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Ward v Ward [2022] NZCA 428 (9 September 2022)

Last Updated: 12 September 2022

JUDGMENT OF THE COURT

1. In CA160/2021 the application for an extension of time to file the case on appeal and apply for a hearing date is declined. The appeal is struck out.

B In CA473/2021 the appeal is struck out.

100. In both appeals the appellants must pay the respondents costs for an interlocutory application on a band A basis and usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Brown J)

Introduction

• [1] This decision concerns three interlocutory applications:

(a) in CA160/2021, by the appellant Mr R Ward for an extension of time to file the case on appeal and apply for a hearing date;

(b) also in CA160/2021, by the respondents Mr C Ward and Ms James to strike out the appeal; and

(c) in CA473/2021, by the respondent Mr Makinson to strike out the appeal.

• [2] The particular issue for decision is whether the Court has jurisdiction to strike out an appeal which, by effluxion of time, is already to be treated as having been abandoned.

The relevant rules

• [3] The Court of Appeal (Civil) Rules 2005 (the Rules) contain various provisions which incentivise the timely prosecution of appeals by appellants. As relevant here:

(a) Rule 35 requires an appellant to pay security for costs within 20 working days of the filing of their appeal. Failure to do so entitles the Court, on its own initiative or on a respondent’s interlocutory application, to strike out an appeal under r 37(1).

(b) Rule 43(1) provides that an appeal is to be “treated as having been abandoned” if the appellant does not apply for the allocation of a hearing date and file the case on appeal within three months after the appeal is brought. An appellant may apply for a hearing date “at any time” (r 38(1)), but may not do so if in default of their obligation to pay security for costs (r 38(2)).

(c) Rule 44A gives the Court a general power to strike out or stay an appeal or cross-appeal. The grounds for doing so are specified in r 44A(1), which states:

(1) In addition to any express power in these rules to strike out an appeal, the Court may, on an interlocutory application or on its own initiative, make an order striking out or staying an appeal in whole or in part if—

(a) the appellant is in continuing default in complying with any of these rules or with any procedural direction or order made by a Judge; or

(b) the appellant has failed to prosecute the appeal with due diligence and dispatch; or

(c) the appeal is frivolous, vexatious, or otherwise an abuse of the process of the Court.

As can be seen, that general power supplements the more specific power found in r 37(1).

• [4] The Court also has power to relieve an appellant as regards the requirements of r 43. Rules 43(1B) and 43(2) provide respectively for the suspension of r 43 and the extension of the stipulated period of three months. Under r 43(1B) the Registrar may on an informal application suspend r 43(1) for successive periods of one month if questions of legal aid, security for costs or the waiving of fees remain at large. Under r 43(2) the Court may on an interlocutory application extend, on one or more occasions, the stipulated period of three months provided the application is, as r 43(3) provides, made:

(a) before the period or extended period ends; or

(b) within three months after the period or extended period ends.

• [5] Rule 43(7) addresses the effect of the grant of such an extension:

(7) An extension of time granted under this rule has the effect of reinstating the appeal as at the date that it was treated as abandoned under subclause (1).

• [6] Thus the combination of r 43(1), (2), (3)(b) and (7) provide for an appeal deemed abandoned by r 43(1) to be retrospectively reinstated. The issue here is the status of such an appeal and, more particularly, its susceptibility to being struck out after the date of its deemed abandonment but before it is retrospectively reinstated.

The applications before us

Ward v Ward: CA160/2021

• [7] On 22 March 2021 Mr R Ward filed a notice of appeal against a decision of the High Court of 15 March 2021 which ruled that, unless he paid $15,229 by 30 March 2021, he would be adjudicated bankrupt.^[1]
• [8] Mr Ward, the appellant, failed to pay security for costs in that appeal by the required date of 27 April 2021. On 28 May 2021 Mr C Ward and Ms James, the respondents, filed an interlocutory application seeking an order striking out the appeal under r 37(1) of the Rules. That is the order they now seek.
• [9] Mr Ward failed to file his case on appeal or apply for a hearing by 22 June 2021 at which time the respondents’ application remained unheard. On 1 July 2021 the registry notified the parties that the appeal was treated as having been abandoned pursuant to r 43(1). Some days later, on 9 July 2021, Mr Ward filed an application for an order extending the time for compliance with r 43.
• [10] That is the order Mr Ward now seeks. The grant of that application would retrospectively reinstate Mr Ward’s appeal as at the date of its deemed abandonment, that is 22 June 2021.
• [11] The issues in CA160/2021 are (a) whether we should grant Mr Ward’s application for an extension of time, (b) if we do not, do we now have jurisdiction to hear Mr C Ward and Ms James’s application for strike out for failure to pay security and, (c) if we do, should we grant it?

