New Zealand Supreme Court

Insurance, policy wording, successive events, Christchurch earthquakes

IAG New Zealand Ltd v Moore [2020] NZSC 122 (13 November 2020)

Unsuccessful leave application – M owned a house in Christchurch, which suffered extensive damage in the 22 February 2011 and 13 June 2011 earthquakes - Estimated reinstatement cost said to be approximately $2.08 million for February earthquake damage and $2.77 million for June earthquake damage - IAG New Zealand Ltd (IAG) insured the house for accidental loss over the relevant period - Under the insurance policy, the sum insured was $2.5 million (excluding GST) – M said he should be paid up to $2.5 million for each event - Claim turned on interpretation of the aggregation clause in the insurance policy which, it was common ground, required that in certain circumstances, losses arising from separate events were aggregated together for the purpose of applying the policy - Parties sought an HC ruling from on preliminary question of whether, under the aggregation clause, maximum sum payable was the sum insured – HC ruled in IAG’s favour of IAG – M successfully appealed to CA – IAG sought leave to appeal to SC – SC said high point of proposed argument for IAG around whether CA effectively doubled up on the “same cause” requirement in the policy, effectively saying this was a requirement for a series as well as a separate requirement of the clause - Potentially a question of general or public importance or commercial significance – However, SC said, among other things, leave criteria not met because, even if the question of the approach to the “same cause” requirement resolved in IAG’s favour would not affect appeal outcome unless Court also overturned factual finding that the events did not have the same cause – Application dismissed.

Self-represented applicant, bankruptcy, stay of, imposing conditions

Hampton v MinterEllisonRuddWatts and ors [2020] NZSC 123 (13 November 2020)

Unsuccessful leave application – Self-represented H applied for leave to appeal CA decision dismissing two appeals; first where H sought stay of bankruptcy adjudication and second where he challenged HC order imposing conditions on his discharge from bankruptcy – SC said for reasons generally traversed in CA judgment and respondents was satisfied that H’s prospects of succeeding in his arguments insufficient either to give rise to any issue of general or public importance, or to meet the heightened standard for risk of miscarriage in relation to civil appeals – Saw no reason to depart from CA view that r 17.29 High Court Rules did not apply to bankruptcy adjudications, which were dealt with under HCR Part 24 - Also satisfied that there no issue of general or public importance nor any risk of miscarriage with respect to the appeal against H’s conditions of discharge – Application dismissed.

Self-represented applicant, successive litigation, strike out, civil restraining order

Faloon v Planning Tribunal [2020] NZSC] 124 (16 November 2020)

Unsuccessful leave application – Self-represented F engaged in litigation against the Crown for some 30 years - Filed 19 proceedings giving rise to some 60 judgments – Eleven proceedings related to an interest he claimed in land adjoining Palmerston North Airport - In 2018 F presented a further statement of claim for filing in HC - Struck out and HC issued a civil restraint order under s 166 of the Senior Courts Act 2016 – F’s appeal to CA dismissed (CA decision) – F’s subsequent application to have this judgment recalled also dismissed (Recall decision) – F applied to SC for leave to appeal against both CA decision and Recall decision - Application for leave to appeal against decision is out of time - That application treated as also encompassing application for time extension – SC said leave criteria not met - Applied both to CA decision and Recall decision - Principles applied to strike-out decisions well settled - Regarding civil restraint order, issue whether order correctly made in the particular circumstances of this case - No matter of general or public importance – Nothing F raised suggested any risk of a miscarriage of justice - Application dismissed.

Weight re starting point, personal mitigating circumstances, MPI imposition

Berkland v R [2020] NZSC 125 (17 November 2020)

Successful leave application – Approved question whether CA decision correct – SC particularly interested in hearing: (a) whether, given the more limited role CA attributed to B (compared to his co-offender), sufficient weight placed on that factor in setting the starting point; (b) whether CA applied correct approach to personal mitigating circumstances regarding B and in particular in requiring a causal link between his addiction or history of deprivation and the offending; and (c) whether CA correct to uphold imposition of MPI - Not intended that appeal should proceed as a wholesale re-litigation of CA guideline judgment in Zhang – Application allowed.

