Muollo v Creative Engineering Design Ltd

[2004] NZCA 334

IN THE COURT OF APPEAL OF NEW ZEALAND

CA240/04

BETWEENJUSTINE MUOLLO

Applicant

ANDCREATIVE ENGINEERING DESIGN LIMITED

Respondent

Hearing:6 December 2004

Court:Anderson P, McGrath and Glazebrook JJ

Counsel:B A Gibson for Applicant

F J Thorp for Respondent

Judgment:14 December 2004 

JUDGMENT OF THE COURT

The application for special leave to extend the time for bringing an appeal is allowed.  The applicant must bring her appeal in this Court, and any application for waiver of security for costs in the High Court, within 7 working days of delivery of this judgment.  There will be no order for costs.

REASONS

(Given by McGrath J)

[1]       This is an application for special leave to extend the time prescribed for appealing to this Court.  It is brought under r 6(2)(b) of the Court of Appeal (Civil) Rules 1997.  The applicant, Ms Muollo, wishes to appeal against a judgment entered against her in the High Court in a proceeding brought by the respondent Creative Engineering Design Limited.  Keane J, in a judgment delivered on 29 July 2004, held that the applicant was liable to the respondent in the sum of $53,276 for misleading and deceptive conduct in breach of the Fair Trading Act 1986.  The Judge at the same time separately gave judgment for the respondent against a company associated with the applicant for $97,273. The present application for special leave, however, is only concerned with the judgment against the applicant.

[2]       The need for the application for special leave to extend the time for appealing arises because the High Court has decided that an appeal brought by the appellant within time must be treated as abandoned under Rule 11(3). 

[3]       On 25 August 2004 the applicant filed and served a notice of appeal to this Court against the High Court judgment.  She sought civil legal aid for the conduct of the appeal and on 7 September 2004 her counsel notified the respondent’s legal advisers that this application had been granted.

[4]       Under r 11(1), unless the High Court were otherwise to direct, the applicant was required to give security for the respondent’s costs in this Court within 14 days of bringing the appeal.  That period expired on 8 September 2004 and on that day the appellant’s solicitor applied ex parte to the High Court for an order waiving security.  That course was contrary to the terms of r 11(5)(b), under which the application had to be made on notice to all parties affected.  The application, together with a supporting affidavit and memorandum for counsel, were eventually served on the respondent, but not until 22 September 2004. 

[5]       On 17 September the Judge had issued a Minute indicating that by the time the ex parte application had reached him it was out of time.  He said that, in light of the grant of legal aid, he would have excused the applicant from the requirement that she give security for costs if he had retained jurisdiction to do so.  If the consequence of the application being out of time was that a fresh notice of appeal had to be given, he would deal with any related application to waive security on the papers.

[6]       On receiving the application, counsel for the respondent wrote to the appellant’s solicitor taking the position that the appeal brought on 25 August had to be treated as having been abandoned by virtue of r 11(3).  He maintained that the Court of Appeal had no jurisdiction to entertain an application for special leave to bring a fresh appeal out of time adding that, in any event, if such an application were to be made, the applicant should make it to the Court of Appeal rather than the High Court.

[7]       The applicant nevertheless applied under r 5 of the Civil Rules to the High Court for leave to appeal out of time and for waiver of the requirement that she give security for costs.  On 4 November 2004 Keane J delivered a judgment dismissing that application.  He upheld the respondent’s argument that the appeal brought on 25 August had to be treated as abandoned, in accordance with r 11(3), because the applicant had neither given security for costs within the 14 day period allowed by r 11(1) nor applied properly to the Court within the required time so as to be excused from doing so. The latter reason reflected her failure to serve the respondent in time.  The Judge then considered the application brought under r 5 for leave to bring a fresh appeal.  He concluded that r 5 did not apply in the circumstances, as it only covered the situation where an enactment stipulated that leave was required to bring an appeal.  As the present applicant was entitled to appeal as of right (under s 66 of the Judicature Act), r 5 did not apply.  That left the High Court without any jurisdiction to deal with the application for leave to bring a fresh appeal and it was dismissed.  Keane J also observed that despite the absence of any reference to r 6(3) in r 11(3), the only route open to the applicant was to apply directly to this Court under r 6(3) for special leave to extend the time prescribed for bringing a fresh appeal.

