BROWN AND BROWN V PETERSON AND ANOR CA CA2/06

BROWN AND BROWN V PETERSON AND ANOR CA CA2/06 12 April 2006IN THE COURT OF APPEAL OF NEW ZEALAND CA2/06BETWEEN EAN INNES BROWN AND FRANKLIN WAYNE BROWN Appellants AND CARLTON GUSTAV PETERSON First Respondent AND PACIFIC RIM ENTERPRISES LIMITED Second Respondent Hearing: 6 April 2006 Court: William Young P, Gendall and Ronald Young JJ Counsel: H Fulton for Appellants W W Peters for Respondents Judgment: 12 April 2006JUDGMENT OF THE COURT A Leave to appeal in respect of both judgments is granted and the time prescribed for appealing is extended until 24 April 2006. B The appellants are to pay costs of $3,000 to the respondents along with usual disbursements.____________________________________________________________________REASONS(Given by Gendall J) [1] The proposed appellants seek special leave to appeal out of time pursuant to R 29(4) Court of Appeal (Civil) Rules 2005 from judgments of Baragwanath J delivered in the High Court at Whangarei on 24 March 2005 and 28 September2005. Although the operation of the 2005 Rules commenced as from 1 May 2005 the time period within which an appeal must be brought, without special leave extending the time, remains the same at 20 working days. [2] Accordingly the time for filing a Notice of Appeal in respect of the first judgment expired on 21 April 2005 and in respect of the second, on 26 October 2005.Background[3] The facts relevant to the High Court judgment are as follows. Mr Keeys owned a large section of rural land in Northland and entered into an agreement to sell part of it to Mr Peterson, the first respondent. The agreement contemplated that Mr Peterson was to construct (or to complete the construction of) a road upon the property which would be suitable for providing vehicular access from an existing public road. He was thereafter to grant to Mr Keeys, at the latter's expense, an easement in the form of a right of way along the road. Mr Peterson disposed of his interest in the acquired property to Pacific Rim Enterprises Ltd the second respondent, and Mr Keeys settled his interest in trust upon trustees who are the present appellants. Mr Keeys has now died. [4] In the first judgment Baragwanath J held that on a proper interpretation of the contract the vendor was required to wait indefinitely for the purchaser to complete the road, although he would be at liberty to do so himself, and thereafter receive the right of easement. [5] The first judgment dealt with the rights of the parties but no specific relief was granted apart from what the Judge called "the substantive relief of a declaration of the rights recorded in paras [16]-[17]" of the judgment. The Keeys' interests were also entitled to an order authorising the lodgement of a second caveat over the property. The rights recorded in paras [16]-[17] of the first judgment were as follows:[16] .Mr Peterson could not lawfully resile from his obligation, of indefinite duration, following the eventual establishment of a permanentroad to grant Mr Keeys a permanent right of way over it. Given Mr Keeys' insistence on the right of way as a component of the sale of the block of land, it is clear that while the timing of the creation of the road was not agreed upon Mr Keeys' receipt of an ultimate right of way was. So what if anything should be imputed to the parties by way of contractual obligations and rights? [17] The courts' approach is to give effect to what reasonable commercial parties would take to be their enforceable commitments.A practical means of assessing that was formulated by McKinnon LJ's in Southern Foundries (1926) Ltd v Shirlaw [1939] 2 KB 206, 227, since applied in reported English cases on some 36 occasions. The present case falls in my opinion squarely within that test: if when they were about to sign the contracting parties had been asked by an officious bystander what was to happen if Mr Peterson were unwilling or unable to complete the construction of the road so as to trigger the obligation to provide the right of way, the least they would undoubtedly have agreed was that Mr Keeys could either wait indefinitely for Mr Peterson to complete the road or be at liberty whenever suited him to do so himself and thereupon receive a registerable right of way. Until then, since Mr Peterson could not lawfully resile from his obligation, Mr Keeys was entitled to the law's protection.[6] The second judgment was a necessary continuation of the first because the parties were not able to reach any agreement as to the nature of the caveat to be registered. In his oral judgment the Judge held that the following relief to be given (which included the granting of a declaration recording the rights as he set out in paras [16]–[17] already recorded). The Keeys' interests were required to make an election by 28 October 2005 whether to apply for planning consent to develop the road to a certain standard and if such election was not made then the proceedings would be at an end save as to a claim for damages that the appellants might seek to pursue. The Judge set out certain timetable and other orders as to completion of the construction of the road way with the provisions as to costs of construction and the provision of a bond. [7] The intended appellants are the trustees of the Trust who were joined as plaintiffs in the High Court proceedings. In late 2005 Mr Keeys' health deteriorated seriously and he died on 17 December 2005. One of the trustees deposes that they were largely unaware of the outcome of the High Court proceedings until about November 2005 but Mr Keeys' health was then seriously failing and unable to give them proper instructions. But counsel were instructed to lodge an appeal. Mr Keeys died shortly after on 17 December 2005 and the appeal was lodged on 23 December 2005.[8] The solicitor for the late Mr Keeys deposed that as soon as the second judgment was delivered he came to the view that the direction that the intended appellants form a road within a specific timeframe or lose their rights had to be the subject of appeal and gave Mr Keeys that advice. But the serious ill-health of Mr Keeys led to instructions not being given prior to his death. Counsel's affidavit evidence was to the effect that settlement proposal or discussions took place after the second judgment at least up until 13 October 2005 but came to nothing and the then solicitor for the Keeys' interests deposes that he discussed with Mr Peterson's solicitor that an appeal was to be brought but that process was withheld to allow discussions to take place, and because of the health crisis of Mr Keeys. [9] There is no evidence to explain why the first judgment was not subject of immediate appeal although this may well be because it was simply declaratory in terms of paras [16]-[17], and on 17 May 2005 (1 month after time expired) the Judge issued a Minute, and much of which is reproduced in para [1] of the judgment of 28 September 2005. From that Minute it is clear that the Judge is expressing some views as to the terms of the caveat and ordered that the Keeys elect whether or not they wished to pursue their claim to equitable relief.Discussion[10] Rule 27 empowers the Court to grant or refuse leave and if granted may be subject to such conditions as appropriate. The authorities pursuant to the 1997 Rules are well known. The onus is on the intended appellants to satisfy the Court that in all the circumstances the justice of the case requires that leave be given so that they may have an opportunity to attack the judgment. A wide discretion is conferred upon the Court and the whole history of the proceedings, the conduct of the parties, the nature of the litigation and the needs of the intended appellant as well as the effect of the granting of leave on other persons involved, are all to be placed in balance; Avery v No. 2 Public Service Appeal Board & Ors [1973] 2 NZLR 86. [11] Weighing up all those matters it is clear to us that the justice of the case requires that leave be given to extend time for bringing an appeal in respect of thesecond judgment. The delay involves a little over two months and there is reasonable explanation for that delay. [12] The position in respect of the proposed appeal against the first judgment is more difficult particularly as we have largely been left to infer an explanation of the delay. There is also a sense in which the parties acted on the first judgment by proceeding to the second hearing. On the other hand the full implications of the first judgment probably only became apparent with the second judgment. Further, on the appeal against the second judgment it is likely to be artificial to attempt to leave the first judgment out of contention. [13] We extend the time for bringing the appeal from both judgments to Monday 24 April 2006 and order the intended appellants to pay to the respondents costs in the sum of $3,000.Solicitors: C F Eckard, Whangarei for Appellants Thomson Wilson, Whangarei for Respondents