TARAHAU FARMING LTD v SHEARING SERVICES KAMUPENE LTD (IN LIQ) [2019] NZCA 601 [29 November 2019]

TARAHAU FARMING LTD v SHEARING SERVICES KAMUPENE LTD (IN LIQ) [2019] NZCA 601[29 November 2019]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA311/2019[2019] NZCA 601BETWEEN TARAHAU FARMING LIMITEDFirst AppellantMAUNGA HIKURANGI KOPOREIHANAMAORISecond AppellantKAITIAKI AHUWHENUA TRUSTThird AppellantAND SHEARING SERVICES KAMUPENELIMITED (IN LIQUIDATION)First RespondentCRAIG ALEXANDRA SANSON ANDDAVID BRIDGMANSecond RespondentsCourt: French and Stevens JJCounsel: Appellants in person represented by P Te WhataG A D Neil and B J Hamilton for RespondentsJudgment:(On the papers)29 November 2019 at 12.30 pmJUDGMENT OF THE COURTA The application for an extension of time to appeal is granted, providedhowever that such order is conditional upon Tarahau Farming Limited(Tarahau Farming) complying with the following directions:(a) Tarahau Farming is to consider obtaining legal representation toadvise the company on the following matters:(i) Whether the preferable course to pursuing an appeal inthis Court is to apply to the High Court pursuant to r 15.10 ofthe High Court Rules 2016 to set aside or vary the judgment ofDowns J;(ii) Whether Tarahau Farming wishes to proceed with an appeal,reframe the grounds of appeal, as well as reconsider the partiesinvolved, and file amended grounds of appeal;(iii) Whether the appeal filed by Tarahau Farming (and the secondand third appellants) was properly authorised by each ofthe appellants; and(iv) Whether in the filing of the appeal the provisions of r 30 ofthe Court of Appeal (Civil) Rules 2005 were complied with byeach of the appellants.(b) Irrespective of the directions in (a), an amended notice of appealcomplying with r 30(1A) of the Court of Appeal (Civil) Rules 2005shall be filed and served on the respondents by Tarahau Farming nolater than Friday 14 February 2020.B If the condition in order A(b) is not complied with by Friday 14 February2020, the order extending the time to appeal will be revoked with the effectthat the application to extend the time to appeal is declined.C The costs of filing the application for extension of time to appeal arereserved until after 14 February 2020.____________________________________________________________________REASONS OF THE COURT(Given by Stevens J)[1] The first appellant, Tarahau Farming Ltd (Tarahau Farming), was the defendantin a case brought in the High Court by the liquidators of the first respondent,Shearing Services Kamupene Ltd (in liquidation) (Shearing Services) for recovery ofthe sum of $149,704.43. Tarahau Farming did not file a statement of defence orotherwise engage with the High Court proceeding which was dealt with by way ofa formal proof hearing before Downs J. The claim was successful.1[2] Mr Pessiman Te Whata (also known as Pehimana) is the sole director ofShearing Services, which was placed in liquidation in 2016. He was also (until March2017) a director of Tarahau Farming. Between 2013 and 2016, Shearing Servicesadvanced $149,704.43 to Tarahau Farming. Downs J found that this money was a loanrepayable to the liquidators of Shearing Services, together with interest and costs.[3] Mr Te Whata has purported to file a notice of appeal on behalf ofTarahau Farming. Maunga Hikurangi Koporeihana Maori, being the ultimate holdingcompany of Tarahau Farming, is named as the second appellant, andthe Kaitiaki Ahuwhenua Trust is named as the third appellant. Why these parties havebeen named as appellants is not readily apparent. Shearing Services is named asthe first respondent and the liquidators, Craig Alexandra Sanson and David Bridgman,have been named as second respondents.[4] Mr Te Whata has lodged the appeal on the basis that he claims the case involvesMāori land rights, tikanga Māori should be applied to resolve the issues involved andan order should be made to state a case for the Māori Appellate Court.2 Mr Te Whataalso seeks "an order to dismiss the ruling of Justice Downs".[5] As the notice of appeal was not served on the respondents within the timeallowed for filing an appeal, Mr Te Whata has filed an application for an extension oftime under r 29A of the Court of Appeal (Civil) Rules 2005 (the Rules).[6] The respondents have opposed the granting of an extension and raised otherissues with the appeal, including questioning Mr Te Whata's standing to bringthe appeal on behalf of Tarahau Farming.31 Shearing Services Kamupene (in liq) v Tarahau Farming Ltd [2019] NZHC 1280.2 And requests an order for a stay of proceedings in the case of Commissioner of Inland Revenue vTarahau Farming Ltd CIV-2019-488-1, filed in the Whangarei Registry of the High Court.See Lincu v Registrar-General [2019] NZHC 1783.3 Mr Te Whata describes himself as a "Kaiwhakawa Native Assessor" but does not seem to bea lawyer. That leaves open the prospect the appellants are not legally represented.Grounds relied upon under Rule 29A[7] Mr Te Whata says the appeal itself was filed in time in this Court on 4 July2019, being the 20th working day after the High Court judgment. However, he acceptsthe respondents were not served until 8 July because of a delay on the part ofthe courier.Notice of opposition[8] Counsel for the respondents oppose the application for an extension onthe basis that the proposed appeal has no merit and is simply a mechanism for delayingpayment of the judgment debt. They say inter alia:(a) No question of tikanga Māori arose in the proceeding. Nor was thereany question of fact relating to the interests of Māori in any land orpersonal property.