MEMELINK AND LYNX TRUSTEES LIMITED AS TRUSTEES OF THE LINK TRUST NO 1 v HAINES [2020] NZCA 205

MEMELINK AND LYNX TRUSTEES LIMITED AS TRUSTEES OF THE LINK TRUST NO 1 v HAINES[2020] NZCA 205 [2 June 2020]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA503/2019[2020] NZCA 205BETWEEN HARRY MEMELINK AND LYNXTRUSTEES LIMITED AS TRUSTEES OFTHE LINK TRUST NO 1AppellantsAND QUENTIN STOBART HAINESFirst RespondentBPE TRUSTEES (NO 1) LIMITEDSecond RespondentQUENTIN HAINES PROPERTIESLIMITEDThird RespondentCourt: French and Collins JJCounsel: D G O Livingston for AppellantsJ P Dallas for RespondentsJudgment:(On the papers)2 June 2020 at 11 amJUDGMENT OF THE COURTA Harry Memelink and Lynx Trustees Ltd are removed as appellants andsubstituted with Roy Bassett-Burr.B Quentin Stobart Haines is removed as first respondent.C Within five working days Roy Bassett-Burr must either pay the filing fee ormake an application for waiver.D Within five working days Roy Bassett-Burr must either pay security for costsin the sum of $7,060 or make an application for dispensation of payment.E The application to strike out the appeal is declined.F The costs of the application to strike out are reserved.____________________________________________________________________REASONS OF THE COURT(Given by French J)Introduction[1] On 27 September 2019 Mr Memelink filed a notice of appeal against a decisionof Churchman J in the High Court. The decision had been issued on 30 August 2019.1[2] In the decision, the Judge set aside five statutory demands served on Mr Hainesand associated entities by Mr Memelink and Lynx Trustees Ltd as trustees of the LinkTrust No 1. Mr Memelink and Lynx Trustees Ltd were both named as the respondentparty in the High Court. The Judge also made an award of costs against the soledirector and shareholder of Lynx Trustees Ltd, a Mr Bassett-Burr in his personalcapacity on the grounds that the demands had been issued improperly and thatMr Bassett-Burr had failed to withdraw them when this was brought to his attention.[3] In the notice of appeal, Mr Memelink stated he was filing the appeal in hiscapacity as a trustee of the Link Trust No 1. It was not entirely clear from the noticewhether he was the sole appellant or whether he was also purporting to file the noticeof appeal on behalf of Lynx Trustees Ltd as well as himself. It appears fromsubsequent communications that the latter was what was intended.[4] Mr Memelink's authority to file the appeal on behalf of Lynx Trustees Ltd wasthen challenged by the respondents. The company had ceased being a trustee ofthe Link Trust No 1 on 26 August 2019 and had been placed into liquidation on10 September 2019, some 17 days before the appeal was filed. The liquidators advisedthis Court that they were not notified of the proposed appeal and did not consent to it.1 Body Corporate 68792 v Memelink [2019] NZHC 2169.[5] That development prompted Clifford J to suggest the respondents file anapplication for an order striking out the appeal. The strike out application was dulyfiled on 29 November 2019.[6] It is that application to strike out which is the subject of this judgment.Grounds of the strike out application[7] The key grounds of the application are that:(a) Mr Memelink consented to the orders being made in the High Courtand has not disclosed any error of fact or law which could found anappeal.(b) Mr Memelink was not entitled to bring proceedings in the name ofLynx Trustees Ltd and therefore should not have named it asan appellant.(c) The appellants have failed to prosecute the appeal in that they havefailed to seek leave to remove Lynx Trustees Ltd as appellant, failed topay security for costs and failed to seek leave to file additional evidenceon appeal.(d) Mr Memelink's behaviour in the conduct of the proceedings has beenvexatious and unreasonable.Opposition to the strike out application[8] After the application to strike out was filed, memoranda were filed by counselMr Livingston. The first memorandum dated 10 March 2020 listed the appellants as"Harry Memelink and Lynx Trustees Limited as Trustees of the Link Trust No. 1" andwas signed by Mr Livingston as their counsel.2 The second memorandum dated2 Mr Livingston signed the memorandum as "Counsel for the Respondent" but we assume this wasin error, as he represents the appellants.27 April 2020 was signed by Mr Livingston as "Counsel for the Appellants/Trusteesof the Link Trust No. 1".[9] In his memoranda, Mr Livingston contended that the liquidator's permissionto bring the appeal was not required. He also confirmed that Lynx Trustees Ltd wasno longer a trustee of the Link Trust No 1, the company being replaced in August 2019by a new trustee.[10] Mr Livingston further informed the Court: "These proceedings are continuedby the trustees of the Link Trust No. 1 and Mr Bassett-Burr in his personal capacity."And that the appeal was solely concerned with the costs award made againstMr Bassett-Burr. As regards the grounds of the appeal, Mr Livingston summarisedthe main grounds which he described as reasonably arguable and therefore notsusceptible to strike out. The main grounds identified were:(a) The respondents should have served their submissions seekinga third party costs award in the High Court on Mr Bassett-Burr so thathe had an opportunity to respond.