Rangly Developments Limited v JCL Equities Limited
[2024] NZHC 2774
•25 September 2024
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2024-409-000163
[2024] NZHC 2774
BETWEEN RANGLY DEVELOPMENTS LTD
Appellant
AND
JCL EQUITIES LTD
Respondent
Hearing: On the papers Appearances:
B G Walker for Appellant
H C Matthews for Respondent
Judgment:
25 September 2024
JUDGMENT OF EATON J
(extending time to pay security for costs)
This judgment was delivered by me on …….. at ……… pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
RANGLY DEVELOPMENTS LTD v JCL EQUITIES LTD [2024] NZHC 2774 [25 September 2024]
[1] The respondent brought proceedings against the appellant in the District Court seeking a refund of a deposit on the purchase of a residential property. The appellant sought summary judgment on the grounds that none of the pleaded causes of action could succeed. In a reserve judgment dated 15 March 2024, Judge Kelly dismissed the application for security of costs. The appellant has since filed an appeal against that decision.
[2] An issue has arisen as regards payment of security for costs and the consequential status of this appeal.
Procedural history and submissions
[3] By consent memorandum that gave rise to judicial directions, security for costs in the sum of $1,195 was due for payment within 10 working days of 9 May 2024. The appellant failed to pay the security within that timeframe. This failure was through no fault of the appellant. Mr Walker, counsel for the appellant, had agreed to make the payment for the appellant, but due to oversight omitted to do so. Security for costs was ultimately paid on 13 June 2024.
[4] On 25 June, Mr Matthews for the respondent wrote to Mr Walker recording that security for costs had not been paid by the due date, with reference to rule 20.13(3) of the High Court Rules 2016 (the Rules) and s 126(3) of the District Court Act 2016 and that the appeal was deemed to have been abandoned. Mr Walker responded confirming that the omission was counsel’s oversight. He referred to SNB Holdings Ltd v Slabbert as authority for the Court to retrospectively extend the time to pay security under r 1.19 of the High Court Rules 2016.1
[5] Unfortunately, Mr Walker’s email did not resolve the impasse. Mr Walker then filed a memorandum dated 19 August 2024 informing the Court of the issue and confirming that the appellant wished to continue with the appeal rather than abandon it and file a fresh appeal. Mr Walker submitted that the Court has, and should exercise, its jurisdiction to extend time in relation to the requirement to pay security as it did in Slabbert, because the respondent has not suffered any prejudice.
1 SNB Holdings Ltd v Slabbert [2024] NZHC 492.
[6] In a reply memorandum dated 21 August 2024, Mr Matthews submitted that the appeal must be deemed abandoned by operation of s 126(3) of the District Court Act. In any event, acknowledging Mr Walker’s reliance on Slabbert, Mr Matthews submitted that Mr Walker’s application ought to proceed by way of interlocutory application in accordance with the Rules.
[7] I issued a minute on 27 August 2024 inviting counsel to consider whether there is agreement that the issue can appropriately be resolved on the papers as opposed to by interlocutory application, or whether either a formal application for a retrospective extension of time to pay security for costs and/or any further material is to be filed.
[8] Mr Matthews subsequently filed memorandum confirming his position that if this matter is to be dealt with on the papers, any grant of retrospective extension of time for security should be on the basis that a further additional amount of security is paid in the sum of $10,000. Mr Matthews relies on Slabbert as authority for increased security.
[9] Mr Walker, in reply, does not accept Slabbert is authority for the proposition that an additional $10,000 be paid in order for an extension to be filed under r 1.19. He highlights that in that case the increased security order was made by consent and was very much a case specific resolution. Mr Walker concedes his unfortunate oversight has put him in an uncomfortable position and asks that the Court adopts a substance over form approach so as to allow the appeal to be heard. In the event an extension is not granted, he considers it likely that counsel will be replaced and at the same time, a fresh appeal will be filed along with an application for leave out of time.
[10] Mr Walker has since filed full written submissions in support of the substantive appeal.
Principles
[11] Section 126(3) of the District Court Act provides that if security for costs is not given within the time required by the High Court Rules, the appeal is abandoned. The relevant rule of the High Court Rules is r 20.13(4). It specifies that security must be
paid to the Registrar at the registry of the court no later than 10 working days after the case management conference, unless the Judge otherwise directs.
[12] Rule 1.19 of the High Court Rules contemplates an extension of timeframes. It provides:
1.19 Extending and shortening time
(1)The court may, in its discretion, extend or shorten the time appointed by these rules, or fixed by any order, for doing any act or taking any proceeding or any step in a proceeding, on such terms (if any) as the court thinks just.
(2)The court may order an extension of time although the application for the extension is not made until after the expiration of the time appointed or fixed.
Analysis
Jurisdiction
[13] Slabbert bears very similar facts to the present case. It concerned an agreement of the parties expressed by way of joint memorandum that the appellant would pay security for costs in the amount of $1,195.2 The appellant failed to pay the security within the time required due to an oversight. The security was paid as soon as the appellant’s lawyers brought it to his attention. The respondent contended that as a consequence of s 126, the appeal was deemed to be abandoned.
