Stewart v Eversons International Limited (in liquidation)
[2024] NZCA 104
•11 April 2024 at 2.30 pm
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA536/2023 [2024] NZCA 104 |
| BETWEEN | EVAN KERRY STEWART |
| AND | EVERSONS INTERNATIONAL LIMITED (IN LIQUIDATION) |
| AND | ELIZABETH HELEN KEENE AND LUKE NORMAN |
| Court: | Gilbert and Wylie JJ |
Counsel: | Applicant in person |
Judgment: | 11 April 2024 at 2.30 pm |
JUDGMENT OF THE COURT
AThis Court has jurisdiction to hear the applicant’s appeal.
B An extension of time for filing the notice of appeal is granted.
C An extension of time is granted for filing the case on appeal and for applying for a hearing date, until 17 May 2024.
D Security for costs on the appeal is to be set pursuant to r 35 of the Court of Appeal (Civil) Rules 2005 and is to be paid on or before 3 May 2024.
E There is no order as to costs.
____________________________________________________________________
REASONS OF THE COURT
(Given by Wylie J)
Introduction
The applicant, Evan Stewart, seeks an extension of time to appeal a judgment given by Churchman J in August 2023, dismissing an application made by Mr Stewart under r 15.16(5) of the High Court Rules 2016 (the HC Rules).[1]
[1]Eversons International Ltd (in liq) v Stewart [2023] NZHC 2325 [judgment of Churchman J].
There are two issues raised by the application — whether Mr Stewart can appeal as of right against Churchman J’s judgment and, if so, whether Mr Stewart should be granted an extension of time to do so.
Mr Stewart is self-represented. He says, first, that he can appeal to this Court against Churchman J’s judgment as of right without first obtaining the leave of the High Court because the judgment was not given on an interlocutory application, and secondly, that he should be granted an extension of time to bring the appeal.
The respondents oppose the application. They say that what was before Churchman J was an interlocutory application, that an appeal can therefore only proceed with leave and that leave has neither been sought nor granted. Further they say that, in any event, no extension of time should be granted.
Background
To understand the issues before us, it is necessary to set out the background in some detail.[2]
Mr Stewart/the company
[2]The summary which follows is taken from the judgment of Churchman J, above n 1; Eversons International Ltd (in liq) v Stewart [2020] NZHC 3188 [judgment of Associate Judge Paulsen]; and Eversons International Ltd (in liq) v Stewart [2022] NZHC 3616 [judgment of Nation J].
Mr Stewart was the sole shareholder and director of the first respondent, Eversons International Ltd (Eversons). It imported and sold synthetic “legal high” products. Its business was very profitable until the law was changed in May 2014 to ban the sale of such products. The business was lost and Mr Stewart placed the company into liquidation in April 2018 by a special resolution as shareholder, following a demand by the Commissioner of Inland Revenue (the CIR) for the payment of tax arrears.
A liquidator was appointed. On 30 January 2020, the liquidator resigned and the first named second respondent, Elizabeth Keene (together with Vivian Fatupaito), was appointed as a liquidator. On 11 March 2022, Ms Fatupaito resigned and the second named second respondent, Luke Norman, was appointed as a liquidator in her stead.
The liquidators investigated Eversons’ affairs and reconstructed its accounts. They identified payments in excess of $2,000,000 they considered had been made to or for the benefit of Mr Stewart which had not been debited to his shareholder current account.
Proceeding CIV-2020-409-192
The liquidators filed proceeding CIV-2020-409-192 against Mr Stewart seeking to recover $2,074,876 said to be owing in respect of his overdrawn current account, as well as the unpaid tax owing by Eversons to the CIR, alleging breach by Mr Stewart of various of his duties as a director of Eversons.
The liquidators sought summary judgment in respect of Mr Stewart’s liability in relation to the overdrawn current account. Their claim for summary judgment was dismissed by Associate Judge Paulsen in December 2020.[3] The Judge was not satisfied that there was no arguable defence to the claim. He also expressed the view that there might be a potential limitation defence.
