Mu v Body Corporate 31241

[2012] NZHC 22

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-4768 [2012] NZHC 22

BETWEEN  DANNI MU Plaintiff

AND  BODY CORPORATE 31241

First Defendant

ANDSHARRON WYNNE O'SULLIVAN Second Defendant

ANDGRAHAM BELL Third Defendant

Hearing:         25 January 2012

Appearances: G Illingworth QC for Plaintiff

T J Herbert for Defendants

Judgment:      25 January 2012

ORAL JUDGMENT OF ASSOCIATE JUDGE BELL Re:  application for stay of security for costs judgment

Copy for:

Carter & Partners (Brent O’Callahan) P O Box 2137 Auckland 1140, for plaintiff

Email:   [email protected]

Adina Thorn Ltd (A J Thorn) P O Box 1753 Auckland 1140, for first defendant

Email:   [email protected]

Lee Salmon Long (Tim Mullins), P O Box 2026 Auckland 1140, for second and third defendants

Email:   [email protected]

Grant M Illingworth QC, P O Box 7205 Auckland 1141, for plaintiff

Email:     [email protected]

Timothy J Herbert, Level 13, Shortland Chambers, 70 Shortland Street, Auckland 1010, for first defendant

Email:   [email protected]

David J Chisholm P O Box 2629 Auckland 1140, for second and third defendants

Email:   [email protected]

Paul W David, P O Box 4472 Auckland 1140, for fourth defendant

Email:   [email protected] /  [email protected]

Case Officer:

Email:   [email protected]

MU V BODY CORPORATE 31241 HC AK CIV-2011-404-4768 25 January 2012

[1]      On 8 December 2011 I heard an application by the first defendant that the plaintiff provide security for costs.  I gave an immediate oral decision.  I dismissed the application because I was not satisfied that the first defendant had established the threshold of showing that there was reason to believe that the plaintiff would be unable to pay costs if the plaintiff were unsuccessful in the proceeding.

[2]      The  substantive  proceeding  is  to  be  heard  on  10  February  2012.    The plaintiff’s substantive application challenges the validity of resolutions passed at a meeting of Body Corporate 312431.  The case is expected to take no more than a day.

[3]      The matter comes before the court today because the first defendant says that it has lodged a notice of appeal with the Court of Appeal against my decision of

8 December 2011.  It seeks a stay of the proceeding until the appeal has been heard, and says that unless the stay is granted then the appeal will be rendered nugatory.

[4]      There is a preliminary matter to be sorted out.   That is whether the first defendant has chosen the correct remedy to challenge my decision on the security for costs application.  An application for security for costs under r 5.45 is made by way of an interlocutory application.  Rule 7.34(1) directs that an interlocutory application for which a hearing is required must be heard in chambers unless a Judge otherwise directs.   In this case there was no direction that the matter was not to be heard in chambers.  The matter therefore proceeded as a chambers hearing.  If I had given a direction that the matter was not to be heard in chambers but was to be heard in court, then the matter would have had to be heard before a Justice, not before an Associate Judge because a court hearing of an interlocutory application is not within the jurisdiction of an Associate Judge.

[5]      Under r 2.1 an Associate Judge has the jurisdiction and powers of a Judge in chambers conferred by the Judicature Act or these rules and other enactment.  That rule has been made pursuant to s 26J of the Judicature Act 1908.  That section allows

rules to be made to confer on Associate Judges the jurisdiction and powers of a

Judge sitting in chambers.

[6]      Section 26P of the Judicature Act provides for review and appeals against decisions  of Associate  Judges.    Section  26P(1)  provides  that  any  party  to  any proceedings who is affected by any order or decision made by an Associate Judge in chambers may apply to the Court to review that order or decision.   On the other hand, s 26P(2) provides that any party to any proceedings may appeal to the Court of Appeal against any order or decision of an Associate Judge other than an order or decision made in chambers.  I made the decision on the application for security for costs in chambers.  The remedy to challenge that decision was to apply for a review under s 26P(1), not to appeal to the Court of Appeal under s 26P(2).

[7]      Under  r  2.32,  unless  a  Judge  or  Associate  Judge  directs  otherwise,  an application  for review  of such a decision  must  be filed and  served  within  five working days of the order being made and decision given if the application for review is made by a party who was present or represented when the order was made or decision was given.  In this case, the first defendant was represented at the hearing and was present when I gave my decision.  Accordingly the five working days ran from 8 December 2011.  The application for review had to be filed and served by

15 December 2011 if the application was to be made as of right.   The notice of appeal to the Court of Appeal was not lodged until this year – although Ms Thorn advises that if the matter had been the subject of appeal it would be within time under the Court of Appeal (Civil Rules).  The first defendant is in the unfortunate position that it has chosen the incorrect remedy and has not applied for a review within time.   The appeal to the Court of Appeal was lodged outside the time for applying for a review. The notice of appeal to the Court of Appeal could not be considered to be an application for review of a decision within r 2.3 of the High Court Rules.  In fact the appeal document has not yet reached the court file.

