STYLO MEDICAL SERVICES LTD v HUM HOSPITALITY LTD CA690/2014 [2015] NZCA 405 [1 September 2015]

STYLO MEDICAL SERVICES LTD v HUM HOSPITALITY LTD CA690/2014 [2015] NZCA 405 [1 September 2015]IN THE COURT OF APPEAL OF NEW ZEALANDCA690/2014[2015] NZCA 405BETWEEN STYLO MEDICAL SERVICES LIMITEDAppellantAND HUM HOSPITALITY LIMITEDRespondentHearing: 20 August 2015Court: French, Simon France and Asher JJCounsel: R O Parmenter for AppellantS L Abdale for RespondentJudgment: 1 September 2015 at 4.00 pmJUDGMENT OF THE COURTA The appeal is dismissed.B The appellant must pay the respondent's costs for a standard appeal on aband A basis, and usual disbursements.____________________________________________________________________REASONS OF THE COURT(Given by Asher J)Introduction[1] This appeal is the latest manifestation of a long-running dispute between the appellant, Stylo Medical Services Ltd (Stylo), and the respondent, Hum HospitalityLtd (Hum), concerning Hum's tenancy of a property in central Auckland.[2] Hum leased an old villa in Grafton from Stylo in 2011. It was a term of the lease that Hum would carry out renovations on the villa in lieu of paying rent for the first three years. Disputes arose as to the extent of the work done by Hum under that term, and whether Stylo could cancel the lease because of an alleged breach. Once rent became payable, a further dispute arose when Hum fell behind on rent. Stylo applied to cancel the lease for non-payment of rent and outgoings, and Hum sought relief. Justice Whata, in a judgment dated 3 October 2014 (the relief against forfeiture judgment), granted conditional relief against forfeiture so long as Hum paid its arrears in the following terms:1Given these unusual circumstances of this case, I am only prepared to grant relief from forfeiture and possession on the following condition all outstanding rent (exclusive of interest) and outgoings as at the date of this judgment are paid within 15 working days.[3] As terms of relief he stated:Orders[44] Hum has 15 working days to pay all outstanding rental (exclusive ofinterest) and other outgoings due at the date of this judgment.[45] If Hum does not make the abovementioned payment within the specified time frame, there shall be an order in favour of Stylo for the possession of the land comprised in the lease and an order cancelling the lease.[4] Therefore it was a term of the order granting relief that the outstandingarrears be paid in 15 working days. The amount in question was $53,995.50. Thatamount was paid, but not until the sixteenth working day, one day outside thestipulated time.[5] Stylo sought to enter judgment on the basis of the failure to meet the terms of relief. Hum opposed this and applied to extend the time for payment of arrears. After considering the matter, on 3 November 2014 Whata J issued a judgment extending the time for payment by one working day (the extension judgment).2 The extension judgment which is the subject of this appeal had the effect of putting Hum1 Stylo Medical Services Ltd v Hum Hospitality Ltd [2014] NZHC 2428 at [39].2 Stylo Medical Services Ltd v Hum Hospitality Ltd [2014] NZHC 2723 [Judgment under appeal].into a position of compliance, so that it could rely on the relief against forfeiture judgment. Hum was ordered to pay costs despite its success.[6] In the extension judgment Whata J summarised his understanding of why the payment was late (a summary that has not been contested by the appellant on appeal):3I am advised by Ms Abdale that attempts were made by Hum to make therequisite payment on the 15th working day but could not do so because ofbanking transfer difficulties. She says that Hum was in directcommunication with Stylo about the difficulties with the transfer betweenthe banks and would look to effect transfer between solicitors. Hum'ssolicitors also gave an undertaking to the effect that on receipt of the moniesthey would transfer them to Stylo's lawyers. The monies were not, however,transferred on the 15th working day but were transferred on the 16th workingday.[7] Justice Whata considered that r 1.19 of the High Court Rules (the Rules) appeared to provide a proper jurisdictional basis for the extension of time.4However, he stated that he preferred to make no final determination of the matterunder r 1.19 and that the answer lay more squarely in the Court's inherentjurisdiction. Relying on various authorities, the Judge concluded he had inherentjurisdiction to extend the time within which to comply with the order to pay theoutstanding rent and outgoings "so as to do justice between the parties".5[8] Mr Parmenter for Stylo accepts the issue of whether an extension of time could be granted under r 1.19 is properly before us, despite the lack of a notice from the respondent supporting the appeal on that ground. We record that we will treat the respondent as supporting the judgment under appeal on the basis the Judge could have relied on r 1.19. Mr Parmenter went on to submit r 1.19 provided no jurisdiction for an extension, as it applies to orders only and not to final judgments of the type extended by Whata J.[9] Mr Parmenter further submitted there was no inherent jurisdiction to change a final judgment, and no need for such a power. He argued the order that arrears be3 Judgment under appeal, above n 2, at [4].4 At [18].5 At [27].paid within 15 working days was not a "self executory order" as the Judge hadfound, and the time could not be extended.DiscussionFunctus officio[10] One of the grounds in the notice of appeal was that the Judge was functus officio when he issued the extension judgment. Mr Parmenter did not actively pursue that argument in the hearing before us.[11] The Court did not become functus officio once it released the relief against forfeiture judgment. The relief order in the judgment required a further event tooccur before it became final, namely the payment of the arrears. The relief grantedwas not unconditional, and there were potentially further tasks for the Court toperform. Further, a court does not cease to have a functional role when it issues ajudgment that is expressed in final terms. It retains powers and functions includingthose of correction of slips and recall, and its role in enforcement.Rule 1.19[12] Rule 1.19 of the Rules provides:1.19 Extending and shortening time(1) The court may, in its discretion, extend or shorten the time appointed by these rules, or fixed by any order, for doing any act or taking any proceeding or any step in a proceeding, on such terms (if any) as the court thinks just.