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Hongying Yu v/s Chandler Properties Limited

    CA No. 270 of 2020
    Decided On, 02 September 2020
    At, Court of Appeal of New Zealand
    By, THE HONOURABLE MR. JUSTICE BROWN & THE HONOURABLE MR. JUSTICE COLLINS
    For the Appellant: K.H. Morrison, A. Manuson, Advocates. For the Respondent: D.J.G. Cox, Advocate.


Judgment Text
REASONS OF THE COURT(Given by Brown J)Introduction[1] On 30 July 2019 Chandler Properties Ltd (the respondent) obtained an order for specific performance requiring Ms Yu (the appellant) to complete the purchase of a section of bare land in Queenstown pursuant to an agreement for sale and purchase (the Agreement).[1] On 16 April 2020 a judgment was issued declaring that the Agreement remained on foot and directing that the summary judgment may be enforced by way of a sale order (the judgment).[2][2] On 21 May 2020, four working days out of time, the appellant filed a notice of appeal against the judgment together with an application for stay of execution of the judgment. Acting pursuant to r 5A(1)(c)(ii) of the Court of Appeal (Civil) Rules 2005 (the Rules) the Deputy Registrar of this Court extended the time for filing the notice of appeal by four working days.[3] The respondent filed an application for review of the Deputy Registrar’s decision by a Judge in accordance with r 5A(3)(a) of the Rules. The appellant filed an application for an order restraining Rennie Cox from continuing to act as solicitor for the respondent in this appeal (the restraint application).[4] In a minute of 23 June 2020 a direction was made that the restraint application and the application for review of the Deputy Registrar’s decision to grant an extension of time were to be heard together prior to any hearing on the application for stay of execution of the judgment. Those two matters are the subject of this judgment.Relevant facts[5] On 24 September 2018 the appellant and respondent entered into the Agreement whereby the appellant agreed to purchase the Queenstown section. When the appellant refused to settle, the respondent sought and obtained an order for specific performance of the agreement by way of summary judgment.[6] The appellant having failed to comply with the summary judgment order, the respondent applied for a charging order against the property which was granted on 26 August 2019. On 19 September 2019 the respondent applied for a sale order over the property.[7] However it transpired that in an affidavit of 16 August 2019 in support of the application for the charging order Mr Cox of Rennie Cox stated that the respondent had given notice of its intention to cancel the Agreement and subsequently gave notice of cancellation. This prompted the High Court registry to seek clarification from the respondent as to the legal basis on which a sale order could be sought in circumstances where an order for specific performance had been made but a notice of cancellation had been given.[8] The response is detailed in the judgment:[10] CPL filed and served a second affidavit of Mr Cox sworn on 17 December 2019 which sought to correct the statement made in Mr Cox’s 16 August 2019 affidavit. In his 17 December 2019 affidavit Mr Cox explained that the notice of intention to cancel the Agreement was ineffective as notice had not been given in accordance with the Agreement. He said that CPL purported to give written notice of intention to cancel the Agreement on 23 August 2019 by email to the defendant and by letter sent by courier delivery to the offices of Carson Fox (who CPL believed were representing the defendant). However, the defendant failed to acknowledge receipt of the email as required by cl 1.3(4)(d) of the Agreement. Carson Fox had also advised by letter dated 7 June 2019 that they no longer acted for the defendant. Consequently, CPL’s notice of cancellation on 12 September 2019, sent by the same means, in reliance on the notice of intention to cancel, was ineffective given the notice of intention to cancel was not served. Therefore, Mr Cox said the Agreement remained on foot.[9] The Deputy Registrar’s advice that the enforcement process would not be issued without further order of the Court led to the judgment under appeal in which the Court held:[16] As the notice of CPL’s intention to cancel was not served on the defendant in accordance with the Agreement, the cancellation of the Agreement cannot be effective. As Mr Cox submits, the Agreement remains on foot.[10] The time for filing an appeal against the judgment expired on 15 May 2020. However the appellant contended that she did not become aware of the judgment until 19 May 2020. Consequently with her notice of appeal she filed an application for extension of time to appeal under r 29A of the Rules.[11] Under r 5A(1)(c) the Deputy Registrar may, unless otherwise directed by a Judge, extend the time for complying with any rule by up to five working days despite the absence of consent. On 21 May 2020 the Deputy Registrar advised the parties as follows:I note that this appeal is only filed four working days out of time. That being the case, pursuant to rule 5A(1)(c)(ii) of the Court of Appeal (Civil) Rules 2005, I extend the time for filing this notice of appeal by 4 working days. The delay is minimal and will cause no real prejudice to the respondents.The application for review of the Deputy Registrar’s decision[12] The basis for the respondent’s application for review was that in an uncompleted affirmation lodged in support of her application for an extension of time the appellant made several false statements. Several of the alleged false representations concerned events in 2019. However in an affidavit of Ms Round, a solicitor employed by Rennie Cox, it was also asserted that the appellant falsely stated that the judgment under appeal was not served on her and that she only became aware of it when a copy was emailed to her new lawyers on 19 May 2020. It was contended that in its totality the itemised conduct demonstrated a pattern of behaviour on the appellant’s part of disengaging with her solicitors when it suited her and setting up barriers to communication in order to avoid service or alternatively to delay matters.