Rocket Surgery Limited v Goodwin

[2012] NZHC 3319

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

CIV-2012-412-000335 [2012] NZHC 3319

BETWEEN  ROCKET SURGERY LIMITED Respondent/Plaintiff

ANDWAYNE ERNEST GOODWIN AND MARY ELIZABETH GOODWIN Applicants/Defendants

Hearing:         5 December 2012 (by telephone)

Appearances: A C Beck for Applicants/Defendants

R J M Sim for Respondent/Plaintiff

Judgment:      10 December 2012

JUDGMENT OF ASSOCIATE JUDGE OSBORNE [as to application for stay of execution]

Introduction

[1]      By a summary judgment granted on 19 October 20121  I found that a trust existed in relation to a property legally owned by the plaintiff.  While the sale of the property was resisted by the defendants, I found the power under s 64 Trustee Act

1956 to be applicable to the situation.   The plaintiff established beyond argument that the sale of the property was expedient in the administration of the trust and should be ordered on terms.

[2]      The defendants now apply for a stay of execution of that judgment, pending an appeal to the Court of Appeal. The appeal was filed on 16 November 2012.

1      Rocket Surgery Ltd v Goodwin [2012] NZHC 2572.

[3]      In their grounds of appeal, the defendants say (I summarise) that the case was unsuitable for summary judgment and that s 64 Trustee Act was not applicable.  To the extent I awarded increased costs to the plaintiff, that decision is also appealed as being wrong.

[4]      The stay application is comprehensive and encompasses the costs order. However, Mr Beck addressed no submissions specifically to a stay in relation to the costs order.  All his submissions were focussed on the substantive judgment.   No authority was referred to in support of any proposition that there should be a stay in relation to the costs order.  None of the central considerations concerning nugatory appeals,  addressed  in  some  detail  by  Mr  Beck  in  relation  to  the  substantive judgment, is applicable to the costs order.  There is no suggestion that the plaintiff will be unable to repay any costs it receives as a result of the costs order I made.  For that reason I will be dismissing the application for stay so far as it affects the costs order.   This judgment now turns to focus on the part of the judgment to which submissions were addressed.

Factual background

[5]      The background to the arrangements which were entered into by the plaintiff and the defendants is set out in the necessary detail in my judgment of 19 October

2012.2

[6]      Put simply, the plaintiff was a white knight.   It is a company of which the defendants’ son-in-law is a director and shareholder.   It came to the defendants’ rescue when they were facing a mortgagee sale of “Chelmsford”, their Mosgiel property. In accordance with arrangements agreed upon the plaintiff purchased the property from  the mortgagee.    It  arranged  finance.    It  settled the purchase.    It proceeded to hold the property for a period to give the defendants an opportunity to repurchase the property.  If not repurchased by the defendants, the property was to be sold  with  the  defendants  to  receive  any  balance  equity  after  the  plaintiff  was

reimbursed its holding costs and something extra for its efforts.

2      At [6]-[12].

[7]      The  defendants  as  agreed  occupied  the  property.    It  transpired  that  the defendants could not repurchase the property in the first year.  Another year then passed.  The defendants were still unable to fund the repurchase.  The effect of my judgment was to recognise that on any view the time had come for the property to be sold with the defendants (if they were not the buyers) receiving any balance equity as had been agreed.  I indicated to counsel that I would be making an order for sale. I then adjourned the proceeding for a day to enable counsel (Mr Shiels for the defendants reserving his primary position that an order for sale should not be made) to settle if possible the appropriate terms and conditions of the sale order.  Counsel then had an opportunity to make final submissions on any remaining detail as to terms of sale.  My judgment followed a brief second day of hearing.

[8]      The specific terms of sale were informed by a number of considerations, as discussed in my judgment.3     The defendants strongly favoured a spring/summer marketing and sale period as the optimum period for marketing and sale.   They favoured an extended settlement date because they remained (with friends) in occupation of the property.   In the event I specified the closing of tenders on 20

December 2012 and a settlement date no earlier than 25 January 2012.  There then had to be an additional period for a possible sale by auction (which I specified as 28

February 2013) in case the property did not attract an acceptable tender.  The terms of sale did not specifically identify the possibility of a purchase by the defendants but the terms were so drafted as to encompass that possibility.