(2) The court may order an extension of time although the application for the extension is not made until after the expiration of the time appointed or fixed.[13] Mr Parmenter focused on the lack of any reference to "judgment" in r 1.19, and submitted the 15 day period for payment, being part of a judgment that ended the relief against forfeiture proceedings, could not be extended using this rule. He submitted r 1.19 does not apply to such orders in a judgment. He compared r 1.17(1)which provides for calculating periods of time fixed by rules or "by a judgment,order, or direction" and submitted the lack of reference to "judgment" indicatesr 1.19 relates only to interlocutory orders.[14] There is no definition of "order" in the Rules.6 However, "judgment" isdefined in pt 11 (which relates to judgments) for the purposes of that Part asincluding "a decree or order of the court".7 By comparison, "judgment" is defined in pt 32 (relating to freezing orders) as including an "order" (no reference is made to"decree"), and more generally in the Judicature Act 1908 as including a "decree" (no reference is made to "order").8 Decree itself is not defined.[15] Our view is that these definitions do not suggest "orders", "judgments" and "decrees" are mutually exclusive concepts. It cannot be said that orders in judgments are not orders for the purposes of the Rules. Plainly most judgments contain orders of one sort or another, such as orders for the payment of a sum ofmoney, or provision of a remedy, or for costs. An order does not lose itscharacterisation as an order by reason of it being within a judgment.[16] Nor does the characterisation of an order turn on whether the judgment is interlocutory or final. In modern usage the word "judgments" refers to substantivedeterminations, but there is no common usage limiting "orders" to interlocutoryorders or orders not made in judgments.9 On its plain words r 1.19 applies withoutqualification to all orders, and therefore it applies to orders made in all judgments atall stages in a proceeding.[17] The alternative conclusion, that r 1.19 does not apply to orders contained in substantive judgments, would run contrary to the purpose of the Rules, which is toachieve just, as well as speedy and inexpensive, determinations.10 The facts of thiscase demonstrate how contrary to the objectives of the Rules the proposedinterpretation would be. The non-payment was caused by an inability of the banks to6 There is a definition of "interlocutory order" in r 1.3, "discovery order" in r 8.1, as well as "ancillary order" and "freezing order" in r 32.1.7 High Court Rules, r 11.1.8 Judicature Act 1908, s 2. That definition applies to the High Court Rules: see r 1.3(2) and s 34 of the Interpretation Act 1999.9 See the discussion in Andrew Beck and others McGechan on Procedure (online looseleaf ed,Brookers) at [HR11.1.02].10 High Court Rules, r 1.2.transfer the required funds, and Hum's lawyers gave an undertaking to Stylo'ssolicitors to transfer the monies when they were received. The sum was paid the next day. It appears the non-payment the day before was the result of an error beyond the control of Hum. There is no suggestion of prejudice to Stylo. The well-known rhetorical question of Lord Denning in R v Bloomsbury (posed during a discussion of the inherent jurisdiction) is apt:11Suppose a man is on his way to the court in time with the money in his pocket. Then he is run down in an accident, or he is robbed of it. Or suppose that his cheque has been held up in the bank for a short time. Has the court no power to enlarge the time in such a case?[18] If r 1.19 was limited to interlocutory orders only, that could have the effect of precluding a court from preventing an injustice, contrary to the key objective of a just determination. We can see no policy reason for a power to extend time beinglimited to orders that are not in final judgments. The desirability of finality ofjudgments is a factor a court can take into account in exercising the discretion underr 1.19, but that concept should not be regarded as warranting an immutable noextension rule.[19] We conclude r 1.19 is not limited in the way proposed. In our view, it gives a power to extend the time fixed by any order to which the Rules apply without limitation as to the type of order. There was clearly a sound basis for the granting of the extension, and indeed Mr Parmenter did not contest the justice of the extension on the merits. We conclude Whata J had the power under r 1.19 to make the order he did, and that his decision to grant the extension was correct for that reason.Inherent jurisdiction[20] Because there is a rule that provides express jurisdiction to grant an extension of time, there was no need for Whata J to rely on the Court's inherent jurisdiction. It is unnecessary to invoke the Court's undoubted inherent jurisdiction to make orders11 R v Bloomsbury and Marylebone County Court, ex parte Villerwest Ltd [1976] 1 WLR 362 (CA) at 365, cited by Whata J in the judgment under appeal, above n 2, at [21]. In R v Bloomsburythe English Court of Appeal considered the application of the English High Court Rule on which the New Zealand r 1.19 is based, but the decision did not address whether it applied to an order in a final judgment, but rather whether the High Court Rule could apply in the County Courts,and if it did not whether time could be extended under the Court's inherent jurisdiction.necessary to enable it to act effectively,12 when the Court can act effectively under aparticular rule. That being the case, because r 1.19 applies, it is unnecessary for us tocomment on the Court's inherent jurisdiction. The circumstances that would warrantsuch an application of the inherent jurisdiction have not arisen.Result[21] The appeal is dismissed.[22] The appellant must pay the respondent's costs for a standard appeal on aband A basis, and usual disbursements.Solicitors:Winston Wang & Associates, Auckland for AppellantFoy & Halse, Auckland for Respondent12 Donselaar v Mosen [1976] 2 NZLR 191 (CA) at 192; Champtaloup v Northern Districts Aero Club Inc [1980] 1 NZLR 673 (CA) at 679.