MANAWATU GREYHOUND RACING CLUB INCORPORATED V NEW ZEALAND GREYHOUND RACING ASSOCIATION INCORPORATED COA CA29/2012

MANAWATU GREYHOUND RACING CLUB INCORPORATED V NEW ZEALAND GREYHOUND RACING ASSOCIATION INCORPORATED COA CA29/2012 17 January 2012IN THE COURT OF APPEAL OF NEW ZEALANDCA29/2012[2012] NZCA 1BETWEEN MANAWATU GREYHOUND RACINGCLUB INCORPORATEDAppellantAND NEW ZEALAND GREYHOUNDRACING ASSOCIATIONINCORPORATEDRespondentCounsel: J Mahuta-Coyle for the AppellantJ Toebes for the RespondentJudgment: 17 January 2012 at 5:00 PMJUDGMENT OF WILD JA The application for a stay of execution is dismissed.B Costs are reserved.____________________________________________________________________REASONS OF WILD J[1] By application filed earlier today the appellant seeks a stay of execution of a judgment given against it in the High Court at Palmerston North on 9 December.1[2] The stay application is made against the background of a notice of appeal, also filed earlier today.[3] In the judgment appealed against Associate Judge Gendall made an order placing the appellant in liquidation, appointing liquidators and awarding costs. Those orders took effect at 11.40 am on 9 December 2011. The winding up order was made in respect of a debt of $766,947.61 owed by the appellant to the respondent, in respect of which the respondent had served on the appellant a1 New Zealand Greyhound Racing Association Incorporated v Manawatu Greyhound Racing ClubIncorporated HC Palmerston North CIv-2011-454-529, 9 December 2011.statutory demand as long ago as 21 February 2011 (that is, some nine months earlier).[4] Although the stay application is stated to be made in reliance on r 20.10(2)(a) of the High Court Rules, it ought to have been made under r 12 of the Court of Appeal (Civil) Rules 2005. I treat it as an application under that rule.[5] This is a convenient point to mention that, as a single Judge of this Court, I give this judgment in exercise of the powers contained in s 61A of the Judicature Act 1908 and r 7 Court of Appeal (Civil) Rules.[6] In a memorandum filed today responding to and opposing the stay application, Mr Toebes questioned whether this appeal and stay application are properly brought. He questioned whether s 26(3) of the Incorporated Societies Act 1908 and s 248 of the Companies Act 1993 empower the officers of the appellant –who appear to have brought the appeal and stay application. Mr Toebes may be correct, but I prefer to deal with the stay application on the basis that it has been brought by a person or persons empowered to bring it.[7] The principles governing a stay application are well established by decisions of this Court, notably Dymocks Franchise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd2 and Keung v GBR Investment Ltd3.[8] I will work through the factors suggested in these cases, insofar as they are relevant here.Whether the appeal may be rendered nugatory by the lack of a stay[9] This factor favours the grant of a stay. The affidavit sworn on 16 January 2012 by Mr W T Hodgson in support of the stay application satisfies me of this. Mr Hodgson states that the liquidators of the appellant have indicated their intentionto advertise the assets of the appellant for sale by tender "in the middle of January2 Dymocks Franchise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd (1999) 13 PRNZ 48 (HC).3 Keung v GBR Investment Ltd [2010] NZCA 396.2012". Mr Hodgson was the President of the appellant when it was placed in liquidation by the High Court.The bona fides of the appellant as to the prosecution of the appeal[10] Mr Hodgson addresses these in paragraphs 9–13 of his affidavit. He candidly accepts that the appellant did not properly pursue an appeal (CA451/2011) broughtby the appellant against the High Court's judgment of 24 June 2011 dismissing theappellant's application to set aside the statutory demand upon which the High Court's judgment of 9 December 2011 now appealed was based. That appeal was adjourned when the appellant failed to appear in support of the appeal at the fixture on 3 August 2011. The position, including what the appellant needed to do if itwished to pursue the appeal, is recorded in the Court's minute of 3 August 2011adjourning the appeal and vacating the fixture.[11] In respect of the present appeal, Mr Hodgson deposes that he and other officers of the appellant will pay the filing fees and security for costs, insofar as they are not waived.