[9]      The defendants had produced no evidence to indicate that they were likely to be in a financial position to purchase the property.  Some months before I heard this summary judgment case, Mr Shiels had appeared for Mr Goodwin in Copland v Goodwin,4  in which Mr Goodwin  sought an order setting aside a judgment for US$465,000 and NZ$30,000 obtained on his own admission five-and-a-half years earlier.  Gendall J refused Mr Goodwin’s application for a stay of the execution of the 2006 judgment.  His Honour recorded that he might have been prepared to grant

a stay if Mr Goodwin had offered security to remove possible prejudice to the plaintiff.  His Honour recorded:5

The defendant has not offered security and I am told he is in no position to do so.

[10]     The defendants (the Goodwins) have not put any contrary evidence before the Court on this stay application.  The financial problems of Mr Goodwin have in fact further crystallized.  On 30 November 2012 I gave judgment in Copland v Goodwin6 dismissing Mr Goodwin’s application for an order setting aside the 2006 judgment. Mr Copland is now free to proceed with a bankruptcy application which is before the Court.  I make no assumption that Mr Goodwin will be bankrupted but the evidence and  the matters of record contained  in  this  Court’s  judgments  indicate  that  Mr Goodwin’s financial circumstances are poor.

The timing of the hearing of any appeal

[11]     The defendants filed their appeal on 16 November 2012.  The usual intention of the Court of Appeal is to have appeals usually come to hearing within six months. There was some uncertainty between counsel as to whether an earlier hearing might be possible.  I accordingly directed the Deputy Registrar to contact her counterpart in the Court of Appeal and have been informed that if application were to be made and granted for a Fast Track procedure, the hearing might take place in February, March or April 2013.

Stay of execution

[12]     The appeal  to  the Court  of Appeal  does  not  act  as  a stay of execution: r 12(1)-(2) Court of Appeal (Civil) Rules 2005.   A stay of execution (or of the proceeding itself) may be granted under r 12(3) of the Rules which provides:

12       Stay of proceedings and execution

(1)      None of the matters referred to in subclause (2) operate as—

(a)      a stay of a proceeding in which a decision was given; or

(b)      a stay of execution of that decision. (2)     The matters are—

(a)      an application for leave to appeal; or

(b)      the giving of that leave; or

(c)      an appeal.

(3)      Pending the determination of an application for leave to appeal or an appeal, the court appealed from or the Court may, on application,—

(a)       order a stay of the proceeding in which the decision was given or a stay of the execution of the decision; or

(b)      grant any interim relief.

[13]     Rule 12(4) of the Rules authorises the Court to impose conditions on any order of stay:

(4)      An order or a grant under subclause (3) may—

(a)       relate to execution of the whole or part of the decision or to a particular form of execution:

(b)       be subject to any conditions that the court appealed from or the Court thinks fit, including conditions relating to security for costs.

Considerations relevant to the exercise of this jurisdiction

[14]     In considering the exercise of the discretion to grant a stay, I adopt (as did counsel in the course of their submissions) the list of factors set out in the judgment of Hammond J in Dymocks Franchise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd:7

1.If no stay is granted will the applicants' right of appeal be rendered nugatory?

2.        The bona fides of the applicants as to the prosecution of the appeal.

3.        Will the successful party be injuriously affected by the stay?

7      Dymocks Franchise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd HC Auckland CP64/98, 26

March 1999 at [9]; decision followed by a similar decision of the Court of Appeal sub nom Bilgola Enterprises Ltd v Dymocks Franchise Systems (NSW) Pty Ltd (1999) 13 PRNZ 48. See McGechan on Procedure (looseleaf ed, Brookers) at [CR 12.01].

4.        The effect on third parties.

5.        The novelty and importance of the question involved.

6.        The public interest in the proceedings.

7.        The overall balance of convenience.

[15]     As Hammond J emphasised in Dymocks, these factors are not comprehensive. The decided cases emphasise the breadth of matters which may appropriately be addressed by a Court to balance the overall interests of justice.  I adopt the approach of Buckley LJ in Minnesota Mining & Manufacturing Co v Johnson & Johnson8 as cited by the Court of Appeal in New Zealand Insulators Ltd v ABB in which his Lordship said:9

The object, where it can be fairly achieved, must surely be to so arrange matters that, when the appeal comes to be heard, the appeal Court may be able to do justice between the parties, whatever the outcome of the appeal may be.

