsel for the parties for the purpose of a directions conference which took place on 5 February 2001. In his memorandum the plaintiff s counsel suggested a timetable which included the filing and service of a statement of claim. The defendant's counsel noted the need to make application to the Court for leave to file out of time and reserved his position on that application. The application was duly filed in accordance with the timetable and the defendant determined to oppose the grant of leave.

[5] In support of the application for leave, Mr Tetley submitted that the failure to file the statement of claim earlier was excusable. He contended that the defendant had failed to establish any prejudice arising out of the delay. He argued that the over-riding interests of justice supported the grant of leave in this case.

[6] Mr Gresson, in opposing the application, first urged me to consider the application in the context of the Admiralty Rules and, in particular, to bear in mind that the proceeding in this case involved what he described as the uniquely draconian remedy of pre-emptive seizure of a defendant's property, administratively, ex parte, without protection of undertaking as to damages, and largely with immunity for unwarranted arrest. In support of this submission, he referred me to The Rangiora [2000] 1 Lloyd’s Law Reports 36 and also to the Attorney-General v The Ship "Tosa Maru" (1992) 5 PRNZ 661 which, although concerning the defective endorsement on a writ and not a failure to file a statement of claim, suggested, in Mr Gresson's submission, that the Court should be less willing to grant indulgences in in rem proceedings, should impose a higher threshold on the grant of leave and, if leave is granted, impose more stringent terms.

[7] Mr Gresson submitted that the delay in this case was inordinate and inexcusable, amounting in total to over five months. He submitted that this delay should be seen in the context of the principles governing in rem proceedings previously referred to and also to what he described as a history of delay and inaction in relation to the basis of the claim itself. He acknowledged that, until the filing of the memoranda for the purpose of the February directions conference, the plaintiff had not been formally put on notice that the filing of a statement of claim was required. He recalled, however, that there was some reference to the need to file a statement of claim in the course of the hearing of the application for stay. That accords with my own recollection, although I agree with Mr Gresson that it was not a matter which seemed to be regarded as of major significance at the time.

[8] Mr Gresson further submitted that the defendant had suffered prejudice as a result of the delay. In addition to the general prejudice associated with any unnecessarily protracted litigation, he submitted that the defendant suffered the particular prejudice of being subjected to litigation with no more than a summary of the claim brought against him and had been denied the use of a valuable pleasurecraft while the claim effectively languished.

[9] I accept that the Court should scrutinise an application of this nature with particular care. The remedy offered by the in rem proceeding is indeed a draconian one and the Court must be vigilant to ensure that any delays are not elevated into an abuse of process. I am not, however, persuaded that in this case the delay has been inordinate in all the circumstances or that the defendant has suffered prejudice of such a nature as would warrant a refusal to grant the application. For practical purposes, I think the delay should be regarded as running from the date of my judgment in relation to the stay application. It is understandable that the statement of claim should not have been filed while the application for stay was pending and the defendant did not object to the application being disposed of on that basis. Thereafter the Christmas vacation intervened and, although the provisions of the High Court Rules which prevent time running over that period have no direct application, realistically the intervention of the holiday period should be taken into account.

[10] Of greater significance to me is the question of prejudice. I am, however, unable to find any special prejudice over and above that which necessarily ensues as a result of delays of this nature and which cannot be met by the imposition of appropriate terms on the grant of leave. As Mr Gresson frankly conceded, the defendant was not denied particulars of the basis of the plaintiff's claim. The application for stay and the quite extensive evidence filed on behalf of the plaintiff in opposition to it resulted in the defendant receiving a great deal more information about the claim than would have been available through the filing of a statement of claim.

[11] I am accordingly of the view that the plaintiff's application for leave should be granted. Mr Gresson submitted that the grant of leave should be on terms which would permit the defendant vessel to be released in the interim and that Mr Smith should have all of his costs in the proceeding paid by the plaintiff to date. I can see no proper basis for imposing those conditions on the grant of leave. They would be totally disproportionate to the nature and effect of the plaintiff's default. I am of the view, however, that as the plaintiff is seeking an indulgence and the defendant was entitled to advance argument in opposition to the application, that the plaintiff should pay the defendant's costs of and incidental to this application.

[12] I have had referred to me correspondence between the parties canvassing proposals for the disposal of this application and a pending application for security for costs. I do not see the terms of that correspondence as having any significant bearing on either the fact or the quantum of an order for costs in the defendant's favour, although it may have some relevance in the future in relation to security for costs issues.

[13] I fix costs on this application at $1,500 and direct that they be paid within fourteen days.

[14] I make the following consequential timetable directions:

[a] The plaintiff to file and serve the statement of claim by 16 March.

[b] Statement of defence to be filed by 20 April.

[c] List of documents to be filed by the defendant by 4 May.

[d] List of documents to be filed by the plaintiff by 18 May.

[e] Inspection of documents to take place within fourteen days of receipt of lists of documents.

[f] An evaluation conference to be arranged for the earliest practicable date after I June or earlier if requested by the parties.

[g] If the progress of interlocutory steps to that point has resulted in a view by the parties that the plaintiff's claim is capable of settlement, the plaintiff should attend that conference.

[15] The defendant filed an application for security for costs in relation to that part of the proceedings extant at the time of the application for stay. It is accepted that that application may be amended to relate to the entire proceedings as now constituted.