Wiltshire Investments Ltd v Symons HC Auckland CIV 2010-404-1011
[2010] NZHC 1798
•8 October 2010
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2010-404-001011
BETWEEN WILTSHIRE INVESTMENTS LTD Plaintiff
ANDROBERT MICHAEL SYMONS First Defendant
ANDGREGORY JOHN SYMONS Second Defendant
CIV-2010-404-001572
AND BETWEEN WILTSHIRE INVESTMENTS LTD Plaintiff
ANDROBERT MICHAEL SYMONS AND ANNETTE SYMONS AS TRUSTEES OF THE ST ANTHONY TRUST
First Defendants
ANDGREGORY JOHN SYMONS, CLAIRE ANNE SYMONS AND LORRAINE JEAN SYMONS AS TRUSTEES OF THE DRAKENSBERG TRUST
Second Defendants
Hearing: 8 October 2010
Appearances: H J Lees for Plaintiff
M A Karam for Defendants
Judgment: 8 October 2010
ORAL JUDGMENT OF ASSOCIATE JUDGE BELL
Solicitors:
Hornabrook MacDonald, PO Box 91 845, Auckland
Quay Law, PO Box 106765, Auckland
WILTSHIRE INVESTMENTS LTD V R M SYMONS AND ANOR HC AK CIV-2010-404-001011 8 October
2010
[1] On 26 July 2010, I gave judgment in favour of the plaintiff, as follows:
Against Robert Michael Symons and Gregory John Symons personally for
$2,241,035.34.
Against Robert Michael Symons and Annette Symons as trustees of the
St Anthony Trust for $1,400,256.29.
Against Gregory John Symons, Claire Anne Symons and Lorraine Jean
Symons as trustees of the Drakensberg Trust for $1,400,256.29.
[2] The liability of Annette Symons under the judgment is limited to the assets of the St Anthony Trust and the liabilities of Claire Anne Symons and Lorraine Jean Symons are limited to the assets of the Drakensberg Trust.
[3] On 18 August 2010, all the defendants filed a notice of appeal against my decision. They have paid security for costs for the appeal.
[4] They have now applied under r 12(3) of the Court of Appeal (Civil) Rules
2005 for a stay of execution pending the appeal. [5] The plaintiff opposes.
[6] An application under r 12(3) requires the Court to balance the competing rights of the party who has obtained judgment against the need to preserve the appellant’s position in the event that the appeal succeeds. In Insulators Ltd v ABB Ltd (2006) 18 PRNZ 565 at [13], the Court of Appeal cited Buckley LJ in Minnesota Mining & Manufacturing Co v Johnson & Johnson [1976] RPC 671 (CA) at 676:
The object, where it can be fairly achieved, must surely be so to arrange matters that, when the appeal comes to be heard, the appeal court may be able to do justice between the parties, whatever the outcome of the appeal may be.
[7] In this case, both parties cited factors which the Courts typically take into account to find the appropriate balance:
a) If no stay is granted will the appellants’ right of appeal be rendered nugatory?
b) The bona fides of the applicants in the prosecution of the appeal;
c) Will the successful party be injuriously affected by the stay?
d) The effect on third parties;
e) The novelty and importance of the question involved;
f) The public interest in the proceedings;
g) The overall balance of convenience; and, in some cases, h) The strength of the appeal.
[8] Not all these matters are directly applicable. I do not see questions of third parties, novelty and importance of questions of law and public interest, as requiring consideration here.
[9] In cases such as Dymocks Franchise Systems (NSW) Pty Ltd v Bigola Enterprises Ltd (1999) 13 PRNZ 48, the Court of Appeal has given general guidance but it has to be borne in mind that dicta in those cases are given to apply to a wide range of cases that can be the subject of decisions on appeal where the Court must consider the appropriate interim arrangements to be made.
[10] In this case, I recognise that the defendants are entitled to appeal against my decision, they have filed their appeal in time, and they appear to be pursuing their appeal rights diligently. There is nothing that suggests to me that they are not pursuing the appeal in good faith. However, what is important is that the plaintiff has obtained a judgment money against the defendants. In Contributory Mortgage Nominees Ltd v Harris Road No. 10 Ltd HC Auckland CIV-2005-404-3078, 31
January 2006 at [8], Associate Judge Faire recognised that in appeals against money judgments, the general approach is that an order staying execution will be granted upon payment by the defendant to the plaintiff of the money in question, with the plaintiff giving security for payment.
[11] There is old authority for this approach. It is found in the decision of
Williams J: McLeod v New Zealand Pine Co Ltd (1892) 11 NZLR 493. At 494-
495, Williams J said:
The judgment of Lord Justice Bowen in The Annot Lyle 11 PD 114, seems to show what the principle is. He says:
There is no reason why we should make a practice of depriving a successful litigant of the fruits of his litigation and locking up funds to which prima facie he is entitled for a long time because they are secured by the bail bond. We cannot assume that it is a matter of small importance to a successful party to go without his damages for a long time.
The right of plaintiff in the present case is an absolute right to have his money at once. The right of defendants is the right of appeal, and the right in some way or other to have it made certain by this Court that that appeal shall not be fruitless. The duty of this Court is, I think, to reconcile as far as possible the conflicting rights of the plaintiff and the defendants. The way to do that is to follow the English cases, and to say that an order staying proceedings shall be made on payment by the defendants to the plaintiff of the money in question, the plaintiff giving security for the repayment.
