Peach v Batten HC Wellington Ap89/01

[2001] NZHC 753

IN THE HIGH COURT OF NEW ZEALAND
WELLINGTON REGISTRY AP89/01

Between B C PEACH and M J PEACH
Applicant

And C M BATTEN and S L BATTEN
Respondent

Hearing: 23 July 2001

Appearances: J R Grace for Applicants and Also Mr Peach in Person
D Laurenson for the Respondents

Judgment: 16 August 2001

RESERVED JUDGMENT OF WILLIAM YOUNG J

Solicitors:
J R Grace for Applicants and Mr Peach in person
S M Mills, Waikanae for Respondents

Introduction

[1] On 28 November 2000, in the District Court at Porirua, Judge Thompson delivered judgment in favour of Mr Christopher and Mrs Sandra Batten as plaintiffs against Mr Bernard and Mrs Marion Peach as defendants in the sum of $15,000 together with interest under s 62B of the District Courts Act to be calculated from 11 October 1999. He reserved the position as to costs indicating that if they could not be agreed he would hear counsel by way of memorandum.

[2] Mr and Mrs Peach now seek to challenge that decision. In particular, they seek leave to appeal against it.

[3] At the commencement of the hearing, Mr Grace, who appeared for Mr and Mrs Peach, sought leave to withdraw which I granted. Mr Peach then appeared in person. When, however, it came time for Mr Peach to reply to the submissions made by Mr Laurenson for the respondents, he asked if Mr Grace could make submissions as to the strength of the proposed appeal. I acceded to Mr Peach’s request and heard Mr Grace from that point.

The underlying factual dispute

[4] I will describe the underlying factual dispute between Mr and Mrs Peach and Mr and Mrs Batten largely by reference to the findings of fact made by the Judge in the District Court.

[5] On 2 October 1999, Mr and Mrs Batten entered into an agreement to purchase a property from Mr and Mrs Peach. The real estate agent was Lethbridge Real Estate and the salesman involved was Mr Peter Blackler. Mr Blackler is married to Ms Elaine Lethbridge who is the principal of Lethbridge Real Estate and she is the sister of Mr Peach who was one of the vendors.

[6] The agreement was subject to a special condition in these terms:-

“This agreement is conditional on the Purchaser being satisfied with a report on the property to be obtained from a registered valuer. Should the Purchaser in good faith be dissatisfied with the report the Purchaser may terminate this agreement by notice in writing to the Vendor or the Vendors’ solicitor, such notice to be received by 4 p.m. 8th October 1999. If notice is not received within time the Purchaser shall be deemed to have waived the Purchasers’ rights under this condition, time being of the essence.”

[7] On 4 October, Mrs Batten approached a valuer who had previously valued the property for Mr and Mrs Peach. He agreed to provide an update of his earlier report for a fee of $100.00.

[8] On the Tuesday, 5 October, Mrs Batten paid $15,000 by way of deposit to Lethbridge Real Estate.

[9] The updated valuer’s report was provided to the mortgage broker who was acting for Mr and Mrs Batten on the Wednesday (6 October) or Thursday (7 October). The mortgage broker told Mr and Mrs Batten that the report raised questions about building permits and code compliance issues. The report itself was not, however, sent to Mrs Batten at that time.

[10] Pausing there, it is reasonably apparent that as between Mr and Mrs Batten it was Mrs Batten who was primarily responsible for the property transaction.

[11] On 8 October Mrs Batten contacted Mr Blackler. She still did not have the report. She wished to have the right to cancel the agreement under the special condition extended until Monday 11 October. So Mr Blackler prepared a variation of the contract extending the time and he arranged for Mrs Batten to sign it. This was around the middle of day.

[12] According to Mrs Batten’s evidence (which the Judge accepted despite conflicting evidence from Mr Blackler) Mr Blackler told her that the extension would be agreed to by the vendors because they were keen to sell and the form would be signed and he would be back within the hour. The Judge’s finding on this was that Mr Blackler:-

“did leave Mrs Batten with the clear assurance that the extension would be granted.”

