Green v Gillette
[2021] NZCA 323
•19 July 2021 at 11.00 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA278/2019 [2021] NZCA 323 |
| BETWEEN | THOMAS PATTON GREEN |
| AND | NATHAN DANIEL GILLETTE |
| Court: | Cooper and Clifford JJ |
Counsel: | Appellant in person |
Judgment: | 19 July 2021 at 11.00 am |
JUDGMENT OF THE COURT
[Application for recall]
AThe application for recall of this Court’s judgment of 30 October 2020 is granted and the judgment is recalled.
BThe time for applying for the allocation of a hearing date and filing the case on appeal is extended to Friday 27 August 2021.
CThe appellant must proceed to diligently carry out the necessary steps under the Court of Appeal (Civil) Rules 2005. These include his obligations under r 39(1) to prepare the case on appeal in consultation with the respondent and under r 40 as to the form and content of the case on appeal.
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REASONS OF THE COURT
(Given by Cooper J)
In a judgment dated 30 October 2020, we declined an application for an extension of time to file the case on appeal and apply for the allocation of a hearing date for this appeal under r 43(2) of the Court of Appeal (Civil) Rules 2005 (the Rules).[1] We directed that the appeal was to be treated as abandoned under r 43(1). Mr Green has sought the recall of that judgment.[2]
[1]Green v Gillette [2020] NZCA 533, [2021] NZCCLR 4.
[2]Court of Appeal (Civil) Rules 2005, r 8A.
The background to Mr Green’s application for an extension of time was set out in the judgment of 30 October 2020 as follows:
[2] The appeal is against a judgment of Cooke J in which the Judge upheld a claim made by the respondent, Mr Gillette, for relief under s 174 of the Companies Act 1993. In 2014, Mr Green formed a company called Sunpower Ltd (Sunpower). Mr Green and Mr Gillette entered into a shareholders’ agreement on 18 January 2016, under which Mr Gillette obtained the right to acquire up to 49 per cent of the shares in Sunpower for a total of $98,000, which he paid shortly afterwards.
[3] There was also an employment agreement dated 21 January 2016, executed by Mr Gillette and Sunpower. This provided for a 90-day trial period, and an annual salary of $60,000 with potential bonuses payable if sales targets were met. However, the relationship between the parties deteriorated and by the end of March 2016 Mr Green had advised Mr Gillette that Sunpower did not have sufficient money to pay Mr Gillette’s salary. Payments of salary ceased, and Mr Gillette subsequently ceased working for Sunpower in July 2016.
[4] Mr Gillette brought proceedings in the Employment Relations Authority (the ERA). The ERA decided Mr Gillette had been wrongly deprived of his salary and that he had been unjustifiably dismissed. It ordered the company to pay him $26,043.96 for arrears of salary between 22 February 2016 and 28 July 2016, and imposed a penalty of $10,000.
[5] On 18 August 2016 Mr Green incorporated a new company, Sunpower Solar Ltd (Sunpower Solar). Sunpower Solar acquired Sunpower’s assets on or about 6 September 2016. Mr Gillette did not know about these developments at the time. Mr Green then took steps to market the business for sale. He was able to sell it to BSC Shipping for $120,000, after negotiating an employment contract with a related company under which he was to be paid a salary of $80,000 with potential bonuses. Once again, Mr Gillette was not made aware of these transactions.
[6] Sunpower not having paid the judgment debt, the ERA subsequently ordered that the company’s debt to Mr Gillette be paid by Mr Green personally, finding Mr Green had aided and abetted the breach of the employment agreement by Sunpower. The ERA also ordered Mr Green to pay costs. Mr Green subsequently paid Sunpower’s debt and costs to Mr Gillette.
[7] Mr Gillette commenced a proceeding in the District Court in April 2017, which was later transferred to the High Court. He advanced a number of causes of action. In the judgment under appeal, the Judge rejected claims based on misrepresentation and misleading or deceptive conduct, but held that the facts revealed what he described as a “[straightforward] case of unfair prejudice” directed towards Mr Gillette under s 174 of the Companies Act. The Judge continued:
The majority shareholder has utilised his control of the company to effectively take the whole business operation owned by the company, transferred it to his own company at under value, and then sold those assets for the true value to a third party. He has then kept all the proceeds of sale. No resolutions approving such a major transaction were passed, and these steps have taken place without any approval or involvement of the minority shareholder.