Wislang v Makinson: CA473/2021

• [12] On 27 July 2021 Dr Wislang filed a notice of appeal against a judgment of the High Court, delivered on 30 June 2021, striking out his claim in defamation against Mr Makinson.^[2] On 13 August 2021 Mr Makinson filed an interlocutory application to strike out the appeal under r 44A of the Rules, in reliance on s 101 of the Insolvency Act 2006.
• [13] While that application was pending Dr Wislang failed to pay security for costs by the required date of 24 August 2021. Subsequently he also failed to file the case on appeal or apply for a hearing date by 27 October 2021. His appeal was treated by the Registrar as having been abandoned under r 43(1) on 28 October 2021. Dr Wislang has not applied for reinstatement under r 43(2).
• [14] The issues in CA473/2021 are whether we have jurisdiction to consider Mr Makinson’s strike out application and, if we do, should we grant it?

Management of the appeals

• [15] The applications in both appeals were to be determined on the papers in the month of November 2021. However in a minute dated 30 November 2021 French J identified that the strike out applications raised an important jurisdictional issue, namely whether the Court has jurisdiction to strike out an appeal when the appeal has already been deemed to be abandoned under r 43. Her Honour posed the question: does the fact the appeal has been abandoned mean it no longer exists for the purpose of a strike out application?
• [16] Because the issue had not previously been the subject of a considered decision of the Court, French J directed that the applications in the two appeals be heard together at an oral hearing. As neither appellant had legal representation, Mr Whittington was appointed as independent legal counsel to assist the Court.

Submissions

Appellants

• [17] Mr Ward filed two documents on 27 January and 9 March 2022, neither of which engaged specifically with the jurisdiction issue but focused rather on the International Covenant on Civil and Political Rights and the New Zealand Bill of Rights Act 1990. Dr Wislang did not file any submissions in support of his application.

Respondents

• [18] For Mr Ward and Ms James, the respondents and strike out applicants in CA160/2021, Ms Kalinowski contended that in addition to the statutory strike out powers in rr 37 and 44A the Court possesses an inherent power to strike out an appeal in circumstances where it is treated as having been abandoned. She submitted that such an inherent power is necessary for the efficacy of the Court, particularly considering that an appeal deemed abandoned is not necessarily the end of the matter or the appeal. In this respect, Ms Kalinowski drew attention to the provision for reinstatement in r 43(7) and the ability to apply for an extension of time under r 29A to bring a fresh appeal where the extended time frames under r 43 have expired.
• [19] Ms Kalinowski submitted that r 43 parallels and supports the Court’s inherent power to strike out an appeal already deemed abandoned. She submitted that it is extremely unlikely, if not practically impossible, to obtain a r 37 order striking out an appeal before the expiry of the r 43 three‑month period. She contended that r 37 would be moot in most if not all instances of a failure to pay security for costs if the Court is held not to possess an inherent power to strike out an appeal deemed abandoned, which cannot have been Parliament’s intention.
• [20] Mr More, counsel for Mr Makinson, adopted a similar position, emphasising the need for finality in the resolution of civil disputes. Mr More submitted that where a respondent has a positive argument for an appeal being struck out, as opposed to simply relying on a deemed abandonment, the Court should be loath to determine it has no jurisdiction to hear a strike out application. He argued that the fact of such jurisdiction was supported by the first ground for strike out in r 44A, namely a continuing default in complying with the Rules, reasoning that a continuing default was likely to bring about an abandonment in any event. Drawing attention to the fact that this Court has held that it has an inherent jurisdiction to set aside a notice of abandonment under r 44,^[3] Mr More submitted that setting aside a notice of abandonment is the reverse side of the coin to striking out an appeal.

