Grindlay v Memelink

[2017] NZCA 243

IN THE COURT OF APPEAL OF NEW ZEALAND

CA592/2016
[2017] NZCA 243

BETWEEN	ROBYN GRINDLAY Appellant
AND	HARRY MEMELINK Respondent

Counsel:

J D Haig for Appellant
Q S Haines for Respondent

Judgment:

(On the papers)

12 June 2017 at 3 pm

JUDGMENT OF COOPER J
(Review of Registrar’s Decision)

AAn extension of time in which to file the application for review of the Registrar’s decision dispensing with security for costs is granted.

BThe application to review the Registrar’s decision dispensing with security for costs is declined.

____________________________________________________________________

REASONS

Introduction

1. The appellant, Mrs Grindlay, filed an appeal against a decision of the High Court delivered on 31 October 2016.[1]  She applied to the Registrar to dispense with security for costs under r 35(6) of the Court of Appeal (Civil) Rules 2005.  Her application was granted by Deputy Registrar McGrath (the Registrar).

   [1]Memelink v Grindlay [2016] NZHC 2589.

2. Mr Memelink, who was the successful plaintiff in the High Court, has applied for a review of the Registrar’s decision.  His application was filed 10 days later than it should have been filed under r 7(3).  Under r 5(2) there is power to extend the time appointed by the Rules for taking any step in a proceeding.  Counsel for Mr Memelink, Mr Haines, proffers that the time limit was not met because his prior commitments meant he was unable to comply with the limit of 10 working days set under r 7(3).  For Mrs Grindlay, Mr Haig submits that this is an inadequate explanation, and her stance is not without merit.  However, there is no prejudice as a result of the delay and I am satisfied that an extension of time should be granted in the interests of justice.

The High Court judgment

1. The High Court proceeding was commenced by Mr Memelink against both Mrs Grindlay and her husband, Mr Grindlay, a bankrupt.  The Judge determined four issues against the Grindlays.  The Judge found that both were purchasers under a contract for the sale and purchase of Mr Memelink’s shares in a company called DM Recyclink Ltd, that they had repudiated but not cancelled the contract, that Mr Memelink was entitled to damages in the sum of $176,786 and interest, and that Mrs Grindlay had defamed Mr Memelink and should pay damages in the sum of $100.

Security for costs

1. Deputy Registrar McGrath made her decision applying the principles summarised in Reekie v Attorney-General.[2]  In terms of the relevant considerations set out in Reekie, the Registrar found first that the appeal is not hopeless. 

   [2]Reekie v Attorney-General [2014] NZSC 63, [2014] 1 NZLR 737.

2. The Registrar recorded her view that the Judge’s conclusions were fully reasoned, referring to his conclusion that it was inconceivable Mr Grindlay would have permitted Mrs Grindlay’s name to be recorded on the contract as a purchaser if she were not a party.  She thought it was unlikely that finding would be overturned on appeal.  However, she noted Mrs Grindlay’s contentions that the Judge had failed to take into account the fact that the contractual terms had been varied on the third page of the contract naming only Mr Grindlay as the purchaser, and said:

   … the notice of appeal refers to evidence that is not mentioned in the judgment, namely that the third page of the contract was changed so as expressly to vary the terms including by naming only Mr Grindlay as the purchaser.  If such evidence exists, it could alter the pivotal finding that Mrs Grindlay was a party to the contract, meaning the appeal would succeed. 

3. She also noted that there were further grounds of appeal, at least some of which seemed arguable.  This is a reference to the Grindlays’ evidence that Mrs Grindlay did not intend to be a party to the contract or authorise Mr Grindlay to sign the contract on her behalf and the fact that Mrs Grindlay had not signed the lease or contract.  They also allege that the Judge placed undue weight on the wording of post-contractual letters sent by them and that the Judge erred when he found Mrs Grindlay signed cheques in part payment of the purchase price.  On this basis the Registrar concluded that the appeal had “some merit” and was “not hopeless”. 

4. The Registrar also referred to a concessionary fee arrangement that had been agreed between Mrs Grindlay and Mr Haig.  She evidently considered that, in accordance with what was said in Reekie, such an arrangement might imply an assessment that the case would be a proper one for appeal.[3]

   [3]Reekie v Attorney-General, above n 2, at [37].

5. The Registrar was satisfied on the basis of detailed information provided by Mrs Grindlay that she has no assets readily available to meet security or access to other money for the payment of security for costs, and is reliant on financial support from her husband to pay her legal fees (although bankrupt, he is employed). 

6. She concluded that a reasonable and solvent litigant would proceed with the appeal.  Taken together, the circumstances were exceptional and justified dispensing with security for costs.  She thought Mrs Grindlay’s situation was analogous to those in which Randerson J had granted an application for dispensation in Kaye v Norris Ward McKinnon.[4]

The application for review

[4]Kaye v Norris Ward McKinnon [2015] NZCA 513, (2015) 22 PRNZ 781.

1. Mr Memelink accepts that Mrs Grindlay is impecunious.  However, Mr Haines submitted that the correspondence between the parties, which was considered by the High Court, concerning the contract and the business at the centre of the dispute involved both Mr and Mrs Grindlay.  He emphasised a finding by the Judge that there was no dispute that on 12 November 2013 Mr Memelink had received a letter purporting to cancel the contract and the lease, the letter having been signed on behalf of both Mr and Mrs Grindlay.  Mr Haines submitted that the Judge had carried out a thorough analysis of all the relevant documents and claimed it was inconceivable that Mrs Grindlay would succeed in establishing that she was not a party to the contract.

2. I accept that the appeal does not appear to have strong prospects of success.  However, I am not prepared to depart from the Registrar’s conclusion that it has “some merit” and is “not hopeless”.  I consider she properly addressed and applied the relevant considerations in accordance with Reekie.  While I do not give much weight to the fact Mrs Grindlay has legal advice, that does not detract from the Registrar’s overall conclusion that the appeal is one that might be pursued by a reasonable and solvent litigant. 

3. Much will depend on the implications of the fact that the agreement in question was not signed by Mrs Grindlay and had been amended so as to provide that only Mr Grindlay was named as the purchaser.  If the Court considers that significant it is possible the appeal might succeed.  As with the fact-dependent issues referred to in Kaye v Norris Ward McKinnon, it is difficult to conclude that the appeal is hopeless without a detailed consideration of the facts, an exercise that is not appropriate or required at this stage.

4. Once that point is reached, the approximately $177,000 at stake for Mrs Grindlay (given her husband’s bankruptcy) and the potential bankruptcy that she herself faces suggest that a reasonable and prudent litigant might chose to proceed with the appeal.

Result

1. The application to review the Registrar’s decision dispensing with security for costs is declined.

Solicitors:
Thomas Dewar Sziranyi Letts, Lower Hutt for Appellant
Simpson & Co, Otaki for Respondent