New Zealand Law Society - Supreme Court roundup 17 March - 23 March 2022

Supreme Court roundup 17 March - 23 March 2022

Supreme Court roundup 17 March - 23 March 2022

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

New Zealand Supreme Court

Evidence, hearsay, conspiracy

Naufahu v R [2022] NZSC 22 (17 March 2022)

Unsuccessful leave application – N sought leave to appeal CA dismissing his conviction appeal - Court applied s 22A Evidence Act 2006, admitting hearsay evidence of his participation in conspiracy to supply pseudoephedrine - Common ground there was reasonable evidence of conspiracy and hearsay statements were furthering it pursuant to s 22A(a) and (c) - Only question whether also reasonable evidence N participated in conspiracy – CA upheld HC ruling statements admissible –

Application grounds included whether “reasonable evidence” standard was balance of probabilities or simply sufficient evidence to satisfy judge that admitting hearsay safe – SC said principle did not arise here – Rejected this and other proposed grounds – Application dismissed.

Regional Policy Statement, reflection of Coastal Policy Statement

Port Otago Ltd v Environmental Defence Society and ors [2022] NZSC 23 (17 March 2022)

Successful leave application - Approved question whether CA correct to dismiss appeal – CA had said, among other things, essential question in appeal to it whether proposed regional policy statement gave effect to requirements in New Zealand Coastal Policy Statement 2010 - Application allowed.

Self-represented litigant, land purchase, security for costs

Chen v Auckland Weihao Investment Ltd [2022] NZSC 24 (17 March 2022)

Unsuccessful leave application – Self-represented C and A parties to agreement for sale and purchase of land A owned, and term loan agreement under which A would provide vendor finance – After agreement did not proceed C lodged caveat - Issued proceeding against A seeking return of her deposit and damages for breach of term loan agreement - HC declined application for order that caveat not lapse –

C appealed to CA – Deputy Registrar dismissed application to dispense with security for costs – CA Judge reviewing decision agreed with Deputy Registrar – C applied for leave to appeal to SC –

SC said could not grant leave unless necessary in interests of justice to hear and determine appeal – Criteria whether proposed appeal involved matter of general or public importance or matter of general commercial significance, or if substantial miscarriage of justice may have occurred or may occur unless appeal heard – Not case here – Application dismissed.

Supreme Court of Canada

First Nation, advance costs

Anderson v Alberta [2022] SCC 6 (18 March 2022)

Successful appeal from Alberta CA - Beaver Lake Cree Nation (Beaver Lake) of north-eastern Alberta whose members were beneficiaries of Treaty No. 6 - Meant they had right to hunt and fish on traditional lands - More than a decade ago, Beaver Lake sued governments of Canada and Alberta for damages due to industrial development on those lands, including oil and gas wells - Since then, had been many interlocutories - Beaver Lake had already paid $3 million in legal fees - Said could not afford to pay more – Asked Alberta QB to award it advance costs – QB accepted request and ordered Canada and Alberta to each contribute $300,000 annually to Beaver Lake’s legal costs until trial over - Same amount as Beaver Lake would also contribute annually –

Alberta CA reversed order because Beaver Lake had not proven it could not afford ongoing litigation - Beaver Lake appealed to SC –

SC said advance costs rarely awarded - However, party with funds could still qualify for advance costs if it satisfied “impecuniosity” test - One of three requirements for advance costs in 2003 case - Other two requirements not disputed here – Appeal allowed.

High Court of Australia

Unconscionable lending, intermediary, “independent” advice

Stubbings v Jams 2 Pty Ltd [2022] HCA (16 March 2022)

Successful appeal from Victoria CA – J asset-based lender – Lending system involved potential borrowers, such as S, meeting intermediary working with law firm - Firm acted as J’s agent and  never dealt directly with S because of intermediary –

Unemployed S had no regular income - Owned two properties, both of which were mortgaged - In 2015, S wanted to purchase another property - Met several times with intermediary – S guarantor for a loan from J to company – S company’s sole director and shareholder, with three properties as security for his guarantee - As part of transactions, firm prepared certificates of "Independent Financial Advice" and "Independent Legal Advice" for accountant and lawyer to sign - Firm referred S to them –

When company defaulted on third month's interest payments, J sought to enforce guarantee and enforce rights as properties’ mortgagee - CA overruled primary judge, saying nothing inherently unconscionable about asset-based lending – Said J’s agent had neither actual nor constructive knowledge of S’s desperate personal and financial circumstances - Entitled to rely on independent advice certificates –

HC said J acted unconscionably contrary to equitable principle - Not disputed that S suffered from special disadvantage – J’s agent sufficiently appreciated S’s vulnerability and likelihood loss would be suffered - Actual knowledge not essential –

Open to primary judge to infer certificates "window dressing" - could not negate agent's actual appreciation of loans’ dangerous nature and S’s vulnerability - Unconscionable for J to insist upon rights under mortgages – Appeal allowed.

