New Zealand Law Society - Supreme Court roundup 26 November - 2 December 2021

Supreme Court roundup 26 November - 2 December 2021

Supreme Court roundup 26 November - 2 December 2021

Decisions, proceedings and news from the highest courts in some common law jurisdictions in the past fortnight.

New Zealand Supreme Court 

Self-represented litigant, relationship property

LFDB v SM [2021] NZSC 164 (30 November 2021)

Unsuccessful leave application – HC Registrar declined to accept application from self-represented L that, amongst other things, sought reconsideration and setting aside of HC judgment of 27 October 2015 (the October 2015 judgment) in the parties’ relationship property proceeding – HC Judge upheld decision - L appealed to CA - CA made orders striking out the appeal under r 44A(1) of the Court of Appeal (Civil) Rules 2005, essentially because appeal an abuse of Court’s process – L sought leave to appeal to SC –

SC noted lengthy litigation history – Said it need only note that an order debarring L from taking any further part in the relationship property proceeding after non-compliance with unless orders remained in force – SC had granted leave to appeal against the decision to make the order debarring L,  but leave subsequently withdrawn - Court “formed the view that the manner in which the [applicant] has continued to conduct the proceeding [was] oppressive” and the applicant was “gaming the court system” - Following that decision, HC determined substantive relationship property proceeding on a formal proof basis - This was the October 2015 judgment L sought to challenge through application to HC - 

SC said proposed appeal would largely reprise arguments made in CA - L also sought to rely on r 15.10 of the High Court Rules, which provided for judgments obtained by default to be set aside or varied where there had been or may have been a miscarriage of justice - Finally, L wished to challenge the effect of the debarment order – SC said leave criteria not met - Application dismissed.

Supreme Court of Canada

Taxation, avoidance, creation of Luxembourg-based company

Canada v. Alta Energy Luxembourg S.A.R.L. [2021] SCC 49 (26 November 2021)

Unsuccessful appeal from Federal CA - An American oil and gas company created a Luxembourg subsidiary, AL, which had Canadian subsidiary, AC - In 2013, AL sold its AC shares and made more than $380 million in profit - AL paid taxes on profit to Luxembourg tax authorities - In its Canadian tax return, AL claimed tax exemption on basis that profit not “taxable income earned in Canada” - Supported its claim by relying on tax treaty between Canada and Luxembourg - That agreement exempted Luxembourg companies who profited from selling shares in Canada from paying taxes as long as shares related to buildings and lands in Canada where company conducted business – Canadian Minister of National Revenue denied exemption –

AL appealed to Canadian Tax Court - Before Tax Court, Minister said AL could not quality for exemption because AC did not do business on property - Minister also said the only reason AL existed was to sell shares without having to pay taxes to Canadian tax authorities - Minister said that was abusive tax avoidance - Tax Court ruled for AL – Minister appealed to Federal CA - It also favoured AL - Said no abusive tax avoidance –

Minister then appealed to SC - SC dismissed appeal – SC majority said Minister had not proven abusive tax avoidance – Canada had agreed to include exemptions for buildings and lands in tax treaty to encourage investments by Luxembourg residents and companies - AL made such an investment - Consequently, it could claim a tax exemption and anti-avoidance provisions of Canadian Income Tax Act could not be used to deny the exemption – Appeal dismissed.

Judicial Committee of the Privy Council

Adoption, process for, judicial review

Sookhan v Children’s Authority of Trinidad and Tobago  [2021] UKPC 29 (1 November 2021)

Unsuccessful Authority appeal from Trinidad and Tobago CA – S was a registered nurse - In October 2015, biological parents abandoned a young child (AB) at the hospital where S worked - AB spent over a year at hospital - S cared for him - In November 2016 S applied to Authority to adopt AB - On 13 June 2019, Authority informed S that her application form had not been submitted correctly and that AB had since been matched with prospective adoptive parents - S sought to challenge  Authority’s decision not to consider her application to adopt AB through judicial review - HC refused S permission to bring her claim, saying it was unarguable – She appealed to CA – CA said she had an arguable claim that Authority had acted in a procedurally unfair manner -

Authority appealed to PC - PC said threshold for grant of leave to apply for judicial review low – Here PC concerned only to examine whether S had an arguable judicial review  ground with realistic prospect of success and not subject to a discretionary bar such as delay or an alternative remedy –

PC said  existence and extent of any obligation of fairness here was a matter for full hearing – Also not persuaded that CA was plainly wrong to say it was arguable that there should be a fair procedure for application to be placed on the list of suitable persons for adopting children – PC said each potential breach of fairness obligation as CA set them out supported by evidence as it presently stood – Appeal dismissed.

