DAVEY v BANK OF NEW ZEALAND [2023] NZCA 86

DAVEY v BANK OF NEW ZEALAND [2023] NZCA 86 [30 March 2023]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA445/2022[2023] NZCA 86BETWEEN MATTHEW ROBERT DAVEYApplicantAND BANK OF NEW ZEALANDRespondentCourt: Courtney and Mallon JJCounsel: Applicant in personK M Paterson for RespondentJudgment:(On the papers)30 March 2023 at 11 amJUDGMENT OF THE COURTThe application for extension of time to appeal is declined.____________________________________________________________________REASONS OF THE COURT(Given by Courtney J)Introduction[1] On 21 July 2021 Associate Judge Paulsen granted the Bank of New Zealand's(BNZ) application for summary judgment against Matthew Robert Davey for$3,851,640 plus interest.1 On 13 August 2021 the Judge made an order for costsagainst Mr Davey. 2 The time for appealing these decisions expired on 18 August 20211 Bank of New Zealand v Davey [2021] NZHC 1854 [Summary judgment].2 Bank of New Zealand v Davey [2021] NZHC 2122 [Costs judgment].and 10 September 2021 respectively.3 Mr Davey has applied for an extension of timeto appeal both decisions.4[2] The principles on which an application for extension of time is determined areset out in the Supreme Court's decision in Almond v Read.5 The ultimate question iswhether extending the time to appeal in the particular case is the interests of justice.6The relevant considerations will generally be:7(a) the length of the delay;(b) the reason for the delay;(c) the conduct of the parties, particularly the applicant;(d) any prejudice or hardship to the respondent or to others with alegitimate interest in the outcome; and(e) the significance of the issues raised by the proposed appeal, both to theparties and more generally.[3] In principle, the merits of the proposed appeal may also be relevant.8Consideration of the merits must, however, be relatively superficial.9Application[4] Mr Davey is the sole director and majority shareholder of Fortress InformationSystems Ltd (in rec and liq) (Fortress). The company had banking facilities with BNZ3 Court of Appeal (Civil) Rules 2005, r 29.4 Rule 29A. In his interlocutory application dated 29 August 2022, Mr Davey also sought to appealagainst a third judgment of Associate Judge Paulsen dated 16 July 2021 (Bank of New Zealand vDavey [2021] NZHC 1816). However, this Court recently found it has no jurisdiction to consideran appeal from that judgment as leave had to be sought first from the High Court (Davey v Bankof New Zealand [2022] NZCA 517).5 Almond v Read [2017] NZSC 80, [2017] 1 NZLR 801 at [38]; Rabson v Attorney-General [2017]NZCA 350 at [9]; and Dowden v Commissioner of Inland Revenue [2020] NZCA 630 at [3].6 Almond v Read, above n 5, at [38].7 At [38].8 At [39].9 At [39(c)].which Mr Davey had guaranteed. From 22 May 2020, Fortress was in default of itsobligations to BNZ. On 28 July 2020, the bank made demand on Fortress for paymentof $4,346,508.84. When Fortress failed to make the payment, BNZ made demand onMr Davey under the guarantee for $3,851,640. BNZ appointed receivers. On22 October 2020, Fortress was placed in liquidation.[5] BNZ brought its summary judgment application on 22 February 2021. Asnoted, the Judge granted the application on 21 July 2021. Mr Davey signalled anintention to appeal the summary judgment on 29 April 2022 but did not file the presentapplications until 29 August 2022.[6] Mr Davey filed an affidavit in support of his application but has advised thathe does not intend to file submissions. Mr Davey is unrepresented and has,understandably, not directed his affidavit specifically towards the factors identified asrelevant in Almond v Read. 10 However, his affidavit discloses sufficient informationto consider the application against the relevant factors.[7] BNZ opposes the application.Length of delay[8] There has been a delay of some 13 months between the expiry of the time toappeal and Mr Davey's application for an extension of time to do so. While notexceptionally long, this is undoubtedly a significant delay.Reason for delay[9] Mr Davey has been engaged in other legal proceedings, in particularbankruptcy proceedings, in both Australia and New Zealand. These have taken up histime and attention. In addition, he has had difficulties with legal representation andhis present counsel has had to withdraw due to a potential conflict of interest.Mr Davey also says that he was previously unaware of his right to appeal. Finally,Mr Davey says that he filed his appeal after he gained access to necessary materialswhich he had been unable to acquire due to COVID-19 travel restrictions. He states10 Almond v Read, above n 5, at [38].that he was prevented from travelling to Canada to access business documents held ona laptop in storage.[10] BNZ does not accept that there is any reasonable excuse for the delay. Inparticular they are sceptical of Mr Davey's claim that he was not aware of his right toappeal, given that he was represented at the summary judgment hearing.