The possibility of a nugatory right of appeal

[16]     Mr Beck’s synopsis succinctly identified the “nugatory” argument in these

terms:

In this case, the consequences of the High Court decision are that property will be alienated.  If there is no stay pending the appeal, the benefits of the appeal would be completely lost.

[17]     What was implicit in Mr Beck’s reference to the alienation of the property, which assumes that the summary judgment is executed, is a proposition that but for that alienation the Goodwins will be in a position to repurchase the property for themselves and their family.   Mr Goodwin’s affidavit in support dealt with that proposition in this way:

The purpose of my appeal is to ensure that the property at Chelmsford is dealt with correctly in terms of the arrangements between the plaintiff and the defendant, and that its value is preserved for future generations of the family.

8      Minnesota Mining & Manufacturing Co v Johnson & Johnson [1976] RPC 671 (CA).

9      New Zealand Insulators Ltd v ABB (2006) 18 PRNZ 459 (CA) at [13].

It goes without saying that if Chelmsford is sold under a forced sale, then the property will no longer be in the family.

[18]     The  proposition  contained  in  the  second  of  those  paragraphs  is  not necessarily logical.   If Mr and Mrs Goodwin are in a position to repurchase the property, they can do so whether the property is sold at a forced sale or simply offered to them for purchase.  Under the summary judgment they have the right to tender.  The summary judgment may be seen as the Court’s way of requiring them to effect the repurchase, if they are going to, without further delay.

[19]     Reading between the lines, the Goodwins appear to be saying this:

If the Court forces us to have to exercise our repurchase right now, we will not be able to do so because we are at present not financially able to do so. If, on the other hand, the sale of the property is delayed, our financial situation may improve and we may then be able to repurchase the property and to keep it in the family.

[20]     Mr Sim submitted that on the evidence of the Goodwins’ current financial circumstances, the Goodwins’ real interest is in the proceeds of sale as they simply have no ability to repurchase the property at this point.  On the evidence before the Court, this submission is likely to prove correct.

[21]     In my view, when the “nugatory” argument is correctly analysed, the key proposition for the defendants is that they lose “the right” to repurchase the property from the plaintiff at a significantly later date.  If the sale proceeds now as ordered in the summary judgment, the defendants remain fully entitled to be purchasers of the property (subject only to their financial ability).

[22]     I then ask myself if the nugatory nature of a (later) right of purchase is of real significance in this case?  On the evidence which the defendants have adduced, the answer must be “no”.  Their current financial position on the available information is poor at best.  The defendants have given no evidence to indicate that their financial position is likely to change.  Accordingly, although Mr Goodwin deposes to the loss of the opportunity to keep the property in the family for future generations, he has failed to provide any evidence that that is a financial possibility.

[23]     In these circumstances, the concept of a nugatory appeal does not assume the significance on the facts of this case as might at first appear.

[24]     Even had there been a tangible implication of a nugatory appeal, this would in my assessment have been a case for the recognition that the consequence of a nugatory appeal should not be treated on the facts as of overriding significance.  This is partly indicated by Mr Sim’s submission as to the defendants’ real interest, on the facts,  lying  in  the  proceeds  of  sale.    If  the  defendants  are  not  now  or  in  the foreseeable future in a position to repurchase the property, a successful appeal might obtain a longer period for repurchase.  But such is meaningless if repurchase cannot occur.  There is no suggestion that the plaintiff will not honour its obligation under the trust arrangements (as I have found them) to account to the defendants for the remaining equity on any sale to a third party.  Indeed, the inclusion in the summary judgment order of provision for a stakeholder/solicitor gives further assurance of proper accounting for any balance proceeds.