[13] Mr and Mrs Batten were represented by a solicitor, Ms S M Mills. Her role in the events of 8 October was limited because Mrs Batten, presumably out of a desire to keep her legal costs as low as possible, chose not to involve Ms Mills in the exercise of obtaining an extension under the special condition. On the afternoon of 8 October there were some confusing communications between Ms Mills and Mr Steven Lee, the solicitor acting for Mr and Mrs Peach. The causes of the confusion were, I think, two-fold: first, Ms Mills had not been instructed by Mr and Mrs Batten as to the obtaining of the extension; and, secondly, Mr Lee had misinterpreted the condition (in that he thought the contract would lapse in the absence of confirmation). For present purposes, however, these communications are of comparatively little moment. It is sufficient for me to note that at 2.59 p.m. Ms Mills received a fax advice from Mr Lee that Mr and Mrs Batten were seeking an extension. He said that he had not been able to contact his clients but that he had no instructions to grant an extension. Ms Mills then attempted to contact Mr Blackler.

Ms Mills said in evidence (which the Judge, I think, accepted) that she was told when she rang his office that he was, at that time, with the vendors and that there would be no problem over the extension.

[14] There was a discussion between Mr Blackler and Mr Batten sometime after 3.00 p.m. but before 4.00 p.m. on 8 October. The Judge rejected Mr Blackler’s evidence that he told Mr Batten that an extension had not been granted. I have to say that on my appreciation of the case, there was not much difference between what Mr Blackler said in evidence (which the Judge rejected) and what Mr Batten acknowledged he was told which was:

“that the Peaches preferred the contract to become unconditional that day, as they were wanting to purchase another property.”

Mr Batten’s evidence (which was accepted by the Judge) was that he then told Mr Blackler to speak to his wife (Mrs Batten), to tell her what was going on, and to leave the final decision as to what should be done to her. Mr Blackler did not, in fact, make any further contact with Mrs Batten. The long and the short of it is that no notice terminating the contract was given before 4.00 p.m. on 8 October.

[15] There was at least one meeting between Mr and Mrs Batten and Mr Blackler over the weekend. Mr Blackler appeared to recognise, at that meeting, that Mr and Mrs Batten believed that the time for terminating the contract under the special condition had been extended until the following Monday. He did not disabuse them of that belief.

[16] On 11 October 1999, Ms Mills wrote a letter to Mr Lee which the Judge construed as being a termination under the special condition.

The decision of the District Court Judge

[17] The Judge made findings as to what had happened between the parties and Mr Blackler broadly along the lines indicated.

[18] He then expressed his conclusion in terms of the fundamental factual issues in the case in these terms:-

“I am satisfied on the balance of probabilities that Mr Blackler, as agent for the defendants, encouraged an expectation in the plaintiffs, and Mrs Batten in particular, that the extension would be granted, and indeed a belief that it had been. Further, the plaintiffs relied upon that expectation and belief, in that they did not take steps to terminate the contract by 4.00 p.m. on 8 October because they believed they had until the following Monday to do so.”

[19] The Judge also concluded that Mr Blackler was the agent of Mr and Mrs Peach with the result that they were bound by the expectation which he had created.

[20] Accordingly, he held that Mr and Mrs Peach were estopped from denying that the time for the cancellation of the contract under clause 16 was extended until 4.00 p.m. on 11 October. He also held that a somewhat ambiguous letter from Ms Mills to Mr Lee, to which I have already referred and which was sent on the morning of 11 October, was a sufficient termination of the contract for the purposes of clause 16.

[21] On this basis, the Judge held that Mr and Mrs Batten were entitled to their deposit back.

[22] In the course of argument there was some discussion as to whether there could be any arguable appeal against a judgment which depended so much upon factual findings. Given my conclusion that this Court does not presently have jurisdiction to entertain the present proceedings by Mr and Mrs Peach (see below) I do not think it is necessary for me to go into these arguments in any detail. However, in light of what I am about to say, it is unlikely that this judgment will resolve the underlying dispute between Mr and Mrs Batten and Mr and Mrs Peach and it is, indeed, likely enough that another Judge (in the District Court) will be invited to form a view as to whether there is an arguable basis for an appeal against the judgment of Judge Thompson. For this reason, and because the point was argued, albeit briefly, in front of me, I should make some brief observations.

