White v Spence

[2014] NZCA 298

IN THE COURT OF APPEAL OF NEW ZEALAND

CA510/2013
[2014] NZCA 298

BETWEEN	AMANDA ADELE WHITE First Appellant
ANNE LEOLINE EMILY FREEMAN Second Appellant
AND	STUART GORDON SPENCE First Respondent
CHRISTOPHER MAURICE LYNCH Second Respondent

Hearing:	23 June 2014
Court:	Harrison, Wild and French JJ
Counsel:	R S Pidgeon for Appellants P J Wright for Respondents
Judgment:	2 July 2014 at 3.30 pm

JUDGMENT OF THE COURT

AThe application under r 43(2) of the Court of Appeal (Civil) Rules 2005 for an extension of time to apply for a fixture and file a case on appeal is granted.

BThe application under r 29A of the Court of Appeal (Civil) Rules for an extension of time to file an appeal against the costs decision in the High Court is granted.

CThe application under r 45 of the Court of Appeal (Civil) Rules to adduce further evidence is declined.

DThe appellants are to pay the respondents’ costs as for a standard application for leave to adduce further evidence on a band A basis with usual disbursements.

ECosts on the applications under rr 43(2) and 29A are to lie where they fall.

____________________________________________________________________

REASONS OF THE COURT

(Given by French J)

Introduction

1. On 17 July 2013 Ms White and Ms Freeman filed an appeal against a decision of Priestley J.[1]

   [1]Spence v Lynch [2013] NZHC 1478.

2. This judgment concerns three interlocutory issues that have since arisen.

3. The first is an application for an extension of time under r 43(2) of the Court of Appeal (Civil) Rules 2005 (the Rules) to apply for a fixture and file a case on appeal.  An extension is required because Ms White and Ms Freeman did not comply with the time requirements for attending to those matters.  The delay was, however, only seven days.  The respondents have appropriately consented to an extension of time being granted and we so order.

4. The second issue for determination arises because Ms White and Ms Freeman wish to adduce further evidence on appeal.  That application, made under r 45, is opposed.

5. The third issue has arisen because on 8 May 2014 Ms White and Ms Freeman filed an amended notice of appeal.  The notice purports to include for the first time an appeal against Priestley J’s costs decision, which was delivered in a separate judgment on 11 October 2013.[2]  The respondents submit that in the absence of any application for an extension of time to appeal, this aspect of the appeal should be dismissed.

Factual background

[2]Spence v Lynch [2013] NZHC 2668.

1. Ms White was in a de facto relationship with Mr Spence, one of the respondents, for some years.

2. She established a family trust called the DCT Trust.  There were three trustees: Ms White herself, her solicitor Mr Lynch (the other respondent) and her mother Ms Freeman.

3. The relationship between Ms White and Mr Spence subsequently broke down.  Following the breakdown of the relationship, Mr Spence filed proceedings in the High Court against Mr Lynch seeking repayment of advances that Mr Spence claimed to have made to the DCT Trust, totalling $224,480.48.

4. Mr Lynch settled with Mr Spence.  The terms of the settlement were that Mr Lynch would pay Mr Spence $155,000 in exchange for the claim against him being discontinued, and the alleged debt being assigned to him.  Mr Lynch then joined his co-trustees, Ms White and Ms Freeman, as third parties to the proceeding.

5. As Priestley J noted in his costs decision, the focus of the hearing then shifted, with Mr Lynch effectively suing Ms White and Ms Freeman for the debt of $224,480.48, or in the alternative seeking an indemnity of $155,000.

6. The Judge found that sums totalling $224,480.48 had been advanced to the DCT Trust from Mr Spence’s separate property.  However the Judge also found that the DCT Trust had made four partial repayments, which had the effect of reducing the amount by $94,322.00.  That left a judgment debt of $130,158.00 owing to Mr Lynch by Ms White and Ms Freeman.

7. Ms White and Ms Freeman had filed various counterclaims against Mr Lynch alleging negligence and breach of fiduciary duty but these were all unsuccessful.

The proposed new evidence

1. The further evidence Ms White and Ms Freeman wish to adduce consists largely of various bank statements covering the period of the relationship between Ms White and Mr Spence (July 2002 to December 2008), as well as an account reconciliation by Ms White and commentary on all the material.  In total, there are approximately 1000 pages of additional material.

