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Court of Appeal of New Zealand |
Last Updated: 1 April 2016
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IN THE COURT OF APPEAL OF NEW ZEALAND
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BETWEEN
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Applicants |
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AND
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First Respondent |
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PARNELL PROPERTY INVESTMENTS LIMITED
Second Respondent |
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Third Respondent |
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Fourth Respondent |
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Fifth Respondent |
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Sixth Respondent |
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JUDGMENT OF THE COURT
____________________________________________________________________
REASONS OF THE COURT
(Given by French J)
[1] On 24 September 2015 Mr Alexander filed a notice of appeal against a decision of Woodhouse J given in the High Court at Auckland.[1]
[2] Under r 43(1) of the Court of Appeal (Civil) Rules 2005 Mr Alexander was required to file and serve the case on appeal and apply for a fixture on or before 24 December 2015. He failed to do so and in order to keep the appeal alive must now obtain an extension of time under r 43(2).
[3] The application for an extension of time is opposed by the first respondent, Mr Noyce, and the sixth respondent, the Bank of New Zealand (BNZ).
Reasons for the delay
[4] The explanation for the delay is twofold: first, the Court’s letter about the 24 December 2015 deadline was delivered to Mr Alexander’s old postal address for service (he having failed to notify the Court of the new address) and, second, because of the way Mr Alexander had compiled the documents in the High Court when he was self-represented, the task of compiling the case on appeal requires particular care.[2]
Is the appeal genuinely arguable?
[5] Mr Noyce is the liquidator of two companies under the indirect control of Mr Alexander that were involved in a failed property venture. BNZ had loaned monies to the two companies. The companies defaulted on the loans. There was a mortgagee sale and BNZ filed a proof of debt representing the outstanding balance of loan monies it claimed was still owing.
[6] Mr Noyce applied to the High Court for various orders under the Companies Act 1993 approving his remuneration and confirming decisions he had made regarding acceptance of proofs of debt and his proposed distribution to creditors.[3] Mr Alexander opposed the application principally on the ground BNZ had allegedly transferred monies out of the joint bank account of the two companies without authority, causing loss to other interests associated with Mr Alexander. Mr Alexander contended Mr Noyce should not have accepted BNZ’s proof of debt in the liquidation and should have pursued a claim against the bank over the impugned transfers. A further argument raised by Mr Alexander was that two other companies associated with him (the Alexander creditor companies) were preferential creditors in the liquidation.
[7] Woodhouse J rejected all of Mr Alexander’s contentions and held Mr Noyce had acted reasonably and was entitled to the remuneration sought.[4] The Judge also made adverse findings about Mr Alexander’s credibility, including a finding that Mr Alexander was a party to the production into evidence of a forged letter.
[8] On appeal, Mr Alexander does not seek to challenge the credibility findings but contends that, independently of those findings, there were material errors in the Judge’s assessment of the evidence. According to his counsel Ms Murphy, the focus of the appeal will be on BNZ’s own contemporary documentation and what that material demonstrates in combination with missing documents when compared to the narrative of events as relayed in evidence by the bank’s chief witness.
[9] In our view, the appeal has no realistic prospect of success. We say that for the following reasons.
[10] First, the appeal is essentially seeking to re-litigate findings of fact that were not determinative of the outcome of the High Court proceeding.
[11] What was before the High Court was a review of a liquidator’s decision. That being so, as Woodhouse J noted, the question for determination was not whether Mr Alexander or BNZ was correct about the bank transfers.[5] Rather, the question was whether the liquidator’s decisions in respect of BNZ’s claims were reasonable having regard to the information available to the liquidator and the liquidator’s duty to act in a reasonable and efficient manner.[6] Other than his own say-so, Mr Alexander did not adduce any new evidence that could have provided a basis for Woodhouse J to undertake a fresh, independent, in-depth assessment of the BNZ claim and reach a different view from the liquidator.[7] As noted by the Judge, none of Mr Alexander’s evidence on the critical issues was supported by any contemporaneous documentation.[8] In our view, the Judge’s conclusion that Mr Noyce had acted reasonably is unassailable on the evidence.
