Mobil Oil New Zealand Ltd v Bagnall [2001] NZCA 12; (2001) 14 PRNZ 666 (7 February 2001)

Last Updated: 14 December 2011

IN THE COURT OF APPEAL OF NEW ZEALAND

CA290/99

	BETWEEN	MOBIL OIL NEW ZEALAND LIMITED
		Appellant

	AND	JOHN ANDREW BAGNALL
		First Respondent

	AND	ANDREW JOHN MAHER
		Second Respondent

Hearing:	1 February 2001
Coram:	Keith J Blanchard J McGrath J
Appearances:	J G Miles QC for appellant J Chesterman and S Hunter for respondents
Judgment:	7 February 2001

JUDGMENT OF THE COURT DELIVERED BY BLANCHARD J

[1] On 22 August 2000 this Court allowed an appeal by Mobil Oil New Zealand Limited against the refusal by a Master to enter summary judgment against the respondents on their guarantee given in respect of the obligations of their company, Promo Marketing International Limited, under a sponsorship agreement. Essentially the disputed matter relates to Promo’s liability to refund to Mobil a portion of the sponsorship fee paid by Mobil to Promo. This Court determined that Mobil was entitled to judgment against each respondent in the sum of $127,824.
[2] The respondents then applied for and were granted conditional leave to appeal to Her Majesty in Council. It was accepted by Mobil that they were entitled to such leave as of right because of the amount in dispute.
[3] The conditions do not appear in the formal order but were set out in the leave application. They were the standard conditions, namely that:

• [a] within three months (running from 18 September 2000) the respondents should provide security in the amount of $2,000 for the due prosecution of the appeal (which condition has been duly satisfied); and
• [b] “Within the same three months the necessary steps be taken for the purpose of procuring the preparation of the record and the dispatch thereof to England”.

[4] On 12 December 2000 the respondents lodged the present application for final leave. But Mobil opposes it saying that the respondents are in default in complying with the condition concerning the record. It appears that until about the time when the respondents made the application little or nothing had been done towards preparation of the record. At the same time as they forwarded the application their solicitors wrote to the solicitors for Mobil sending them a copy and indicating that they would shortly be forwarding a draft form of the record for approval. Thereafter they began to collate the documents to be included and to draft the index. It is deposed that prior to 18 December the record was substantially complete. However, it was not until 22 December 2000, and thus outside the stipulated period, that the respondents’ solicitors tendered to Mobil’s solicitors even the draft index of the record. They proposed that the record should consist of all documentation in the Case on Appeal filed in this Court together with our judgment and the final leave order.
[5] Since that time the draft index has been sent to Mobil’s solicitors but they have not signified agreement with it because they have taken the view that the condition was not met and that final leave cannot therefore be granted. A copy of the draft index was received in this Court on 23 January 2001 with the respondents’ submissions in support of the application for final leave.
[6] Opposing final leave, counsel for Mobil, Ms Chesterman, accordingly submitted that there was an entire non-compliance with the second condition and that this Court has no power to extend the three month period so as to enable a belated compliance. Final leave, she says, may only be granted if the conditions precedent laid down by the Privy Council Rules have been met.
[7] Rule 5 reads:

Leave to appeal under Rule 2 shall only be granted by the Court in the first instance:

(a) Upon condition of the Appellant, within a period to be fixed by the Court, but not exceeding three months from the date of the hearing of the application for leave to appeal, entering into good and sufficient security, to the satisfaction of the Court, in a sum not exceeding two thousand New Zealand dollars for the due prosecution of the Appeal, and the payment of all such costs as may become payable to the Respondent in the event of the Appellant not obtaining an order granting him final leave to appeal, or of the Appeal being dismissed for non-prosecution, or of His Majesty in Council ordering the Appellant to pay the Respondent's costs of the Appeal (as the case may be); and

(b) Upon such other conditions (if any) as to the time or times within which the Appellant shall take the necessary steps for the purpose of procuring the preparation of the Record and the dispatch thereof to England as the Court, having regard to all the circumstances of the case, may think it reasonable to impose.

[8] It was submitted by counsel for Mobil that it is essential for compliance with condition (b) that within the stipulated period (which is here the normal period of three months) the record must have been put in such an agreed form that it can immediately be delivered to the Court upon the granting of final leave. The “necessary steps” suggested by counsel are:

(a) The production of a draft index by the applicant for leave;
(b) Agreement on the index by the parties; and

(c) The compiling of the record in a form suitable for delivery to the Court upon the order for final leave being sealed.

