ELLIOT SGARGETTA AND ASB BANK LIMITED ANDREW JOHN HAWKES and VIVIAN JUDITH FATUPAITO s
[2024] NZHC 3516
•22 November 2024
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2022-404-000198
[2024] NZHC 3516
BETWEEN ELLIOT SGARGETTA
Plaintiff
AND
ASB BANK LIMITED
First Defendant
ANDREW JOHN HAWKES and VIVIAN JUDITH FATUPAITO
Second Defendants
Hearing: On the papers Appearances:
Plaintiff in Person
A D Marsh for the First-Named Second Defendant
Judgment:
22 November 2024
COSTS JUDGMENT OF GARDINER J
This judgment was delivered by me on 22 November 2024 at 4.00 p.m. pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date.......................................
Solicitors:
Minter Ellison, Auckland A D Marsh, Christchurch Copy to: E Sgargetta
SGARGETTA v ASB BANK LTD [2024] NZHC 3516 [22 November 2024]
Introduction
[1] On 31 July 2024, I dismissed Elliot Sgargetta’s application for an order extending the time for service of the notice of proceeding and statement of claim on the first-named, second defendant, Andrew Hawkes.1
[2]Mr Sgargetta has applied for leave from this Court to appeal that decision.
[3] Mr Sgargetta also applies for a stay of enforcement of the judgment under r 17.29 of the High Court Rules 2016.
[4] Mr Hawkes opposes the application for leave to appeal on the grounds that Mr Sgargetta’s arguments are not capable of bona fide or serious argument; the issue does not concern a decision of significance to the parties or a question of law of sufficient importance to justify the cost and delay of an appeal; and the interests of justice are not served by granting leave to appeal.
[5] Mr Hawkes opposes the application for a stay on the grounds that the application for leave to appeal is unmeritorious.
Judgment subject to proposed appeal
[6] My judgment determined whether to make an order extending the period for service of the statement of claim and notice of proceeding by six months under r 5.73(2). The Court may order an extension if satisfied that reasonable efforts have been made to effect service on the defendant, “or for other good reason”. Whether an extension should be granted is a discretionary decision, with the Court entitled to have regard to the balance of hardship between the plaintiff and defendant.2
[7] I decided not to extend the period for service of the statement of claim and notice of proceeding because I did not consider that Mr Sgargetta had made reasonable efforts to effect personal service of the documents on Mr Hawkes as soon as practicable after filing the documents and within 12 months. Moreover, I was not
1 Sgargetta v ASB Bank Ltd [2024] NZHC 2109 [Judgment].
2 Kleinwort Benson Ltd v Barbrak Ltd [1987] AC 597 (HL) at 623 as cited in Hibbs v Towle
CA60/87, 21 July 1988.
satisfied that another good reason existed for granting an extension. I considered it relevant that granting the application would deprive Mr Hawkes of a limitation defence that would otherwise be available to him.3 I also considered it relevant that the Court of Appeal had found that there was no merit to Mr Sgargetta’s allegations about the Receivers.4
Submissions in support of proposed appeal
[8]In his notice of appeal,5 Mr Sgargetta alleges that:
(a)I erred by not directing him throughout 2023 to apply for an extension of time and instead directed him to effect personal service on Mr Hawkes.
(b)I erred by not finding that Mr Hawkes was deemed to have been served in January 2023 based on his evidence that he had been informed about the proceedings by the first defendant.
(c)I erred by not giving enough weight to a 7 February 2023 email from a registrar to Mr Sgargetta, in which the registrar said that service of the proceedings by post was adequate.
[9] In his memorandum in support of the application for leave and for a stay, Mr Sgargetta repeats the arguments he made in his application for an extension of time, focusing again on the 7 February 2023 email from the registrar. He says that fresh and new experts’ reports have been obtained in relation to the valuation and misconduct of the Receivers, which will be submitted and relied upon in the claim against Mr Hawkes.
3 Judgment at [44].
4 Judgment at [45].
5 Memorandum of Appeal dated 26 August 2024.
Legal principles
[10] In Greendrake v District Court of New Zealand,6 the Court of Appeal approved the discussion of the considerations relevant to an application for leave to appeal as identified in Finewood Upholstery Ltd v Vaughan.7 In particular, the leave requirement is a filtering mechanism and:
(a)a high threshold exists;
(b)the applicant must identify an arguable error of law or fact;
(c)the alleged error should be of general or public importance warranting determination or otherwise of sufficient importance to the applicant to outweigh the lack of general or precedential value;
(d)the circumstances must warrant incurring further delay; and
(e)the ultimate question is whether the interests of justice were served by granting leave.
