Noe v Ratzapper Australasia Limited

[2019] NZHC 2962

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-001323

[2019] NZHC 2962

BETWEEN

ROBERT NOE

Applicant

AND

RATZAPPER AUSTRALASIA LIMITED

Respondent

Hearing:

12 November 2019

Appearances:

D J G Cox for Applicant

W McCartney and N Eilenberg for Respondent

Judgment:

12 November 2019

ORAL JUDGMENT OF WYLIE J

Solicitors/counsel:

Truman Wee & Associates, Hamilton/W McCartney, Auckland Rennie Cox, Auckland

NOE v RATZAPPER AUSTRALASIA LTD [2019] NZHC 2962 [12 November 2019]

Introduction

[1]                 The applicant, Mr Noe, has filed an application seeking to stay the enforcement of a judgment given against him in an arbitral award issued in June 2017 by the Hon Rodney Hansen CNZM QC. The award was issued after Mr Noe was debarred from defending a claim made against him by the respondent, Ratzapper Australasia Limited (Ratzapper). Mr Noe was debarred because of his persistent failure over a prolonged period to comply with discovery orders made by the arbitrator.

[2]                 Mr Noe did not meet the award, and Ratzapper sought to enforce the same. Mr Noe applied to this Court for an order that it would be contrary to the public policy of New Zealand to enforce the award relying on art 36(3) of sch 1 to the Arbitration Act 1996. Muir J found in November 2017 that there was no breach of the rules of natural justice and that it would not be contrary to public policy if Ratzapper were to enforce the award in its favour.1

[3]                 Mr Noe appealed to the Court of Appeal. It issued its judgment in December 2018 dismissing the appeal.2

[4]                 Mr Noe then sought leave to appeal to the Supreme Court. It declined leave to appeal in March 2019.3

[5]                 While the appeals were pending, Mr Noe had the benefit of orders staying the enforcement of the award. Now that all appeals have been exhausted, Ratzapper again seeks to proceed. It has obtained both a charging order over and a sale order for a farm property owned by Mr Noe near Hot Water Beach on the Coromandel Peninsula. It seeks to sell the farm property through the Sheriff.

[6]                 The order for the sale of the farm property first issued in August 2018. As noted, the sale was stayed pending the hearing of the appeals. The Sheriff has since put Mr Noe on notice of the prospect of sale. This occurred in March 2019 after the Supreme Court issued its judgment declining leave. Mr Noe then made a settlement

1      Ratzapper Australasia Ltd v Noe [2017] NZHC 2931, [2018] NZAR 1.

2      Noe v Ratzapper Australasia Ltd [2018] NZCA 597.

3      Noe v Ratzapper Australasia Ltd [2019] NZSC 33.

offer to Ratzapper. That offer was declined in May 2019. Mr Noe and his advisors have been engaging in correspondence with the Sheriff about the pending sale since May 2019. Notice of the sale was sent by the Sheriff to Mr Noe on 16 October 2019. It advised that the property would be advertised and put up for sale. The sale is scheduled for this Saturday – 16 November 2019.

The application

[7]                 The application is brought pursuant to r 17.29 of the High Court Rules 2016. It provides as follows:

17.29 Stay of enforcement

A liable party may apply to the court for a stay of enforcement or other relief against the judgment upon the ground that a substantial miscarriage of justice would be likely to result if the judgment were enforced, and the court may give relief on just terms.

[8]                 Counsel did not dispute that the applicable principles are those set out in the judgment of White J in Bay City Real Estate Ltd v Re/Max New Zealand Ltd.4 He there stated as follows:

[19]As the authorities referred to in McGechan on Procedure at [HR 17.29.02] and the submissions for the parties confirm, the principles relating to the interpretation and application of rule 17.29 are reasonably well established. They may be summarised as follows:

(a)The onus is on an applicant for the stay of enforcement to persuade the Court to exercise its discretion.

