MB Technology Ltd v Orbis Blockchain Technologies Ltd

[2022] NZHC 2408

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

COMMERCIAL PANEL

CIV-2020-404-1541

[2022] NZHC 2408

BETWEEN

MB TECHNOLOGY LTD

Plaintiff

AND

ORBIS BLOCKCHAIN TECHNOLOGIES LTD

First defendant

DAVID SHU-HAN YU
Second defendant

DANIEL JOHN CROTHERS
Third defendant

Continued overleaf

Hearing:

16 September 2022

Appearances:

S A Barker and L C Sizer for plaintiff

M Heard for first, fifth and sixth defendants AJB Holmes for second and third defendants

C P Browne and CJL Martin for fourth defendant

Date of judgment:

20 September 2022

JUDGMENT OF JAGOSE J

[Leave to appeal]

This judgment was delivered by me on 20 September 2022 at 3.00pm.

Pursuant to Rule 11.5 of the High Court Rules.

…………………………

Registrar/Deputy Registrar

Counsel/Solicitors:

J S Cooper KC, Auckland

AJB Holmes, Barrister, Auckland Buddle Findlay, Wellington

Lee Salmon Long, Auckland Wilson Harle, Auckland

MB TECHNOLOGY LTD v ORBIS BLOCKCHAIN TECHNOLOGIES LTD [2022] NZHC 2408 [20

September 2022]

ECOMI TECHNOLOGY PTE LTD

Fourth defendant

DENISE MULLINGS

Fifth defendant

JAHANZAIB KHAN
Sixth defendant

[1]    Ecomi and Orbis seek leave to appeal my 1 June 2022 judgment, dismissing both their applications to strike out MB Technology’s first cause of action as barred by a settlement agreement, and Orbis’ application for summary judgment on its counterclaims.1

Proposed appeals

[2]    Ecomi  and  Orbis  wish  to  argue  on   appeal   I   erred   in   concluding   MB Technology’s first cause of action, alleging breach of a “Bonus OMI Token Contract”,2 was “not settled with … discontinued proceedings”.3 Orbis separately wishes to argue on appeal I erred in concluding “the agreements’ warranties and their contended consequences” only arguably constituted the parties’ express ‘remedy’ required to be given effect under s 34 of the Contract and Commercial Law Act 2017.4

[3]    MB Technology responds, even if I erred (which it denies), my finding its first cause of action was not settled is not a final decision, and even if so open to appeal on the substantive decision; and my finding Orbis’ defences remained for determination at trial is orthodox. It says any appeal adds delay and cost.

Approach to applications for leave to appeal

[4]    Section 56(3) of the Senior Courts Act 2016 prohibits appeals of orders or decisions on interlocutory applications in civil proceedings without this Court’s leave. The object of requiring such leave is:5

1      MB Technology Ltd v Orbis Blockchain Technologies Ltd [2022] NZHC 1257.

2      At [10]–[11].

3 At [23].

4 At [27].

5      Sandle v Stewart [1982] 1 NZLR 708 (CA) at 715.

… to limit the cases which may go on appeal in the interests of finality of litigation and the workload of the [appellate] Court, while preserving the integrity of the law and the interests of justice.

[5]    The Court of Appeal recently endorsed this Court’s approach to leave as       a “filtering mechanism”,6 noting its own approach to be similar:7

… leave to appeal should only be granted where the significance or implications of an arguable error of fact or law, either for the particular case or for the applicant or as a matter of precedent, warrants the further delay which the appeal process would involve.

There is no reason for this Court’s approach to be seen any differently, and it is not.8 The question is if there is something justifying intermediate appeal.

Discussion

[6]    I hesitate to interpret my judgment if final or interlocutory in aspects. But it certainly construed the settlement agreement for the purposes of strike out on what appeared to be all available evidence, leaving Ecomi and Orbis to face a claim for transfer of some 11.8 billion bitcoin tokens presently apparently valued at approximately NZD 30 million or damages in lieu.

[7]    I accept — particularly for Ecomi (which faces no other claim in this proceeding), in the context of an agreement by which it may be taken to have settled such liability — that finding thus has very material significance and implications in the case and for Ecomi and Orbis. It especially is so precisely because my conclusion springs from construction of a settlement agreement, rather than the contractual documents at issue. Settlement has similar ‘finality’ interests as litigation.

[8]    Determination of that point on appeal now, rather than on any appeal against a substantive judgment, may reduce the scope of both trial and any subsequent appeal. As the assigned Commercial Panel judge to deal with this proceeding, I am not asked

6      Greendrake v District Court of New Zealand [2020] NZCA 122 at [6], citing Finewood Upholstery Ltd v Vaughan [2017] NZHC 1679 at [13].

7      At [7], citing Ngai Te Hapu Inc v Bay of Plenty Regional Council [2018] NZCA 291 at [17]; and Meates v Taylor (1992) 5 PRNZ 524 (CA) at 526. Similarly, Fairway Holdings Ltd v McCullagh [2018] NZCA 605 at [11]–[14]; and McLaren v McLaren [2018] NZCA 570 at [3]–[5].

8      Li v Chief Executive, Ministry of Business, Innovation and Employment [2018] NZHC 1171, [2018] NZAR 1134 at [21]–[22].

to, nor presently would, defer any aspect of its case management pending the appeal’s result. I will grant Ecomi and Orbis leave to appeal my judgment in this respect.

[9]    My finding as to Orbis’ counterclaims, however, has none of that consequence. Rather, Orbis seeks to argue on appeal for s 34’s incontrovertible application to provisions that have yet to be construed as ‘expressly providing’ for remedy. Whether they may do so is, as I said, a matter for trial. There is nothing justifying interlocutory appeal. If I am wrong in that, leave is available directly from the Court of Appeal.9

Result

[10]   Ecomi’s  application  for  leave  to  appeal,  in  relation  to  strike  out   of  MB Technology’s first cause of action, is granted. Orbis’ application for leave to appeal is granted only in the same respect, and otherwise is dismissed.

Costs

[11]   Given Ecomi and Orbis required to satisfy me leave was warranted  (and   MB Technology otherwise was successful), in my preliminary view, costs should lie where they fall. If my view is not accepted by the parties, or they cannot otherwise agree, I reserve costs for determination on short memoranda each of no more than five pages — annexing a single-page table setting out any contended allowable steps, time allocation and daily recovery rate — to be filed and served by Ecomi within ten working days of the date of this judgment, with any response or reply to be filed within five working day intervals after service.

Next steps

[12]   As indicated at the leave hearing, counsel are to liaise on a timetable leading to allocation of a fixture date, with reference to items 1–5 of Schedule 5 to the    High Court Rules 2016. In particular, the parties should seek to articulate the issues for trial. I direct:

9      Senior Courts Act 2016, s 56(5).

(a)MB Technology file (desirably jointly, but otherwise also to serve) its memorandum by Friday, 21 October 2022;

(b)any response or reply be filed within five working day intervals after service; and

(c)a case management conference be convened before me on or after     7 November 2022.

—Jagose J