[23] Obviously if there is to be an appeal, it will be very difficult for Mr and Mrs Peach to upset the primary findings of fact made by the Judge. As well, it is inherently extremely unlikely that they would be permitted to adduce further evidence in support of their appeal. On the other hand, there may well be issues associated with the judgment which could be the subject of credible argument on appeal and which do not involve direct challenges to the Judge’s primary findings of fact.

[24] By way of example, the Judge has, in effect, held that Mr Blackler, by his conduct, extended the time available to Mr and Mrs Batten under the special condition to terminate the contract. The case cited by the Judge as to the authority of Mr Blackler to do this was James v Campbell (2000) 4 NZ ConvC 193,131. This case is authority for the proposition that where a real estate agent has secured a conditional contract, that agent has the authority of the vendor to receive from the purchaser waiver of a condition inserted for the benefit of the purchaser. It is not, I think, authority for the proposition that a real estate agent has authority to grant, on behalf of a vendor, an extension of time. I certainly have real reservations as to whether a real estate agent does have such authority. I have always understood the law to be as expressed in McMorland, Sale of Land (2nd Ed 2000) at para 107:-

“The implied authority of a real estate agent does not extend to creating the legal and binding contractual relationship for the sale of the property, or the making of any collateral contract or contractual warranty binding the principal, though there can be express authority given in those terms . . . . Where such express authority is found, it extends only to making a contract on such terms as to price and other details as are specified by the authority. The agent has no implied authority materially to vary those instructions, or to enter into a contract binding the principal/vendor to terms materially different from those instructions . . . . The implied authority of an agent employed by the vendor extends only to finding a willing purchaser, in carrying offers or counter offers, and eventually an acceptance, from one to the other.”

[25] I am not aware of any evidence in the case which points to Mr Blackler having actual or ostensible authority to extend time under the contract.

[26] If it is the case that Mr Blackler did not have authority to grant an extension of time on behalf of Mr and Mrs Peach expressly, then there may well be difficulty with the view that he could do so indirectly by creating a situation in which Mr and Mrs Peach were estopped from relying on the contract as executed. I stress that I am not expressing any concluded view on this point. Nor am I to be taken as suggesting that the arguments available to Mr and Mrs Peach are necessarily confined to this point.

The sealing of the judgment

[27] Mr and Mrs Batten sealed the judgment on 30 November 2000. The judgment, as sealed, recorded that it was :-

“Adjudged that:-

1. Judgment will be entered for the plaintiffs in the sum of $15,000 plus interest of $1,871.51 to the date of judgment and $4.52 per day thereafter until the date of payment.

2. There will be judgment for the plaintiffs on the defendants’ counterclaim.

3. If costs cannot be agreed, counsel may file memoranda.”

[28] The form of the judgment follows generally, although not precisely, Form 43 as prescribed by the District Court Rules 1992. That form contemplates that the sealed judgment will record both the date the judgment was delivered and also the date upon which it was sealed. The judgment as sealed records the date of delivery correctly (28 November) but, in the typed version, the date of sealing is left blank. Someone has filled in, in handwriting, “28/11/2000”. I imagine that this was a mistake, probably on the part of either the court filing clerk who presented the judgment for sealing or the court officer who dealt with it. The cover sheet of the sealed judgment records that it was lodged with the court on 30 November.

[29] There are two infelicities with the sealed judgment. The first is the problem over the date which I have just mentioned. The second is that the judgment, as sealed, refers to post-judgment interest. The Judge, of course, did not (and could not) award post-judgment interest under s 62B, District Courts Act. The $4.52 per day recorded in the sealed judgment represents daily interest at the rate of 11% per annum on the  primary judgment sum of $15,000. Neither of these infelicities seems to me to be of any moment. Both are plainly within Rule 12 of the District Court Rules and capable of correction.

[30] There was, however, a more significant deviation from the procedure provided for by the District Court Rules. This was a failure to notify Mr and Mrs Peach of the sealing of the order.