[8]       No appeal was brought against that judgment.  Nevertheless at the hearing before us counsel for the applicant, Mr Gibson, argued that it did not follow from the terms of r 11 that an application for waiver of security for costs which had been brought in time, but which was defective, was deemed to be abandoned.  For reasons which will become apparent it is not necessary for us to consider this submission.

[9]       The applicant then applied to this Court for special leave to appeal against the High Court judgment of 29 July 2004 under r 6(3)(b). The principal issue is whether this Court has jurisdiction to grant special leave in a situation where an appeal is treated as abandoned under r 11(3).

[10]     Prior to 1 January 2004, where a party who had a right of appeal against a judgment of the High Court failed to comply timeously with requirements under r 11 to give security for the respondent’s costs in this Court, or to obtain an order waiving that requirement, the party wishing to appeal could apply under r 5 for special leave to bring an appeal out of time.  Rule 5 at that time provided as follows:

5  Time for appeal

(1)  Except by special leave of the Court below or by special leave of the Court of Appeal, and unless the enactment conferring the right of appeal otherwise provides, no appeal may be brought after the expiration of 28 days.

(2)  An appeal by special leave of the Court below must be brought within the time fixed by the Court below.
(3)  In calculating the period referred to in subclause (1), the period commencing on 20 December and ending with the close of 10 January must be disregarded.

[11]     Under the Court of Appeal (Civil) Amendment Rules 2003 (SR2003/341/5), with effect from 1 January 2004, r 5 was revoked and substituted by rr 5 and 6 of the Civil Rules.  They separately address the position where an Act provides that a person wanting to appeal has to obtain leave to appeal to this Court and cases where a party has a statutory right of appeal to this Court.  No change was made to r 11(3) to incorporate a reference to r 6 as well as r 5.  This obviously was an oversight and, on its terms, r 11(3) does not curtail the operation of r 6 .

[12]     In providing for situations where the statute provides that an appeal may only be brought with leave, r 5 prescribes the times within which an application for leave and, if it is granted, the appeal itself must be brought.  The Court is also empowered by r 5(4) to extend the period for bringing an application for leave to appeal, if the relevant enactment permits such an extension or, alternatively, if it does not limit the time prescribed for making the application.

[13]     As Judge Keane recognised, r 6 is directly concerned with the present position.  It provides:

6     Time for appeal where there is right of appeal

(1)   This rule applies when a party has a right of appeal to the Court.

(2)An appeal must be brought,-

(a)if the enactment that confers the right of appeal specifies a period

within which the appeal must be brought, within that period; or

(b)in every other case, within 20 working days after the decision

appealed against is given.

(3)By special leave, the Court may extend the time prescribed for appealing if the enactment that confers the right of appeal-

(a)permits the extension;  or

(b)does not limit the time prescribed for bringing the appeal.

(4)An application for an extension-

(a)must be made on notice to every other party affected by the appeal;

and

(b)may be made before or after the expiry of the time for appealing.

[14]     The present application for special leave is brought under r 6(3)(b), and seeks an extension of the time prescribed for appealing so that a fresh appeal may be brought in this Court.  It follows an application to waive security for costs in the High Court.  The first issue is whether we have jurisdiction to grant special leave at all.  Mr Gibson, for the applicant, said that this Court has entertained an application for special leave under r 6(3), after an appeal had been deemed abandoned for failure to give security for costs, declining it on the merits:  Creser v Creser CA110/04 2 September 2004.  Mr Thorp for the respondent however has raised a jurisdictional argument not previously put to the Court.  He pointed out that r 6(3)(b) is expressed in terms that are more restrictive than the previous r 5 in that the Court’s power to extend time is conditional on “the enactment that confers the right of appeal” either permitting the extension sought or not limiting the time prescribed for bringing the appeal.  It is the latter element, covered by r 6(b), that applies in this case. 

