NEW ZEALAND BLOODSTOCK FINANCE & LEASING LTD v JONES [2020] NZHC 1633

NEW ZEALAND BLOODSTOCK FINANCE & LEASING LTD v JONES [2020] NZHC 1633 [9 July 2020]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2019-404-1822[2020] NZHC 1633BETWEEN NEW ZEALAND BLOODSTOCKFINANCE & LEASING LIMITEDPlaintiffAND GREGORY JOHN JONESDefendantHearing: 8 July 2020Appearances: F A King for the plaintiffG J Jones in personJudgment: 9 July 2020JUDGMENT OF JAGOSE J[Leave to appeal and stay]This judgment was delivered by me on 9 July 2020 at 11.00am.Pursuant to Rule 11.5 of the High Court RulesRegistrar/Deputy RegistrarSolicitors/Party:McKenna King Limited, HamiltonG J Jones, Auckland[1] On 20 and 25 May 2020, I deferred determination of Mr Jones' interlocutoryapplications dated 19 and 25 May 2020 for at or after the substantive hearing.1[2] My judgment of 5 June 2020 dismissed the applications. I gave judgmentagainst Mr Jones on NZ Bloodstock's claim dated 3 September 2019,2 for some$430,000 in unpaid loans (plus interest and solicitor-client costs).[3] Mr Jones has appealed my judgment to the Court of Appeal. Mr Jones nowseeks leave to appeal against my decisions on his interlocutory applications, and alsoto stay execution of my judgment.3Recusal[4] In chambers at the outset of the hearing for leave and stay, Mr Jones sought myrecusal on grounds of my statement in the judgment "Mr Jones does not dispute suchliability ".4 Mr Jones said that was wrong, and the error constitutes a conflictbetween us such as justified my recusal. After hearing from Mr King, and consideringthis Court's recusal guidelines, I declined to recuse myself, with reasons to follow.[5] These are those reasons. Even if I erred, error alone is not grounds for recusal.Judges are confronted with contended errors in their judgments as a matter of course.Mr Jones' presence before me as both an officer of the Court and an unrepresentedlitigant may make his contention of my error here a more personally difficult ordelicate proposition for him, but it does not give rise to a "real and not remotepossibility",5 in the circumstances, "a fair-minded, fully informed observer" wouldreasonably apprehend I "might not bring an impartial mind to the resolution of thequestion" I am required to decide.6 Neither is there any "logical and sufficientconnection" between my contended error and any reasonable apprehension of mypossible partiality.7 That is, after all, the essence of the judicial oath: "I will do right1 New Zealand Bloodstock Finance & Leasing Ltd v Jones CIV 2019-404-1822, 20 and 25 May2020 (minutes).2 New Zealand Bloodstock Finance & Leasing Ltd v Jones [2020] NZHC 1233.3 Mr Jones' application was amended on 3 July 2020 to include specific reference to s 56(3) of theSenior Courts Act 2016 and related caselaw. No objection is taken to the belated amendment.4 At [37].5 Recusal guidelines, High Court of New Zealand, 12 June 2017 at 1.3.6 At 1.2.7 At 1.4.2.to all manner of people after the laws and usages of New Zealand, without fear orfavour, affection or ill will".[6] Absent grounds for recusal, I am obliged "to sit on any case allocated" to me,8as are the present applications. I turn to them.Leave to appeal[7] Section 56(3) of the Senior Courts Act 2016 prohibits appeals of orders ordecisions on interlocutory applications in civil proceedings without this Court's leave.The object of requiring such leave is:9 to limit the cases which may go on appeal in the interests of finality oflitigation and the workload of the High Court, while preserving the integrityof the law and the interests of justice.[8] The Court of Appeal recently endorsed this Court's approach to leave as a"filtering mechanism",10 noting its own approach to be similar:11 leave to appeal should only be granted where the significance orimplications of an arguable error of fact or law, either for the particular caseor for the applicant or as a matter of precedent, warrants the further delaywhich the appeal process would involve.There is no reason for this Court's approach to be seen any differently.