Specialised Livestock Imports Limited v Darren Donald Borrie

[2003] NZCA 275

IN THE COURT OF APPEAL OF NEW ZEALAND

CA72/01

BETWEENSPECIALISED LIVESTOCK IMPORTS LIMITED

First Appellant

ANDPHILIP BENDALL

Second Appellant

ANDGORDON CLIFTON BENDALL

Third Appellant

ANDDOREEN LOUISA BENDALL

Fourth Appellant

ANDOSTRICH IMPORT AND QUARANTINE (1996) LIMITED

Fifth Appellant

ANDEO EXPORTS LIMITED

Sixth Appellant

ANDDARREN DONALD BORRIE AND MICHELE CHRISTINE BORRIE AND OTHERS

First To Fifteenth Respondent

Hearing:18 November 2003

Coram:Tipping J
McGrath J
Glazebrook J

Appearances:  T C Weston QC for Appellants

G J Kohler for Respondents

Judgment:26 November 2003 

JUDGMENT OF THE COURT DELIVERED BY McGRATH J

[1]       This is an application for final leave to appeal to the Judicial Committee of the Privy Council. On 20 September 2002 this Court delivered a final judgment in an appeal brought by Gordon Bendall, Doreen Bendall and their son Philip Bendall (the appellants) against a judgment of the High Court finding them along with associated companies jointly liable to fifteen parties (the respondents) who had entered into contracts with them for the purchases of live ostriches and in some cases ostrich eggs.  The Court had, on 28 March 2002, delivered an interim judgment in the appeal.  The outcome of the final judgment, insofar as it concerns the application now before the Court, was that the appeal against the High Court Judge’s finding that Philip Bendall was liable to each of the respondents was dismissed.  The Bendall parents’ appeal was allowed in respect of the finding of liability to five of the respondents and dismissed in respect of such findings concerning the other ten respondents.

[2]       The appellants then applied for and, on 22 November 2002, were granted conditional leave to appeal to the Privy Council against both judgments. The conditions subject to which leave to appeal was granted included:

(a)Within 30 days of the making of this order the appellants lodging with the Registrar security for costs on the appeal in the sum of $2,000.00 and within 90 days of the making of this order taking all steps necessary to procure the preparation of the Record and its dispatch to England…

[3]       Security was fixed and paid by the appellants on 20 December 2002.  On 20 February 2003 a draft record was submitted to the Registrar of the Court together with an application by the appellants for final leave to appeal.  It seems however that there had been no prior attempt by the appellants to reach agreement with the respondents on what was to be included in the record.  Differences arose over the considerable number of documents which had been before the Court of Appeal but which the appellants proposed to omit. 

[4]       In mid May 2003 Mr Kohler indicated that if the appeal to the Privy Council proceeded the respondents wished to raise a cross-appeal.  The  response on behalf of the appellants at the time, which Mr Weston QC had no instructions to withdraw at the hearing before us on 18 November, was that the appellants were out of time to bring a cross-appeal to the Privy Council, and would be able to proceed with one only if they made a successful petition for special leave.  Any such petition would be opposed.

[5]       The parties did not resolve their differences and the matter came back to this Court on 16 June 2003, when the appellants sought final leave to appeal.  The application was adjourned by the Court on the understanding that the parties would meet immediately to reach agreement on which documents should be included in the record with objection being taken by the appellants to any documents which in their opinion were unnecessarily being included.  Counsel would then prepare and file a consent memorandum in relation to the final leave application, which would be granted on the papers. Later that day counsel for the respondents, Mr Kohler, met with the solicitor acting for the appellants, who had appeared for them at the hearing.  They agreed to include all of the disputed documents subject to the appellants’ formal objection in respect of some of them.  The compilation of the record and the lodging of it in Court remained the appellants’ responsibility.

