Khan v Reid

[2010] NZCA 391

IN THE COURT OF APPEAL OF NEW ZEALAND

CA241/2010
[2010] NZCA 391

BETWEENYOUMNA KHAN

First Applicant

ANDSHER AFZAL KHAN

Second Applicant

ANDKEITH WILLIAM REID

Respondent

Hearing:17 August 2010

Court:Arnold, Ellen France and Stevens JJ

Counsel:S A Khan (in person) for Applicants

M R T Colthart (via video link) for Respondent

Judgment:23 August 2010 at 2.30 pm 

JUDGMENT OF THE COURT

A            The application is dismissed.

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

REASONS OF THE COURT

(Given by Stevens J)

Introduction

[1]        The applicants, Mr and Mrs Khan, have applied for an extension of time to appeal against a judgment of Allan J given in the High Court at Auckland on 30 October 2009.[1]  The case related to a claim in tort and/or contract by the Khans (the applicants) against the respondent, a lawyer who had previously acted for Mrs Khan.  Initially, the applicants filed an application for leave to appeal against this decision by lodging it in the High Court.  On 17 February 2010, the matter came before Cooper J who explained to the applicants (who were unrepresented), that any notice of appeal would need to be filed in the Court of Appeal.  Cooper J also explained that, given the time that had elapsed, the applicants would need to make an application for an extension of time.

[1]      Khan v Reid HC Auckland CIV-2009-404-1721, 30 October 2009.

[2]        The notice of appeal and application for extension of time were filed in this Court on 16 March 2010.  The proposed grounds of appeal are that:

(a)The learned Judge made error of fact and law wrongly applied legal test 4 limitations Act 1950 to struck out the plaintiff claim.  As matter of fact the plaintiff’s claim is not statute barred under s 28 of the limitation Act 1950, which learned Judge failed to take in to account. [sic]

(b)The plaintiff’s have serious arguable case against defendant conspiracy with Accident Compensation Corporation in 1996, which was discovered by plaintiff’s in 2005. [sic]

[3]        The issue for this Court is whether the applicants have established any proper basis for an extension of time under r 29A of the Court of Appeal (Civil) Rules 2005.

Factual background

[4]        The first applicant, Mrs Khan, was injured at work in 1993.  She sought and obtained weekly compensation payments from the Accident Compensation Corporation (ACC).  Subsequently, ACC discovered that Mrs Khan’s statement of her earnings at the time of the accident was inaccurate.  In April 1996, the first applicant and her husband, Mr Khan, were arrested on fraud charges and ACC determined to cease the weekly payments.  The applicants were ultimately convicted of using documents with intent to defraud in October 1997.

[5]        The respondent, Mr Reid, was instructed to act for the applicants in May 1996 to deal with the ACC matter.  Other lawyers dealt with their criminal prosecution.  On behalf of Mrs Khan, Mr Reid sought review of ACC’s decision to cease payments.  Because the review was not carried out within three months (i.e. by 10 September 1996), the review was deemed to have been determined in Mrs Khan’s favour.[2]  ACC advised the respondent of this in a letter dated 6 May 1997.  However, ACC also advised that under s 73(1) of the Accident Rehabilitation and Compensation Insurance Act 1992 it would re-cease payments as at 10 September 1996 as it was not satisfied on the basis of the information that it had that Mrs Khan was entitled to compensation.

[2]      Accident Rehabilitation and Compensation Insurance Act 1992, s 90(9).

[6]        The respondent gave evidence that he wrote to the applicants on 21 May 1997 enclosing ACC’s letter of 6 May 1997.  His letter advised the applicants that they would need to lodge a further application for review of this decision.  Any review, however, would not occur until after the trial in October 1997.  He produced a copy of the letter and a fax receipt showing that the letter had been received by a fax number that the respondent confirmed had been given to him by Mr Khan and recorded on the file.  The applicants assert that they never received the letter.

[7]        After the applicants’ conviction at the criminal trial, the respondent wrote to the applicants in October 1997 advising that it would be pointless to continue with the second review application.  He did not act for them further after this point.

[8]        Some 10 years later, in November 2007, Mr Khan contacted the respondent to complain that the respondent had not advised the applicants of ACC’s letter of 6 May 1997.  He alleged that, had the applicants known about ACC’s letter of 6 May 1997, and in particular about the deemed review in Mrs Khan’s favour, they would have been able to put this information before the District Court at the criminal trial and would not have been convicted.

[9]        The respondent replied refuting the allegation and enclosing the fax transmission report.  He heard nothing from the applicants until the present proceeding was commenced in March 2009.

[10]       In the meantime, there had been a long history of proceedings, involving unsuccessful appeals against conviction to this Court and an eventual finding by the District Court that, although Mrs Khan did not have to repay the compensation that ACC had paid between 1993 and 1996, she had not shown an entitlement to compensation.  The history is summarised by Allan J in his judgment in the High Court.[3]

High Court proceeding

[3]      At [20]–[31].

[11]       The applicants’ statement of claim in the present proceeding alleged that the respondent had been negligent in failing to advise them of ACC’s letter of 6 May 1997.  The main allegation was that, had they known about the letter and been able to put it before the District Court they would not have been convicted.  They claimed damages and interest.  The applicants also complained before Allan J about various other aspects of the respondent’s advice but accepted that they would have to amend their pleadings to pursue those complaints.

