Gough v Walsh
[2022] NZCA 395
•24 August 2022 at 10.00 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA213/2022 [2022] NZCA 395 |
| BETWEEN | BARRY JOSEPH GOUGH |
| AND | MICHAEL EDWARD WALSH |
| Court: | Miller and Collins JJ |
Counsel: | C Muston for Applicant |
Judgment: | 24 August 2022 at 10.00 am |
JUDGMENT OF THE COURT
AThe application for an extension of time to appeal is declined.
BThere will be no order for costs.
____________________________________________________________________
REASONS OF THE COURT
(Given by Collins J)
Introduction
Mr Gough applies under r 29A of the Court of Appeal (Civil) Rules 2005 (the Rules) for an extension of time in which to appeal subdivision orders made by the High Court on 29 November 2018.[1]
[1]Walsh v Gough [2018] NZHC 3104.
The subdivision orders concern a property near Kaeo in Northland (the property). Mr Gough co-owns the property with the respondent, Mr Walsh, as tenants in common. At the time of the High Court orders, it was thought the subdivision would result in Mr Gough and Mr Walsh each receiving 80 hectares.
The orders in issue were made following a formal proof hearing.[2]
[2]Pursuant to r 15.9 of the High Court Rules 2016.
The principles governing Mr Gough’s application to extend the time to appeal were explained by the Supreme Court in Almond v Read.[3] Ultimately, the interests of justice will dictate whether or not an application to extend time to appeal should be granted. Relevant considerations include:[4]
(a)the length of the delay;
(b)the reasons for the delay;
(c)the conduct of the parties, particularly of the applicant;
(d)any prejudice or hardship to the respondent or to others with a legitimate interest in the outcome; and
(e)the significance of the issues raised by the proposed appeal, both to the parties and more generally.
[3]Almond v Read [2017] NZSC 80, [2017] 1 NZLR 801 at [35]–[40].
[4]At [38].
The merits of the proposed appeal may be relevant but are not likely to be decisive in and of themselves. There will be instances in which the merits will be overwhelmed by other factors, such as the length of the delay and the prejudice to the respondent, and so will not require consideration.[5]
Narrative
[5]At [39].
Mr Gough and Mr Walsh purchased the property in 1984. They contributed equally to the purchase price and towards the vendor mortgage. In 1989 Mr Gough and Mr Walsh agreed they would split the property into equal halves, with Mr Walsh occupying the “front” half of the property (Lot 1) and Mr Gough the “back” half of the property (Lot 2).
Mr Gough and Mr Walsh developed their respective allotments. Mr Gough built a home, barns and other structures on Lot 2. Mr Walsh built barns and other structures on Lot 1.
In 2011 or 2012, Mr Gough and Mr Walsh agreed to subdivide the property in accordance with their earlier agreement so as to ensure they would each receive freehold properties each comprising approximately 80 ha. Mr Walsh applied for a resource consent for the proposed subdivision, which was granted on 29 March 2012.
In 2014, Mr Walsh instructed a surveyor to survey the property. Mr Gough however, changed his mind about the agreement. He formed the view Mr Walsh was getting the better half of the property. At about this time, Top Energy Ltd placed pylons through part of the property. Top Energy offered compensation for the pylon easements.
The relationship between Mr Gough and Mr Walsh continued to deteriorate. Mr Walsh ultimately applied to the High Court for a subdivision order under s 339 of the Property Law Act 2007. That application came before Palmer J in the High Court at Whangārei on 28 November 2018.
Mr Gough failed to take steps to defend the subdivision application, which was granted following a formal proof hearing. The orders subdividing the property were along the boundary lines previously agreed to by Mr Gough and Mr Walsh. The Judge directed that the costs of the subdivision be paid equally by the parties. Mr Gough was also ordered to pay costs to Mr Walsh on a scale 2B basis.[6]
[6]Walsh v Gough, above n 1, at [28].