[25]     The focus on what is the meaningful and likely outcome for the defendants brings to mind the decision of the Court of Appeal in Savill v Chase Holdings (Wellington) Ltd.10   In that case, the Court of Appeal declined an application for stay of execution pending appeal to the Privy Council.  The effect of the stay would have been to allow caveats to remain over three properties which were the subject of the litigation.   If the caveats were removed the properties would be sold and the appellant’s preferred relief of specific performance would no longer be available. The Court of Appeal focussed on the appellant’s right to appropriate relief rather than to the specific claim before the Court. The Court said:11

… In the result we are of the view that the balancing of the various factors mentioned must result in the application for a stay of execution being declined.   The dismissal of the application does not put an end to the appellant’s right of appeal to the Privy Council.   It does not make their appeal nugatory.  What it may do is require them to substitute a claim for damages for the claim for specific performance in the event that in the interim a sale of the three properties or any one of them is effected.  The application for stay of execution is therefore dismissed.

10     Savill v Chase Holdings (Wellington) Ltd [1989] 1 NZLR 257; adopted by Hammond J in

Dymocks Franchise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd, above n 7 at [11]-[12].

11     At 318.

[26]     As Hammond J  found in  Dymocks Franchise  Systems  (applying Savill v

Chase Holdings (Wellington) Ltd), the availability of other relief – such as damages

– may cut across the force of the proposition that refusal of a stay would render an appeal nugatory.

[27]     Furthermore, it is settled law that even if on a correct analysis the refusal of a stay of execution does render all relevant relief no longer available, that is not decisive but is merely one factor to be considered: Phillip Morris (New Zealand) Ltd v Liggett & Myers Tobacco Co (New Zealand) Ltd;12  Minhinnick v Historic Places

Trust.13

The bona fides of the appeal/the novelty and importance of questions involved

[28]     It is convenient to deal with both the bona fides of the appeal and the novelty and importance of the questions involved as a combined consideration.  Mr Harvey for the plaintiff has deposed that he does not believe the defendants are acting in good faith to file or prosecute the appeal.  For this conclusion he draws on aspects of Mr Goodwin’s affidavit in support of the application.  Mr Goodwin has deposed:

Before the property can be sold, a substantial amount of maintenance is required.  Several of the walls have to be repaired and painted, and a number of trees have to be taken out.  Many years’ of accumulated chattels have to be removed from the house. The work to be done would take several months to complete.

[29]  Mr  Harvey’s  concern  arising  from  these  statements  is  entirely understandable.  The summary judgment proceeding was commenced in May 2012, more than two years after the original arrangements were entered into and the property purchased by the plaintiff.   The defendants had the right of occupation under those arrangements and the responsibilities for maintenance.  Mr Goodwin’s willingness to depose to the matters I have quoted indicates a fundamental lack of

responsibility and reality in the approach he is taking.  He has been on notice for six

12     Phillip Morris (New Zealand) Ltd v Liggett & Myers Tobacco Co (New Zealand) Ltd [1977] 2

NZLR 41 (CA).

13     Minhinnick v Historic Places Trust CA280/97, 18 December 1997.

months that sale of the house was a possible outcome and has since the conclusion of the summary judgment hearing had almost two months to prepare the house for sale. There is a whiff of prevarication emanating from Chelmsford.

[30]     All that said, I am not prepared to draw a conclusion of bad faith in relation to  the  appeal  itself.    The  defendants  appear  as  aggrieved  about  the  summary judgment itself as they were at facing the summary judgment proceeding initially. They have gone to the trouble of abandoning their former counsel and retaining new counsel to formulate the appeal. The appeal itself has been commenced in time.

[31]     I acknowledge that Mr Sim referred me to other aspects of Mr Goodwin’s evidence and of the conduct of the defendants over the last two years.  The conduct in  question  may  be  said  to  amount  to  opposition  to  this  plaintiff’s  and  other plaintiffs’ attempts to pursue Court relief.   As frustrating for plaintiffs as is that opposition, and the delay it involves, it does not of itself necessarily drive a conclusion that the appeal now pursued is brought with bad faith.