Counsel assisting

• [21] The respondents’ stances were not, however, supported by Mr Whittington. He contended that once an appeal is deemed abandoned, it is “terminated, no longer extant, or no longer on foot”. Responding to the question in this Court’s minute he submitted that the appeal no longer exists.
• [22] Mr Whittington analysed the text of rr 43, 44 and 44A, reviewed authorities which have considered the implications of a r 44 abandonment and considered the purpose of r 43 in the light of various authorities.^[4] Salient propositions included:

(a) The heading “[t]ermination before hearing”, under which rr 43, 44 and 44A all fall, suggests these rules deal with the means of terminating, or bringing to an end, an appeal without it being heard and determined by the Court.

(b) Unlike r 44, r 43 has two distinct stages and states. After the expiry of the initial three‑month period in r 43(1) and during the additional three‑month period in r 44(3)(b), an appeal may sit “in some middle-ground, inchoate state, neither live, nor at an end”.

(c) After the expiry of the additional three‑month period the Court has no jurisdiction to reinstate an appeal.

(d) The fact that abandonment changes the state or status of an appeal is confirmed by the use of “reinstated” in r 43(7), which suggests that an extension restores the otherwise abandoned appeal to its former state as a live appeal.

• [23] Mr Whittington reviewed the three Rabson v Transparency International New Zealand Inc decisions, in which this Court and the Supreme Court considered the interaction between rr 37 and 43.^[5] In its leave decision the Supreme Court drew attention to the fact that Mr Rabson had made a timely r 43(2) application for an extension of time, which had not been finally determined. The Supreme Court commented:^[6]

On this basis, the application for an extension of time was still current in November 2015. In those circumstances, it is at least open to question whether the effect of r 43(1) was that the appeal was to be treated as abandoned so as to obviate the need for, or appropriateness of, an order striking it out.

On that issue Mr Whittington submitted:

There is nothing in r 43 which suggests that an application for an extension of time under r 43(2) made after the expiry of the initial three-month period, but before expiry of the additional period, has the effect of somehow suspending the effect of r 43(1). For myself, I do not therefore share the view of the Supreme Court that the question is as open as it suggested. If the Rabson cases could be ignored, I would argue that an appeal is deemed abandoned under r 43(1) even after an application to extend time has been made and until such time as an application is actually granted by the Court. That approach is consistent with r 43(7). Regardless, an alternative, and possibly preferable, way to address a Rabson situation would be for the Court to determine the extant application for an extension of time under r 43(2) despite security for costs not having been paid. Then, if declined, the Court could leave the appeal to be deemed abandoned on the expiry of the additional period.

• [24] Mr Whittington did not consider that the existence of an inherent power to strike out arose on the appeals. Even if, contrary to his analysis, an appeal continued to exist for the purpose of strike out, he considered there was still no need to resort to an inherent power since rr 37 and 44A adequately covered the necessary ground.

Discussion

The evolution of r 43 and its implications

• [25] The rationale of r 43 was addressed by this Court in Airwork (NZ) Ltd v Vertical Flight Management Ltd^[7] when considering its predecessor, namely r 10 of the Court of Appeal (Civil) Rules 1997 which provided:

10 Appeal abandoned if not pursued—

(1) An appeal is to be treated as having been abandoned if the appellant does not, within 6 months after the appeal is brought, either—

(a) Apply for a fixture and file the case on appeal; or

(b) Apply for an extension of time for applying for a fixture and filing the case on appeal.

(2) On an application under subclause (1)(b), the Court may extend, by such period as it thinks fit, the time for applying for a fixture and filing the case on appeal, and may from time to time further extend that period while the proceeding is pending.

...

• [26] This Court explained:^[8]

The new rule implements the philosophy that once a matter has been the subject of a determination in the High Court any party wishing to challenge that determination by an appeal to this Court must do so expeditiously or forfeit the right to pursue the appeal. It is thus required of appellants that they should have the case on appeal prepared and lodged within six months of the filing of the appeal and an application for a fixture made to the Registrar of this Court within the same period.

