RICHARD QUENTIN CHALLIS AND WENDY ANN CHALLIS v DESTINATION MARLBOROUGH TRUST BOARD INCORPORATED & ANORS [2003] NZCA 283 (8 December 2003)

IN THE COURT OF APPEAL OF NEW ZEALAND

CA37/03

BETWEEN RICHARD QUENTIN CHALLIS AND WENDY ANN CHALLIS

Applicants

AND DESTINATION MARLBOROUGH TRUST BOARD INCORPORATED

First Respondent

AND ANTHONY PAGE PRESTON

Second Respondent

Hearing: 17 November 2003

Coram: Gault P

Tipping J

Glazebrook J

Appearances: E W Gartrell and C Skagen for Applicants

M Radich for Respondents

Judgment: 8 December 2003

JUDGMENT OF THE COURT DELIVERED BY TIPPING J

[1] This application for special leave to appeal became necessary when an earlier appeal was deemed to be abandoned pursuant to Rule 10.The judgment from which Mr and Mrs Challis wish to appeal was delivered by Wild J on 12 February 2003 in the High Court at Blenheim.An appeal was filed on 12 March 2003.The six month period prescribed by Rule 10 for taking the steps there mentioned expired on 12 September 2003, which was a Friday.On that very day the applicants’ solicitors sent a faxed application for fixture to the Registrar.The fax did not arrive until after 5pm.With it came an undertaking to pay the necessary fee on the following Monday.The case on appeal was not mentioned and was not filed for several weeks thereafter.There can be no doubt that Rule 10 applied.

[2] The present application for special leave turns essentially on whether the applicants have demonstrated sufficient merit in their proposed appeal to justify their being given the indulgence of special leave.While their failure to observe Rule 10 was not gross, once their ability to appeal as of right ceased, they are required to demonstrate that the proposed appeal has enough merit to warrant the indulgence they seek.The level of perceived merit must be weighed against the prejudice to the respondents in having to face the intended appeal.The central focus in the latter respect is the prejudice resulting from the operative delay, albeit all aspects of the subject are relevant to the ultimate discretionary decision which the Court must make.

[3] While we appreciate the points which Ms Radich made for the respondents, the operative prejudice to them in present circumstances cannot be regarded as substantial.Nevertheless they are entitled to argue, as they did, that the appeal is so lacking in merit that the necessary special leave should not be granted.The only external evidence relating to the merit of the proposed appeal is that a grant of legal aid was made in favour of the solicitors previously representing Mr and Mrs Challis.Following a change of representation, the grant is under review.We cannot place weight on Mr Challis’ own expression of confidence in the prospects of success of the appeal.

[4] Mr Gartrell, who was not counsel below, submitted that the applicants wish to contend that Wild J had made “egregious factual errors” and was guilty of “erroneous legal analysis which led to some improper inferences”.No specifics of either contention were given.If the point is in issue, the applicant for special leave, facing the need to demonstrate that the proposed appeal is sufficiently arguable, should give a clear and succinct summary of the findings of fact or law, in respect of which the Judge below is said to have erred and on what basis the error is said to have been made.We are without that assistance in the present case.

[5] We have referred back to the points on appeal which were filed in support of the now abandoned appeal.We have also examined the pleadings and the judgment delivered by Wild J.In their notice of opposition the respondents put the merits of the proposed appeal squarely in issue, saying:

On the merits, the Applicants face seemingly insurmountable hurdles in connection with their appeal.Their Points on Appeal advances nine grounds of appeal.Eight of those grounds are appeals against factual findings of Justice Wild at trial.The one ground of appeal as to a matter of law relates to Justice Wild’s finding that public law estoppel is not available as a cause of action in New Zealand public law.The Respondents submit that even if the Applicants are successful on this ground, it does nothing to advance their appeal in view of Justice Wild’s finding at trial that:

If I am wrong, and the plaintiffs can maintain a cause of action in public law based upon an estoppel, then I find the claimed estoppel not established on the evidence [....]In brief summary, I find:

[a] No sufficiently clear and certain representation [...]

[b] No reliance upon any such representation, and thus

[c] No detriment to the plaintiffs from any such reliance.

Judgment of Justice Wild at Para 107.

[6] It is plain from our perusal of all the relevant material that the appeal is likely to be confined in substance to matters of fact, as the respondents contend.No supplementary points on appeal were filed in support of the present application.Hence it is reasonable to infer that nothing is proposed beyond the earlier points.The circumstance that the appeal focuses essentially on matters of fact is relevant to its arguability.Applicants are of course entitled to challenge factual findings on appeal but it is elementary that there are well known constraints on an Appellate Court in such circumstances.The materiality of the facts in dispute must of course be assessed against the tenability in law of the causes of action to which they relate.

[7] In their proceeding in the High Court Mr and Mrs Challis sought on their first cause of action, headed Public Law – Legitimate Expectations:(1) a declaration that the first respondent (the Board) had breached a legitimate expectation which they held that the Board would, within a reasonable time of 1 June 2000, enter into a contract with them to operate a visitor information centre of a nature identified earlier in the pleadings; (2) an order of mandamus that the Board forthwith enter into negotiations and negotiate in good faith with them “for the purpose of” entering into a contract with them to operate a visitor information centre of the nature identified earlier in the pleadings; and (3) a mandatory injunction that the Board forthwith enter into negotiations and negotiate in good faith with them “for the purpose of” entering into a contract with them to operate a visitor information centre of the nature identified earlier in the pleadings.