[8]      Rule  2.3(2)  allows  the  court  to  allow  extensions  of  time  for  filing  an application for review.   Realising the point that a review is the appropriate remedy, Ms Thorn argued that time for a review should be extended.  Her submission was that a review could be filed promptly, the plaintiff would be able to reply and the

court should then give urgency to allow a review application to be heard, with that review application expected to take no more than an hour or so.

[9]      In applying for an extension of time, the first defendant is asking the court for an indulgence.   In seeking an indulgence it cannot say that it is entitled to seek a review as of right.   In these situations where the court is being asked to consider whether to extend the time for a decision to be reviewed, the merits of the proposed challenge are not the only consideration. The court is required to weigh what may be competing considerations.  On the one hand there are questions of justice, that is, the concern to see that decisions are made correctly according to law.  But against that there is also the need for finality, and in the case of interlocutory decisions the need to see that the proceeding as a whole is allowed to proceed expeditiously.   It can happen that the requirements of finality and the need for prompt disposal of proceedings  may  prevail  over  the  requirement  to  see  that  decisions  are  made correctly according to law.

[10]     As to the question of justice, I understand the ground of the appeal to be along the lines that I erred in holding that the threshold has not been established. That will raise two considerations.  The first is whether I applied the correct test in holding that the test was an inability to pay rather than an unwillingness to pay; the second is a factual question, as to whether I made correct findings of fact on the evidence.

[11]     On the first point, Mr Illingworth submits that the way I made the decision was in accordance with a long-standing practice in the courts on security for costs applications.  On the second, there was evidence consistent with the plaintiff being defiant rather than insolvent and I was not able to make any finding of potential inability to pay on her part.  While there may be grounds for challenge, at this stage they do not strike me as being all that strong.  I consider the other considerations.

[12]     This   was   a   decision   on   an   interlocutory   application.      Interlocutory applications, of their nature, involve procedural directions given on the way to a final hearing.   They do not necessarily determine the final result.   That comes at the substantive hearing.  As interlocutory proceedings are procedural, it can happen that

a case can  go to a hearing notwithstanding that procedural directions  might, in hindsight, be seen to be in error.   Not every interlocutory decision deserves to be taken on review – even those that might be later considered to be in error.  There can be value in getting on with the case notwithstanding the merits or otherwise of interlocutory decisions.  In my view that is the more important consideration in this case.

[13]     It is wasteful and inefficient for the parties in this case to be involved in interlocutory skirmishing.  That becomes particularly inefficient given that this case is to have its hearing shortly.  If I were to accede to the first defendant’s request, the parties would have to devote time and effort to dealing with a review application when their energies would be better directed at getting ready for trial.  I cannot help thinking that preparation for trial would be hampered by having to deal with a review application.  While the hearing itself might be short, the parties still have to spend time and effort in preparation.  A review hearing at this stage would be very disruptive.

[14]     I remain of the view that the fixture for 10 February 2012 should still stand. In this proceeding, the first defendant is the body corporate for a block of apartments which has weathertightness problems.   The body corporate has been working on proposals for remedial works.  The resolution which is the subject of challenge is directed at the body corporate’s plans to use Rockcote.  The challenge is brought by one apartment-owner, apparently a dissident.  It is important for the orderly conduct of the affairs of the body corporate that challenges, such as the one brought by the plaintiff in this case, are addressed and disposed of promptly.   I say that without intending to make any comment one way or the other on the merits of the plaintiff’s claim.  If the claim is justified, it ought to be addressed promptly so that the body corporate can then re-direct matters.   On the other hand, if the plaintiff ’s claim is unjustified, then that should be recognised promptly as well so that it cannot be allowed to fester.  Promptness of decision is, in my judgment, an important benefit for both parties in this case.

[15]     Accordingly, my view is that as the present fixture is to stand, it would cause more stress and inconvenience to have a review of my decision in addition to the

substantive hearing.    Accordingly the application for stay must be declined and, equally, I decline the oral application to extend time to file an application for review.

[16]     Mr Illingworth proposes that costs be held over to await the outcome of the substantive hearing.  I agree with that course.

[17]     There has been slippage in complying with timetable directions.  I give these directions varying the directions given in my minute of 16 December 2011:

(a)       The  first  defendant  is  to  file  and  serve  its  affidavit  evidence  by

2 February 2012.

(b)The plaintiff is to file and serve any evidence in reply and a casebook, bundle of authorities and copies of the plaintiff ’s opening submissions by 7 February 2012.

(c)      The first defendant is to file and serve its submissions no later than the day before the hearing.

.............................................

Associate Judge R M Bell