(b)A “substantial miscarriage of justice” must be involved bearing in mind that “substantial miscarriage” means “ something more than minor or insubstantial” and that it is not a substantial miscarriage of justice for a party that has had the use of another's money to be required to repay that money or for a creditor to be able to take whatever steps it sees fit to pursue recovery: …

(c)A substantial miscarriage of justice must be “likely to result” if the judgment were enforced. It is not sufficient that a miscarriage of justice “might” result; it must be “likely to result”, i.e. probably result: …

4      Bay City Real Estate Ltd v Re/Max New Zealand Ltd HC, Napier, CIV-2010-441-134, 8 June 2011 at [19].

(d)The Court must seek to recognise and reconcile the conflicting interests of both parties in such manner as will best serve the overall interests of justice: … A balancing exercise is involved.

(e)A miscarriage of justice is unlikely to result where a party is required to pay to another an amount that is owing to it and the paying party is free to pursue its claim against the other party in the normal way: …

(f)Other factors which may be relevant include: the apparent strength or weakness of the claim; the ability of the applicant for the stay to meet the judgment that is being enforced; and the potential bankruptcy or liquidation of a party seeking to pursue an apparently strong claim: …

(Citations omitted)

[9]I turn to consider these principles in the circumstances of this case.

Submissions

[10]              Mr Cox, for Mr Noe, advised that Mr Noe seeks to stay enforcement of the judgment so that he can complete the subdivision and sale of a three-acre section from his farm property, and so that he can pursue a claim for damages against a Mr Hinds. It was asserted that Mr Hinds is the principal behind Ratzapper. It was argued that Mr Hinds has defamed Mr Noe through the establishment and promotion of a website, as well as through email communications sent to third parties. Mr Cox submitted that because of these alleged defamations, Mr Noe has been unable to achieve the subdivision and sale of the section, and that the allegedly defamatory material has tainted the property so badly that it is unlikely to be possible to achieve a sale price at market value at the present time. It was also alleged that the marketing campaign conducted by the Sheriff has been inadequate.

[11]              Mr McCartney, for the respondent, submitted that Ratzapper should be entitled to enforce the judgment in its  favour  regardless  of  any  alleged  defamation  by  Mr Hinds. He submitted that Ratzapper and Mr Hinds are distinct legal entities, and that there is nothing to stop Mr Noe from pursuing the defamation proceedings recently commenced by him. He also noted that the defamation proceedings are based on allegations, which remain unproven. Further, he argued that Mr Noe has had ample time to complete the proposed subdivision, and to sell the resulting section, to satisfy

the debt in favour of Ratzapper. He submitted that little or no progress has been made in that regard by Mr Noe.

Analysis

[12]              Mr Noe has failed to meet the onus which rested on him of satisfying me that a substantial miscarriage of justice would be likely to result if Ratzapper is able to enforce its judgment through the sale of the Hot Water Beach property.

[13]              Prima facia, Ratzapper is entitled to the fruits of the judgment it holds. The monies it seeks to recover have been outstanding since late 2012/early 2013. Mr Noe has taken every step to try and deny Ratzapper’s entitlement to the monies owed to it. He has not however been so assiduous in trying to meet the award.

[14]              Mr Noe says that he should be entitled to additional time to complete the subdivision. He says that the proceeds of sale of the section he intends to create following on from the subdivision will be more than sufficient to meet the judgment debt.

[15]              The difficulty from Mr Noe’s perspective is that he has had ample time to progress the subdivision. It appears from the evidence that the subdivision has been in prospect since at least January 2018 and more likely earlier. In his affidavit filed in support of the present application, Mr Noe says that when he gave instructions to lodge an appeal to the Court of Appeal, he put in place a contingency plan so that he could settle the award if the appeal was not successful. He goes on to refer to the subdivision. He says that in early 2018, he engaged surveyors to proceed with the steps required to facilitate the subdivision of the property. He annexes a proposed subdivision plan and a photograph with an overlay of the proposed subdivision.

[16]              It appears from the affidavits that the subdivision requires resource consent as a discretionary activity. Insofar as I can ascertain, no steps have been taken by Mr Noe to progress the required application. As long ago as 22 August 2018, Mr Noe, in support of an application to stay execution of the judgment pending the appeal to the Court of Appeal, deposed that he was working on the subdivision, that he was awaiting the finalisation of a consultant’s report and it was anticipated the required consent

would take approximately six months. In a 30 January 2019 affidavit supporting his application for a stay pending determination of the application for leave to appeal to the Supreme Court, Mr Noe deposed that since the Court of Appeal judgment, he had used “all of his time and resources to try to both progress the subdivision and to refinance mortgages already secured over property to enable funds to be paid to Ratzapper”. Despite those assertions by Mr Noe, nothing appears to have been done to advance the subdivision or the sale. In my view, Mr Noe has had ample time to progress matters. He has done very little and he cannot expect Ratzapper to wait indefinitely and at his pleasure.

