Hornsby v Haines - [2017] NZHC 1347

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2016-404-003126 [2017] NZHC 1347

BETWEEN
EDWARD THOMAS HORNSBY

Applicant

AND

RODNEY DAVID HAINES Respondent

Hearing: 11 May 2017

Appearances:

S Bryers for the Applicant
R Mark for the Respondent

Judgment:

19 June 2017

JUDGMENT OF HINTON J

This judgment was delivered by me on 19 June 2017 at 3.30 pm pursuant to Rule 11.5 of the High Court Rules

……………………………………………………………………
Registrar/Deputy Registrar

Counsel/Solicitors:
Stephen Bryers, Barrister, Auckland
Richard Mark, Kerikeri

HORNSBY v HAINES [2017] NZHC 1347 [19 June 2017]

Introduction

[1] The applicant, Mr Hornsby, seeks special leave to extend the time for appealing a decision of Judge Gibson in the District Court, dated 4 August 2016.

[2] Mr Hornsby’s case is that leave should be granted because he has a proper explanation for the delay in appealing, the length of the delay is not great, there is no significant prejudice to the respondent if the appeal is allowed to proceed, he has good grounds for his appeal and it is in the interests of justice to grant the extension of time sought.

Facts

[3] Mr Haines, the respondent, owned a commercial property at Duke Street, Riverhead (“Duke Street”). On 1 September 2003, he leased that property to a company owned by Mr Hornsby, Amalgamated Building Removals & Contracting Limited.

[4] In about May 2004, another company owned by Mr Hornsby, Okura Developments Limited (“Okura”) agreed to buy Duke Street and to lease part of it back to a company owned by Mr Haines, Haines House Haulage Limited, which I refer to as “Haines” because that is the description used by Mr Haines in later documents. There was also an option for Mr Haines to purchase shares in Okura, which was driven by Mr Haines being interested in acquiring significant tax losses sitting in Okura.

[5] The purchase price of Duke Street was recorded as $820,000, which was funded solely by way of two mortgages, the first for $510,000 from Rice Craig Solicitors and the second for $310,000 from Mr Haines. Mr Hornsby guaranteed the mortgage from Mr Haines. The terms of the mortgage from Mr Haines required that
$100,000 was to be repaid on or before 31 July 2004 and the balance on 5 May 2009. Mr Hornsby said the early payment of $100,000 was only to apply if Mr Haines exercised the share option, so that no funds were required on his part. He says the interest under the second mortgage and the rent were also to be off-set.

[6] Both Okura/Mr Hornsby and Mr Haines accepted that the purchase price of Duke Street had been reduced by $30,000 from its true market value. The basis for that was, however, a point of difference between them. Mr Hornsby said the
$30,000 was the non-refundable price of the option given to Mr Haines. Mr Haines said it was a loan to Mr Hornsby personally, or a “payment” in advance for the Okura shares.

[7] Nothing was recorded about the share…

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: [2017] NZHC 1347
Decision Date: 19 June 2017

CaseChat Overview and Summary

In Hornsby v Haines, the High Court of New Zealand considered whether Edward Thomas Hornsby could extend the time for appealing a decision of the District Court. The dispute between Hornsby and Rodney David Haines stemmed from a property transaction and subsequent legal claims. Haines owned a commercial property which he leased to a company owned by Hornsby. The two parties later entered into agreements concerning the purchase and sale of the property and shares in another company, Okura Developments Limited. A series of disputes arose from these transactions, culminating in a District Court judgment in favor of Haines. Hornsby sought to appeal this decision but missed the statutory deadline, necessitating a special leave application to extend the time for appeal.

The legal issues before the Court included whether Hornsby had a proper explanation for the delay in appealing, the extent of any prejudice caused by the delay, the merits of the appeal, and whether the extension of time would meet the interests of justice. Hornsby argued that he had a reasonable explanation for the delay due to health issues and difficulties in obtaining a transcript of the evidence. Haines contended that the delay was excessive and prejudicial, and that the grounds for appeal lacked merit. The Court found that Hornsby's explanation for the delay was acceptable, and while there was some prejudice due to the delay, it was not significant enough to preclude an extension. The Court also found that the appeal had some merits, particularly concerning the agreements between the parties and the legitimacy of the underlying debts and interest claims.

After considering all the factors, the Court concluded that granting the extension would meet the interests of justice. The application for special leave to extend the time for appeal was therefore allowed, and Hornsby was directed to bring his appeal within 20 working days from the date of the judgment. The costs of the application were to lie where they fell.

Orders