Memelink v Mead

[2016] NZHC 1886

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2015-485-854 [2016] NZHC 1886

UNDER	the Insolvency Act 2006
IN THE MATTER OF	the bankruptcy of Harry Memelink
BETWEEN	HARRY MEMELINK Applicant
AND	BRUCE ALAN MEAD Respondent

Hearing:	11 August 2016
Counsel:	Applicant in Person J C Gwilliam for Respondent
Judgment:	15 August 2016

JUDGMENT OF CLARK J

I direct that the delivery time of this judgment is

4:00 pm on 15 August 2016

MEMELINK v MEAD [2016] NZHC 1886 [15 August 2016]

Introduction

[1]      This is an application under r 20.10 of the High Court Rules for a stay of enforcement of a District Court judgment pending appeal.

[2]      On 16 September 2015 Judge Tompkins determined that a sum of A$40,000 transferred  from  Mr  Mead  into  the  bank  account  of  a  company  controlled  by Mr Memelink was an undocumented personal loan repayable on demand.

[3]      Mr Memelink appeals “on grounds of perjury”.  The appeal is set down for

hearing on 1 September 2016.

The legal principles

[4]      An appeal does not operate as a stay of enforcement of a judgment appealed against.  Despite that the Court may, on application, order a stay of enforcement of a judgment.1  The rationale is that a party is entitled to enjoy the fruits of a judgment in its favour.   But that principle is to be balanced against the need to preserve the position in case the appeal is successful.2

[5]      In Dymocks Franchise Systems (NSW) Pty Ltd v Bilgoa Enterprises Ltd3

Hammond J addressed the factors the Courts commonly address to find this balance. The following factors are relevant to this application:

(a)       whether the applicant’s right of appeal will be rendered nugatory if there is no stay;

(b)      the bona fides of the applicant as to the prosecution of the appeal;

(c)       whether the successful party will be injuriously affected by the stay.

1      Rule 20.10.

2      Duncan v Osborne Buildings Ltd (1992) 6 PRNZ 85 (CA) at 87.

3      Dymocks Franchise Systems (NSW) Pty Ltd v Bilgoa Enterprises Ltd [1993] 3 NZLR 239 (HC)

at [9].

[6]      Ultimately I must exercise my discretion in a manner that best meets the overall justice of the case.4   The object is to ensure the appellate Court is able to do justice between the parties.5

Submissions

[7]      Mr Memelink’s  essential  submission  was  that  a  stay  should  be  granted because the situation was a “serious situation of fraud”.   He referred me to an “urgent memorandum” filed at 4.07am on the morning of the hearing attaching a number of documents.  Mr Memelink said that two documents in particular support his case which is that the payment made was in reduction of an amount owed by Mr Mead or by a company owned by Mr Mead to Mr Memelink.   This was the argument rejected by the District Court Judge.  In particular Mr Memelink focused on an email exchange which the District Court Judge relied on in determining that the   funds   were   an   enforceable   personal   loan   as   asserted   by   Mr   Mead. Mr Memelink’s contention is that the email chain is essentially a fraudulent cut-and- paste reconstruction.

[8]      I note that Mr Memelink has an application outstanding for leave to adduce evidence of a technical expert to demonstrate that these emails have been altered and thus to support his claim of perjury having been committed by Mr Mead.

[9]      Mr Gwilliam, counsel for Mr Mead, opposed the stay application unless Mr Memelink pays into Court or otherwise satisfactorily secures for the respondent the fruits of the District Court judgment.

[10]     Counsel referred to a bankruptcy notice served on Mr Memelink on 28 April

2016. The amount of the judgment debt had not been paid and Mr Mead had filed an application  for  adjudication.     That  has  a  first  call  on  20  September  2016. Mr Gwilliam referred also to a costs judgment against Mr Memelink which was

sealed  on  21  March  2016.    That  has  not  been  the  subject  of  an  appeal  and

4      Philip Morris NZ Ltd v Liggett & Myers Tabacco Co (NZ) Ltd [1977] 2 NZLR 41 (CA) at 42.

5      New Zealand Insulators Ltd v ABB Ltd (2006) 18 PRNZ 459 (CA) at [13] citing Minnesota

Mining & Manufacturing Co v Johnson & Johnson Ltd [1976] RPC 671 at 676.

accordingly  it  also  is  available  as  a  basis  for  adjudication  of  Mr Memelink’s

bankruptcy.