[3]Judgment of Associate Judge Paulsen, above n 2.
Mr Stewart had filed a statement of defence to the liquidators’ statement of claim. An amended statement of claim was then filed by the liquidators and Mr Stewart filed a statement of defence to this amended pleading as well.
The trial of the proceeding was due to commence on 29 August 2022.[4] However, in early August 2022, the matter settled and a “Settlement Deed” was entered into between the parties. The terms of the Settlement Deed were summarised by Churchman J as follows:[5]
[4]This is the date referred to by both Mander J, in Eversons International Ltd (in liq) v Stewart Minute of Mander J, 27 February 2023, and Nation J, above n 2, but we note the Settlement Deed refers to 9 August 2022.
[5]Judgment of Churchman J, above n 1.
[14] … The relevant provisions of the Settlement Deed provided:
(a)the Company, liquidators and Mr Stewart agreed to settle all outstanding matters among them on the terms set out in the Settlement Deed;
(b)Mr Stewart agreed to pay the settlement sum of $1,000,000 to the liquidators by instalments;
(c)Mr Stewart was to procure the owners of a property situated [in] … , Burnside, Christchurch (the Property) to pay the Liquidators an amount not exceeding $300,000 from the net proceeds of sale of the Property, after deduction of amounts payable to the mortgagee and the reasonable costs of sale and settlement;
(d)if the sale of the Property had not settled by 1 November 2022, then Mr Stewart was to pay $100,000 to the Liquidators as part of the settlement sum;
(e)Mr Stewart was to complete an admission of claim and acknowledgement of debt in the sum of $2,000,000 in the Liquidators’ proceeding. The admission was not to be filed unless there was a default under the Settlement Deed and a default notice served and not complied with;
(f)Mr Stewart agreed that he would not bring any claim against the Company or any claim against the Liquidators, their staff or agents, in respect of any matter arising in relation to the Company and its liquidation;
(g)the Liquidators’ proceeding was to be adjourned and, provided Mr Stewart complied with his obligations under the Settlement Deed, the proceeding would be discontinued.
…
An admission of claim and acknowledgment of debt in the sum of $2,000,000 was signed by Mr Stewart (the admission). The proceeding was then adjourned to a nominal date of 12 December 2022 so that the remaining settlement terms could be implemented. There was some delay and, following a joint request from the parties, the proceeding was further adjourned, this time to 12 December 2022.
On 9 December 2022, the liquidators filed a memorandum asserting that the Settlement Deed had not been complied with by Mr Stewart. They sought judgment in the sum of $1,720,00.00 under the admission that Mr Stewart had signed (being the $2,000,000 recorded in the admission, less $280,000 which had been paid by Mr Stewart). The Settlement Deed was attached to the memorandum. So was a notice of default the liquidators had sent to Mr Stewart on 28 November 2022.
The memorandum was placed before Nation J and it was called in the duty judge list on 12 December 2022. Counsel for the liquidators then asked that judgment be entered on the admission pursuant to r 15.16(1) of the HC Rules. Mr Stewart, through his then counsel, opposed the entry of judgment. Counsel asserted that Mr Stewart was not in default under the Settlement Deed. He was not however in a position to make submissions on the issue and he sought an adjournment so that Mr Stewart could provide evidence that he was not in default.
Nation J reserved his judgment. It was issued on 22 December 2022.[6] The Judge did not expressly deal with the application for the adjournment. Rather he referred to the Settlement Deed, noting that it permitted the liquidators and Eversons to file the admission if Mr Stewart defaulted under the Settlement Deed. The Judge did not discuss the default alleged by the liquidators. Rather, he recorded that a notice of default had been served and that Mr Stewart had been given five working days to remedy the default. He discussed r 15.16 of the HC Rules and relevant authorities. He then proceeded to enter judgment for Eversons and the liquidators in the sum of $1,720,000 under r 15.16(1).[7] The Judge did however note that Mr Stewart could protest the sealing of the judgment by filing an application under r 15.16(5). The Judge directed that, if he wished to do so, Mr Stewart should file an application, together with a supporting affidavit, by 27 January 2023.[8] He further directed that the proceeding was to be called in the duty judge list on 13 February 2023 to deal with any application filed.
