Taylor v Asteron Life Ltd
[2019] NZHC 2459
•27 September 2019
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2015-485-1032
[2019] NZHC 2459
BETWEEN PETER JAMES TAYLOR
Plaintiff
AND
ASTERON LIFE LIMITED
Defendant
Hearing: On the papers Counsel:
A C Beck for the Plaintiff
C M Meechan QC and A Borchardt for the Defendant
Judgment:
27 September 2019
JUDGMENT OF COOKE J
(Application for a stay of execution and under the slips rule)
[1] By judgment dated 7 May 2019 I dismissed the plaintiff’s claim, and upheld the defendant’s counterclaim.1 I subsequently determined the defendant’s claims for costs and interest.2 By application dated 30 July 2019 the plaintiff has now applied for a stay of execution pending the hearing of his appeal to the Court of Appeal. He also seeks alteration to two aspects of the orders sealed by the defendant. The application is supported by an affidavit from the plaintiff. The defendant opposes the applications, and has filed and served two affidavits from Michelle Leach and Anne Lindsay. Mr Taylor has also filed an affidavit in reply.
[2] The parties have agreed that the applications should be determined on the papers. A direction to that effect was made by Grice J on 19 August 2019. Written submissions have been filed.
1 Taylor v Asteron Life Ltd [2019] NZHC 978.
2 Taylor v Asteron Life Ltd [2019] NZHC 1489.
TAYLOR v ASTERON LIFE LIMITED [2019] NZHC 2459 [27 September 2019]
Alteration to sealed orders
[3] The plaintiff says that two aspects of the sealed orders should be corrected under r 11.10.
Post-judgment interest
[4] First the plaintiff says that the defendant has wrongly included post-judgment interest in the sealed order. Mr Beck argues that this is not appropriate. Section 87(1) of the Judicature Act 1908, which applies in this case, only allows the award of interest up until the date of judgment. Interest on the amount awarded in a Court’s judgment then arises by operation of law, and is not ordered by the Court.
[5] The submissions from the defendant do not seem to contest this. Ms Meechan QC’s submissions identify that under r 11.27 of the High Court Rules 2016 the judgment carries interest at the rate prescribed by s 87 of the Judicature Act 1908 unless the Court specifies a lesser rate (which it did not do).3 Her submissions accept the proposition that the Court itself does not award interest for the post-judgment period.
[6] For that reason Mr Beck’s point is technically correct and the sealed order dated 28 June 2019 should not include post-judgment interest. The plaintiff should now re-seal the judgment without that amount and return/destroy all copies of the existing order. If necessary I will exercise the powers under r 11.10, but it seems to me preferable that the defendant simply re-seal a corrected order rather than trying to amend the current sealed order under this rule.
Second counsel
[7] The plaintiff next disputes the appropriateness of the defendant sealing its costs award including an allowance for second counsel. Mr Beck takes the point that provision for second counsel is only permitted if allowed by the Court.
3 Rule 11.27 was amended on 1 January 2018 and now refers to the Interest on Money Claims Act 2016.
[8] In the memoranda filed in relation to costs the defendant sought the costs of second counsel. I did not understand from the memorandum of counsel for the plaintiff that this was disputed — Mr Beck simply made the point that second counsel needed to be allowed by the Court. I accordingly did not address this as a disputed matter in the judgment in relation to costs dated 28 June 2019. I agree with Ms Meechan that it was implicit from my judgment that the costs as claimed were allowed subject to the disputes which were addressed, and accordingly that I have allowed costs including for second counsel. Second counsel was plainly appropriate in the present case. I accordingly decline the plaintiff’s application on this issue.
Stay of execution
[9] The plaintiff seeks a stay of execution under r 12 of the Court of Appeal (Civil) Rules 2005. There is no dispute as to the approach to be adopted to such applications which has been addressed in a number of cases, including Yan v Mainzeal Property & Construction Ltd.4 The plaintiff’s grounds are the following:
a.The applicant has filed an appeal against both judgments in the Court of Appeal and is progressing the appeals. It is likely that the decisions will be adjusted by the Court of Appeal.
b.The respondent has advised that it will take immediate action to enforce the judgments it has sealed by way of bankruptcy proceedings.
c.There will be substantial prejudice to the applicant if the judgments are enforced before the appeal is determined by the Court of Appeal, and his appeal will be rendered nugatory, but there is no substantial prejudice to the respondent if there is a stay of execution of the judgments pending determination of the appeal.
d.There are important questions of law involved that have not previously been considered by the Court of Appeal.
e.The balance of convenience favours the granting of a stay of execution.
[10] Mr Taylor has sworn an affidavit in support of the application dated 30 July 2019. He says he will face bankruptcy if the judgment is enforced. He says:
[10] I have earned no salary since becoming ill in 2010. My living expenses from that time onwards have been met out of my wife’s salary and my savings. Although the broking business was sold in 2018, the purchase price was not paid to me, but to the trust who owned the business. The
4 Yan v Mainzeal Property & Construction Ltd [2014] NZCA 86, (2014) 22 PRNZ 296.
purchase price was an indicative figure only, and was subject to an earn out period of two years. The income of the business has been severely impacted by litigation tactics pursued by the respondent and a number of other circumstances, notably business migration, reputational damage, and the terms of the judgment given by the Court.
