Johnson v Johnson [2011] NZCA 171; (2011) 28 FRNZ 413 (4 May 2011)

Last Updated: 11 May 2011

IN THE COURT OF APPEAL OF NEW ZEALAND

CA854/2010 [2011] NZCA 171

BETWEEN LINDA CLARE JOHNSON Applicant

AND CLIVE ASHLEY JOHNSON Respondent

Hearing: 19 April 2011

Court: Ellen France, Randerson and Wild JJ

Counsel: S Abdale for Applicant D R I Gay for Respondent

Judgment: 4 May 2011 at 11.30 am

JUDGMENT OF THE COURT

A The application for an extension of time to appeal is dismissed.

2. The applicant must pay the respondent costs for a standard application on a band A basis together with usual disbursements.

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REASONS OF THE COURT

(Given by Randerson J)

Introduction

[1] The applicant seeks an extension of time under r 29A of the Court of Appeal (Civil) Rules 2005 to appeal from a decision of Keane J delivered on 13 September 2007.[1]
[2] The judgment was part of a long-running dispute between the parties following their separation in 1998. The judgment in question related to the value, for relationship property purposes, of the shares in a company (AHL). Keane J held that the shares were valueless and ordered the applicant to pay to the respondent costs according to the 2B scale in the High Court Rules. The Judge also directed that the parties bear equally the costs of Mr J C Hagen who had been appointed by the Court to value the shares under s 38 of the Property (Relationships) Act 1976.
[3] The applicant seeks to challenge on appeal both the valuation and the costs orders. The application for leave is opposed by the respondent.

Background

[4] A Family Court Judge made an order dividing the relationship property of the parties on 14 May 2003. The AHL shares were not included in those orders but, on 20 November 2003, the Family Court Judge divided the shares equally between the parties. This decision was set aside by Winkelmann J on appeal on 29 September 2004.[2] Winkelmann J also ordered that the shares be valued under s 38.
[5] Mr J C Hagen, an experienced chartered accountant, was appointed to undertake the valuation. He concluded the shares were valueless. The applicant disputed the valuation and instructed her own expert who expressed the opinion that the shares were worth at least $400,000. The principal issue before Keane J was whether an intra-company debt retained the value ascribed to it in the company’s accounts. This in turn depended on whether a sum of $325,000 received by the respondent on the sale of a company asset had been expended, as the respondent deposed, to meet AHL’s liabilities.
[6] The Judge accepted the respondent’s evidence on this point. In consequence, the Judge accepted Mr Hagen’s opinion that the intra-company debt was of negligible value and the shares in AHL were worthless.
[7] Following the delivery of Keane J’s judgment on 13 September 2007, the time for filing an appeal expired on 11 October 2007. The applicant has deposed that she intended to proceed with an appeal and her solicitors arranged for the appeal documents to be sent to the registry on the last day for filing. She has sworn that the documents were received by the registry and the filing fee paid, but the documents were rejected shortly afterwards on the grounds that they had not been received until after 5 pm on the relevant day. The filing fee was returned to the applicant accordingly.
[8] The evidence given by the applicant in this respect is plainly hearsay and no affidavit has been filed by the agent responsible for the filing of the appeal documents. In the circumstances, we take the view that the applicant has not tendered sufficient proof of the events she describes.
[9] On 19 December 2007, the applicant applied for leave to appeal out of time, but it is common ground that this application (although filed) was never served. The applicant did not take any steps to advance the application for leave to appeal over the ensuing period of nearly three years. At the instigation of the registry, the application for leave to appeal was brought to the attention of the court. On 5 November 2010, Randerson J determined that the application for leave to appeal was to be treated as having no effect since it had not been served and had not therefore been “brought” in terms of r 16 of the Court of Appeal (Civil) Rules 2005.[3] The applicant was ordered to pay costs to the respondent of $600 together with disbursements.
[10] It was not until 17 December 2010 (over three years after the expiry of the relevant time limit) that the applicant filed an application which sought “special leave” to appeal. This was in error. The proper application was for an order extending time for appealing under r 29A. A copy of the application was not received by the respondent’s solicitors until 17 January 2011.

Principles

[11] The discretion to extend time is wide and flexible but will not lightly be exercised. The overarching consideration is whether the grant of an extension is in the interests of justice. Relevant factors include the length of the delay and the reasons for it; the parties’ conduct; the extent of prejudice caused by the delay; the merits of the appeal; and whether the appeal raises any question of public importance.[4]

Discussion

[12] We have no doubt that the application to extend time must be dismissed. The length of the delay has been inordinate and is not adequately explained by the general evidence offered by the applicant as to her state of health. Nothing was done to advance the appeal over a very lengthy period of time. We accept the submission made on behalf of the respondent that, despite apparent ill-health, the applicant was able to advance other court proceedings and we see no reason why she could not have advanced the proposed appeal had she wished to do so.
[13] We are also satisfied that the proposed appeal has no reasonable prospect of success. The conclusion reached by the Judge was plainly open to him on the material before him. We note that both experts and the parties were cross-examined. The conclusion of the Judge was essentially a question of fact and we see no basis on which the conclusion reached as to the valuation of the shares could be successfully challenged on appeal.
[14] In relation to the issue of costs, it was appropriate that costs should follow the event. We also accept the submission made on behalf of the respondent that Winkelmann J’s direction in her decision of 29 September 2004 that Mr Hagen’s costs should be met by the respondent, subject to final adjustment on rehearing by the Family Court, did not preclude the order ultimately made by Keane J that those costs be met equally by the parties.[5]
[15] We are satisfied that the Judge intended that the respondent should meet the costs initially but that the incidence of those costs was to be adjusted by subsequent court decision once a conclusion was reached on the valuation issue.
[16] We are also satisfied that the respondent will suffer prejudice should leave be granted. He should not be put to the further cost and inconvenience of an appeal which has no realistic prospect of success.

Conclusion

[17] For these reasons, the application for leave to appeal is dismissed.
[18] The applicant must pay the respondent costs for a standard application on a band A basis together with usual disbursements.

Solicitors:
Clive Gardner Law, Auckland, for Applicant
Wadsworth Ray, Auckland for Respondent

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[1] A v C HC Auckland CIV 2003-404-7204, 13 September 2007.
[2] Johnson v Johnson HC Auckland CIV-2003-404-7204, 29 September 2004.
[3] Johnson v Johnson (Minute of Randerson J) CA709/2007, 5 November 2010.

[4] Robertson v Gilbert [2010] NZCA 429; Barber v Cottle [2010] NZCA 31; and My Noodle Ltd v Queenstown-Lakes District Council [2009] NZCA 224, (2009) 19 PRNZ 518.

[5] The disputed valuation was transferred from the Family Court to the High Court for determination.