[11] In granting the summary judgment application, the Judge recorded that, despitefiling a substantial notice of opposition, at the hearing Mr Davey's counsel indicatedthat he had not been instructed to make further submissions but did not seek leave towithdraw.11 Despite now being unrepresented, Mr Davey clearly had the benefit oflegal advice at the relevant time. Given the significance of having summary judgmententered against him we cannot accept that he was unaware of his rights of appeal. Forthe same reason, we are not persuaded that the delay is explained by Mr Davey'sinvolvement in the related proceedings.Conduct of the parties[12] BNZ asserts that Mr Davey has a history of not complying with Court timetabledirections and deadlines, which has caused delays and frustration for both BNZ andthe courts. The affidavit filed in support of BNZ's opposition discloses a patternduring both the summary judgment and the bankruptcy proceedings of non-compliance with timetable directions and applications for adjournment. Mr Davey'spattern of non-compliance is not as serious as some, but it is a factor to take intoaccount.Any prejudice or hardship to the respondent or others with a legitimate interest in theoutcome[13] BNZ submits that Mr Davey's conduct and extended bankruptcy proceedingswill result in further costs and delays, and that it may also be prejudiced through thecompromise of relief under the Insolvency Act 2006. We accept that there is aninevitable increase in cost and risk to outcome for BNZ. We cannot assess thesignificance of the latter.11 Summary judgment, above n 1, at [3].Significance of the issues raised by the proposed appeal, both to parties and moregenerally[14] The matter is of a private, commercial nature between Mr Davey and BNZ.There is no wider public interest that would warrant the granting of an extension.Proposed appeal lacks merit[15] Broadly, Mr Davey's position is that BNZ has acted unreasonably in pursuinghim and that he had crossclaims and equitable defences that his previous lawyers failedto advance. He explains these in his affidavit as follows:One of the main grounds of my appeal is that there was a material mistakeand/or an error in fact and/or in law, which is that it was in fact the BNZ Bankwho appointed receivers BDO and not me or Fortress. I believe that thismeans that the BNZ is vicariously liable for the acts and/or omissions and/orbreach of the receiver's duties and I had a legal defence in the law of agencyagainst the BNZ. I also believe that I had numerous cross-claims and/oroffsets (different to a set-off) on the basis that there were numerous contractswith event venues which were owed money or damages followingCOVID[-]19 which threw a spanner in the works causing significant fundingand financial difficulties.My main issue is that BDO as receivers and effectively the bank's agents werenegligent and/or contributed to any losses and that the BNZ and/or BDO'sconduct was injurious or adverse to the company and then to me. There werenumerous opportunities to recoup or recover losses and also the sell off assetand/or intellectual property to realise the value, minimising any losses to thecompanies, the BNZ and/or me as the Guarantor. In my view, the[y] failedand/or neglected in exercising their duty of care and/or are contributor[il]yliable.[16] We consider that, for a number of reasons, Mr Davey's proposed appeal lacksmerit. All the matters he wishes to raise now were considered by the Judge andrejected.12 There is no apparent error in the Judge's reasoning. It is well settled thatthe existence of a counter-claim or a claim against a third party will rarely justifyrefusing summary judgment, particularly where the loan agreement or guarantee inquestion precludes the debtor raising any set-off or counterclaim,13 which is the case12 Summary judgment, above n 1, at [27]–[38].13 Baxter v Murray [2020] NZCA 222 at [38], citing Continental Illinois National Bank & Trust Coof Chicago v Papanicolaou [1986] 2 Lloyd's Rep 441 (CA) at 445.in these proceedings.14 In any event, Mr Davey's proposed counter-claim is predicatedon BNZ being the agent of the receiver, which is not a tenable position at law.15[17] In summary, Mr Davey's application comes after a significant delay which isnot adequately explained. Further delay will have adverse consequences for BNZ. Inthese circumstances the merits of the proposed appeal become more relevant and weare satisfied that the proposed appeal does not have merit.Result[18] The application for extension of time to appeal is declined.Solicitors:Buddle Findlay, Christchurch for Respondent14 Compare Patrick v Bank of New Zealand [2018] NZCA 122. In his affidavit, Mr Davey assertshe had various "offsets", which he seeks (without explanation) to distinguish from a set-off. Wedo not accept that is a valid distinction.15 Receiverships Act 1993, s 6(3) and the Deed of Appointment of Receivers of Company Propertyboth state that the receivers are the agents of Fortress, not BNZ.