Sharrock v Wedd

[2016] NZHC 1802

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

CIV-2015-441-132 [2016] NZHC 1802

BETWEEN

GERALD ERRINGTON SHARROCK

First Plaintiff

JUST STEEL FRAMING LIMITED Second Plaintiff

AND

STEPHEN CHARLES WEDD Defendant

On the papers
Judgment:	5 August 2016

JUDGMENT (2) OF ASSOCIATE JUDGE SMITH

[1]      On 1 July, 2016 I gave judgment on the plaintiffs’ application for summary judgment  against  Mr  Wedd.1     I  made  a  declaration  that  the  first  plaintiff (Mr Sharrock) is and has since 22 February 2013 been a director of the second plaintiff (Just Steel), and that an annual return and particulars of directors of Just Steel which Mr Wedd had lodged with the Companies Office on 1 December 2015 were not validly lodged by him.   I also made a declaration that Mr Sharrock is entitled to be entered as a shareholder in the share register of Just Steel, or (in the event that such a register currently exists) to an order rectifying that register under s

91 of the Companies Act 1993 by including Mr Sharrock’s name in the register in

respect of:

1      Sharrock v Wedd [2016] NZHC 1477

SHARROCK v WEDD [2016] NZHC 1802 [5 August 2016]

(a)       The  shares  acquired  by  him  under  a  deed  which  the  parties  had entered into.

(b)      Any other shares he may subsequently have validly acquired in Just

Steel.

[2]      I also made an order setting aside a notice of discontinuance which Mr Wedd had purported to file on behalf of Just Steel.

[3]      By application dated 13 July 2016 Mr Wedd has applied for an order recalling the judgment given on 1 July 2016.  Mr Wedd did not provide any sworn affidavit with  his  application  to  recall  the  judgment,  but  made  a  number  of  unsworn statements in the body of the application.

[4]      First, Mr Wedd says that Mr Sharrock was supposed to pay $250,000 for shares in Just Steel and the related company (Affordable Residential Limited), but he did not pay that sum.  Mr Wedd contends that the true figure paid by Mr Sharrock appears to have been only $91,882.59.

[5]      Mr Wedd  does  acknowledge that  $170,000  was  paid  to Just Steel  on 22

March  2013  (much  later  than  the  payment  date  specified  in  the  deed),  but  he contends that various sums, totalling $118,265.60, were wrongfully taken out of Just Steel’s bank account.  Mr Wedd contends that $118,265.60 allegedly taken from Just Steel amounted to theft by a person in a special relationship, contrary to s 220 of the Crimes Act 1961.  He says that Mr Sharrock appears to have been deliberately misleading the Court when he claimed to have paid $257,000 for shares in Just Steel and Affordable.

[6]      Mr Wedd goes on to contend that all and any shares Mr Sharrock claims to have purchased in Just Steel and Affordable are forfeited due to non-performance of the deed and not paying the agreed purchase price.  Mr Wedd refers to a statement in a receiver’s report of 3 June 2016, which suggests that Mr Sharrock’s company Tannenberg Limited did not pay for the shares it acquired in Affordable, and that Affordable should not have been placed in receivership.

[7]      Mr Wedd submits that Mr Sharrock’s attempts to mislead the Court as to the true position regarding the payment for the shares justify the recall of the judgment. He says that all of the evidence only came to light after the summary judgment application was heard on 26 May 2016.

[8]      In a memorandum filed in reply, the plaintiffs submit that there is no basis to recall the judgment.

[9]      The plaintiffs note first that Mr Wedd is not seeking an order recalling the judgment setting aside the notice of discontinuance.  Secondly they submit there was evidence given at the hearing showing that $210,148.98 was deposited into Just Steel’s bank account.  With additional payments made to third parties on Just Steel’s account, the total payments made on behalf of Mr Sharrock totalled $257,787.74. The plaintiffs further note that the deed did not provide for payments of $257,000 by Mr Sharrock for the shares:  the deed provided for a combination of payments for shares in Just Steel and Affordable, and advances to those companies.

[10]     The plaintiffs further submit that, of the total  $250,000 to be paid, only

$124,999 was for the shares in Just Steel.  Whether repayments from Just Steel to Tannenberg or Mr Sharrock were validly made is a matter going beyond the scope of the cause of action in respect of which summary judgment was entered.

[11]     Finally, the plaintiffs submit that even if there were any substance to the allegations made by Mr Wedd (which they deny), recall of the judgment would not be the appropriate remedy.   To the extent that Mr Wedd challenges the Court’s judgment,  the  appropriate  remedy  was  to  appeal  to  the  Court  of Appeal.    The plaintiffs ask that the application to recall the judgment be dismissed, with an increased costs order in their favour.

Discussion and conclusions

[12]     Rule  11.9  of  the  High  Court  Rules  provides  that  a  Judge  may  recall  a judgment at any time before a formal record of the judgment has been drawn up and sealed.  In this case the judgment has not been sealed, so the court may recall the judgment if it considers that course of action is warranted.

[13]     The  principles  on  which  a  judgment  may  be  recalled  are  now  well understood.   The starting point is that a judgment, once delivered, must stand for better or worse, subject to any appeal.   However the courts have identified three categories of case in which a judgment which has not been sealed may be recalled:

(a)      Where, since the hearing, there has been an amendment to a relevant statute  or  regulation,  or  a  new  judicial  decision  of  relevance  and higher authority;

(b)      where counsel have failed to direct the court’s attention to a legislative

provision or authoritative decision of plain relevance;

(c)      where for some other special reason justice requires that the judgment be recalled.2

[14]     The three categories of case referred to in Horowhenua County were accepted by the Supreme Court in Saxmere Co Limited v Wool Board Disestablishment Co Limited.3

[15]     In Erwood v Maxted, the Court of Appeal set out the following guidelines for applications made to recall judgments:4

...