[11] This has been responded to in the affidavit of Ms Leach dated 27 August 2019 on behalf of Asteron. She points out the evidence received by the Court, the findings made in relation to a number of matters, and also refers to the lack of proper financial information provided in support of the stay application.
[12] In his affidavit in reply dated 3 September 2019 Mr Taylor further asserts that he has personally had no income from his broking business since he because ill and that he has earned nothing from the business since it was sold.5 He further asserts that he has had “no personal earnings from brokerage since 2010”.6 He also says:
[14] Ms Leach states that I have provided no evidence regarding my current financial position. I am not sure what she is expecting me to provide. My financial statements have all been provided in discovery. I do not currently have a savings account.
…
[19] I have appealed the High Court decisions in order to try and restore some of the damage that has been done to my reputation, and am asking the Court to allow me the opportunity to have that appeal heard without the threat of being bankrupted by Asteron.
[13] I do not accept the assertions of fact in Mr Taylor’s affidavits which are inconsistent with the factual findings of the Court, and the evidence before the Court. In particular:
(a)Mr Taylor’s broking business was undertaken in his own name, and it was his income from that business in the form of profits which was insured with Asteron.7 The business was not owned by a company, and neither was there any evidence (or even a suggestion) that the business was owned by a trust.8 This would have been inconsistent with
5 Affidavit of Mr Taylor, 30 July 2019 at [6]–[7].
6 At [13].
7 Taylor v Asteron Life Ltd, above n 1, at [9] and [86].
8 At [6] and [55].
Mr Taylor’s very claim that he was insuring his own income from the business.
(b)The accounts for that business signed off by Mr Taylor’s accountants (or at least the accurate ones, as a false set of accounts had earlier been discovered) show that Mr Taylor earned operating profits $149,025 in 2010, $163,830 in 2011, $155,407 in 2012, $150,561 in 2013, and
$166,013 in 2014.9 These amounts are over and above the amounts that
Mr Taylor received from Asteron under the insurance policy. The statements in his affidavits are a repetition of the false assertions he made to induce Asteron to pay out on the policy to him, and his evidence to the Court found to be unreliable and at times untrue.
(c)Mr Taylor has then received significant sale proceeds from the sale of the business. It would appear that the sale and purchase agreement is in the name of Mr Taylor’s company, rather than his personal name. To achieve that he must have transferred his business to that company in a way not explained. He would have been entitled to the value of the business so transferred to his company. The further assertion that the business is actually owned by a trust is inconsistent with the foundation of Mr Taylor’s claims in this litigation, and there is no evidential basis for it.
[14] I generally regard Mr Taylor’s affidavit evidence as again unreliable. I also note the evidence he provided to the Court of the luxury cars he had purchased, the holiday home he had built, and the extensive holidays undertaken by him in the Pacific which he contended at trial involved expenditure incurred by him in reliance on the payments he had received by Asteron.10 He has certainly acquired significant assets. This includes the Maserati parked in the garage of his home.11 I regard this evidence at trial as inconsistent with his current assertions.
9 At [88].
10 At [112]–[122].
11 At [119].
[15] There is also a complete absence of detailed or accurate financial information, or explanation as to the legal structures used, that would allow the Court to accept that Mr Taylor has no money to meet the judgment, or to provide as security for a stay. On the contrary, based on the material before the Court, I believe Mr Taylor is seeking to minimise the prospect of Asteron recovering under the judgment by using artificial legal structures and entities, and that he changes his position on the owner of assets as and when it suits him.
[16] In Keung v GBR Investment Ltd the Court of Appeal held that “… generally a stay upon payment of a judgment sum would only be granted on provision of security”.12 Given the above matters that is clearly the appropriate position here. A stay would only be appropriate if security for the defendant’s judgment was lodged. No such security is being offered. On this basis alone I would dismiss the application for a stay.
[17] Had it been necessary to go further in terms of relevant considerations, I would also have concluded that there is little apparent merit in Mr Taylor’s appeal. Ultimately Mr Taylor’s case failed because of findings of fact rather than any more complex legal questions. The Court has found that Mr Taylor continued to work in his business notwithstanding his claims that he was not doing so because of his sickness. Those findings were based on the evidence of three of Mr Taylor’s former employees, and the detailed documentary record of the extent to which he continued working. The only evidence to the contrary was the assertions in Mr Taylor’s own evidence, which were found to be unreliable, and at times not truthful. Furthermore, even apart from this evidence, the Court also found that he continued to earn the same levels of income from the business as he had previously. That is clearly recorded in his accounts. So he did not have an entitlement on that basis as well. These are factual findings. The prospect of Mr Taylor being able to overturn the factual findings on both of these points on appeal seems to me to be remote. The argument that they were procedurally unfair because they were not raised on the pleadings similarly seems to me to also be unrealistic. These matters were clearly alive at trial. Indeed it was
12 Keung v GBR Investment Ltd [2010] NZCA 396, [2012] NZAR 17 at [12].
Mr Beck in opening who identified that Asteron’s position was that Mr Taylor had acted fraudulently.
Mr Taylor is entitled to pursue an appeal to the Court of Appeal as of right. But if he is to obtain a stay of execution he would at least have to provide appropriate security before that could be considered. Accordingly I dismiss the application.
Cooke J
Solicitors:
Peter Sara, Dunedin for Plaintiff
Anne Lindsay, Auckland for Defendant
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