Body Corporate 202254 v Attorney-General

[2008] NZCA 309

IN THE COURT OF APPEAL OF NEW ZEALAND

CA350/2008
[2008] NZCA 309

BETWEENBODY CORPORATE 202254

First Applicant

ANDCITY RENTAL TRUSTEES LIMITED & ORS

Second Applicants

ANDATTORNEY-GENERAL

Respondent

Hearing:12 August 2008

Court:Glazebrook, O'Regan and Robertson JJ

Counsel:T C Weston QC for Applicants

M T Scholtens QC and A J Williams for Respondent

Judgment:18 August 2008 at 11.30 am

JUDGMENT OF THE COURT

AThe application for an extension of time in which to appeal is granted, with the consequences set out in [17] of the Reasons of the Court.

B        Costs are reserved.

REASONS OF THE COURT

(Given by O’Regan J)

Introduction

[1]       The applicants seek special leave to appeal against a decision of the High Court striking out their claims against the respondent.  The application is made under r 29(4) of the Court of Appeal (Civil) Rules 2005 (the Civil Rules).  That provision has now been revoked, but the new r 29A(1) is in similar terms and we will treat the application as being an application for an extension of time in which to appeal under r 29A(1) of the Civil Rules.

[2]       The applicants’ claims against the respondent are based on allegations of negligence against the Building Industry Authority (BIA), the liabilities of which have been assumed by the respondent.  The alleged negligence is said to have been a cause of the applicants’ properties being affected by leaky building syndrome.

Why an extension of time under r 29A(1) is needed

[3]       The circumstances leading to the present application are unusual.  The applicants filed an appeal within time (CA141/06) on 12 July 2006.  Payment of $4,740 as security for costs was made.  A case on appeal was filed as required by the Civil Rules on 20 December 2006.  However, the solicitors for the applicant overlooked making a formal application for the allocation of a hearing date, as they were required to do under rr 38 and 43(1) of the Civil Rules within six months after the appeal was brought. 

[4]       This oversight was not noticed because the solicitor in charge of the file was on paternity leave and, when he returned to work, he did not notice that a hearing date had not been sought.  His evidence was that two discrete appeals arose from the same High Court decision (the present appeal and another appeal against a different defendant).  Cases on appeal were filed for both appeals, but the allocation of a hearing date was sought in relation to the other appeal only. 

[5]       All parties proceeded on the basis that an application for the allocation of a hearing date for appeal CA141/06 had been made, and it was only after more than a year had passed that the oversight came to light.  By that stage appeal CA141/06 was deemed to be abandoned under r 43(1) of the Civil Rules and the three month period during which an application for an extension of time to apply for the allocation of a hearing date could be made (r 43(3) of the Civil Rules) had also expired.  So the applicants now wish to commence a new appeal and seek an extension of time to allow them to do so.

No opposition

[6]       Counsel for the respondent, Ms Scholtens QC, confirmed to the Court that both parties had laboured under the misapprehension that an application had been made for a hearing date.  She confirmed that the respondent did not oppose the present application, and that the respondent had not been prejudiced by the delay resulting from the failure to seek the allocation of a hearing date for CA141/06.

Criteria

[7]       In Sexton v Rice Craig [2007] NZCA 200, this Court determined that there is jurisdiction under r 29(4) of the Civil Rules to grant leave in the case of a deemed abandonment under r 43, in circumstances where an extension for time under r 43(3) is precluded. However, the Court made it clear that there must be a compelling case before it would exercise its discretion under r 29(4) to allow a new appeal in those circumstances. It said that the discretion under r 29(4) had to be exercised in a way that did not undermine the objectives of r 43. It added at [31]:

As a consequence, it will be rare in deemed abandonment cases that the Court will exercise its r 29(4) discretion.  The case for the exercise of the discretion will need to be compelling.  The Court must reach an overall assessment in the light of all relevant considerations.  These will include the explanation for the delay and for the failure to apply for an extension under r 43, and the merits of the proposed appeal.  Other factors will also be relevant, for example prejudice to the respondent.  The hurdle is a high one.

[8]       We are satisfied that the replacement of r 29(4) by r 29A(1) does not alter this analysis.

