Jones v New Zealand Bloodstock Financing and Leasing Limited [2021] NZCA 213 (26 May 2021)

Last Updated: 1 June 2021

IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA

CA350/2020 [2021] NZCA 213

	BETWEEN	GREGORY JOHN JONES Applicant
	AND	NEW ZEALAND BLOODSTOCK FINANCING AND LEASING LIMITED Respondent
CA538/2020
	BETWEEN	GREGORY JOHN JONES Applicant
	AND	NEW ZEALAND BLOODSTOCK FINANCE AND LEASING LIMITED Respondent

Court:	French and Miller JJ
Counsel:	Applicant in person F A King and A Osama for Respondent
Judgment: (On the papers)	26 May 2021 at 2.00 pm

JUDGMENT OF THE COURT

1. CA538/2020 is struck out on terms in [45] below.
2. The application for an extension of time in CA350/2020 is granted.

100. The application for stay of execution in CA350/2020 pending appeal is dismissed.

____________________________________________________________________

REASONS OF THE COURT

(Given by Miller J)

• [1] Mr Jones, a barrister, has brought two proceedings in this Court. The first is CA350/2020, an appeal against a decision of Jagose J granting summary judgment against him in favour of the respondent, New Zealand Bloodstock Finance and Leasing Ltd (Bloodstock).^[1] One interlocutory application is before us in this appeal; it is an application to extend time under r 43 of the Court of Appeal (Civil) Rules 2005 to file the case on appeal and apply for a hearing date.
• [2] Mr Jones seeks an extension until one month after his outstanding applications in CA538/2020 (the second proceeding) are determined. He says that the two matters are interrelated to such a degree that CA538/2020 should be heard together with CA350/2020; further, the proposed appeal is genuinely arguable, he honestly intends to pursue it, and he has acted in a manner conducive to the speedy determination of the proceedings. This last claim is incorrect, as we will later explain.
• [3] The second proceeding is CA538/2020, which encompasses applications for leave and an extension of time to appeal two decisions of Jagose J determining interlocutory applications by Mr Jones in the same litigation, and an application to stay Jagose J’s substantive judgment pending the appeal in CA350/2020.
• [4] The interlocutory applications were as follows:

(a) The first was an application of 19 May 2020 for the dismissal or stay of Bloodstock’s summary judgment application. In a minute issued on 20 May Jagose J declined to stay or dismiss “at this juncture”, reasoning that the application was better determined at or after the summary judgment hearing.

(b) The second was an application of 25 May 2020 for stay of Bloodstock’s summary judgment application and adjournment of the hearing, pending hearing of Mr Jones’s appeal in this Court against the 20 May refusal to dismiss or stay the summary judgment application. This application was an attempt to re-run the argument raised in the 19 May application on the ground that an appeal was pending. There is no minute before us but it is clear that Jagose J again decided that he would deal with the arguments at the hearing.

The summary judgment application was heard on 26 May and judgment was delivered on 5 June 2020. In that judgment Jagose J dismissed the two interlocutory applications.^[2]

• [5] Mr Jones now makes five applications to this Court in CA538/2020:

(a) An application for an extension of time to seek leave to appeal the 20 and 25 May interlocutory decisions;^[3]

(b) An application for leave to appeal the 20 May decision on the basis that the Judge failed to address Mr Jones’ applications for leave to file further evidence and that various witnesses give evidence viva voce, and wrongly rejected Mr Jones’ application for dismissal of the summary judgment application;^[4]

(c) An application for leave to appeal the 25 May decision on the basis that the Judge failed to adjourn the summary judgment hearing and wrongly proceeded without first determining the issues raised on 20 May 2020;

(d) An application for the stay of execution of the judgment on appeal until the hearing of the appeal of that decision;^[5] and

(e) An application for an extension of time to apply to this Court for the order to stay execution of the judgment on appeal. In fact, Mr Jones does not require an extension of time for this application.