It later transpired that the survey of the property carried out as a pre-requisite to subdivision revealed more land than had been anticipated. As a consequence, Mr Gough’s allotment increased to 85.5 ha and Mr Walsh’s allotment increased to 94.3 ha.
On 31 May 2019, Mr Walsh obtained a charging order over land owned by Mr Gough, situated adjacent to the co-owned land, to meet the High Court costs award and Mr Gough’s share of the subdivision costs. Mr Walsh then took steps to enforce the charging order.
On 19 June 2019, Mr Gough attempted to file an appeal against the subdivision judgment. His notice of appeal was rejected for filing because it was filed five months out of time. Mr Gough was told by court staff he needed to apply for an extension of time to appeal.
On 11 July 2019, Mr Walsh obtained an interim charging order over Mr Gough’s right or interest in a debt of $27,750, thought to be owed to Mr Gough by Top Energy. However, Top Energy successfully applied to set aside that interim charging order on the basis that it did not owe any money to Mr Gough.
On 25 July 2019, Mr Gough filed an application to stay enforcement of the charging orders which could lead to the sale of his land. Mr Walsh opposed the application on the basis the subdivision judgment had not been appealed and that no miscarriage of justice would occur if the charging order was executed.
The stay application was determined by Palmer J on 8 October 2019. The Judge said:
… a substantial miscarriage of justice is likely to result if the judgment is enforced by way of a sale order being issued before Mr Gough has had a reasonable opportunity to pursue his application for leave to appeal. If his application were to be successful, because the subdivision ordered is unjust as he submits, then sale of his other property in the meantime would not be just.
Palmer J also said that he would:
… stay enforcement of the judgment of 29 November 2018 … until such time as Mr Gough’s application for leave to appeal, and any resulting appeal, is determined. If Mr Gough does not pursue his application and appeal in a timely manner, then [he would] grant leave for Mr Walsh to apply to discharge this order after Friday 28 February 2020.
Mr Walsh, in due course, applied to discharge the stay. That application came before Duffy J who, in a judgment dated 14 April 2022 made the following orders by consent:
(a)Mr Gough is to assign all his interest in the Top Energy easement compensation to Mr Walsh by 9 May 2022; and
(b)Mr Gough is to file an application in the Court of Appeal for leave to appeal out of time by 9 May 2022.
Mr Gough assigned his interest in the Top Energy easement compensation to Mr Walsh on 4 May 2022 and filed his application under r 29A in this Court on 5 May 2022.
Grounds for extending time to appeal
Length of delay and the reasons for it
There has been a delay of three years and three months in Mr Gough seeking to appeal the High Court decision. Mr Gough says Mr Walsh was “clearly aware” that an appeal was always contemplated. He attributes the delay to:
(a)consultations with a lawyer and a valuer between October 2019 and August 2020;
(b)communications and attempts to settle matters with Mr Walsh; and
(c)delays caused by COVID-19.
We note that in his original notice of appeal Mr Gough said he had been suffering from “debilitating mental illness” in 2018. There is evidence to support this in a report from a psychiatrist. The psychiatrist says that it was “highly likely that [Mr Gough’s] capacity to address Court matters in 2018 was significantly impaired”. It has not been suggested Mr Gough was suffering any mental illness in the years after 2018 which might have affected his ability to pursue an appeal in a timely manner.
Conduct of the parties
Mr Gough rejects Mr Walsh’s contention that the opposition to the subdivision has changed significantly over time. Instead, Mr Gough says that his latest grounds of appeal have evolved in response to new information, namely, advice that he has received that the High Court orders breached s 340 of the Property Law Act. We will explain this ground of appeal below at [25].
Prejudice to Mr Walsh
Mr Gough accepts that he has not paid his share of the surveyor’s costs or his share of the rates. He says, however, he has an arrangement with the Far North District Council in relation to rates arrears and that he has paid the costs ordered by the High Court (totalling $20,244.19). He also refers to the assignment of his interest in the compensation payable by Top Energy to Mr Walsh as a factor that mitigates any prejudice suffered by Mr Walsh.