[17]              I now turn to the alleged defamations. Mr Noe has outlined in his supporting affidavit a number of allegedly defamatory comments which he says were made either in whole or in part by Mr Hinds. Mr Cox asserted in his submissions that Mr Hinds is the principal and a director of Ratzapper. This does not appear to be supported by any evidence, but I note that Mr McCartney did not deny the assertion. Even assuming that the assertion is correct, I do not think that the alleged defamatory comments result in the likelihood of a substantial miscarriage of justice occurring in the event that the award is enforced.

[18]              The first allegedly defamatory comment is said  to  have been  made  by a  Mr Hollister on 12 June 2018. There is no evidence to tie this allegedly defamatory comment to Mr Hinds, let alone to Ratzapper. Nor is there any evidence to suggest that it has affected the proposed subdivision or the sale of the any section resulting from any subdivision. Mr Cox accepted this when I questioned him in this regard.

[19]              Mr Noe asserts that he was grossly defamed on a website – bob-noe.com. The website apparently went online on 28 March 2019. Copies of materials said to have been taken from the website have been exhibited. Mr Hollister has apparently been arrested and charged in relation to the material on the website under s 22 of the Harmful Digital Communications Act 2015. Mr Hinds in his affidavit says that he had nothing to do with the website and notes that he has not been charged. A detective in the Criminal Investigation Bureau, Damian Dellabarca, has filed an affidavit recording that Mr Hollister’s computer and cellphone were seized, that they have since been examined and that there is clear evidence linking Mr Hinds to the website.

[20]              Be that as it may, none of this material throws any light on the present application. First, Ratzapper is a separate legal entity in its own right. It holds the benefit of the judgment, not Mr Hinds. Secondly, there is nothing to stop Mr Noe from pursuing his defamation claim against Mr Hinds. It is unrelated to the monetary order Ratzapper is seeking to enforce. I adopt the observations of Justice Tompkins in Econotek Construction Ltd v Kale.5 A miscarriage of justice is unlikely to result when a party is required to pay to another an amount that is owing and the paying party is free to pursue his or her claim against the other party in the normal way. Thirdly, there is nothing to link the allegedly defamatory comments on the website to Mr Noe’s failure to advance the subdivision or the sale of any resulting section or sections.

[21]In addition, other factors tell against the grant of a stay.

(a)First, there has been significant delay in filing the application. Mr Noe has known of his liability to Ratzapper since the award against him issued in June 2017. He has known of the alleged defamatory comments since they occurred, first in June 2018 and then in March 2019. He only filed the defamation proceedings against Mr Hinds in early November 2019. He delayed in filing the stay application until 29 August 2019. There is no explanation for these delays.

(b)Secondly, Mr Noe does not seem to have any other plan to satisfy the judgment debt against him, other than his proposal to subdivide and then sell. There can be no guarantee that a subdivision application will be approved, or that Mr Noe’s existing mortgagees would consent to the release of the funds realised on a sale. Indeed, Mr Noe, in his affidavit, suggests that the sale of the property may not generate sufficient funds to meet his debts.

[22]              I reiterate the observations made by White J in the Bay City Real Estate case. A substantial miscarriage of justice must be likely to result before a stay of enforcement can be granted. Substantial means something more than minor or insubstantial. It is not a substantial miscarriage of justice for a party that has had the

5      Econotek Construction Ltd v Kale, HC Gisborne, CP 8/87, 7 January 1988 at [8].

use of another’s money to be required to repay that money or for a creditor to be able to take whatever steps it sees fit to pursue recovery. There is no substantial miscarriage of justice likely to result from a sale of the farm property.

[23]The application for a stay of enforcement is declined.

Costs

[24]              I heard briefly from counsel in relation to costs. Costs against Mr Noe in favour of Ratzapper are ordered on a 2B basis, together with any reasonable disbursements.

Wylie J