[8] As a second cause of action against the Board, headed Public Law – Improper Purposes, Mr and Mrs Challis claimed:(1) a mandatory injunction that the Board forthwith enter into negotiations and negotiate in good faith with them “with the intention of” entering into a contract with them to operate a visitor information centre of the nature identified earlier in the pleadings; (2) substantial special damages; (3) interest; and (4) general damages of $10,000 each.Similar, but not quite so extensive, relief was sought on a third cause of action, headed Public Law – Estoppel.

[9] The fourth cause of action was brought against the second respondent, Mr Preston, alleging against him misfeasance in public office in his capacity as chairman of the Board.The relief sought on this cause of action was:(1) special damages in certain particularised sums; (2) interest; and (3) general damages in the sum of $10,000 each.We note that no particulars were given of the basis on which the allegation of knowledge or recklessness was made against Mr Preston.The fifth cause of action returned to the Board and claimed the same relief as in the second and third causes of action but this time on the basis of equitable estoppel.

[10] We will address first the claim for misfeasance in public office brought against Mr Preston.There were two aspects to this claim.The first depended on the validity of the causes of action against the first respondent.The second depended on what was called the Cosgrove proposal.The first aspect fell with the causes of action upon which it depended.The second aspect was “emphatically” rejected by Wild J.We are bound to say that, having considered everything that Mr Gartrell advanced in his oral and written submissions, the proposed appeal in respect of this cause of action appears to us to be so lacking in merit that special leave to pursue it should not be granted.

[11] The allegation is, as the Judge said, a serious one.It was wholly unparticularised in the statement of claim and none of the proposed points of appeal comes close to establishing a case for finding that the cause of action was established on either of the aspects alleged.Without prejudice to other issues, there is simply insufficient material from which the necessary knowledge or recklessness could reasonably be inferred.Even if it were established that Mr Preston urged the Board towards a course inconsistent with the claim of Mr and Mrs Challis, that is some distance short of misfeasance in public office.Further, the fact that the Board did not follow that course leaves a significant gap between the alleged conduct and any entitlement to the relief claimed.

[12] We now address the proposed appeal so far as it relates to the Board.In this respect it is instructive to examine the relief which was sought.On the first cause of action a declaration was sought that the Board had breached a legitimate expectation held by Mr and Mrs Challis that the Board would, within a reasonable time of 1 June 2000, enter into a contract with them to operate the visitor centre for a period of three years “at a rate equivalent to the current contract”.For a legitimate expectation of the kind alleged to be enforceable in law, there must, all other issues aside, be sufficient certainty in relation to the material terms of the contract envisaged.Mr and Mrs Challis obviously did not consider the relevant terms were sufficiently identified.If they had been there would have been no need for them to seek the relief by way of mandamus and mandatory injunction which accompanied the claim for the declaration just mentioned.

[13] In this respect Mr and Mrs Challis sought, in addition to the declaration of legitimate expectation, an order of mandamus requiring the Board forthwith to enter into negotiations with them and to negotiate in good faith with them for the purposes of entering into a contract with them to run the visitor centre.No such order could have been made as it would have been practically and legally unenforceable; see Wellington City Council v Body Corporate 51702 (Wellington) [2002] 3 NZLR 486.Exactly the same difficulty arises with the third order sought, which is really to the same effect as the second.A mandatory injunction is not materially different from mandamus when directed to requiring parties to enter into negotiations in good faith.The claim was clearly based on the premise that the negotiations referred to were necessary to bring about an enforceable contract.The legitimate expectation declaration was therefore understandably not seen as sufficient on its own.

[14] Identical problems arise on the second, third and fifth causes of action, all of which have as their principal basis a claim for a mandatory injunction to the same effect as that sought in the first cause of action but without any suggestion of a preceding legitimate expectation.The damages sought appear to be based upon the premise that the Board was somehow contractually obliged to Mr and Mrs Challis even though no contract had been entered into.In its various formulations the claim is, in effect, for enforcement, primarily on public law grounds, of a right of renewal of their contract when they have no such contractual right.Viewed against that reality the claim is untenable.

[15] As Mr and Mrs Challis failed to comply with Rule 10, their ability to proceed with their intended appeal is now at the discretion of the Court.They have failed to persuade us that there is any reasonable prospect of their appeal being successful.There are major legal impediments in its path.These would remain even if they were able to establish that their factual points or some of them had merit.

[16] The respondents have already had to face a substantial High Court trial at the suit of legally aided plaintiffs.It would, in our view, be unjust if they had to face further proceedings in this Court on the same basis when the intending appellants have so little apparent merit in their appeal.We express some surprise that it was thought appropriate for legal aid to be granted for the appeal.As it turns out there will be no appeal because we do not consider it is in the overall interests of justice to grant special leave to appeal.The intending appellants failed to persuade the High Court that their claim had any factual or legal merit.Having lost their ability to appeal as of right they have been unable to satisfy us that their appeal has sufficient merit to justify the indulgence which they seek.The application for special leave is therefore dismissed.If any question of costs arises, memoranda may be filed.

Solicitors:

E W Gartrell, Wellington for Applicants

Radich Dwyer, Blenheim for Respondents