(b) There is nothing to suggest that Link Trust No 1 is insolvent andtherefore there was no need to award costs against Mr Bassett-Burrpersonally.(c) The High Court Judge failed to acknowledge that Mr Bassett-Burr'sassistance was essential to Mr Memelink whose dyslexia prevents himfrom conducting proceedings on his own account.[11] As to the lack of progress in prosecuting the appeal, Mr Livingston pointed tothe fact there is an extant review of the Registrar's adverse decisions regarding securityfor costs and filing fees.Our viewWho are the correct parties to this appeal?[12] After reviewing the papers, we became concerned that the arguments regardingthe naming of the appellants appeared to be misconceived.[13] We therefore issued a minute advising our provisional view that the correctappellant was not the trustees of the Link Trust No 1 but rather Mr Bassett-Burr andonly Mr Bassett-Burr. In our view, that appeared to follow from the fact the appealwas solely about the order awarding costs against him. The fact the order was madein proceedings to which he was not a named party did not alter that conclusion.To assist counsel, we referred them by way of an example to the decisions of this Courtand the Privy Council in Harley v McDonald. Ms Harley was a barrister. A costsorder against her personally was made by the High Court in proceedings entitledMcDonald v FAI (NZ) General Insurance Co Ltd.3 The appellant in the subsequentappeals against that costs was Ms Harley: Harley v McDonald.4[14] The parties had not addressed that point in submissions. Nor had theyaddressed the related point that because the costs order against Mr Bassett-Burr wasmade in favour of BPE Trustees (No 1) Limited and Quentin Haines Properties Ltd, itwas those two entities and those two entities only that should be the namedrespondents. Mr Haines should not be a respondent. He was not a beneficiary ofthe costs award.[15] We invited submissions which the parties then filed. Counsel on both sidesagreed with our provisional view. Mr Livingston suggested directions amendingthe parties to the appeal could be made under r 5 of the Court of Appeal (Civil) Rules2005.[16] In his submission, Mr Dallas for the respondents respectfully requested that we"make an obiter comment on any future application filed by Mr Bassett-Burr for leave3 McDonald v FAI (NZ) General Insurance Co Ltd 1 [1999] NZLR 583 (HC).4 Harley v McDonald [1999] 3 NZLR 545 (CA); and Harley v McDonald [2001] UKPC 18, [2002]1 NZLR 1.to appeal out of time pursuant to Rule 16A" and that such an application be deemedres judicata.[17] Rule 16A in the Court of Appeal (Civil) Rules states that where an applicationfor leave to appeal is not bought within the specified time an application for anextension of that time may be filed. We assume that counsel in fact meant to refer tor 29A, which allows the Court to grant extensions of time in which to appeal. In sofar as the submission appears to be based on the premise that a change of appellantwould mean the filing of a fresh appeal, we consider that premise to be wrong.The appeal that was filed in time remains extant.[18] One consequence that does flow from substituting a new appellant is thatpayment of filing fees and security for costs are required to be considered afresh.If waiver and dispensation are sought, it will be the means of Mr Bassett-Burr that willbe relevant, not the trustees of the Link Trust No 1.[19] Finally, as regards the merits of the appeal, on the face of them the groundsappear weak. On the other hand, on the limited information we have before us we donot consider they fall into the frivolous and vexatious category. We would thereforenot strike out the appeal for that reason.Outcome[20] We make the following orders.[21] Harry Memelink and Lynx Trustees Ltd are removed as appellants andsubstituted with Roy Bassett-Burr.[22] Quentin Stobart Haines is removed as first respondent.[23] Within five working days Roy Bassett-Burr must either pay the filing fee ormake an application for waiver.[24] Within five working days Roy Bassett-Burr must either pay security for costsin the sum of $7,060 or make an application for dispensation of payment.[25] The application for an order striking out the appeal is declined.[26] Although the respondents' application to strike out the appeal has beenunsuccessful, it would not have been necessary had Mr Memelink, and to a lesserextent his counsel, put their procedural house in order. We therefore consider that themost just outcome as regards costs is to reserve them.[27] We make one final comment. The delay in this case is unacceptable. Furtherdelay will not be tolerated. The appeal must be prosecuted diligently.Solicitors:Livingston & Livingston, Wellington for Appellantsjd Dallas — Lawyer, Wellington for Respondents