THE PHONE COMPANY LIMITED v M2 NZ LIMITED [2021] NZCA 231

THE PHONE COMPANY LIMITED v M2 NZ LIMITED [2021] NZCA 231 [3 June 2021]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA159/2021[2021] NZCA 231BETWEEN THE PHONE COMPANY LIMITEDApplicantAND M2 NZ LIMITEDFirst RespondentM2 TELECOMMUNICATIONS PTYLIMITEDSecond RespondentCourt: Kós P, Clifford and Courtney JJCounsel: D W Grove for ApplicantL L Fraser and Z Wall-Manning for RespondentsJudgment:(On the papers)3 June 2021 at 9 amJUDGMENT OF THE COURTA The application for an extension of time to appeal is declined.B The applicant must pay the second respondent costs on a band A basis for astandard application for leave to appeal and usual disbursements.____________________________________________________________________REASONS OF THE COURT(Given by Kós P)[1] The Phone Company Ltd (TPC) sues the respondents (together, M2) inthe wake of the agreed termination of their former business relationship in 2012.Proceedings were filed in 2015. Trial in the High Court at Auckland is set down for15 November 2021.[2] On 4 February 2021 Edwards J gave judgment declining TPC's application forfurther and better discovery, except in respect of some documents for which theapplication was adjourned.1[3] Time for appealing expired on 4 March 2021. On 8 March 2021, TPC askedM2 to extend the time period by agreement, but M2 declined. An application for leaveto appeal and draft notice of appeal were filed in the High Court in error, and servedon 23 March 2021. Application was then filed in this Court on 30 March 2021, some18 working days out of time.[4] The governing principles are those set out by the Supreme Court in Almond vRead.2 The ultimate question when considering the exercise of the discretion to extendtime is what the interests of justice require. Relevant factors include the length of thedelay, the reasons for the delay, the conduct of the parties (particularly of theapplicant), any prejudice or hardship to the respondent or to others with a legitimateinterest in the outcome and the significance of the issues raised by the proposed appeal,both to the parties and more generally, and whether the appeal lacks merit (or is"clearly hopeless").3[5] Default in compliance with time limits means the applicant exposes itself tothat merits review and the respondent will not needlessly be subjected to an appealotherwise as of right if that appeal is clearly hopeless.[6] In this case we accept that the first four factors in [4] do not stand in the wayof an extension of time. However, the fifth and sixth do.[7] This is a proposed interlocutory appeal concerning discovery ina much-delayed case set down for trial in November. Appeals over discovery are notto be encouraged unless they are patently material to the likely outcome at trial andthere is at least some reason to believe the Judge below has erred. In this case,discovery was completed in April 2017, four years ago. Limited further discovery was1 The Phone Company Ltd v M2 NZ Ltd [2021] NZHC 98 [High Court judgment].2 Almond v Read [2017] NZSC 80, [2017] 1 NZLR 801.3 At [39].given in April 2020. The application for further discovery was not made untilSeptember 2020, suggesting the application was of modest import only.[8] That impression is confirmed on inspecting the content of the proposed noticeof appeal. The first category concerns documents (1) constituting an agreement witha company called Cytek Communications Ltd and (2) evidencing the net receipts ofanother company called M Communications Ltd on the basis that it was a substitutefor Cytek. In light of the two discovery affidavits sworn, the Judge found there wasno evidential basis for suggesting the discovery process was flawed, and there was noreason to believe a Cytek agreement existed.4 Further, there were no grounds to gobehind the affidavit sworn by a director of M Communications Ltd contradicting thepremise for the application.5 We have considered [26]–[28] of Mr Grove'ssubmissions, but consider the approach taken by the Judge is plainly right.The proposed appeal against that finding has no prospect of success.[9] The second category sought concerned documents relating to the financialposition of M2 "from mid-2010 to mid-2012". It is advanced as a "variation ofthe [extant, tailored] Discovery Order, by way of an application for specificdisclosure", but was in fact premised on an alleged failure to discover by M2.The Judge held:6Category 2 of the Discovery Order provides for M2 NZ's audited financialaccounts from 2010 to currently available records to be provided. M2 saysthese documents were listed in its affidavit of documents dated 19 April 2017.The parties agreed that the disclosure of the audited financial accounts wouldbe proportionate to establishing the financial position of M2's New Zealandbusiness at the relevant time. There is no basis to renegotiate the terms ofthe Discovery Order.In agreement with the Judge we consider the application to vary those orders lacksmerit. We have considered [30]–[34] of Mr Grove's submissions. His protest as toabsence of agreement to scope of discovery is unsound; the tailored discovery ordershere were made pursuant to a joint memorandum. TPC has not demonstrated error inthe Judge's refusal to revisit those orders to require this further discovery to be made.4 High Court judgment, above n 1, at [16].5 At [17].6 At [50].Accordingly, we do not consider an appeal from that refusal has any prospect ofsuccess either.[10] We observe that while the present application has failed, none of that preventscounsel for TPC exploring any issue of relevance at trial and seeking such furtherorders as might appropriately be made at that time.Result[11] The application for an extension of time to appeal is declined.[12] The applicant must pay the second respondent costs on a band A basis fora standard application for leave to appeal and usual disbursements.Solicitors:Foy and Halse, Auckland for ApplicantChapman Tripp, Auckland for Respondents