Lawrence v Warkworth MotorCycle and Machinery Limited HC Auckland AP 33-Sw01

[2001] NZHC 348

1N THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY AP 33-SW01

BETWEEN BASIL FLETCHER LAWRENCE and COLLEEN DORNE LAWRENCE
Applicants

AND WARKWORTH MOTORCYCLE & MACHINERY LIMITED
Respondent

Hearing: 9 May 2001

Counsel: L Robinson for applicants
G Millar for respondent

Judgment: 9 May 2001

ORAL JUDGMENT OF NICHOLSON J

[1] The applicants, Mr and Mrs Lawrence, apply for further time within which to bring an appeal against a District Court judgment.

[2] The circumstances are that the respondent company purchased a motorcycle business in Warkworth and paid for stock. It was found they had made an over payment and they sought reimbursement. The business had been owned by a company and it was sued as a defendant. However, the principal shareholders and directors of that company were Mr and Mrs Lawrence and they were also sued as defendants. There was no argument about entitlement to reimburse but only about who should make it. Thus was very pertinent because the company was insolvent and judgment against it would be worthless. The respondent therefore pressed for judgment against the applicants.

[3] In a clearly reasoned and comprehensive reserved judgment the District Court Judge ruled that Mr and Mrs Lawrence were the vendors and thereby personally liable. That judgment was delivered on 2 March 2001. On 9 March the solicitors for the respondent sealed the judgment even though costs were outstanding. By coincidence that day the applicants solicitors wrote to their client advising the decision and stating that they might wish to consider an appeal to the High Court and if so could they advise the solicitor immediately. Notice of the sealing of the judgment was not given by the respondent to the applicants until a letter was sent on 20 March advising that the judgment had been sealed. That letter did not, however, state the date on which it had been sealed.

[4] On 22 March the applicants solicitors sent a copy of the 20 March letter to the applicants and requested urgent instructions by return. On 28 March the applicants advised their solicitors that they wished to appeal. The solicitor thereupon requested that they deposit funds without delay so that the appeal could be filed. Notice of appeal was filed and served on 9 April, some nine days after the 21 day time for lodging that notice had expired. The application for further time to appeal was filed on 30 April within the one month allowed for such an application.

[5] The pertinent law has been clearly stated by both counsel. The primary provision is s 73(1) of the District Courts Act 1947 which requires an appeal to be brought within 21 days after judgment is sealed but allows further time to be given by the High Court on application made within one month after the expiration of that period of 21 days. The principles to be considered in deciding whether to grant such special leave were summarised by the Court of Appeal in Stedmances v Stedmances [1987] 2 NZLR 336 at p 340:

“The principles governing the grant of special leave are clear. The governing consideration is the requirements of the justice of the case. The reasons for failing to bring the appeal within time, prejudice which may have been incurred by the other party, subsequent events, and the merits of the intended appeal are important considerations.”

[6] A factor to be taken into account is when notice of the sealing of the judgment was given. Rule 533(2) of the District Courts Rules provides:

“A party who has a judgment sealed shall forthwith give notice of the sealing of the judgment to every other party who has given an address for service.”

[7] For the respondent Mr Millar accepts that the respondent did not comply with that requirement but he argues that nevertheless the delay in giving such notice was not a disabling factor because in the circumstances the applicants could have taken steps to ascertain when the judgment was sealed and they squandered the remaining time for appealing without special leave.

[8] I will not deal in any detail with the submissions which have been made relating to the various factors because in my view this is a case in which the requirement of justice clearly calls for leave to be granted. The delay in lodging the notice of appeal was not great and no significant prejudice has been suffered by the respondents because of the short delay. There is also the factor that notice of sealing was not given forthwith as required. There is a further factor that the basis upon which judgment was given is such that it is in my view open for argument as to its merit. Whereas the learned District Court Judge found that the relevant provision in the contract describing the vendor was not ambiguous, it could well be that a Judge on appeal might not reach the same conclusion. Although the amount involved, some $25,000, is not big by High Court standards, nevertheless it is of considerable importance to the respective parties.

[9] For the reasons stated I consider that the interests of justice require leave to be granted and I accordingly allow the further required time.

[10] There is a charging order securing judgment in the respondents favour in respect of property owned by the applicants which they are in the process of selling. Mr Robinson asks that in the event of leave being granted the Court order that that charge be discharged upon an undertaking by the applicants to hold the judgment sum, interest and costs in trust pending the outcome of the appeal. I consider that such an undertaking should be given not only by the applicants but also by the solicitor acting on their behalf. I accordingly order that the charge securing the judgment be discharged on sale of the property the subject of the charge if prior unrevokable written undertakings are given by the applicants and their solicitor to hold sufficient of the proceeds to meet the judgment sum, interest and costs in the solicitor’s trust account pending the outcome of the appeal and such proceeds be applied in satisfaction of the judgment should the appeal not succeed.

[11] I invited counsel to make submissions on costs. Although the applicants have succeeded, they have receive an indulgence to cover a failure on their part. On the other hand the need may not have arisen had the respondents given notice of the sealing of the judgment forthwith as required. The case has been appropriately argued by counsel on both sides today. I consider that the justice of the case requires that the costs of this application lie where they fall and so order.