[6]Judgment of Nation J, above n 2.
[7]At [43].
[8]At [51].
On 27 January 2023, Mr Stewart filed an affidavit but not an application. The proceeding was called before Dunningham J on 13 February 2023. She was prepared to treat the affidavit as if it was an application, but only if a formal application was filed within seven days and Mr Stewart paid the next instalment of $80,000 due under the Settlement Deed (which he said he had complied with and which he wanted to keep on foot).[9]
[9]Eversons International Ltd (in liq) v Stewart Minute of Dunningham J, 13 February 2023.
Mr Stewart made a further payment of $80,000 and he filed a formal application under r 15.16(5) of the HC Rules. He also informed the Court that he was filing charges against the liquidators in the District Court by way of a private prosecution. He wanted to adjourn his application under r 15.16(5) while those charges proceeded.
On 20 February 2023, the proceeding came before Dunningham J again. Inter alia, Mr Stewart was directed to provide the liquidators’ counsel with copies of the District Court charges.[10] Mr Stewart did not comply with this direction.
[10]Eversons International Ltd (in liq) v Stewart Minute of Dunningham J, 20 February 2023.
On 27 February 2023, Mr Stewart was again directed by the Court, this time by Mander J, to provide the following by 13 March 2023:
(a)details of the charges which Mr Stewart said he had filed in the District Court; and
(b)copies of the settlement statement for the sale of the property, and other documents showing how the proceeds of sale had been paid or dispersed.[11]
Mr Stewart reiterated that he wanted his r 15.16(5) application to be adjourned, while the charges proceeded in the District Court.
[11]Eversons International Ltd (in liq) v Stewart Minute of Mander J, 27 February 2023.
Mr Stewart did not comply with the directions made by Mander J. He also failed to make two further instalment payments due under the Settlement Deed, each of $80,000.
When the proceeding was before Dunningham and Mander JJ, there was some uncertainty as to whether or not Mr Stewart’s private prosecution in the District Court had been accepted for filing. Both Judges made it clear that if the documents had not been accepted for filing, they could have no relevance to proceeding CIV‑2020‑409‑192. In the event, on 20 April 2023, the Registrar of the District Court was directed by Judge Mabey KC not to accept any of the charging documents for filing.[12] In so far as we are aware, this decision has not been appealed.
[12]Stewart v KPMG Partners [2023] NZDC 7435.
This development notwithstanding, by application dated 12 May 2023, Mr Stewart applied in the High Court to stay proceeding CIV‑2020‑409‑192. The application was made on the basis that the private prosecution had been filed in the District Court.
Proceeding CIV-2023-40-225
On 12 May 2023, Mr Stewart filed a statement of claim against Ms Keene and KPMG Partners in the High Court at Christchurch. It was allocated number CIV‑2023‑409-225. Mr Stewart had drafted the statement of claim himself. It was in narrative form. He alleged that Ms Keene had falsely attempted to bring claims that had been dismissed by Associate Judge Paulsen. It was claimed that Ms Keene had falsely alleged that Mr Stewart had overdrawn his current account and had falsified records “to bring investments out of statute bar”. Judgment in the sum of $11,055,858.14 was sought, together with interest.
Ms Keene and KPMG Partners applied to strike out the statement of claim.
Churchman J’s judgment
Both Mr Stewart’s application under r 15.16(5) of the HC Rules in proceeding CIV-2020-409-192 and Ms Keene’s and KPMG Partners’ application to strike out the statement of claim in proceeding CIV-2023-409-225 came before Churchman J in early August 2023.
