Gatfield v Pearson
[2024] NZHC 2074
•29 July 2024
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2023-404-2969
[2024] NZHC 2074
UNDER Parts 5 and 18 of the High Court Rules 2016, the Trusts Act 2019 and the inherent
jurisdiction of the Court
IN THE MATTER
of an application for review under section 126 of the Trusts Act 2019; claims for reaches of trustee duties; and removal of trustee
BETWEEN
GILLIAN JANE GATFIELD
First Plaintiff
EMMA JACQUELINE PEARSON
Second Plaintiff
AND
ANNE ELIZABETH HINTON
Defendant
Hearing: 29 July 2024
(Telephone Conference)
Counsel:
M A Jeffries for First and Second Plaintiffs A S Butler KC for Defendant
R Lange for Interested Parties (J M Allen and R M Gatfield)
Judgment:
29 July 2024
JUDGMENT OF ASSOCIATE JUDGE LESTER
(Application to stay enforcement)
This judgment was delivered by me on 29 July 2024 at 4:00 pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar
GATFIELD v HINTON [2024] NZHC 2074 [29 July 2024]
[1] On 26 June 2024, orders were made as sought by the defendant requiring this proceeding to be referred to mediation and if mediation was unsuccessful, then for the parties to attend arbitration.1
[2] The mediation is scheduled for Thursday 1 August 2024. The normal arrangements for mediation, including the hiring of a neutral venue, have been completed.
[3] On 22 July 2024, the plaintiffs filed an application seeking leave to appeal the 26 June 2024 decision, a stay of enforcement, and requesting a copy of the transcript be prepared.
[4] This judgment deals with the stay application given the order made on 26 June 2024 and varied by a Minute of 10 July 2024, required the mediation to be completed by 1 August 2024.
[5] Mr Jeffries, counsel for the plaintiffs, in his application of 22 July 2024, sets out a comprehensive summary (running to some 16 pages) of the grounds of appeal that are relied on and the asserted basis for leave to appeal.
[6] Mr Butler KC, counsel for the defendant, filed a notice of opposition dated 25 July 2024. Counsel for the interested parties filed a brief memorandum on 26 July 2024 which supported the defendant’s opposition to the stay insofar as it relates to mediation. Both the defendant and the interested parties seek to retain the mediation date and have the balance of the orders in respect of the stay for arbitration, leave to appeal, and the prepared transcript, deferred until after mediation.
[7] While Mr Jeffries’ application does not refer to the jurisdiction relied on to seek a stay, r 12 of the Court of Appeal (Civil) Rules 2005 provides that pending determination of an application for leave to appeal, the court appealed from (or the Court of Appeal) may order a stay. The stay may relate to whole or part of the decision.2
1 Gatfield v Hinton [2024] NZHC 1712.
2 Court of Appeal (Civil) Rules 2005, r 12(4)(a).
[8] The authors of McGechan on Procedure discuss the general approach to an application for a stay.3 The Court must balance the competing rights of the party who obtained judgment against the need to preserve the appellant’s position against the event of the appeal succeeding.4
[9]The factors listed in McGechan at CR12.01(1)(c) include:
(i)whether the appeal may be rendered nugatory by the lack of a stay;
(ii)the bona fides of the applicant as to the prosecution of the appeal;
(iii)whether the successful party will be injuriously affected by the stay;
(iv)the effect on third parties;
(v)the novelty and importance of questions involved;
(vi)the public interest in the proceeding;
(vii)the overall balance of convenience; and
(viii)the apparent strength of the appeal.
[10] A telephone conference was held on the morning of Monday 29 July 2024, in relation to the stay application. Given the need to inform the parties of the outcome of the application, I said the decision would be released later on 29 July 2024, but given that short timeframe the reasons may not be as comprehensive as they would be if more time had been available.
The effect of the stay being declined
[11] Mr Jeffries submitted that if the stay was declined, it would render the appeal nugatory in respect of the mediation issue. That must be correct because the mediation
3 Jessica Gorman and others McGechan on Procedure (online ed, Thomson Reuters) at [CR12.01].
4 Jessica Gorman and others, above n 3, at [CR12.01(1)(a)] citing Duncan v Osborne Buildings Ltd
(1992) 6 PRNZ 85 (CA) at 87.
will have been completed before the application for leave to appeal could be considered. However, what is the impact on the plaintiffs’ rights if the stay is declined?
[12] The plaintiffs do not want to attend mediation but have been ordered to do so. The defendant and interested parties are keen for the matter to go to arbitration. Mr Lange, counsel for the interested parties, stated during the telephone conference that the interested parties found the litigation stressful and were anxious to have the prospect of early resolution through mediation.
[13] As set out in the judgment proposed to be appealed, on the present state of the pleadings and parties, the plaintiffs cannot achieve the outcome they wish through litigation.5
[14] Accordingly, the plaintiffs who are reluctant to attend mediation and who cannot achieve their desired outcome through litigation, are faced with a defendant and interested parties keen to attend mediation which can only be interpreted as keen to explore resolution.
[15] If the stay is declined, that will have no substantive impact on the plaintiffs’ rights. They will be required to attend a mediation they do not want to attend and may find it an uncomfortable experience, but their substantive rights can only be affected if they agree to a settlement.