Application of criteria

[9]       We now apply the criteria identified in Sexton to the facts of this case.  We have already set out the reasons for the failure to seek the allocation of a fixture and to seek an extension of time under r 43(3).  The mistake made by the solicitors for the applicant, although regrettable, has been explained and it is clear that all parties were labouring under the same misapprehension.  Generally, this Court takes a sympathetic approach to applications for extensions of time or for special leave where a genuine error by a lawyer would otherwise deprive a litigant of the ability to pursue a right to appeal: see, for example, State Insurance Ltd v Brooker (2002) 15 PRNZ 493 (CA).  However, prompt remedial action is expected, and the Court will need to satisfy itself that the appeal has some potential merit.  Prompt remedial action was taken in this case after the oversight was discovered. 

[10]     We have also dealt with the issue of prejudice: in short, the respondent has confirmed that it has not been prejudiced. 

[11]     That leaves the merits of the proposed appeal.

[12]     The essence of the proposed appeal is a challenge to the decision of this Court in Attorney-General v Body Corporate 200200 [2007] 1 NZLR 95. Counsel for the applicants, Mr Weston QC, accepted that for the applicants to succeed in the proposed appeal they would need to persuade this Court to overrule its decision in the Body Corporate 200200 case.  He indicated that the applicants intended to make some arguments which were not made to the Court which determined the Body Corporate 200200 case, and also suggested that the subsequent decision of the Supreme Court in Couch v Attorney-General [2008] NZSC 45 may support the applicants’ arguments.

[13]     Without wishing to prejudge any of those arguments, the applicants’ case appears to involve a relitigation of the issues determined in the Body Corporate 200200 case.  Given the relatively strict criteria for this Court to reverse its own decisions, as set out in R v Chilton [2006] 2 NZLR 341 at [83] – [100], it may be thought that there is little likelihood that the Court would reverse a decision made by a Full Court after full argument only two and a half years ago.

[14]     Thus, if the merits of the appeal were assessed only by reference to its likelihood of success in this Court, it could be said that the appeal appears to have little prospect of success.

[15]     The matter is more complex than that, however.  Body Corporate 200200 did not appeal against the decision of this Court and, although another party sought to do so, its application for leave was dismissed.  Eventually Body Corporate 200200 settled with the other defendants in that case.  That means the Supreme Court has not considered the conclusion reached by this Court that the BIA did not owe a duty of care to owners of leaky homes.  The applicants have indicated that they intend to seek the leave of the Supreme Court to appeal to that Court if unsuccessful in this Court, and it can be anticipated that the respondent would do the same if the applicants succeed in this Court.  Ms Scholtens indicated that the respondent saw it as inevitable that a case against the Crown as successor to the BIA would eventually be taken to the Supreme Court, and that this case could be an appropriate one.  It was for this reason that the Crown did not oppose the present application.

[16]     It is not for us to assess the likelihood of leave to appeal being granted by the Supreme Court or the likelihood that an appeal to that Court would be successful.  But we can say that the issues at stake are significant and that the Supreme Court should have the opportunity to consider them, at least at the leave stage.

Decision

[17]     We are satisfied that in the very unusual circumstances of this case, there is a compelling case for the granting of an extension of time in which to appeal under r 29A(1) of the Civil Rules, thereby allowing the applicants to commence a new appeal.  We therefore grant an extension on the basis outlined below.  This will prevent waste of the work already done in preparing appeal CA141/06 for hearing and allow for the important issues at stake in that appeal to progress to the Supreme Court if that Court gives leave.  The new notice of appeal should be filed within 14 days after the date of this judgment, and an application for an allocation of a fixture should be done within seven days after the filing of the new appeal.  The security for costs which has already been paid in relation to CA141/06 should be treated as security for costs for the new appeal, and the case on appeal filed for CA141/06 should be treated as the case on appeal for the new appeal: it will not be necessary to file fresh copies.

Costs

[18]     Under r 53G(2) the respondent would normally be entitled to costs.  However, as the respondent did not oppose the granting of leave and did not seek costs, we formally reserve the issue of costs.  If the respondent wishes to seek costs this can be dealt with in conjunction with the new appeal.

Solicitors:
Grimshaw & Co, Auckland for Applicants
Crown Law Office, Wellington for Respondent