[8] The Judge ordered Mr Green to pay Mr Gillette the sum of $60,000 for his 49 per cent shareholding in Sunpower. He directed that, on payment of that amount together with any interest that might have accrued, Mr Gillette was to execute transfers of the shares in Sunpower to Mr Green.
[9] Mr Green made an application for legal aid, which was refused on 16 August 2019, a decision that was confirmed on 5 September 2019. Mr Green appealed that decision to the Legal Aid Tribunal. In the meantime, he made three informal requests for a one-month extension of time to file the case on appeal and apply for a hearing date, on 12 September, 14 October and 13 November 2019 respectively. Each request was granted by the Registrar, under r 43(1B)(a) of the Rules.
[10] Mr Green’s appeal to the Legal Aid Tribunal was declined on 27 November 2019. Mr Green then filed the present formal application for an extension of time on 17 December 2019.
(Footnotes omitted.)
Mr Green’s application for an extension of time to comply with his obligations to file the case on appeal and seek the allocation of a hearing date was advanced on the basis that he had complied with the rules in seeking and being granted informal extensions of time while progressing his application for legal aid. He then claimed that he had made the application for an extension of time under r 43(2) on a timely basis, but needed more time to compile the case on appeal and apply for a fixture on the basis that, following his unsuccessful application for legal aid, he was to represent himself.
Mr Gillette, who had succeeded in the High Court,[3] opposed the application for an extension on the basis that Mr Green had given no valid reason why an extension of time should be granted, had not paid the required security for costs, and had, during a period of eight months, failed to compile a case on appeal and apply for the allocation of a hearing date, having “repeatedly failed to obtain legal aid due to the [T]ribunal ruling that the appeal was without merit”.
[3]Gillette v Green [2019] NZHC 946.
In the substantive judgment we accepted Mr Gillette’s submission that Mr Green had not advanced a compelling reason for an extension of time.[4] We noted that almost 11 months had gone by since Mr Green’s application for legal aid had been finally determined against him. We noted his reference to the COVID-19 lockdown being partly to blame, but observed that he had not explained how that might have prevented him from compiling the case on appeal. There had been no reference to difficulties in obtaining relevant documents or any other reason proffered as to why the case on appeal could not have been filed.
[4]Green v Gillette, above n 1, at [18].
We also recorded that Mr Green’s application to dispense with security for costs had been made on 15 January 2020, and that delays since that date were unexplained.[5]
[5]At [19].
We then said:
[20] The delay in timetabling submissions and setting the present application down for hearing is in part attributable to the COVID-19 lockdown, but that can hardly have prevented the case on appeal being prepared. Mr Green has apparently simply relied on the fact the present application has been outstanding as a reason not to prepare the case on appeal. That was not a justified approach. Although it is necessary to make some allowance for the fact that Mr Green is a layperson, his obvious familiarity with the time limits in the Rules should have impressed upon him the need to progress the appeal.
In dealing with the application we applied this Court’s decision in Schmidt v Ebada Property Investments Ltd,[6] and other cases referred to in the substantive judgment.[7] In doing so, we considered the reasons why the appeal had not been prosecuted diligently, the merits of the proposed appeal and whether it was genuinely arguable and the need to allow some latitude to some litigants in person in the interests of justice.
[6]Schmidt v Ebada Property Investments Ltd [2012] NZCA 452.
[7]Airwork (NZ) Ltd v Vertical Flight Management Ltd [1999] 1 NZLR 29 (CA); Russell v Commissioner of Inland Revenue (2006) 22 NZTC 19,807 (CA); Harris v Davies [2007] NZCA 358; Rabson v Gallagher [2011] NZCA 204; and Crequer v Chief Executive of the Ministry of Social Development [2014] NZCA 284.