[9] The advent of the photocopier has naturally led to the abandonment of the printing of the record which is referred to in Miller v Minister of Mines and the Attorney-General (No.2) [1962] NZLR 275. Counsel observed that in practice the photocopied record is often delivered to the Court before the order is sealed with a space left for the order to be inserted. We consider that the practice should be that the filing of the agreed record in that way should precede or accompany the application for final leave.
[10] The wording of Rule 5(b) itself and the practical considerations mean that an approach which requires a literal compliance in every detail would not be appropriate. The condition concerning the record can be taken to be satisfied if it has been substantially met. This will, we think, have been achieved if the three things mentioned in counsel’s submission (para [8] above) have been done. And if the applicant for leave has made reasonable efforts, but timeous completion of the record (apart from the final order) has been frustrated by a lack of cooperation from the other party it is likely that the Court will take the view that sufficient has been done to constitute compliance with the condition. In this connection we note that Rule 7 provides that the preparation of the record is subject to the supervision of the Court and that the parties may submit any disputed question arising in connection therewith to the decision of the Court, which is empowered to give such directions thereon as the justice of the case may require. There is also provision in Rule 9 for the inclusion of a document subject to the noting of the objection of a party.
[11] Lest it may be thought that the standard period of three months is unduly short, we observe that in recent years considerable efforts have been made in this country to speed up the progress of litigation and, in particular, of appeals. Rule 10 of the Court of Appeal (Civil) Rules 1997 requires an appellant from the High Court to this Court to make application for a fixture and, significantly, also to file the Case on Appeal, within six months from the bringing of the appeal. It will ordinarily be much simpler to prepare a record for the purposes of an appeal to the Privy Council than it will have been to prepare the Case on Appeal for this Court. In this connection we note that the applicants’ tardy proposal to Mobil’s solicitors would merely have replicated the Case on Appeal, adding only the judgment of this Court and the sealed final order. Three months was therefore a more than adequate period, as it will be in most instances.
[12] We take the view that the present applicants have not complied with the condition. It can be accepted on the basis of the affidavit of the solicitor undertaking the work that the draft record had been prepared within the three months but no attempt had been made to have its form agreed by Mobil’s solicitor. Nevertheless the respondents cannot be said to have entirely failed to attend to the task within the time fixed by the Court.
[13] It may once have appeared to have been established in New Zealand that this Court had no power to extend the period which it stipulates in the condition pertaining to the record. Stout CJ said as much in Gisborne Harbour Board v Lysnar [1923] NZLR 345, 349, with the concurrence of Adams J (Salmond J dissenting). But it is apparent that the Chief Justice had fallen into the error of thinking that Rule 5 itself provided for a maximum period of three months for both conditions, whereas of course it does so only for the giving of security.
[14] The decision in Lysnar must, we think, now be taken to have been displaced by the advice of the Judicial Committee itself in Roulstone v Panton [1979] 1 WLR 1465. The judgment of their Lordships, who included Sir Clifford Richmond, was delivered by Lord Russell of Killowen. Referring to s5 of the Cayman Islands (Appeal to Privy Council) Order 1965, which appears to be very similar to the rule in New Zealand, the Privy Council was of the view that the Court of Appeal had not been obliged to refuse final leave merely because the condition imposed in relation to the record had not been met. Their Lordships pointed out that there was a crucial distinction between conditions (a) and (b). In the one case there was a maximum period of 90 days laid down by the Order in Council “and clearly the court has no jurisdiction to alter the Order in Council by extending that period”. But, as in New Zealand, it was left at large for the Court of Appeal to determine what period was to regulate the second condition. Their Lordships saw “no justification for holding that there is no jurisdiction to re-fix the period either expressly or implicitly on or before granting final leave”.
[15] This decision was drawn to the attention of this Court in Lomas v Foreland Investments Ltd (unreported, CA78/91, 20 December 1991) where there is a very brief oral decision of Cooke P in the following terms:

On 2 September 1991 conditional leave was granted to appeal to Her Majesty in Council on standard conditions as to security, which is no longer in issue, and that within three months the applicant take the necessary steps for the purpose of procuring the preparation of the record. From the affidavits now before the Court it appears and it has been common ground between counsel this morning that during that period no step whatever was taken by or on behalf of the applicant for the purpose of procuring the preparation of the record.

Assuming as we do having regard to the judgment of their Lordships in Roulstone v Paton [1979] 1 W.L.R. 1465 that this Court has jurisdiction to extend the time for taking the necessary steps, we are not satisfied that in all the circumstances there is sufficient excuse for the delay to justify the exercise of that jurisdiction. Accordingly the application for an extension of time is dismissed, with the consequence that the conditional leave will lapse.

[16] In the present case there has been, in formal terms, no application for an extension of time. However, as the condition was not met by 18 December any grant of final leave now can only be made on the basis of allowing further time for compliance. We are prepared to do this. There has been no prejudice to Mobil by reason of the delay. Ms Chesterman confirmed that in principle the respondents’ proposal in their letter of 22 December 2000 was acceptable, subject only to the clerical process of checking that indeed all the documents in the Case on Appeal in this Court have been included. That can now quickly be done. In reality, despite appearances at the time when the three months expired, there was then comparatively little remaining to be done concerning the record. The position thus differs considerably from that in Lomas.
[17] Provided that the agreed record is delivered to the Registrar for certification within 14 days of delivery of this judgment, time will be extended accordingly and final leave to appeal will be granted. We do not imagine that there will be any dispute on its content which the parties cannot sensibly resolve but, if necessary, application can be made under Rule 7.
[18] The respondents failed to ensure strict compliance with the Court’s condition and also failed fully to explain the position until very shortly before the hearing. They have asked for and received an indulgence. In these circumstances Mobil’s action in opposing leave was not unreasonable. It is awarded costs of $2,500 together with its reasonable disbursements, to be fixed if necessary by the Registrar.
[19] Mobil has filed an application seeking leave to execute its judgment. Such an application is unnecessary and no order is made. There has been no stay applied for and no basis for one appears to exist.

Solicitors
Russell McVeagh, Wellington for Appellant
Grove Darlow & Partners, Auckland for Respondents