[14] Cooke J in Slabbert referred to Siemer v Heron observing that the Supreme Court had observed in similar factual circumstances that it “seems” the appeal would be abandoned and “if that is so” any subsequent extension would be ineffective.3 He observed that the issue had been left open. Cooke J found the analysis of Heath J in Graham v Mills to be persuasive.4 Heath J had found that there was jurisdiction to extend the time for paying security.
[15] Cooke J found that there was jurisdiction to extend the time for payment of security for costs under r 1.19 notwithstanding that the original time for payment had
2 At [3].
3 Siemer v Heron [2011] NZSC 133, [2012] 1 NZLR 309 at [39].
4 Graham v Mills (2005) 18 PRNZ 157 at [21]–[26].
passed.5 The Court’s reasoning is best expressed by reproducing the relevant paragraphs of the judgment:
[13] Section 126(3) refers to giving security for costs within the time required by the High Court Rules and r 1.19 is part of those rules. Rule 1.19(2) explicitly provides that an extension of time can be granted after the expiration of the time earlier fixed by the Court. There is nothing in r 20.13 that says that r 1.19 does not apply to the time period contemplated by that rule.
…
[15] … the objective of the rule is not to prevent a party pursuing a genuine appeal when they have duly paid the security and they have a good explanation for failing to do so earlier as required. The amount required to be paid by way of security for costs in accordance with the formula in r 20.13 is also usually small. Here the amount involved was only $1,195. That sum is unlikely to provide much by way of actual security to the opposing party in an appeal in this type of case …
[16] … the view that there is no jurisdiction is not one that ultimately arises from the wording of the rules, as on their face they permit a retrospective extension of time.
(footnotes omitted)
[16] Mr Matthews does not contest that the Court does not have jurisdiction to extend the time for payment of security for costs under r 1.19 notwithstanding that the original time for payment has passed. I am satisfied that such an extension is possible and contemplated by r 1.19, as Cooke J recently found in Slabbert.6 I respectfully adopt the reasoning of Cooke J and am satisfied that the Court may extend time.
Should leave be granted?
[17] In Graham v Mills Heath J found that there should be “very good reasons” before an extension for the time required to pay the security is granted.7 As observed
5 At [17].
6 I note that in Malcolm v Saxton [2024] NZHC 1969 at [11]–[12] Powell J, in obiter, would have declined to follow Cooke J’s approach in SNB Holdings v Slabbert. Powell J considered that r 1.19 does not provide the Court power to reinstate proceedings already deemed abandoned by operation of statute. As Powell J’s discussion is obiter only and the facts of the present case so closely align with SNB Holdings v Slabbert, I respectfully apply Cooke J’s approach.
7 Graham v Mills, above n 4, at [26].
by Cooke J in Slabbert, granting an extension is an indulgence.8 The interests of justice of the particular case will carry the day.
[18] I am satisfied an extension should be granted for the following reasons. First, the appellant's failure to pay security was simply an act of inadvertence. Secondly, the inadvertence was that of counsel, not the appellant. The appellant is not at fault at all. Thirdly, immediately upon discovering the oversight, the security was paid. Fourthly, no prejudice is suffered by the respondent as a consequence of counsel’s oversight. Fifthly, the security amount is relatively small compared to the likely costs of appeal and was agreed upon by both parties in a joint memorandum. The appellant was not aware that failure to pay would result in the appeal being deemed abandoned. Finally, there is no suggestion that the appeal is not bona fide. The appellant is entitled to exercise the right of appeal.
[19] As highlighted by Mr Matthews, Cooke J in Slabbert directed increased security in the sum of $10,000. Cooke J expressed the view the appellant in that case might struggle to succeed on appeal. The possibility of increased security was raised by the Judge who invited further memorandum. Cooke J considered that an increased security would reflect the genuine nature of the appeal.
[20] Perhaps not surprisingly Mr Matthews submits that the appellant should lodge a further $10,000 by way of security for costs. I am not persuaded that increased security is appropriate. There is no suggestion the appellant will not be able to meet an adverse costs order, and the respondent has not sought to argue the appellant’s case is meritless.
[21] I am quite satisfied the appeal is genuine. As I have observed, Mr Walker has filed full written submissions in support of the appeal such that it can proceed as scheduled on 23 October 2024.
[22] What this case comes down to is a mistake in need of rectification. It is within the Court’s power to ensure that mistake does not prejudice the appellant by triggering
8 SNB Holdings Ltd v Slabbert, above n 1, at [20].
“an overly complex procedural workaround”.9 Deemed abandonment will not prevent the appellant from seeking to bring a fresh appeal, but there will be additional filing fees, and almost certainly a need for leave to appeal out of time. I am prepared to grant an indulgence to ensure that the rules do not operate unjustly.
[23] I am satisfied that very good reasons exist to grant leave to extend the time for paying security.
Result
[24] The time for payment of security for costs is extended under rr 1.19 and 20.13(4) to 14 June 2024. Given that the security has already been paid, and submissions for the appellant filed, this appeal should proceed on 23 October 2024.
...................................................
Eaton J
Solicitors:
Trollope & Co, Christchurch White Fox & Jones, Christchurch
Counsel:
B G Walker, Barrister, Christchurch
9 SNB Holdings Ltd v Slabbert, above n 1, at [17].
2
0