IN THE Court of appeal OF new Zealand

I TE KŌTI PĪRA O AOTEAROA	
 CA416/2020
 [2021] NZCA 108

	
BETWEEN	
FOREST HOLDINGS (NZ) LIMITED
Applicant	
	
AND	
THEAN KAI SHEUNG
Respondent	

Counsel:	
J W Donald for Applicant
No appearance for Respondent	

Judgment:
(On the papers)	
14 April 2021 at 10.00 am	

JUDGMENT OF GODDARD J

A	The time for bringing the appeal is extended under r 29A of the Court of Appeal (Civil) Rules 2005 (Rules) to 5.00 pm on Friday, 14 May 2021.  
B	A direction for substituted service is made under r 5(1) of the Rules.  Instead of personal service of the notice of appeal, the steps set out at [32] may be taken by the applicant to bring the appeal to the attention of the respondent.  
C	A direction is made that if the respondent does not file an address for service for the purposes of the appeal, documents other than the notice of appeal may be served on the respondent in the manner specified at [32](b) and (c).
____________________________________________________________________

REASONS

The applications before this Court
[1]	Forest Holdings (NZ) Ltd (Forest Holdings) wishes to appeal to this Court from a judgment of the High Court declining to grant an order for specific performance against the respondent, Mr Sheung.  Forest Holdings applies for an extension of time to bring its appeal to this Court under r 29A of the Court of Appeal (Civil) Rules 2005 (Rules).  Forest Holdings also applies for an order under r 5(1) of the Rules dispensing with the need for personal service on the respondent and allowing substituted service.
[2]	These applications may be determined by a single Judge under s 49(3) of the Senior Courts Act 2016.  
Background 
[3]	Forest Holdings is the holder of forestry rights on a property in Kaimai which permit it to harvest Rimu and Tawa timber.  In August 2017, Forestry Holdings entered into a joint venture agreement (the Agreement) with Pristine Timber Co Ltd and Mr Sheung.  
[4]	Forest Holdings claims that Mr Sheung was required to pay Forest Holdings $1,170,000 (the purchase price) under the Agreement, but failed to do so.  The Agreement provided that all parties submitted to the jurisdiction of the New Zealand courts in respect of any proceedings arising out of or relating to the Agreement.  Forest Holdings filed proceedings in the High Court seeking an order for specific performance of the claimed obligation on the part of Mr Sheung to pay the purchase price.  The High Court proceedings were served personally on Mr Sheung at an address in Kuala Lumpur, Malaysia (Kuala Lumpur address).
[5]	Forest Holdings has filed evidence (discussed in more detail below) that Mr Sheung resides at, or continues to visit, the Kuala Lumpur address.  He appears to divide his time between Kuala Lumpur and China.
[6]	Mr Sheung did not file a statement of defence, or take any other steps, in the High Court proceedings.  He did not provide an address for service.  In default of an appearance by Mr Sheung, the High Court proceedings were set down for a formal proof hearing.
[7]	Following the formal proof hearing, Duffy J declined to make an order for specific performance by Mr Sheung in respect of payment of the purchase price.  The Judge considered that the Agreement had never become legally enforceable.  And she considered that even if the Agreement had become legally enforceable, there was no obligation on the part of Mr Sheung to pay the purchase price to Forest Holdings.
[8]	Forest Holdings filed a notice of appeal in this Court on 29 July 2020, within the 20-working-day period prescribed by the Rules.  But attempts to serve the notice of appeal on Mr Sheung have been unsuccessful.
[9]	Rule 31(1) of the Rules provides that an appeal is brought only when the appellant has filed the notice of appeal with the registry and a copy of the notice of appeal is “served on every person who is a party to the proceeding in the court appealed from”.    Although the notice of appeal was filed with this Court within time, because Mr Sheung has not been served with the notice of appeal, the appeal has not yet been brought in accordance with r 31(1) of the Rules.  
Evidence in relation to attempts to serve Mr Sheung
[10]	Forest Holdings has filed affidavit evidence in relation to its attempts to serve the notice of appeal on Mr Sheung.  The affidavits are from Kow Yaw Wei, a process server, dated 4 March 2020 and Chee Kin Sum, a director of Pristine Timber Co Ltd, dated 11 March 2021.
[11]	Kow Yaw Wei’s affidavit describes an attempt to serve Mr Sheung with the notice of appeal at the Kuala Lumpur address on 29 July 2020.  Entry to the premises was denied by security guards.  A second attempt was made on 30 July 2020, but entry to the premises was again denied.  
[12]	Chee Kin Sum’s affidavit states that she visited the Kuala Lumpur address on 14 February 2021 to see if Mr Sheung was still living there.  When she was nearby, she saw Mr Sheung, whom she recognised from previous encounters, entering the premises, but was not permitted entry by the security guards.  She also states that she previously corresponded with Mr Sheung by email.  To her knowledge, Mr Sheung’s email address remains the same as the email address used for previous correspondence.  The last time she received an email from Mr Sheung from that email address was July 2018. 
