Forsyth Barr Limited v Houghton and Jones

[2009] NZCA 223

IN THE COURT OF APPEAL OF NEW ZEALAND

CA30/2009
[2009] NZCA 223

BETWEENFORSYTH BARR LTD

Applicant

ANDERIC MESERVE HOUGHTON

First Respondent

ANDDARRYL ALEXANDER JONES

Second Respondent

Hearing:18 May 2009

Court:Glazebrook, O'Regan and Arnold JJ

Counsel:A C Challis for Applicant

E M Houghton in person

Judgment:2 June 2009 at 3 pm

JUDGMENT OF THE COURT

AAn extension of time for the bringing of an appeal is granted on the condition that the applicant file a notice of appeal and pay the applicable fees by 19 June 2009.

B        The applicant must pay usual disbursements to the first respondent.

REASONS OF THE COURT

(Given by O’Regan J)

Introduction

[1]       Forsyth Barr Ltd is the fifth defendant in representative proceedings brought by the respondents, Messrs Houghton and Jones, on behalf of a large number of shareholders of Feltex Carpets Ltd.  On 7 October 2008, French J delivered a judgment dealing with various interlocutory matters: Houghton v Saunders HC CHCH CIV-2008-409-348.  All of the defendants appealed that judgment within time, except for Forsyth Barr, which now seeks an extension of time in which to file its notice of appeal.

Background

[2]       The High Court proceedings concern a share prospectus issued by Feltex prior to its public float in 2004, which the respondents claim contained a number of misleading statements.  They seek damages, under four causes of action, against the directors of Feltex and a number of entities associated with the share float.  Forsyth Barr, along with the fourth defendants, are named as the organising participants and joint lead managers of the share issue.

[3]       French J’s judgment of 7 October dealt with five interlocutory applications brought by the various defendants.

[4]       The defendants had some, but not complete, success.

[5]       The time for appealing French J’s judgment expired on 5 November 2008. Forsyth Barr was the only defendant yet to file its appeal by this time.  Ms Challis, counsel for Forsyth Barr, had unsuccessfully attempted to obtain instructions regarding a potential appeal prior to this time.  By email dated 10 November, Ms Challis informed counsel for the respondents that she anticipated filing an appeal once instructions were received.

[6]       It was not until 1 December 2008 that Forsyth Barr confirmed its desire to pursue an appeal.  Those instructions were approximately four weeks out of time.

[7]       Certain aspects of the High Court judgment required leave to be obtained in order to appeal.  On 3 December, Forsyth Barr was granted an extension of time within which to file an application seeking the requisite leave.  That application was filed on 12 December.  It was unopposed and leave was granted by French J on 16 December.

[8]       Ms Challis then wrote to the respondents’ counsel on 16 December seeking consent to an extension of time in which to file Forsyth Barr’s appeal with this Court.  The respondents did not reply.

Submissions

[9]       Ms Challis submitted that this Court should grant an extension of time to file Forsyth Barr’s notice of appeal.  She advanced three main arguments in support of her position:

(a)The respondents are already facing appeals on the same issues from the other defendants, and Forsyth Barr’s appeal does not raise any new issues;

(b)The High Court gave Forsyth Barr leave to bring an appeal on certain issues, an application that was not opposed by the respondents;

(c)The short delay in Forsyth Barr filing its notice of appeal will not delay the progression of the appeal.

[10]     Mr Houghton, the first respondent, appeared in person.  He pointed out that while Ms Challis’ submissions explain her delay in filing the appeal, they do not explain why Forsyth Barr failed to ensure its appeal was filed on time.  In the absence of an explanation for the delay, Mr Houghton submitted that there was no good reason to grant Forsyth Barr an extension of time.  In addition, he submitted that permitting Forsyth Barr to file its appeal would cause prejudice to the respondents, in that it would require additional time and resources, to oppose the issues raised on appeal.  He also expressed concern that the respondents would be exposed to the risk of a greater adverse costs order.

Decision

[11]     The failure by Forsyth Barr to instruct its lawyer to bring the appeal does not make it a particularly compelling candidate for leave.  But, on balance, we consider that leave should be granted.  Our reasons are:

(a)This is an early stage of what may be major litigation and the orderly conduct of the litigation will be enhanced if all parties are represented on the appeal;

(b)Adding Forsyth Barr as an additional appellant, with similar interests to those of other appellants, will not be likely to materially extend the time for the hearing of the appeal;

(c)No delay in the hearing of the appeal will be caused;

(d)No other prejudice to the respondents arises;

(e)The application was made within a reasonably short time after the deadline for the filing of the appeal and the likelihood of an appeal was signalled within a few days of that deadline elapsing;

(f)The respondents did not oppose leave to appeal being granted (out of time) by the High Court and their then lawyers initially indicated that consent would be forthcoming.

[12]     The extension is granted on condition that Forsyth Barr file and serve its notice of appeal and pay the applicable fees by 19 June 2009.

Costs

[13]     Forsyth Barr have been granted an indulgence and, had the respondents been represented by counsel, we would have awarded costs in favour of the respondents.  As Mr Houghton appeared in person, there is no entitlement to costs, but we order that Forsyth Barr reimburse Mr Houghton for his usual disbursements.  We also signal that, if the addition of Forsyth Barr as an appellant leads to a material increase in the hearing time for the appeal, Forsyth Barr should pay any costs thereby incurred by the respondents and, if it is successful at the appeal hearing, Forsyth Barr should not be entitled to its costs on the appeal.

[14]     We thank Mr Houghton for his courtesy in attending the hearing.

Solicitors:
McElroys, Auckland for Applicant