[15]     The enactment which confers the general statutory right of appeal to this Court against judgments of  the High Court is s 66 of the Judicature Act 1908.  It provides:

66.  Court may hear appeals from judgments and orders of the High Court

The Court of Appeal shall have jurisdiction and power to hear and determine appeals from any judgment, decree, or order save as hereinafter mentioned, of the High Court, subject to the provisions of this Act and to such rules and orders for regulating the terms and conditions on which such appeals shall be allowed as may be made pursuant to this Act.

[16]     Mr Thorp’s argument is that s 66 does limit the time prescribed for bringing the appeal to a period of 20 working days after the lower Court judgment.  That is because the right of appeal that it confers is subject to such rules made pursuant to the Act that regulate the terms and conditions on which appeals are allowed.  He refers to r 6(2) which requires that an appeal as of right is brought within 20 working days after the decision appealed against is given,  and says that this is a limit on the time for bringing an appeal which restricts the Court’s power to grant special leave extending the time for appealing under r 6(3).  He claims support for this approach from observations made in the judgment of this Court in Seamar Holdings Limited v Kupe Group Limited [1995] 2 NZLR at 274 in which at p277 the Court observed that s 66 was expressly subject to such rules and orders regulating the terms and conditions on which appeals shall be allowed as are made pursuant to the Act.

[17]     Section 66 of the Judicature Act is the provision which confers the general statutory right of appeal from decisions of the High Court to this Court. On its terms it is subject to rules made under the Act which regulate the terms and conditions on which such appeals shall be allowed.  We accept that r 6(2) is such a rule which “limit(s) the time prescribed for bringing the appeal” in terms of r 6(3)(b).  Accordingly, if s 66 is to be read with r 6(2) to which it is subject as “the enactment that confers the right of appeal” under r 6(3), the condition subject to which the Court’s right to extend time for appealing is conferred is not satisfied.  There is in that event no longer a power to extend time.  This in essence is Mr Thorp’s argument.

[18]     That reading of r 6(3) is open, but it is not the only available meaning of “the enactment that confers the right of appeal”.  The phrase can also be read as referring to s 66 alone, excluding rules that it incorporates, as the statutory provision conferring the right of appeal.  On this reading the enactment does not include rules such as r 6(2) which regulate the terms and conditions on which s 66 allows appeals. 

[19]     We do not accept Mr Thorp’s submission that this Court’s decision in Seamar Holdings is of assistance in ascertaining the scope of the ambiguous phrase “enactment that confers the right of appeal”.  On this point the decision does no more than make plain that s 66 is subject to rules, such as r 6, which regulate terms and conditions on which appeals may be brought.  That is of course plain on the language of s 66 but as indicated it does not assist us to ascertain the meaning of the phrase “enactment which confers the right of appeal” in r 6(3).

[20]     The Court must decide which of these two available meanings is to be preferred having regard to the context in which r 6(3) appears in the Civil Rules.

[21]     Rule 6(2) and 6(3) are drafted in a way that indicates that they form a complementary regime first in relation to the time within which an appeal, whether by leave or as of right, must be brought, and secondly when an extension of the prescribed time may be allowed by the Court.  The respondent’s approach would interpret r 6(2)’s prescription of 20 working days as the time for appeal as restrictive of the scope of the power to allow an extension of time under r 6(3).  That seems both incongruous and inconsistent with the complementary way the provisions are structured.  The other broader approach we have identified would give the two paragraphs separate and independent application that seems more consistent with their structure.  The context supports that latter meaning.