[6]       Shortly before the hearing of 16 June the possibility of settling the litigation had been discussed by the legal advisers and Mr Kohler had invited the appellants to submit a proposal for consideration.  The appellants’ solicitor raised the matter with his clients and in late July received their instructions to put together a settlement proposal. In the meantime the solicitor put further work on the compilation of the now agreed record on hold.  In an affidavit now before the Court he said:

From this time my focus on the matter shifted to assisting in the construction of a settlement offer to the respondents and away from the task of reconstructing the Record.  It was my hope that a well-reasoned and presented offer might result in a settlement or, at least, a negotiation and/or mediation process and that I might avoid my clients incurring the expense of reconstruction of the Record.

[7]       Mr Kohler wrote to the solicitor on 5 August 2003 asking him to forward the record. There have also been references to the failure to complete it in the course of telephone discussions about the litigation.  The solicitor however did not complete the work that was required of him by the order granting conditional leave.  Nor did he even reply to Mr Kohler’s letter.

[8]       A settlement offer was not forthcoming from the appellants until 17 October 2003.  It seems from the affidavit of the appellant’s solicitor that other work he was doing on the proposed Privy Council appeal and the intended settlement offer distracted him during this period.  This work included the finalisation of a draft case, effectively an outline of the appellants’ intended submissions. It was intended to submit this to the respondents, with the offer of settlement, so that Mr Kohler understood the argument that the respondents would face and could give advice to them on the terms of the settlement proposal accordingly. 

[9]       The actual response of the respondents took the form of a memorandum from Mr Kohler, filed in this Court, referring to the appellants’ delays in compliance with the condition for the grant of leave to appeal and asking that the Court bring the matter to an end by indicating that it would not further extend time for compliance. The consequence of that of course would be that the conditional leave would lapse. 

[10]     To complete the narrative we have drawn from the affidavit filed by the appellants’ solicitor, and which we accept as factually correct, on receiving the memorandum of 29 October he immediately recommenced work on the record.  He said:

I want to stress that I had no intention to delay the appeal.  Looking at the matter with the benefit of hindsight I think I got it into my head that a settlement offer would be made and that my efforts should be directed to that end.  I accept that Mr Kohler did not give me any formal assurance along those lines.  However, I did take from his invitation (to present a settlement offer) that I should be focusing upon doing so.  Looked at, now, it seems obvious that I should have taken steps before now to finalise the Record.

[11]     The solicitor in his affidavit told the Court that he accepted sole responsibility for the delay in constructing the record.  He had no instructions from his clients to cease work on that task while the settlement offer was being prepared.  On the contrary his instructions had always been that the appellants were absolutely committed to bringing the appeal which they were doing in good faith. His opinion is that there is no undue prejudice caused by the delay and he accepts that he should be responsible for meeting the respondents’ costs of the application of 29 October and today’s hearing.  He also reports that the record has now been completed and sent to the Court for certification.

[12]     The matter came before the Court as presently constituted on 5 November 2003.  Mr Weston QC appeared to oppose the application on behalf of the appellants. After hearing argument from counsel the Court indicated that it would set down the appellant’s application for final leave to appeal for a hearing, but that it required that the various assertions of fact in relation to delay, that had been referred to in the memoranda of counsel, be verified by affidavit so that the issues raised by the delays in compliance with the conditional leave order could be properly determined.  On that basis, on 18 November 2003, the Court heard the application.

[13]     The issue now before the Court is accordingly whether the appellants’ application for final leave to appeal should now be granted in light of the delay between 22 February 2003 (when the time for filing the Record expired) and 7 November 2003 when they advised that it had been filed.  In this case the time allowed had expired without the appellants seeking an extension of time but nothing turns on that:  Carter Holt Harvey v Commerce Commission (CA180/00, 3 March 2003).