Significance of the issues raised by the proposed appeal and its merits
Mr Gough now relies on s 340(1) of the Property Law Act. He says that section precluded the making of the subdivision orders in this case because of a failure to comply with s 11 of the Resource Management Act 1991. Under s 11 of the Resource Management Act, land cannot be subdivided unless certain conditions have been met, including that the subdivision is shown on a survey plan.[7] Mr Gough argues that because there is no survey plan which had been approved by the Chief Surveyor,[8] Palmer J did not have jurisdiction to make the subdivision order.
[7]Section 11(1)(a).
[8]Pursuant to s 11(1)(a)(ii) of the Resource Management Act 1991.
Mr Gough appears to accept that there should be an order for equal division of the property, but he wishes to provide evidence and make submissions as to the appropriate boundaries and easements of the subdivision.
Opposition
Length of delay
Mr Walsh emphasises the delay of three years and three months and says that Mr Gough plainly understood the need to file an appeal in a timely manner.
Despite having been advised by this Court when his initial appeal was rejected for filing that he would need to apply for an extension of time to appeal, Mr Gough failed to make such an application until 5 May 2022. In addition, Palmer J expressly warned Mr Gough to pursue his appeal with “all due speed” when he granted a stay of enforcement of the subdivision judgment.
Conduct of the parties
Mr Walsh argues Mr Gough has constantly failed to act responsibly in the course of this dispute and that his grounds for opposing the subdivision have changed over time. Mr Walsh emphasises Mr Gough failed to take part in the original proceedings in 2018 and took no steps to appeal the judgment until the charging order was obtained.
Prejudice to Mr Walsh
Mr Walsh says that he has been trying to subdivide the land for more than 20 years and that he is in a weak financial position. He states that he has paid his half‑share of the subdivision costs and the rates for the property, but Mr Gough has not done likewise. Mr Walsh emphasises that he has been unable to complete the subdivision while the dispute lingers.
Significance of the issues raised by the proposed appeal and its merits
Mr Walsh argues:
(a)Palmer J did have jurisdiction to make the order because s 11(1)(a)(ii) of the Resource Management Act does not apply to the subdivision of a co-owned property.
(b)The application for extension of time to appeal is based on entirely new grounds.
(c)The subdivision is not contrary to the Resource Management Act because Mr Walsh has a resource consent to subdivide the property, as evidenced in an affidavit from a surveyor who confirms the survey plan complies with the resource consent.
Analysis
Two factors weigh most heavily against the granting of an extension of time for an appeal in this case:
(a)the delay of three years and three months in seeking an extension of time to appeal; and
(b)the prejudice which further delay is likely to cause Mr Walsh.
Mr Gough has not provided an adequate explanation for this extensive delay. He first attempted to file an appeal on 19 June 2019 and was told then that he would need to make an application under r 29A of the Rules. The delay in filing an application under that rule persisted even after Mr Gough obtained legal representation.
Mr Walsh is correct when he submits the survey plan did not need to be approved by the Chief Surveyor pursuant to s 11 of the Resource Management Act, because the survey was not conducted by or on behalf of a Minister of the Crown in respect of land outside the Land Transfer Act 2017 regime. It was sufficient for the survey plan to be deposited under pt 10 of the Resource Management Act by the Registrar-General of Land.
While the proposed grounds of appeal attempt to identify errors of law, in reality Mr Gough’s complaint seems to be that the High Court judgment was entered by formal proof and in circumstances where he did not provide evidence and make submissions as to the appropriate boundaries and easements for the subdivision.
We are satisfied that the application under r 29A must be declined.
As we have signalled, the merits of the proposed appeal are weak. This in itself is not a decisive factor. What is decisive is the extensive delay that has occurred because of Mr Gough’s failure to prosecute his appeal and the considerable prejudice that will be suffered by Mr Walsh if this matter is allowed to linger.
Result
The application for an extension of time to appeal is declined.
We are advised that Mr Gough and Mr Walsh are both now in receipt of legal aid. In these circumstances there will be no order for costs.
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