[11] The judgment Mr Sgargetta wants to appeal involved a discretionary decision. The courts have established relatively strict criteria for a successful appeal against a decision made in the exercise of a discretion. These criteria were set out in May v May as follows:8
No authority requires to be stated for the proposition that in considering an appeal of this kind an appellant must show that the Judge acted on a wrong principle; or that he failed to take into account some relevant matter or that he took account of some irrelevant matter or that he was plainly wrong.
[12] In Blackstone v Blackstone, the Court of Appeal confirmed that the principles from May v May continue to apply to appeals against discretionary decisions.9
6 Greendrake v District Court of New Zealand [2020] NZCA 122.
7 Finewood Upholstery Ltd v Vaughan [2017] NZHC 1679.
8 May v May (1982) 1 NZFLR 165 (CA) at 169–170.
9 Blackstone v Blackstone [2008] NZCA 312, (2008) 19 PRNZ 40 at [8].
In Kacem v Bashir (where the relevant decision was not deemed to be discretionary in nature), the Supreme Court also confirmed these principles:10
[32] … the important point arising from Austin, Nichols is that those exercising general rights of appeal are entitled to judgment in accordance with the opinion of the appellate court, even where that opinion involves an assessment of fact and degree and entails a value judgment.11 In this context a general appeal is to be distinguished from an appeal against a decision made in the exercise of a discretion. In that kind of case the criteria for a successful appeal are stricter: (1) error of law or principle; (2) taking account of irrelevant considerations; (3) failing to take account of a relevant consideration; or (4) the decision is plainly wrong.12…
Analysis
[13] In terms of the considerations outlined in [10], plainly the judgment is of substantial importance to Mr Sgargetta because its practical effect is to bring his claim against Mr Hawkes to an end.
[14] The application turns on the considerations described at [10(b)] and (e) — whether Mr Sgargetta has identified an arguable error of law or fact in the decision; and whether the interests of justice are served by granting leave.
[15] I do not consider that Mr Sgargetta has identified any arguable error of law or principle; or established that arguably I took into account an irrelevant consideration or failed to take account a relevant consideration; or shown that the decision is arguably plainly wrong.
[16] In terms of the complaint about my directions throughout 2023, I compensated for the fact that the Court did not advise Mr Sgargetta to apply for an extension of time earlier (despite it not being the Court’s role to advise Mr Sgargetta) by considering the application as if it had been made in April 2023, when the matter first came before the Court.13
10 Kacem v Bashir [2010] NZSC 112, [2011] 2 NZLR 1 (emphasis added).
11 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 [16].
12 See May v May (1982) 1 NZFLR 165 (CA) at 170; and Blackstone v Blackstone [2008] NZCA 312, (2009) 19 PRNZ 40 at [8].
13 Judgment at [30]–[31].
[17] The argument that I erred by not deeming Mr Hawkes served with the proceedings in January 2023 is not tenable. In these circumstances, the High Court Rules required personal service of proceedings on the defendant unless orders for substituted service were made.14 The fact that a defendant may be generally aware that they have been named a party to proceedings does not provide a basis for deeming them served with the proceedings.
[18] In terms of the email from the registrar, I considered the email but ultimately was not persuaded that Mr Sgargetta would have served the proceeding by personal service within 12 months of filing even if the Registrar had responded differently.15 Mr Sgargetta’s complaint is that I did not give this email enough weight. A complaint about weight does not provide a basis for an appeal of a discretionary decision unless the weight given to the matter means that the decision is plainly wrong.
[19] In terms of the interests of justice, weighing in favour of granting leave is that the effect of the judgment is that Mr Sgargetta’s claim is at an end. However, weighing against leave is my assessment that Mr Sgargetta’s appeal, and the underlying claim against Mr Hawkes, is without merit. Granting leave to appeal the judgment will cause Mr Hawkes to incur further expense defending an appeal in relation to events that took place some eight years ago, when the Court of Appeal has already determined that no tenable claim exists.16
Result
[20]Mr Sgargetta’s application for leave to appeal the judgment is dismissed.
[21] Consequently, the application for a stay of enforcement of the judgment is dismissed.
[22] Mr Sgargetta is ordered to pay Mr Hawkes’ costs on a 2A basis for the notice of opposition and memoranda of submissions, and disbursements.
14 Judgment at [27]–[28].
15 Judgment at [35]–[39].
16 Judgment at [45].
Gardiner J
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