Edel Metals Group Ltd v Geier Ltd - [2017] NZCA 359

IN THE COURT OF APPEAL OF NEW ZEALAND

CA136/2017
[2017] NZCA 359

BETWEEN

EDEL METALS GROUP LIMITED
First Applicant

JOHN ANDREW SORENSEN
Second Applicant

AND

GEIER LIMITED
First Respondent

MICHAEL JOHN JACOMB, TRENA KATHLEEN JACOMB AND PETER REGINALD RICHARDSON AS TRUSTEES OF THE GENSET TRUST
Second Respondents

Hearing:	10 July 2017
Court:	Winkelmann, Brown and Clifford JJ
Counsel:	D H McLellan QC, KFT Stolberger and J C Adams for First and Second Applicants No appearance for First Respondent N W Ingram QC and C F Foote for Second Respondents J Heard for Mr Gibson as Interested Party
Judgment:	22 August 2017 at 1 pm

JUDGMENT OF THE COURT

AThe application for an extension of time to appeal is granted.
BThe second respondents must pay the applicants one set of costs for a standard application on a band A basis and usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Clifford J)

Introduction

The applicants, Edel Metals Group Ltd and John Sorensen, apply for an extension of time within which to appeal against a decision of Fogarty J in the High Court given on 22 February 2017.[1] The second respondents, Michael Jacomb, Trena Jacomb and Peter Richardson as trustees of the Genset Trust, oppose. The first respondent, Geier Ltd, was insolvent by the time of the hearing before Fogarty J and has taken no part in the proceedings since then.
[1]Edel Metals Group Ltd v Geier Ltd [2017] NZHC 225.
After initial submissions were filed the Registrar was directed to bring the decision of the Supreme Court in Almond v Read to the attention of the parties.[2] The Genset trustees then filed further submissions, addressing the application in light of that decision. Edel Metals and Mr Sorensen did not. They did, however, file a memorandum attaching a letter their solicitors had written to the Genset trustees’ solicitors, pointing to that decision as being determinative, in their favour, of this application. As will become apparent, we too consider that decision is determinative of this application, notwithstanding Mr Ingram QC’s submissions on behalf of the Genset trustees to the contrary.

The litigation to date

[2]Almond v Read [2017] NZSC 80 [Almond (SC)].

Fogarty J’s decision came, as the Judge put it, at the end of much litigation pertaining to a former director of Edel Metals, Kenneth Wikeley. For the purpose of this application, that history can be summarised briefly.
In 2008 Mr Wikeley promoted a Chilean mineral processing operation to the Genset trustees. Edel Metals was formed to undertake the venture. Of its 100 million shares, 76.25 million were issued to Geier, as nominee for Mr Wikeley. The remaining 23.75 million were issued to the Genset trustees. No capital was called at the time of the issue of those shares. Sometime later the Genset trustees lent Edel Metals USD 1,500,060. Mr Wikeley personally guaranteed half of that loan.
The mineral venture failed. Edel Metals was struck off for failure to file an annual report. On 10 April 2013 the…

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: [2017] NZCA 359
Decision Date: 22 August 2017 at 1 pm

CaseChat Overview and Summary

Edel Metals Group Ltd and John Sorensen applied for an extension of time within which to appeal against a decision of the High Court. The application was opposed by the trustees of the Genset Trust, who were the respondents in the High Court. The first respondent, Geier Ltd, had been insolvent since the proceedings began and had taken no part in the proceedings since then. The applicants sought an extension of time within which to appeal on the basis that the notice of appeal had not been served on the Genset trustees until seven days outside the appeal period. This was due to an error by the applicants’ solicitors, who had expected the High Court to return an endorsed copy of the notice of appeal, so that the trustees could be served.

The applicants sought an extension of time within which to appeal under rule 29A of the Court of Appeal (Civil) Rules. The Court of Appeal had previously held that this Court should not extend time where it was satisfied that the appeal was hopeless and that no purpose would be served by granting an indulgence. In Almond v Read the Supreme Court reviewed the background to rule 29A and the way in which it had been interpreted and applied by the Court of Appeal over time. The Supreme Court emphasised the importance of rights of appeal and, hence, the hesitation a court should have before summarily dismissing an appeal by declining an extension of time. The Court of Appeal considered the circumstances of the present application in light of the principles set out in Almond v Read. It found that the applicants had filed their notice of appeal within time but had not served it on the Genset trustees within the appeal period due to a clerical error by their solicitors. The error was discovered promptly and the applicants took steps to serve the notice of appeal as soon as they were aware that they were out of time. The Genset trustees had not identified any prejudice arising from the delay, other than the fact of the appeal itself. The Court of Appeal found that the circumstances of the present application were ones which came within the Almond v Read type of application and granted the application for an extension of time to appeal.

The Court of Appeal ordered that the second respondents must pay the applicants one set of costs for a standard application on a band A basis and usual disbursements. It declined the applicants’ application for increased or indemnity costs, given that this was the first occasion on which the Court of Appeal had considered an application for extension of time in light of the Almond v Read decision.

Orders