The Judge discussed the relevant background, in part as set out above. Even though it does not seem to have been before him, the Judge referred to Mr Stewart’s application to stay proceeding CIV-2020-409-192. He commented that this application was “self-drafted”, that there were no supporting affidavits and that it made little sense.[13] He also observed that it listed KPMG Partners as a party, notwithstanding that KPMG Partners were not a party to proceeding CIV‑2020‑409‑192.[14] Under the heading “[t]he submissions on the stay application”, the Judge summarised Mr Stewart’s submissions and those advanced by the liquidators. The Judge went on to comment that Mr Stewart’s claims of fraud, false accounting and the like in proceeding CIV-2023-409-225 were misconceived and that they appeared to be based on a misunderstanding of what Associate Judge Paulsen had decided on the summary judgment application.[15] The Judge commented that the reconstruction of the current account balance by the liquidators was an entirely conventional accounting practice.[16]
[13]Judgment of Churchman J, above n 1, at [25].
[14]At [26].
[15]At [36]
[16]At [37].
The Judge then returned to Mr Stewart’s r 15.16(5) application. He observed that an application under r 15.16(5) is not a “merits review” of the “decision in question” (presumably Nation J’s judgment) and that “Mr Stewart’s liability in terms of the [Settlement Deed] ha[d] been conclusively determined by that decision”.[17] The Judge observed that Mr Stewart had not been able to identify any duty or obligation on the part of Eversons and the liquidators not to enter judgment on the admission and that neither had Mr Stewart been able to point to any information that supported the conclusion that, in entering judgment, Eversons, or the liquidators, had acted fraudulently, unconscionably, or with reckless disregard of his rights.[18] The Judge also recorded that Mr Stewart was legally represented at the time he entered into the Settlement Deed and at the hearing before Nation J.[19] He considered that the allegations of fraud and the like made by Mr Stewart were wholly misconceived.[20] He dismissed Mr Stewart’s application under r 15.16(5) to set aside the judgment entered by Nation J on 22 December 2022.[21]
[17]At [38].
[18]At [38].
[19]At [39].
[20]At [40].
[21]At [41].
The Judge also granted Ms Keene’s and KPMG Partners’ strike out application in respect of proceeding CIV-2023-409-225.[22]
The notice of appeal in this Court
[22]At [65].
On 14 September 2023, Mr Stewart filed a notice of appeal in the Registry of this Court. The notice intituled both CIV-2023-409-225 and CIV‑2020-409-192.
On 28 September 2023, Ms Keene and KPMG Partners filed a memorandum. They noted that the notice of appeal had not been served on them and that, pursuant to r 31 of the Court of Appeal (Civil) Rules 2005 (the CA Rules), no appeal had therefore been brought.[23] They observed that the period within which to appeal had expired and that as a result, an application for an extension of time was required under r 29A of the CA Rules. They also suggested that leave was required under s 56(3) of the Senior Courts Act 2016 because Churchman J’s judgment was an interlocutory judgment and there was no appeal as of right.
[23]Court of Appeal (Civil) Rules 2005, r 31(1)(b). The rule provides that an appeal is brought only when there a copy of the notice of appeal has been served on every person who was a party to the proceeding in the court appealed from.
On 5 October 2023, Mr Stewart filed an application for an extension of time to appeal. He filed an affirmation in support of this application. Mr Stewart explained that he does not seek to appeal Churchman J’s strike out decision in respect of proceeding CIV-2023-409-225; the proposed appeal relates only to Churchman J’s decision in relation to proceeding CIV-2020-409-192.
On 11 October 2023, Mr Keene and KPMG Partners filed a memorandum under r 19A of the CA Rules, opposing the application for an extension of time. They again recorded that they had not been served with the notice of appeal and they reiterated their assertion that Mr Stewart is not entitled to appeal to this Court as of right.
On 12 October 2023, Mr Stewart filed an amended notice of appeal. The amended notice of appeal is much more succinct than the original notice of appeal. It records that Mr Stewart is seeking to appeal to this Court against Churchman J’s decision given on 23 August 2023 in proceeding CIV-2020-409-192. There are two grounds of appeal alleging that:
(a)the Judge erred in fact in finding that Mr Stewart was in breach of the Settlement Deed and erred in law in finding that failures to pay amounts due under the Deed in May and August 2023, after judgment had been entered in December 2022, amounted to breaches of the Deed entitling Eversons and the liquidators to file the admission in November 2022; and
(b)the Judge erred in fact and in law in finding that the Eversons and the liquidators were not under a duty to withhold from filing the admission.