Representative claim, Opt in or Opt out

Southern Response Earthquake Services Ltd v Ross and anor [2020] NZSC 126 (17 November 2020)

Unsuccessful appeal from CA - Mr and Mrs R brought a claim against their insurer, Southern Response Earthquake Services Ltd (SR), alleging that they agreed to settle their insurance claim on a less favourable basis because SR gave them incomplete information about the cost of remedying damage to their home caused by the Canterbury earthquakes – Also said many other policyholders settled their insurance claims with SR in similar circumstances – They applied to HC for leave to bring proceeding as a representative claim for class of some 3,000 policyholders who settled in these circumstances – SR did not oppose the claim being brought on a representative basis – However, it opposed them bringing claim on an “opt out” basis - This meant claim brought on behalf of every member policyholder class, apart from those who expressly chose to opt out – SR said claim should be brought on “opt in” basis, where class member would have to complete a form electing to opt in to the proceeding to be included in the claim –Up until this case, opt in had been the New Zealand approach – HC accordingly granted leave for opt in claim - CA took a different view and allowed R’s appeal – Said opt out should generally be the norm and ordered that their claim proceed on an opt out basis - SR granted leave to appeal to the SC – SC unanimously dismissed appeal - Said representative actions had three objectives: improving access to justice, facilitating the efficient use of judicial resources and strengthening incentives for compliance with the law - also necessary to be guided by High Court Rules objectives namely, to secure the just, speedy and inexpensive determination of proceedings – Opt out procedure generally consistent with those objectives and has particular advantages in improving access to justice - Not necessary to wait for comprehensive legislation before allowing for opt out claims - Court should fill the void with a flexible application of existing court rules to develop procedures concerning representative actions, including in an opt out context – SC also provided some guidance on when representative proceeding should be allowed to proceed on an opt in or an opt out basis - Said generally procedure applicant sought, whether that be opt in or opt out, should be adopted unless good reason to do otherwise - Court should consider all relevant factors in light of what best met permissible objectives of the representative action in the particular case - Applying these principles here, SC said CA correct to say opt out order was appropriate – Appeal dismissed.

High Court of Australia

Patents, implied licence doctrine, exhaustion doctrine

Calidad Pty Ltd and ors v Epson Corporation and anor [2020] HCA 41 (12 November 2020)

Successful appeal from Full FCA Court - Epson Corporation (E) manufactured and sold printer ink cartridges under the brand name "Epson" ("the original Epson cartridges") - After original Epson cartridges have used, a third party ("Ninestar") obtained them from a number of sources and modified them to be refilled and re-used – Calidad (C) acquired modified cartridges from Ninestar and imported them into Australia for public sale – E was patentee of two patents in which the inventions embodied in the original Epson cartridges was claimed - Section 13(1) of the Patents Act 1990 (Cth) relevantly provided that "a patent gives the patentee the exclusive rights ... to exploit the invention" - Term "exploit" defined to include "make, hire, sell or otherwise dispose of the product" and to "use" it – Respondents (S) went to FCA alleging C infringed the E’s rights as patentee - Reference to principle that purchaser of patented goods that are obtained without restriction on their sale or use had the ordinary ownership rights because the law implies a full licence (the "implied licence doctrine") - Primary judge found said modifications to certain categories of original Epson cartridges extinguished any implied licence - On appeal Full FCA Court in separate judgments, said none of the categories of the original Epson cartridges were modifications authorised by any implied licence, and modifications to the original Epson cartridges constituted making a new embodiment of the invention claimed in the patents - C appealed from the Full Court decision and asked HC to say that, in cases of this kind, a doctrine that a patentee's monopoly rights of use and sale with respect to a product arising from statute were exhausted on first product sale ( "exhaustion doctrine") should apply instead of the implied licence doctrine – Allowing the appeal, HC majority said modifications to the original Epson cartridges did not amount to impermissible making of a new product and exhaustion doctrine should apply - Refilled and restored cartridges merely modified product versions modifications within scope of the rights of an owner of a chattel to prolong the life of a product and make it more useful - Result Full FCA Court reached would likely have been different if that Court had been in a position to apply the exhaustion doctrine - Matters informing adoption of a policy of the law as to the scope of the patent rights to sell and use a product pointed strongly to accepting the exhaustion doctrine and away from the implied licence doctrine - Also principle, authority and Patents Act did not require the implied licence doctrine continue to apply – Appeal allowed.
Judicial Committee of the Privy Council

Tort, Authority liability, re ipsa loquitor

Airport Authority v Western Air Ltd [2020] UKPC 29 (9 November 2020)

