CHRISTOPHER RUSSELL HOOK AND CALLAGHAN INNOVATION
[2025] NZCA 148
•7 May 2025 at 11 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA801/2024 |
| BETWEEN | CHRISTOPHER RUSSELL HOOK |
| AND | CALLAGHAN INNOVATION |
| Court: | French P and Cooke J |
Counsel: | Applicant in person |
Judgment: | 7 May 2025 at 11 am |
JUDGMENT OF THE COURT
AThe application for leave to appeal under s 60 of the Senior Courts Act 2016 is declined.
BThe applicant must pay costs to the respondent calculated on the basis of a standard appeal with a 30 per cent uplift together with usual disbursements.
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REASONS OF THE COURT
(Given by French P)
Introduction
Mr Hook brought a negligence claim in the District Court against Callaghan Innovation (Callaghan). Judge Kelly struck out the proceeding on the ground that it disclosed no reasonably arguable cause of action.[1] Mr Hook appealed that decision to the High Court. The High Court dismissed the appeal,[2] and declined to grant Mr Hook leave to bring a second appeal in this Court.[3]
[1]Surface Micro-Guard Ltd v Callaghan Innovation [2024] NZDC 7314.
[2]Hook v Callaghan Innovation [2024] NZHC 2240 [judgment under appeal].
[3]Hook v Callaghan Innovation [2024] NZHC 3432.
Having failed to obtain the necessary leave from the High Court, Mr Hook now seeks leave from this Court. The respondent opposes the application.
Background
Proceedings against Cross Slot IP and its directors
The background to the application dates back to five separate proceedings initiated by Mr Hook in the District Court against a company called Cross Slot IP Ltd (Cross Slot IP) and its directors. The dispute centred on a 2019 heads of agreement between Cross Slot IP and a company controlled by Mr Hook called Surface Micro-Guard Ltd (Surface).
Under the heads of agreement, a new entity, Cross Slot Europe Ltd (Cross Slot Europe), was established. Cross Slot Europe was licensed to manufacture and distribute technologies and agricultural machinery designed and manufactured by Cross Slot IP. Cross Slot Europe was operated by Mr Hook.
In March 2021, Cross Slot IP cancelled Cross Slot Europe’s licence on the grounds that it was using its access to Cross Slot IP’s intellectual property for unauthorised purposes and had thus repudiated the heads of agreement. This was denied by Mr Hook, who contended that the cancellation was unlawful and that it was Cross Slot IP which had repudiated the agreement.
The five sets of proceedings were initiated by Mr Hook using different entities as plaintiff.[4] As each proceeding was struck out for non-payment of security for costs the next one was initiated. Two of the strike-out decisions were unsuccessfully appealed to the High Court.
[4]The first proceeding was brought by Cross Slot Europe against Cross Slot IP. Cross Slot IP successfully applied for security for costs against Cross Slot Europe and a stay of proceedings until that security was paid. It was not paid and, instead of paying the security or appealing the decision in which it was ordered, Mr Hook brought two new proceedings. The first was brought in his own name against Cross Slot IP and the second was brought in the name of Surface against Cross Slot IP. Cross Slot IP successfully applied for security for costs in both proceedings and, once again, the proceedings were stayed until security was paid. Once again, security was not paid. Nor were the costs awards made against the plaintiffs in respect of their unsuccessful opposition to the applications for security. The District Court ordered on 20 April 2023 that each of the three proceedings would be struck out unless the plaintiffs either filed applications for leave to appeal or paid security for costs. Applications were not filed, and security was not paid. The proceedings were all struck out on 2 June 2023. Mr Hook then brought two further proceedings, the first in the name of Surface against the directors of Cross Slot IP and the second in his own name against one of the directors of Cross Slot IP and a third party, Mark Scott. It is difficult to discern the basis for the claim against Mr Scott, and the District Court struck out the claim against him on the basis that he had no involvement with the fundamental allegations in the dispute. The proceeding involving Mr Scott was deemed an abuse of process and led to orders being made under s 213 of the District Courts Act 2016 against Mr Hook.
