The Phone Company Limited v M2 NZ Limited [2021] NZCA 231 (3 June 2021)

Last Updated: 8 June 2021

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

CA159/2021 [2021] NZCA 231

	BETWEEN	THE PHONE COMPANY LIMITED Applicant
	AND	M2 NZ LIMITED First Respondent M2 TELECOMMUNICATIONS PTY LIMITED Second Respondent

Court:	Kós P, Clifford and Courtney JJ
Counsel:	D W Grove for Applicant L L Fraser and Z Wall-Manning for Respondents
Judgment: (On the papers)	3 June 2021 at 9 am

JUDGMENT OF THE COURT

1. The application for an extension of time to appeal is declined.
2. The applicant must pay the second respondent costs on a band A basis for a standard application for leave to appeal and usual disbursements.

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REASONS OF THE COURT

(Given by Kós P)

• [1] The Phone Company Ltd (TPC) sues the respondents (together, M2) in the wake of the agreed termination of their former business relationship in 2012. Proceedings were filed in 2015. Trial in the High Court at Auckland is set down for 15 November 2021.
• [2] On 4 February 2021 Edwards J gave judgment declining TPC’s application for further and better discovery, except in respect of some documents for which the application was adjourned.^[1]
• [3] Time for appealing expired on 4 March 2021. On 8 March 2021, TPC asked M2 to extend the time period by agreement, but M2 declined. An application for leave to appeal and draft notice of appeal were filed in the High Court in error, and served on 23 March 2021. Application was then filed in this Court on 30 March 2021, some 18 working days out of time.
• [4] The governing principles are those set out by the Supreme Court in Almond v Read.^[2] 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, the reasons for the delay, 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, and whether the appeal lacks merit (or is “clearly hopeless”).^[3]
• [5] Default in compliance with time limits means the applicant exposes itself to that merits review and the respondent will not needlessly be subjected to an appeal otherwise as of right if that appeal is clearly hopeless.
• [6] In this case we accept that the first four factors in [4] do not stand in the way of an extension of time. However, the fifth and sixth do.
• [7] This is a proposed interlocutory appeal concerning discovery in a much‑delayed case set down for trial in November. Appeals over discovery are not to be encouraged unless they are patently material to the likely outcome at trial and there is at least some reason to believe the Judge below has erred. In this case, discovery was completed in April 2017, four years ago. Limited further discovery was given in April 2020. The application for further discovery was not made until September 2020, suggesting the application was of modest import only.
• [8] That impression is confirmed on inspecting the content of the proposed notice of appeal. The first category concerns documents (1) constituting an agreement with a company called Cytek Communications Ltd and (2) evidencing the net receipts of another company called M Communications Ltd on the basis that it was a substitute for Cytek. In light of the two discovery affidavits sworn, the Judge found there was no evidential basis for suggesting the discovery process was flawed, and there was no reason to believe a Cytek agreement existed.^[4] Further, there were no grounds to go behind the affidavit sworn by a director of M Communications Ltd contradicting the premise for the application.^[5] We have considered [26]–[28] of Mr Grove’s submissions, but consider the approach taken by the Judge is plainly right. The proposed appeal against that finding has no prospect of success.
• [9] The second category sought concerned documents relating to the financial position of M2 “from mid-2010 to mid-2012”. It is advanced as a “variation of the [extant, tailored] Discovery Order, by way of an application for specific disclosure”, but was in fact premised on an alleged failure to discover by M2. The Judge held:^[6]

Category 2 of the Discovery Order provides for M2 NZ’s audited financial accounts from 2010 to currently available records to be provided. M2 says these documents were listed in its affidavit of documents dated 19 April 2017. The parties agreed that the disclosure of the audited financial accounts would be proportionate to establishing the financial position of M2’s New Zealand business at the relevant time. There is no basis to renegotiate the terms of the Discovery Order.

In agreement with the Judge we consider the application to vary those orders lacks merit. We have considered [30]–[34] of Mr Grove’s submissions. His protest as to absence of agreement to scope of discovery is unsound; the tailored discovery orders here were made pursuant to a joint memorandum. TPC has not demonstrated error in the Judge’s refusal to revisit those orders to require this further discovery to be made. Accordingly, we do not consider an appeal from that refusal has any prospect of success either.

• [10] We observe that while the present application has failed, none of that prevents counsel for TPC exploring any issue of relevance at trial and seeking such further orders as might appropriately be made at that time.

Result

• [11] The application for an extension of time to appeal is declined.
• [12] The applicant must pay the second respondent costs on a band A basis for a standard application for leave to appeal and usual disbursements.

Solicitors:
Foy and Halse, Auckland for Applicant
Chapman Tripp, Auckland for Respondents

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^[1] The Phone Company Ltd v M2 NZ Ltd [2021] NZHC 98 [High Court judgment].

^[2] Almond v Read [2017] NZSC 80, [2017] 1 NZLR 801.

^[3] At [39].

^[4] High Court judgment, above n 1, at [16].

^[5] At [17].

^[6] At [50].