Application for extension of time
The law
[13]	Where the appeal period prescribed by r 29(1) has expired, a party may apply for an extension of time under r 29A of the Rules.  As the Supreme Court said in Almond v Read, the ultimate question when considering the exercise of the discretion under r 29A is what the interests of justice require.  The factors which are likely to require consideration under r 29A include:
(a)	the length of the delay;
(b)	the reasons for the delay;
(c)	the conduct of the parties, in particular the applicant;
(d)	any prejudice or hardship to the respondent or to others with a legitimate interest in the outcome; and
(e)	the significance of the issues raised by the proposed appeal, both to the parties and more generally.
Applicant’s submissions
[14]	Forest Holdings submits that the notice of appeal was filed with this Court within time, on 29 July 2020.  The delay in bringing the appeal stems primarily from the fact that Mr Sheung has never provided an address for service as he took no part in the High Court proceedings.  Three attempts have been made to personally serve Mr Sheung with the notice of appeal at the Kuala Lumpur address, all of which have been unsuccessful.
[15]	Forest Holdings submits that as Mr Sheung took no part in the High Court proceedings, it is unlikely he will oppose the appeal, so there is no prejudice to him if an extension of time was granted.  The proposed appeal is of significant importance to Forest Holdings as it wishes to enforce payment of $1,170,000 which it considers it is entitled to under the Agreement.  This is not a case where the merits of the substantive appeal are relevant as the proposed appeal is not “hopeless”.
Discussion
[16]	Forest Holdings filed its application for an extension of time to bring an appeal on 16 March 2021, 147 working days after the time for bringing an appeal expired.  Although that delay is considerable, the main cause of the delay has been the inability to serve the documents on Mr Sheung.  The initial notice of appeal was filed within time, on 29 July 2020.  It is only because the respondent could not be served with the notice of appeal that the appeal has not been “brought” and an extension of time is needed.  
[17]	Forest Holdings has acted reasonably in the steps it has taken to bring its appeal.  It attempted twice to personally serve Mr Sheung immediately after filing the notice of appeal with this Court.  Efforts to personally serve Mr Sheung with the documents were also made in February 2021, where Mr Sheung was sighted at his Kuala Lumpur address, but guards prevented entry onto the premises.  No unfair prejudice or hardship to the respondent would arise if an extension was granted, in these circumstances.
[18]	The issues raised by the proposed appeal are significant to Forest Holdings: the sum it claims is substantial, and it also says it has an interest in establishing that the agreement has become legally enforceable and remains on foot.  It is not necessary to consider the merits of the proposed appeal before granting an extension of time, in circumstances where the appeal is not plainly “hopeless”.
[19]	In these circumstances, it is in the interests of justice to grant an extension of time for Forest Holdings to bring its appeal, under r 29A of the Rules.  Forest Holdings will have until 5.00 pm on Friday, 14 May 2021 to bring its appeal, by serving the notice of appeal on Mr Sheung in accordance with the directions given below for substituted service.  
Application for substituted service directions 
The law
[20]	As already mentioned, a copy of the notice of appeal must be served on every person who is a party to the proceeding in the court appealed from.  That includes every person named as a party and served with the proceedings in the court appealed from, even if that person took no part in the proceedings.  
[21]	Where service of the notice of appeal is unable to be effected personally, or at an address for service provided in the court below, the appellant may apply to this Court for appropriate directions under r 5(1) of the Rules:
The Court may give any directions that seem necessary for the just and expeditious resolution of any matter that arises in a proceeding, whether on application by a party or on the Court’s own initiative.
[22]	The Rules do not make specific provision in relation to orders for substituted service.  But relevant guidance is provided by r 6.8(1) of the High Court Rules 2016, which provides:
6.8	Substituted service
(1)	If reasonable efforts have been made to serve a document by a method permitted or required under these rules, and either the document has come to the knowledge of the person to be served or it cannot be promptly served, the court may—
(a)	direct—