Injury to the successful party

[32]     The arrangement originally put in place by the plaintiff and the defendants envisaged the plaintiff obtaining finance for the purchase from the mortgagee and thereafter  sustaining  the  finance  costs  for  a  period  of  approximately  one  year pending repurchase or sale to a third party.  The property purchase was settled on 7

April 2012.  The plaintiff has accordingly now sustained the financing for two years and eight months.   Mr Harvey gave detailed evidence for the summary judgment application as to repeated variations and renegotiations of financing arrangements which the plaintiff has had to enter into to meet the situation of the property ownership running on.   He put the monthly cost to the plaintiff in May 2012 as approximately $9,000  and  has  deposed in  this application  that  current  expenses amount to $7,516 per month.

[33]     Mr Goodwin has not given evidence of any ability to meet the full costs of those financing arrangements while at the same time maintaining payment of rates, insurance and other outgoings which, as occupiers, the defendants have by their

agreement been meeting.   In a letter written by the defendants’   barrister on 29

November 2012, it is indicated that Mr Goodwin would undertake to pay the usual

occupier’s outgoings and –

-to contribute $2,000 per month to the RSL Kiwi Bank account in payment of the mortgage; and

-to  meet  all  other  outgoings  and  maintenance  costs  on  the property.

[34]     Mr Beck confirmed that the reference to “all other outgoings” in the final sentence was not an offer to cover the difference between the $2,000 specifically offered and the $7,516 per month financing costs identified by Mr Harvey.  When I put it to Mr Beck that a likely condition of any stay granted (if one were granted) would be an expectation that the defendants cover all outgoings for the time being, Mr Beck indicated that if such was a condition the defendants would simply have to accept it.  In response to my observation that there is no evidence that the defendants would be able to bear those costs, Mr Beck submitted that they would have to and any inability would soon become apparent, with the matter then able to come back to Court.

[35]     On the evidence before me, including the notice I take of the Copland v Goodwin proceedings, that the defendants probably will, from a very early point, be unable  to  sustain  the  full  costs  associated  with  retaining  the  property.    The defendants have chosen not to adduce evidence as to their income and outgoings (or indeed as to their assets and liabilities).  It would serve only to visit further delay and cost on the plaintiff if I were to impose, as a term of any stay, a requirement for a level of payment by the defendants which is unrealistic.  Such would simply invite a further round of this litigation.

[36]     This might be seen as a relatively modest injurious effect but it is a factor to be considered.

[37]     A potentially more serious injurious effect relied upon by the plaintiff flows from the possibility that, with the passage of time and accruing of additional finance costs, the plaintiff will be left with too few sale proceeds to repay the plaintiff’s

holding costs.   The plaintiff’s  solicitors  provided to  the defendants’ solicitors  a

detailed  calculation  of  the  holding  costs  as  at  July 2012.    The  net  figure  was

$1,164,111.89.  Were the defendants to obtain an order staying execution, and were a Court  of Appeal  judgment  to  become  available  by July 2013,  an  additional  12 months of interest (on Mr Harvey’s  evidence approximately $86,000) will have accrued.

[38]     The total figure of, say, $1,250,000 stands for comparison with the likely net proceeds of the sale of the property.  In an understandable way, given the urgency of a stay application, the evidence as to the current value of the property is somewhat sketchy.  The defendants did not initially file any evidence of a market assessment. By contrast, the real estate agent retained in relation to the sale of the property pursuant  to  the  summary  judgment  has  filed  an  affidavit  at  the  request  of  the plaintiff.   She offers her appraisal of an estimated market value.   She notes the rateable  value  as  $1,675,000.    Having  conducted  a  kerbside  inspection  of  the property, she then draws on two particular recent sales as comparable.   She then gives a current market value of between $900,000 and $1,000,000.   Her valuation appears to have been partly coloured by her comment that she:

… had to approach it as if it were a forced sale as at that point I had no access to the property, and it appeared the occupant could be obstructive to the sale process.

[39]     In the way the summary judgment was framed there was no intention that the terms of the Court order or the pressures on any particular party would form any part of the publicity of the sale.  Whether the defendants will be prepared to cut across their own and  the plaintiff’s  financial  interests  by being obstructive in  the sale process is speculative at this point.