An order is sought under r 15.16(5) of the HC Rules setting aside the judgment, or in the alternative, under r 15.16(6), also of the HC Rules, directing that Mr Stewart bring a proceeding to determine whether the judgment was wrongfully entered. A stay of Nation J’s judgment pending the determination of any such proceeding is also sought.
On 13 November 2023, Mallon J, directed that there is, first, an issue as to whether leave is required from the High Court or whether there is a right of appeal direct to this Court, and second, that if there is a right of appeal direct to this Court, whether an extension of time is necessary. She directed that both matters were to be determined together, and that they should be dealt with by two judges on the papers.
As a result, the matter has been referred to us.
Analysis
Jurisdiction
The first issue is whether Mr Stewart is entitled to appeal to this Court as of right or whether he must first seek leave from the High Court or, if leave is refused, from this Court.
Relevantly, s 56 of the Senior Courts Act provides as follows:
56 Jurisdiction
(1) The Court of Appeal may hear and determine appeals—
(a) from a judgment, decree, or order of the High Court:
…
(3)No appeal, except an appeal under subsection (4), lies from any order or decision of the High Court made on an interlocutory application in respect of any civil proceeding unless leave to appeal to the Court of Appeal is given by the High Court on application made within 20 working days after the date of that order or decision or within any further time that the High Court may allow.
(4)Any party to any proceedings may appeal without leave to the Court of Appeal against any order or decision of the High Court—
(a)striking out or dismissing the whole or part of a proceeding, claim, or defence; or
(b) granting summary judgment.
(5)If the High Court refuses leave to appeal under subsection (3), the Court of Appeal may grant that leave on application made to the Court of Appeal within 20 working days after the date of the refusal of leave by the High Court.
…
As can be seen, this Court can hear and determine appeals from any judgment, decree or order of the High Court, but no appeal as of right lies from an order or decision of the High Court made on an interlocutory application, unless the order or decision of the High Court strikes out or dismisses the whole or part of a proceeding, claim or defence, or grants summary judgment.
An interlocutory application is defined in s 4(1) of the Senior Courts Act. Relevantly the definition reads as follows:
4 Interpretation
(1) In this Act, unless the context otherwise requires,—
…
interlocutory application—
(a)means any application to the High Court in any civil proceedings … for—
(i)an order or a direction relating to a matter of procedure; or
(ii)in the case of civil proceedings, for some relief ancillary to that claimed in a pleading; and
(b)includes an application to review an order made, or a direction given, on any application to which paragraph (a) applies
This Court has held that the word “ancillary” used in the definition means collateral to but flowing out of the relief claimed in the proceeding, or necessary to support or respond to the relief claimed in the pleadings.[24]
[24]Trotter v Telfer Electrical Nelson Ltd [2018] NZCA 231, [2019] NZAR 476 at [21].
The first question for us is whether a refusal to set aside a judgment entered on an admission under r 15.16(1) of the HC Rules is an order made on an interlocutory application.
Rule 15.16 of the HC Rules provides for the admission of a cause or causes of action, or the whole of a claim. As is noted in McGechan on Procedure, the rule enables a party to seal judgment on the basis of the admission without application. The rationale behind the rule is that if a party has, with knowledge of a claim, conceded liability, there is no need for the Court to determine liability. Judgment can follow the admission.[25] Nation J held that a judgment on an admission requires neither an interlocutory application nor formal proof — rather the request for entry of judgment can be made by memorandum attaching the relevant documents and, if appropriate, affidavit evidence.[26] Conversely, under r 15.16(5) of the HC Rules, a judgment entered on an admission can be set aside, but only upon application.
[25]JK Gorman and others McGechan on Procedure (looseleaf ed, Thomson Reuters) at [HR15.16.01]; and P v Bridgcorp Ltd (in rec and in liq) [2012] NZCA 530 at [25].
