Striking out claims as an abuse of process: An innominate ground of substantive challenge

Claims can be advanced for legitimate purpose.  Claims can be advanced strategically but legitimately.  And claims can be advanced illegitimately.  The latter purpose will arise where a party is using litigation (or the processes of the Court) to achieve a collateral outcome that is not available in the course of properly conducted litigation.  The purpose of this article is to provide a brief foundation of when that might arise.  If a proceeding is an abuse of process it may be amenable to strike-out or summary judgment, which is a quick and less expensive mechanism of disposing of proceedings.

The concept and principles

Rule 15.1 of the High Court Rules 2016 provides that a court may strike out all or part of a pleading if it is frivolous or vexatious or is otherwise an abuse of process of the court.  A pleading is defined inclusively as being “a statement of claim, a statement of defence, a reply, and a counterclaim”.[1]  This application for review was commenced by a statement of claim and is therefore subject to the strike out jurisdiction on these grounds.

The particular limb of abuse of process that arises in this case is using a legal process to obtain a collateral purpose.[2]  In Commissioner of Inland Revenue v Chesterfields Preschools Limited, the Court of Appeal said that it will be an abuse of process where a proceeding “has been brought with an improper motive or [is] an attempt to obtain a collateral benefit”, though the jurisdiction is ”used sparingly”.[3] More recently the Court of Appeal said as follows of the jurisdiction to strike out prior to accepting for filing:[4]

[14]             The powers conferred under r 5.35B reflect the inherent power all courts have to prevent their own procedures from being misused, for example as a means of oppression or otherwise in a way that is manifestly unfair such that the administration of justice will be brought into disrepute. Lord Bingham described abuse of process as simply being “a use of the court process for a purpose or in a way which is significantly different from the ordinary and proper use of the court process”. Courts have a duty to prevent such abuse.

In D v RMC, the High Court expressed the test as being use of a court process “for a purpose or in a way significantly different from its ordinary and proper use”.[5]  Another expression is whether the proceeding is an improper use of the court’s machinery.[6] 

The fundament of the strike-out jurisdiction is maintaining public confidence in the administration of justice.[7]  The Court of Appeal has expressed the question as whether right thinking people would consider the Court was exercising poor control over its processes if it permitted the matter to proceed further.[8]  The principles have recently been distilled by the Court of Appeal in M v H as follows:[9]

(a)        the alleged improper purpose need not be the sole purpose, as long as it is the predominant purpose;

(b)        put another way, qualifying abuse will not be found, and a litigant will not be barred from pursuing a genuine cause of action, if the cause of action would be pursued despite the collateral purpose;

(c)        the onus on the party alleging abuse is heavy, and the power to grant remedies is to be exercised in exceptional circumstances; and

(d)        it is unnecessary to prove an improper act to justify a remedy but, other than in the clearest of cases, it will be necessary to point to some manifestation of intent, in the form of an overt act (such as a demand) which is indicative of the true (collateral) purpose

Exemplar cases

In Sheffield Properties Ltd v Kapiti Coast District Council, Churchman J found the applicant (a trade creditor of the respondent) was predominantly motivated to interfere with and delay the efforts of a fellow competitor despite Sheffield staunchly denying that motivation.[10]  The judicial review application was struck out.  Most recently, and analogously with the instant case, a claim was struck out as an abuse of process in CNP Holdings Limited v Central Park Property Investment Limited.[11]  In that case strike out was ordered because the proceedings were being used in an endeavour to leverage the proceeding to obtain a collateral advantage.  In that case the court said the following:

[90]             This is one of those rare and exceptional cases where the extrinsic evidence is sufficient to make an objective determination that CNP would not have commenced this proceeding without CNP having the collateral purpose. The collateral purpose is the predominant purpose, it is improper and not a by-product of legitimate relief sought in this proceeding. This proceeding is an abuse of process and should be struck out.

In O’Neill v Webster the High Court was faced with two applications for judicial review.[12]  That proceeding was struck out on the strength of the conclusion that the Judge “concluded that the proceeding is transparently a vehicle for Mr O'Neill's persistent attacks on the judicial system and judges”.[13]  Another decision in a different context is Waterfall Park Developments Limited v Hadley.[14]  In that case, Nation J struck out the claim as an abuse of process brought for collateral purposes.  His reasoning is below:

… I am satisfied that Waterfall Park has brought these civil proceedings not to seek damages for a loss they can seriously argue the Hadleys are liable. I am satisfied they brought the claim to impose on the Hadleys the burden and costs of having to defend a claim for damages in excess of $7 million. I am satisfied Waterfall Park did that to deter the Hadleys from continuing to oppose Waterfall Park's attempt, through their appeals, to obtain relief from the Environment Court which would allow Waterfall Park to develop the Ayrburn land in the way it wants to. I am satisfied that is Waterfall Park's ulterior and predominant purpose of the civil proceedings.

[1]           High Court Rules 2016, r 1.3(1).

[2]           Stephen Todd (ed) and others Todd on Torts (online ed, Thomson Reuters) at [17.5].

[3]           Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2013] NZCA 53, [2013] 2 NZLR 679 at [89].  As to the sparing use, in Johnson v Gore Wood & Co [2002] 2 AC 1 (HL) at 22 “[l]itigants are not without scrupulous examination of all the circumstances to be denied the right to bring a genuine subject of litigation before the court”.

[4]           Te Wakaminenga o Nga Hapu ki Waitangi v Waitangi National Trust Board [2023] NZCA 63 (citations omitted).

[5]           D v RMC [2021] NZHC 1633 at [6].

[6]           Commissioner of Inland Revenue v Chesterfields Preschools Ltd, above n 5, at [87].

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

[8]           O'Neill v Judicial Conduct Commissioner [2023] NZCA 152 at [33].  See too Smyth-Davoren v Parker [2018] NZHC 3034 at [8].

[9]           M v H [2024] NZCA 243, [2024] 3 NZLR 44 at [138]. 

[10]          Sheffield Properties Ltd v Kapiti Coast District Council [2018] NZHC 3290, [2019] NZAR 574.

[11]          CNP Holdings Limited v Central Park Property Investment Limited [2024] NZHC 2541.

[12]          O’Neill v Webster [2023] NZHC 2570.  See too O’Neill v Leaupepe [2023] NZHC 2574.

[13]          At [16].

[14]          Waterfall Park Developments Limited v Hadley [2022] NZHC 2221, [2023] NZRMA 11.