Davey v Bank of New Zealand [2023] NZCA 86 (30 March 2023)

Last Updated: 3 April 2023

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

CA445/2022 [2023] NZCA 86

	BETWEEN	MATTHEW ROBERT DAVEY Applicant
	AND	BANK OF NEW ZEALAND Respondent

Court:	Courtney and Mallon JJ
Counsel:	Applicant in person K M Paterson for Respondent
Judgment: (On the papers)	30 March 2023 at 11 am

JUDGMENT OF THE COURT

The application for extension of time to appeal is declined.
____________________________________________________________________

REASONS OF THE COURT

(Given by Courtney J)

Introduction

[1] On 21 July 2021 Associate Judge Paulsen granted the Bank of New Zealand’s (BNZ) application for summary judgment against Matthew Robert Davey for $3,851,640 plus interest.^[1] On 13 August 2021 the Judge made an order for costs against Mr Davey. ^[2] The time for appealing these decisions expired on 18 August 2021 and 10 September 2021 respectively.^[3] Mr Davey has applied for an extension of time to appeal both decisions.^[4]

[2] The principles on which an application for extension of time is determined are set out in the Supreme Court’s decision in Almond v Read.^[5] The ultimate question is whether extending the time to appeal in the particular case is the interests of justice.^[6] The relevant considerations will generally be:^[7]

(a) the length of the delay;

(b) the reason for the delay;

(c) the conduct of the parties, particularly the applicant;

(d) any prejudice or hardship to the respondent or to 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.

[3] In principle, the merits of the proposed appeal may also be relevant.^[8] Consideration of the merits must, however, be relatively superficial.^[9]

Application

[4] Mr Davey is the sole director and majority shareholder of Fortress Information Systems Ltd (in rec and liq) (Fortress). The company had banking facilities with BNZ which Mr Davey had guaranteed. From 22 May 2020, Fortress was in default of its obligations to BNZ. On 28 July 2020, the bank made demand on Fortress for payment of $4,346,508.84. When Fortress failed to make the payment, BNZ made demand on Mr Davey under the guarantee for $3,851,640. BNZ appointed receivers. On 22 October 2020, Fortress was placed in liquidation.

[5] BNZ brought its summary judgment application on 22 February 2021. As noted, the Judge granted the application on 21 July 2021. Mr Davey signalled an intention to appeal the summary judgment on 29 April 2022 but did not file the present applications until 29 August 2022.

[6] Mr Davey filed an affidavit in support of his application but has advised that he does not intend to file submissions. Mr Davey is unrepresented and has, understandably, not directed his affidavit specifically towards the factors identified as relevant in Almond v Read. ^[10] However, his affidavit discloses sufficient information to consider the application against the relevant factors.

[7] BNZ opposes the application.

Length of delay

[8] There has been a delay of some 13 months between the expiry of the time to appeal and Mr Davey’s application for an extension of time to do so. While not exceptionally long, this is undoubtedly a significant delay.

Reason for delay

[9] Mr Davey has been engaged in other legal proceedings, in particular bankruptcy proceedings, in both Australia and New Zealand. These have taken up his time and attention. In addition, he has had difficulties with legal representation and his present counsel has had to withdraw due to a potential conflict of interest. Mr Davey also says that he was previously unaware of his right to appeal. Finally, Mr Davey says that he filed his appeal after he gained access to necessary materials which he had been unable to acquire due to COVID-19 travel restrictions. He states that he was prevented from travelling to Canada to access business documents held on a laptop in storage.

[10] BNZ does not accept that there is any reasonable excuse for the delay. In particular they are sceptical of Mr Davey’s claim that he was not aware of his right to appeal, given that he was represented at the summary judgment hearing.

[11] In granting the summary judgment application, the Judge recorded that, despite filing a substantial notice of opposition, at the hearing Mr Davey’s counsel indicated that he had not been instructed to make further submissions but did not seek leave to withdraw.^[11] Despite now being unrepresented, Mr Davey clearly had the benefit of legal advice at the relevant time. Given the significance of having summary judgment entered against him we cannot accept that he was unaware of his rights of appeal. For the same reason, we are not persuaded that the delay is explained by Mr Davey’s involvement in the related proceedings.

Conduct of the parties

[12] BNZ asserts that Mr Davey has a history of not complying with Court timetable directions and deadlines, which has caused delays and frustration for both BNZ and the courts. The affidavit filed in support of BNZ’s opposition discloses a pattern during both the summary judgment and the bankruptcy proceedings of non-compliance with timetable directions and applications for adjournment. Mr Davey’s pattern of non-compliance is not as serious as some, but it is a factor to take into account.

