Tarahau Farming Ltd v Shearing Services Kamupene Ltd (in liq)
[2019] NZCA 601
•29 November 2019 at 12.30 pm
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA311/2019 [2019] NZCA 601 |
| BETWEEN | TARAHAU FARMING LIMITED |
| AND | SHEARING SERVICES KAMUPENE LIMITED (IN LIQUIDATION) |
| Court: | French and Stevens JJ |
Counsel: | Appellants in person represented by P Te Whata |
Judgment: | 29 November 2019 at 12.30 pm |
JUDGMENT OF THE COURT
AThe application for an extension of time to appeal is granted, provided however that such order is conditional upon Tarahau Farming Limited (Tarahau Farming) complying with the following directions:
(a)Tarahau Farming is to consider obtaining legal representation to advise the company on the following matters:
(i)Whether the preferable course to pursuing an appeal in this Court is to apply to the High Court pursuant to r 15.10 of the High Court Rules 2016 to set aside or vary the judgment of Downs J;
(ii)Whether Tarahau Farming wishes to proceed with an appeal, reframe the grounds of appeal, as well as reconsider the parties involved, and file amended grounds of appeal;
(iii)Whether the appeal filed by Tarahau Farming (and the second and third appellants) was properly authorised by each of the appellants; and
(iv)Whether in the filing of the appeal the provisions of r 30 of the Court of Appeal (Civil) Rules 2005 were complied with by each of the appellants.
(b)Irrespective of the directions in (a), an amended notice of appeal complying with r 30(1A) of the Court of Appeal (Civil) Rules 2005 shall be filed and served on the respondents by Tarahau Farming no later than Friday 14 February 2020.
BIf the condition in order A(b) is not complied with by Friday 14 February 2020, the order extending the time to appeal will be revoked with the effect that the application to extend the time to appeal is declined.
CThe costs of filing the application for extension of time to appeal are reserved until after 14 February 2020.
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REASONS OF THE COURT
(Given by Stevens J)
The first appellant, Tarahau Farming Ltd (Tarahau Farming), was the defendant in a case brought in the High Court by the liquidators of the first respondent, Shearing Services Kamupene Ltd (in liquidation) (Shearing Services) for recovery of the sum of $149,704.43. Tarahau Farming did not file a statement of defence or otherwise engage with the High Court proceeding which was dealt with by way of a formal proof hearing before Downs J. The claim was successful.[1]
[1]Shearing Services Kamupene (in liq) v Tarahau Farming Ltd [2019] NZHC 1280.
Mr Pessiman Te Whata (also known as Pehimana) is the sole director of Shearing Services, which was placed in liquidation in 2016. He was also (until March 2017) a director of Tarahau Farming. Between 2013 and 2016, Shearing Services advanced $149,704.43 to Tarahau Farming. Downs J found that this money was a loan repayable to the liquidators of Shearing Services, together with interest and costs.
Mr Te Whata has purported to file a notice of appeal on behalf of Tarahau Farming. Maunga Hikurangi Koporeihana Maori, being the ultimate holding company of Tarahau Farming, is named as the second appellant, and the Kaitiaki Ahuwhenua Trust is named as the third appellant. Why these parties have been named as appellants is not readily apparent. Shearing Services is named as the first respondent and the liquidators, Craig Alexandra Sanson and David Bridgman, have been named as second respondents.
Mr Te Whata has lodged the appeal on the basis that he claims the case involves Māori land rights, tikanga Māori should be applied to resolve the issues involved and an order should be made to state a case for the Māori Appellate Court.[2] Mr Te Whata also seeks “an order to dismiss the ruling of Justice Downs”.
[2]And requests an order for a stay of proceedings in the case of Commissioner of Inland Revenue v Tarahau Farming Ltd CIV-2019-488-1, filed in the Whangarei Registry of the High Court. See Lincu v Registrar-General [2019] NZHC 1783.
As the notice of appeal was not served on the respondents within the time allowed for filing an appeal, Mr Te Whata has filed an application for an extension of time under r 29A of the Court of Appeal (Civil) Rules 2005 (the Rules).
The respondents have opposed the granting of an extension and raised other issues with the appeal, including questioning Mr Te Whata’s standing to bring the appeal on behalf of Tarahau Farming.[3]
Grounds relied upon under Rule 29A
[3]Mr Te Whata describes himself as a “Kaiwhakawa Native Assessor” but does not seem to be a lawyer. That leaves open the prospect the appellants are not legally represented.
Mr Te Whata says the appeal itself was filed in time in this Court on 4 July 2019, being the 20th working day after the High Court judgment. However, he accepts the respondents were not served until 8 July because of a delay on the part of the courier.