[31] Rule 533, District Court Rules, as it stood at the time, provided:-

“1. (Subject to s 79 (5) of the Act) Every judgment shall take effect from the day of its date: provided that no steps shall be taken on a judgment before it has been sealed.

2. The party who has a judgment sealed shall forthwith give notice of the sealing of the judgment to every other party who has given an address for service.”

[32] In breach of the requirements of R 533, Mr and Mrs Batten did not give notice “forthwith” of the sealing of the judgment. Such notice was not, in fact, given until 22 February 2000. I note that Rule 533 (2) has now been amended so that the obligation is not just to give notice of the sealing of the judgment to the other parties to the litigation but now extends to serving sealed copies of the judgment on such parties.

Other events

[33] On 12 December 2000, Mr Peach wrote to Mr and Mrs Batten, care of their solicitors. In this letter he expressed some dissatisfaction about the course events had taken. The letter could be construed as making settlement proposals (albeit of a nature which Mr and Mrs Batten, as successful plaintiffs, were most unlikely to accept). The letter then concludes in this way:-

“It is factual that we could overturn the judgment with other evidence now available but then would come the appeals courts and on ad infinitum which couldn’t help either you or us so we are making an end to it now.”

[34] Mrs Batten construed that letter as indicating an intention not to appeal and that is certainly one way of reading it. Mr Peach, in his submissions to me suggested that it should be regarded as being merely an indication that he and his wife would not appeal if the case could be settled along the lines proposed.

[35] Mr Peach’s general position as advanced to me, is that he was acting on the assumption that he could not appeal until the judgment was sealed and that the judgment would not be sealed until the quantum of costs had been fixed. He claims that he was acting on the basis of legal advice to this effect given to him by counsel who appeared for him in the District Court. He also says that during December 2000 and January 2001 and February 2001, he telephoned the District Court at Porirua on a number of occasions to inquire whether the judgment had been sealed and was told that it had not been. There is no affidavit before me from the court officer with whom Mr Peach was dealing. It would be surprising if the officer gave this advice to Mr Peach given that the sealed judgment must have been sitting on the file. It is, however, possible that Mr Peach, consistently with the advice which he had received as to when the time for appeal would begin to run, was inquiring whether an order as to costs had been sealed.

[36] By letter of Tuesday 30 January 2001 from Mr and Mrs Batten to Mr and Mrs Peach care of their solicitors, Mr and Mrs Batten made it clear that they intended to enforce the judgment.

[37] On 22 February 2001, Ms Mills sent to Mr Lee a sealed copy of the judgment.

[38] On 2 March the Judge made an order in favour of Mr and Mrs Batten by way of costs in the sum of $10,116.35 and as for disbursements and witnesses’ expenses in the sum of $1,979. The order as to costs has not been sealed.

The application for leave to appeal

[39] On 11 April, Mr and Mrs Peach filed a document which, as well as being a notice of appeal, was described as being:

“2. Notice for the application to have the sealing of the judgment made by the respondents 30 November 2000 overturned. or;

3. Notice for the application for appeal out of time.

4. Notice for stay of judgment until after the appeal hearing

5. Notice to file for leave to adduce new evidence.

[40] For present purposes, the application with which I am primarily concerned is for leave to appeal out of time. I will also have to consider whether I can “overturn” the sealing of the judgment on 30 November.

The jurisdictional problem

[41] Section 73, District Courts Act 1947 provides for appeals to be brought within 21 days after the date on which the final order is sealed. If that time limit is not complied with the Court may extend the time for filing the appeal but only on an application made to it within one month of the expiration of the period of 21 days.

[42] The judgment was sealed on 30 November. So, on a literal application of the section, the time for lodging an appeal without leave expired on 21 December 2000 and the time within which application for leave to appeal could be made expired on 21 January 2001. On the other hand, Mr and Mrs Batten are not well-positioned, in terms of the case as a whole, to complain about much of the delay which has occurred. This is because they were, themselves, in default of the requirement under Rule 533 (2) to notify Mr and Mrs Peach of the sealing of the judgment for a period for nearly two months (30 November 2000-22 February 2001).