(b) Tarahau Farming without explanation failed to engage withthe proceeding in the High Court and has not made an application tohave the judgment set aside or varied.(c) The appeal is intended to delay the payment of the judgment debt andwill put the respondents to further costs and delay.(d) The appellants failed to serve the extension application onthe respondents within the time allowed.(e) The second and third appellants have no standing in any event asthe judgment sought to be appealed made no finding about theseentities.[9] In addition to filing the notice of opposition containing the groundssummarised above, counsel for the respondents has filed a memorandum submitting:(a) The notice of appeal is defective as it is signed by Mr Te Whata who isnot currently a director of, nor is he the lawyer for, Tarahau Farming.He is only a former director of that company.4(b) Tarahau Farming is said to be in voluntary administration andMr Te Whata claims to be the voluntary administrator. However, thereis no evidence provided for the nature of such a role and this status orappointment is not recorded on the Companies Register.(c) Mr Te Whata has no standing to represent Tarahau Farming inadvancing an appeal, even if he is its voluntary administrator.[10] Mr Te Whata filed a memorandum contending that he does have standing andalso claiming that the second appellant was part of the High Court proceedings.5SubmissionsAppellant[11] The appellants have not yet filed a document entitled "submissions".However, in accordance with the minute of Brown J, the respondents have been servedwith a document filed by the appellants on 13 September entitled "interlocutoryapplication for extension of time".[12] In this application the appellants apologise for the fact that the respondents didnot receive the notice of appeal until Monday 8 July, and contend that the furtheralienation of tikanga rights and turangawaewae ancestral customary land is imminentif an extension of time to appeal is not granted. The failure to file the submissionsnormally required may well be attributable to the lack of legal skills on the part ofMr Te Whata.4 As required by r 30(1A) of the Court of Appeal (Civil) Rules 2005, a notice of appeal must besigned by the appellant personally or by their lawyers.5 The claimed involvement of Maunga Hikurangi Koporeihana Maori as a party to the High Courtproceeding is not apparent from the intituling in that case.Respondents[13] The respondents submit, first, that the conduct of the appellants is such thatthe exercise of discretion to extend time should not be exercised in their favour.In particular, Tarahau Farming did not take any steps to defend Shearing Service'sclaims in the High Court. It did not file any statement of defence, and a formal proofhearing was requested, of which it was given notice to Tarahau Farming asthe defendant. Tarahau Farming did not seek leave to then file a statement of defenceor otherwise defend the claim. Nor has it exercised the option of applying tothe High Court to set aside the default judgment.6 It is therefore contrary to theinterests of justice to permit the appellants to challenge the judgment by an appeal.[14] Secondly, the respondents submit the proposed appeal is hopeless because,inter alia, the notice of appeal does not disclose any meritorious grounds of appeal.The High Court correctly found there was a loan and did not err in applying commonlaw/statute law, in failing to allow tikanga Māori to be proved or in failing to refer theproceeding to the Māori Appellate Court, particularly as Tarahau Farming did notrequest this in any case. This was a simple matter of the High Court determiningwhether one corporate entity was indebted to another or had gifted money to another.[15] Thirdly, the proposed appeal does not raise any issue of general or publicimportance, and no miscarriage of justice has or may have occurred.Importantly, if Tarahau Farming truly believed there was a miscarriage of justice, itcould apply to the High Court to set aside the judgment, this being a judgment obtainedby default, under r 15.10 of the High Court Rules 2016.[16] Fourthly, the exercise of discretion to grant an extension of time will beprejudicial to the liquidation of Shearing Services as it will serve to delay its recoveryof the judgment debt by the liquidators.[17] Finally, the respondents submit that if an extension application were granted,it ought to be granted only in respect of Tarahau Farming and subject to it obtaininglegal representation and filing/serving refined points of appeal in a timely manner.6 High Court Rules 2016, r 15.10.Analysis[18] The leading authority on the application of r 29A is Almond v Read.7 The keyquestion in determining whether to extend time is what the interests of justice require.8Relevant factors include the length of the delay and the reasons for it; the conduct ofthe parties; any prejudice to the respondent; and the significance of issues raised bythe proposed appeal.9 The merits of a proposed appeal may be relevant, but a decisionto refuse an extension of time based substantially on the lack of merit of a proposedappeal should be made only where the appeal is clearly hopeless.10[19] Applying these criteria, it is apparent that the delay by the appellants was veryshort — only two working days. Further, the respondents have not been able to showany material prejudice arising from this short delay.