[12] The same point is also fatal to any challenge on appeal about the reasonableness of the liquidator’s remuneration because the argument to be run turns primarily on the liquidator’s approach to the bank transfers. We also note that in the High Court Mr Alexander did not cross-examine Mr Noyce on the subject of his remuneration or expenses. Nor did Mr Alexander adduce any expert evidence to challenge the reasonableness of the remuneration. There is no suggestion of there being any new evidence that has since become available.
[13] As regards the contention the Alexander creditor companies should be given priority in the distribution, that relates to leaky home problems discovered in the venture property. The liquidator instructed solicitors to pursue a common law damages claim against certain third parties. The claim was eventually settled.
[14] Mr Alexander argued the Alexander creditor companies had made payments that assisted in the settlement of the claim and were accordingly entitled to priority over other creditors pursuant to cl 1(1)(e) of sch 7 of the Companies Act. The Judge rejected that argument on several grounds, namely:
- (a) The evidence did not establish any of the payments made by the Alexander creditor companies protected the property, preserved its value or recovered it.[9] All relevant acts leading to the settlement occurred without any assistance from Mr Alexander or his interests.[10]
- (b) Any payments made by the Alexander creditor companies after the date of the liquidation were not approved by the liquidator as was required.[11]
- (c) None of the payments made — both before and after the liquidation — was for the benefit of the general body of creditors. Rather, they were contrived and made solely for the benefit of Mr Alexander’s interests.[12]
[15] Other than blandly asserting the Judge was “wrong to conclude” the Alexander creditor companies are not entitled to priority, the notice of appeal does not provide any particulars as to why and none was advanced at the hearing of the application for an extension of time.
Overall justice
[16] The period of delay was relatively short. We also accept the delay has not of itself caused material prejudice to the respondents. However, we are satisfied the appeal should not be permitted to proceed. It is devoid of merit and is needlessly delaying finalisation of the liquidations, which commenced on 2 February 2011 and 31 March 2011. We were told that this litigation has already reduced the funds available for distribution to creditors from $324,000 to $186,000. We were also told Mr Alexander proposes to run the appeal without paying security for costs.
Result
[17] The application for an extension of time to apply for a hearing date and file the case on appeal is declined. That means under r 43 the appeal is deemed to be abandoned.
[18] There is no reason why costs should not follow the event. Mr Alexander is ordered to pay costs to the first and sixth respondent as for a standard application for leave to appeal on a band A basis with usual disbursements.
Solicitors:
Gregory Simon
Law, Auckland for Appellants
McMahon Butterworth Thompson, Auckland for First
Respondent
MinterEllisonRuddWatts, Auckland for Sixth Respondent
[1] Noyce v Parnell Property Investments Ltd [2015] NZHC 2037. Although Fifer Residential Ltd and Compark Properties Ltd are named as applicants, Mr Alexander took an assignment of their interests in the proceeding in or around December 2014.
[2] At the time of his application, Mr Alexander was self-represented. He has since engaged counsel.
[3] An application for an order that the assets and liabilities of the two companies in liquidation be pooled was also sought and granted but is not part of the appeal.
[4] Noyce v Parnell Property Investments Ltd, above n 1.
[5] Woodhouse J went on to address that issue at the invitation of the BNZ, but the findings were essentially obiter.
[6] Companies Act 1993, s 253.
[7] Noyce v Parnell Property Investments Ltd, above n 1, at [45]; citing Manifest Capital Management Pty Ltd v Lawrence HC Auckland CIV-2010-404-7741, 20 December 2011 at [7]–[8].
[8] At [52].
[9] Noyce v Parnell Property Investments Ltd, above n 1, at [76].
[10] At [73].
[11] At [77].
[12] At [75].
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URL: http://www.nzlii.org/nz/cases/NZCA/2016/88.html