[14]     The basic principle is that an extension will not be granted unless the Court is satisfied that in all the circumstances there is sufficient excuse for the delay to justify doing so.  It is for the appellant seeking final leave to satisfy the Court that is so. Weatherston and others v Waltus (CA251/00, 13 June 2001, para 5); Lomas v Foreland Investments Ltd (1991) 5 PRNZ 199 (CA).  This Court also discussed its approach to extensions of time for compliance with conditions imposed under Rule 5 of the New Zealand (Appeals to the Privy Council) Order 1910 in Mobil Oil New Zealand Limited v Bagnall & Anor (CA290/99, 7 February 2001). Rule 5 provides for conditions to be imposed as to the time for preparation and despatch to England by an intending appellant of the record relating to an appeal.  The Court said that it was not appropriate to require strict compliance with each detail of such a condition which could be taken to be satisfied if its requirements were substantially met.  As well, the Court said that sufficient would be done to comply within a stipulated period if reasonable efforts to comply with the condition in that time had been made by the party granted conditional leave and the party had been frustrated by a lack of co-operation from the other side. 

[15]     In Mobil Oil the applicants were found not to have complied with the condition because they had made no attempt to reach agreement on the draft form of record that they had prepared within the specified period.  It could not, however, be said that the intending appellant had entirely failed to attend to the task within the period that the Court had fixed.  In reality little had remained to be done once the specified period expired.  That, and the important fact that there had been no prejudice occasioned to the respondent by the delay, were the basis for the Court’s decision to grant an extension of time and the application for final leave itself. 

[16]     On the other hand, in Waltus little work had been done on the preparation of the record as the intending appellant was not minded to take steps in compliance with the condition as to time for its preparation until it secured confirmation of an anticipated award of costs by the High Court in the litigation.  It anticipated that award would fund the further appeal but had done little to progress the making of it.  Even when the matter was before this Court on the final leave application the work required to satisfy the condition of leave largely remained to be done.  Furthermore the intending appellants had not adequately answered claims of prejudice made in the respondents’ affidavits concerning detrimental effects on its operational functions caused by the fears of the company’s financiers that a minority buy-out might yet be ordered.  The application for an extension of time was declined and as a consequence, the condition of interim leave not having been fulfilled, final leave was refused.

[17]     The delay from 22 February to 16 June 2003 was largely the result of the parties’ differences over what should be included in the record.  While primary responsibility for its collation and lodging was that of the appellants, who carried the burden of compliance with the conditions of the grant of leave, they were to some extent impeded in their task by the impasse that developed over which documents should be excluded.  Neither of the legal advisers for the parties involved at this stage appears to have appreciated that Rule 10 of the 1910 Order allows disputed questions concerning the record to be submitted to the Court for directions, and that Rule 9 enables inclusion in the record of documents, subject to the noting of a party’s objection.

[18]     The appellants had principal responsibility for this period of delay as they had to meet the conditions of the grant of leave, but some responsibility must also be attributed to the respondents.  It follows that we regard the order made on 16 June 2003 as involving the excusing of the appellants for a delay for which they should now be held mainly, but not solely, responsible.

[19]     Once the parties had reached agreement on 16 June on what constituted the record, it became the responsibility of the appellants’ solicitor to carry that agreement into effect, at which point the consent memorandum was to be filed and the Court would make an order granting final leave on the papers.

[20]     It is the delay thereafter by the appellants’ solicitor, that is since 16 June 2003, that is of particular concern in this case. It was undoubtedly the responsibility of the appellants’ solicitor, who has fully and frankly acknowledged that he failed to meet his obligations.  He is not absolved by his explanation that he was working on other aspects of the continuing litigation including preparation of the appellants’ settlement proposal and incidental work required of him in relation to the written case.  Nevertheless, a number of factors serve to explain his failure to complete the record.  First, the appellant’s solicitor was actively engaged on aspects of the litigation during the relevant period.  In particular, he was actively endeavouring to resolve the litigation in another way, by negotiating a settlement.  This distinguishes this case from Waltus and Carter Holt, where the appellants failed to take steps to prepare the record while awaiting the resolution of peripheral matters.  Second, the preparatory work on the record was largely complete. In this important  respect the present case differs from both Lomas and Waltus in which legal advisors had in one case done nothing and in the other taken only minimal steps to prepare the record.  Additionally, it was no doubt because the record could be compiled quickly if necessary that the solicitor in this case felt able to turn to pursue the settlement initiative. 

