Small (2005) Limited v Mahon
[2025] NZHC 1697
•25 June 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2020-404-002333 [2025] NZHC 1697
BETWEEN SMALL (2005) LIMITED
Plaintiff/Respondent
AND
NEVILLE CHRISTOPHER MAHON
Defendant/Applicant
Hearing: 18 June 2025 Appearances:
A R Barker KC and R B Hucker for Applicant D Chisholm KC and M Lenihan for Respondent
Judgment:
25 June 2025
JUDGMENT OF ANDREW J
This judgment was delivered by Justice Andrew on 25 June 2025 at 2.00 pm
pursuant to r 11.5 of the High Court Rules 2016 Registrar / Deputy Registrar
Date: …………………………………
SMALL (2005) LTD v MAHON [2025] NZHC 1697 [25 June 2025]
Introduction
[1]In a judgment dated 5 November 2024, Wilkinson-Smith J:1
(a)held that the defendant, Mr Mahon, was liable to the plaintiff (Small) in the amount of $6,518,491.20 plus interest to be calculated in accordance with the loan agreement; and
(b)dismissed Mr Mahon’s counterclaim.
[2] Mr Mahon has appealed the judgment to the Court of Appeal. The appeal was filed in November 2024.
[3] Small subsequently served a bankruptcy notice dated 10 December 2024 on Mr Mahon in which the judgment debt was quantified at that date as being
$11,886,815.47.
[4] In the present interlocutory proceedings, Mr Mahon, as applicant, seeks a stay of execution of the judgment pending the determination of the appeal by the Court of Appeal.2
Factual background
[5] The application for stay was filed and served in November 2024. It was not supported by any affidavit evidence when it was filed. Mr Mahon did not file and serve his affidavit in support until 10 June 2025.
[6] Mr Hucker, on behalf of Mr Mahon, sent an email to the Court on 2 December 2024 stating that:
It is intended that any Affidavit in support of the application be filed by 20 December 2024.
[7] On 12 December 2024, Small’s counsel filed a memorandum stating the application was opposed but that, until affidavits in support were provided, Small
1 Small (2005) Ltd v Mahon [2024] NZHC 3251.
2 Court of Appeal (Civil) Rules 2005, r 12.
would be unable to file any affidavits in support of its opposition. Small stated that a formal notice of opposition would be filed and served once Mr Mahon had filed and served an affidavit in support.
[8] On 18 February 2025, the Court sent an email to the parties stating that it was working on the matter and that the provision of a timetable would be helpful. There was no reply by Mr Mahon.
[9] On 6 May 2025, Small, by its counsel, sent an email to the Registry noting that no affidavit in support had been filed by Mr Mahon and sought the listing of the application before the Duty Judge.
[10] On 9 May 2025, Small filed a notice of opposition to Mr Mahon’s application that noted that an affidavit in support would follow once Mr Mahon filed an affidavit in support of the application.
[11] That same day, Mr Hucker sent an email to the Court noting, amongst other things, that no affidavit in support of the application would be filed by Mr Mahon. Despite this, as noted above, Mr Mahon filed his affidavit on 10 June 2025.
[12] In response, Timothy Edney of Small filed an affidavit in opposition dated 15 June 2025. Mr Mahon has also filed an affidavit in reply dated 17 June 2025.
[13] On 28 March 2025, Mr Mahon made an application to have the bankruptcy notice set aside. Two of the grounds of the application were that Mr Mahon had filed an appeal of the judgment of Wilkinson-Smith J and that he had also applied for a stay of execution of that judgment. Mr Mahon did not dispute the amount of the debt claimed in the bankruptcy notice.
[14] The application to set aside the bankruptcy notice has been set down for a hearing in this Court on 1 August 2025.
[15] Mr Mahon’s appeal to the Court of Appeal has not yet been allocated a hearing date. It is likely to be next year.
Relevant legal principles
[16] Rule 12(2) of the Court of Appeal (Civil) Rules 2005 provides that an appeal of a decision does not operate as a stay of a decision. The stay must be separately applied for under r 12(3).
