Louden Cosmetics Ltd v Yves Saint Laurent Parfumes

IN THE COURT OF APPEAL OF NEW ZEALAND

CA86/97

BETWEEN	LOUDEN COSMETICS LTD
Appellant

AND	YVES SAINT LAURENT PARFUMES AND ANOTHER
Respondents

Hearing:	1 February 2001
Coram:	Keith J Blanchard J McGrath J
Appearances:	R Harrison QC for the Appellant R J Katz QC for the Respondents
Judgment:	8 February 2001

JUDGMENT OF THE COURT DELIVERED BY KEITH J

The respondents (YSL) apply to strike out the appeal for want of prosecution. If that application fails, they apply for an order for the expeditious disposal of the appeal. The appellant (Louden) resists the strike out and applies for a fixture.
On 11 February 1997 YSL, as plaintiffs, obtained a judgment restraining Louden from manufacturing and dealing in certain fragrances, toiletries and other cosmetics and making associated orders. Quantum and costs were reserved. The judgment was sealed on 25 November 1997, the Judge having settled its form on 6 June 1997. Louden had filed its notice of appeal on 6 May 1997 and YSL filed a cross appeal on 12 November 1998. It was not until 4 December 2000 that Louden filed the case on appeal and applied to set down the appeal for hearing.
YSL contend that
•      Louden has failed to prosecute the appeal diligently and has been guilty of unreasonable and inordinate delay without excuse
•      they have suffered prejudice as a result and
•      the appeal has no merit in any event
The appeal was filed before the Court of Appeal (Civil) Rules 1997 came into force (on 1 October 1997) and accordingly is not subject to R10 under which an appeal is to be treated as having been abandoned if, as here, the appellant did not, within six months, either (1) apply for a fixture and file the case on appeal or (2) apply for an extension of time to take those steps : see R10(4). Rather, the application is made and is to be considered under R26 of the 1997 Rules. That rule is expressed in broad terms:
The Court may, on the application of the respondent or any other party to an appeal, order that the appeal be struck out for want of prosecution.
If not the last this appeal must be one of the last pending appeals filed before 1 October 1997.
The submissions focus on delay, prejudice and the merits of the appeal – the matters identified as going to the justice of the case when the 1955 Rules were still in force; Gallagher Electronics Ltd v Donaghys Electronics Ltd (1995) 8 PRNZ 177, 179.
YSL contend that more recent decisions under the new rules indicate a stricter approach. They quote this passage from Reid v Wilkins (CA271/90; judgment of 27 May 1999):
Appeals to this Court should be prosecuted with expedition. They are not to be left dormant, in the expectation that should the need arise in the future they can be brought on for hearing. The importance of due diligence is now expressed in the present rule 10, in force since 1 October 1997.
As the Court clearly recognised in that case, R10 was not directly applicable, but it does emphasise expedition, as does this Court’s practice, the role of the Commercial List (used in this case) and wider principle. Further, R26 does not in its terms or purpose require a showing of prejudice, although prejudice may support an application. Inordinate and inexcusable delay may be enough to rid both the respondent and the Court of an appeal which the appellant is not prosecuting with due diligence; eg Russell v Attorney-General (CA253/98; judgment 24 May 1999). The rule also makes no reference to the merits of the appeal.
We begin and indeed we essentially end with the delays. Louden accepts that it has been guilty of serious delays in its prosecution of the appeal. Mr Harrison QC (who has come into the case only at this stage) emphasised that the delays are not the fault of Louden itself. The delay from judgment to this stage is a but few days short of four years, with the case on appeal being filed only two months ago. But, says Louden, YSL have acquiesced in the delays and waived any right to rely on them. It contends that the parties have cooperated in getting the appeal to the present stage where the appeal is ready for hearing. The appeal, it says, is important for the world wide business of Louden’s supplier, Constance Carroll Cosmetics Plc, which has not however ever been the subject of proceedings by YSL anywhere else in the world.
We summarise the steps taken since the initial decision was given in February 1997. Until June 1997 the parties were engaged in settling the form of the judgment, Louden having indicated within a month of the decision that it would appeal and having filed its notice of appeal in May. From July 1997 to January 1998 counsel for YSL three times inquired about progress on the appeal but it was not until September 1998 that Louden’s solicitors sent a draft index to the case on appeal. YSL’s counsel responded in November (his absence overseas having been advised by his instructing solicitors in September) and advised that he would be preparing a notice of cross-appeal. High Court mentions occurred in July 1998 and February 1999, with the Judge on the latter occasion expressing surprise at the lack of progress.
In April 1999 Louden’s solicitors wrote in response to the November comments on the case on appeal to YSL’s counsel who replied a week later and included a draft notice of cross appeal. In June he approved the “final draft” of the index to the case on appeal and asked for the points on appeal which Louden’s solicitors had earlier indicated would be ready by then.