[13] We consider the representations concerning the 2019 events are peripheral to the application for an extension of time. The critical representation related to the appellant’s claimed lack of knowledge of the fact of the judgment. If it could be demonstrated that that statement upon which the Deputy Registrar relied was knowingly false, then we consider there would be a proper basis for reviewing the extension of time.[14] In the uncompleted affirmation the appellant explained that she terminated her instructions to Carson Fox and sought to instruct new lawyers. She stated that she had difficulty doing so while New Zealand was at COVID-19 Alert Level 3. However on 12 May 2020 she engaged new lawyers who requested Mr Cox to provide electronic copies of the proceedings filed against her. She stated that she only became aware of the judgment on 19 May 2020 when Mr Cox annexed it to a letter he sent in response to a letter from the appellant’s new lawyers.[15] She further explained that the email address in the order for substituted service dated 24 May 2019 is not her email address but her husband’s. In any event she makes the point that neither she nor her husband read or speak English.[16] We are not satisfied on the basis of the material before us that the appellant’s statement to the Deputy Registrar concerning her lack of knowledge of the fact of the judgment was knowingly false. In those circumstances the Deputy Registrar’s decision to exercise the discretion to extend the time for filing the appeal by four days cannot be impugned.[17] The application for review of the Deputy Registrar’s decision is dismissed.The application to restrain Rennie Cox from acting[18] The restraint application is made in reliance on rr 13.5.1 and 13.5.3 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 which relevantly state:13.5.1 A lawyer must not act in a proceeding if the lawyer may be required to give evidence of a contentious nature (whether in person or by affidavit) in the matter....13.5.3 A lawyer must not act in a proceeding if the conduct or advice of the lawyer or of another member of the lawyer’s practice is in issue in the matter before the court. ...[19] The grounds in the application state:a. The main issue in the proceeding is whether the Agreement remains on foot. The issue directly concerns:i. The advice of Rennie Cox Lawyers to cancel the Agreement;ii. The conduct of Rennie Cox Lawyers in serving the notice of cancellation on Carson Fox and/or the appellant;iii. The change of advice by Rennie Cox Lawyers to not cancel the Agreement and subsequent attempt to reverse their conduct of serving the notice of cancellation on Carson Fox and/or appellant.b. Another issue on appeal is the extent to which the appellant has been served with all relevant Court documents. The affidavit evidence of Sarah Round (also from Rennie Cox Lawyers) asserts that “[c]opies of all relevant Court documents were emailed to the Appellant’s email address ...”.c. The evidence given by Rennie Cox Lawyers both in the High Court and Court of Appeal are contentious. Rennie Cox Lawyers would in effect be defending their own conduct on the issues raised in this appeal.d. The affidavit evidence of Sarah Round (also from Rennie Cox Lawyers) makes strong, partisan assertions that the appellant’s claims, pertaining to the issues in the proceeding, are “either untrue, or misleading”. Permitting Rennie Cox Lawyers to give evidence in favour of its own client’s case (the respondent) would impair the integrity of the judicial process.[20] As noted in footnote 3 in the judgment, Gault J did not consider that the evidence of Mr Cox in his affidavits was contentious. We agree.[21] The first Cox affidavit, which was stated to be in support of an application without notice for a charging order, annexed the sealed summary judgment order and a copy of the title to a property owned by Ms Yu in Queenstown. The affidavit records that notice of intention to cancel and notice of cancellation were given to Ms Yu and that Ms Yu had failed to pay the amount of the judgment.[22] The second Cox affidavit explains that its purpose was to correct an error in the first affidavit. It then proceeds to explain why, and to acknowledge that, service of the notices was not undertaken in accordance with the Agreement. The affidavit concludes with a statement in the nature of a submission that the Agreement had not been validly cancelled and remains on foot.[23] Save for the final statement in the second affidavit, all the statements in the two affidavits are matters of fact which are documented. It is difficult to see how those facts could possibly be contentious. The final statement is not a statement of fact but a conclusion of mixed fact and law. It would not be permitted in evidence and nor would it be the subject of cross-examination.[24] Howeve

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r the application is also directed at the affidavit of Ms Round which responds to the appellant’s uncompleted affirmation. This affidavit is contentious in that it asserts that various statements made by the appellant were either untrue or misleading and the reasons for that assertion. The affidavit is also in support of the opposition to the appellant’s application for a stay of execution of judgment, which is yet to be heard.[25] While it would have been preferable for that affidavit to have been made by a party and not by a solicitor in the firm acting for the respondent, given that it is directed solely at these interlocutory processes we do not consider that it warrants an order that Rennie Cox be restrained from acting in the appeal.Result[26] The application for review of the Deputy Registrar’s decision to extend the time for appeal is declined.[27] The application for an order that Rennie Cox be restrained from acting as solicitors for the respondent on the appeal is declined.--------------------------------------------------------------------------[1] Chandler Properties Ltd v Yu HC Auckland CIV-2019-404-571, 30 July 2019.[2] Chandler Properties Ltd v Yu [2020] NZHC 753.
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