Turning to the merits, we observed they were difficult to assess.[8] We noted however that none of the grounds proffered in the notice of appeal engaged directly or convincingly with the Judge’s key finding which we had quoted in [7] of the substantive judgment (included in the extract set out above).[9] We also observed that while there were factual challenges in the grounds of appeal, the attack was not on the primary findings of fact, but rather the inferences drawn by the Judge. We recorded our view that the merits of the appeal were weak.
[8]Green v Gillette, above n 1, at [21].
[9]At [2] above.
In summary, we considered there had been a lengthy and unjustified delay, and, to the extent they could be considered, the merits of the appeal were weak.[10] In those circumstances, while acknowledging Mr Green’s position as a layperson, we were not persuaded there should be an extension under r 43 of the Rules.[11] The consequence of that was the appeal was to be treated as abandoned under r 43(1).[12]
The recall application
[10]Green v Gillette, above n 1, at [23].
[11]At [23]–[24].
[12]At [25].
In his recall application Mr Green has endeavoured to challenge the conclusions in the substantive judgment that there had been a lengthy and unjustified delay and the appeal appeared weak on its merits. On the delay issue, Mr Green has again raised issues that were before us when we considered the extension application. However, he has also referred to advice from the Registrar sent in an email dated 17 December 2019 in which she advised him that the substantive appeal was deemed abandoned while the extension of time application was being dealt with. She then wrote:
If your application is granted then the appeal then just continues and you will be given a timeframe in which to file your case on appeal and apply for fixture.
The Registrar followed that advice with a summary of Mr Green’s obligations with respect to security for costs having regard to the refusal of legal aid. Mr Green says that he believed he could not apply for a hearing date nor submit the case on appeal because of the provisions of r 37(2). Under that rule, the appellant may not apply for the allocation of a hearing date under r 38(1) if in default of any obligation to pay security for costs. Mr Green says that on receiving the Registrar’s advice set out above, he thought that, if granted, the extension of time would set out a timetable for compliance with r 43(1).
Decision
While Mr Green was not in a position to make an application for a fixture without paying security for costs, that would not have prevented him filing the case on appeal. Mr Green had already previously sought and had been granted three informal extensions of time to take that step, but he did not do so. That was part of our reasoning for finding that he had not provided a satisfactory reason for delay.[13]
[13]At [9] and [14].
However, the Registrar’s email of 17 December 2019 had not been brought to our attention until the current application for recall was made. While it obviously did not have the effect of preventing Mr Green assembling and filing the case on appeal, we can understand why the advice might have created the impression in the mind of a layperson that he need not take that step while waiting for the issues of security for costs and the extension of time to be dealt with. He may in the circumstances have thought he could simply wait for the extension of time application to be dealt with.
Accordingly, Mr Green has now identified at least a partial explanation for the delay in progressing his appeal which was not previously drawn to our attention. That may in part be attributable to his failure to raise it, but we must make appropriate allowance for the fact that he is a layperson.[14]
[14]Crequer v Chief Executive of the Ministry of Social Development, above n 7, at [13]–[14].
We remain of the view that the prospects of success on appeal are weak, but we are not in a position at this point to say with the necessary degree of certainty that the appeal would inevitably fail. This is not one of those cases where we could conclude the merits were so weak as to justify refusal of an extension of time on that basis.
We have not received any submissions in opposition to the present application from Mr Gillette. We have asked the Registrar to confirm that the application has been provided to him, as Mr Green claims, and to give him time to respond, but nothing has been received.
In the circumstances we are satisfied that the interests of justice favour allowing the application for recall and granting the extension sought under r 43(2) of the Rules, subject to procedural directions that must be strictly complied with.
Result
The application for recall of this Court’s judgment of 30 October 2020 is granted and the judgment is recalled.
The time for applying for the allocation of a hearing date and filing the case on appeal is extended to Friday 27 August 2021.
The appellant must proceed to diligently carry out the necessary steps under the Rules. This includes his obligations under r 39(1) to prepare the case on appeal in consultation with the respondent and under r 40 as to the form and content of the case on appeal.
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