Dominion Finance Group Limited (in rec and in liq) v Tauber HC Auckland CIV-2009-404-6248

[2011] NZHC 1126

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2009-404-6248

BETWEEN  DOMINION FINANCE GROUP LIMITED (IN RECEIVERSHIP AND IN LIQUIDATION)

Plaintiff

ANDDAVID ANDREW TAUBER Defendant

Hearing:         15 September 2011

Counsel:         C Mansell for the Plaintiff

D Grove for the Defendant

Judgment:      16 September 2011

RESERVED JUDGMENT OF ELLIS J

This judgment was delivered by me on 16 September 2011 at 3 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:      Martelli McKegg, PO Box 5745, Auckland 1141

Vincent Carmen, PO Box 26032, Auckland 1344

Counsel:       D Grove, PO Box 130, Auckland 1140

DOMINION FINANCE GROUP LTD (in rec and in liq) V TAUBER HC AK CIV-2009-404-6248 16 September

2011

[1]      Mr Tauber applies for a stay of execution of my judgment dated 31 May 2011 pending determination of his appeal from that judgment to the Court of Appeal.  He filed a notice of appeal in the Court of Appeal on 22 July 2011.  On 17 August 2011, Dominion Finance Group Limited (Dominion Finance) served a bankruptcy notice on him.  On 31 August 2011, Mr Tauber committed an act of bankruptcy by failing to comply with that notice.

[2]      Jurisdiction to stay is governed by r 12 of the Court of Appeal (Civil) Rules

2005.  It is trite that when determining whether or not to grant a stay, the Court must weigh the balance between a successful litigant’s right to the fruits of its judgment and the need to preserve the status quo in the event that the appeal is successful: Keung v GBR Investment Ltd.[1]

[1] Keung v GBR Investment Ltd [2010] NZCA at [11].

[3]      It is accepted (and agreed by the parties) that in undertaking that balancing exercise, the Court may look at the following factors:

(a)       Whether the appeal would be rendered nugatory if the stay is not granted;

(b)The bona fides of the applicant in terms of the prosecution of the appeal;

(c)       Whether  the  successful  party  would  be  adversely  affected  by  the granting of the say;

(d)      The effect, if any, a stay would have on third parties;

(e)       The novelty and importance of the question being appealed;

(f)       The  public  interest  in  the  appeal  and  the  overall  balance  of convenience; and

(g)      The strength of the appeal.

[4]      Dominion Finance opposes the grant of a stay.

[5]      Mr  Tauber  contends  that  the  refusal  of  a  stay  would  render  his  appeal nugatory because, absent a stay, he will in all probability be adjudicated bankrupt and it is unlikely that the Official-Assignee would take steps to pursue the appeal. Dominion Finance, however, contend that the appeal would not necessarily be rendered nugatory because the Official-Assignee is capable of pursuing the appeal if he believes that it is worthwhile to do so.  Moreover, Mr Tauber may also ask the Official-Assignee to allow him to pursue the appeal himself because it underlies the

order of adjudication: Wright v Health Distribution Ltd.[2]

[2] Wright v Health Distribution Ltd HC Hamilton CIV-2010-419-121, 4 November 2010 at [16].

[6]      In  terms  of  the  bona  fides  of  Mr  Tauber  in  the  pursuit  of  his  appeal, Dominion Finance point to the fact that the notice of appeal was filed only one day short of the time limit for doing so.  Ms Mansell also noted that, as yet no case on appeal has been filed nor a hearing date applied for.  Mr Grove, however, said that those matters can and will quickly be attended to and indeed that Mr Tauber is more than willing to have the Court impose “unless” orders in those respects.

[7]      The merits of the appeal (insofar as they can fairly be assessed) are also relevant in this respect.  Mr Grove candidly admitted that the appeal was a “difficult” one  as  it  principally involved  challenges  to  my  factual  findings.    However,  by reference to the Supreme Court decision in Austin Nichols & Co Inc v Stichting

Lodestar,[3]   he  quite  correctly  submitted  that  factual  findings  are  not  necessarily

[3] Austin Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.

immune from appeal.

[8]      While not placing any great weight on this factor (the authorities indicating that it will not generally be appropriate to do so), my own view is that the appeal is, indeed, a difficult one.  Moreover as a result of my exposure to the evidence during the trial and certain of the factual findings I have made, I also have some cause to consider that Mr Tauber may, indeed, merely be seeking to delay the inevitable by

pursuing the appeal.

[9]      The issue of potential prejudice to Dominion Finance arising from the grant of a stay is slightly more nuanced.  Ordinarily there would be no doubt that prejudice would arise from the fact that a stay would prevent it, in the interim, from enjoying the fruits of its judgment.  However, as I have already noted, it seems that Mr Tauber is  unable  to  pay  the  judgment  debt  and  indeed  it  is  for  that  reason  that  his adjudication is pending.   The position appears therefore to be that there are no “fruits” for Dominion Finance to enjoy.

[10]     Ms Mansell nonetheless submitted that Dominion Finance ought to still be able to have the benefit of the Official-Assignee “shaking the tree” at an earlier rather  than  a  later  stage.    Plainly,  this  is  one  step  removed  from  what  might ordinarily be regarded as enjoying the “fruits” of my judgment.  But while Mr Grove submitted that there is nothing for the Official-Assignee to find (and therefore no possible benefit to Dominion Finance in his involvement sooner rather than later), I am not so sure.  It seems to me that there is potentially some prejudice to Dominion Finance if the possibility of scrutiny of Mr Tauber’s affairs by the Official Assignee is deferred pending the appeal.

[11]     In terms of the other factors to which I have referred above, it can merely be noted that:

(a)      There are no third parties which would be affected by the stay; (b)      There will be no public interest in the appeal proceedings; and (c)      No novel questions are raised by the appeal.

[12]     In the end, and balancing the factors to which I have referred, I am not persuaded that a stay is warranted.  In particular, I do not accept that Mr Tauber’s appeal will be rendered nugatory if a stay is granted.  And whether or not the appeal is ultimately pursued by the Official-Assignee or, with his consent, by Mr Tauber, the Official-Assignee’s involvement may address the other reservations about the appeal that I have expressed above.   And finally,  I am prepared to accept that, in the circumstances  of  this  case,  there  may  be  benefit  to  Dominion  Finance  in  the

involvement of the Official-Assignee now, rather than in the future (following the hearing of the appeal).

[13]     Accordingly, Mr Tauber’s application for stay is declined.  Dominion Finance

is entitled to costs on a 2B basis.

Rebecca Ellis J