Application is thinly veiled attempt to circumvent ban on suing another entity, ruling says
The New Zealand Court of Appeal refused to grant permission to file a further appeal to an applicant who alleged that the respondent’s failure to recover loan monies resulted in losses due to the cancellation of a licensing agreement.
The case of Hook v Callaghan Innovation, [2025] NZCA 148, arose from a 2019 heads of agreement between Cross Slot IP Ltd and Surface Micro-Guard Ltd, which the applicant controlled.
The document concerned Cross Slot Europe Ltd, a new entity operated by the applicant and licensed to manufacture and distribute technologies and agricultural machinery designed and manufactured by Cross Slot IP.
In March 2021, Cross Slot IP cancelled this licence on the basis that Cross Slot Europe repudiated the agreement by using its access to the intellectual property for unauthorised purposes.
Arguing that this cancellation was unlawful, the applicant commenced five distinct proceedings against Cross Slot IP and its directors. The applicant began another proceeding using a different entity as the plaintiff after the District Court struck out the previous proceeding due to non-payment of security for costs.
The applicant unsuccessfully appealed two strike-out decisions to the High Court. The fourth and fifth proceedings resulted in orders restraining the applicant and any company in which he acted as a director from initiating related proceedings for five years under s. 213 of the District Court Act 2016.
In August 2023, the applicant brought the present proceeding against the respondent – a Crown agency with a loan scheme that supplemented private funding shortfalls amid the COVID-19 pandemic – in his personal capacity and in Surface’s name.
The applicant alleged negligence in the respondent’s approval of a loan to Cross Slot IP when it did not qualify for such a loan and in the respondent’s failure to recover the loan monies after the applicant informed it of Cross Slot IP’s ineligibility.
The District Court judge struck out the applicant’s latest proceeding upon finding no reasonably arguable cause of action.
The High Court agreed with the decision, dismissed the applicant’s appeal, and refused permission to file a second appeal. Thus, the applicant applied for leave to bring another appeal before the appeal court.
The Court of Appeal of New Zealand rejected the application seeking leave to appeal under s. 60 of the Senior Courts Act 2016, with costs awarded to the respondent.
The appeal court ruled that the applicant failed to allege a legal or factual issue capable of a bona fide and serious argument concerning sufficiently important interests to outweigh the cost and delay needed for a second appeal.
The appeal court noted that the High Court thoroughly dealt with the applicant’s claims of bias, bad faith, and misconduct and found these allegations unwarranted. The appeal court saw no arguable error in the High Court’s assessment that would justify reconsidering the same evidence.
Next, the appeal court applied established principles of the law of negligence. The appeal court determined that it could not hold the respondent liable for any losses due to the licence’s cancellation because the respondent owed no duty of care to the applicant or Surface.
The court agreed with the lower courts’ findings that the present proceeding was a thinly disguised attempt to get around the orders restraining the applicant from initiating proceedings against Cross Slot IP.
