Lee v Composite Cladding & Signage Manufacture and Installation Limited [2012] NZHC 3164 (26 November 2012)

Last Updated: 3 December 2012

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

CIV-2011-488-176 [2012] NZHC 3164

BETWEEN OLIVIA LEE Applicant

AND COMPOSITE CLADDING & SIGNAGE MANUFACTURE AND INSTALLATION LIMITED

Respondent

Hearing: 26 November 2012 (Heard at AUCKLAND)

Counsel: G Beresford for Applicant

R Espie for Respondent

Judgment: 26 November 2012

(ORAL) JUDGMENT OF LANG J

_{[on application for order staying enforcement of judgments]}

OLIVIA LEE V COMPOSITE CLADDING & SIGNAGE MANUFACTURE AND INSTALLATION LIMITED HC WHA CIV-2011-488-176 [26 November 2012]

[1] On 27 October 2009, Composite Cladding and Signage Manufacture and

Installation Limited (“CCS”) obtained judgment against Ms Lee in the sum of

$53,979.40. The judgment related to building work CCS had carried out on Ms Lee’s instructions. CCS sought to enforce the judgment by obtaining an order in this Court for the sale of Ms Lee’s property. Ms Lee then filed an application for an order staying enforcement of the judgment and, in particular, staying the order for sale.

[2] On 7 June 2011, the parties reached agreement regarding the terms on which the order could be set aside. On that date, Brewer J issued a minute in the following terms:

[a] The plaintiff has obtained a judgment of $53,979.40 (with interest, costs and disbursements that sum has increased to $105,847.91).

[b] The defendant has a counterclaim which will be heard in the District

Court by way of rehearing in September 2011.

[c] The defendant seeks to stay the enforcement of the sale order and has paid into Court $105,847.91.

[d] The parties have agreed that the enforcement of the judgment obtained by the plaintiff should be stayed pending the rehearing and determination of the defendant’s counterclaim.

[e] The parties are further agreed that costs on the application to stay the enforcement of the sale order should lie where they fall.

[3] The Judge then made orders by consent as follows:

[a] Enforcement of the judgment of Judge Harvey dated 27 October 2009 including the sale order is stayed pending the rehearing and determination of the defendant’s counterclaim;

[b] Costs on the stay application are to lie where they fall.

[4] Ms Lee’s counterclaim against CCS was finally determined in the District Court on 16 August 2012, when Her Honour Judge Sharp entered judgment in Ms Lee’s favour on the counterclaim in the sum of $100.[1] Ms Lee has now appealed to this Court against Judge Sharp’s decision, and her appeal is due to be heard on

18 February 2013. Remarkably, the appeal has been allocated a hearing of four days duration.

[5] On 19 November 2012, I granted an application by CCS for an order that the funds Ms Lee paid into Court be paid out to it.[2] I did so because I was satisfied the parties intended the funds to remain in Court until such time as Ms Lee’s counterclaim had been heard and determined by the District Court. I did not accept they intended the funds to remain in Court until such time as either party had exhausted its appeal rights.

[6] Ms Lee has now applied for an order staying enforcement of the District

Court judgment against her, and staying enforcement of my judgment delivered on

19 November 2012. As part and parcel of the present application, she seeks an order that the funds remain within the custody of the Court pending determination of the appeal in this Court and determination of an appeal to the Court of Appeal against my judgment. She contends her appeal rights will be rendered nugatory if such an order is not made.

[7] As I indicated to counsel during the hearing, there is nothing to prevent Ms Lee from pursuing her appeal rights. The fact that the funds might be paid out to CCS do not detract in any way from those rights. She does not say that she would not be able to pursue her appeal unless she was to have access to the funds. In any event, her proposal would not see the funds paid out to her. Rather, the funds would remain in Court. For that reason, I do not accept that Ms Lee’s appeal rights are rendered nugatory if the funds are now paid out to CCS.

[8] In essence, Ms Lee is seeking to have the Court exercise its discretion as if the application were an application for a freezing order under Part 32 of the High Court Rules. Counsel for Ms Lee expressly eschews that argument but, in reality, the present application is a means by which Ms Lee is seeking to preserve the funds for possible execution in the event that she succeeds in her appeal. Her counsel ran his argument at the hearing on 19 November 2012 along much the same lines.

[9] The problem with this argument is that, in order to obtain a freezing order, the applicant must show not only that it has a good arguable case, but also that the defendant is likely to dissipate assets in the event that the application is not granted.[3]

In the present case, as counsel for Ms Lee realistically acknowledges, the fact that Ms Lee essentially lost her counterclaim in the District Court means that it is difficult for her to say she has a good arguable case. Secondly, there is no evidence to support the proposition that CCS is likely to dissipate its assets in the event that the application is not granted. CCS might well have difficulty in meeting a judgment on the counterclaim that exceeds $200,000, but that is a different proposition to an assertion that CCS is likely to dissipate its assets.

[10] I do not propose to depart from the reasoning contained in the judgment delivered on 19 November 2012. I therefore decline to grant the present application. I record, however, that counsel for CCS has advised me that, provided the funds held in Court are paid out to it, CCS does not propose to take any further steps to enforce the judgment (in respect of further accrued interest) pending determination of the appeal. For that reason Ms Lee is not currently in danger of losing her property.

Result

[11] The application is accordingly dismissed.

Costs

[12] CCS is entitled to costs on a Category 2B basis, together with disbursements as fixed by the Registrar. I further direct that the funds held in Court are not to be paid out for 48 hours in order to give Ms Lee an opportunity to exercise her appeal

_rights.

_{Lang J}

Solicitors:

Robin Espie, Whangaparaoa

Grimshaw & Co, Auckland

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[1] Composite Cladding & Signage Manufacture and Installations Ltd DC Auckland CIV-2009-088-

562, 16 August 2012.

[2] Composite Cladding & Signage Manufacture and Installations Ltd v Lee HC Whangarei, CIV-2011-

488-176, 19 November 2012.

[3] Euro-National Corporation v Petricevic Financial Services Ltd (1989) 2 PRNZ 351.