2. Ms White says the reason she wishes to adduce this further evidence is to shed a more accurate light on the financial interactions between Mr Spence and the Trust than was provided to the High Court.  In particular she wants to show the extent of the benefits Mr Spence took from the DCT Trust by way of financial remuneration or benefits that were only informally recorded.  She submits that if this additional material had been placed before Priestley J, it would have had a material influence on the outcome.  Indeed it is submitted that it would have resulted in Mr Spence being held to owe $33,000 to the trustees.

Application to adduce further evidence

1. The constraints on the admission of further evidence are very strict.  The evidence must be fresh, credible and cogent.  It will not be regarded as fresh if it could with reasonable diligence have been adduced at trial.  Evidence that is not fresh will only be admitted in exceptional and compelling circumstances.[3]

   [3]Paper Reclaim Ltd v Aotearoa International Ltd [2006] NZSC 59, [2007] 2 NZLR 1; Erceg v Balenia [2008] NZCA 535; Airwork (NZ) Ltd v Vertical Flight Management Ltd [1999] 1 NZLR 641 (CA); and Rae v International Insurance Brokers (Nelson Marlborough) Ltd [1998] 3 NZLR 190 (CA).

2. We accept that bank statements are business records and hence inherently reliable.[4]  Not so the analysis by Ms White, some of which is, as Mr Pidgeon conceded, inadmissible opinion evidence.[5]

   [4]Evidence Act 2006, ss 16, 19; R Mahoney and others The Evidence Act 2006: Act and Analysis (2nd ed, Thomson Reuters, Wellington, 2010) at [19.01].

   [5]Evidence Act, s 23.

3. More importantly, the evidence is not fresh.  The financial records were all in existence and were discoverable at the time of the trial.  Mr Spence’s bank statements had been discovered in the Family Court for the purposes of relationship property litigation between Ms White and Mr Spence.  As for the Trust’s bank statements, these were in the control of Ms White and Ms Freeman.

4. Ms White attempts to justify the failure to obtain the statements by blaming the bank and the fact that she was not legally represented.  The record does not, however, suggest that the bank was to blame.  In any event, even if the bank were at fault, there were steps that Ms White and Ms Freeman could have taken.  The fact they were self-represented in our view does not excuse the failure to take those steps.

5. All litigants, whether self-represented or not, are under an obligation to put their best case at trial and must live with the litigation strategy they choose to adopt.[6] On appeal, parties are not entitled to recast their case by adducing new evidence, which is what the appellants in this proceeding are effectively attempting to do.

   [6]Hayes v Guerin [2010] NZCA 148 at [5] and Haden v Wells HC Auckland CIV-2010-404-2050, 25 November 2010 at [83].

6. We have come to a very clear view that it is not in the interests of justice to allow the further evidence to be adduced.  There are no compelling or exceptional circumstances.

7. The application is accordingly dismissed.

Appeal against Priestley J’s costs decision

1. By the time of the hearing before us, it was common ground that a separate appeal should have been filed against the costs decision and that an extension of time to do so was now required.  Mr Pidgeon explained that he had misread the Rules.

2. The scope of the appeal against the costs decision is very narrow.  It is limited to a single discrete issue and will not add significantly to the time required to hear the main appeal.  We anticipate that no more than 15 minutes will be needed.  The respondent is not significantly prejudiced by the delay.

3. An extension of time is accordingly granted to bring an appeal against the costs decision.

Outcome

1. The application under r 43(2) of the Rules for an extension of time to apply for a fixture and file a case on appeal is granted.

2. The application under r 29A of the Rules for an extension of time to file an appeal against the costs decision in the High Court is granted.

3. The application under r 45 of the Rules to adduce further evidence is declined.

4. As regards costs, we consider that the successful respondents should be entitled to costs on the application to adduce further evidence.  The appellants are to pay the respondents’ costs as for a standard application on a band A basis with usual disbursements.

5. Although the appellants succeeded on the other two applications, one was not opposed and the other involved the granting of an indulgence which occupied negligible hearing time and in respect of which the appellants had not even filed a formal application.  Accordingly costs on the applications under rr 43(2) and 29A are to lie where they fall.

Solicitors:
Pidgeon Law, Auckland for Appellants
Sellar Bone, Auckland for Respondents