	(i)	that instead of service, specified steps be taken that are likely to bring the document to the notice of the person to be served; and
	(ii)	that the document be treated as served on the happening of a specified event, or on the expiry of a specified time:
…
(c)	subject to any conditions that the court thinks just to impose, dispense with service of a document on a person and give to the party by whom the document is required to be served leave to proceed as if the document had been served.
[23]	The approach set out in r 6.8(1) of the High Court Rules can be applied by analogy in this Court, when giving directions under r 5(1) of the Rules.
Applicant’s submissions
[24]	Forest Holdings submits that dispensing with personal service is appropriate as Mr Sheung has never provided an address for service, and reasonable efforts have been made by Forest Holdings to personally serve the notice of appeal on Mr Sheung at the Kuala Lumpur address with no success.  It appears Mr Sheung may be evading service.
[25]	Forest Holdings asks that this Court direct that Forest Holdings may take the following steps instead of personal service:
(a)	affixing a copy of each document, together with a copy of the order in relation to service, to Mr Sheung’s last known address in Kuala Lumpur;
(b)	posting a copy of each document, together with a copy of the order in relation to service, to Mr Sheung’s last known address in Kuala Lumpur; and
(c)	emailing a copy of each document, together with a copy of the order in relation to service, to what is believed to be Mr Sheung’s last used email address.
Discussion
[26]	Although Mr Sheung took no part in the High Court proceedings, he was named as a party to those proceedings and served with those proceedings.  He must therefore be served with the notice of appeal under r 31(1)(b) of the Rules.   
[27]	As discussed above, reasonable efforts have been made by Forest Holdings to personally serve the notice of appeal on Mr Sheung at his Kuala Lumpur address, where he resides or continues to visit.  It is quite clear that the notice of appeal cannot promptly be served on Mr Sheung in person.  It seems likely Mr Sheung is evading service.
[28]	This is not a case in which service of the notice of appeal should be dispensed with entirely.  Steps should be taken to bring it to Mr Sheung’s attention, so that he has the opportunity to appear and be heard before this Court if he wishes to do so.  I am satisfied by the evidence filed by Forest Holdings that the steps set out above at [25] are likely to bring the notice of appeal to Mr Sheung’s attention.  It appears Mr Sheung still resides at, or regularly visits, the Kuala Lumpur address.  The email address is the address specified in the Agreement for notices and demands to be sent to Mr Sheung under the Agreement. It is the last email address from which Chee Kin Sum received an email from Mr Sheung in July 2018.  So far as she is aware, Mr Sheung’s email address remains the same.  
[29]	An order under r 5(1) of the Rules of the kind contemplated by r 6.8(1)(a) of the High Court Rules is appropriate.  Instead of personal service on Mr Sheung, Forest Holdings may serve the notice of appeal in the manner set out above at [25].  Forest Holdings has until 5.00 pm on Friday, 14 May 2021 to take those steps.  The documents are to be treated as having been served on Mr Sheung for the purposes of r 31 of the Rules upon completion of all three steps.
[30]	Mr Sheung may elect to file an address for service for the purposes of this appeal.  If he fails to do so, then I direct that documents other than the notice of appeal that must be served on him in connection with this appeal, may be served by sending them by post and by email in accordance with paras [25](b) and (c) above: those documents need not be physically affixed to the Kuala Lumpur address.   
Result
[31]	The time for bringing the appeal is extended under r 29A of the Court of Appeal (Civil) Rules 2005 (Rules) to 5.00 pm on Friday, 14 May 2021.
[32]	A direction for substituted service is made under r 5(1) of the Rules.  Instead of personal service of the notice of appeal, the following steps may be taken by the applicant to bring the appeal to the attention of the respondent, by 5.00 pm on Friday, 14 May 2021:
(a)	affixing a copy of the notice of appeal, together with a copy of the orders in relation to extension of time and service, to Mr Sheung’s last known address in Kuala Lumpur;
(b)	posting a copy of the notice of appeal, together with a copy of the orders in relation to extension of time and service, to Mr Sheung’s last known address in Kuala Lumpur; and
(c)	emailing a copy of the notice of appeal, together with a copy of the orders in relation to extension of time and service, to the email address for Mr Sheung specified in the Agreement.
[33]	A direction is made that if the respondent does not file an address for service for the purposes of the appeal, documents other than the notice of appeal may be served on the respondent in the manner specified at [32](b) and (c).

Solicitors: 
Braun Bond & Lomas Ltd, Hamilton for Applicant