The applicants were restrained from commencing proceedings against a bank for three years
In a recent case, the Court of Appeal has clarified the rules and principles applicable to an application for an extension of time to file an appeal.
In Mao v Buddle Findlay [2023] NZCA 393, married couple Liansen Mao and Quifen Lu borrowed money from the Industrial and Commercial Bank of China (New Zealand) Ltd. to purchase a property in Auckland. After Lu defaulted on the loan, the bank carried out a mortgagee sale and pursued a claim in China against Mao and Lu for the outstanding debt balance.
Mao and Lu have filed or attempted to fine nine proceedings against the bank and others in connection with the steps taken by the bank to recover the amounts that Lu owed. These proceedings have been struck out or rejected for filing because of their manifest defects. Furthermore, Mai and Lu have not paid any of the numerous cost awards made against them by the High Court.
The High Court issued an order under the Senior Courts Act 2016 restraining Mao and Lu from commencing or continuing any proceedings against the bank for three years. The High Court issued the order in November 2022. The applicants filed a notice of appeal in December. A few months later, Mao and Lu applied to the Court of Appeal, seeking an extension of time to file the case on appeal.
The appeal court explained in detail the factors to be considered on an application for an extension of time. Relevant considerations are likely to include the length of the delay, the reasons for it, the conduct of the parties, any prejudice or hardship to the respondent or others with a legitimate interest in the outcome, and the significance of the issues raised by the proposed appeal, both to the parties and more generally. The court further said that the merits of an appeal may be relevant, but a decision to refuse an extension of time based substantially on that ground should only be made where the proposed appeal is hopeless.
The court considered the delay in bringing the application and acknowledged the previous decision made under the Senior Courts Act, which restrained the parties from initiating or pursuing proceedings. The court said that while it restricted the applicants’ access to courts, the purpose of the order was to protect the respondents from meritless proceedings that are frivolous, vexatious, and an abuse of the court’s process.
Furthermore, the court said it is usually difficult to assess the merits of a proposed appeal in the context of an application to extend time. However, it appeared to the court that the applicants’ proposed appeal has little realistic prospect of success in this case.
Additionally, the court considered Mao and Lu’s conduct as relevant. They have completely disregarded court orders by not paying any of the numerous costs awards made against them. The court saw no reason why security for costs would be dispensed with on the appeal. Otherwise, the court emphasised that the respondents would be put to more costs with no realistic prospect of recovery if they succeed on any appeal, as it seems likely. The court also found no indication that the applicants will pay security for costs if the extension of time is granted.
After carefully reviewing these circumstances, the court ruled that the overall interests of justice strongly favour declining the application for an extension of time.
