Davidson v Halloran-Davidson

[2020] NZHC 1342

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-595

[2020] NZHC 1342

UNDER

Part 9 of the District Courts Act 2016

IN THE MATTER

Of an appeal against an order for summary judgment

BETWEEN

BEAU FLETCHER DAVIDSON

First Appellant

JOY HALLORAN-DAVIDSON
Second Appellant

AND

SANDRA JOY BOWATER

Respondent

Hearing:

21 May 2020

(by telephone)

Appearances:

C G Smith for the Appellants

J T Burley and K O’Halloran for the Respondent

Further submissions received:

26 May 2020

Judgment:

16 June 2020

JUDGMENT OF POWELL J

[Application to extend time for filing appeal]

This judgment was delivered by me on 16 June 2020 at 3.30 pm pursuant to R 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

DAVIDSON v BOWATER [2020] NZHC 1342 [16 June 2020]

[1]                  The appellants, Beau Davidson and Joy Halloran-Davidson, have applied for an extension of time to appeal a decision of Judge Harrison in the District Court at North Shore.1 Judge Harrison granted summary judgment in favour of the respondent, Sandra Bowater, finding the appellants had no arguable defence to Ms Bowater’s claim she had loaned them personally sums totalling $55,000 and these sums had not been repaid.

[2]                  The present appeal is in fact the second appeal brought by the appellants. The first was  commenced  in  time,  and  although  advancing  towards  a  hearing  on  31 March 2020, was determined by me on 19 March 2020 to have been struck out with effect from 19 November 2019, after security for costs were not paid as directed.

[3]                  In support of the application to extend time, Ms Smith on behalf of the appellants relies primarily upon r 20.13(6) of the High Court Rules 2016 which provides that a Judge must defer the fixing of security for costs on appeal if an appellant has applied for legal aid and the application has not been determined. In Ms Smith’s submission I erred in ordering security for costs on the first appeal and that as the appellants had promptly filed an application for an extension of time on the second appeal there was no prejudice for the extension to now be given.

[4]                  In addition Ms Smith submitted that there were clearly arguable appeal points, noting in particular that Judge Harrison had declined to receive further evidence prior to the hearing that would have supported the appellants’ contention that Ms Bowater had loaned the monies to a company called HTE Investments Ltd rather than to the appellants personally.

[5]                  In response, Mr Burley, for Ms Bowater, suggested that as the initial appeal had been dismissed there was no basis to extend time on the present appeal, that even if the payment of security could not have been directed the subsequent dismissal of the appellants’ application for legal aid meant that the security was payable at the time the appeal was dismissed. Mr Burley’s major focus was however on the merits of the appeal. In particular, Mr Burley noted that legal aid was ultimately declined because the Legal Services Agency was not satisfied the appeal had realistic prospects of

1      Bowater v Davidson [2019] NZDC 17144.

success, a conclusion reiterated when the application was reconsidered. Moreover, Mr Burley submitted that all of the issues raised on behalf of the appellants had been considered in the District Court and there was no prospect that the appeal could succeed.

Discussion

[6]                  As Mr Burley submitted, the principles applicable to the granting of leave to extend time for bringing an appeal are as set out in My Noodle Ltd v Queenstown Lakes District Council.2 The overall test “is whether granting an extension would ‘meet the the overall interests of justice’”,3 with a number of factors being relevant to a decision as to whether the time to appeal should be extended including:4

(a)the reasons for the delay;

(b)the length of the delay;

(c)the conduct of the parties; and

(d)the extent of any prejudice caused by the delay.

[7]                  Added to these factors are the merits of the appeal, although this appears to be relevant in only the clearest of cases.5 Overall the position is as the Court of Appeal stated in Havanaco v Stewart:6

Normally, where the delay in bringing an appeal is the fault not of the intending appellant but rather his or her lawyer and where the delay is not significant, this court will generally be inclined to grant special leave. But this court will not grant an indulgence in cases where the proposed appeal has no merit.