[43] I note that Mr Laurenson, in his argument to me, suggested that the breach of Rule 533 (2) on the part of Mr and Mrs Batten was not of any causative significance in terms of what happened. He said that the 12 December 2000 letter indicated that at that time Mr and Mrs Peach were not going to appeal and, accordingly, it followed that if they had been notified of the sealing of the judgment this would not have affected their actions. He also claimed that notice of the sealing of the judgment would have been irrelevant as Mr and Mrs Peach were acting on the basis that there was no need to file an appeal until after costs were fixed and an order as to that was sealed.

[44] I think, however, that the letter of 12 December 2000 is at best ambiguous. Further, Mr Peach’s position is that he understood that a judgment would not be sealed until costs were fixed. Had he been notified “forthwith” of the sealing of the judgment, this would have shown him that his belief as to this was unfounded and would, in all probability, have alerted him and his legal advisers to the true position as to the time limits for appealing.

[45] Accordingly, the complaints made by Mr Peach in relation to non-notification of the sealing of the judgment cannot simply be batted away as being irrelevant on the facts (at least as far as they are known to me on the material presently before the court). So this requires me to address the question whether the failure by Mr and Mrs Batten to comply with Rule 533 (2) affects the application to the facts of this case of the strict time limits provided for by s 73.

Does the failure by Mr and Mrs Batten to comply with R 533 mean that there is jurisdiction to depart from the apparently strict requirements of S 73?

[46] There are two comparatively recent High Court decisions which support the view that I could treat the date from which time began to run, for the purposes of s 73, as being 22 February 2001 (when notice was given of the sealing of the judgment). If 22 February 2001 is the operative date, then the application for leave to appeal could be granted (as it was made within the second of the two time limits provided for by s 73). Both cases dealt with appeals which, broadly at least, involved situations similar to the present, that is where the District Court judgment has been sealed but where the party who has sealed the District Court judgment did not notify the other side in accordance with Rule 533 with the result that the relevant time periods have been allowed to elapse without an appeal or application for leave to appeal being filed.

[47] The first of these cases is Harrison v Amcor Trading (NZ) Ltd (1998) 12 PRNZ 343. In this case there were factors other than the breach of Rule 533 (2) which helped to persuade Cartwright J to find in favour of the proposed appellant. In her judgment she simply noted that she was “influenced” by the fact that the first respondent failed to give notice as required by Rule 533 (2). She did not, however, reference her conclusion as to this to the statutory scheme which governs rights of appeal and time for appealing.

[48] The second case is the judgment of Laurenson J in Zaza v Beckett (1998) 12 PRNZ 415. That case also involved a breach of Rule 533 (2). There, Laurenson J referred to Rule 5 (2) of the District Court Rules which deals with the consequences of non-compliance with rules and provides that where there has been an irregularity:-

“[T]he Court may, on the grounds that there has been such a failure . . . and on such terms as to costs or otherwise as it thinks just,-

(a) Set aside, either wholly or in part,-

(i) The proceeding in which the failure occurred; or

(ii) Any step taken in the proceeding in which the failure occurred; or

(iii) Any document, judgment, or order in the proceeding in which the failure occurred; or

Exercise its powers under these rules to allow such amendments (if any) to be made and to make such order (if any) dealing with the proceeding generally as it thinks fit.”

[49] Laurenson J posed the issue for himself as follows:-

“Stated simply, I am required to determine as a matter of discretion whether the failure by the intended respondent to give notice pursuant to R 533 (2) occurred in circumstances where that irregularity justifies the setting aside the entry of judgment so that the intended appellant can proceed with his appeal.”

He went on:-

“The first point to note is that in terms of r 5(4) there has not been any application filed which expressly states that relief is sought relying on r 5. The intended appellant has, however, sought leave to appeal out of time and in the course of this has relied expressly on the failure to give notice. In my view it would be unreasonable in terms of both cost and time to now require a further application to be filed which would simply raise again, in a different form, the issue now before the Court. I consider it appropriate, therefore, to exercise my discretion to deal with the irregularity on my own motion. This being the case, the restrictions contained in r 5(4) do not apply: Brooker’s District Courts Procedure, para DR 5.07.”

Laurenson J then exercised what he considered to be his discretion in terms of Rule 5, District Court Rules. In the end, he decided against the intended appellant because he was of the view that the proposed appeal was without merit.