[16] The long term prospects of settlement are not going to be helped by a potentially unsuccessful application for leave to appeal in this Court, and a further potentially unsuccessful leave to appeal in the Court of Appeal or, if leave is granted, further litigation in the Court of Appeal.
[17] I accept Mr Butler’s submission that there is no genuine prejudice to the plaintiffs in attending mediation. If settlement is reached, well and good. If settlement is not reached, then at least the parties will have had an opportunity to explore the issues in this proceeding with the benefit of input from the mediator, a senior King’s
5 Gatfield v Hinton, above n 1, at [64] and [76].
Counsel, who will help them test the assumptions that underlie their present positions. This is a case that calls for a dispassionate assessment of the issues.
[18] Accordingly, I do not accept this is a situation where the idea of appeal rights being rendered nugatory is truly applicable. That is because the plaintiffs’ substantive rights will not be adversely affected unless they agree to a settlement at mediation. The fact the plaintiffs will have to attend a mediation they do not wish to attend, in my view, does not outweigh the principle that the defendant is entitled to the benefit of her judgment or the reality there is prejudice to the defendant and the third parties in the stay being ordered.
Prejudice
[19] Mr Jeffries submitted that there was no prejudice to other parties, that is neither the defendant nor the third parties would be injuriously affected by the stay, as all that would happen pending the determination of the leave to appeal application, and then possibly the appeal, is that the status quo would be maintained. That is true, but that does not mean that there is no prejudice to the defendant and interested parties.
[20] This is essentially family litigation. All litigation is stressful; family litigation all the more so. The proceeding will be significantly delayed and if the plaintiffs obtain leave to appeal. If the appeal is successful, then the plaintiffs’ proceeding must be amended and parties added before it can proceed. The status quo is poles apart from a satisfactory state of affairs given the proceeding as it stands cannot deliver to the plaintiffs the relief they seek.
[21] Accordingly, that the defendant will be injuriously affected by the stay, the effect on third parties (the Interested Parties) and the overall balance of convenience, in my view, all stand against a stay when all the plaintiffs are required to do is attend a mediation with parties who are willing to participate in settlement discussions in a constructive way. It was that reality that underpinned the Court’s order that this matter go to mediation.
[22] I see no public interest in this proceeding. The fact the defendant is a judge does not mean that there is a public interest in the proceeding. As I have said, this is
essentially a family dispute concerning the estate of the father of the first plaintiff, the defendant and the interested parties.
[23] I do not doubt the bona fides of the plaintiffs to prosecute the appeal, but there is some merit in Mr Butler’s point that, despite Mr Jeffries advising on 1 July 2024 that he had been instructed to prepare documents to seek leave to appeal (which in context must have contemplated an application for a stay), the stay application was not made until 22 July 2024. That necessarily constrained the timeframe in which the application could be considered.
Novelty and importance of questions involved/apparent strength of appeal
[24] I preface my brief observations on these points by recognising that given the application for a stay was dealt with at a telephone conference, without written submissions, I consider I can only make preliminary comments about these factors. The merits of the proposed appeal will be to the fore in the application for leave to appeal.
[25] All I say at this point is that the plaintiffs do not address why the factors I identified as favouring a referral to mediation did not support that conclusion.
[26]The claims in the application that:
m. Safety trivialised: The personal safety of and risks raised by the plaintiffs were not evaluated by the Court…
n. Personal harm: The efficacy of ordering mandatory mediation where: the orders against the plaintiffs may create personal harm and safety risks by forcing the plaintiffs to engage in private settings with the defendant Judge and interested parties… [was not considered]
are, in my view, without merit.
[27] I repeat, all litigation is stressful. Attending a one-day mediation outside of a court at a neutral venue where the parties advocating for mediation are content to be in a separate room, if necessary, and to be guided by the mediator as to the conduct of the mediation, means mediation will be less stressful than a multi-day court hearing. Mediation, if successful, will avoid a possibly protracted appeal process in relation to
the 26 June 2024 judgment and, at the very least, further interlocutory processes in the substantive proceeding in respect of pleadings and parties.
[28] I do not make further comment in respect of the grounds of appeal given; as I have said, they will be matters for the application for leave to appeal.
[29] I say to the parties mediation will take place in a safe environment. At mediation, an outcome not yet contemplated may be reached. The parties shape an outcome they can accept. Any outcome can be made as enforceable as a court order by way of a Tomlin Order, if requested.
Decision
[30]The application for stay in respect of the mediation on 1 August 2024 is
declined. The mediation is to proceed as ordered.
[31] The balance of the plaintiffs’ application, that is for the stay in respect of the order for arbitration in the event mediation is unsuccessful, for leave to appeal and for a prepared transcript, is adjourned. Counsel are to advise the outcome of the mediation.
Costs
[32]Costs are reserved.
Associate Judge Lester
Solicitors:
Simpson Grierson (for Defendant and Interested Parties)
Copy to counsel:
M A Jeffries Solicitors, Auckland (for First and Second Plaintiffs) A S Butler KC, Barrister, Auckland (for Defendant)
H Waalkens KC, Barrister, Auckland (for Interested Parties)