[26]Judgment of Nation J, above 2, at [39]–[41].
In our view, an application under r 15.16(5) can only be an interlocutory application — it is an application made in the course of a civil proceeding, for relief ancillary to that claimed in the pleading. The relief sought in the pleading was judgment for a declaration and monetary sums (namely the balance of Mr Stewart’s current account with Eversons), a declaration that Mr Stewart had breached duties he owed to the company and an order that Mr Stewart contribute such sum to the company by way of compensation or restitution as the Court thought just. The application under r 15.16(5) seeking to set aside the judgment obtained on the admission for a fixed amount, is a claim for relief collateral to but flowing out of the relief claimed in the pleading.[27]
[27]Trotter v Telfer Electrical Nelson Ltd, above n 24, at [21]–[22]; and 100 Investments Ltd v PVG Securities Ltd [2020] NZCA 458 at [18].
If that were the end of the matter, there could be no appeal to this Court unless leave to appeal had been given by the High Court on application made within the requisite time limit set out in s 56(3) of the Senior Courts Act, or if leave had been refused by the High Court, by this Court under s 56(5).
However, s 56(4) provides that any party to any proceeding may appeal without leave to this Court, against any order or decision of the High Court striking out or dismissing the whole or part of a proceeding. Churchman J did not strike out proceeding CIV-2020-409-192. The second question for us becomes whether the effect of the Judge’s decision declining Mr Stewart’s application under r 15.16(5), thus bringing proceeding CIV-2020-409-192 to an end, was an order or decision dismissing the proceeding.
There is conflicting authority in this Court.
In Trotter v Telfer Electrical Nelson Ltd this Court observed that an application to stay or dismiss a proceeding dealt with in the High Court does not fall into the categories of decision referred to in s 56(4) of the Senior Courts Act.[28] It noted that the High Court Judge whose decision was challenged had not entered summary judgment; nor had he struck out or dismissed the whole or part of the claim or defence. He had simply made an order staying one of the claims.[29] The Court acknowledged that the position would have been different if the Judge had upheld the protest to jurisdiction there in issue and dismissed the respondent’s claim. In that case, an appeal could have been brought as a right, as it would have fallen within s 56(4).[30]
[28]Trotter v Telfer Electrical Nelson Ltd, above n 24, at [24].
[29]At [24].
[30]At [25].
In 100 Investments Ltd v PVG Security Ltd, the applicant company sought to appeal a High Court decision declining its application to enforce an undertaking.[31] The respondent claimed that there was no appeal as of right, because the High Court decision was in respect of an interlocutory application. This Court agreed.[32] It also went on to state as follows:
[19] It does not matter that if the High Court judgment is allowed to stand that will effectively bring the proceeding to an end. Section 56(4) of the Act amounts to a form of statutory recognition that an interlocutory application may have that effect. But it is only certain kinds of interlocutory applications which are referred to in that subsection. The implication is that appeals from other kinds of interlocutory applications which require leave might be the final procedural event in a proceeding.
[31]One Hundred Investments Ltd v PVG Securities Ltd, above n 27, at [2].
[32]At [18].
However, in Dokad Trustees Ltd v Auckland Council, this Court took a rather different view.[33] The issue in that case was whether a High Court decision that an applicant could not bring civil proceedings in the Environment Court or related judicial review proceedings in the High Court because of an order made under s 166 of the Senior Courts Act, could be appealed as of right. Goddard J focused on s 56(4) and held as follows:
[10] The scheme of s 56 is that appeals as of right are reserved for final determinations in respect of a proceeding. A leave filter applies to appeals from decisions on interlocutory applications in order to avoid delay and unnecessary cost. The underlying assumption is that such decisions are made in the course of a proceeding, and appeal rights should be exercised when the proceeding comes to an end. If a procedural decision has affected the ultimate outcome, that issue can be raised in an appeal against the substantive High Court decision that concludes the proceeding: see s 56(6). I consider that s 56(4) must be interpreted purposively, to apply to decisions that have the effect of bringing to an end the whole of a proceeding. Such a decision is, for the purposes of s 56(4), a decision that dismisses the proceeding.
