NAVARATNAM v HG METAL MANUFACTURING LTD [2022] NZCA 185

NAVARATNAM v HG METAL MANUFACTURING LTD [2022] NZCA 185 [13 May 2022]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA692/2020[2022] NZCA 185BETWEEN VASHIHARAN NAVARATNAMFirst AppellantSHERINE NAVARATNAMSecond AppellantAND HG METAL MANUFACTURINGLIMITEDRespondentCourt: Miller and Goddard JJCounsel: First and Second Appellant in personT B Fitzgerald and B J Dominikovich for RespondentJudgment:(On the papers)13 May 2022 at 11.00 amJUDGMENT OF THE COURTA The appeal is not struck out under rr 37(1) and 44A of the Court of Appeal(Civil) Rules 2005.B The appellants must pay costs of $2,390 to the respondent by Friday,27 May 2022.C Timetable orders and directions are made as set out in paragraph [22]below.____________________________________________________________________REASONS OF THE COURT(Given by Goddard J)Background[1] Mr and Mrs Navaratnam appeal from a decision of the High Court enteringjudgment by default against Mrs Navaratnam on 22 October 2020. The notice ofappeal was filed a few days out of time. Mr Navaratnam filed an application forextension of time under r 29A of the Court of Appeal (Civil) Rules 2005 (Rules).Mrs Navaratnam subsequently filed her own application for extension of time underr 29A. Following a telephone conference before Goddard J on 17 February 2021, therespondent (HG Metal) consented to an extension of time. The application for anextension of time was granted on 22 March 2021.[2] On 22 April 2021 HG Metal applied for a fixture and paid the scheduling fee.[3] Mr and Mrs Navaratnam sought, and were granted, a number of extensions oftime under r 43 of the Rules for filing the case on appeal. By minute dated1 November 2021 Goddard J extended time for compliance with r 43(1) to Wednesday,10 November 2021. The case on appeal has now been filed.[4] Mr and Mrs Navaratnam also sought a number of extensions of time to applyfor dispensation with security for costs. By minute dated 1 November 2021 time topay security for costs or apply for a dispensation was extended to 10 November 2021.The minute specifically recorded that if no application for dispensation was filed,security for costs must be paid by that date.[5] Mr and Mrs Navaratnam did not pay security for costs, or apply for adispensation, by 10 November 2021. They sought a further extension of time.On 22 December 2021 Goddard J directed as follows:1. There will be no further extensions of time to apply for dispensationwith security for costs in CA692/2020.2. As at 10 November 2021, the appellants had failed to pay security forcosts, and had failed to apply for dispensation with security for costs.3. The appellants are notified that the Court will consider striking outtheir appeal in CA692/2020 under rules 37(1) and 44A of the Court ofAppeal (Civil) Rules 2005, in the week beginning 31 January 2022.If they wish to oppose the making of such an order, they may filesubmissions of not more than 10 pages by 21 January 2022.The respondent may, if it wishes to do so, file submissions of not morethan 10 pages in response by 28 January 2022. The Court will thenconsider whether to make such an order on the papers.[6] On 19 January 2022 Mr and Mrs Navaratnam paid security for costs.Should the appeal be struck out?[7] Despite the belated payment of security for costs, it remains necessary toconsider whether the appeal should be struck out under rr 37(1) and 44A of the Rules.Rule 37(1) provides that the court may make an order striking out an appeal if securityfor costs is not paid by the time payment is due. In this case, payment was not madeby the time it was due: it was made more than two months later.[8] Rule 44A provides, as relevant:44A Court's power to strike out or stay appeal(1) In addition to any express power in these rules to strike out an appeal,the Court may, on an interlocutory application or on its own initiative,make an order striking out or staying an appeal in whole or in part if—(a) the appellant is in continuing default in complying with anyof these rules or with any procedural direction or order madeby a Judge; or(b) the appellant has failed to prosecute the appeal with duediligence and dispatch; or(c) the appeal is frivolous, vexatious, or otherwise an abuse of theprocess of the Court.(2) The Court must—(a) give the appellant 10 working days' prior notice of itsintention to consider making an order under this rule; and(b) give ancillary directions as to the filing and service of anywritten submissions.(3) The Court may make an order under this rule on the papers or after anoral hearing, as the Court thinks fit.[9] In this case, the Navaratnams were in default in complying with the Rules, andwith directions, from 10 November 2021 to 19 January 2022. They had also failed tocomply in a timely manner with a number of other procedural directions.[10] HG Metal submits that despite the eventual payment of security for costs, theappeal should be struck out because:(a) Mr and Mrs Navaratnam failed to pay security for costs by10 November 2021, notwithstanding a specific direction from the Courtand a reminder from the Registry.(b) The failure to pay security for costs was part of a longstanding strategyto delay progress of these and related proceedings. Failing to paysecurity for costs on time was not an oversight. It was deliberate.(c) The proposed appeal has no realistic prospect of success.(d) It would unfairly prejudice HG Metal to further delay enforcement ofthe amounts that have been owing to it since 2014, or to put it to thecost of continuing this litigation.