Notice of opposition
Counsel for the respondents oppose the application for an extension on the basis that the proposed appeal has no merit and is simply a mechanism for delaying payment of the judgment debt. They say inter alia:
(a)No question of tikanga Māori arose in the proceeding. Nor was there any question of fact relating to the interests of Māori in any land or personal property.
(b)Tarahau Farming without explanation failed to engage with the proceeding in the High Court and has not made an application to have the judgment set aside or varied.
(c)The appeal is intended to delay the payment of the judgment debt and will put the respondents to further costs and delay.
(d)The appellants failed to serve the extension application on the respondents within the time allowed.
(e)The second and third appellants have no standing in any event as the judgment sought to be appealed made no finding about these entities.
In addition to filing the notice of opposition containing the grounds summarised above, counsel for the respondents has filed a memorandum submitting:
(a)The notice of appeal is defective as it is signed by Mr Te Whata who is not currently a director of, nor is he the lawyer for, Tarahau Farming. He is only a former director of that company.[4]
(b)Tarahau Farming is said to be in voluntary administration and Mr Te Whata claims to be the voluntary administrator. However, there is no evidence provided for the nature of such a role and this status or appointment is not recorded on the Companies Register.
(c)Mr Te Whata has no standing to represent Tarahau Farming in advancing an appeal, even if he is its voluntary administrator.
[4]As required by r 30(1A) of the Court of Appeal (Civil) Rules 2005, a notice of appeal must be signed by the appellant personally or by their lawyers.
Mr Te Whata filed a memorandum contending that he does have standing and also claiming that the second appellant was part of the High Court proceedings.[5]
Submissions
Appellant
[5]The claimed involvement of Maunga Hikurangi Koporeihana Maori as a party to the High Court proceeding is not apparent from the intituling in that case.
The appellants have not yet filed a document entitled “submissions”. However, in accordance with the minute of Brown J, the respondents have been served with a document filed by the appellants on 13 September entitled “interlocutory application for extension of time”.
In this application the appellants apologise for the fact that the respondents did not receive the notice of appeal until Monday 8 July, and contend that the further alienation of tikanga rights and turangawaewae ancestral customary land is imminent if an extension of time to appeal is not granted. The failure to file the submissions normally required may well be attributable to the lack of legal skills on the part of Mr Te Whata.
Respondents
The respondents submit, first, that the conduct of the appellants is such that the exercise of discretion to extend time should not be exercised in their favour. In particular, Tarahau Farming did not take any steps to defend Shearing Service’s claims in the High Court. It did not file any statement of defence, and a formal proof hearing was requested, of which it was given notice to Tarahau Farming as the defendant. Tarahau Farming did not seek leave to then file a statement of defence or otherwise defend the claim. Nor has it exercised the option of applying to the High Court to set aside the default judgment.[6] It is therefore contrary to the interests of justice to permit the appellants to challenge the judgment by an appeal.
[6]High Court Rules 2016, r 15.10.
Secondly, the respondents submit the proposed appeal is hopeless because, inter alia, the notice of appeal does not disclose any meritorious grounds of appeal. The High Court correctly found there was a loan and did not err in applying common law/statute law, in failing to allow tikanga Māori to be proved or in failing to refer the proceeding to the Māori Appellate Court, particularly as Tarahau Farming did not request this in any case. This was a simple matter of the High Court determining whether one corporate entity was indebted to another or had gifted money to another.
Thirdly, the proposed appeal does not raise any issue of general or public importance, and no miscarriage of justice has or may have occurred. Importantly, if Tarahau Farming truly believed there was a miscarriage of justice, it could apply to the High Court to set aside the judgment, this being a judgment obtained by default, under r 15.10 of the High Court Rules 2016.
Fourthly, the exercise of discretion to grant an extension of time will be prejudicial to the liquidation of Shearing Services as it will serve to delay its recovery of the judgment debt by the liquidators.
Finally, the respondents submit that if an extension application were granted, it ought to be granted only in respect of Tarahau Farming and subject to it obtaining legal representation and filing/serving refined points of appeal in a timely manner.
Analysis
The leading authority on the application of r 29A is Almond v Read.[7] The key question in determining whether to extend time is what the interests of justice require.[8] Relevant factors include the length of the delay and the reasons for it; the conduct of the parties; any prejudice to the respondent; and the significance of issues raised by the proposed appeal.[9] The merits of a proposed appeal may be relevant, but a decision to refuse an extension of time based substantially on the lack of merit of a proposed appeal should be made only where the appeal is clearly hopeless.[10]
[7]Almond v Read [2017] NZSC 80, [2017] 1 NZLR 801.
[8]At [38].
[9]At [38(a)–(e)].
[10]At [39(c)].
Applying these criteria, it is apparent that the delay by the appellants was very short — only two working days. Further, the respondents have not been able to show any material prejudice arising from this short delay.
