Hitchcock v Murphy [2021] NZCA 689 (15 December 2021)

Last Updated: 22 December 2021

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

CA745/2020 [2021] NZCA 689

	BETWEEN	STEPHEN LESTER HITCHCOCK Applicant
	AND	SUSAN KERRIE MURPHY Respondent

Court:	Courtney and Goddard JJ
Counsel:	G J Thwaite for Applicant K E Hogan for Respondent
Judgment: (On the papers)	15 December 2021 at 11.30 am

JUDGMENT OF THE COURT

1. The application to set aside the abandonment of appeal in CA545/2020 is declined.
2. The applicant must pay costs to the respondent for a standard application on a band A basis, with usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Goddard J)

Background

• [1] Mr Hitchcock, the applicant, is the brother of the respondent, Ms Murphy. Ms Murphy owns a 10-acre rural property in Auckland. Mr Hitchcock has lived at the property since 2003, with some periods of absence. Mr Hitchcock has at various times provided funds to Ms Murphy, though the basis on which he did so is in some respects contested. He has also undertaken work on the property, though the parties differ about the purpose of that work, whether it was done at Ms Murphy’s request or for her benefit, and also about its value.
• [2] Ms Murphy intends to subdivide the property and sell the subdivided sections. On 2 May 2019 Mr Hitchcock lodged a caveat against the title to the property. On 18 March 2020, a notice to lapse the caveat was issued.
• [3] On 25 March 2020, Mr Hitchcock filed an originating application in the High Court seeking an order under s 143 of the Land Transfer Act 2017 that the caveat not lapse. That application was dismissed by Associate Judge Gardiner (High Court caveat decision).^[1]
• [4] On 25 September 2020 the Associate Judge made interim orders staying enforcement of her decision and sustaining the caveat, pending determination of a foreshadowed appeal to this Court. However on 30 September 2020 those interim orders were discharged, as the caveat had already lapsed following notice to the Registrar of the High Court caveat decision.
• [5] On 13 November 2020 Mr Hitchcock commenced proceedings in the High Court against Ms Murphy seeking orders for specific performance of an alleged agreement to subdivide the property and sell a 2.5-acre section to him, and in the alternative seeking a declaration of constructive trust over a 2.5-acre section of the property.

The appeal to this Court

• [6] On 24 September 2020 Mr Hitchcock filed a notice of appeal in this Court (CA545/2020) against the High Court caveat decision. However on 23 October 2020, Mr Hitchcock abandoned his appeal. A notice of result was issued on 27 October 2020.
• [7] Then on 22 December 2020, despite that earlier abandonment, Mr Hitchcock applied for an extension of time to appeal from the High Court caveat decision, under r 29A of the Court of Appeal (Civil) Rules 2005 (Rules). That application made no reference to the previous appeal, or to the abandonment of that appeal.
• [8] A teleconference was held on 10 February 2021. Mr Hitchcock was advised that in circumstances where his appeal had been abandoned, the proper course was to apply to set aside the notice of abandonment. He proceeded to do so: that is the application now before this Court (CA745/2020).

When may a notice of abandonment be set aside?

• [9] Rule 44 of the Rules provides for the abandonment of an appeal. It is silent on the circumstances in which a notice of abandonment may be withdrawn.
• [10] In Humphries v Carr, this Court held that the discretion to set aside an abandonment will be exercised only in “compelling” or “exceptional” cases.^[2] The ultimate question is what the interests of justice require.^[3] That test must be applied having regard to the context, and in particular the prior abandonment of the appeal. That abandonment will be a relevant factor — often, a highly material factor — when assessing the interests of justice, having regard to the importance of finality. The applicant will need to provide a reasonable explanation for their change of position. Where a respondent has relied on the abandonment of the appeal, that is likely to count strongly against setting that abandonment aside.
• [11] The factors that are relevant to an extension of time application will also be relevant in this context, including:^[4]

  (a) the length of delay in pursuing the appeal;
  (b) the reasons for the delay;
  (c) the conduct of the parties, particularly the applicant;
  (d) any prejudice or hardship to the respondent or others with a legitimate interest in the outcome; and
  (e) the significance of the issues raised by the proposed appeal, both to the parties and more generally.

• [12] The merits of the proposed appeal may be relevant, but the court should reach a view on the merits only where they are obviously very strong or very weak. A decision to refuse an application to set aside an abandonment of an appeal based substantially on the lack of merit of that appeal should be made only where the appeal is clearly hopeless.^[5]

Applicant’s submissions

• [13] Mr Hitchcock says that his former lawyer abandoned the appeal without his informed consent. His proposed appeal is meritorious. Ms Murphy is not materially prejudiced by the delay in pursuing the appeal, or by the withdrawal of the notice of abandonment.