The fourth and fifth proceedings also led to orders under s 213 of the District Court Act 2016 restraining Mr Hook and any company of which he is a director from commencing related proceedings for a five-year period.[5]
The current proceedings against Callaghan Innovation
[5]Hook v Scott [2023] NZDC 2299. This decision was upheld on appeal in Hook v Scott [2024] NZHC 2071.
In August 2023, Mr Hook issued proceedings against Callaghan in his personal capacity and also in the name of Surface. Callaghan is a Crown agency that administered a loan scheme supplementing shortfalls in private funding due to the COVID-19 pandemic.[6]
[6]Callaghan’s main objective is to “support science and technology-based innovation and its commercialisation by business, primarily in the manufacturing sector and service sector, in order to improve their growth and competitiveness: Callaghan Innovation Act 2012, s 13.
The essence of the claim brought against Callaghan is that it was negligent in (a) granting a loan to Cross Slot IP because Cross Slot IP did not qualify for a loan; and (b) failing to take any action to recover the loan monies despite Mr Hook advising Callagan of Cross Slot IP’s ineligibility. It is further claimed that Callaghan’s failure to have the loan monies repaid caused Cross Slot IP to cancel the licensing agreement with Cross Slot Europe, thus causing loss to Mr Hook and Surface.
Mr Hook and Surface sought summary judgment against Callaghan. For its part, Callaghan sought summary judgment or strike out or alternatively security for costs.
As mentioned, the District Court Judge struck out the claims as disclosing no reasonably arguable cause of action, a finding which was upheld by the High Court.
The application for leave to appeal to this Court
Mr Hook seeks to advance the following grounds of appeal, namely that the High Court erred in:
(a)Upholding the strike out of the summary judgment despite the application being supported by extensive affidavit evidence and despite Callaghan’s evidence containing false and misleading statements material to the dispute.
(b)Rejecting his claims that the District Court judge was biased and that counsel for Callaghan had misled the court.
(c)Rejecting his claims that Callaghan, in breach of its statutory duty, had acted in bad faith towards Mr Hook prior to and throughout the proceeding.
Analysis
The principles governing applications for leave to bring a second appeal are well established. Leave will only be granted if the case raises a question of law or fact capable of bona fide and serious argument involving interests of sufficient importance to outweigh the cost and delay of a further appeal.[7]
[7]Waller v Hider [1998] 1 NZLR 412 (CA) at 413.
We are satisfied by some margin that the proposed appeal does not satisfy these criteria. The allegations of bias, bad faith and misconduct were thoroughly traversed in the High Court and found to be unwarranted.[8] We are unable to discern any arguable error in the High Court’s assessment which would warrant a reconsideration of the same material in this Court.
[8]Judgment under appeal, above n 2, at [16]–[22] and [24(h)–(k)].
We are also satisfied, applying established principles of the law of negligence, that it is not reasonably arguable that Callaghan owed a duty of care to either Mr Hook or Surface. Nor is it reasonably arguable that Callaghan could be liable for the losses caused by the cancellation of the licence. The fact that Mr Hook filed extensive affidavit evidence in support of his claim does not change that. We further agree with the conclusion of the lower Courts that this proceeding is a thinly disguised attempt to circumvent the ban on bringing proceedings against Cross Slot IP.[9]
[9]At [24(j)].
The application for leave to bring a second appeal is accordingly declined.
Costs
In the event the application was unsuccessful, Callaghan sought indemnity costs on the grounds of delay and additional costs associated with the application for leave. Reduced indemnity costs were awarded in the lower courts.
We accept that the application for leave to appeal involved the pursuit of an application without merit. However, the application has been relatively limited in terms of time and costs. We consider it preferable that the increased award not involve the complications that can be involved in calculating an award of reasonable indemnity costs. Applying the criteria under r 53E(2)(b)(ii) of the Court of Appeal (Civil) Rules 2005 we consider that increased costs of 30 per cent above scale are justified.
Outcome
The application for leave to appeal under s 60 of the Senior Courts Act 2016 is declined.
The applicant must pay costs to the respondent calculated on the basis of a standard appeal with a 30 per cent uplift together with usual disbursements.
Solicitors:
Fee Langstone, Auckland for Respondent
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