Procedural narrative

• [6] Mr Jones sought to file an appeal against the decisions of 20 and 25 May. It appears that he did so on 25 May, the day on which he appeared in the High Court to seek a stay pending hearing of the appeal.
• [7] The proposed appeal was rejected for filing on the ground that this Court was without jurisdiction and the appeal was interlocutory in nature so Mr Jones had first to seek leave from the High Court under s 56(3) of the Senior Courts Act 2016. Even experienced counsel such as Mr Jones sometimes overlook the need for leave. However, counsel usually can be relied on to seek leave when it is drawn to their attention. Mr Jones did not respond in that way. He sought review of the Registrar’s decision. Miller J declined that.^[6] Mr Jones’s explanation is that he took advice from senior counsel, who never responded to his requests for assistance, and that explains his attempt to file an appeal direct, without first seeking leave.
• [8] As noted, summary judgment was granted on 5 June 2020. The appeal in CA350/2020 was filed on 3 July 2020.
• [9] On 9 July 2020 Jagose J refused leave to appeal and declined an application for stay of judgment.^[7] We return to this judgment at [40] below.
• [10] On 7 September 2020 Mr Jones commenced CA538/2020 by filing his application for the orders listed at [5] above.
• [11] On 22 October 2020 Miller J declined an application for review of a Registrar’s decision refusing to waive security for costs in CA350/2020.^[8] The waiver was sought not on the grounds of impecuniosity but because the appeal was said to be meritorious; Bloodstock had engaged in a deliberate attempt to financially impede Mr Jones in his own bloodstock business. This argument presumed that Mr Jones would succeed on appeal because it is the very allegation that is said to supply a defence to the summary judgment application. Miller J accepted that the appeal was arguable but declined to speculate on its merits. Security for costs has since been paid.^[9]
• [12] On 30 October 2020 Brown J issued a minute directing:^[10]

(a) the application for a stay should be made in the appeal against the decision granting summary judgment, namely CA350/20202; and

(b) the proposed appeals against the interlocutory applications contained in the same judgment should be pursued as part of the same appeal (CA350/2020) and not in a separate appeal.

Brown J therefore indicated the applications for leave and extensions of time were unnecessary because the arguments can be advanced in the timely appeal filed as of right in CA350/2020.^[11]

• [13] Remarkably, Mr Jones did not accept that direction. On 18 November 2020 Brown J issued a further minute stating:^[12]

[6] The Court intends to consider making an order striking out CA538/2020 for the reason that CA538/2020 is an abuse of process because it raises matters which should be addressed in an extant appeal, CA350/2020. Challenges to multiple rulings in a single judgment should be raised in a single appeal.

[7] Mr Jones is to provide written submissions indicating whether he intends to proceed with CA538/2020 and if so, why, within 10 working days of the date of this minute.

[8] Within 10 working days of receipt of Mr Jones’s submissions the respondent may file any written submission in response.

[9] The matter will then be considered on the papers.

• [14] Mr Jones still wants to proceed with his appeal under CA538/2020 and opposes it being struck out as an abuse of process under r 44A. He says that the matters before the High Court were not contained in a single judgment; rather, three were dealt with on 20 May and the remainder were dealt with, in part, in the summary judgment. Even if they were dealt with in the summary judgment, the decisions remained interlocutory and required leave to appeal. And they should be dealt with in the absence of any consideration of the summary judgment, which is incorrect in fact and law.
• [15] It appears from the papers that it is this last consideration that motivated Mr Jones’s decision to file a separate appeal, by leave, against decisions made on 20 and 25 May; he wanted to wind the clock back and have that appeal heard without reference to the merits of the summary judgment application. He has argued that the Court should hear them “in the context in which they were made and at the time they were made”. He now accepts they must be heard together but evidently continues to perceive some advantage in having them separately intituled. It is an advantage that eludes us.
• [16] As noted above, Mr Jones also sought an extension of time for filing his case on appeal and seeking a hearing date in CA350/2020. He was granted a first extension on 1 October 2020 by the Registrar, in connection with his application for waiver of security. The extension of time expired on 5 November 2020. The r 43 application for a second extension was filed on 23 October 2020.

Relevant legal provisions

Strikeout jurisdiction

• [17] Rule 44A(1)(c) of the Court of Appeal (Civil) Rules provides that the Court may, on an interlocutory application or on its own initiative, make an order striking out or staying an appeal in whole or in part if it is frivolous, vexatious, or otherwise an abuse of the process of the Court. The power corresponds broadly to the High Court’s jurisdiction.^[13]

Extension of time criteria

• [18] Bloodstock has drawn the Court’s attention to conflicting authority on whether the same considerations apply to an extension of time under r 43 as to under r 29A. Bloodstock relies on the observation of this Court in Schmidt v Ebada Property Investments Ltd that the two tests are different.^[14] Bloodstock submits this Court should apply the test set out in Russell v Commissioner of Inland Revenue, requiring consideration of the length and reasons for the delay, the merits, prejudice and conduct of the parties.^[15]
• [19] More recently, following the Supreme Court’s decision in Almond v Read,^[16] this Court has applied to r 43 applications the principles set out by the Supreme Court for extensions of time to appeal under r 29A.^[17] The principles are in effect the same.^[18] The ultimate question when considering the exercise of the discretion to extend time is what the interests of justice require. Relevant factors include the length of the delay and reasons for it; the conduct of the parties, particularly of the applicant; any prejudice or hardship to the respondent or to others with a legitimate interest in the outcome; and the significance of the issues raised by the proposed appeal, both to the parties and more generally.^[19]