[22]     It is also significant that the respondent’s approach leaves very little scope for this Court to grant special leave extending the time for appeal in cases where the requirements of rr 6(2) and 11 are not complied with whatever the circumstances. From time to time an appeal is deemed to be abandoned due to the inadvertence of legal advisers.  Mr Thorp’s approach would preclude the Court from permitting the appeal to proceed in any circumstances irrespective of the merits of the appeal. It is very unlikely that this was part of the purpose when rr 5 and 6 were promulgated in their present form.  The broader approach is much more likely to reflect that purpose.

[23]     The conclusion we reach is that s 66 itself, and not any rules that it is subject to, is the enactment that confers the right of appeal under r 6(3).  It does not limit the time prescribed for bringing an appeal so that the Court has power to grant special leave to extend the time for appealing, where there is an appeal as of right, even after the time prescribed by r 6(2) has expired. 

[24]     We have not overlooked Mr Thorp referral to the definitions of “Act” and “enactment” in s 29 and 30 of the Interpretation Act 1999 but these are of limited assistance being general provisions that may be excluded by the context.

[25]     In Creser v Creser this Court said that where as a consequence of the application of r 11(3) an appeal must be treated as having been abandoned and an application is brought for extension of time to appeal under r 6(3):

[2]   The test to be applied in circumstances such as these is well established.  This court held in Air Work (NZ)Limited v Vertical Flight Management [1999] 1 NZLR 29 at 31 that the power to grant special leave under r 5 followed a deemed abandonment is unlikely to be exercised “save in exceptional circumstances”, an approach further approved by this court in State Insurance Limited v Brooker (2001) 15 PRNZ 493 at [8].  Ultimately the test is whether granting leave would meet the overall interests of justice (B Bullock and Co Ltd v Matthews (1998) 13 PRNZ 505 (CA)) but it must always be remembered that an important “interest of justice” is the interest in finality of litigation.

[3]   An applicant for special leave must always demonstrate a satisfactory explanation for the delay and an arguable appeal point.  Normally this court considers those matters in that order.  In this case, we can go immediately to consider the merits of the proposed appeal, as we are satisfied it has no merit.  The court should never grant an indulgence in circumstances where a proposed appeal which cannot be brought as of right is unmeritorious.

[26]     In the present case the applicant’s solicitor brought the appeal within the prescribed time, but regrettably then delayed applying to the High Court for a waiver of security for costs until being notified that legal aid for the appeal had been approved.  On the last day an application for waiver was made but, in breach of the Civil Rules, it was not served on the respondent.  The High Court held that the effect was that r 11(3) applied and the appeal was abandoned.  This finding was not directly challenged by appeal and it is unnecessary for us to consider whether it was correct.

[27]     The failure was a genuine error by the solicitor concerned and it is clear from the material before the Court that at no stage were the respondent’s advisers ever misled concerning the applicant’s intention to appeal.  There was some delay because the application for special leave to extend time was initially made to the High Court under r 5, although in error, but that was also understandable given the terms of r 11(3).  Overall we regard these circumstances as exceptional and sufficient explanation for the delays in making this application.  It will, however, be clear in future cases that despite the way that r 11(3) is expressed r 5 is not available as a basis for obtaining an extension of time to appeal where the appeal is of right.

[28]     In relation to the merits of the application Mr Thorp has emphasised that there had been findings of credibility against the applicant in relation to a number of matters in the judgment.  It is not however apparent to us that these are of significance in relation to the Judge’s finding that the applicant was misleading and deceptive in her dealings with the respondent.  The reasoning of the Judge on that aspect of the judgment is covered succinctly in particular in paras [168] to [170] of the judgment of 29 July 2004.  Having heard both counsel on the matters of evidence that underlie those findings we have not been persuaded by Mr Thorp that the appeal clearly lacks merit.  Having reached this conclusion it is inappropriate for us to discuss the matters in any detail.

[29]     We are satisfied that the application for extension of time should be granted.  The applicant must bring her appeal in this Court, and any application for waiver of security for costs in the High Court, within 7 working days of delivery of this judgment.  In all the circumstances we consider there should be no order as to costs.

Solicitors:
B A Gibson, Wellington for Applicant
Fleming Foster & Palmer, Auckland for Respondent