We accept that the grounds of appeal advanced by the appellants to date are vague and not clearly articulated. Certainly the way they are currently crafted does not inspire confidence in their prospects of success. At this early stage, it is difficult to ignore the fact that Tarahau Farming did not file a statement of defence in the High Court proceeding, nor did it engage with that process. Moreover, as counsel for the respondents has submitted (correctly, in our view) it would be open to Tarahau Farming to contest the High Court judgment against it directly by means of an application filed in the High Court under r 15.10 of the High Court Rules. In that way the cost and inconvenience of an appeal to this Court would be avoided.
We are also concerned about the question of the authority of Mr Te Whata to file and advance the appeal on behalf of Tarahau Farming. Although the respondents submit Mr Te Whata is not a director of Tarahau Farming (given that he resigned as a director of the company in March 2017), it seems from the records of the Companies Office that Mr Te Whata was (re)appointed as a director on 1 April 2019 and consented to his appointment as a director on 22 July 2019. Issues concerning Mr Te Whata’s status and authority to give instructions in relation to this appeal need to be clarified.
A second matter of even greater concern is that Mr Te Whata seems not to be a legal representative of the company. And the status of a “Kaiwhakawa Native Assessor” has not been explained. These questions regarding Mr Te Whata’s authority and standing need to be addressed, if Tarahau Farming chooses to pursue an appeal in this Court.[11] The same applies to the authority and standing of the second and third appellants to file and pursue the appeal.
[11]On the information presently available it is doubtful that the provisions of r 30(1A) of the Rules have been complied with.
The concern about legal representation is important because of the rule that a lay person, even if a director, cannot represent a company in court at common law, unless leave is given by the Court.[12] This rule extends to requiring a solicitor to act for a company in commencing and continuing litigation.[13] Filing and pursuing an appeal in this Court falls within the rule. There are “sound policy reasons” for having a rule such as this, some of which are already apparent from the circumstances of the present appeal.[14]
[12]ReG J Mannix Ltd [1984] 1 NZLR 309 (CA).
[13]Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2013] NZCA 53, [2013] 2 NZLR 679 at [33].
[14]At [34].
Relevantly for Tarahau Farming, the notice of appeal needs to be signed by a lawyer representing the company. The same is true for the second and third appellants. This requirement means that the provisions of r 30(1A) have not been complied with, as Mr Te Whata is not permitted to sign the document on behalf of any of the appellants.
Finally, we are troubled by the way in which the grounds of appeal advanced so far have been articulated. While we do not seek to comment on the merits or otherwise of such grounds, Mr Te Whata may wish to consider the wisdom and desirability of seeking legal representation and, if so advised, filing amended grounds of appeal. Such legal representation could also extend to providing Mr Te Whata with advice on the simpler, and less costly, option of applying in the High Court to set aside or vary the judgment of Downs J, referred to at [20] above. It should also extend to the principle that a solicitor must act for a company in commencing and carrying on a proceeding (including an appeal), subject to the discretion to depart from the rule only in exceptional circumstances.
Result and costs
The application for an extension of time to file the appeal is granted, provided however that such order is conditional upon Tarahau Farming complying with the following directions:
(a)Tarahau Farming is to consider obtaining legal representation to advise the company on the following matters:
(i)Whether the preferable course to pursuing an appeal in this Court is to apply to the High Court pursuant to r 15.10 of the High Court Rules to set aside or vary the judgment of Downs J;
(ii)Whether Tarahau Farming wishes to proceed with an appeal, reframe the grounds of appeal, as well as reconsider the parties involved, and file amended grounds of appeal;
(iii)Whether the appeal filed by Tarahau Farming (and the second and third appellants) was properly authorised by each of the appellants; and
(iv)Whether in the filing of the appeal the provisions of r 30 of the Court of Appeal (Civil) Rules were complied with by each of the appellants.
(b)Irrespective of the directions in (a), an amended notice of appeal complying with r 30(1A) of the Court of Appeal (Civil) Rules shall be filed and served on the respondents by Tarahau Farming no later than Friday 14 February 2020.
If the condition in [26(b)] is not complied with by Friday 14 February 2020, the order extending the time to appeal will be revoked with the effect that the application to extend the time to appeal is declined.
We record that costs may be granted to the respondents where an appellant or appellants have been granted an indulgence such as an order under r 29A of the Rules. Without finally determining the point, we consider the case for an award of costs in favour of the respondents could well be made out. However, Tarahau Farming and the second and third appellants seem to have been operating at this stage only with the benefit of lay representation. We have recommended this should change. Against the hope that Tarahau Farming and Mr Te Whata choose to comply with all the directions we have given, we reserve the question of costs until after 14 February 2020. Thereafter, counsel for the respondents may apply for costs if that course is thought appropriate.
Solicitors:
Meredith Connell, Auckland for Respondents
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