Jurisdiction to stay execution pending appeal

• [20] The Court’s jurisdiction to stay execution pending appeal is found in r 12(3) of the Court of Appeal (Civil) Rules. The rule provides relevantly that the Court may “on an interlocutory application” order a stay of execution.^[20]

CA538/2020

Discussion: CA538/2020 is an abuse of process

• [21] We accept the submission for Bloodstock that CA538/2020 duplicates grounds of appeal already before the Court in CA350/2020. Further, this is unnecessary and pointless. The pre-hearing evidentiary matters were all decided in the summary judgment decision. The notice of appeal in CA350/2020 begins with the allegations that the Judge was wrong not to adjourn and to allow the evidence that Mr Jones wanted to adduce.
• [22] Putting the question of stay to one side, CA538/2020 is accordingly redundant. The only possible reason for bringing it as a separate proceeding would be an expectation that the Court might hear it separately from, and before, CA350/2020, but that was always a hopeless ambition and one that Mr Jones ought to have abandoned once it was made clear that the Court would not accept duplicated proceedings.
• [23] The Court can strike out part of an appeal as an abuse. Alternatively, we might simply refuse an extension of time on the ground that there is no merit in the applications for leave to appeal in the circumstances. That would leave only the stay application.
• [24] We prefer to decide the matter on the ground that the duplication of grounds of appeal is plainly an abuse of process in the circumstances of this case. We treat the attempt to file an appeal on 25 May as an understandable reaction to the failure of an attempt to forestall the summary judgment application. That attempt was not an abuse; it did not duplicate any proceeding already in this Court. But the application for leave in CA538/2020 was not filed until 7 September, when the appeal in CA350/2020 was already on foot. Mr Jones ought to have known better than to file it and his persistence in the face of judicial direction is inexplicable. His behaviour has delayed the progress of CA350/2020, an outcome for which he alone is responsible, and imposed unnecessary burdens on the Court and Bloodstock.

Discussion: application for stay of execution cannot be made in CA538/2020

• [25] An application for stay under r 12.3 does not require leave but it must be brought as an interlocutory application, meaning that it can only be brought in CA350/2020. Brown J pointed this out in his minute of 30 October.
• [26] Rather than dismiss the application on this ground, however, we will direct that the application be treated as if filed as an interlocutory application in CA350/2020. Any future papers filed in connection with it should be intituled in that proceeding. We return to its merits below, after dealing with the r 43 application.

Outcome: CA538/2020

• [27] CA538/2020 is struck out as an abuse of process.