[11] Mr and Mrs Navaratnam oppose strike out. Mr Navaratnam filed submissionson their joint behalf submitting that their appeal is arguable and is of public interest.Access to justice ought not to be denied lightly.Discussion[12] In Tannadyce Investments Ltd v Commissioner of Inland Revenue the appellantfailed to pay security for costs. The respondent applied under r 37(1) of the Rules foran order striking out the appeal. That prompted the appellant to pay the security, somethree months late.11 Tannadyce Investments Ltd v Commissioner of Inland Revenue [2009] NZCA 136,(2009) 19 PRNZ 305.[13] Counsel for the respondent accepted that, in view of the appellant havingbelatedly paid the security, the Court would probably want to leave the appeal on foot,but put in place a timetable to ensure the appeal is promptly prosecuted in the future.The Court considered that was the fair course in the circumstances of the case.2[14] The application to strike out the appeal was dismissed. But the Court put inplace a timetable, and awarded costs to the respondent on the basis that the application,though unsuccessful, was properly brought.3[15] The Navaratnams are on considerably weaker ground in opposing strike out.They have repeatedly failed to comply with the requirements of the Rules andtimetable directions issued by the Court. We accept the submission of HG Metal thatthose delays appear to have been deliberate. Mr Navaratnam's conduct in theHigh Court proceedings, and in a related appeal brought by him to this Court, has beendescribed by this Court as unsatisfactory.4[16] However we have concluded, by the finest of margins, that the interests ofjustice require that this appeal not be struck out. Rather, it should be determinedpromptly on the merits. The Navaratnams' default in payment of security for costswas remedied, albeit belatedly. The merits of the appeal do not seem strong, in lightof the analysis in this Court's judgment declining an extension of time forMr Navaratnam to pursue his related appeal. But Mrs Navaratnam was not a party tothat application, and the issues are not identical as judgment against her was enteredby default. More generally, Mr Navaratnam's unsatisfactory conduct of theHigh Court proceedings and of his appeal should not be attributed to Mrs Navaratnam,and should not debar her from pursuing her appeal.[17] It would not be appropriate for us to embark on a detailed consideration of themerits of Mrs Navaratnam's appeal in the context of a r 44A strike out decision.HG Metal has not suffered any material prejudice as a result of the delay in payingsecurity for costs apart from the cost of making submissions on whether the appeal2 At [2].3 At [3] and [6].4 Navaratnam v HG Metal Manufacturing Ltd [2021] NZCA 704 at [32].should be struck out in light of that delay: that prejudice can be addressed through anaward of costs.[18] We will therefore adopt the same approach that was adopted in Tannadyce.We decline to strike out the appeal. But the Navaratnams must pay costs to HG Metalin respect of this step in the proceeding, which was required only because of theirdefault in compliance with the Rules and this Court's directions. For the purposes ofr 53D of the Rules, we assess one day as the reasonable time for HG Metal to prepareits submissions in respect of this step in the appeal. Costs should be assessed on thebasis of a standard appeal. So the daily rate is $2,390. That is the amount that theNavaratnams must pay HG Metal. It must be paid promptly: we direct that theNavaratnams must pay the costs to HG Metal by Friday 27 May 2022.[19] There have been far too many delays in this appeal. It should be readied for ashort back-up fixture.[20] The appeal relates to a judgment against Mrs Navaratnam. Mr Navaratnam isa party, and is entitled to be heard. But he is not entitled to represent Mrs Navaratnam,and in light of the concerns previously expressed about his conduct of relatedproceedings it would not be appropriate to grant him leave to represent his wife inconnection with the future conduct of this appeal or at the hearing. Mrs Navaratnam'ssubmissions, and any other documents filed on her behalf, must be signed by herpersonally or by counsel acting for her. At the hearing of the appeal Mrs Navaratnammay be represented by counsel, or may appear in person. Mr Navaratnam may notappear for her. If she does not appear by counsel or in person at the hearing of theappeal, she will be treated as unrepresented.[21] Mr Navaratnam can of course continue to represent himself. But his role inthis appeal against a judgment against Mrs Navaratnam is very much a secondary one.Any submissions he may wish to make in addition to those made on behalf ofMrs Navaratnam should be brief.[22] We direct that:(a) Mrs Navaratnam must file and serve a written synopsis of her argumenton appeal, which complies with r 40E, by Friday, 27 May 2022.(b) If Mr Navaratnam wishes to make submissions on the appeal, he mustfile and serve a written synopsis of his argument on appeal, whichcomplies with r 40E, by Friday, 27 May 2022.(c) HG Metal must file a written synopsis of argument on appeal whichcomplies with r 40E by Friday, 15 June 2022.(d) The appeal should be allocated a 1.5 hour fixture on the earliestavailable date after 27 June 2022. This appeal is suitable for a back-upfixture before a Divisional Court.[23] There must be no further delays or failures by Mr and Mrs Navaratnam tocomply with this timetable and the Rules.Result[24] The appeal is not struck out under rr 37(1) and 44A of the Rules.[25] Mr and Mrs Navaratnam must pay costs of $2,390 to HG Metal by Friday,27 May 2022.[26] Timetable orders and directions are made as set out in paragraph [22] above.Solicitors:Bell Gully, Auckland for Respondent