[12]       The respondent applied to have the claims struck out.  Allan J struck out the action in negligence as being statute-barred under s 4(1) of the Limitation Act 1950 which provides that all actions founded on contract or tort must be brought within six years of the cause of action accruing.  He noted that in order for the applicants to be within time, their cause of action would have had to have accrued no earlier than March 2003, being six years prior to the filing of the proceeding.  Even if it were true that the respondent had not advised of ACC’s letter, the cause of action would have accrued in 1997.  Allan J stated:[4]

In contending that time did not commence to run for limitation purposes until the plaintiffs allegedly first became aware in 2004 of the 6 May 1997 letter from the ACC, Mr Khan is effectively seeking to rely upon a reasonable discoverability exception in a conventional claim in contract and/or tort.  The reasonable discovery exceptions do not apply in this case.  In my opinion the plaintiffs’ claim became statute barred, at the latest, in or about October 2003.  On this ground alone the defendant is entitled to an order striking out the plaintiffs’ claim.

[4] At [46].

[13]       The Judge also found that the evidence was sufficient to grant summary judgment to the respondent on the merits.  He was satisfied that the respondent’s evidence established that he had advised the applicants of the ACC letter.  Further, the Judge pointed to the fact that Mrs Khan had filed an application for review with ACC in August 1998 which referred to ACC’s letter of 6 May 1997.  This showed that, even if the accrual of the cause of action depended on the reasonable discoverability of the facts, which the Judge held it did not,[5] this was evidence that the applicants knew of the facts in August 1998 and so the claim would still be statute-barred.  Accordingly, the claims were struck out.

Application for extension

[5] At [44].

[14]       With respect to the applicants’ intention to appeal against the decision of Allan J, the time for filing an appeal expired on 27 November 2009.  Mr Khan alleged that he was advised by the registries of both this Court and the High Court that he had to apply to the High Court.  Hence, he filed the application for leave which was struck out by Cooper J.

[15]       The application for extension of time was filed almost four months out of time.  No affidavit has been provided explaining the precise circumstances leading to the delay.  Mr Colthart for the respondent emphasised that the applicants knew from the date of Cooper J’s minute that they had to apply to this Court and were out of time already, yet they delayed for another month before filing their application.

[16]       However, for the purposes of this judgment we will assume that Mr Khan was given incorrect advice by Registry staff as to the process to be followed in filing the appeal.  Furthermore, the delay from the time Cooper J informed Mr Khan of the correct procedural steps is not excessive.  But that is not the end of the matter.

[17]       An application for extension of time falls to be considered against the principles discussed by this Court in Barber v Cottle[6] as follows:

[6]      Barber v Cottle [2010] NZCA 31 at [6].

In terms of r 29A(2)(b) of the Court of Appeal (Civil) Rules 2005 the application is to be dealt with as if it was an application for leave to appeal.  The approach to be adopted is accurately summarised in McGechan on Procedure.  The essential question is whether an extension of time will meet the overall interests of justice.  The Court will consider factors such as:

(a)         The length of the delay and the reason for it.

(b)The extent of any prejudice flowing from the grant of an extension.

(c)         The merits of the appeal.

(d)         Whether the appeal raises any issue of public importance.

[18]       Turning to the merits, we are satisfied that the proposed appeal is wholly lacking in merit.  It is apparent that the two grounds sought to be advanced by the applicants[7] raise entirely different matters to those set out in the statement of claim considered by Allan J.  Mr Khan explained that ground (a) contemplated a new factual allegation that the respondent acted fraudulently in deliberately concealing the letter from ACC concerning the deemed decision.  But no proper particulars have been provided and we are satisfied that the factual findings of Allan J are a complete answer to this new claim.  It seems to us to be a blatant attempt by Mr Khan to seek to avoid the decisive effects of s 4 of the Limitation Act and to enable him to rely on the provisions of s 28 of the Act, which provides for postponement of limitation periods in cases of fraud.

[7] Referred to at [2] above.

[19]       So far as ground (b) is concerned, it raises a claim of conspiracy between ACC and the respondent.  Again, the required particulars have not been provided.  Even if they had been, it would have involved the introduction of an entirely new party, ACC, to the proceeding.  Moreover, any concept of a conspiracy in the present circumstances involving ACC and the respondent is fanciful.

[20]       We consider that Allan J was correct to strike out the claim.  It was based on the untenable argument that the claim was not statute-barred.  Clearly, for the reasons Allan J gave, that is not the case.  We consider that there was a sufficient evidential and legal basis to grant summary judgment to the respondent.

[21]       The only other point raised by Mr Khan was the possibility of having more time to enable him to seek to instruct counsel to deal with the appeal.  We consider it is far too late for that.  Mr Khan has had ample time to pursue that option prior to the hearing, had he wished to do so.  Any further delay would risk causing real prejudice to the respondent.

[22]       Finally, we are satisfied that there is no question of public importance raised by the proposed appeal.

Result

[23]       The application for extension of time is dismissed.

[24]       The respondent is entitled to costs on a band A basis for a standard application, together with usual disbursements.

Solicitors:

C K Lyon, Auckland for Respondent