The proposed points on appeal, supplied in July, were the subject of intermittent correspondence through the latter part of 1999, with YSL asking that they be made more informative. In December Louden’s counsel provided redrafted points on appeal (served in that form in October 2000) and indicating its wish to have the appeal set down.
In March 2000 YSL’s counsel had only one comment (about the order of documents) on the draft case on appeal. He also wrote in April about his intended absence and about the next High Court mention in June. “I have no doubt that the appeal will not have been heard and determined in the intervening period. … I invite you to join with me in seeking an adjournment of that [June] mention to a date in December 2000.” According to YSL’s submissions, the mention was adjourned by consent to 4 December. Louden’s counsel at trial and at that stage has deposed that from April to October 2000 he was heavily committed to other litigation, became distracted from this appeal and had difficulty refocusing on it. At the end of October he indicated to YSL’s counsel that he would file “the Case on Appeal with the Points on Appeal as they stand” and he served the points on appeal. In November he forwarded a draft application to set down the appeal for hearing, seeking comments and an indication of suitable dates; the case on appeal would be forwarded to this Court with the application for a hearing date. The next day counsel for YSL replied, declining to sign the fixture application because he had received instructions to apply to have the appeal struck out. That application was filed in January 2001.
The above account confirms that Louden’s delays over the past four years have indeed been substantial : on the available record its legal advisers appear to have taken no action at all from July 1997 to September 1998, from November 1998 to April 1999, and from April 2000 to October 2000.
Not only were the delays substantial but YSL’s counsel and solicitors several times expressed concern about them and, more importantly, reserved their client’s position. Thus in October 1997, after a silence of three months (following the settling of the form of the judgment and a Louden query about appealing the form of the order), YSL’s counsel asked for advice on progress on the preparation of the case as they wished to see the appeal progressed in a timely manner. In January 1998 he expressed concern that prosecution of the appeal should not simply drift. Following an exchange in November 1998 and April 1999 about the contents of the case on appeal, counsel stated that Louden had done little to prosecute the appeal and YSL were becoming anxious about the drift. On 6 July 1999 counsel, referring to a mention hearing set for the following week, stated his expectation that Louden would be in a position “to give some undertaking regarding appeal”. On 13 July Louden provided proposed points on appeal. On 22 July YSL’s solicitors, in seeking “proper and detailed Points on Appeal”, expressly reserved their rights to take up the question of delay with this Court as appropriate. “It can hardly have taken the Appellant two years or more to prepare the Points on Appeal.” Following the provision of redrafted points of appeal on 7 December, Louden’s counsel on 22 December indicated his wish to have the matter set down. YSL’s solicitors’ reply on Christmas Eve, indicating that counsel hoped to return to the matter in the second week of January, noted that “delays to date have been appreciable and solely those of the appellant. The respondents accordingly reserve their rights in that regard”. There is no basis in this record for Louden’s argument that YSL have waived their rights to seek to strike out the appeal or through their conduct have precluded themselves from seeking a strike out. The opposite interpretation is to be given. We also agree with Mr Katz QC for YSL that the necessary cooperation between counsel and solicitors in the preparation of the case on appeal should not be seen as prejudicing the rights of the respondent in situations such as the present.
Given the present circumstances we do not consider that the alleged prejudice or the merits of the appeal carry any real weight. On prejudice (to Louden rather than YSL) we would note only that the order made here does not appear to have had any practical consequence elsewhere in the world for Louden’s suppliers (we realise of course it cannot have legal effect) and that Louden has never sought the suspension of the order to protect its business here. This is a case where the delays in context by themselves provide a basis for decision that outweighs all other factors. Their extent and number, their overall extent, YSL’s expressed concern about them, their reservations of their position, and the policy and principle reflected in this Court’s Rules and in our practice all lead us to the conclusion that the appeal should be struck out. We so order.
The respondents are entitled to $2,500 costs and their reasonable disbursements including the travel costs of counsel to be fixed by the Registrar if the parties cannot agree.

Solicitors:
Phillips Fox, Auckland for the Appellant
Courtney Ewart, Auckland for the Respondents

[2001] NZCA 15

8 February 2001