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Shafik v Makary

Shafik v Makary

Case [2015] NZHC 2194 11 September 2015

Jurisdiction

Stay of Proceedings

Impecuniosity

Inherent Jurisdiction

Comity

Civil Litigation & Procedure

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IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

CIV-2014-412-176 [2015] NZHC 2194

BETWEEN
SHERIF SHAFIK

Appellant

AND

NAGY ALBERT MAKARY Respondent

Hearing:
3 September 2015

(Heard at Christchurch)

Appearances:

R S Pidgeon for Appellant
N A Till QC for Respondent

Judgment:

11 September 2015

JUDGMENT OF MANDER J

[1] Mr Shafik, who is described as the appellant in respect of this application, seeks the stay of a District Court judgment obtained against him by the respondent, Mr Makary, in the wake of an unsuccessful appeal from both the substantive judgment and costs orders made against him. He does so on the basis of his impecuniosity and his stated objective to pursue a claim in this Court against Mr Makary, which he may otherwise be unable to do in the absence of the District Court judgment being stayed.

Background

[2] Messrs Shafik and Makary, together with one other party, were co-guarantors of two leases. The lessees failed to meet their obligations under the leases and the guarantors were called upon to indemnify the lessor. Mr Makary met the entire costs of indemnification personally.

[3] Mr Makary issued proceedings seeking to recover a one third contribution from Mr Shafik. On 8 September 2014, Judge Crosbie entered summary judgment

SHAFIK v MAKARY [2015] NZHC 2194 [11 September 2015]

in Mr Makary’s favour in the sum of $91,561.28 (to be reduced to $76,672.45 in the event certain funds were released).1 On 8 December 2014 Judge Crosbie ordered costs against Mr Shafik, despite him being legally aided; His Honour considered exceptional circumstances existed to warrant departure from the prima facie position that costs cannot be awarded against a legally aided litigant.2

[4] Mr Shafik appealed the substantive decision on 6 October 2014. Multiple errors of law and fact were advanced. On 22 July 2015, an interlocutory application for special leave to appeal the costs decision was filed, together with “a stay of enforcement” which was described as an application to stay “the judgment this Court on appeal ultimately arrives at, or makes orders which the Court deems just under the High Court Rules 2008, r 20.19(1)(c).”3

[5] After various delays, the appeal was finally heard on 29 July. At this hearing counsel for Mr Shafik, formally advised the Court that the substantive component of the appeal was abandoned and that only the application seeking special leave to extend time for filing an appeal against the costs decision was to be pursued.

[6] Gendall J delivered an oral judgment on the day of the hearing.4 His Honour declined the application for special leave on the basis the view Judge Crosbie came to as to exceptional circumstances was open on the facts. On the appeal, Gendall J awarded costs to Mr Makary on a 2B basis, with a 50 per cent uplift. Mr Shafik then made an oral application, based on r 17.29 of the High Court Rules and the inherent jurisdiction of this Court, to stay the District Court judgment of Judge Crosbie of 8

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Shafik v Makary

Details

AGLC: Shafik v Makary [2015] NZHC 2194
Case: [2015] NZHC 2194
Decision Date: 11 September 2015

CaseChat Overview and Summary

In Shafik v Makary, the appellant, Mr Shafik, sought to stay a District Court judgment obtained against him by Mr Makary, the respondent, on the basis of his impecuniosity and his intention to pursue a claim against Mr Makary in the High Court. The case originated from a lease indemnification dispute where Mr Makary sought a one-third contribution from Mr Shafik. The District Court granted summary judgment in favour of Mr Makary, followed by a costs order despite Mr Shafik being legally aided. Mr Shafik's appeal against both the substantive judgment and the costs order was dismissed, and he subsequently applied to the High Court for a stay of enforcement of the District Court's judgments.

The court considered whether it had jurisdiction to stay a District Court judgment. While Rule 17.29 of the High Court Rules allows for the stay of enforcement of a High Court judgment, it was clear that this rule did not extend to judgments of other courts. However, the court recognised its inherent jurisdiction to stay proceedings in extraordinary cases where justice demands it, provided it does not conflict with statutory provisions. Despite this, the court found that the application was not appropriate as Mr Shafik had an alternative and more suitable avenue available to him under the District Courts Act 1947, which allows a District Court judge to stay a judgment if a party is unable to pay. The court declined to intervene, emphasizing the principle of judicial comity and the importance of the original court determining the stay issue. Additionally, the court declined the oral application to stay the costs judgment on appeal, finding it to be untimely and not beneficial to Mr Shafik.

The application was dismissed, and the court awarded costs to Mr Makary if the parties could not agree on the amount.

Orders