Unsuccessful appeal from Bahamas CA - In April 2007, an aircraft Western Air (W) owned and operated was stolen from an airport at Nassau, The Bahamas - Authority (A) a statutory body charged, among other duties, with airport security - W claimed A breached statutory duty and was negligent - Damages sought included special damages to reflect an increase in W’s insurance premium and interest on its bank loan, as well as loss of revenue - Trial judge Said A negligent (but not in breach of statutory duty) and awarded damages of $833,000 against it - However, trial judge declined to award damages for W’s revenue loss from inability to charter the plane, finding that this was not proven on the balance of probabilities - A appealed to the CA against liability finding - W cross-appealed regarding denial of damages for loss of revenue – Both appeals dismissed - A to PC – PC said proximate relationship between W and A – Negligence liability established – Not pure economic loss case - res ipsa loquitor relevant here – Appeal dismissed.

United Kingdom Supreme Court

Restrictive covenant, competing public interests

Alexander Devine Children’s Cancer Trust v Housing Solutions Ltd [2020] UKSC 45 (6 November 2020)

Successful appeal from CA - In July 1972 a farmer sold part of his land (application land) to a company (SSPC) that already owned the land next door (the unencumbered land) - Application land and the unencumbered land together formed a rectangular plot (the Exchange House site) - As part of the sale, SSPC covenanted that at all times thereafter: (i) no building structure would be built on the application land; and (ii) application land would only be used for car parking (the restrictive covenants) – The farmer’s son, S, later inherited the land adjacent to the Exchange House site - In 2012 he gifted part of this land (the hospice land) to the Alexander Devine Children’s Cancer Trust (Trust) to build a children’s hospice – Soon afterwards, and with knowledge of the restrictive covenants, Millgate Developments Ltd (Millgate) acquired the Exchange House site - In July 2013 Millgate applied for planning permission to build 23 affordable houses on the site, in line with its affordable housing planning obligations - Thirteen houses were to be built on the application land, breaching the restrictive covenants - Some houses would overlook the hospice’s planned gardens and wheelchair walk - Planning permission granted in March 2014 and Millgate began construction in July 2014 – In September 2014 S wrote to Millgate objecting to them building on application land - Millgate continued regardless and in May 2015 agreed to sell the development at the Exchange House site to Housing Solutions Ltd (Housing Solutions) - In July 2015, after completing the development, Millgate applied to the Upper Tribunal (UT) seeking to modify restrictive covenants, under section 84 of the Law of Property Act 1925 (1925 Act) - S and the Trust objected - Shortly afterwards, in September 2015, hospice construction began – On 18 November 2016 UT allowed Millgate’s application on condition that it paid £150,000 to the Trust as compensation - On 28 November 2018 CA overturned UT’s decision - Housing Solutions appealed to SC – SC unanimously dismissed appeal, though for different reasons to CA – SC differed from CA over how UT failed to consider Millgate’s cynical conduct – SC said UT deliberations involved two stages: jurisdictional and discretionary - First issue was whether Millgate’s deliberate and cynical breach of restrictive covenants was relevant at the jurisdictional stage – CA said it was – SC said it was not - A “contrary to the public interest” ground in s 84 of the 1925 Act should be narrowly interpreted - Focus on impeding of a reasonable user of the land and “whether that impediment, by continuation of the restrictive covenant, is contrary to the public interest” - Question not the wider one of “whether in all the circumstances it would be contrary to the public interest to maintain the restrictive covenant” - Narrow interpretation required weighing the public interest in 13 affordable housing units not going to waste against the public interest in the hospice providing a sanctuary for children dying of cancer - Good or bad applicant conduct not relevant at jurisdictional stage - Says nothing about the merits of what the land in question was being or will be used for [44] - Narrow interpretation is also in line with the other four grounds under s 84, accords with s 84 purpose, and reflects the fact that applicant conduct could still be considered at the discretionary stage - Said only appropriate for an appellate court to interfere in a discretionary decision of a specialist tribunal if that tribunal made an error of law – Here, even though UT accounted for Millgate’s conduct, made an error of law - UT failed to consider two relevant factors at the discretionary stage of its decision making: (i) Millgate could have built on the unencumbered land, not the application land; and (ii) Millgate would have been unlikely to satisfy a “contrary to the public interest” ground had it applied to modify the restrictive covenants prior to building on the application land - Millgate could not be rewarded for presenting the UT with a fait accompli – Appeal dismissed.