Aircraft engine lease, possession under international protocol

Wells Fargo Trust Company and anor v VB Leaseco Pty Ltd (Administrators Appointed) [2022] HCA 8 (16 March 2022)

Unsuccessful appeal from Full Court FCA - Primary issue content of obligation to "give possession" under Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment (Protocol) –

L, part of Virgin Australia group, leased aircraft engines from W - In 2020, L went into administration - Lease agreements specified on default event, including appointing administrators, W could demand redelivery of aircraft engines to Florida – Protocol preserved rights but s 440B Corporations Act 2001 (Cth) constrained rights under domestic law -

After Full Court decision, engines returned to USA - Important question for aviation industry was content of obligation to "give possession" under Protocol Art XI(2) - Practical effect of Court's answer determined who paid costs incurred returning engines to USA –

HCA said L's administrators' invitation to W to take control of engines in Australia fulfilled Art XI(2) obligation - Article construed this way operated consistently with underlying realities of modern structured finance, particularly to facilitate capital market financing – Appeal dismissed, Full Court FCA orders modified.

Judicial Committee of the Privy Council

Same sex marriage, recognition of

Day and anor v Governor of the Cayman Islands and anor [2022] UKPC 6 (14 March 2022)

Unsuccessful appeal from Cayman Islands CA – D and partner in committed relationship - Wanted same-sex marriage in Cayman Islands - Refused licence because Cayman Islands Marriage Law defined marriage as “the union between a man and a woman as husband and wife” –

Filed constitutional petition claiming: (i) Bill of Rights, Freedoms and Responsibilities (Bill) conferred constitutional right to legal recognition of same-sex marriage; (ii) Marriage Law infringed their rights under Bill; and (iii) Marriage Law should be read to give effect to their constitutional right to legal recognition for same-sex marriage –

Claims successful at first instance - CA allowed Government appeal – D appealed to PC –

PC referred to s 14(1) Bill of Rights: “[g]overnment shall respect the right of every unmarried man and woman of marriageable age… freely to marry a person of the opposite sex” – Said other Bill sections to be interpreted in light of section 14(1), meaning none could be construed as including right for same-sex couple to marry – PC said interpretation did not prevent Cayman Islands’ Legislative Assembly from introducing legislation to recognise same-sex marriage - Choice for Legislative Assembly rather than right laid down in Constitution – Appeal dismissed.

United Kingdom Supreme Court

Solicitors fees, equitable lien

Bott & Co Solicitors Ltd v Ryanair DAC [2022] UKSC 8 (16 March 2022)

Successful appeal from CA – B handled large volume of passenger compensation claims for flight cancellation and delays, primarily on “no win, no fee” basis - High proportion related to R – Before 2016, R dealt with B over claims it handled - When claims admitted, R paid compensation into B’s client account - R changed practice and dealt directly with B’s clients – Consequently, instead of deducting its fees from compensation paid into client account, B had to pursue clients for payment –

B brought proceedings against R – Claimed equitable lien for its costsand injunction restraining R from paying compensation directly to customers when R on notice that B was retained - Equitable lien would allow B to pursue R for unpaid client fees – HC said previous binding authority was solicitor's equitable lien arose only once proceedings had actually been started - Meant no equitable lien where R paid compensation without passengers commencing legal proceedings –

By time CA heard B’s appeal, SC had delivered judgment in another case which ruled solicitor's equitable lien could arise where proceedings not started - CA dismissed B’s appeal saying unless and until R disputed compensation claim, B not providing litigation service – B appealed to SC –

SC  3–2 majority gave three separate judgments but all agreed on test for equitable lien – Said previous case supported clear, principled and easy-to-apply test for recognising solicitor’s equitable lien that did not turn on whether or not dispute had arisen – In that case, no proceedings had been issued, no real dispute had yet arisen and solicitors who claimed lien had done little to progress legal claim beyond entering it in online portal – Based on this, relevant test for solicitor's equitable lien was whether solicitor (within scope of the retainer with client) provided services relating to making client's claim (with or without legal proceedings) which significantly contributed to client’s successful recovery –

On facts here B provided services to clients to compensate for flight cancellation and delay - Services significantly contributed to compensation recovery - B entitled to lien for costs – Appeal allowed.

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