Recognising, however, that sometimes there may be good reason to give an appellant a longer period to prepare for the hearing of the appeal, the Court is empowered to extend the period on one or more occasions provided that the appellant continues to be willing to pursue the appeal speedily and demonstrates that willingness by applying to the Court within the time allowed for an extension. The appellant in so doing brings the further progress of the appeal within the control of the Court.

Where an appellant does not prior to the expiry of the six-month period bring such an application, the Court lacks any power to extend time under R 10 and the appeal is deemed abandoned (see also in this context R 27). It may in theory be possible for such an appellant to begin again by bringing another appeal by special leave under R 5, but after a first appeal has been deemed abandoned under R 10, that power is unlikely to be exercised save in exceptional circumstances.

On the other hand, where an application has been made under R 10(2) within the six-month period and the Court is satisfied that there is sound reason for allowing further time and that the appeal is not devoid of merit, the Court will grant the indulgence of an extension of time as a matter of normal practice. The order granting the application will effectively operate as a timetable order but there will exist the continuing sanction of deemed abandonment if the appellant does not comply with the new time limit or make a further application within the extended period accompanied by a persuasive explanation of the need for another extension.

• [27] When the Court of Appeal (Civil) Rules 2005 were adopted, r 43 allowed an initial six‑month period in which to apply for a hearing date and file the case on appeal, along with an additional three-month period in which an application for an extension of time could be made. Then, in 2013, the period for taking the requisite steps was reduced to three months but the further three‑month period for applications seeking extensions of time was retained. Because thereafter an appeal was to be treated as having been abandoned on the expiry of the initial three‑month period, it was necessary to provide for reinstatement of an appeal where an extension application was subsequently successful.^[9]
• [28] The conceptual difficulties evident in these applications arise because of the Lazarus effect whereby, although pending the hearing of an extension application in the latter three‑month period the appeal is treated as having been abandoned, the subsequent grant of an extension has the seamless consequence of backdating the reinstatement to the date of abandonment. Thus the initial status of “treated” abandonment is retrospectively removed.
• [29] The benefit of knowledge of the outcome of an extension application will resolve the status of any individual appeal: it will either remain abandoned or, by dint of reinstatement, it will continue on foot as if not abandoned — that is, with retrospective effect. However once the initial three‑month period expires, in the context of a debate about jurisdiction the interval between the filing of an extension application and its determination (during which the ultimate fate of the appeal is unknown) is problematic. As noted above, Mr Whittington argued that during that interval the appeal is deemed abandoned and hence no longer exists. It follows that, if the application is successful, then like Lazarus the appeal lives once more.

The implications of suspensions and extensions on the time for compliance

• [30] For the purposes of analysis it will be convenient to focus simply on a scenario of an initial (first) and a subsequent (second) three‑month period. However, the reality is that the three‑month period for compliance in r 43(1) will not infrequently be prolonged considerably as a consequence of suspensions of time occasioned by legal aid applications, challenges to the requirement to pay security for costs or applications for the waiver of a fee.
• [31] Concerning the former, in practice suspensions of time are granted by the Registrar under r 43(1B) throughout the period of consideration of an application for legal aid.^[10] Furthermore an appellant whose application for legal aid has not been determined at the time the appeal is brought is not required to pay security for costs while the legal aid application is pending.^[11] Consequently r 37(1) will not come into play.
• [32] Within 20 working days of filing a notice of appeal an appellant may apply to the Registrar for an order reducing the amount of, or dispensing with, security for costs.^[12] As with legal aid applications, suspensions of the r 43(1) period are generally granted where an application under r 35(6) in relation to security for costs or for a waiver of a fee has yet to be determined.^[13] Where the Registrar declines to grant an application for reduction or dispensation of security for costs, an appellant may apply for a review of the Registrar’s decision.^[14] If that review is unsuccessful, the appellant may apply for leave to appeal to the Supreme Court. In both those scenarios the Registrar may also suspend the application of r 43(1).^[15]
• [33] Hence an unsuccessful legal aid application followed by a challenge to the obligation to pay security for costs can bring about a de facto extension for many months of the requirement for the appellant to file the case on appeal and apply for a hearing date. Furthermore, experience has shown that there is the potential for still further delays associated with recall applications, interlocutory applications for stay of execution or for production of hearing transcripts, and reviews of decisions of single judges of this Court. It is understandable therefore that respondents to appeals which they consider are frivolous, vexatious or otherwise an abuse of the Court’s process might, as Mr Makinson has done, seek to have such appeals struck out under r 44A(1)(c).

