Withers v Registrar of Companies

[2021] NZHC 3046

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2020-409-325

[2021] NZHC 3046

UNDER

the Companies Act 1993 and an Appeal under section 370 of the Companies Act

IN THE MATTER OF

an appeal against a Notice of Prohibition

BETWEEN

MURRAY IAN WITHERS

Plaintiff

AND

THE REGISTRAR OF COMPANIES

Respondent

Hearing:

On the Papers

Counsel:

Appellant in Person

S Conway for Respondent

Judgment:

10 November 2021

JUDGMENT OF ISAC J

Background

[1]                  This appeal concerns a notice of prohibition issued by the Registrar of Companies against Mr Withers. The notice of appeal was  filed  on  24 July  2020, 16 months ago.

[2]                  Since then the appellant has failed to advance his appeal. The relevant procedural history is recorded in a minute of Churchman J of 6 August 2021 at [2]– [7]:

[2]        Initially, the appeal was first scheduled to be heard on 11 February 2021. However, in December 2022, the appellant sought a new hearing date, seeking a date after 14 May 2021.

WITHERS v THE REGISTRAR OF COMPANIES [2021] NZHC 3046 [10 November 2021]

[3]        The appellant’s grounds for seeking the adjournment and later hearing were his lack of financial means, parallel Court proceedings, his health, and the ill-health of a family member.

[4]        The Court granted the application and a new hearing date was set for 5 May 2021.

[5]        In April 2021, the appellant again sought to have the matter postponed for 12 months. Again the grounds relied on were his involvement with parallel Court proceedings and his ongoing family, health and financial difficulties.

[6]        In a joint memorandum filed on 14 April 2021, the Registrar of Companies consented to the orders sought by the appellant “while reserving its position to apply to have the appeal struck out for want of prosecution if no steps are taken after the expiry of the stand down period”. The adjournment was granted and Mallon J made adjustments to the timetabling order on 14 April 2021. She directed that a teleconference be held in six months’ time. That was set down for 7 September 2021.

[7]        For the third time, by an undated memorandum received by email on 2 August 2021, the appellant sought vacation of the case management conference (CMC) set for 7 September 2021. The grounds relied on are very similar to the grounds relied on in relation to both previous adjournment applications: family and personal health issues, involvement in other litigation, and difficulties with legal representation.

[3]                  As this history reveals, Mr Withers has consistently sought to delay a hearing of the appeal. The grounds relied on have included involvement with parallel court proceedings, and ongoing family, health and financial difficulties.

[4]                  All this led Churchman J  to  make  an  unless  order.  The  order  required  Mr Withers, amongst other things, to file and serve a common bundle of all relevant documents by 5 pm on 2 November 2021. He was also directed to serve supplementary points on appeal, and pay security for costs in the sum of $2,390, by  5 pm on 8 November 2021.

[5]                  Finally, Churchman J recorded, at [12] of his minute, that should the appellant fail to comply with any of the Court’s timetabling directions, the appeal would be struck out.

[6]                  On 4 November 2021, counsel for the Registrar filed a memorandum noting Mr Withers had failed to comply with the first timetabling direction requiring filing and service of the paginated bundle of relevant documents on 2 November. The

Registrar sought an order striking out the appeal. Since then, Mr Withers has also defaulted on the direction requiring service of supplementary points on appeal and payment of security for costs.

[7]                  In reply, Mr Withers filed a memorandum of 8 November 2021. In it he noted his previous efforts to defer the proceedings “due to personal reasons both financial and medical.” He went on to note, correctly: “The last request [for deferment] was declined.” Despite this he again submitted that there is no prejudice created by further delay because he remains subject to a banning order until such time as his appeal is determined.

[8]                  Mr Withers submits there are no cost issues and that there are “no affected parties apart from myself”.

[9]                  Finally, he submits the rules of natural justice should permit him to progress his appeal.

Discussion

[10]              An unless order takes effect automatically if it is not complied with.1 Accordingly, a party need not apply to enforce the order.2

[11]              I proceed on the basis that what Mr Wither’s in fact seeks is an order relieving him of the consequences of the unless order. The Court of Appeal summarised the principles applicable to such applications in these terms:3

…

(a)As an unless order is an order of last resort, it is properly made only where there is a history of failure to comply with earlier orders.

(b)An unless order should be clear as to its terms. That is, it should specify clearly what is to be done, by when and what is the sanction for non-compliance. That sanction should be proportionate to the default.

1      SM v LFDB [2014] NZCA 326 at [29].

2      Ibid.

3 SM v LFDB, above n 1, at [31].

(c)The sanction will apply without further order if the party in default does not comply with the order by the time specified. However, the party in default may seek relief by application to the Court

(d)Justice may require that the party in default be relieved of the consequences of the unless order where the Court is satisfied that the breach resulted from something for which that party should not be held responsible. The party should not assume that belated compliance will suffice.

(e)Where the unless order has been deliberately breached – that is, flouted – it is difficult to conceive of any situation where the interests of justice would require granting the flouter relief from the sanction imposed, notwithstanding belated compliance with the order.

(f)In deciding whether or not to excuse breach of an unless order the question for the Judge is: what does justice demand in the circumstances of this case? Considerations in answering that question include:

(i)The public interest in ensuring that justice is administered without unnecessary delays and costs.

(ii)The interests of the injured party, in particular in terms of delay and wasted cost.

(iii)Any injustice to the defaulting party, although that consideration is likely to carry much less weight in the circumstances than considerations (i) and (ii).

[12]              The unless order was clear in its terms and proportionate to Mr Withers’ repeated defaults.

[13]              In terms of principle (d) above, given the matters advanced by Mr Withers in his memorandum, I am satisfied his (further) default under the unless order is something for which he should be held responsible. And in terms of the considerations identified at (f)(i)-(iii) above, I am also satisfied — by a clear margin — that the public interest in ensuring justice is administered without unnecessary delay and cost, and the interests of the respondent, outweigh any injustice to Mr Withers arising from the dismissal of his appeal. He has been provided with many indulgences and there comes a time when there can be no more. The consequences of a further default were also clear.

[14]              Finally, I note that the overriding objective of the High Court Rules 2016 is to secure the just, speedy and inexpensive determination of proceedings.4 In addition to the prejudice the considerable delay to the appeal has caused to the respondent, the ongoing allocation of judicial resources to Mr Withers’ case, when he is unwilling or unable to advance it, is a cost borne by other litigants who wish to have their cases heard. I do not accept Mr Withers’ submission that no one other than himself is prejudiced by his delay.

[15]I therefore decline Mr Withers’ application.

Isac J

Solicitors:

Crown Law, Wellington for Respondent

4      High Court Rules 2016, r 1.2.