RABSON V CROAD AND DUNPHY COA CA289/2011

RABSON V CROAD AND DUNPHY COA CA289/2011 [27 April 2012]IN THE COURT OF APPEAL OF NEW ZEALANDCA289/2011[2012] NZCA 161BETWEEN MALCOLM EDWARD RABSONApplicantAND ANDREW CROAD AND CHRISTINEMARGARET DUNPHYRespondentsHearing: 3 April 2012Court: Ellen France, Harrison and White JJCounsel: Applicant in PersonH L Thompson for RespondentsJudgment: 27 April 2012 at 2.30 p.m.JUDGMENT OF THE COURTA The application for an extension of time to apply for the allocation of a hearing date and file the case on appeal is allowed.B Any further documents forming the case on appeal must be filed and served on or before 31 May 2012 together with an index to the volumes already filed.C Mr Rabson must attend to security for costs and payment of any outstanding Court fees on or before 31 May 2012.D Costs on this application are reserved.____________________________________________________________________REASONS OF THE COURT(Given by Ellen France J)Introduction[1] Andrew Croad and Christine Dunphy, the respondents, are the liquidators of two companies, Double Zero Holdings Ltd and Vision Ltd. Mr Rabson, the applicant, was a director of both companies.[2] In September 2009, Mr Rabson transferred $240,000 out of Vision Ltd to two family trusts, one (the MRF Trust) involving himself, and the other involving thecompany's other director, Mr Hitchens. The family trusts received $120,000 each. Subsequently, Double Zero Ltd and Vision Ltd were placed into liquidation. The liquidators brought proceedings claiming that Mr Rabson had failed to adequately account for over $50,000 of the company money the MRF Trust received. They sought an order under s 301 of the Companies Act 1993 for its recovery. French J granted the liquidators' application on 11 April 2011.1[3] Mr Rabson appealed against the decision of French J but was late filing the case on appeal. He seeks an extension of time for doing so under r 43 of the Court of Appeal (Civil) Rules 2005. The application is opposed on the basis the delay is not adequately explained and the appeal has no merit.Background[4] French J dealt with the liquidators' application as a matter of formal proof.That was because Mr Rabson made no appearance.2[5] For present purposes, we need only note that the proposed appeal raises an issue about whether some of the money the liquidators claimed Mr Rabson had failed to account for was paid as rent to another company, Casino Properties Ltd (Casino). Mr Rabson is a shareholder in Casino.1 Croad v Rabson HC Wellington CIV-2010-485-793, 11 April 2011.2 Mr Rabson's application for an adjournment of the hearing was declined: Croad v RabsonHC Wellington CIV-2010-485-793, 23 March 2011 (Minute of Gendall J).[6] Casino was Vision Ltd's landlord. From the money transferred fromVision Ltd to the MRF's trust account, the trust subsequently paid $52,000 to Casino.[7] Vision Ltd issued a statutory demand against Casino for the $52,000. The basis of the statutory demand was that at the time of the transfer Casino knew that the funds were held on trust for Vision Ltd. Casino applied to set aside the statutory demand on the basis that the payment to Casino was for rent Vision Ltd owed to it.[8] Associate Judge Gendall held that there was a genuine dispute over whether $33,420.60 of the total claim for $52,000 was rent, costs and interest due to Casino.3The Associate Judge set aside Casino's statutory demand except for $18,579.40.Evaluation[9] As this Court said in Russell v Commissioner of Inland Revenue,4non-compliance with r 43 and the resulting need for leave "requires the exercise bythis Court of a positive discretion".5[10] There is force in the respondents' submission that the reason for the delay isunclear. However, the delay is not great and Mr Rabson has made an attempt to file a case on appeal. Further, the proposed appeal is not in that category of cases which are obviously without merit given Associate Judge Gendall's conclusion when allowing Casino's application to set aside Vision Ltd's statutory demand. The prospect of any further delay can be dealt with by requiring any other necessary matters to be dealt with promptly. In these circumstances, we consider it is appropriate to grant an extension of time.3 Casino Properties Ltd v Vision Ltd (in liq) CIV-2011-485-924, 7 September 2011.4 Russell v Commissioner of Inland Revenue (2006) 22 NZTC 19,807.5 At [10].Disposition[11] For these reasons, the application for an extension of time to apply for the allocation of a hearing date and file the case on appeal is allowed. The case on appeal filed by Mr Rabson was incomplete and contained some documents which should be in a bundle of authorities. Mr Thompson for the liquidators has helpfully filed supplementary bundles. Mr Thompson is to advise Mr Rabson whether there are any further documents that he considers need to be included in the case on appeal. Any further documents forming the case on appeal must be filed and served on or before 31 May 2012 together with an index to the volumes already filed by both Mr Rabson and the respondents.[12] Mr Rabson must attend to security for costs and payment of any outstanding Court fees on or before 31 May 2012. Costs on this application are reserved.Addendum[13] There are three further matters we need to deal with as we said we would do so in the course of argument. The first two relate to the composition of the panel.[14] Prior to the hearing, White J issued a minute informing the parties that he had been counsel for Mr Rabson some years ago.6 Neither of the parties raised any objection to White J sitting prior to the hearing. At the hearing, Mr Rabson initially said he would object but ultimately did not pursue an objection. We did not consider there was a basis for White J to recuse himself and in the absence of any objection to that course we decided there was no basis not to proceed.[15] Mr Rabson then raised an objection to Ellen France J sitting. This was on thebasis Simon France J, Ellen France J's husband, had dealt with a matter relating to Casino. On the basis of the information before us we concluded this was not a reason for recusal.6 Rabson v Croad CA289/2011, 27 March 2012 (Minute of White J).[16] Subsequent to the hearing, we have considered the decision of Simon France J to which Mr Rabson referred. The decision related to caveats registered against a property at 21 Sunset Parade, Plimmerton.7 One of the caveatswas lodged in the name of Casino to protect an interest for "improvements" to theproperty. In ordering the removal of the caveats, Simon France J said he was applying the decision of this Court that the property at 21 Sunset Parade (the subject of relationship property proceedings) be sold by the trustee proprietor without regard to the renovations carried out by Mr Rabson.8[17] Having considered this matter further, we remained of the view there was no basis for recusal. There is nothing to give rise to any apprehension in the mind of a fair-minded lay observer that there is a real possibility the Judge might not bring an impartial mind to the matter.9 The issues raised by the two decisions are not linked.10[18] Finally, Mr Rabson sought an adjournment of the hearing. This was primarily on the basis advice from the Court registry left him unsure whether the matter was to proceed on 3 April 2012. We were satisfied Mr Rabson had been given sufficient notice of the hearing. His notice of appeal was a full one and he had sufficient opportunity to provide submissions. The adjournment application was declined.Solicitors:McMahon Butterworth Thompson, Auckland for Respondents7 Chapman v Casino Properties Ltd HC Wellington CIV-2012-485-162, 8 February 2012.8 Rabson v Gallagher [2011] NZCA 669.9 Saxmere Company Ltd v Wool Board Disestablishment Company Ltd [2009] NZSC 72, [2010]1 NZLR 35; recalled by [2009] NZSC 122, [2010] 1 NZLR 76 on other grounds.10 Simon France J had earlier granted an application for a strike out by Mr Hitchens of across claim issued by Mr Rabson: Croad v Rabson HC Wellington CIV-2010-485-793,29 November 2010. We did not understand Mr Rabson to object to Ellen France J sitting on thisbasis. In any event, while the decision concerned related parties, the matters now in issue aredistinct and not linked.