Kumar v Smartpay Ltd - [2022] NZCA 490

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA427/2022
[2022] NZCA 490

BETWEEN	MANAS KUMAR Applicant
AND	SMARTPAY LTD Respondent

Court:	Gilbert and Katz JJ
Counsel:	Applicant in Person D J Chisholm KC and J D Ryan for Respondent
Judgment: (On the papers)	25 October 2022 at 9.30 am

JUDGMENT OF THE COURT

AThe application for an extension of time to appeal is granted.
BThe appeal must be brought within 10 working days of the date of this judgment.

____________________________________________________________________

REASONS OF THE COURT

(Given by Gilbert J)

Mr Kumar applies for an extension of time to appeal against an interim judgment of Downs J delivered on 13 May 2022.[1]
[1]Smartpay Ltd v Kumar [2022] NZHC 997 [High Court judgment].
Following a four-day hearing in May 2022, the Judge found that Mr Kumar had breached his duties under ss 131, 135 and 136 of the Companies Act 1993 (the Act) as a director of 4468440 Ltd (previously known as Optimizer Corporation Ltd) (in liquidation) (OCL).[2] Smartpay Ltd is a creditor of OCL and brought the claim pursuant to s 301 of the Act. The judgment was interim because the Judge acceded to Smartpay’s request in closing submissions to hold a separate hearing on the question of quantum.[3] The quantum hearing was originally scheduled to be heard on 22 August 2022. However, that hearing was adjourned because counsel for Mr Kumar was granted leave to withdraw. Downs J directed that the matter be heard not earlier than 26 September 2022.[4] As far as we are aware, the question of relief has not yet been determined.
[2]At [42].
[3]At [66]–[68]; and Smartpay Ltd v Kumar HC Auckland CIV-2020-404-1775, 14 June 2022 (Minute No 3).
[4]Smartpay Ltd v Kumar HC Auckland CIV-2020-404-1775, 22 August 2022 (Minute No 4).
Smartpay opposes the application for an extension of time to appeal. It argues that the proposed appeal has no merit and raises no issues of significance to the parties or generally, there is no legitimate reason for the delay, Mr Kumar and entities associated with him have a history of delaying court proceedings and Smartpay is prejudiced by the continuing delay because it anticipates that Mr Kumar will use the appeal as a means of resisting payment of any quantum award.
The question as to whether an extension of time to appeal should be granted under r 29A of the Court of Appeal (Civil) Rules 2005 ultimately depends on what the interests of justice require in the particular case. The factors likely to require consideration were set out by the Supreme Court in Almond v Read as including the length of the delay, the reasons for it, the conduct of the parties (particularly the applicant), any prejudice and the significance of the issues raised by the proposed appeal, both to the parties and more generally.[5] It is not normally possible to make more than a superficial assessment of the merits of the proposed appeal in the context…

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.

Continue reading Kumar v Smartpay Ltd

Details

AGLC: Kumar v Smartpay Ltd [2022] NZCA 490
Case: [2022] NZCA 490
Decision Date: 25 October 2022 at 9.30 am

CaseChat Overview and Summary

The Court of Appeal of New Zealand dealt with an application by Manas Kumar for an extension of time to appeal an interim judgment rendered by Downs J on 13 May 2022. The judgment found Kumar had breached his duties as a director of 4468440 Ltd (in liquidation), previously known as Optimizer Corporation Ltd, under the Companies Act 1993. Smartpay Ltd, a creditor of the liquidated company, opposed the application, arguing that the appeal had no merit, the delay was unjustified, and Kumar had a history of delaying court proceedings. The appeal related to the interim judgment, with a separate hearing on quantum to be determined later.

The Court of Appeal considered whether to grant an extension under rule 29A of the Court of Appeal (Civil) Rules 2005, focusing on the interests of justice. Factors to consider included the length of the delay, the reasons for it, the conduct of the parties, any prejudice, and the significance of the issues. While the merits of the proposed appeal were not determinative, the Court noted that Kumar had sought to appeal promptly after the judgment and had made diligent efforts to proceed with the appeal despite delays caused by his counsel. The Court found that Kumar's conduct and the history of delaying tactics in other litigation were not disqualifying factors in this case. Smartpay's concern that Kumar might use the appeal to resist payment of any quantum award was mitigated by the fact that an appeal does not stay execution, and Kumar would have the opportunity to appeal the quantum judgment as of right.

The Court of Appeal concluded that it would be unjust to deprive Kumar of his right to appeal, which he sought to exercise diligently. Although the appeal might not raise significant issues of general importance, it was of importance to the parties and brought in good faith. The Court granted the application for an extension of time, requiring the appeal to be brought within 10 working days of the date of the judgment.

Orders