(b)      Applications to recall judgments not falling within r 85

(i)       Where a party seeks to recall a judgment not falling within r 8, the criteria set out in Horowhenua County v Nash (No 2) [1968] NZLR

632  at  p  633  (as  confirmed  by  this  Court  in  Unison  Networks

Limited  v  Commerce  Commission  [2007]  NZCA  49)  are  to  be followed and will be strictly applied.

(ii)      Applications   which   merely   seek   to   relitigate   matters   already considered, or to challenge substantive findings of fact and law, will

2      Horowhenua  County  v  Nash  (No 2)  [1968] NZLR 632(SC) at 633. The judgment in Horowhenua County has been approved by the Court of Appeal in Erwood v Maxted [2010] NZCA 93, (2010) 20 PRNZ 466 at [3] and Unison Networks Limited v Commerce Commission [2007] NZCA 49 at [10].

3      Saxmere Co Ltd v Wool Disestablishment Co Ltd [2009] NZSC 122, [2010] 1 NZLR 76 at [2].

4      Erwood v Maxted, above n 2, at [23].

5      Rule 8 of the Court of Appeal (Civil) Rules 2005, which is concerned with accidental slips or omissions in judgments.

not be entertained.   Reference may usefully be made to Ngahuia Reihana Whanau Trust v Flight CA23/02 26 July 2004; and Faloon v Commissioner of Inland Revenue (2006) NZTC 19, 832.

(c)      Process

(i)       Where a formal application is required in terms of these guidelines: (a)     it must be made on notice to all other parties;

(b)       any party served with an application need not respond unless directed to do so by the Court;

(c)       the Court will deal with the application on the papers or by oral hearing in terms of r 51(6);

(d)       the Court will usually give only brief reasons for its decision on any application;

(e)       any further application seeking to recall a decision refusing an application to recall will usually be dealt with summarily; and

(f)       the  Court  will  consider  ordering  increased  or  indemnity costs against parties and/or counsel bringing unmeritorious applications.

[16]     In this case, Mr Wedd has not pointed to any relevant amendment to a statute or regulation, or to any new judicial decision.   Nor has he directed the Court’s attention to any relevant legislative provision or authoritative decision that was not referred to at the hearing.  His application must therefore be considered as relying on the third category of case identified in Horowhenua County, namely that there are “special reasons” requiring recall.

[17]     I am satisfied that there are no such special reasons.  I accept the plaintiffs’ submission that Mr Wedd is simply attempting to re-litigate matters which have already been decided.  In the judgment I gave on 1 July 2016 I was satisfied on the evidence that Mr Sharrock had shown that he is entitled to be entered on the share register for Just Steel.    I noted that he appeared to have satisfied  the payment obligations which entitled him to his share allocation by 22 March 2013 at the latest, when he made a payment of $170,000 to Just Steel.  I referred to the fact that there was no evidence of Mr Wedd or Just Steel cancelling the deed, and to the concession

made by Mr Wedd at the hearing that Mr Sharrock had become a shareholder in Just

Steel.6

[18]     The judgment was only concerned with Mr Sharrock’s claimed shareholding in Just Steel, and his directorship of that company.  It was not concerned at all with the shares he was to take (for a consideration of $1) in Affordable.  The shares Mr Sharrock was to take in Just Steel were to be allocated on payment of the sum of

$124,999, and the deed stated that the shares were to be allocated to Mr Sharrock

“upon payment of $124,999”.

[19]     In the judgment, I found that Mr Sharrock had paid that sum by 22 March

2013 at the latest.  While that payment may have been late on the strict terms of the deed, there is no evidence that Mr Wedd took any point over the lateness at the time.

[20]     The remaining money to be paid by Mr Sharrock, totalling $125,000, was to be made by way of advances, repayable to Mr Sharrock on demand.

[21]     If Mr Sharrock became entitled to the shares in Just Steel on payment of the

$170,000 on 22 March 2016, and became a director of Just Steel (as I found in the judgment), the Court was not required to consider the propriety or otherwise of steps taken by Mr Sharrock after he became a director.   Mr Wedd acknowledged at the hearing that  Mr Sharrock  had  become a director  and  shareholder,  and  the only ground  for  contending  otherwise  set  out  in  his  notice  of  opposition  was  that “[Mr Wedd is] the only shareholder and only duly appointed director of [Just Steel]”. The nature and amounts of the payments made by Mr Sharrock were traversed at the hearing, and Mr Wedd did not run any argument at the hearing that acts or omissions by Mr Sharrock had somehow operated to forfeit his entitlement to the Just Steel shares, beyond the arguments relating to Mr Sharrock never having paid for the shares, which I rejected in the judgment.

[22]     In summary, Mr Wedd has provided no sworn evidence showing that there are special circumstances sufficient to justify a decision to recall the judgment.

There is no basis for the recall application, which appears to be no more than an

6      Sharrock v Wedd [2016] NZHC 1477 at [59].

attempt to re-litigate the issues which were decided by the summary judgment.  Mr Wedd’s remedy, if he considered that the judgment was wrongly entered, was to appeal to the Court of Appeal, not to apply to this Court to recall the judgment.  The application for recall is accordingly dismissed.

[23]     I will deal with the plaintiffs’ application for costs on the recall application, when I give judgment on the plaintiffs’ first application for costs, made following the summary judgment.

Associate Judge Smith

Solicitors:

Hucker Associates, Auckland for the plaintiffs

S Wedd, Hastings, in person