[9] Mr Jones' applications respectively were:(a) to dismiss or stay NZ Bloodstock's summary judgment application; and(b) to stay NZ Bloodstock's application and adjourn the proceeding,pending hearing of his appeal to the Court of Appeal against my refusalearlier to stay or dismiss NZ Bloodstock's summary judgmentapplication.8 At 1.1.9 Sandle v Stewart [1982] 1 NZLR 708 (CA) at 715.10 Greendrake v District Court of New Zealand [2020] NZCA 122 at [6], citing Finewood UpholsteryLtd v Vaughan [2017] NZHC 1679 at [13].11 At [7], citing Ngai Te Hapu Inc v Bay of Plenty Regional Council [2018] NZCA 291 at [17]; andMeates v Taylor (1992) 5 PRNZ 524 (CA) at 526. Similarly, Fairway Holdings Ltd v McCullagh[2018] NZCA 605 at [11]–[14]; and McLaren v McLaren [2018] NZCA 570 at [3]–[5].[10] My reasons for dismissing Mr Jones' interlocutory applications were theformer:12 [did not provide] grounds then to dismiss or stay NZ Bloodstock'ssummary judgment application, all of which was capable of being raised by[Mr Jones] in opposition to NZ Bloodstock's necessary contention he 'had nodefence' to its claims;and, on the latter:13I remained unwilling to stay the application or adjourn the proceeding,determination of which should continue to depend on NZ Bloodstock's abilityto discharge its onus to satisfy me Mr Jones 'had no defence' to its claims, inopposition to which Mr Jones remained able to argue for its unfair or unjustdetermination in light of his intended cross-claims and proposed evidence.[11] Mr Jones says my failure to determine the applications in advance of thehearing was unfair and unjust. By not doing so, the hearing proceeded on an uncertainevidentiary basis, prejudicially to Mr Jones' interests. With time and opportunity toadduce the sought evidence, I should have concluded summary judgmentinappropriate, for the matter go to trial.[12] That is to presume Mr Jones' applications would have been successful. ButI considered:14 "what the witnesses may have to say is less material in opposition than theavailability of a defence"; i.e., "reasonable particulars of the matters which heclaims ought to be put in issue".In that respect, ultimately I held "NZ Bloodstock's claim for judgment raises nothingjustifying trial; neither does anything in Mr Jones' opposition to its summarydetermination".15[13] Particularly in light of Mr Jones' appeal against my judgment, it is unclear whatis served by granting leave to appeal my decisions on the interlocutory applications.If their determination may have had substantive consequences, that is open to being12 At [20].13 At [22].14 At [20] (footnotes omitted).15 At [38].addressed on the appeal. Without substantive consequences for the case, Mr Jones, oras a matter of precedent, leave should not be granted.[14] Mr Jones wishes to argue the appeals on the interlocutory applicationsseparately, without regard for what is said in my judgment, so the Court of Appealcould "roll the clock back" to the time I first considered Mr Jones' former applicationon 20 May 2020. When I suggested that was at odds with the express determination"to prosecute the appeal as soon as possible", he said he meant all appeals should beheard on the same day, in the order he sought.[15] But, if I refuse leave, the Court of Appeal nonetheless may grant it.16 And, evenif leave again is refused, "nothing prevents any point raised in the application forleave to appeal from being raised in an appeal against the substantive High Courtdecision".17 Granting leave permits pointless additional effort and expense on appeal.[16] I will refuse Mr Jones leave to appeal.Stay[17] Rule 12(3) of the Court of Appeal (Civil) Rules 2005 entitles "the courtappealed from" to order "a stay of execution of the decision" pending determinationof the appeal. In doing so, I am to weigh NZ Bloodstock's right to the fruits of itsjudgment against "the need to preserve the position in case the appeal is successful",18"where it can be fairly achieved, to arrange matters to do justice between the parties,whatever the outcome of the appeal may be".19[18] Factors to be taken into account include:20(a) Whether the appeal may be rendered nugatory by the lack of a stay;(b) The bona fides of the applicant as to the prosecution of the appeal;16 Senior Courts Act 2016, s 56(5).17 Section 56(6).18 Duncan v Osborne Buildings Ltd (1992) 6 PRNZ 85 (CA) at 87.19 New Zealand Insulators Ltd v ABB Ltd (2006) 18 PRNZ 459 (CA) at [13], citing Minnesota Mining& Manufacturing Co v Johnson & Johnson Ltd [1976] FSR 139; [1976] RPC 671 (CA).20 Keung v GBR Investment Ltd [2010] NZCA 396 at [11], citing Dymocks Franchise Systems (NSW)Pty Ltd v Bilgola Enterprises Ltd [1999] 3 NZLR 239, (1999) 13 PRNZ 48 (HC) at [9].