Respondent’s submissions

• [14] Ms Murphy opposes the application. She says the evidence shows the notice of abandonment was filed with Mr Hitchcock’s knowledge, and in accordance with his instructions. It was consistent with advice he received from experienced counsel and was a strategically sensible decision. She was entitled to treat the appeal as having been abandoned. This is not a compelling or exceptional case in which the importance of finality is displaced. She also reiterates her submission that Mr Hitchcock’s proposed appeal lacks any merit.

The evidence before this Court about the abandonment

• [15] Mr Hitchcock has filed an affidavit in which he says that the appeal was abandoned before he received formal advice about whether or not he should do so, and without his prior approval.
• [16] In order to enable this Court to consider the merits of Mr Hitchcock’s argument that the abandonment was filed without instructions from him to do so, Mr Hitchcock provided a waiver of privilege. Mr Hitchcock’s former solicitor, Mr Baker, has provided an affidavit setting out the background to the abandonment.
• [17] Mr Baker says he met with Mr Hitchcock in person on 8 October 2020 to discuss the proceedings. He advised Mr Hitchcock that because the caveat had lapsed, an appeal was futile. Rather, the focus should be on the High Court proceedings to be filed in relation to Mr Hitchcock’s claims. Mr Baker says there were further communications consistent with that discussion. Mr Baker also communicated with counsel who had been retained, Mr St John. Mr St John proceeded to file the notice of abandonment.
• [18] Mr Baker also says that he sent a letter dated 6 November 2020 to Mr Hitchcock recording in writing the approach discussed on 8 October 2020. A file note that he made on 6 November 2020 records that Mr Hitchcock called, and confirmed that the appeal should be withdrawn.
• [19] There is a measure of confusion about timing. Although Mr Baker’s evidence suggests that Mr Hitchcock had given instructions to abandon the appeal on 8 October 2020, Mr Baker subsequently asked this Court for an extension of time to pay security for costs for the appeal because he was “still taking instructions” on 22 October 2020. And confirmation of Mr Hitchcock’s decision to withdraw the appeal appears to have been given by him to Mr Baker on 6 November 2020, as noted above, some two weeks after the notice of abandonment had been filed on 23 October 2020.
• [20] Be that as it may, the position that was ultimately reached was that Mr Hitchcock had instructed his lawyers to abandon the appeal, and the appeal had been abandoned.

Discussion

• [21] Even if the original appeal had not been abandoned, and Mr Hitchcock was simply seeking an extension of time under r 29A of the Rules, that extension would not be granted. The fundamental difficulty that Mr Hitchcock faces is that the caveat has lapsed. There is no power to reinstate a lapsed caveat.^[6]
• [22] It may be possible for Mr Hitchcock to make an application in his new High Court proceedings for leave to lodge a second caveat, under s 146 of the Land Transfer Act. But there is no relief that could be granted by this Court on appeal from the caveat decision that would revive the original caveat and give Mr Hitchcock the relief he seeks before this Court. Thus the appeal cannot succeed: it is futile.
• [23] It is unsurprising that competent legal advisers gave Mr Hitchcock the advice outlined in Mr Baker’s affidavit, and advised that the appeal should be abandoned. The evidence that Mr Hitchcock agreed to that course of action is clear, even if there is some confusion around the dates.
• [24] Mr Hitchcock’s original legal team rightly understood that pursuing an appeal from the High Court caveat decision would be a waste of time and money. It was therefore, very sensibly, abandoned.
• [25] The abandonment of the appeal was a further nail in its coffin. But it was in any event already doomed.
• [26] It follows that the test for withdrawal of abandonment of an appeal is not met in the present case. Mr Hitchcock’s application must be dismissed.
• [27] Costs should follow the event in the ordinary way.

Result

• [28] The application to set aside the notice of abandonment of appeal in CA545/2020 is declined.
• [29] The applicant must pay costs to the respondent for a standard application on a band A basis, with usual disbursements.

Solicitors:
Insight Legal Ltd, Rodney for Respondent

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^[1] Hitchcock v Murphy [2020] NZHC 2207, (2020) 21 NZCPR 303 [High Court caveat decision].

^[2] Humphries v Carr [2009] NZCA 608 at [17], quoting Sexton v Rice Craig [2007] NZCA 200 at [31]; and R v Cramp [2009] NZCA 90 at [35].

^[3] Almond v Read [2017] NZSC 80, [2017] 1 NZLR 801 at [38].

^[4] At [38].

^[5] At [39].

^[6] Chambers v District Registrar of Land Titles Office HC Wellington M396/97, 12 November 1997 at 7, quoting Metcalfe v Skyline Holdings Ltd (1982) 1 NZCPR 480 (HC) at 484.