Chen v Chen

[2019] NZCA 136

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

 CA739/2018
 [2019] NZCA 136

BETWEEN	SHAN-HUA CHEN First Applicant WENG YUAN TSAO Second Applicant
AND	YEN WEI CHEN First Respondent KUEI HUAN CHEN Second Respondent

Court:	Brown and Gilbert JJ
Counsel:	Applicants in person Respondents in person
Judgment: (On the papers)	2 May 2019 at 11.30 am

JUDGMENT OF THE COURT

The application for an extension of time to appeal is declined.

____________________________________________________________________

REASONS OF THE COURT

(Given by Brown J)

Introduction

1. The applicants apply under r 29A of the Court of Appeal (Civil) Rules 2005 for leave to appeal out of time against a decision declining to award them costs as a successful party for the reason that they were self-represented.  The application is opposed by the respondents. 

Background

1. There is a substantial history of litigation between the applicants and the respondents consequent upon an unsuccessful business venture.  The applicants were successful in a proceeding against the respondents in the District Court[1] but the respondents’ appeal was allowed and a direction made for a rehearing in the District Court.[2]  That proceeding was eventually struck out on 25 July 2016 on account of the applicants’ non-compliance with directions.  An appeal against the strike-out order was dismissed on 21 February 2017.[3]

   [1]Chen v Chen DC Manukau CIV-2010-092-5263, 23 May 2013.

   [2]Chen v Chen [2014] NZHC 2788.

   [3]Chen v Chen [2017] NZHC 242.

2. The applicants then commenced a fresh proceeding in the High Court on 14 June 2017.  The respondents applied to strike-out that proceeding.  Their application was dismissed in a judgment of Associate Judge Bell delivered on 29 March 2018.[4]  The judgment concluded in this way:[5]

   This decision has gone in favour of Mrs Chen and Mr Tsao.  If they had legal representation, I would order costs in their favour.  If the defendants may later seek costs against them, Mrs Chen and Mr Tsao may be able to raise their victory on this occasion as counting in reduction of any order for costs they might otherwise be ordered to pay.

   [4]Alligators Fast Food Ltd v Chen [2018] NZHC 587.

   [5]At [60].

3. The proceeding was called again before Muir J on 1 November 2018.  His Honour’s minute of 1 November 2018 records that, after an adjournment during which the parties conferred, a comprehensive settlement was reached which was recorded in a handwritten agreement, a copy of which is appended to the minute.[6]  The agreement included provision that the applicants agreed to “cease litigation and will not in future litigate the defendants anything related to this case”.  The respondents also agreed that they would not “counterclaim or litigate any costs associated with the case”. 

   [6]Alligators Fast Food Ltd v Chen HC Auckland CIV-2017-404-1276, 1 November 2018.

4. However soon after that Mr Tsao filed a memorandum in the High Court dated 16 November 2018 which we infer pursued a request for costs with reference to the judgment of Associate Judge Bell.  In a minute dated 16 November 2018 Muir J stated:[7]

   [3]       If contrary to established principles in terms of general unrecoverability of costs by successful lay litigants, the plaintiffs considered themselves entitled to costs on the judgment delivered by Associate Judge Bell (whether because of previous alleged “fraud” by defendants’ counsel or otherwise), their remedy lay in appeal from that judgment.  As I have previously indicated, the High Court is now functus officio in that respect.

The application for leave

[7]Alligators Fast Food Ltd v Chen HC Auckland CIV-2017-404-1276, 16 November 2018 (footnote omitted).

1. The application for leave to appeal out of time was filed on 30 November 2018.  Although it is a somewhat confused document, it is apparent that the applicants wish to appeal from Associate Judge Bell’s refusal to grant them costs after their successful defence of the respondents’ strike-out application.  However references in the application to the minute of Muir J of 16 November 2018 might also be read as signalling an intention to seek leave to appeal in relation to that minute. 

2. We do not consider that the application should be construed in that manner for two reasons.  First, the minute is not in itself a decision on the applicants’ entitlement to costs.  It merely records the fact and consequences of the judgment of Associate Judge Bell.  Secondly as at the date of the application for leave to appeal, 20 working days had not expired since the minute of 16 November 2018.  Hence no application under r 29A would have been necessary if the applicants were purporting to bring an appeal in respect of the minute. 

Applicable principles

1. As the Supreme Court explained in Almond v Read,[8] the ultimate question when considering the exercise of the discretion to extend time under r 29A is what the interests of justice require.  Factors identified as likely to require consideration included:[9]

   ·     the length of the delay;

   ·     the reasons for the delay;

   ·     the conduct of the parties, particularly of the applicant;

   ·     any prejudice or hardship to the respondent or to others with a legitimate interest in the outcome;

   ·     the significance of the issues raised by the proposed appeal, both to the parties and more generally.

   [8]Almond v Read [2017] NZSC 80, [2017] 1 NZLR 801.

   [9]At [38].

2. The Court recognised that the merits of a proposed appeal may, in principle, be relevant to the exercise of the discretion to extend time because there will be occasions on which the Court will risk facilitating unjustifiable delaying tactics on the part of dilatory or recalcitrant litigants if it does not consider the merits.  However the Court identified three qualifications to that principle:[10]

   ·     There will be instances in which the merits or otherwise of a proposed appeal will be overwhelmed by other factors such as the length of the delay and the extent of prejudice.

   ·     The merits will not generally be relevant in a case where there has been insignificant delay as a result of a legal adviser’s error and the proposed respondents have suffered no prejudice beyond the fact of an appeal.

   ·     Consideration of the merits of an appeal in the context of an application to extend time must necessarily be relatively superficial.  Consquently a decision to refuse an extension of time based substantially on the lack of merit of a proposed appeal should be made only where the appeal is clearly hopeless.  An appeal would be hopeless where on the facts to which there was no challenge it could not possibly succeed.

Discussion

[10]At [39].

1. The delay of seven months in making the application under r 29A is substantial.  The reasonably full written submissions of the applicants filed on 10 December 2018 do not offer any explanation for the delay.  Indeed the request to bring an appeal out of time is inconsistent with the conduct of the applicants in agreeing to the settlement which was negotiated on 1 November 2018. 

2. We note that it appears from a further document filed by the applicants on 9 April 2019 described as an application for leave to bring civil appeal that the appellants also wish to “appeal against the settlement in date 1st Nov 2018”.  However that is not a matter properly raised by the application under r 29A filed on 30 November 2018.  Nor is an appeal to this Court the appropriate process for launching a challenge to a compromise of litigation.

3. The noteworthy feature of the applicants’ submissions in support of the application for leave is the failure to engage at all with the ground on which the Associate Judge declined to award costs, namely the fact that the applicants were not entitled to costs because they were not legally represented.  The rule that a successful litigant in person is not entitled to recover costs was recently affirmed by the Supreme Court in McGuire v Secretary for Justice.[11]While the Court left open the possibility of an exceptional circumstances exception, we do not consider that there is any feature of the present case that would engage that exception.  Consequently this is one of those cases where the proposed appeal is clearly hopeless.

   [11]McGuire v Secretary for Justice [2018] NZSC 116, (2018) 24 PRNZ 350 at [55] and [88].

4. We further note that the present application is procedurally flawed because the decision which is sought to be appealed was one made on an interlocutory application in respect of a civil proceeding.  Consequently s 56(3) of the Senior Courts Act 2016 applies with the consequence that an application should have been made to the High Court for leave to appeal to this Court.

Result

1. The application for an extension of time to appeal is declined.