GREGORY JOHN JONES v NEW ZEALAND BLOODSTOCK FINANCE AND LEASING LIMITED [2023] NZSC 98

GREGORY JOHN JONES v NEW ZEALAND BLOODSTOCK FINANCE AND LEASING LIMITED [2023]NZSC 98 [2 August 2023]IN THE SUPREME COURT OF NEW ZEALANDI TE KŌTI MANA NUI O AOTEAROASC 100/2022[2023] NZSC 98BETWEEN GREGORY JOHN JONESApplicantAND NEW ZEALAND BLOODSTOCKFINANCE AND LEASING LIMITEDRespondentCourt: Glazebrook, Williams and Kós JJCounsel: Applicant in personF A King and A Osama for RespondentJudgment: 2 August 2023JUDGMENT OF THE COURTA The application for leave to appeal is dismissed.B The applicant must pay the respondent costs of $2,500.REASONS[1] This application for leave to appeal stems from a dispute over two loanagreements between the applicant and the respondent. The first, entered into on23 May 2016, granted the applicant access to monies up to an initial limit of $200,000in advances at a 10 per cent interest on the unpaid daily balance. Full payment had tobe made on "30th June 2017 or upon demand". By the end of 2016, the applicant hadobtained over $400,000 in advances. The second contract, entered into on10 October 2017, was a lease purchase agreement enabling the applicant to acquire aninterest in another horse for $44,000. The contract required the applicant to pay therespondent a partial annual repayment each July and to pay the remainder on10 October 2020 or on earlier termination.[2] Ultimately, in April 2019, the respondent served a notice of demand seekingthe outstanding debt of $369,800 under the first contract. At the same time, it alsoserved a notice of default in due payments under the second contract, amounting to$22,718 and stated that, if not remedied, all amounts owing under the agreement wouldfall due, totalling $61,832. The applicant did not make any payments after receivingthese notices.[3] As the Court of Appeal noted, these proceedings have a somewhat protractedhistory.1 What follows is a condensed version to the extent it is relevant to this leaveapplication.[4] In early September 2019, the respondent filed an application for summaryjudgment in the High Court in respect of the applicant's debts and sought $431,632 inrepayments (plus interest and costs). The applicant opposed the application on anumber of grounds, including on the basis that the respondent had acted oppressively,and that the applicant had a claim to equitable set-off. He alleged that there was aconspiracy in the thoroughbred industry to harm his business interests. Jagose J heldthat there was no evidence to suggest the applicant had any available defence to therespondent's claims, nor was there anything unfair or unjust about determining therespondent's claim without taking the applicant's intended cross-claim into account.He gave judgment against the applicant.2[5] The applicant appealed to the Court of Appeal.3 He made allegations in variousaffidavits that certain High Court judges were party to the alleged conspiracies againsthis interests, alongside several members of his own family, his friends and others inthe horse racing industry. The Court of Appeal took what it described as an "undulylenient approach to admissibility essentially because the overall breadth of[the applicant's] suspicions [were] potentially relevant to an assessment of thecredibility of his claims" and admitted some aspects of the further evidence.4 Itdisagreed with the High Court's decision that the applicant's claims, even if they had1 Jones v New Zealand Bloodstock Financing and Leasing Ltd [2022] NZCA 397 (Dobson, Thomasand Duffy JJ) [CA judgment] at [2].2 New Zealand Bloodstock Finance & Leasing Ltd v Jones [2020] NZHC 1233 (Jagose J).3 CA judgment, above n 1.4 At [61] and [65].merit, were not capable of qualifying for equitable set-off.5 It nevertheless dismissedthe applicant's appeal. The Court held that there was no tenable cause of action inrelation to fraud,6 and that the wide-ranging conspiracies alleged by the applicant wereneither substantiated nor credible.7[6] The applicant has applied for leave to appeal. In a series of memoranda andaffidavits, he criticised certain Judges in the Courts below who had dealt with litigationinvolving him. He requested Judges of this Court recuse themselves where they hadpersonal knowledge of the issues he referred to, had a personal relationship with theJudges complained of or where they had discussed the applicant or any aspect of hislitigation with those Judges. In a minute of 28 April 2023, this Court observed that itis for the Court to determine whether any member should recuse him or herself, andthat it is contrary to principle that the judiciary be interrogated on such matters.Notwithstanding that principle, it confirmed that no Judge of this Court, whetherassigned to the panel or not, met any of the applicant's criteria.8The applicant's submissions[7] The applicant argues that his case involves matters of general publicimportance and general commercial significance.9 He argues that there is a risk of asubstantial miscarriage of justice if the case is not heard.10[8] He raises 12 substantive grounds of appeal, which can be broadly grouped intofour categories. The applicant first contests the Court of Appeal's decision that thetwo loan contracts are enforceable, arguing instead that the contracts should be variedor that the respondent should be estopped from demanding repayments in the mannersought. Second, according to the applicant, the Court of Appeal erred in deciding hecould not succeed in a defence based on fraud or oppressive conduct. He argues thatthe principle in Lazarus Estates Ltd v Beasley, that "fraud unravels everything",applies here.11 Third, he argues that the evidence does not fall short of the standard5 At [64].6 At [86] and [89].7 At [93], [95], [100] and [112]–[115].8 Jones v New Zealand Bloodstock Finance and Leasing Ltd SC 100/2022, 28 April 2023.9 Senior Courts Act 2016, s 74(2)(a) and (c).10 Section 72(2)(b).11 Lazarus Estates Ltd v Beasley [1956] 1 QB 702 (CA) at 712.required to establish a lawful or unlawful conspiracy against him. Finally, hechallenges the principles of summary judgment relied on by the Court of Appeal,including the Court's characterisation of the onus of proof. As part of this argument,the applicant submits that the Court of Appeal did not conduct its hearing inaccordance with the principles of natural justice because it relied onMcGrouther v Paulden without giving the applicant a chance to respond.12[9] Alongside his written submissions, the applicant filed a supplementarymemorandum, responding to the Court's minute on recusal. He argued that afair-minded lay observer would reasonably apprehend that the Judges of this Courtmight not bring an impartial mind to this case because the applicant has "indicated animmediate intention to issue proceedings against 13 Judges with whom there is at leasta clear link of collegiality to be expected amongst the judiciary". He submitted thatthe only alternative was for the leave application to be heard by members of theSupreme Court who are no longer actively sitting, or by overseas Judges.[10] In his affidavit accompanying the application, the applicant states that duringhis time as a partner at Jones Fee, people would "present themselves immediately onthe making of a telephone call or other possible connector" and that he recalled "thisoccurred in a judicial management conference in which Justice Kós was presiding andmy impression was that he was responsible for an activity of [that] type". He alsostates that, at a very early point in time when the alleged conspiracy was beginning,he saw Williams J in the TAB at Eastridge on several occasions. While his presence"was not intimidating in any way I gained the impression that he was aware that Iwas under pressure at that time from the types of parties of which I now complain".He also states that he has no reason to assume that Williams J "even now knows of meor my identity".13Our assessment[11] We deal first with recusal, and then with leave.12 McGrouther v Paulden HC Christchurch CIV-2010-409-1124, 7 December 2010.13 To clarify the position, Williams J, who lives in Wellington, has never visited the Eastridge TAB,which appears to be in Auckland.Recusal[12] As to recusal, we reiterate the conclusion recorded in our minute of28 April 2023 and above at [6]. We note, also, that the Senior Courts Act 2016 doesnot permit substitution of retired or overseas Judges. The further claims made by theapplicant—traversed at [10] above—are mystifying. The short point is that nothingadvanced by the applicant could possibly concern a fair-minded and fully-informedobserver as to the impartiality of the panel in hearing this leave application.Leave[13] The proposed appeal raises no matter of general public importance orcommercial significance.14 The issues raised are confined to the facts of this particularcase and lack broader implications beyond the parties themselves.[14] Nor are we satisfied that the prospects of success are such that a substantialmiscarriage of justice may have occurred in the decision of the Court of Appeal.15 Foran applicant in a civil case to establish that there is a risk of a substantial miscarriageof justice, they must demonstrate a sufficiently apparent error of such a substantialcharacter that it would be repugnant to justice to allow it to go uncorrected.16 We seeno error in the approach taken by the Court of Appeal, and the appeal grounds raisedby the applicant have insufficient prospects of success to justify a grant of leave.17[15] The Court of Appeal applied orthodox principles relating to summaryjudgment in reaching its decision. Those principles are well settled. We do not seethe Court of Appeal judgment (and McGrouther) as in conflict with the basic principlethat the plaintiff has the ultimate onus to show that there is no arguable defence(including, where relevant, an interdependent equitable set-off counterclaim). Instead,the Court of Appeal's judgment merely acknowledges the forensic reality that where14 Senior Courts Act, s 74(2)(a) and (c).15 Section 74(2)(b).16 Junior Farms Ltd v Hampton Securities Ltd (in liq) [2006] NZSC 60, (2006) 18 PRNZ 369 at [5].17 Prime Commercial Ltd v Wool Board Disestablishment Company Ltd [2007] NZSC 9, (2007)18 PRNZ 424 at [2]; Hookway v R [2008] NZSC 21 at [4]; and B (SC 18/2020) v R [2020] NZSC52 at [12].a plaintiff has met this standard, the evidential onus shifts to the defendant todemonstrate a tenable defence if it is to defeat the application.18[16] We see no error in the Court's conclusion that both contracts are enforceable,and that the respondent had established that the applicant had no arguable defence.The evidential onus then shifted to the applicant. Contrary to his submissions, weconsider the Court of Appeal did not fail to grasp the essence of his defence. Rather,the Court found it was not tenable. This conclusion was available to the Court on theevidence before it. The evidence plainly fell short of establishing a conspiracy; theapplicant's allegations were, at best, entirely speculative and lacking in credibility. Itis not, therefore, necessary in the interests of justice for this Court to hear anddetermine the appeal.19Result[17] The application for leave to appeal is dismissed.[18] The applicant must pay the respondent costs of $2,500.Solicitors:McKenna King Dempster, Hamilton for Respondent18 A point clearly stated in Krukziener v Hanover Finance Ltd [2008] NZCA 187, (2008) 19 PRNZ162 at [26].19 Senior Courts Act, s 74(1).