Kumar v Smartpay Ltd
[2022] NZCA 490
•25 October 2022 at 9.30 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA427/2022 [2022] NZCA 490 |
| BETWEEN | MANAS KUMAR |
| AND | SMARTPAY LTD |
| Court: | Gilbert and Katz JJ |
Counsel: | Applicant in Person |
Judgment: | 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.
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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 of an application to extend time. For this reason, the merits will not generally be relevant, except in clear cases.[6]
[5]Almond v Read [2017] NZSC 80, [2017] 1 NZLR 801 at [38].
[6]At [39(c)].
For the reasons briefly summarised below, we are persuaded that a short extension of time to appeal should be granted.
The application for an extension of time was filed on 22 August 2022, approximately 10 weeks out of time. The delay is therefore reasonably significant. However, it seems clear that Mr Kumar wanted to appeal against the judgment shortly after it was delivered and sought to do so.
Within days of receiving the judgment, Mr Kumar asked counsel then acting for him whether it could be appealed. Junior counsel responded that she would discuss this with senior counsel and respond. Mr Kumar followed up on 17 May 2022 but received no substantive response. A month later, on 17 June 2022, counsel sought Mr Kumar’s instructions to proceed with an appeal. Mr Kumar confirmed these instructions by return. On 21 June 2022, counsel advised Mr Kumar of the costs of filing the appeal. Mr Kumar again confirmed his instructions to proceed.
Mr Kumar followed up on 1 July 2022 as to whether the appeal had been filed. Junior counsel advised that the appeal had not been lodged but she was liaising with senior counsel. Mr Kumar sent a further email seeking clarification on 5 July 2022. Junior counsel again stated that she was waiting for senior counsel to respond.
On 21 July 2022, junior counsel again sought instructions from Mr Kumar, advising that the appeal would be filed the following day if he agreed. Mr Kumar responded promptly, confirming his instructions to proceed. He sought confirmation on 22 July 2022 that the appeal had been filed and followed up on 29 July and 3 August after receiving no response. There was further correspondence with junior counsel on 15 August regarding the appeal. Junior counsel sent an email on 19 August attaching the notice of appeal and advising Mr Kumar that he should file this himself. Mr Kumar did so promptly, filing the appeal on 21 August 2022. Counsel withdrew from acting for him the following day.
In summary, it is clear that Mr Kumar wished to exercise his right of appeal immediately following delivery of the judgment and thereafter made diligent efforts to secure his appeal right. Most, if not all, of the delay appears to have been attributable to counsel. This is not a case where it could fairly be said that the appellant has in any way slept on his rights.
We do not consider Mr Kumar’s conduct (and that of his associated entities) in other litigation has any material bearing on whether an extension of time should be granted in this case. There is nothing about his conduct in connection with the present appeal that could be seen as disqualifying.
It does not appear that Smartpay will suffer any real prejudice if an extension of time is granted. The concern identified is that Mr Kumar might use the appeal as a way of resisting payment of any quantum award. However, an appeal does not operate as a stay of execution.[7] In any event, the relevant prejudice is that caused by the delay, not from the fact of the appeal. Once quantum has been determined, Mr Kumar will be able to appeal against that judgment as of right.[8] In that event, both appeals would likely be heard together. The delay in bringing the present appeal is therefore not likely to cause any material prejudice to Smartpay.
[7]Court of Appeal (Civil) Rules 2005, r 12(1).
[8]Senior Courts Act 2016, s 56(1).
In all the circumstances, we are satisfied that it would be unjust to deprive Mr Kumar of his right of appeal which he diligently sought to exercise in a timely manner. The proposed appeal may not raise any issue of general or public importance. However, we accept that the issues are of importance to the parties and the appeal is brought bona fide. While we are inclined to agree with Smartpay that the appeal does not appear to be strong, it would not be safe to dismiss it as being in the clearly hopeless category on the basis of the very limited information available to us in the context of the present application.
Result
The application for an extension of time to appeal is granted.
The appeal must be brought within 10 working days of the date of this judgment.
Solicitors:
Claymore Partners Ltd, Auckland for Respondent
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