[12] As I have mentioned, the judgment appealed today was given on 9 December 2011. That judgment records4, the Associate Judge's refusal of an oral application for a stay of execution of the judgment just delivered. What Mr Hodgson does not address, still less explain, is why prompt application for a stay was not made to this Court. I consider it ought to have been, and that the failure promptly to apply casts doubt on the bona fides of the appeal brought today. In short, the appellant has inexcusably and inexplicably left matters to the last minute.[13] This factor counts against the grant of a stay.Whether the successful party will be injuriously affected by the stay[14] Mr Hodgson addresses this factor in [14]–[17] of his affidavit. He suggeststhat there will be no injurious affect on the respondent "by a further delay while the4 In the POSTSCRIPT 2, paras [47]–[51].Club's appeal is considered by the Court". However, a theme of the judgmentappealed today is the Associate Judge's view that the liquidation of the appellantshould commence without further delay. Three examples of this are:[39] In my view it is important here that a liquidator of the defendant is appointed promptly and that this liquidator might have an opportunity to consider fully whether s/he should explore or investigate the position of thedefendant. [40] As I have noted, it is important in my view that there is no further delay in appointing a liquidator for the defendant which is clearly insolvent.[50] In my view, for all the reasons I have outlined in the judgment above, it is important that the defendant society be placed into liquidation and a liquidator be appointed without further delay. This is for the range ofreasons also outlined above. [15] Given the background set out by the Associate Judge in his judgment, I can see why the Associate Judge made these comments. I agree with them. This third factor counts against the grant of a stay.The effect on third parties[16] Mr Hodgson suggests "there will be no material impact on any other third party if the Court were to grant a stay pending the Club's appeal".5 It is difficult to see that any other party will be adversely affected, so I accept Mr Hodgson's assertion. This factor favours the grant of a stay, or is neutral.The public interest in the proceeding[17] Mr Hodgson deposes that there has been considerable public interest in thePalmerston North area and in the wider racing industry in the parties' dispute. Heannexes an article from the 10 December 2011 issue of "The Manawatu Standard".[18] I do not consider the interest and publicity referred to by Mr Hodgson is quitethe type of "public interest" contemplated by the case law. My view is that the true5 At para 17 of his affidavit.public interest is best served by the liquidation of the appellant proceeding uninterrupted by a stay, given that it is unable to pay its substantial debt to the respondent, as found by the High Court.[19] This factor goes against the grant of a stay.The apparent strength of the appeal[20] The grounds of appeal set out in today's notice are:UPON THE GROUNDS that the learned Associate Judge erred in law by applying the wrong test required in that proceeding to grant an application for liquidation of the Appellant and erred in law in holding that the debt was owing, based on the material before the High Court.[21] These grounds do not indicate with the specificity required by r 30 Court of Appeal (Civil) Rules what the ground(s) of appeal are.[22] I have read the judgment sought to be appealed. It deals, in turn, with variousdefences suggested by the appellant's counsel. In respect of each defence, the Associate Judge noted the lack of any real evidence to support the suggested defence. The Associate Judge was left overwhelmingly satisfied that the appellant was in default under a loan agreement it had with the respondent, and that the statutory demand had been properly served. If no evidence founding an arguable defence or defences could be put before the High Court, then it is difficult to see how the present appeal has any prospect of success. I view the appeal as hopeless.[23] This factor argues strongly against the grant of a stay.The overall balance of convenience[24] I consider this falls decisively in favour of refusing a stay. While the appeal will certainly be rendered nugatory if a stay is not granted, that factor counts for little because I consider the appeal lacks any merit and is hopeless, and I have also questioned the bona fides of the appellant in bringing it.[25] In the result, the application for a stay of the 9 December 2011 judgment of the High Court is dismissed.[26] Costs are reserved for application by memorandum if pursued by the respondent.Solicitors:Loughnans, Palmerston North for the AppellantJ T Law, Wellington for the Respondent