Any prejudice or hardship to the respondent or others with a legitimate interest in the outcome

[13] BNZ submits that Mr Davey’s conduct and extended bankruptcy proceedings will result in further costs and delays, and that it may also be prejudiced through the compromise of relief under the Insolvency Act 2006. We accept that there is an inevitable increase in cost and risk to outcome for BNZ. We cannot assess the significance of the latter.

Significance of the issues raised by the proposed appeal, both to parties and more generally

[14] The matter is of a private, commercial nature between Mr Davey and BNZ. There is no wider public interest that would warrant the granting of an extension.

Proposed appeal lacks merit

[15] Broadly, Mr Davey’s position is that BNZ has acted unreasonably in pursuing him and that he had crossclaims and equitable defences that his previous lawyers failed to advance. He explains these in his affidavit as follows:

One of the main grounds of my appeal is that there was a material mistake and/or an error in fact and/or in law, which is that it was in fact the BNZ Bank who appointed receivers BDO and not me or Fortress. I believe that this means that the BNZ is vicariously liable for the acts and/or omissions and/or breach of the receiver’s duties and I had a legal defence in the law of agency against the BNZ. I also believe that I had numerous cross-claims and/or offsets (different to a set-off) on the basis that there were numerous contracts with event venues which were owed money or damages following COVID[‑]19 which threw a spanner in the works causing significant funding and financial difficulties.

...

My main issue is that BDO as receivers and effectively the bank’s agents were negligent and/or contributed to any losses and that the BNZ and/or BDO’s conduct was injurious or adverse to the company and then to me. There were numerous opportunities to recoup or recover losses and also the sell off asset and/or intellectual property to realise the value, minimising any losses to the companies, the BNZ and/or me as the Guarantor. In my view, the[y] failed and/or neglected in exercising their duty of care and/or are contributor[il]y liable.

[16] We consider that, for a number of reasons, Mr Davey’s proposed appeal lacks merit. All the matters he wishes to raise now were considered by the Judge and rejected.^[12] There is no apparent error in the Judge’s reasoning. It is well settled that the existence of a counter-claim or a claim against a third party will rarely justify refusing summary judgment, particularly where the loan agreement or guarantee in question precludes the debtor raising any set-off or counterclaim,^[13] which is the case in these proceedings.^[14] In any event, Mr Davey’s proposed counter-claim is predicated on BNZ being the agent of the receiver, which is not a tenable position at law.^[15]

[17] In summary, Mr Davey’s application comes after a significant delay which is not adequately explained. Further delay will have adverse consequences for BNZ. In these circumstances the merits of the proposed appeal become more relevant and we are satisfied that the proposed appeal does not have merit.

Result

[18] The application for extension of time to appeal is declined.


Solicitors:
Buddle Findlay, Christchurch for Respondent

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^[1] Bank of New Zealand v Davey [2021] NZHC 1854 [Summary judgment].

^[2] Bank of New Zealand v Davey [2021] NZHC 2122 [Costs judgment].

^[3] Court of Appeal (Civil) Rules 2005, r 29.

^[4] Rule 29A. In his interlocutory application dated 29 August 2022, Mr Davey also sought to appeal against a third judgment of Associate Judge Paulsen dated 16 July 2021 (Bank of New Zealand v Davey [2021] NZHC 1816). However, this Court recently found it has no jurisdiction to consider an appeal from that judgment as leave had to be sought first from the High Court (Davey v Bank of New Zealand [2022] NZCA 517).

^[5] Almond v Read [2017] NZSC 80, [2017] 1 NZLR 801 at [38]; Rabson v Attorney-General [2017] NZCA 350 at [9]; and Dowden v Commissioner of Inland Revenue [2020] NZCA 630 at [3].

^[6] Almond v Read, above n 5, at [38].

^[7] At [38].

^[8] At [39].

^[9] At [39(c)].

^[10] Almond v Read, above n 5, at [38].

^[11] Summary judgment, above n 1, at [3].

^[12] Summary judgment, above n 1, at [27]–[38].

^[13] Baxter v Murray [2020] NZCA 222 at [38], citing Continental Illinois National Bank & Trust Co of Chicago v Papanicolaou [1986] 2 Lloyd’s Rep 441 (CA) at 445.

^[14] Compare Patrick v Bank of New Zealand [2018] NZCA 122. In his affidavit, Mr Davey asserts he had various “offsets”, which he seeks (without explanation) to distinguish from a set-off. We do not accept that is a valid distinction.

^[15] Receiverships Act 1993, s 6(3) and the Deed of Appointment of Receivers of Company Property both state that the receivers are the agents of Fortress, not BNZ.