Three scenarios

• [34] In an ideal world a r 44A application would be heard prior to the expiry of the three‑month period (including as suspended). In practice, however, that will be a rarity. As Ms Kalinowski emphasised, that simply may not be possible given the time which will inevitably lapse by compliance with a submissions timetable and the orderly allocation of hearings of interlocutory applications.
• [35] That reality is reflected here, where the strike out applications were both filed during the first three‑month period but remained undetermined when that period elapsed and the appeals were to be treated as abandoned. The difference between the two appeals (apart from the fact that the strike out applications were made under different rules, namely rr 37 and 44A) is that in the Ward appeal an application for an extension of time was filed,^[16] albeit during the second three‑month period in r 43(3)(b) after the appeal was to be treated as abandoned. Neither appeal poses the scenario where a strike out application is accepted for filing during the second three‑month period when the appeal is to be treated as abandoned.
• [36] We proceed to consider the following three scenarios:^[17]

(a) Rule 43(2) and r 44A applications are both filed within the first three‑month period.

(b) A r 43(2) application is filed in the second three‑month period.

(c) A r 44A application is filed within the first three‑month period but no r 43(2) application is filed at all.

Rule 43(2) and 44A applications are both filed within the first three‑month period

• [37] In the second Rabson decision the Supreme Court observed that where a timely extension of time application under r 43(2) is still extant it is open to question whether the appeal is to be treated as abandoned.^[18] Mr Whittington’s view notwithstanding, the Supreme Court’s view is binding on this Court.^[19] We consider that where an extension application is filed before the first three‑month period expires, the appeal should practically be viewed as resting in a dormant state until the extension application is heard and determined. As r 43(7) makes clear, on a successful application under r 43(2) the appeal will be reinstated with effect from the date it was presumptively treated as having been abandoned.

A r 43(2) application is filed in the second three‑month period

• [38] Once the first three‑month period expires, the appeal is to be treated as abandoned. Hence, subject to the qualification below, the Registry should not accept a r 44A application for filing after that time.
• [39] However, r 43(3)(b) permits an application for an extension to be filed during the second three‑month period. Obviously the Court has jurisdiction to hear such an application even though its filing was not “timely”. We regard this situation as analogous to that addressed by the Supreme Court in Rabson, whereby the appeal is only presumptively abandoned.
• [40] Given the desirability of r 43(2) and r 44A applications being heard at the same time by the same panel we consider that, just as the Court has jurisdiction to determine the r 43(2) application, it should also have jurisdiction to determine a latent or subsequent r 44A application. Consequently we consider that when a r 43(2) application is filed during the second three‑month period, a respondent may then file a r 44A application with a view to the two being heard together.

A r 44A application is filed within the first three‑month period but no r 43(2) application is filed at all

• [41] The more taxing issue is the scenario in the Wislang appeal: whether the Court continues to have jurisdiction to determine a r 44A application which is filed but not yet determined before the first three‑month period expires.
• [42] In our view the word “treated” in r 43(1) is a direction as to the way in which an appeal is to be administered or engaged with. We consider that it directs both the Registry and the opposing party that no steps need be taken and nothing more need be done, at least in the interim period prior to any reinstatement. However, while the Court is also free to view the appeal as abandoned (for the time being) we consider that more explicit terminology would be necessary in order to convey that the Court was deprived of jurisdiction to grant or dispose of an application that had validly come before it.
• [43] Jurisdiction concerns the Court’s capacity to be seized of a matter, not the issue whether, as a matter of discretion and for reasons of efficiency, the Court elects to decline to hear a matter.^[20] We do not consider that the Court’s jurisdiction to determine an application simply evaporates on the date on which an appeal is to be treated as abandoned, but then re-crystallises if an extension application is filed during the second three‑month period. In our view, the Court retains the jurisdiction to hear and determine an extant r 44A application after the first three‑month period elapses. However it is not obligated to do so.
• [44] The Court may well consider that the application should be determined where issues of abuse of process are raised or where a res judicata determination is justified, thereby avoiding the prospect of a subsequent r 29A application for an extension of time to file a fresh appeal. As Young P observed in Humphries v Carr, in the context of r 44, an abandonment is not tantamount to a dismissal of an appeal and thus does not give rise to a res judicata. It simply terminates the original appeal.^[21] Consequently the Court may, if it considers it appropriate, determine a validly filed r 44A application notwithstanding that the first three‑month period has expired.

