YU v CHANDLER PROPERTIES LIMITED [2020] NZCA 384

YU v CHANDLER PROPERTIES LIMITED [2020] NZCA 384 [2 September 2020]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA270/2020[2020] NZCA 384BETWEEN HONGYING YUAppellantAND CHANDLER PROPERTIES LIMITEDRespondentCourt: Brown and Collins JJCounsel: K H Morrison and A Manuson for AppellantD J G Cox for RespondentJudgment:(On the papers)2 September 2020 at 10.30 amJUDGMENT OF THE COURTA The application for review of the Deputy Registrar's decision to extendthe time for appeal is declined.B The application for an order that Rennie Cox be restrained from acting assolicitors for the respondent on the appeal is declined.____________________________________________________________________REASONS OF THE COURT(Given by Brown J)Introduction[1] On 30 July 2019 Chandler Properties Ltd (the respondent) obtained an orderfor specific performance requiring Ms Yu (the appellant) to complete the purchase ofa section of bare land in Queenstown pursuant to an agreement for sale and purchase(the Agreement).1 On 16 April 2020 a judgment was issued declaring that theAgreement remained on foot and directing that the summary judgment may beenforced by way of a sale order (the judgment).2[2] On 21 May 2020, four working days out of time, the appellant filed a notice ofappeal against the judgment together with an application for stay of execution of thejudgment. Acting pursuant to r 5A(1)(c)(ii) of the Court of Appeal (Civil) Rules 2005(the Rules) the Deputy Registrar of this Court extended the time for filing the noticeof appeal by four working days.[3] The respondent filed an application for review of the Deputy Registrar'sdecision by a Judge in accordance with r 5A(3)(a) of the Rules. The appellant filed anapplication for an order restraining Rennie Cox from continuing to act as solicitor forthe respondent in this appeal (the restraint application).[4] In a minute of 23 June 2020 a direction was made that the restraint applicationand the application for review of the Deputy Registrar's decision to grant an extensionof time were to be heard together prior to any hearing on the application for stay ofexecution of the judgment. Those two matters are the subject of this judgment.Relevant facts[5] On 24 September 2018 the appellant and respondent entered into theAgreement whereby the appellant agreed to purchase the Queenstown section.When the appellant refused to settle, the respondent sought and obtained an order forspecific performance of the agreement by way of summary judgment.[6] The appellant having failed to comply with the summary judgment order, therespondent applied for a charging order against the property which was granted on26 August 2019. On 19 September 2019 the respondent applied for a sale order overthe property.1 Chandler Properties Ltd v Yu HC Auckland CIV-2019-404-571, 30 July 2019.2 Chandler Properties Ltd v Yu [2020] NZHC 753.[7] However it transpired that in an affidavit of 16 August 2019 in support of theapplication for the charging order Mr Cox of Rennie Cox stated that the respondenthad given notice of its intention to cancel the Agreement and subsequently gave noticeof cancellation. This prompted the High Court registry to seek clarification from therespondent as to the legal basis on which a sale order could be sought in circumstanceswhere an order for specific performance had been made but a notice of cancellationhad been given.[8] The response is detailed in the judgment:[10] CPL filed and served a second affidavit of Mr Cox sworn on17 December 2019 which sought to correct the statement made in Mr Cox's16 August 2019 affidavit. In his 17 December 2019 affidavit Mr Coxexplained that the notice of intention to cancel the Agreement was ineffectiveas notice had not been given in accordance with the Agreement. He said thatCPL purported to give written notice of intention to cancel the Agreement on23 August 2019 by email to the defendant and by letter sent by courier deliveryto the offices of Carson Fox (who CPL believed were representing thedefendant). However, the defendant failed to acknowledge receipt of theemail as required by cl 1.3(4)(d) of the Agreement. Carson Fox had alsoadvised by letter dated 7 June 2019 that they no longer acted for the defendant.Consequently, CPL's notice of cancellation on 12 September 2019, sent bythe same means, in reliance on the notice of intention to cancel, was ineffectivegiven the notice of intention to cancel was not served. Therefore, Mr Cox saidthe Agreement remained on foot.[9] The Deputy Registrar's advice that the enforcement process would not beissued without further order of the Court led to the judgment under appeal in whichthe Court held:[16] As the notice of CPL's intention to cancel was not served on thedefendant in accordance with the Agreement, the cancellation of theAgreement cannot be effective. As Mr Cox submits, the Agreement remainson foot.[10] The time for filing an appeal against the judgment expired on 15 May 2020.However the appellant contended that she did not become aware of the judgment until19 May 2020. Consequently with her notice of appeal she filed an application forextension of time to appeal under r 29A of the Rules.[11] Under r 5A(1)(c) the Deputy Registrar may, unless otherwise directed bya Judge, extend the time for complying with any rule by up to five working daysdespite the absence of consent. On 21 May 2020 the Deputy Registrar advised theparties as follows:I note that this appeal is only filed four working days out of time. That beingthe case, pursuant to rule 5A(1)(c)(ii) of the Court of Appeal (Civil) Rules2005, I extend the time for filing this notice of appeal by 4 working days.The delay is minimal and will cause no real prejudice to the respondents.The application for review of the Deputy Registrar's decision[12] The basis for the respondent's application for review was that in anuncompleted affirmation lodged in support of her application for an extension of timethe appellant made several false statements. Several of the alleged falserepresentations concerned events in 2019. However in an affidavit of Ms Round,a solicitor employed by Rennie Cox, it was also asserted that the appellant falselystated that the judgment under appeal was not served on her and that she only becameaware of it when a copy was emailed to her new lawyers on 19 May 2020. It wascontended that in its totality the itemised conduct demonstrated a pattern of behaviouron the appellant's part of disengaging with her solicitors when it suited her and settingup barriers to communication in order to avoid service or alternatively to delaymatters.