Herbert v USAR Napier Limited

[2022] NZCA 230

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

 CA627/2021
 [2022] NZCA 230

BETWEEN	MALCOLM ANDREW HERBERT First Appellant ANTHONY JAMES HERBERT Second Appellant ANTHONY JAMES HERBERT AND STEPHEN PETER LUNN, AS TRUSTEES OF THE THACKERAY TRUST Third Appellants ANTHONY JAMES HERBERT AND STEPHEN PETER LUNN, AS TRUSTEES OF THE CHARLES STREET TRUST Fourth Appellants
AND	USAR NAPIER LIMITED Respondent

Hearing:	1 June 2022
Court:	Gilbert J
Counsel:	J K Mahuta-Coyle for Appellants S M Lowery for Respondent
Judgment:	1 June 2022 at 9.45 am
Reasons:	3 June 2022 at 3 pm

JUDGMENT OF GILBERT J
[On application for stay]

AThe appellants’ application for a stay of execution of the High Court judgment pending disposition of the appeal is declined.

BThe appellants must pay costs to the respondent for a standard application on a band A basis and usual disbursements.

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REASONS

1. On 5 October 2021, Associate Judge Lester granted the respondent’s application for summary judgment for amounts owing pursuant to an agreement reached on 10 December 2020 and subsequently signed by all parties to the present appeal.[1]  The appellants’ appeal against the summary judgment is due to be heard by this Court next week, on 8 June 2022.

   [1]USAR Napier Ltd v Herbert [2021] NZHC 2638.

2. The appellants applied to the High Court for a stay of execution of the judgment pending appeal.  Associate Judge Johnston declined to grant a stay for reasons set out in his judgment delivered on 1 April 2022.[2]   

   [2]Herbert v USAR Napier Ltd [2022] NZHC 655.

3. The appellants then applied to this Court for a stay.  The application was referred to me and heard on 1 June 2022.  I dismissed the application at the conclusion of the hearing and indicated that my brief reasons for doing so would follow as soon as time permitted.  These are my reasons.

4. The starting point is that a successful plaintiff is generally entitled to the fruits of its judgment.  An appeal does not operate as a stay.  Good reason needs to be shown why this general rule should be departed from in the given case.

5. A primary consideration is usually whether the appeal right will be rendered nugatory if a stay is not granted.  Mr Mahuta-Coyle, for the appellants, responsibly acknowledges this is not the case here.  The respondent accepts that it would not be appropriate for any of the appellants to be adjudicated bankrupt pending disposition of the appeal.  Further, the respondent has agreed to hold any payment of the judgment sum in a trust account on terms requiring the monies to be refunded if the appeal succeeds. 

6. For present purposes, I accept that the appeal is being pursued on a bona fide basis.  The appellants assert a counterclaim against the respondent and have applied to adduce fresh evidence on appeal in support of this claim.  Mr Mahuta-Coyle acknowledged that the counterclaim does not amount to a legal or equitable set-off.  If that is right, it does not provide a defence to the respondent’s claim.  In any event, the asserted counterclaim faces some difficulties.  However, it is neither necessary nor appropriate to say more than that in advance of the hearing of the appeal. 

7. Mr Mahuta-Coyle submits that the appeal raises a novel and important question of some public interest.  In particular, he argues that the evidential standard imposed on a cross-claimant resisting an application for a summary judgment has not been the subject of appellate authority since this Court’s decision in Middleditch v NZ Hotel Investments Ltd in 1992.[3]  However, I do not presently perceive that the appeal will raise any issue of novelty or general importance.  It seems to me that the outcome of the appeal will likely turn on the straightforward application of well‑settled principles to the particular facts.

   [3]Middleditch v New Zealand Hotel Investments Ltd (1992) 5 PRNZ 392.

8. It is difficult to assess the respondent’s claim that it will suffer prejudice if the stay is granted.  Given that the appeal is being heard next week, any prejudice is unlikely to be particularly significant.  However, this cuts both ways. 

9. In summary, I do not consider that the appellants have made out good grounds for the grant of a stay.  In my view, the overall interests of justice are best served by declining the application for a stay of execution of the judgment pending appeal.     

Result

1. The appellants’ application for a stay of execution of the High Court judgment pending disposition of the appeal is declined.

2. The appellants must pay costs to the respondent for a standard application on a band A basis and usual disbursements.

Solicitors:
Lawson Robinson, Napier for Appellants
Anthony Harper, Christchurch for Respondent