Diver v Loktronic Industries Ltd - [2012] NZCA 272

IN THE COURT OF APPEAL OF NEW ZEALAND

CA258/2011
[2012] NZCA 272

BETWEEN STEPHEN JOHN DIVER
Appellant

AND LOKTRONIC INDUSTRIES LIMITED
First Respondent & Ors

CA259/2011

AND BETWEEN NEIL RICHARD HINGSTON & ANOR
Appellants

AND LOKTRONIC INDUSTRIES LIMITED
Respondent

CA260/2011

AND BETWEEN ROY BOWYER & ORS
Appellants

AND LOKTRONIC INDUSTRIES LIMITED & ORS
Respondents

Hearing: 22 June 2012
(by telephone conference)

Counsel: S A Grant for Loktronic in support
P R Rice and B P Molloy for Mr Hingston and Neil Hingston Engineering Ltd (appellants in CA259/2011) abiding the Court's decision
Z G Kennedy for Mr Bowyer, Trimec Technology and Assa Abloy (appellants in CA260/2011) opposing
M H L Morrison for Mr Diver (appellant in CA258/2011) opposing

Judgment: 22 June 2012 at 1 pm

JUDGMENT OF WILD J: APPLICATION FOR STAY AND INTERIM RELIEF PENDING DETERMINATION OF LEAVE TO APPEAL APPLICATION BY SUPREME COURT

ALoktronic’s application is amended to seek a stay of execution and/or the grant of interim relief under r 30(2) of the Supreme Court Rules 2004.
B Execution of the costs order in D of this Court’s judgment of 4 April 2012 is stayed pending further order of the Supreme Court.
CPending further order of the Supreme Court Loktronic is granted interim relief in these terms:
(a)The High Court is directed not to dismiss Loktronic’s bankruptcy proceeding against Mr Diver.
(b)The High Court is directed not to release Assa Abloy’s bank guarantee to the High Court.

DDirection that the security for costs given by the appellants not be paid out while the stay remains in force.

____________________________________________________________________

REASONS OF WILD J

Relevant materials

The following are relevant to this judgment:
(a)Application dated 31 May 2012 by Loktronic for a stay of execution of this Court’s judgment delivered on 4 April, setting aside the judgment of Courtney J delivered in the High Court on 31 March 2011.
(b)Notice of opposition dated 8 June 2012 by Mr Diver (appellant in CA258/2011).
(c)Memorandum of counsel for Mr Hingston filed 15 June 2012 indicating that Mr Hingston does not wish to take an active part in opposing Loktronic’s stay application, and abides the Court’s decision.
(d)Notice of opposition dated 8 June 2012 by Mr Bowyer and others (the appellants in CA260/2011).

Chronology

This is a broad chronology of what has occurred in these proceedings through the High Court and this Court:

Date	Event
1.4.11	Courtney J enters judgment against the appellants (defendants in the High Court) for a total (including interest) of $2.26 million. Appellants’ liability is joint and several.
13.4.11	Loktronic makes demand on Mr Diver for the judgment debt.
15.4.11	Mr Hingston and his Company apply for an order staying enforcement of the High Court judgment.
21.4.11	Loktronic files request for issue of a bankruptcy notice against Messrs Diver and Hingston.
28.4.11	1. All appellants lodge appeals. 2. Mr Diver applies to High Court for a stay of execution of the High Court judgment.
5.5.11	Loktronic serves bankruptcy notice on Mr Diver.
6.5.11	Loktronic serves bankruptcy notice on Mr…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2012] NZCA 272
Decision Date: 22 June 2012

CaseChat Overview and Summary

The Court of Appeal of New Zealand heard appeals from three separate proceedings involving Loktronic Industries Limited and various other parties. The primary dispute revolved around the enforcement of a High Court judgment against the appellants, which was subsequently set aside by the Court of Appeal on 4 April 2012. Loktronic sought a stay of execution and interim relief pending the determination of its application for leave to appeal to the Supreme Court.

The legal issues before the court were whether the Court of Appeal had jurisdiction to stay the execution of its judgment under Rule 30(2) of the Supreme Court Rules 2004, and if so, whether it should exercise that jurisdiction. Loktronic argued that without a stay, it would suffer significant and irreparable harm, primarily through the dismissal of its bankruptcy proceedings against one of the appellants. The appellants opposed the stay on the grounds that the Court of Appeal had no jurisdiction to stay its judgment, as it was non-executory, and that the balance of convenience favoured them. They also contended that the stay would allow Loktronic to proceed with its bankruptcy proceedings despite the judgment being quashed.

The Court of Appeal held that while Rule 30(2) allowed for the stay of a judgment pending an application for leave to appeal, it did not apply to non-executory parts of the judgment. However, the court found that it could grant interim relief under Rule 30(2)(b) to prevent the High Court from dismissing Loktronic's bankruptcy proceeding and releasing the bank guarantee provided by Assa Abloy. The court reasoned that the potential prejudice to Loktronic if its bankruptcy proceeding were dismissed outweighed the prejudice to the appellants, particularly given the likelihood of a relatively short delay before the Supreme Court would decide on the application for leave to appeal. The court granted the stay and interim relief accordingly.

Orders