[50] Notwithstanding these decisions, I am of the view that the application for leave to appeal is out of time. I say this for the following reasons:-

1. The authorities generally make it clear that an appellant who has missed time requirements specified under the District Courts Act for the filing of an appeal or the obtaining of leave to appeal out of time is unable to pursue and cannot invoke any general jurisdiction of the Court in this regard, see for instance Sandle v Stewart [1982] 1 NZLR 708 at 715 where Somers J observed:

“The effect of s 73(1) is that a party successful in the District Court will know conclusively whether he is secure in his judgment at the latest after the expiry of one month plus 21 days.”

2. It is not open to me to hold that a judgment is not scaled for the purposes of s 73 of the District Courts Act until Rule 533 (2) has been complied with. It is sufficient for me to refer, in this respect, to the judgments of Thorp J in Australian Mutual Provident Society v Bleier (1992) 6 PRNZ 582 and Paterson J Dunning v Wang (unreported, HC156/98, High Court, Auckland Registry, judgment delivered 4 November 1998).

3. I do not feel able to follow the judgment of Laurenson J in Zaza v Beckett. I do not see how I, dealing with an application for leave to appeal which is ex facie out of time, can invoke a discretion conferred on District Court Judges pursuant to Rule 5, District Court Rules, to set aside the sealing of the judgment. Rule 5 confers a jurisdiction on District Court Judges; it does not confer a jurisdiction on this Court.

[51] The obvious course of action to be taken where a party to litigation in the District Court complains about some procedural irregularity which has occurred in that court is an application to a Judge of that Court for an order which corrects that irregularity. In Cornish v Cullen (unreported HC48/98, High Court, Auckland Registry, judgment delivered 11 August 1998), Paterson J was confronted with a situation which again was broadly similar to the one with which I must deal. In that case, however, the party who wished to appeal had applied to the District Court for an order addressing the problem over sealing and had obtained an order from a District Court Judge amending the date of the sealing of the judgment so as to permit an appeal. The result was to start afresh the time for appealing. Although the facts of that case were not exactly identical to the present, the judgment of Paterson J seems to me to be authority for the proposition that it would be open to a District Court judge in relation to the present litigation to re-date the sealing of the judgment so as to trigger, again, a right of appeal. Such an approach might be warranted on the basis that it is an abuse of process for Mr and Mrs Batten to assert a time bar in a context where they have been in default of the obligation under Rule 533 (2); this by way of analogy to the argument which was advanced in the District Court in Cornish v Cullen. In any event, such an order could be warranted under Rule 5, District Court Rules.

[52] I am of the view that the application for leave to appeal must be dismissed as I have no jurisdiction to grant it. I am also of the view that I have no jurisdiction to make any order in relation to the sealing of the judgment on 30 November 2000. In view of those conclusions, the appellants are not entitled to the other relief which they have sought.

[53] I am of the provisional view that it is open to Mr and Mrs Peach to apply to the District Court to set aside the sealing of the judgment or to amend the date. In the event that the sealing of the judgment is set aside, it would then have to be resealed and the time for appeal would then start again. Alternatively, it might be open to a District Court judge to amend the date of sealing (as in Cornish v Cullen).

I make it clear that I am not setting out to dictate what should happen in the District Court if such an application is made by Mr and Mrs Peach. There may well be factual or other arguments available to Mr and Mrs Batten which would make it right for such an application to be refused. That said, I rather think that it would be unfortunate if Mr and Mrs Peach are, in the end, deprived of their right of appeal because of the problem over timing which has arisen.

Disposition

[54] For the reasons given, the appeal and the application for leave to appeal (and all Mr and Mrs Peach’s associated applications) are dismissed.

[55] Given that one of the fundamental reasons for the problem which has arisen is the failure by Mr and Mrs Batten to comply with Rule 533 (2) there will be no order as to costs.

[56] To avoid any later argument being advanced against Mr and Mrs Peach based on res judicata or abuse of process (in the event that they secure leave from the District Court which permits a further appeal to be launched), I direct that this judgment be not sealed until there is a further order of this Court.