Negligence, land, reliance on valuation report

Charles B Lawrence and Associates v Intercommercial Bank Ltd [2021] UKPC 30 (22  November 2021)

Successful appeal from Trinidad and Tobago CA - L a professional land valuer  – IB a commercial bank - Singapore Automotive Trading Limited (Singapore) went to IB for a loan - Rafferty Development Limited (Rafferty) to be loan guarantor - Rafferty instructed L to provide land valuation, which Rafferty would use as loan security - Although Rafferty instructed L, parties accepted that valuation report purpose was to ascertain the current open market land value for mortgage purposes -

L prepared the valuation report - Said land’s then current open market value was $15,000,000 - L also indicated in his report that: vacant possession possible; land free from all encumbrances; all necessary statutory planning approvals would be granted for construction of a commercial development on land - Based on valuation report, IB advanced loan to Singapore (of $3,000,000.00) - Transpired that there were occupiers on land and land did not have planning approval for constructing commercial development -

In March 2012 IB issued negligence claim against L, seeking  "at least $2,078,198.99", the difference between sum owing under the mortgage inclusive of interest and true open market property value (at best $2 million) – HC said L negligent by failing to identify occupiers’ presence and in wrongly valuing land on commercial basis – CA dismissed L’s appeal, saying no basis for trial judge’s negligence findings to be reversed – L appealed to PC –

PC said subsequent to lower court decisions in this case, UK Supreme Court in two cases made it clear that, in determining scope of the duty of care, particularly important to consider purpose of  advice or information being given - It was clear, not least from the assumptions L expressly specified in valuation report, that report purpose here to value property assuming good legal title to Land – Not report purpose to advise on, or give information about, Land title  -

Clear that Bank not looking to L’s report to advise on, or give information about, title - That was a matter for a lawyer not a valuer – Appeal allowed.

United Kingdom Supreme Court

Seaworthiness obligations, Hague rules

Alize 1954 and anor v Allianz Elementar Versicherungs AG and ors  [2021] UKSC 51 (10 November 2021)

Unsuccessful appeal from CA - A and associate owners of container ship CMA CGM LIBRA - EV cargo owners - Ship grounded on shoal outside of buoyed fairway shortly after leaving Xiamen, China en route to Hong Kong -  Admiralty judge said vessel’s defective passage plan causative of  grounding involved a breach of carrier’s seaworthiness obligation under article III rule 1 of Hague Rules - As this involved owners’ actionable fault it followed that cargo owners had good defence to owners’ claim in general average – CA upheld judge’s decision - Owners said decisions of courts below wrong - Vessel not unseaworthy and/or due diligence exercised, and any negligence in passage planning a navigational fault which was exempted under article IV rule 2(a) of Hague Rules –

SC unanimously dismissed appeal - Rejected argument that there was category-based distinction between seaworthiness and  navigation or management of the ship - What mattered was fact of unseaworthiness - Causation relevant to due diligence issue, but not to whether relevant defect or state of affairs amounted to unseaworthiness - That would depend on its effect on vessel’s fitness to carry goods safely on the contractual voyage – SC said  save for exceptional cases at boundaries of seaworthiness, well–established prudent owner test, whether prudent owner would have required relevant defect to be made good before sending vessel to sea had he known of it, an appropriate test of seaworthiness, well suited to adapt to differing and changing standards – Said fact that a defect remediable might mean a vessel not unseaworthy - Likely to depend on whether it would reasonably be expected to be put right before any danger to vessel or cargo arose –

On proper interpretation of Hague Rules, article IV rule 2 ‘nautical fault’ exception could not be relied upon regarding causative breach of carrier’s obligation to exercise due diligence to make vessel seaworthy –

SC also said obligation on carrier to exercise due diligence to make vessel seaworthy required due diligence be exercised in work of making the vessel seaworthy, regardless of who was engaged to carry out that task - Carrier might not be liable for lack of due diligence which occurred before he had responsibility for vessel or, in relation to cargo, before he had responsibility for cargo - Carrier might nevertheless be liable if defect or danger would be reasonably discoverable by exercising due diligence once the vessel or cargo came within its control – SC said carrier liable for master and deck officer failure to exercise due diligence in preparation of a passage plan for the vessel’s voyage – Appeal dismissed.

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