The Judge noted that the effect of the High Court judgment was to bring the proceedings to an end.[34] The Judge held that, read in purposive manner, s 56(4) applied to the High Court’s leave judgment and that accordingly leave was not required under s 56(3).[35]
[33]Dokad Trustees Ltd v Auckland Council [2022] NZCA 177.
[34]At [9].
[35]At [11].
In our judgement, Mr Stewart has an appeal as of right under s 56(4) of the Senior Courts Act and he does not require leave of the High Court or this Court to bring the appeal. This is because the effect of Churchman J’s judgment declining to set aside Nation J’s judgment or to direct Mr Stewart to bring a proceeding to determine whether the judgment was wrongly entered, brings proceeding CIV‑2020‑409-192 to an end. The judgment entered by Nation J could be enforced against Mr Stewart and he would have no ability to challenge the same. We adopt the purposive approach taken by Goddard J in Dokad and as required by s 10(1) of the Legislation Act 2019.
Finally, we turn to consider whether or not to grant an extension of time to appeal.
The application for an extension of time
There is no dispute that service of the appeal was delayed. Churchman J’s judgment was issued on 23 August 2023. The 20-working day window within which to appeal expired on 20 September 2023. The original notice of appeal was filed on 14 September 2023, within time, but it was not served on the respondents. Rule 31(1)(b) of the CA Rules provides that an appeal is brought only when service is affected. The amended notice of appeal was filed and served on 12 October 2023 —16 working days late.
As the Supreme Court noted in Almond v Read, the ultimate issue when considering whether to exercise the discretion to grant or decline an extension of time is the interests of justice.[36] Factors identified as likely to require consideration include the length of the delay, the reasons for it, the conduct of the parties and particularly the applicant, any prejudicial hardship to the respondent or to others with a legitimate interest in the outcome, and the significance of the issues raised by the proposed appeal, both to the parties and more generally.[37] The merits of an appeal can be relevant but a decision to refuse an extension of time based substantially on this ground should only be made where the appeal is clearly hopeless.[38]
[36]Almond v Reid [2017] NZSC 80, [2017] 1 NZLR 801 at [38].
[37]At [38].
[38]At [39].
Here, the delay in serving the notice of appeal was short — 16 working days. Mr Stewart states in effect that he did not file and serve the correct documents in the first instance as he did not have legal assistance and did not appreciate what he had to do; the issue was remedied when it was brought to his attention. Although Mr Stewart’s conduct in regard to proceeding CIV‑2020‑409‑192 has not been particularly satisfactory (he has breached various court orders and directions) there is no particular conduct in relation to the proposed appeal to which exception can be taken. There is no prejudice to the respondents. We accept that the issues raised by the proposed appeal are significant to Mr Stewart. We are not in the position to comment on the merits of the proposed appeal, but do not consider that it can be said to be clearly hopeless. In these circumstances, we grant an extension of time for the filing of the notice of appeal.
Costs
Rule 53G(2) of CA Rules provides that where the need for an application for leave to appeal arises from a default on the applicant’s part, the respondent is normally entitled to costs.
Here, Mr Stewart needed an extension of time because he failed to comply with the service obligations contained in the CA Rules. Normally it would follow that costs would be awarded against him. However, the jurisdictional point was raised by the liquidators. They were unsuccessful in this regard.
In these circumstances, we consider that costs should lie where they fall.
Result
This Court has jurisdiction to hear the applicant’s appeal.
An extension of time for filing the notice of appeal is granted.
An extension of time is granted for filing the case on appeal and for applying for a hearing date, until 17 May 2024.
Security for costs on the appeal is to be set pursuant to r 35 of the Court of Appeal (Civil) Rules 2005 and is to be paid on or before 3 May 2024.
There is no order as to costs.
Solicitors:
Martelli McKegg Lawyers, Auckland for Respondent
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