(c) Whether the successful party will be injuriously affected by the stay;(d) The effect on third parties;(e) The novelty and importance of questions involved;(f) The public interest in the proceeding; and(g) The overall balance of convenience.The apparent strength of the appeal is an additional factor.21[19] Mr Jones says:Should the Plaintiff seek to execute any judgment I will not be in a position tomake payment for that sum immediately. As a result, its payment could resultin a lack of liquidity which would in turn impact on my ability to practice lawand to derive income. The nature of my financial affairs is such that thedetriment caused by this occurring could be irretrievable.The contentions are not substantiated, but I take such personal assertions to be madewith regard for Mr Jones' "overriding duty as an officer of the court". Thus I note thespeculative nature of his contentions.[20] For NZ Bloodstock, Mr King says continual failure to repay loans places anunnecessary financial strain on its business, "at a particularly difficult economic timefor the racing industry post Covid-19 lockdown", Mr Jones' failure having adverseeffect on other of its loans to racing industry personnel. That, too, is not substantiated.The former two contentions are statements of the obvious; the last is not established.[21] A stay of execution would be to prevent NZ Bloodstock from enforcing myjudgment. But enforcement of my judgment would not render Mr Jones' appealnugatory. It would remain to be determined and, if successful, any steps taken inreliance on my judgment reversed. I do not doubt Mr Jones' bona fides in prosecutingthe appeal, as he has stipulated in affidavit evidence and submission. I acceptNZ Bloodstock is detrimentally affected by stay of execution, in not being able toobtain the fruits of its judgment (at least, to the extent "immediately" payable byMr Jones). I disregard the contended effect on third parties, if that is what is claimed21 At 11, citing Body Corporate No 188529 v North Shore City Council (No 6) HC Auckland CIV-2004-404-3230, 11 February 2009.of other "racing industry personnel". The questions raised on appeal are not novel orimportant – but entirely case-specific, as to the interrelationship (if any) betweenMr Jones' debt to NZ Bloodstock, and his claims against it – and no public interest inits determination is demonstrated. So far as I can assess it from here, the appeal doesnot appear strong.[22] That leaves, essentially the balance of convenience: does it bear harder onNZ Bloodstock to be held out of execution of my judgment until after Mr Jones' appealis determined in its favour, than it does on Mr Jones to have my judgment enforcedagainst him if successful on appeal?22 It would be easy to say a corporate entity shouldhave to risk carrying bad debts until final determination of an appeal, if enforcementof the judgment may have detrimental financial impact on an individual appellant. Butthat is a charter for disregard of liabilities and obligations, which are the source of thefinancial impact, until all prospects of appeal have been extinguished.[23] Judgments establish legal rights and obligations thereafter to be met, and"justice between the parties" is to be my touchstone. Without any other factor to tipthe balance in Mr Jones' favour, my judgment should be available for execution.[24] I will dismiss Mr Jones' application for stay.Result[25] Mr Jones' amended application dated 3 July 2020 for leave to appeal and stayis dismissed.Costs[26] In my preliminary view, costs incurred in opposing Mr Jones' application donot fall within the advances contract's and lease's indemnities. Instead, as thesuccessful party, NZ Bloodstock is entitled to 1B costs and disbursements for stepstaken on the appeal, as the appeal was of a straightforward nature occupying a normal22 By analogy with Wellington International Airport Ltd v Air New Zealand Ltd HC Wellington CIV-2007-485-1756, 30 July 200, at [4], citing [Cayne] v Global Natural Resources Plc [1984] 1 AllER 225 (CA) at 237.amount of time. If that is not accepted by the parties, or they cannot otherwise agree,I reserve costs for determination on short memoranda of no more thanfive pages – annexing a single-page table setting out any contended allowable steps,time allocation, and daily recovery rate – to be filed and served by NZ Bloodstockwithin ten working days of the date of this judgment, with any response and reply tobe filed within five working day intervals after service.—Jagose J