Shoye Venture Limited v Wilson
[2016] NZCA 523
•3 November 2016 at 2:30 pm
| IN THE COURT OF APPEAL OF NEW ZEALAND |
| CA388/2016 [2016] NZCA 523 |
| BETWEEN | SHOYE VENTURE LIMITED |
| AND | DONALD GORDON WILSON |
| Hearing: | 31 October 2016 |
Court: | Randerson, Cooper and Winkelmann JJ |
Counsel: | P R Rzepecky for Applicant |
Judgment: | 3 November 2016 at 2:30 pm |
JUDGMENT OF THE COURT
AThe application for an extension of time to appeal is declined.
B The applicant must pay costs to the respondent as for an application for leave to appeal on a band A basis and usual disbursements.
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REASONS OF THE COURT
(Given by Randerson J)
Introduction
The applicant (SVL) applies for an extension of time under r 29A of the Court of Appeal (Civil) Rules 2005 (the Rules) to appeal against a decision given by Fogarty J on 29 April 2015.[1] In that decision, Fogarty J dismissed a claim against the respondent, Mr Wilson, under a guarantee dated 10 September 2007.
[1]Shoye Venture Ltd v Wilson [2015] NZHC 319.
The application is required because although an appeal to this Court was filed in time, it was deemed to be abandoned on 27 August 2015 under r 43 of the Rules. After an appeal is deemed to be abandoned, there is a three-month window under r 43(3) in which an extension of time may be sought. That period expired on 26 November 2015. It was not until 5 August 2016 that the present application for an extension of time under r 29A was filed.
The brief background is that the Manukau Golf Club (MGC) owned gambling machines installed in SVL’s Trophy Bar under a venue agreement dated 10 September 2007 between MGC and SVL. On the same date, an employee of MGC, Ms Mara, entered into a management agreement with SVL naming her as the venue manager. Mr Wilson, a member of MGC, guaranteed the performance of Ms Mara’s obligations under the management agreement.
In terms of the Gambling Act 2003, the Department of Internal Affairs must approve a venue agreement of the kind at issue. When the Department did not approve the venue agreement, a second such agreement was entered into on 9 October 2007 between MGC and SVL. Under the second venue agreement, SVL’s director, Mr Joyce, was named as the venue manager. But Ms Mara undertook most of the responsibilities SVL was to perform as the venue manager. This arrangement was illegal under the Gambling Act because of Ms Mara’s close links with MGC. The Judge said this conflicted with the policy of the Gambling Act to separate management from the beneficiaries of the business.[2]
[2]At [31], and see Shoye Venture Ltd v Wilson [2013] NZHC 658.
In 2009, SVL terminated the management agreement. This had the effect of triggering a provision in that agreement requiring her to purchase the Trophy Bar business from SVL for the sum of $300,000 plus GST (if any). Ms Mara failed to comply with that obligation. SVL then sought to recover that sum (together with other amounts it claimed were owing under the management agreement) from Mr Wilson pursuant to the deed of guarantee.
The essence of Fogarty J’s reasons for dismissing SVL’s claim were:
(a)The guarantee was unenforceable because the arrangements made in September had been overtaken by the second venue agreement the following month.
(b)There was no basis for SVL’s plea of non est factum.
(c)There was no foundation for SVL’s alternative claim for relief under the Illegal Contracts Act 1970.
If an extension of time to appeal is granted, SVL wishes to challenge all of these findings.
Principles
In an application under r 29A, the overarching consideration is where the interests of justice lie. [3] Relevant to that assessment is the length of the delay and the reasons for it, the parties’ conduct, the extent of prejudice caused by the delay, the prospective merits of the appeal, and whether the appeal raises any issue of public importance.[4] It is not in the interests of justice to grant an extension of time to pursue a hopeless appeal.[5] Where an appeal has been deemed to be abandoned, a compelling case for the exercise of discretion is required.[6]
Discussion
[3]My Noodle Ltd v Queenstown-Lakes District Council [2009] NZCA 224, (2009) 19 PRNZ 518 at [19]; and Robertson v Gilbert [2010] NZCA 429 at [24].
[4]My Noodle Ltd v Queenstown-Lakes District Council, above n 3, at [19]; and Wardell v ASB Bank Ltd [2015] NZCA 344 at [12].
