Southland Building Society v Fawcett HC Hamilton CIV 2009-419-720

[2010] NZHC 1233

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV 2009-419-000720

AND BETWEEN            SOUTHLAND BUILDING SOCIETY Plaintiff

ANDCHRISTOPHER LOUIS FAWCETT Defendant

Hearing:         20 July 2010

Counsel:         OG Paulsen for plaintiff

GL Wilkin, given leave to withdraw
No appearance by defendant

Judgment:      20 July 2010 at 2:35pm

(ORAL) JUDGMENT OF ASSOCIATE JUDGE FAIRE [on application staying enforcement of judgment]

Solicitors:           Cavell Leitch Pringle & Boyle, PO box 799, Christchurch for plaintiff

Nielsen Law, PO Box 3204, Hamilton for defendant

SOUTHLAND BUILDING SOCIETY V  FAWCETT HC HAM CIV 2009-419-000720  20 July 2010

[1]      The defendant applies for an order staying enforcement of a judgment I gave on 17 March 2010 pending the determination of the defendant’s appeal.

[2]      The application is made in reliance on r 12 of the Court of Appeal (Civil) Rules 2005.

Application for adjournment

[3]      Minutes before this hearing was due to commence the Registrar provided me with a document signed by the defendant/applicant.  He advises in this document that his counsel was now no longer acting and has not made available certain files.  He advised that he had not had sufficient time to prepare his defence.   He sought an adjournment.   Mr Wilkin appeared.   He sought leave to withdraw, which I duly granted.  He confirmed to me that the defendant had notice of the hearing set for this application today.

[4]      The defendant, on his own behalf, has filed a casebook for the purposes of this hearing.  He has had time to prepare his case.  He has not appeared today.   I decline the application for adjournment and I now proceed to hear the application.

The grounds in support

[5]      The grounds in support in summary are:

a)        A bona fide appeal has been filed;

b)If  a  stay  is  not  granted,  the  defendant’s  right  of  appeal  will  be rendered nugatory; and

c)        The plaintiff will not be prejudiced if a stay is granted. and

[6]       Several grounds are referred to in the notice of opposition, namely:

a)        There is no or insufficient evidence that the appeal will be rendered nugatory by the lack of a stay;

b)        The defendant’s prospects on appeal are weak;

c)        The  plaintiff  has  good  reason  to  suspect  the  defendant  has  or  is making away with his assets to defeat payment of the judgment;

d)The  defendant  has  failed  to  make  any  disclosure  of  his  financial position;

e)        There is no novelty in this proceeding nor issues of public interest;

f)        The balance of convenience favours refusing the application for stay;

and

g)        The defendant has failed to provide security for costs on the appeal and has no intention of pursuing the appeal with any haste.

The Court’s approach to a stay application

[7]       The application is made in reliance on the Court of Appeal (Civil) Rules

2005, r 12.  Of particular significance are subrules 3 and 4 which provide:

(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.

(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.

[8]      I am required to balance two principles.  First, a successful litigant should not be deprived of the fruits of his or her litigation.  Second, an appellant should not be deprived of the fruits of a successful appeal: Duncan v Osborne Building Ltd.[1]

[1] Duncan v Osborne Building Ltd (1992) 6 PRNZ 85 (CA) at 87.

[9]      From a practical point of view, where the subject matter of an application for stay pending the determination of an appeal is a money judgment, the general rule referred to in Sims Court Practice at 700,311, namely:

An order staying proceedings will be granted upon payment by the defendant to the plaintiff of the money in question, the plaintiff giving security for repayment

will  often  be appropriate.  In  many instances,  that  approach  best  meets  the two principles which have to be considered.

[10]     In  balancing  the  two  principles  the  courts,  however,  have  considered  a number of matters.  They include:

a)        Whether, if no stay is granted, the appellant’s right of appeal will be rendered nugatory;

b)        Whether the successful party will be injuriously affected by the stay; c)        The bona fides of the applicants as to the prosecution of the appeal; d)  The effect on third parties;

e)        The novelty and importance of questions involved;

f)        The public interest in the proceeding;

h)Whether the appellant has demonstrated a sufficiently arguable point to be considered on appeal.

Dymocks Franchise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd;[2]  Videbeck v

Auckland City Council.[3]

The application analysed

[2] Dymocks Franchise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd 13 PRNZ 48.

[3] Videbeck v Auckland City Council HC Auckland M1053sw02, 21 October 2002 at [7].

[11]     I consider first the bone fides of this appeal.   No detail of the grounds of appeal has been provided.  The issue, in this proceeding, as recorded in [5] of my judgment of 17 March 2010 is whether the plaintiff breached the obligation imposed on it the Property Law Act 2007, s 176.  In short, did the plaintiff sell the properties which were offered as securities for a loan in breach of its duty of reasonable care to persons mentioned in the section, including the defendant, to obtain the best price reasonably obtainable at the time of the sale.

[12]     At [23] I said:

To summarise the position, there is no evidence before me to suggest that there existed some more appropriate method of marketing the property than was undertaken.  There is no evidence to suggest that the auction programme that was undertaken was deficient in some way or that potential buyers did not have a proper opportunity to investigate the property with a view to attending and bidding at the auction.  Although the defendant has advanced an affidavit from a valuer, there was no opinion expressed by the valuer as to what, in the market which existed at the time of the auction, was the best price reasonably obtainable for this property.  When all of these matters are taken into account, it is difficult to see how there is any foundation that might be advanced by the defendant that might have any prospect of success in support of his claim that the plaintiff was in breach of the duty of care imposed by the Property Law Act 2007, s 176.

[13]     No evidence has been advanced to suggest that my conclusion is wrong.  No submission has been advanced to show that my conclusion was not an appropriate conclusion to draw from the evidence.

[14]     The defendant has not:

b)        Taken any steps to prosecute the appeal; and c)          Applied for a hearing date.

[15]     I am not satisfied that this appeal is bona fide.

[16]     I next consider whether the appeal will be rendered nugatory if a stay is refused.

[17]     Once again, this ground is not supported by any evidence.   There is no evidence as to Mr Fawcett’s financial position other than his assertion that he does not have the ability to meet the judgment.  He has not provided details of his assets and liabilities or his income and expenses.  He has not disclosed details of property disposed of.

[18]     I note [11] of Mr CA Heyrick’s affidavit of 20 May 2010 and I quote:

Since August 2008 Mr Fawcett has transferred to companies with which he is associated at least 20 properties.  The companies who have taken title to the properties are Scorpion Property Developments 1 Limited (now called JEC NO1 Limited) and Scorpion Property Developments 2 Limited (now called JEC NO2 Limited).

[19]     There  no  explanation  from  Mr Fawcett  as  to  why  these  properties  were transferred from his name or what he has done with the proceeds.   Without that information I cannot be satisfied that he is not in a position to pay the judgment sum or to give appropriate security covering the judgment sum.  This ground is simply not made out.

[20]     I next consider prejudice to the plaintiff.  This is obvious in this case.  The plaintiff has a large judgment.  It has no security.  There is evidence of the defendant disposing of assets.

[21]     My analysis of the three grounds advanced in support of the application dispose of the application.  None of the grounds justify the making of an order for stay.  The application is accordingly refused.

Costs

[22]     The plaintiff has been successful in opposing this application and is entitled to costs.  I order that the defendant pay costs on this application based on Category 2

Band B  together  with  disbursements  as  fixed  by  the  Registrar.     I  approve

Mr Paulsen’s  travel  to  this  hearing  today  as  a  proper  disbursement  in  this proceeding.

JA Faire

Associate Judge