[40]     On the day before I heard this application, two affidavits were filed on behalf of the defendants in reply.  A real estate agent provided a one-page affidavit.  She refers to having had access to the property more recently than the other agent.  She refers to the rateable valuation of $1,675,000 and states that the current market value of the property should be around that figure:

…  if  marketed appropriately and  given  adequate time  to  determine that value.

She provides no detailed explanation of what she means precisely by this final qualification.

[41]     Neither of the real estate deponents purports to be a registered valuer or to give evidence as an expert.   To the extent that one has referred to at least two comparable sales her evidence might be considered more helpful to the Court than the other.  Neither provides a basis on which I can arrive at a reliable market value. It may be as low as $1,000,000.  It may tend towards the rateable valuation.   The safe inference is that the realisable value of the property is eminently debatable.  As the plaintiff’s holding costs continue to increase there is a real risk that subsequent (uncertain) sale proceeds will be insufficient to fully reimburse the plaintiff.  That is, without being shown by evidence to be a probability, a real possibility.

[42]     The  defendants  made  some  comments  as  to  their  ability  to  protect  the plaintiff in relation to increasing costs.  I find what Mr Goodwin had to say in his affidavits to be so vague and unsatisfactory that it cannot affect my assessment of the relevant considerations.  In his first affidavit Mr Goodwin deposed:

The  plaintiff  is  indemnified  in  respect  of  its  outgoings   relating  to Chelmsford, and it will not suffer any loss if the sale does not proceed while the appeal is resolved.

[43]     Quite what Mr Goodwin meant by “indemnified” was not spelt out.   The legal concept of an indemnity did not appear to relate to anything in the evidence filed in the context of the summary judgment proceeding.

[44]     In the submissions filed for the plaintiff for the hearing (on 30 November

2012) counsel  understandably submitted that  there was  no  satisfactory evidence

before the Court as to the suggested “indemnity”.

[45]     This, in part, prompted the reply affidavit from Mr Goodwin.  He clarified:

While the directors of the respondent had provided personal guarantees, the security for the loan has been provided by the Chelmsford Trust and Autakheia Holdings Inc.  It is that security which will be called on first.

[46]     I note that the reference to the guarantees from those two sources relates to one aspect of the plaintiff’s borrowings only.   Furthermore, the defendants have chosen to give no financial information whatsoever concerning Chelmsford Trust and Autakheia Holdings Inc.   The latter was referred to in documents from Mr Goodwin which were in evidence in the summary judgment proceeding.   Mr Goodwin’s suggestion appears to be that it is a body incorporated in some overseas tax haven.  The evidence filed is bereft of any reliable detail as to its existence and financial state.   It is the defendants who have peculiar knowledge of the status of these entities.  Having regard to their failure to adduce any evidence in that regard, I infer that the entities, to borrow another Judge’s description, may not be worth even the wick let alone the candle.   Their involvement does not fall to be taken into account as modifying, let alone eliminating, the financial risks which continue to be borne by the plaintiff.

The effect on third parties

[47]     Mr Sim submits that the Court should take into account the effect on the financiers (KiwiBank, Cargill Trustees Ltd, and certain individuals who have advanced funds) if the bridging arrangements have to continue in place because of a stay.  Affidavit evidence was adduced in the summary judgment proceeding of the expectation of Cargill Trustees Ltd, at least, that repayment should then occur.

[48]     Mr Beck, on the other hand, submitted that there are no third parties likely to be affected by a stay.  That is, in my view, an unsustainable submission.  There are third parties who entered into finance transactions in reliance on the plaintiff’s accurate explanation of the Chelmsford arrangement as I have found it to exist in the summary judgment.  While the third parties may have some source of comfort from the personal covenant provided by the plaintiff, the reality is they are being kept out of their funds and deprived of the opportunity to reinvest them elsewhere.

Novelty and importance of the appeal questions and public interest

[49]     It is convenient to address these two considerations together.

[50]     Mr Beck submitted that this was an unusual summary judgment for at least two reasons.  First, the plaintiff had initially analysed the case in terms of a cause of action in contract.  I found for them on an amended application based on a cause of action in trust law, when the plaintiff had not initially characterised the arrangement as a trust.   Somewhat  ironically, that had been the defendants’ characterisation. Secondly, Mr Beck characterised the application of s 64 Trustee Act 1956 in this context as novel.  In the summary judgment hearing, I was not referred to any case where s 64 had been applied on similar facts.  That said, the facts of this case are remarkably unusual.