CA350/2020

Discussion: r 43 extension of time in CA350/2020

• [28] As noted above, Mr Jones sought a second extension on 23 October 2020. The application was made within time under r 43(3), which provides that an extension may be granted only if the application was made before expiry of the three-month period for filing the case and seeking a hearing date. The three-month period expired on 5 November 2020.^[21]
• [29] We have referred to Mr Jones’s grounds for extension at [2] above. It is plain from his papers that he chose to delay because he wanted to have CA538/2020 heard with or before CA350/2020. As we have just explained, that was an abuse of process. It cannot excuse delay. Further, Mr Jones’s refusal to follow directions is disentitling conduct.
• [30] Mr Jones does say that following refusal of his application for waiver of security he could not assemble the case on appeal in time. We do not accept that. Mr Jones has had since 3 July 2020 to assemble the case. Sometimes an applicant deposes that they will abandon an appeal if security must be paid. This is not such a case. Mr Jones has chosen to delay compliance.
• [31] There are only two arguments that can be made for permitting an extension. The first is that the respondent has suffered little prejudice by delay. We are told that Mr Jones has not succeeded so far in his attempts to forestall execution by pointing to what he claims to be very high prospects of success in the pending appeal.
• [32] The second is that his appeal is arguable and ought to be heard on its merits. That argument must obviously carry significant weight when balancing the interests of justice.^[22]
• [33] Is the appeal arguable? There appears to be no real doubt about Mr Jones’s obligation to pay the judgment debt, which arose under credit contracts pursuant to which Bloodstock advanced money to allow him to purchase interests in thoroughbred horses between May 2016 and October 2017. The contracts and substantial advances are documented.
• [34] Mr Jones’s principal defence is that he has an equitable set-off which exceeds the judgment debt. (He also alleges oppressive conduct in reliance on the same facts.) Jagose J accurately summarised Mr Jones’s defence as “an alleged wide-ranging conspiracy in at least the thoroughbred industry to harm his blood stock business (but extending to allegations against his former wife, the firm in which he formerly was partner, and an insurance company), of which [Bloodstock’s] actions in enforcement of his liabilities to it are said to be a part”.^[23] It is at heart an allegation of fraud by Bloodstock and others.
• [35] It appears that Mr Jones maintains Bloodstock understood it would need to support him for a period of years while his business became profitable, but the Judge remarked that there is no reference to this in the documents, which provide rather for earlier repayments. Mr Jones alleges that Bloodstock and others instead conspired to shut his business down. To this end the conspirators engaged in conduct which amounted to encouraging him to pay too much for horses or impeding their sale. On Mr Jones’s evidence this conspiracy is remarkable for both the number of participants and the actions that they took. It is said for example that some horses were made ill or injured or falsely said to have medical conditions, while others were misrepresented at auction or their sales mismanaged. There are many other claims; it is not unfair to say that he appears to attribute all his business disappointments to the malign actions of others. It is said that the conspirators turned against him partly because he had acted in proceedings brought by a vendor who was said to have been defrauded by those who sold her horse.
• [36] The principal arguments that might be made on appeal appear to be whether the evidence of Mr Jones is so lacking in reliability that it can be discounted for summary judgment purposes and whether his claims, if made out at trial, would sufficiently involve Bloodstock to give rise to an equitable setoff. Jagose J found some of the allegations both improbable and positively incompatible with the lending documents and correspondence, and he concluded that there was no interdependence between the loans and Bloodstock’s alleged liability to Mr Jones.
• [37] For extension of time purposes, we find these grounds of appeal arguable, meaning we do not think they are wholly without merit.^[24] We do not find the grounds relating to evidence and process arguable. Mr Jones sought inappropriately to turn the summary judgment into a trial of his conspiracy claims, complete with viva voce evidence. The Judge appears to have taken a generous approach to the admissibility of what was strictly hearsay evidence.
• [38] It is correct, as Bloodstock maintains, that a substantial period of time has now elapsed since the appeal was filed and there is no reason why the case on appeal could not have been filed in time. Mr Jones is entirely responsible for the delay. There is no wider public interest or issue of principle in the appeal. Moreover, the delay is explained by pursuit of tactical advantage rather than neglect. However, the delay is not very extensive and it does not appear to have prejudiced Bloodstock materially. His procedural machinations notwithstanding, we also accept that Mr Jones does want to prosecute the appeal. We think that he ought be given one final opportunity to do so.
• [39] We will direct that the case on appeal must be filed, and a fixture sought, by 25 June 2021. An extension of time is granted to that date. No further extensions will be granted.

Discussion: stay of execution

• [40] In his judgment of 9 July 2020 Jagose J refused leave under r 12(3).^[25] Mr Jones alleged that should judgment be executed he would be unable to pay at once and that “could result in a lack of liquidity which would in turn impact on my ability to practise law and to derive income”. The nature of Mr Jones’s financial affairs was such, according to Mr Jones, that this might be irretrievable. The Judge reasoned that execution would not render an appeal nugatory.^[26] The balance of convenience favoured allowing Bloodstock to enforce the judgment.^[27]
• [41] Mr Jones filed an affidavit of 3 July 2020 (in the High Court) and an affidavit of 4 September (in this Court). In the second affidavit he recorded that he had just been served with a bankruptcy notice (which he said was invalid). He argued that his failure to pay would have any significant impact on Bloodstock. Conversely, enforcement would be devastating for him since he was not presently able to pay. His major asset holdings have been bloodstock and he could not realise those assets at anything like a reasonably or market value due, he alleged, to the actions of Bloodstock and others who have acted together to put him in this position. In short, he says he has assets but cannot realise them because the conspiracy is ongoing.
• [42] Bloodstock submits that not only has Jagose J already rejected the application but so too has Harland J as part of the bankruptcy proceedings. We do not think the latter decision takes us very far. Harland J presumably took the judgment below as correct until set aside, while the application for stay in this Court rests on the premise that an appeal has been brought and is arguable. If the appeal were to succeed, it would remain possible that an equitable set-off might be established.
• [43] However, we share the Judge’s view of Mr Jones’s evidence in support of the stay application. It is cryptic and unsupported. The affidavit of 3 July is just one page and the substance of it is contained in the brief quote at [40] above. We are prepared to assume for purposes of argument that the Official Assignee would not pursue an appeal based on a speculative claim in fraud or an action against Bloodstock. In that practical sense bankruptcy might be said to render the appeal nugatory so long as Mr Jones remained in bankruptcy. We also accept that if bankrupted Mr Jones could not practise law. But the evidence does not persuade us that execution will result in bankruptcy. On his own evidence Mr Jones has assets. He does not say he is insolvent. We do not find persuasive his bare claim that he cannot, even now, realise those assets at a reasonable or market value.
• [44] The application for stay of execution pending appeal is dismissed.

