McCullagh v Fairway Holdings Limited - [2018] NZHC 1883

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV 2018-470-000026

[2018] NZHC 1883

UNDER The Companies Act 1993 and Part 19 of the High Court Rules

BETWEEN

CHRISTOPHER CAREY MCCULLAGH and STEPHEN MARK LAWRENCE

Applicants

AND

FAIRWAY HOLDINGS LIMITED

First Respondent

QUEST PROJECTS LIMITED

Second Respondent

Hearing: On the papers; final submissions received 24 July 2018

Counsel:

B J Burt and JRF Cochrane for the Applicants

G Brittain QC and J Delaney for the First and Second
Respondents and 18th and 19th Defendants in CIV 2016-470- 000138

J Heatlie and B Foster for the Plaintiffs in CIV 2016-470-000138 S A Harrigan for the 10th and 11th Defendants in CIV 2016-470- 000138

Judgment:

27 July 2018

JUDGMENT OF ASSOCIATE JUDGE P J ANDREW

This judgment was delivered by me on
27.07.18 at 3:30pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

C C MCCULLAGH and S M LAWRENCE v FAIRWAY HOLDINGS LIMITED AND QUEST PROJECTS LIMITED [2018] NZHC 1883 [27 July 2018]

Introduction

[1] The respondents, Fairway Holdings Ltd and Quest Projects Ltd (Fairway and Quest) have made an application pursuant to s 56(3) of the Senior Courts Act 2016 to appeal my interlocutory judgment of 17 May 2018 to the Court of Appeal. In that judgment I dismissed the respondents’ application for consolidation pursuant to r
10.12 of the High Court Rules.

Relevant legal principles

[2] Under s 56(3) of the Senior Courts Act 2016 no appeal lies from an interlocutory order, unless leave is given.

[3] The overriding consideration is an assessment of the interest of justice. Factors applied in previous cases include:1

(a)A high threshold exists for the granting of leave. An allegation of error of law or fact is generally insufficient. An applicant should raise an arguable error;

(b)Leave should only be granted where the circumstances warrant incurring further delay;

(c)The alleged error should be of general or public importance or otherwise of sufficient importance to the applicant to outweigh any lack of any general or presidential importance.

[4] The requirement for leave should filter unmeritorious appeals of interlocutory orders, or appeals of interlocutory orders of no great significance to the parties or more generally.2

1 A v Minister of Internal Affairs [2017] NZHC 887 at [10] – [12]; Finewood Upholstery Ltd v Vaughan [2017] NZHC 1679 at [9].
2 Finewood Upholstery Ltd v Vaughan, above n 1, at [13].

[5] In Kacem v Bashir3 the Supreme Court distinguished between a general appeal and an appeal against a decision made in the exercise of a discretion. In the latter case, the criteria for a successful appeal are whether the judgment under appeal:

(a)Made an error of law or principle;

(b)Took into account irrelevant considerations;

(c)Failed to take into account relevant considerations;

(d)Resulted in a decision which is plainly wrong.

Background

[6] The background to the three proceedings, the subject of the application for consolidation, is set out at paragraphs [10] to [24]…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] NZHC 1883
Decision Date: 27 July 2018

CaseChat Overview and Summary

McCullagh v Fairway Holdings Limited involved an application for leave to appeal an interlocutory judgment by Fairway Holdings Limited and Quest Projects Limited (the respondents) to the Court of Appeal. The applicants, Christopher Carey McCullagh and Stephen Mark Lawrence, sought leave to appeal the interlocutory judgment dismissing the respondents' application for consolidation of proceedings. The legal issues centred on the principles governing leave to appeal interlocutory orders, particularly under Section 56(3) of the Senior Courts Act 2016, and the application of those principles to the facts of the case.

The court considered the threshold for granting leave to appeal an interlocutory order, which requires an arguable error of law or fact and a showing that the circumstances warrant incurring further delay, while the alleged error is of sufficient importance to the applicant. The court also examined the nature of the rights at stake, the potential prejudice to the parties, and whether the appeal would serve the interest of justice. The respondents argued that the existence of defects in the Cayman Apartments and the arrangements between Hamilton Street Investments Ltd and CBC Construction 2010 Ltd were intertwined, suggesting that the judge's conclusion on common questions of fact was plainly wrong and that their right to a fair hearing was at risk. The applicants, however, contended that the appeal had no basis and would not prejudice the parties.

The court found that the respondents had not met the requisite threshold for leave to appeal. The court was not persuaded that there was any real merit to the grounds of appeal, particularly regarding the commonality of facts between the proceedings. Furthermore, the court found that the respondents' concerns about fair trial rights were more tactical than prejudicial. The court concluded that the respondents had not shown that the appeal was of general or public importance or otherwise of sufficient importance to outweigh the lack of general or precedential importance. The application for leave to appeal was dismissed, and costs were awarded to the applicants on a 2B basis.

Orders