[51]     Mr  Sim  noted  (correctly)  in  his  submissions  that  the  defendants’ former counsel had conceded at the summary judgment hearing that there was no jurisdictional impediment to the use of s 64 Trustee Act 1956 in the manner applied. That does not detract from the proposition that there is, at least arguably, some degree of novelty in the matter to be determined on appeal both in terms of the application of s 64 and in terms of the orders being made by summary judgment.

[52]     I do not view these matters as being particularly influential in relation to whether  there  ought  to  be  a  stay  or  not.    They  simply  indicate  that  there  are legitimate matters for consideration on appeal.

[53]     Neither counsel suggested that any public interest attaches to this case.  It is a case which, on its facts, has its main significance for the parties themselves and for the third party financiers.

Potential damage to the defendants through an early sale

[54]     In the course of his oral submissions, Mr Beck developed a submission as to a difficulty for the defendants in recovering any losses caused by a sale in the coming months, as directed in the summary judgment.   The support for this submission came partly out of evidence from Mr Goodwin as to what time he needs to prepare the property for sale (which I largely discount) and from the real estate evidence in reply as to the possibility of a sale at the rateable valuation if adequate time is devoted to the sale.

[55]     Mr Beck developed these points to meet the proposition which I suggested emerged on the approach taken by Hammond J in Dymocks Franchise Systems.  On that approach, it might be seen as appropriate to leave the defendants without a stay given that there is no suggestion that the plaintiff would not be good for any compensation payable to the defendants if the outcome of the appeal indicates that the sale should never have proceeded.

[56]     I accept that it is appropriate that I take this consideration into account in the slightly indirect way it emerged in submissions.

Balance of convenience

[57]     Counsel did not submit that any particular matters fell for consideration under the heading of balance of convenience.

[58]     For my part, I regard it as a proper consideration that, assuming a discipline on the part of counsel and success on an application for an appellate Fast Track procedure, the parties may receive a hearing in the Court of Appeal as early as the first few months of 2013.   That is not a lengthy wait in terms of usual appeal processes.    That  may  count  somewhat  in  favour  of  a  stay.     It  is,  however, substantially diluted as a consideration because of the mutual recognition by the parties that marketing and sale in the spring/summer period may well achieve the optimum result.  There has certainly been no suggestion that marketing should take place in autumn or winter.  History indicates that the defendants would vigorously oppose any such timing.  Accordingly, even if an appeal judgment became available as early as February or March 2013, the reality is that the stay will have an ongoing effect for months after that.  The potentially early appeal hearing, on the facts of this case, cannot count as significantly as it otherwise might.

Conclusion

[59]     On any view of the arrangement entered into between the defendants and their son-in-law, they have had the benefit of that arrangement for a much longer period than initially intended.   They may argue on appeal for the availability of

outcomes different to those ordered on the summary judgment, but there will remain an overwhelming case (whether in the Court’s summary jurisdiction or ordinary jurisdiction) for judicial recognition of the plaintiff’s right to bring its holding of the property to an end.

[60]     None of the various considerations, as I have weighed them, either singly or together indicate that it would be just to stay the summary judgment.  The matter can be put more strongly than that.  The considerations indicate that it would be unjust to the plaintiff and unfair to the third party financiers to issue a stay.

Costs

[61]     Costs should follow the event.

Orders

[62]     I order:

(a)      The defendants’ application for an order staying execution of the High Court’s judgment of 19 October 2012 and 5 November 2012 pending resolution of the defendants’ appeal is dismissed.

(b)The defendants are to pay to the plaintiff the costs of the application on a 2B basis together with disbursements to be fixed by the Registrar.

Solicitors:

Gallaway Cook Allan, PO Box 143, Dunedin 9054

Ross Dowling Marquet Griffin, PO Box 1144, Dunedin

Associate Judge Osborne

Counsel: Mr A C Beck, Barrister, PO Box 5601, Lambton Quay, Wellington 6145