The present applications

• [45] The application in CA160/2021 for strike out under r 37(1) was a response to Mr Ward’s failure to pay security for costs. Security for costs remains unpaid. The effect of r 37(2) is that even now Mr Ward is not in a position to comply with r 43(1). Consequently in those circumstances there is simply no justification for granting a r 43(2) extension. We consider that the respondents’ application to strike out the appeal under r 37(1) should be granted to avert the prospect of a pointless r 29A application.
• [46] In CA473/2021 Dr Wislang did not apply for an extension of time under r 43(2). It appears from other judgments of this Court that Dr Wislang is now bankrupt.^[22] However a claim in defamation is a personal claim for the purposes of s 101 of the Insolvency Act and hence not an asset or right which passes to the Official Assignee upon adjudication.^[23]
• [47] Consequently, although CA473/2021 is to be treated as abandoned, it is not beyond the realm of possibility, given Dr Wislang’s litigious history, that he might apply under r 29A for leave to appeal afresh. In those circumstances we consider it is appropriate and desirable to grant Mr Makinson’s extant application to strike out the appeal under r 44A.

Result

• [48] In CA160/2021 the application for an extension of time to file the case on appeal and apply for a hearing date is declined. The appeal is struck out.
• [49] In CA473/2021 the appeal is struck out.
• [50] In both appeals the appellants must pay the respondents costs for an interlocutory application on a band A basis and usual disbursements.

Solicitors:
Smith and Partners, Auckland for Respondents in CA160/2021
Downie Stewart Lawyers, Dunedin for Respondent in CA473/2021

^[1] Ward v Ward [2021] NZHC 510.

^[2] Wislang v Makinson [2021] NZHC 1586.

^[3] Humphries v Carr [2009] NZCA 608 at [17].

^[4] Russell v Commissioner of Inland Revenue [2006] NZCA 381; (2006) 22 NZTC 19,807 (CA); Sexton v Craig [2007] NZCA 200; Humphries v Carr, above n 3; Hart v ANZ Bank New Zealand Ltd [2013] NZCA 94; GLW Group Ltd (in liq) v Lepionka & Co Investments Ltd [2019] NZCA 24; and Hill v Māori Trustee [2020] NZCA 219.

^[5] Rabson v Transparency International New Zealand Inc [2015] NZCA 543 [First Rabson decision]; Rabson v Transparency International New Zealand Inc [2016] NZSC 9 [Second Rabson decision]; and Rabson v Transparency International New Zealand Inc [2016] NZCA 26 [Third Rabson decision].

^[6] Second Rabson decision, above n 5, at [3].

^[7] Airwork (NZ) Ltd v Vertical Flight Management Ltd [1999] 1 NZLR 29 (CA).

^[8] At 30–31.

^[9] Court of Appeal (Civil) Rules 2005, r 43(7).

^[10] Rule 43(1B)(a).

^[11] Rule 36(3).

^[12] Rule 35(6) and (7).

^[13] Rule 43(1B)(b).

^[14] Rule 5A(3).

^[15] Rule 43(1B)(c) and (d).

^[16] Dr Wislang never filed an application for an extension of time.

^[17] Although for simplicity we refer only to r 44A the analysis is also relevant for strike out applications under r 37(1).

^[18] Second Rabson decision, above n 5, at [3].

^[19] Third Rabson decision, above n 5, at [5].

^[20] Tehrani v Secretary of State for the Home Department [2006] UKHL 47, [2007] 1 AC 521 at [66]–[67] per Lord Scott.

^[21] Humphries v Carr, above n 3, at [27]. Young P made this observation in his dissenting opinion.

^[22] Wislang v White Island Tours Ltd [2022] NZCA 126.

^[23] Schmidt v Pepper New Zealand (Custodians) Ltd [2012] NZCA 565 at [24].