[11]     Mr  Gwilliam  further  submitted  that  all  the  documents  tendered  with Mr Memelink’s  urgent  memorandum  in  the  stay  hearing  were  provided  in  the document capsule in the District Court proceedings which commenced in 2013.  The documents which Mr Memelink relies on as demonstrating his case were before the District Court Judge.

Discussion

[12]     As I explained to Mr Memelink, who courteously accepted the position, his submissions essentially went to the merits of his appeal.  That is not before me for determination and as such I am unable to engage in the merits one way or another.

Appeal rights rendered nugatory?

[13]     I am not persuaded that Mr Memelink’s right of appeal will be rendered

nugatory if there is no stay.

[14]     First,  the  judgment  under  appeal  is  a  monetary  judgment.    There  is  a difference between monetary judgments and judgments where, due to the nature of the relief, damage to a party cannot be remedied in any meaningful way.6   This being a monetary judgment the worst case scenario for Mr Memelink is that he is made bankrupt before the appeal is heard.   The first call  of the bankruptcy matter is

20 September 2016 so no step towards bankruptcy will be taken before then.  In any event, at least theoretically, the Official Assignee could carry on the appeal.7

[15]     Mr  Memelink  is  unable  to  demonstrate  that,  without  a  stay,  he  will  be deprived of the result of any success on appeal.  Accordingly, his appeal would not

be rendered nugatory.

6      Downes v  Morgenstern [2014] NZHC 671 at [22] where Venning J applied New Zealand

Insulators Ltd v ABB Ltd, above n 5.

7      As Venning J observed in Downes v Morgenstern, above n 6 at [22].

Bona fides of applicant in prosecution of his appeal

[16]     Having heard Mr Memelink I am in no doubt as to the bona fides of his belief as to where the merits lie and what the outcome should be.  I am assessing at this point, however, his good faith prosecution of his appeal.

[17]     It appears that Mr Memelink has been granted a number of indulgences.

(a)      Mr Memelink’s appeal was filed out of time (although counsel has recognised Mr Memelink is a litigant in person and the point is not taken).

(b)On 21 November 2015 Dobson J directed that no steps were required to be taken by the respondent until security for costs had been paid. Security was not paid until 13 April 2016 (the same day Mr Mead issued a bankruptcy notice against Mr Memelink).

(c)      Although it was agreed in a joint memorandum dated 25 May 2016 that  Mr Memelink  would  file  his  submissions  and  chronology  by

29 July 2016 as at the date of the hearing those submissions had still not been filed.

(d)Mr Memelink did not dispute that the evidence he proposes to rely on in the appeal is not fresh.  Mr Memelink challenges the authenticity of the emails.

[18]     I accept that Mr Memelink has been under a great deal of pressure for the personal reasons he outlined in his urgent memorandum.  Nevertheless the factors I have listed tend to negate a stay.

Injury to the respondent?

[19]     Mr Mead has had a judgment in his favour since September 2015.  There is also a costs judgment in his favour and upon which Mr Mead might base a further application  for  bankruptcy.    Yet  he  is  no  further  ahead.    The  District  Court

proceeding was beset by delays.  Judge Tompkins alludes to them.  The hearing of this appeal has also been delayed because of the failure by the applicant to take key steps in good time.   I decline to put a further barrier in the way of Mr Mead’s entitlement to his judgment sum when there is no good case for doing so.

[20]     I asked Mr Memelink why he would not pay the amount into Court.   He replied that he had “millions in assets” but it was not within his grasp because of the other cases against him brought about by lawyers in collusion with each other.

[21]     Mr Memelink has failed to disclose to the Court any information pointing to any prejudice to him in requiring him to pay into Court the amount of the judgment pending determination of the appeal.

Result

[22]     I do not consider that overall justice is served by granting a stay.   For the reasons I have given, the application for a stay is dismissed.   The respondent is entitled to costs.

[23]     A final point: although it is not for me to case manage the appeal I record that the parties agreed in Court that Mr Memelink would file his submissions no later than  5pm  19  August  2016  and  Mr  Gwilliam  would  file  submissions  for  the

respondent by 5pm 29 August 2016.

Karen Clark J

Solicitors:

Main Street Legal, Upper Hutt for Respondent