[21]     One factor which has concerned us is the apparent lack of speed in putting together the settlement offer, which should have been pursued with urgency.  From what the appellants’ solicitor has said this was, however, understandable in the circumstances.  Ultimately, the appellants’ solicitor has provided an explanation for the delay which does not justify his inaction concerning completing the record but does make it understandable.

[22]     We turn to the question of the extent to which the delays in completion of the record have caused prejudice to the respondents.  Here the focus must be on prejudice over and above that inherent in the appellants’ exercise of their right to bring an appeal to the Privy Council which includes deferral of satisfaction of the judgment unless and until it is confirmed.  There must be some new prejudice, or some continuation of prejudice, brought about by the additional delay which it is unreasonable for the respondents to suffer.  This must then be considered alongside the reasons given for the delay.

[23]     One of the respondents, Mrs Borrie, has taken issue in her affidavit with the assertion by the appellants’ solicitor that the respondents have not suffered prejudice as a result of the delay with which we are concerned.  She has outlined in considerable detail the continuing hardship that all respondents have suffered through their inability to obtain satisfaction of their judgment.  We have considered what she has told us but have decided that it is not the type of prejudice that would justify us refusing the present application for an extension of time. While we have a great deal of sympathy for the continuing hardship suffered by the respondents through being unable to execute the judgment they have obtained, significant delay in execution was always going to be the result of the exercise of the appellants’ right to appeal.  While the appeal has been prolonged by the actions of the appellants’ solicitor, this must be balanced against the explanations he has provided for both the current and the earlier delays. There is no evidence of any particular further prejudice which is caused by the additional delays in completing the record. 

[24]     In light of these matters, the further fact that their continuing other activity made it clear that the appellants were not abandoning their appeal, and having regard to the nature of the right that would be affected by the refusal of an extension, we have decided that the appellants have satisfied us that there is sufficient excuse for the delay to justify granting them the extension of time on terms that will secure the expeditious determination of the appeal.

[25]     Although the appellants have satisfied us that the delay should be excused the circumstances fully justified the respondents’ opposition to the grant of final leave.  As the appellants’ solicitor properly acknowledged the respondents are entitled to their costs in opposing the application.

[26]     We are also concerned that despite their request for the Court’s indulgence in respect of the delay the possibility remains that the appellants will oppose the bringing by the respondents of a cross-appeal.  In the circumstances we are firmly of the view that in the absence of a jurisdictional impediment (and we are unaware of any) it would be inappropriate for the appellants to resist that initiative.  Assuming our jurisdiction to do so we have provided accordingly in the order we now make granting final leave to appeal.

[27]     We make the following order:

1.The appellants having completed preparation of the record relating to this appeal time for its preparation is extended and the application for final leave to appeal is granted subject to the condition that the appellants do not oppose the bringing by the respondents of a cross-appeal in respect of matters arising from the substantive judgments of this Court from which they have been granted final leave to appeal.

2.A certificate will be granted under Rule 21 of the New Zealand (Appeals to the Privy Council) Order 1910 that the appeal has not been effectually prosecuted by the appellants and will accordingly lapse unless within one month from today the appellants: 

(i)  seal the order granting leave to appeal; 

(ii)  complete the record; 

(iii)  dispatch the record to London; 

(iv)  pay the costs of the respondents in relation to the hearings of 5 and 18 November 2003 and matters incidental thereto in the sum of $10,000 together with all reasonable disbursements incurred by the respondents’ solicitors and counsel to be agreed by the parties or failing their agreement to be determined by the Registrar on application by the respondents no later than fourteen days from today’s date; 

(v)  register the appeal with the Registrar of the Judicial Committee; 

(vi)  apply for a fixture.

[28]     The application for final leave to appeal to the Privy Council is granted on those terms.

Solicitors:
Lane Neave, Christchurch for Appellants
Friedlander & Co. Auckland for Respondents