[17] An application under r 12(3) requires the Court to balance the competing rights of the party who obtained the judgment appealed from (i.e. the benefit of that judgment) against the need to preserve the appellant’s position in the event of the appeal succeeding.3
[18]Factors to be taken into account in the balancing exercise include:4
(a)whether the appeal may be rendered nugatory by the lack of a stay;
(b)the bona fides of the applicant as to the prosecution of the appeal;
(c)whether the successful party will be injuriously affected by the stay;
(d)the effect on third parties;
(e)the novelty and importance of questions involved;
(f)the public interest in the proceeding;
(g)the overall balance of convenience; and
(h)the apparent strength of the appeal.
[19] The general rule is that a stay is only granted for a monetary judgment if security is given.5
3 Duncan v Osborne Buildings Ltd (1992) 6 PRNZ 85 (CA) at 87.
4 Keung v GBR Investment Ltd [2010] NZCA 396 at [11], citing Dymocks Franchise Systems (NSW) Pty Ltd v Bigola Enterprises Ltd (1999) 13 PRNZ 48 (HC) at [9] and Body Corporate No 188529 v North Shore City Council (No 6) HC Auckland CIV-2004-404-3230, 11 February 2009.
5 Taylor v Asteron Life Ltd [2019] NZCA 683 at [25]; Keung v GBR Investment Ltd, above n 4, at [12].
[20]In McLeod v New Zealand Pine Co Ltd, Williams J held:6
[T]he ordinary course here has been that where an unsuccessful litigant in this Court asks for a stay of execution pending appeal, an order has been made staying execution on his giving security.
…
The right of plaintiff in the present case is an absolute right to have his money at once. The right of defendants is the right of appeal, and the right in some way or other to have it made certain by this Court that the appeal shall not be fruitless. The duty of this Court is, I think, to reconcile as far as possible the conflicting rights of the plaintiff and the defendants. The way to do that is to follow the English cases, and to say that an order staying proceedings shall be made on payment by the defendants to the plaintiff of the money in question, the plaintiff giving security for the repayment.
Analysis and decision
[21] Small accepts that the appeal has some merit and that Mr Mahon is prosecuting it with diligence. It also acknowledges that the appeal might involve some important questions of law; Small did agree to a hearing before a permanent court of the Court of Appeal.
[22] The critical issue to address is whether, in balancing the competing rights of the parties, an immediate stay should be refused and any prejudice to Mr Mahon be further considered in the context of any bankruptcy proceedings.
[23] No security has, of course, been given by Mr Mahon. He says that he is not in a position to provide any security at all. As noted above, a stay is generally only granted if security is given. I need to consider whether there is anything in the present case in terms of the discretionary factors outlined above to warrant a departure from that general rule.
[24] I acknowledge that the judgment debt at issue is substantial. However, Mr Mahon is seeking the indulgence of the Court to have a discretion exercised in his favour. He needs to be candid about his financial circumstances before the Court could properly conclude that the absence of a security is not fatal to the stay being granted.7
6 McLeod v New Zealand Pine Co Ltd (1892) 11 NZLR 493 (SC) at 494 and 495.
7 See Mainzeal Property Construction Ltd v Yan [2020] NZHC 1659 at [30]. See also Yeoh v Al Saffaf HC Auckland CIV-2006-404-1164, 21 June 2006 at [33].
[25] Mr Chisholm KC on behalf of Small was critical of both the late filing of an affidavit by Mr Mahon and the bald and unsubstantiated assertions of a lack of income and realisable assets.
[26] As is clear from the above factual background, Mr Mahon did not file an affidavit in support of his application at the time the application was filed. His solicitor subsequently advised the Court and Small (in May 2025) that no affidavit in support of the application would be filed. However, contrary to that indication and as recently as 10 June 2025 (less than a week before Small was required to file its submissions), he filed his affidavit stating that he has no current income and relies on support from his life partner, Saren Loo. In the affidavit, Mr Mahon says he has no “current immediate realisable assets” that could be utilised to satisfy the debt. He briefly refers to an interest held in a development in Indonesia but says that funds from that development have not come to fruition and there is no prospect of those funds becoming available in the immediate or medium term.