Disposition

• [45] We record the outcomes of the various applications:

(a) CA538/2020 is struck out, bringing to an end Mr Jones’s applications for leave to appeal the decisions of 20 and 25 May. The application for stay of execution erroneously brought in that proceeding is to be treated as if it were made in CA350/2020.

(b) The application for an extension of time in CA350/2020 to file the case on appeal and seek a fixture is granted. Those steps must be taken by 25 June 2021. No further extensions will be granted.

(c) The application for a stay of execution of the High Court judgment of 5 June 2020 is declined.

Costs of these applications

• [46] Mr Jones’s r 43 application has been granted on terms. However, CA538/2020 has been struck out and his application for stay of execution pending appeal has been dismissed. Overall he has been unsuccessful. We order that he pay one set of costs for a standard application on a band B basis, with disbursements incurred by Bloodstock on all applications.

Solicitors:
McKenna King, Hamilton for Respondent

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^[1] New Zealand Bloodstock Finance & Leasing Ltd v Jones [2020] NZHC 1233 [Summary judgment].

^[2] Summary judgment, above n 1, at [42].

^[3] Senior Courts Act 2016, s 56(5).

^[4] Senior Courts Act, s 56(5).

^[5] Court of Appeal (Civil) Rules 2005, r 12(3).

^[6] Jones v New Zealand Bloodstock Finance & Leasing Limited [2020] NZCA 225 [Review of Registrar’s decision].

^[7] New Zealand Bloodstock Finance & Leasing Limited v Jones [2020] NZHC 1633 [Leave judgment].

^[8] Jones v New Zealand Bloodstock Financing & Leasing Limited [2020] NZCA 520 [Security for costs decision].

^[9] The Registrar initially set security at a higher figure, in error, before adjusting it to the correct amount, $7,060. In his application for review Mr Jones sought waiver of the latter amount.

^[10] Jones v New Zealand Bloodstock Finance and Leasing Ltd CA538/2020, 30 October 2020 (Minute 1 of Brown J) at [1]–[2].

^[11] At [3].

^[12] Jones v New Zealand Bloodstock Finance and Leasing Ltd CA538/2020, 18 November 2020 (Minute 2 of Brown J).

^[13] Andrew Beck and others McGechan on Procedure (online looseleaf ed, Thomson Reuters) at [CR44A.01].

^[14] Schmidt v Ebada Property Investments Ltd [2012] NZCA 452 at [5].

^[15] Russell v Commissioner of Inland Revenue [2006] NZCA 381; (2006) 22 NZTC 19,807 (CA) at [9]–[10].

^[16] Almond v Read [2017] NZSC 80, [2017] 1 NZLR 801.

^[17] Rabson v Attorney-General [2017] NZCA 350 at [9], n 5; and Dowden v Commissioner of Inland Revenue [2020] NZCA 630, (2020) 29 NZTC 24-085 at [3], n 2; and Clarke v Racing Industry Transition Agency [2020] NZCA 163 at [7].

^[18] Clarke v Racing Industry Transition Agency, above n17, at [7].

^[19] Almond v Read, above n 16, at [38].

^[20] See generally Concrete Structures Limited v NMHB Limited [2020] NZHC 1852 at [2]–[3].

^[21] The Deputy Registrar extended the deadline to this date from 5 October 2020 under r 43(1B) of the Court of Appeal (Civil) Rules 2005 while security for costs was litigated.

^[22] Almond v Read, above n 16, at [36] and [39(c)].

^[23] Summary judgment, above n 1, at [14].

^[24] Almond v Read, above n 16, at [39(c)]. See also the discussion of where the merit of a proposed appeal will be decisive: at [31].

^[25] Leave judgment, above n 7, at [17]–[24], citing New Zealand Insulators Ltd v ABB Ltd [2006] NZCA 330; (2006) 18 PRNZ 459 (CA) at [13]; and Keung v GBR Investment Ltd [2010] NZCA 396 at [11].

^[26] At [21].

^[27] At [22].