Arranmore Developments Limited v Don Ha Real Estate Limited
[2011] NZCA 85
•21 March 2011
| IN THE COURT OF APPEAL OF NEW ZEALAND |
| CA835/2010 [2011] NZCA 85 |
| BETWEEN ARRANMORE DEVELOPMENTS LIMITED |
| AND DON HA REAL ESTATE LIMITED |
| Hearing: 15 March 2011 |
| Court: Chambers, Randerson and Wild JJ |
| Counsel: K J Muston for the Applicant |
| Judgment: 21 March 2011 at 11 a.m. |
JUDGMENT OF THE COURT
A The application for an extension of time for appealing is dismissed.
BThe applicant is to pay the respondent’s costs of the application as for a standard appeal, with usual disbursements.
REASONS OF THE COURT
(Given by Wild J)
This is an application under r 29A for an extension of time for appealing. The proposed appeal is from a judgment of Associate Judge Christiansen on 4 November 2010 dismissing applications by the applicant (as defendant in the High Court) for summary judgment and to strike out the causes of action of the plaintiff (the present respondent, Don Ha Real Estate Ltd).
The applicant (Arranmore) is the second defendant in the High Court proceeding. The first defendant is Prema Development Limited. Prema is now in receivership and liquidation and the claim against it is stayed. Don Ha sued both defendants for a total of $760,640.49 in commissions it claims are due to it for selling 53 sections in a subdivision in Auckland. The subdivision was undertaken by Prema, funded by a substantial loan from a finance company in the Hugh Green Group (HGG). Don Ha had a written agency agreement with Prema entitling it to commission on each sale it made of a section in the subdivision. That agreement entitled Don Ha to receive a purchaser’s deposit, and retain its commission from that deposit. The agency agreement was varied orally so that the deposits were to be paid, not to Don Ha, but to Prema’s solicitors. Don Ha claims it sold 53 sections. Although each section sale agreement acknowledged that the sale was effected by Don Ha, the agreement did not entitle Don Ha to commission. We presume that was because of the overall agency agreement Don Ha had with Prema.
Prema defaulted on its loan from the HGG finance company. The subdivision was then sold by Prema to Arranmore at a price equating to the outstanding balance of Prema’s loan from the HGG finance company. Arranmore is another HGG company. The subdivision sale agreement included a clause by which Prema assigned to Arranmore its interest as vendor in the 53 section sale agreements (referred to in the clause as “the sub-sales”). At the time those agreements were conditional, but they subsequently became unconditional when title became available.
Upon four causes of action, Don Ha claims from Arranmore the $760,640.79 commission it alleges is due to it for selling the 53 sections. In summary its causes of action are:
(a)The subdivision sale agreement, properly construed, assigned to Arranmore Prema’s obligation under the agency agreement to pay Don Ha’s commissions when the sub-sales became unconditional.
(b)Don Ha is a (named) beneficiary in each of the section sale agreements to the extent of its commission, and is entitled pursuant to s 4 of the Contracts (Privity) Act 1982 to enforce that entitlement against Arranmore as assignee of those section sale agreements.
(c)Arranmore, by retaining the benefit of the section sale agreements and the deposits paid pursuant to them, has unjustly enriched itself at the expense of Don Ha.
(d)Arranmore or its solicitors holds the deposit monies as constructive trustee for Don Ha to the extent of the commissions due to it, and Don Ha is entitled to trace those monies.
The first of the well established considerations in dealing with a r 29A application is the extent of the delay and the reasons for it. The notice of appeal was filed only one day outside the 20 working days period stipulated by r 29(1)(a). Although accepting that one day’s delay is inconsequential, Mr Judd invited us to consider other dilatoriness on Arranmore’s part. First, Mr Judd points out that Arranmore’s application for summary judgment/strike out was filed (on 29 September 2010) 10 months (in fact, it was closer to 12 months) after the respondent had commenced its proceeding in the High Court on 16 September 2009. By that stage discovery and inspection were complete and the proceeding was ready for trial. Indeed, the proceeding has now been given a fixture for trial, commencing 20 February 2012. Arranmore can respond that it stayed its hand until it had inspected all relevant documentation. But it is apparent that its applications for summary judgment/strike out are based squarely on contracts that all parties were aware of throughout.
Secondly, Mr Judd pointed to what occurred in the High Court last November. On 11 November Arranmore filed an interlocutory application seeking review of Associate Judge Christiansen’s decision. There followed a series of minutes, the first issued by Associate Judge Abbott on 22 November, the others issued by Allan J. We need not detail these. It suffices to say that they made it clear to Arranmore that appeal to this Court was its only means of challenging the dismissal of its application for defendant’s summary judgment, and that the time for appeal would shortly expire.
We see force in Mr Judd’s submission that Arranmore should have sought summary judgment when it filed its defence, if it considered it was entitled to it. It had the contracts that it asserts entitled it to judgment. Further, we accept Mr Judd’s submission that Arranmore has not adequately explained why it could not have appealed well within the 20 working days allowed, particularly given the minutes of Associate Judge Abbott and Allan J. Overall, we view Arranmore’s delay, particularly in bringing its application in the High Court, as a consideration going against the grant for an extension of time.
There are two aspects to prejudice here. First, Mr Judd again readily accepted that no prejudice could result from the appeal being filed one day out of time. But he invited us to view prejudice in the context of the High Court proceeding overall. He pointed out that the proceeding now has a fixture for trial. He said Don Ha wants to focus its energies on trial preparation, without the diversion of the proposed appeal. He submitted that granting an extension could put the trial date in jeopardy. That is possible, though we think unlikely. But there is force in Mr Judd’s diversion of resources point. Instead of focusing on trial preparation, Don Ha will need to grapple with an appeal. A timely application for summary judgment would have avoided that situation.
The second aspect about prejudice is that Arranmore, if so advised, can still pursue in the High Court its application to strike out all four causes of action in Don Ha’s amended statement of claim. Dismissing the present application thus does not deprive it of the ability to avoid a trial, if it adheres to the view that Don Ha’s claims against it are untenable.
In terms of the parties’ conduct, Mr Judd submitted that Arranmore should have been required to elect whether it appealed the dismissal of its summary judgment application, or applied for a review of the dismissal of its strike out application. We need not resolve that. But, certainly, by initially seeking a review of the strike out aspect of Associate Judge Christiansen’s decision on grounds, some of which appeared to relate to summary judgment, Arranmore confounded the position in a way that does not now assist it.
It is not appropriate to consider the merits in this particular case, because Arranmore has exercised its right to have that part of the Associate Judge’s decision which deals with its strike out application reviewed by a High Court Judge. That hearing has yet to take place. It would be both wrong and unhelpful for us to express necessarily tentative views on merits, when the arguments relating to the strike-out part of Arranmore’s application are so close to those relating to its application for summary judgment.
In relation to prejudice, we have already made the point that Arranmore, if successful on review of its strike-out application, will avoid going to trial. We add that Arranmore could seek leave to appeal to this Court if unsuccessful on review of the strike-out of the Associate Judge’s decision.
Weighing up the various considerations we have referred to, and assessing where lie the overall interests of justice, our decision is to decline to extend time for appealing.
Solicitors:
Daniel Overton Goulding, Auckland for the Applicant
Oranga Law, Auckland for the Respondent
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