Dotcom v Twentieth Century Fox Film Corporation and Others
| Jurisdiction | New Zealand |
| Judgment Date | 20 August 2014 |
| Neutral Citation | [2014] NZHC 1980 |
| Date | 20 August 2014 |
| Docket Number | CIV-2014-404-001272 |
| Court | High Court |
[2014] NZHC 1980
CIV-2014-404-001272
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
Application by defendants (bank and real estate agent) to strike out claims in breach of contract and misleading or deceptive conduct in breach of the Fair Trading Act 1986, following the cancellation of an agreement to sell property to the plaintiff in a mortgagee sale — first defendant as mortgagee entered into agreement to sell to plaintiff after property was passed in at auction — agreement contained a “better offer” condition, which had not been included in the auction terms and conditions — condition specified that if the vendor received a written offer for the property on terms that were no less favourable, the vendor could by notice in writing “to that effect” immediately cancel the agreement — meaning of “to that effect” — second defendant continued marketing property and first defendant received an offer from a third party — cancellation letter did not specify that the offer received had been in writing — plaintiff alleged that defendants misled it by failing to notify it of the “better offer” clause and that the second defendant was actively marketing the property and that it would put up sold signs on it — whether the agreement was validly cancelled in accordance with the requirements of the “better offer” condition — whether the failure to advise of the ongoing marketing of the property was misleading or deceptive — whether the first defendant had a good faith obligation to advise of ongoing marketing or that a better offer was received.
T J Walker and L F Stringer for Applicant
J E Hodder and L L Fraser for Respondents
M J Gavin for Applicant in Parallel Proceeding (Recording Industry)
This judgment was delivered by Justice Courtney
on 20 August 2014 at 4.30 pm
pursuant to R ll.5 ofthe High Court Rules
Registrar I Deputy Registrar
Date
Yesterday Kim Dotcom applied 1 for a stay of execution of an order requiring him to file and serve an affidavit setting out the nature, extent and value of his assets by 20 August 2014. 2 This morning I issued a minute advising of my intention to deliver this judgment later in the day dismissing the application but varying the order to provide for the confidentiality of information disclosed by Mr Dotcom. I also indicated my intention to grant an interim stay to allow Mr Dotcom to apply to the Court of Appeal. Counsel are conferring regarding the terms of that interim stay.
The application for stay was brought on the grounds that:
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(a) If execution of the order is not stayed Mr Dotcom's appeal rights in respect of it will be rendered nugatory;
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(b) Mr Dotcom has file a notice of appeal, the proposed grounds of appeal are seriously arguable and Mr Dotcom intends to prosecute the appeal promptly;
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(c) A stay will not injuriously affect the respondents because Mr Dotcom has assets worth more than $30m that are currently restrained in New Zealand and elsewhere.
The decision to stay execution of a judgment is an exercise in balancing the right of the successful party to enforce its judgment and the consequences for that party if it is not permitted to do so against the consequences for the party seeking the stay if the judgment is executed. This process is well described by Buckley LJ in Minnesota Mining & Manufacturing Co v Johnson & Johnson Ltd: 3
On what principles ought such a discretion to be exercised? The object, where it can be fairly achieved, must surely be so to arrange matters that, when the appeal comes to be heard, the appellate court may be able to do justice between the parties, whatever the outcome of the appeal may be. Where the injunction is an appropriate form of remedy for a successful
plaintiff, the plaintiff, if he succeeds at first instance in establishing his right to relief, is entitled to that remedy upon the basis of the trial Judge's finding of fact and his application of the law. This is, however, subject to the defendant's right of appeal. If the defendant in good faith proposes to appeal, challenging either the trial Judge's findings or his law, and has a genuine chance of success on his appeal, the plaintiff's entitlement to his remedy cannot be regarded as certain until the appeal has been disposed of.
The factors most frequently found to be relevant to the decision are those identified by Hammond J in Dymocks Franchise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd: 4
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(1) If no stay is grant will the applicants' right of appeal be rendered nugatory?
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(2) Bona fides of the applicants as to the prosecution of the appeal.
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(3) Will the successful party be injuriously affected by the stay?
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(4) The effect on third parties.
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(5) The novelty and importance of the question involved.
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(6) The public interest in the proceedings.
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(7) The overall balance of convenience.
Only the factors at (1), (3), (5) and (7) are relevant in this case. Mr Dotcom has deposed to his genuine intent to prosecute his appeal and I have no reason not to accept that assertion. Whether a stay is granted will have no, or no significant, effect on third parties. Nor is there any particular public interest in the proceeding beyond the fact that Mr Dotcom's affairs often attract public attention.
However, the list of factors that Hammond J indentified is not exhaustive. In particular, it is accepted that, although it is not for the Court considering a stay application to attempt any kind of determination of the proposed grounds of appeal, the existence of questions that are properly or genuinely arguable on appeal is a
relevant consideration. 5
I note, finally, that it is also recognised that conditions and undertakings may be appropriate tools in managing the issues arising on a stay application so as to protect the interests of both parties.
Will Mr Dotcom's appeal rights be rendered nugatory if a stay is refused?
Mr Hodder, for the respondents, endeavoured to argue that Mr Dotcom's appeal rights would not be rendered nugatory because a successful appeal would still result in a vindication of Mr Dotcom's position, entitle him to costs, may found a claim for damages and further disclosure can be prevented by a confidentiality order. However, Mr Hodder acknowledged that the prospect of Mr Dotcom being able to recover damages in the event of his appeal succeeding was unlikely. It is true that Mr Dotcom could obtain a confidentiality order but that would be of limited benefit
if disclosure has already been given. 6 Whilst Mr Hodder's point is right in a
technical sense it does not advance matters in a real sense.
I accept Ms Walker's submission for Mr Dotcom that if a stay is not granted his appeal rights will, effectively, be rendered nugatory. However, the mere fact that appeal rights are rendered nugatory is not necessarily determinative and in the circumstances of this case I consider that this consequence carries little weight. This is because Mr Dotcom himself does not assert that there will be any adverse effect on him if deprived of an effective appeal.
The affidavit that Mr Dotcom filed in support of his application does not touch on the issue of what effect complying with the disclosure order would have on him. He does not say that he will be adversely affected if required to make disclosure of his financial position. Ms Walker did not address the issue in her submissions and dealt with it only in reply. But I found her argument unconvincing.
Ms Walker submitted that it is axiomatic that an individual whose appeal rights are rendered nugatory is prejudiced. When pressed about the nature of the prejudice Ms Walker submitted that a person should not be required to disclose
private financial matters without...
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Kim Dotcom v Twentieth Century Fox Film Corporation
...v Dotcom [2014] NZHC 821. 5 This is the judgment of Thomas J referred to in n 4 above. 6 Dotcom v Twentieth Century Fox Film Corp [2014] NZHC 1980 [High Court stay 7 Dotcom v Twentieth Century Fox Film Corp [2014] NZCA 426 [Court of Appeal stay decision]. 8 Parker v C S Structured Credit ......