[13] We consider the representations concerning the 2019 events are peripheral tothe application for an extension of time. The critical representation related to theappellant's claimed lack of knowledge of the fact of the judgment. If it could bedemonstrated that that statement upon which the Deputy Registrar relied wasknowingly false, then we consider there would be a proper basis for reviewing theextension of time.[14] In the uncompleted affirmation the appellant explained that she terminated herinstructions to Carson Fox and sought to instruct new lawyers. She stated that she haddifficulty doing so while New Zealand was at COVID-19 Alert Level 3. However on12 May 2020 she engaged new lawyers who requested Mr Cox to provide electroniccopies of the proceedings filed against her. She stated that she only became aware ofthe judgment on 19 May 2020 when Mr Cox annexed it to a letter he sent in responseto a letter from the appellant's new lawyers.[15] She further explained that the email address in the order for substituted servicedated 24 May 2019 is not her email address but her husband's. In any event she makesthe point that neither she nor her husband read or speak English.[16] We are not satisfied on the basis of the material before us that the appellant'sstatement to the Deputy Registrar concerning her lack of knowledge of the fact of thejudgment was knowingly false. In those circumstances the Deputy Registrar'sdecision to exercise the discretion to extend the time for filing the appeal by four dayscannot be impugned.[17] The application for review of the Deputy Registrar's decision is dismissed.The application to restrain Rennie Cox from acting[18] The restraint application is made in reliance on rr 13.5.1 and 13.5.3 of theLawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008which relevantly state:13.5.1 A lawyer must not act in a proceeding if the lawyer may be requiredto give evidence of a contentious nature (whether in person or byaffidavit) in the matter.13.5.3 A lawyer must not act in a proceeding if the conduct or advice of thelawyer or of another member of the lawyer's practice is in issue in thematter before the court. [19] The grounds in the application state:a. The main issue in the proceeding is whether the Agreement remains onfoot. The issue directly concerns:i. The advice of Rennie Cox Lawyers to cancel the Agreement;ii. The conduct of Rennie Cox Lawyers in serving the notice ofcancellation on Carson Fox and/or the appellant;iii. The change of advice by Rennie Cox Lawyers to not cancel theAgreement and subsequent attempt to reverse their conduct of servingthe notice of cancellation on Carson Fox and/or appellant.b. Another issue on appeal is the extent to which the appellant has beenserved with all relevant Court documents. The affidavit evidence ofSarah Round (also from Rennie Cox Lawyers) asserts that "[c]opies of allrelevant Court documents were emailed to the Appellant's emailaddress ".c. The evidence given by Rennie Cox Lawyers both in the High Court andCourt of Appeal are contentious. Rennie Cox Lawyers would in effect bedefending their own conduct on the issues raised in this appeal.d. The affidavit evidence of Sarah Round (also from Rennie Cox Lawyers)makes strong, partisan assertions that the appellant's claims, pertaining tothe issues in the proceeding, are "either untrue, or misleading".Permitting Rennie Cox Lawyers to give evidence in favour of its ownclient's case (the respondent) would impair the integrity of thejudicial process.[20] As noted in footnote 3 in the judgment, Gault J did not consider that theevidence of Mr Cox in his affidavits was contentious. We agree.[21] The first Cox affidavit, which was stated to be in support of an applicationwithout notice for a charging order, annexed the sealed summary judgment order anda copy of the title to a property owned by Ms Yu in Queenstown. The affidavit recordsthat notice of intention to cancel and notice of cancellation were given to Ms Yu andthat Ms Yu had failed to pay the amount of the judgment.[22] The second Cox affidavit explains that its purpose was to correct an error inthe first affidavit. It then proceeds to explain why, and to acknowledge that, serviceof the notices was not undertaken in accordance with the Agreement. The affidavitconcludes with a statement in the nature of a submission that the Agreement had notbeen validly cancelled and remains on foot.[23] Save for the final statement in the second affidavit, all the statements in thetwo affidavits are matters of fact which are documented. It is difficult to see how thosefacts could possibly be contentious. The final statement is not a statement of fact buta conclusion of mixed fact and law. It would not be permitted in evidence and norwould it be the subject of cross-examination.[24] However the application is also directed at the affidavit of Ms Round whichresponds to the appellant's uncompleted affirmation. This affidavit is contentious inthat it asserts that various statements made by the appellant were either untrue ormisleading and the reasons for that assertion. The affidavit is also in support of theopposition to the appellant's application for a stay of execution of judgment, which isyet to be heard.[25] While it would have been preferable for that affidavit to have been made bya party and not by a solicitor in the firm acting for the respondent, given that it isdirected solely at these interlocutory processes we do not consider that it warrants anorder that Rennie Cox be restrained from acting in the appeal.Result[26] The application for review of the Deputy Registrar's decision to extend thetime for appeal is declined.[27] The application for an order that Rennie Cox be restrained from acting assolicitors for the respondent on the appeal is declined.Solicitors:Meredith Connell, Auckland for AppellantRennie Cox, Auckland for Respondent