[27] The Indonesian investment is addressed in Mr Mahon’s reply affidavit sworn 17 June 2025:
I had in an earlier Affidavit referred to an investment in Indonesia which I was hopeful would result in an ability to repay the Waimauri debt. Details of that asset were provided to Tim Edney and referred to in my Affidavit in support of the halt of the bankruptcy proceeding based on the Waimauri debt. Unfortunately no funds have come to fruition from that shareholding. I have no other assets nor income that enables me to secure the debt pending appeal. I deny that the delay in filing my Affidavit meant that I was endeavouring to provide financial information. I was conscious that I had no assets or income so there was nothing that I could offer realistically to secure for the judgment debt.
[28] There is a lengthy history of litigation between Mr Edney of Small and Mr Mahon. In Waimauri Ltd v Mahon,8 Muir J described the proceedings as a contest between Mr Edney, “a particularly hard-headed and unsympathetic property investor and money lender” and Mr Mahon, his “long-term business associate” and “no neophyte himself”.9 In that judgment, Muir J makes a number of adverse credibility
8 Waimauri Ltd v Mahon [2020] NZHC 1170.
9 At [1].
findings against Mr Mahon.10 I also acknowledge that a number of findings about Mr Edney are expressed in less than positive terms.
[29] However, in the circumstances, the very belated attempt by Mr Mahon in these proceedings to provide some degree of transparency about his financial affairs is far from satisfactory. It is understandable, given the very “late hour” at which this issue has been addressed and the lack of any real detail, that Small (i.e. Mr Edney) is sceptical of the assertions made by Mr Mahon. As noted above, a bona fide applicant for a stay should provide full details of their own financial position (particulars of assets, liabilities and income), together with entities they control to establish if the applicant is presently unable to pay anything towards the judgment debt and/or provide security. I acknowledge that Mr Mahon has referred to his Indonesian investment but his contention that “unfortunately no funds have come to fruition from that shareholding” is somewhat equivocal and colloquial. Does he or a related entity still hold the investment and, if so, where is it now?
[30] At [8] of his affidavit dated 10 June 2025, Mr Mahon says that he “managed to make payment to Mr Edney of in excess of $1 million” following the judgment of Muir J in the Waimauri litigation. However, as explained by Mr Edney in his affidavit in opposition of 15 June 2025, that is a very incomplete account of what actually happened, with Waimauri receiving full payment of its judgment debt some four years after the judgment of Muir J and with Mr McCrae meeting the entire debt pursuant to an undertaking (instead of Mr Mahon). I note too that Mr Mahon is not in receipt of legal aid; he is represented by senior counsel and a very experienced instructing solicitor. Overall, the lack of transparency by Mr Mahon is concerning and a factor of some importance in the exercise of my discretion.
[31] It is no answer to the concern about a lack of transparency to say that Small, as a judgment creditor, could have sought to examine Mr Mahon as to his financial means. I acknowledge that there is no prohibition on filing an application for examination prior to an application for adjudication. However, it is for Mr Mahon, as
10 See for example [45], [46] and [48].
the applicant seeking a stay, to provide the necessary financial information so that the Court is in a position to assess the issue of security.
[32] There are two further important factors that suggest that the stay application should be declined. They are timing and the prejudice that might arise from the postponement of the clawback time for irregular/voidable transactions under ss 193 and 194 of the Insolvency Act 2006. The two are interrelated.
[33] As Associate Judge Bell held in Mainzeal Property and Construction Ltd (in liq) v Yan,11 the power to order a stay under r 12(3) of the Court of Appeal (Civil) Rules is not the only remedy for a debtor seeking relief pending appeal. When a bankruptcy application is pending, the Court can order a halt under s 42 of the Insolvency Act while the appeal is heard. The Court also has a general power to hold a proceeding under s 38. As Associate Judge Bell noted, the principles on which the Court orders a halt under s 42 pending appeal are broadly similar to those applied under r 12(3) of the Court of Appeal (Civil) Rules.