[20] We accept that the grounds of appeal advanced by the appellants to date arevague and not clearly articulated. Certainly the way they are currently crafted doesnot inspire confidence in their prospects of success. At this early stage, it is difficultto ignore the fact that Tarahau Farming did not file a statement of defence inthe High Court proceeding, nor did it engage with that process. Moreover, as counselfor the respondents has submitted (correctly, in our view) it would be open toTarahau Farming to contest the High Court judgment against it directly by means ofan application filed in the High Court under r 15.10 of the High Court Rules. In thatway the cost and inconvenience of an appeal to this Court would be avoided.[21] We are also concerned about the question of the authority of Mr Te Whata tofile and advance the appeal on behalf of Tarahau Farming. Although the respondentssubmit Mr Te Whata is not a director of Tarahau Farming (given that he resigned asa director of the company in March 2017), it seems from the records of the CompaniesOffice that Mr Te Whata was (re)appointed as a director on 1 April 2019 and consentedto his appointment as a director on 22 July 2019. Issues concerning Mr Te Whata'sstatus and authority to give instructions in relation to this appeal need to be clarified.7 Almond v Read [2017] NZSC 80, [2017] 1 NZLR 801.8 At [38].9 At [38(a)–(e)].10 At [39(c)].[22] A second matter of even greater concern is that Mr Te Whata seems not to bea legal representative of the company. And the status of a "Kaiwhakawa NativeAssessor" has not been explained. These questions regarding Mr Te Whata's authorityand standing need to be addressed, if Tarahau Farming chooses to pursue an appeal inthis Court.11 The same applies to the authority and standing of the second and thirdappellants to file and pursue the appeal.[23] The concern about legal representation is important because of the rule thata lay person, even if a director, cannot represent a company in court at common law,unless leave is given by the Court.12 This rule extends to requiring a solicitor to actfor a company in commencing and continuing litigation.13 Filing and pursuingan appeal in this Court falls within the rule. There are "sound policy reasons" forhaving a rule such as this, some of which are already apparent from the circumstancesof the present appeal.14[24] Relevantly for Tarahau Farming, the notice of appeal needs to be signed bya lawyer representing the company. The same is true for the second and thirdappellants. This requirement means that the provisions of r 30(1A) have not beencomplied with, as Mr Te Whata is not permitted to sign the document on behalf of anyof the appellants.[25] Finally, we are troubled by the way in which the grounds of appeal advancedso far have been articulated. While we do not seek to comment on the merits orotherwise of such grounds, Mr Te Whata may wish to consider the wisdom anddesirability of seeking legal representation and, if so advised, filing amended groundsof appeal. Such legal representation could also extend to providing Mr Te Whata withadvice on the simpler, and less costly, option of applying in the High Court to set asideor vary the judgment of Downs J, referred to at [20] above. It should also extend tothe principle that a solicitor must act for a company in commencing and carrying on11 On the information presently available it is doubtful that the provisions of r 30(1A) of the Ruleshave been complied with.12 Re G J Mannix Ltd [1984] 1 NZLR 309 (CA).13 Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2013] NZCA 53, [2013] 2 NZLR679 at [33].14 At [34].a proceeding (including an appeal), subject to the discretion to depart from the ruleonly in exceptional circumstances.Result and costs[26] The application for an extension of time to file the appeal is granted, providedhowever that such order is conditional upon Tarahau Farming complying withthe following directions:(a) Tarahau Farming is to consider obtaining legal representation to advisethe company on the following matters:(i) Whether the preferable course to pursuing an appeal inthis Court is to apply to the High Court pursuant to r 15.10 ofthe High Court Rules to set aside or vary the judgment ofDowns J;(ii) Whether Tarahau Farming wishes to proceed with an appeal,reframe the grounds of appeal, as well as reconsider the partiesinvolved, and file amended grounds of appeal;(iii) Whether the appeal filed by Tarahau Farming (and the secondand third appellants) was properly authorised by each ofthe appellants; and(iv) Whether in the filing of the appeal the provisions of r 30 ofthe Court of Appeal (Civil) Rules were complied with by eachof the appellants.(b) Irrespective of the directions in (a), an amended notice of appealcomplying with r 30(1A) of the Court of Appeal (Civil) Rules shall befiled and served on the respondents by Tarahau Farming no later thanFriday 14 February 2020.[27] If the condition in [26(b)] is not complied with by Friday 14 February 2020,the order extending the time to appeal will be revoked with the effect thatthe application to extend the time to appeal is declined.[28] We record that costs may be granted to the respondents where an appellant orappellants have been granted an indulgence such as an order under r 29A of the Rules.Without finally determining the point, we consider the case for an award of costs infavour of the respondents could well be made out. However, Tarahau Farming andthe second and third appellants seem to have been operating at this stage only withthe benefit of lay representation. We have recommended this should change.Against the hope that Tarahau Farming and Mr Te Whata choose to comply with allthe directions we have given, we reserve the question of costs until after 14 February2020. Thereafter, counsel for the respondents may apply for costs if that course isthought appropriate.Solicitors:Meredith Connell, Auckland for Respondents