[12] While that is an old case, that principle remains applicable today. It is important to recognise that the plaintiff in this case, as judgment creditor, is entitled to the fruits of its judgment now. On this point, Mr Karam tried to make some play of the fact that the plaintiff had not issued its proceeding as promptly as it might have and said therefore this matter was not a matter of importance. That is a secondary consideration. The point is that the plaintiff has now obtained judgment and is entitled to enforce the judgment now.
[13] On the other hand, the rights of the defendants are simply to have their appeal and, if their appeal succeeds, to have any funds they have paid over restored to them. So in this case, the plaintiff should be allowed to enforce the judgment against both the Symons brothers and the trustees of the St Anthony and Drakensberg trusts now, and the protection for the defendants is that the plaintiff should give security for repayment.
[14] The objection of the defendants, particularly Robert Symons and Gregory Symons, is that, if there is no stay of execution, they will be made bankrupt. Certainly it is clear from the papers that the plaintiff is intent on pursuing bankruptcy
as a way of enforcing the judgment against them. They say that, if they are made bankrupt then that would be the end of their appeal. In other words, they argue that failure to order a stay will result in the appeal becoming nugatory because of the overwhelming effect of bankruptcy.
[15] A common response to such a submission is to say that, if a judgment debtor is adjudicated bankrupt, the Official Assignee may be able to take over the appeal. In many cases, that response tends to be a hollow assurance. In particular, I note that in the case of ANZ National Bank v Pillay CIV-2009-404-4175 HC Auckland Associate Judge Faire, 3 December 2009. At [23] his Honour said:
... the question whether an adjudication order would render the appeal nugatory, one must always appreciate that that is a likely outcome of an order of adjudication because of the fact that there may not be any incentive on the Official Assignee in Bankruptcy to prosecute the appeal.
[16] In this case, the only defendants in peril of bankruptcy are Gregory Symons and Robert Symons. An adjudication in bankruptcy would be of no assistance to the plaintiff against the other defendants because, on their being adjudicated in bankruptcy, no assets would vest in the Official Assignee. The assets they hold in trust under the St Anthony Trust and the Drakensberg Trust do not pass to the Official Assignee on adjudication and they are not personally liable under the judgments.
[17] All the defendants rely on common grounds of appeal. It was common ground between the parties that the defendants will stand or fall together on the appeal. There is nothing that distinguishes the case of one defendant from another. Accordingly, if Robert Symons and Gregory Symons were adjudicated bankrupt, the trustees of the St Anthony Trust and the Drakensberg Trust would still be entitled to continue with the appeal. If they were to succeed in it, there is no reason why their success under appeal should not also enure to the benefit of Robert Symons and Gregory Symons. I see no reason why the relief I give today should not be tailored to that end.
[18] The director of the plaintiff has given an assurance that the plaintiff would be able to repay if the appeal went against the plaintiff. That assurance is not enough.
Some security must be provided. In the course of argument today, a proposal was made that funds could be held in the trust account of an independent solicitor. That may be an appropriate arrangement. It is not for me to say what particular security should be provided, but it is surely possible to arrange something so that if money is paid under the judgment and the appeal were to succeed, then prompt repayment can be assured.
[19] The defendants have tried to make something of the fact that the trustees of the St Anthony Trust and the Drakensberg Trust were changed before judgment was given on 26 July 2010. The trustees who gave the guarantees on which the plaintiff sued are the defendants in the proceeding 157. Judgment was given against them on the guarantees that they gave. There are new trustees but those new trustees have not given any guarantees and they cannot be sued under any guarantees to this plaintiff.
[20] Under subrogation rules, the plaintiff is entitled to enforce any rights that the defendant trustees have for recoupment or indemnity out of the assets of the St Anthony Trust and the Drakensberg Trust. Accordingly, the later change in trusteeship is largely irrelevant for present purposes.
[21] In conclusion, I make these orders:
a) The plaintiff is entitled to enforce the judgment of 26 July 2010 against all defendants pending the defendants’ appeal, on these conditions:
i)the plaintiff is to give adequate security for repayment of any funds it may receive on enforcing the judgment;
ii)if there is any dispute as to adequate security, the parties may file memoranda with me so that I can determine the issue;
iii)if Robert Symons or Gregory Symons are adjudicated bankrupt and the Official Assignee elects not to pursue the appeal lodged by them, any success on appeal by the trustees
of the St Anthony Trust or the Drakensberg Trust will also enure for the benefit of Robert Symons and Gregory Symons.
b) The defendants are to pay the plaintiff costs of $2,068.
[22] The decision I have given now is only about the stay pending appeal. The plaintiff has given clear notice that it intends to pursue bankruptcy proceedings against Robert Symons and Gregory Symons. That means that this Court may be confronted with an application for adjudication while the appeal is still pending in the Court of Appeal. It will be for a judge hearing the application for adjudication to determine what orders ought to be made or that appeal is pending. What I said today is not intended to stand in the way of what a judge may have to decide at a later stage
if an application for adjudication does come before this Court.
R M Bell
Associate Judge
0
0
0