[34] In Mainzeal (in liq) v Yan, the critical issue addressed by Associate Judge Bell was one of timing: whether the stay should be ordered immediately under r 12(3) or the issue be addressed at a later stage in the context of the bankruptcy proceedings.
His Honour concluded:12
[26] My concern, however, is with the timing of the stay application. If I were to order a stay now, the creditors’ efforts to enforce the judgment by bankruptcy will be put on hold until the Court of Appeal gives a judgment. If the judgment goes the way of the creditors, they will need to come back to have the stay lifted. Once the stay is lifted, the bankruptcy notice will be reactivated. Only then will they be able to begin a bankruptcy application. I see little reason why matters cannot be advanced in the interim so that the creditors are not put to those further steps after the Court of Appeal gives it decision. This question of stay may be more appropriately addressed under a bankruptcy application rather than as a ground to set aside a bankruptcy notice. An additional factor is that, if there have been irregular transactions, the clawback time runs from when the bankruptcy application is served on the debtor. Another factor is Mr Yan’s complaint about other efforts by the creditors to enforce the judgment against him. He says that at one stage they were threatening to have him examined under Part 17 of the High Court Rules. If a bankruptcy application is started, s 31 of the Insolvency Act will prevent
11 Mainzeal Property and Construction Ltd (in liq) v Yan [2019] NZHC 3145 at [18].
12 A similar approach was adopted by Associate Judge Sussock in Turuki Healthcare Charitable Trust v Halse [2024] NZHC 2000 at [42]–[43].
the creditors taking any other steps to enforce the judgment against him. Once a bankruptcy application is started, the question of halt can be appropriately reviewed in the light of the circumstances at that time. They may include progress on the appeal and assessing when the Court of Appeal may give a judgment. That will better preserve the status quo than ordering any stay now.
[footnote omitted]
[35] The same concerns discussed by Associate Judge Bell apply in this case. Here, no appeal date has yet been allocated for the appeal in the Court of Appeal. It seems likely that the hearing will not now take place until 2026, with a real likelihood that there will be no judgment until 2027. As was the case in Mainzeal (in liq) v Yan, a court may be better placed to assess those appeal circumstances in the context of the bankruptcy proceedings rather than at this earlier stage.
[36] As was the case in Yan, there is no good reason here to put the bankruptcy steps on hold immediately. Small, as the judgment creditor, should be able to advance matters in the interim.
[37] I reject Mr Barker KC’s submission that the clawback provisions under the Insolvency Act provide procedural rather than substantive protection and should thus not be regarded as a significant factor telling against the application for a stay. It is not in dispute that the clawback period runs from when a bankruptcy application is served on the debtor. If the stay is granted, then obviously that step cannot be taken and the clawback time will be postponed. In my view and given the potential delay with the appeal (with the possibility of a judgment not being issued until 2027), this is a potentially important factor. I note too that the assertion by Mr Mahon that he is reliant on a successful appeal to reduce or extinguish his liability does tend to reinforce why there needs to be an available act of bankruptcy as soon as possible by Mr Mahon, so that the Official Assignee can investigate his affairs from that point if his appeal is unsuccessful.
[38] A decision not to grant a stay at this time will not necessarily render the appeal nugatory. As indicated, matters can be considered afresh and at the more appropriate
bankruptcy stage.13 I acknowledge that this might involve some inevitable duplication of legal argument and hearing time. However, that is not sufficient to justify the making of a stay order at this stage.
[39] For all these reasons I conclude that it is not in the interests of justice to grant the stay.
Result
[40] The application by Mr Mahon for a stay of execution under r 12(3) of the Court of Appeal (Civil) Rules 2005 is refused.
[41] As to costs, I am of the preliminary view that, having succeeded, Small is entitled to costs on a 2B basis plus disbursements. If costs cannot be agreed, then memoranda are to be filed and served by 18 July 2025.
Andrew J
13 As Associate Judge Bell held in Mainzeal Property and Construction Ltd (In liquidation) v Yan, above n 11, the question of a stay is more appropriately addressed under a bankruptcy application rather than as a ground to set aside a bankruptcy notice.
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