Mahon v Waimauri Limited

[2020] NZCA 580

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

 CA338/2020
 [2020] NZCA 580

BETWEEN	NEVILLE CHRISTOPHER MAHON First Applicant BEACH ARENA LIMITED Second Applicant
AND	WAIMAURI LIMITED First Respondent TIMOTHY LAIRD EDNEY Second Respondent WAIKORO LIMITED Third Respondent

Court:	French and Collins JJ
Counsel:	First Applicant in person No appearance for Second Applicant D J Chisholm QC and M J W Lenihan for Respondents
Judgment: (On the papers)	23 November 2020 at 9.00 am

JUDGMENT OF THE COURT

AThe application for an extension of time to file the case on appeal and apply for allocation of a hearing date is granted.

BThe case on appeal must be filed and allocation of a hearing date must be applied for by 15 December 2020.

CCosts are reserved pending determination of the appeal.

____________________________________________________________________

REASONS OF THE COURT

(Given by Collins J)

Introduction

1. The applicants apply for an extension of time for filing the case on appeal.[1]  They have also informally applied for the allocation of a hearing date.  Both applications are opposed.

   [1]Court of Appeal (Civil) Rules 2005, r 43(3).

2. Mr Mahon is acting for himself and he is purporting to act for the second applicant, Beach Arena Ltd (Beach Arena).  Mr Mahon cannot act for the company and must cease doing so.[2]

   [2]Re G J Mannix Ltd [1984] 1 NZLR 309 (CA); and Dreamtech Designs & Productions Pty Ltd v Clownfish Entertainment Ltd [2015] NZCA 491, (2015) 23 PRNZ 141 at [8]–[10].

3. The appeal is from a decision of Muir J delivered on 29 May 2020.[3]

   [3]Waimauri Ltd v Mahon [2020] NZHC 1170.

4. The litigation concerned a hotel and two adjoining development properties in Beach Road, Auckland.  The protagonists are Mr Mahon and Mr Edney, who had engaged in business ventures together for more than 30 years.

5. Waimauri Ltd (Waimauri) sued Mr Mahon and Beach Arena for breaches of a lease and loan agreement executed when delays occurred in developing the hotel and adjacent properties.  Mr Mahon and Beach Arena counterclaimed and pleaded Mr Edney and Waimauri had breached a collateral “clean slate” agreement varying the terms of the lease and loan agreement.  They also counterclaimed that the conduct of Mr Edney and Waimauri was so egregious that they should be estopped from recovering damages. 

6. Muir J gave judgment in favour of Waimauri against Mr Mahon in the sum of $394,245.75 plus interest and dismissed the counterclaim.

7. The grounds of appeal allege that Muir J erred when dismissing the “clean slate” defences and the counterclaim advanced by Mr Mahon and Beach Arena.

Steps taken

1. The notice of appeal was filed on 29 May 2020, the last day for filing an appeal as of right.

2. On 2 July 2020, a Deputy Registrar issued a notice that the case on appeal had to be filed and a fixture date applied for by 29 September 2020 in order to comply with r 43(1) of the Court of Appeal (Civil) Rules 2005.  Security for costs was set at $7,060.

3. Mr Mahon applied for waiver of security.  He abandoned that application on 4 September.  The security has now been paid.

4. On 28 September 2020, Mr Mahon filed the application for an extension of time to file the case on appeal.  Since r 43(1) had not been complied with, the appeal is to be treated as abandoned on 29 September 2020.  Mr Mahon’s submissions, dated 2 November 2020, contain an informal application for the allocation of a fixture.

Grounds of application

1. Mr Mahon explains that the extension sought is to 1 December 2020 and that the reasons for the delay relate to:

   (a)difficulties caused by the second COVID-19 lockdown in Auckland, which he says disrupted preparation of the case on appeal;

   (b)Mr Mahon’s cashflow problems caused by COVID-19 lockdown; and

   (c)other commitments of the litigation support person retained to prepare the case on appeal.

2. Mr Mahon contends that the delay that has occurred does not cause prejudice to the respondents.  Conversely, extinguishing the applicants’ appeal at this stage will unfairly deprive them of the opportunity to have their appeal heard and determined.

3. Mr Mahon asserts that he has conducted himself properly and reasonably throughout the proceedings and that it is the respondents who are engaging in unreasonable tactics.

4. Mr Mahon maintains the estoppel issues raised by the appeal are meritorious and of general public importance.

Grounds of opposition

1. The respondents contend the length of the delay is significant and that Mr Mahon has waited to the last moment before filing the notice of appeal and the current application. 

2. The respondents take issue with Mr Mahon’s explanation for the delay and criticise the fact Mr Mahon has failed to appoint a lawyer to act for Beach Arena, despite having previously been warned of the need to do so.

3. The prejudice to the respondents is said to arise from the fact that they are restrained by the appeal from enforcing the High Court judgment.

4. Mr Chisholm QC, senior counsel for the respondents, was particularly critical of the merits of the proposed appeal.  He submits the grounds of appeal are factual and have little prospects of succeeding.

Governing principles

1. The principles that govern an application for an extension of time to file a case on appeal and apply for a fixture were explained by the Supreme Court in Almond v Read.[4]

   [4]Almond v Read [2017] NZSC 80, [2017] 1 NZLR 801 at [35]–[40].

2. The ultimate question requires us to determine what the interests of justice require.  Factors that may influence that determination include:

   (a)the length of the delay;

   (b)the reasons for the delay;

   (c)the conduct of the parties, particularly the applicant;

   (d)any prejudice or hardship to the respondent; and

   (e)the significance of the issues raised by the proposed appeal, both to the parties and more generally.

Analysis

The length of the delay

1. The delay that has arisen to date is concerning.  The delay is, however, not so long as to cause us to conclude that the application should be declined on this ground.

The reasons for the delay

1. The explanation for the delay, whilst containing some questionable assertions, provide an explanation which, when viewed holistically, is reasonable. 

The conduct of the parties, particularly the applicant

1. While Mr Mahon appears to have waited until the last minute before taking crucial steps in pursuing the appeal, we do not see anything in his conduct which causes us to conclude that the application should be declined because of his actions.

Prejudice or hardship

1. We accept that there is prejudice suffered by the respondents through the ongoing delays in being able to enforce judgment.  Nevertheless, that prejudice is not so pronounced as to justify declining the application.

Significance of the issues raised

1. We should not dismiss the application on the grounds of the merits and the importance of the issues raised unless the appeal is “clearly hopeless”.[5]  While we appreciate the force in Mr Chisholm’s submissions concerning the merits of the appeal, we do not think that this is a case where the appeal can be properly described as “clearly hopeless”.

Result

[5]At [39].

1. The application for an extension of time to file the case on appeal and apply for allocation of a hearing date is granted.

2. The applicants must comply with r 43 by 15 December 2020.  We note that an informal application was made for an allocation of a hearing date in Mr Mahon’s submissions.  This can now be progressed by the Registry.  The case on appeal must be filed by 15 December 2020.

3. We reserve costs pending the determination of the appeal.

Solicitors:
Brown Partners, Auckland for First and Second Respondents