[8]                  In this case it is clear that the initial appeal should not have been struck out and the fact that it has occurred through no fault of the appellants themselves but rather a series of unfortunate circumstances. First, the direction for payment of security for

2      My Noodle Ltd v Queenstown Lakes District Council [2009] NZCA 224, (2009) 19 PRNZ 518.

3 At [19].

4 At [19].

5      Havanaco Ltd v Stewart (2005) 17 PRNZ 622 (CA).

6 At [22].

costs were made by consent following the filing of a joint memorandum filed by counsel, with the orders made including a specific form of reservation required by the appellants’ counsel: that security was to be paid if legal aid had not been granted. Secondly, at the time it became apparent that security for costs had not been paid neither counsel referred me to r 20.13(6), nor was reinstatement of the initial appeal ever sought.

[9]                  Against that background it is also clear that there has been no excessive delay in bringing the present appeal. Although the initial appeal was struck out with effect from 19 November 2019, the non-payment of security was, as noted, only discovered in March 2020 and any delay since then is easily explained by virtue in the change of status of the appellants then counsel, and the subsequent disruption caused by the Covid-19 lockdown.

[10]              I am likewise satisfied there is no real prejudice to Ms Bowater other than the obvious frustration that follows from the lack of certainty that results from allowing the appeal to proceed.

[11]              With regard to the merits of the appeal this case is not one of those where the merits are relevant. In this case the judgment challenged by the appellants was a summary judgment. While Ms Bowater’s case, as articulated in Judge Harrison’s judgment, appears strong, in order to succeed in their appeal the appellants must show that Judge Harrison was wrong, or that on the affidavit evidence available there was no proper basis on which His Honour could have granted summary judgment.7 This will in turn require the appellants to show that there was in fact an arguable defence and in particular whether there is a genuine dispute of fact.8 Given this position and the large amount of factual material that has been placed before the Court, in consequence of the common bundle from the initial appeal having already been prepared, it is not appropriate or indeed possible to determine the appeal is hopeless

7      Washworld Services (Auckland) Ltd v MF Astley Ltd HC Auckland HC90/98, 11 August 1998 at 3.

8      This arises on account of the test required to grant summary judgment as per r 12.2 of the District Court Rules 2014.

without actually hearing the submissions of both parties. This is not therefore the type of case as in Havanaco where it was clear that the appeal had no merit.9

[12]              For completeness, there is also no merit in the other submissions raised by  Mr Burley. First it is in fact well established that an appeal dismissed for failure to pay security can be filed again if it remains within time or an extension of time is granted.10 Likewise, it is irrelevant that by the time the non-payment of the security was revealed the appellants’ legal aid application had been determined as the effect of r 20.13(6) is to prevent the fixing of security while the application for legal aid remains extant. It follows that any order requiring security should not have been made until the dismissal of the appellants’ application for legal aid and the appeal could not therefore have been dismissed for breach of an order made before the application for legal aid had been determined.

[13]              Taking these matters together I am therefore satisfied that the application for extension of time to bring the appeal should be granted.

Decision

[14]              The application to extend time for filing the appeal is granted. Given the substantial preparations undertaken by both parties on the initial appeal, including the preparation of the common bundles, it is anticipated that the appeal should be able to be set down for hearing with minimal delay. Counsel are requested to confer and file a joint memorandum within one week of this judgment setting out the steps needed to be completed prior to a hearing, together with confirmation of their availability for a fixture in July/August 2020 and I will make further timetable directions at that point.

[15]              Given the history of this matter to date I consider that it is appropriate for costs on both the initial appeal and on the present application to be reserved pending determination of the substantive outcome of the present appeal.

9      Havanaco Ltd v Stewart (2005) 17 PRNZ 622 (CA) at [22].

10 See Cresser v Cresser [2004] NZCA 211 citing Air Work (NZ) Ltd v Vertical Flight Management [1999] 1 NZLR 29 (CA); Gatehouse v Middleton HC Hamilton CIV-2006-419-808; Van Selm v Van Selm [2014] NZHC 1993; Almond v Read [2017] NZSC 80, [2017] 1 NZLR 801; and Smyth- Davoren v Parker [2019] NZCA 139.

Powell J