Haines v Memelink - [2024] NZCA 7

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA807/2023
[2024] NZCA 7

BETWEEN	QUENTIN STOBART HAINES First applicant BPE TRUSTEES (NO 1) LTD Second applicant QUENTIN HAINES PROPERTIES LIMITED Third applicant
AND	HARRY MEMELINK AND CISCA FORSTER (AS TRUSTEES OF THE LINK TRUST (NO. 1)) (in receivership) Respondents

Counsel:	J D Dallas for Applicants R Williams for Respondents
Judgment: (On the papers)	2 February 2024 at 4 pm

JUDGMENT OF MALLON J

AThe application for a stay of the High Court proceeding is declined.
BThe applicants must pay costs for a standard application on a band A basis together with usual disbursements.

____________________________________________________________________

REASONS

On 3 August 2021 Grice J in the High Court granted summary judgment on liability against the applicants (the liability judgment).[1] A three-day hearing commencing on 12 February 2024 has been set down in the High Court to determine quantum (the February hearing).
[1]Memelink v Haines [2021] NZHC 1992.
On 14 December 2023 the applicants applied to the High Court for an adjournment of the February hearing. On 22 December 2023 the applicants filed in this Court an application for an extension of time to appeal the liability judgment. On 24 January 2024 Grice J issued a minute declining the application to adjourn the February hearing.
On 31 January 2024 the applicants applied to this Court for an order “staying the February hearing”. This decision concerns that application.

Background

For some years the first applicant, Mr Haines, had business dealings with Mr Memelink. The other applicants are entities that Mr Haines controlled.
The respondents are the trustees of the Link Trust No. 1 (the Link Trust). The Link Trust was effectively controlled by Mr Memelink and was used as a vehicle for his business ventures. The Link Trust was put into receivership in May 2022 and this proceeding is now being conducted by the receivers but, at the time of the liability hearing, the litigation was undertaken by Mr Memelink.
This proceeding concerns three commercial loans (the loans): two from Fico Finance Ltd (Fico) and one from Bright Enterprises Ltd (Bright). Entities associated with Mr Haines were the borrowers under these loans. They were guaranteed by Mr Haines and Mr Memelink, or entities associated with them, and the Link Trust.
By March 2018 the loans were in default and demands were served. The respondents subsequently paid the debts to Fico and Bright and claimed that it had taken assignment of the loans from Fico and Bright. The respondents brought a claim for breach of contract and sought summary judgment on liability based on the rights it claimed it had acquired under the loans. The applicants contended that there was no valid assignment.
The Judge found that there had been a valid assignment of the loan[2] and the applicants were therefore liable to the Link Trust for the outstanding loans.

Adjournment application

[2]At [112].

In support of an adjournment of the quantum hearing it was submitted that the respondents…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2024] NZCA 7
Decision Date: 2 February 2024 at 4 pm

CaseChat Overview and Summary

In Haines v Memelink, the applicants, including Quentin Stobart Haines and several companies he controlled, sought a stay of a High Court proceeding against the respondents, the trustees of the Link Trust (No. 1) in receivership. The primary dispute centred around three commercial loans that were in default, and the applicants contested the validity of the assignment of these loans to the respondents. The Court of Appeal was called upon to decide whether to grant a stay of the High Court's proceeding to determine the quantum of damages, which was set for a three-day hearing in February 2024. The applicants argued that they were entitled to a stay based on alleged late disclosure of documents, new evidence, and procedural errors by the respondents.

The legal issues before the Court of Appeal involved the interpretation and application of the Court of Appeal (Civil) Rules 2005, specifically rule 12(3), which governs the power of the Court to stay proceedings pending the determination of an appeal. The applicants contended that the delay in their application for an adjournment and extension of time to appeal was due to the late disclosure of documents and the unavailability of a key witness, Mr. Gilman. They argued that the respondents had misled the Court and that the appeal had a reasonable prospect of success. The respondents, on the other hand, asserted that the applicants' application was not made in good faith and that the proposed evidence was not compelling. They also highlighted that the High Court judge had declined an earlier adjournment application on the grounds that it was not made in a timely manner and would not serve the interests of justice.

The Court of Appeal, in its judgment, declined the application for a stay. It noted procedural difficulties with the application, including the applicants' failure to seek leave from the High Court to appeal the interlocutory decision on the adjournment application. The Court found that the applicants' proposed appeal would not be rendered nugatory by the lack of a stay, as they could still apply for a stay in the High Court if necessary. The Court also found that the reasons for the delay were not compelling and that the respondents would be prejudiced by further postponement of the quantum hearing. The overall balance of convenience did not favour a stay, and the applicants' proposed fresh evidence and grounds for the appeal did not present a strong case. Consequently, the application for a stay was declined, and the applicants were ordered to pay costs for the application.

Orders