[5]Ngati Tahinga and Ngati Karewa Trust v Attorney-General CA73/02, 27 June 2002 at [3] and My Noodle Ltd v Queenstown-Lakes District Council, above n 3, at [22].
[6]Sexton v Rice Craig [2007] NZCA 200 at [30]–[31].
We agree with the respondent’s submission that the delay in the present case is substantial and not adequately explained. The most relevant delay is the period between 26 November 2015 (when the opportunity to seek an extension of time under r 43(3) expired) and 5 August 2016 (when the application for an extension of time under r 29A was filed). However, the overall delay must also be considered.
SVL’s counsel during the relevant period was Mr Colthart, who filed an affidavit seeking to explain the delay. He said the preparation of the case on appeal was delayed; he was involved in other pressing matters; and he misunderstood the effect of r 43 (wrongly believing that the relevant time limit was six months not three). He accepts the delay in filing the present application was his responsibility. Again, he explains that he had other matters to attend to; he was away over the Christmas and New Year period; SVL arranged to obtain independent advice from another barrister; and there were delays in preparing the application and supporting affidavits. He deposes that it was always SVL’s wish to proceed with the appeal.
We are not persuaded that the matters relied upon by Mr Colthart provide an adequate explanation for the lengthy delay between November 2015 and August 2016. No reason is advanced to explain why Mr Colthart’s instructing solicitors could not have prepared and filed the necessary application for an extension of time. In any event, there are limits to the discretion available to the Court to excuse a party who is let down by its legal advisers. We are not persuaded this is a case where we could excuse SVL given the lengthy delay involved.
Nor are we persuaded by Mr Rzepecky’s submissions there are arguable grounds of appeal. Fogarty J carefully analysed the terms of the various agreements. He found the provision in the October agreement for Mr Joyce to be the venue manager was in direct conflict with the September agreement appointing Ms Mara as the venue manager. He noted that SVL was seeking to enforce a guarantee of Ms Mara’s performance as manager when the October agreement made no reference to Ms Mara and appointed Mr Joyce as manager instead. The Judge concluded that the October agreement was clearly intended to replace the conflicting September management agreement as well as the September venue agreement. Ms Mara had been deliberately removed as manager.
Critically, the Judge recorded[7] that Mr Colthart had accepted at the hearing of the claim that the October venue agreement conflicted with, and was intended to replace, both the September agreements. In consequence, Mr Colthart argued that the venue agreement was void by the plea of non est factum. Neither Mr Colthart nor Mr Joyce have disputed the concession recorded by the Judge in the affidavits each has filed in this Court.
[7]At [33] of the judgment.
The Judge dealt with the issue of non est factum in a thorough and considered way. He noted the high threshold required for such a plea to succeed and recorded that Mr Joyce had signed the October agreement both in his capacity as a director of SVL as the venue operator and in his capacity as the venue manager under that agreement. Accordingly, the Judge found the plea failed. Mr Rzepecky was not willing to abandon the non est factum argument for the purposes of appeal but did not address any submissions on that topic. We are satisfied there are no arguable grounds to upset Fogarty J’s judgment on that point. Mr Joyce’s intention to apply for leave to adduce fresh evidence on appeal, if an extension of time is granted, does not change our view.
Finally, on the Illegal Contracts Act issue, Mr Rzepecky accepted this was only an available and relevant argument in the event that the September 2007 deed of guarantee survived the October agreement. Since we consider there is little prospect of success for the first ground of appeal, it is unnecessary to consider the Illegal Contracts Act point other than to note it was thoroughly considered and rejected by Fogarty J. We conclude that the prospects of a successful appeal are weak.
Finally, on the issue of prejudice, the respondent is now 72 years of age and is yet to receive payment of the costs award he obtained in the High Court. He was entitled to expect the litigation had come to an end when the appeal was deemed abandoned in August 2015, or at the very latest by November 2015, when the time period for applying for an extension of time under r 43 came to an end.
Result
The application for an extension of time to appeal is declined.
The applicant must pay costs to the respondent as for an application for leave to appeal on a band A basis and usual disbursements.
Solicitors:
Warren F Simpson, Papakura for Applicant
Heimsath Alexander, Auckland for Respondent
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