New Zealand Law Society - Supreme Court Roundup 9 - 15 July

Supreme Court Roundup 9 - 15 July

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

New Zealand Supreme Court

Bankruptcy, application for annulment, exercise of discretion

Keung v Official Assignee and anor [2021] NZSC 81 (7 July 2021)

Unsuccessful leave application - K adjudicated bankrupt on 20 September 2010 following not paying costs order made against him on 21 April 2010. He appealed against the costs order - Applications for stay of execution declined in both HC and CA - On 13 October 2010—that is, after his adjudication—the Official Assignee (OA) discontinued appeal against the costs order - K automatically discharged from bankruptcy on 9 November 2013 - Settled with his creditors, on what appeared to have been discounted terms - In September 2018, he applied to HC under s 309(1)(a) of the Insolvency Act 2006 for an order annulling his bankruptcy – HC associate Judge said K “should not have been adjudicated bankrupt” for the purposes of s 309(1)(a) – K  had not been served with the application for an order for costs against him, with the result that the order had been made in breach of natural justice – Associate Judge said if  true facts had been before the Court when adjudication was in issue, K would not have been adjudicated bankrupt – Said, however, K lacked standing to challenge his adjudication on the basis of an attack on the judgment debt - Also said in any event, he would not have exercised the discretion to annul in K’s favour – CA dismissed K’s appeal - Put to one side the standing issue of standing but said, assuming K had standing, his application should be dismissed as a matter of discretion - This because (a) K insolvent when adjudicated; (b) was an eight-year delay in seeking an annulment; (c) he did not pay his creditors in full but rather reached settlements with them, which reflected the then realities of the effect of his adjudication; and (d) there had been an earlier adjudication in bankruptcy – K applied for leave to appeal to SC - SC said a genuinely arguable issue as to whether K had standing to seek an annulment, but conclusion in his favour on this point would not result in his appeal being allowed unless he could also successfully challenge what were now concurrent conclusions on exercise of discretion – K’s challenge based on facts – No issue of general or public importance – No miscarriage of justice – Application declined.

Taxation, company liquidation, bankruptcy

Chesterfields Preschools Ltd (In Liquidation) and anor v Commissioner of Inland Revenue [2021] NZSC 83 (12 July 2021)

Unsuccessful leave application – Self-represented S sought leave to appeal against three CA judgments which collectively dismissed 11 appeals against HC  judgments - Reflecting CA judgments, SC application related to: (1) the liquidation of Chesterfields Preschools Ltd (CPL), a company associated with S and her former husband, H; (2) the vesting of property in CPL; and (3) S’s personal bankruptcy – SC said issues arising reflected both the particular litigation history and particular facts  - No question of general or public importance or of commercial significance arose - Rather, central issue for SC whether approach CA took to calculating tax debt resulted in appearance of a miscarriage of justice in the civil sense such that was in the interests of justice for SC to hear proposed appeal – SC said no appearance of miscarriage – Application declined.

Judicial Committee of the Privy Council

Constitutional law, excessive time in prison, compensation

Duncan and Jokhan v Attorney-General of Trinidad and Tobago [2021] UKPC 17 (12 July 2021)

Partially successful appeal from Trinidad and Tobago CA – D and J were convicted on 4 June 1999 for housebreaking, larceny and misbehaviour in public office - Sentenced to 15 years’ imprisonment - In 2001, CA quashed their convictions for housebreaking and larceny but affirmed their sentence of imprisonment - Both parties agreed that CA failed to consider, as it was required to under section 49(1) of the Supreme Court of Judicature Act Chapter 4:01, whether sentence should be backdated to the date of their conviction instead of starting to run from the date of the appeal - Because of this error, both parties agreed D and J served 29 months longer in prison than the sentences passed upon them permitted or required - They brought the present claim in March 2011 seeking compensation and declaratory relief that they had been unlawfully imprisoned contrary to section 4(a) of Trinidad and Tobago Constitution - Claim rejected in 2013 and their appeal to CA dismissed in 2017 – Appealed to PC – PC allowed appeals in part -  Order to set aside CA order; to declare that there was a violation of D’s rights under section 4(a) from about 23 March 2010 and a violation of J’s rights under section 4(a) from about 21 June 2010; and to remit their claims for monetary compensation to the High Court for assessment – appeal partly allowed.

Property valuation, use of “comparable”, error of law

Kezner International Mauritius Holdings Ltd v Assessments Review Committee and anor [2021] UKPC 18

Unsuccessful appeal from Mauritius SC - K purchased 20% of a third party's shares in a property currently used as a golf course (Subject Property) - Consideration for property's transfer was initially determined to be Mauritian Rupees (MUR) 345,566,722 - Registrar General re-assessed the value of the Subject Property at MUR 1,170,000,000 - On appeal, Assessment Review Committee (ARC) valued Subject Property at MUR 855,364,000 - Mauritius SC dismissed K’s challenge to ARC’s decision – K appealed to PC – PC said would have been preferable for there to have been fewer differences between the transaction taken as a comparable and the property – But could not be said that ARC made any error of law in forming the expert opinion that the earlier transaction could properly be used, with suitable adjustments, as a comparable for the purpose of the valuation exercise – ARC recognised there were various material differences between the comparable and the property and made adjustments to reflect those differences -  It explained why each adjustment was being made and the amount of the adjustment which it considered to be reasonable in all the circumstances - Was a rational and appropriate approach - Which comparable to use and what adjustments should be made were matters for ARC to determine – Not shown that decision on these matters was perverse, irrational or “erroneous in law” – Appeal dismissed.

United Kingdom Supreme Court

Child support benefits, limits on, intensity of scrutiny

R (on application of SC, CB and 8 Children v Secretary of State for Work and Pensions and ors [2021] UKSC 26 (9 July 2021)

Unsuccessful appeal from CA - Child tax credit (CTC) a non-contributory benefit intended to provide financial support to families with children - Had three elements:  family element, individual element, and, in respect of disabled children, a disability element - Section 9(3A) and (3B) of the Tax Credits Act 2002 (2002 Act), limited individual element to the amount payable in respect of two children ( two child limit) - No account taken of third or subsequent children born on or after 6 April 2017, unless one of a number of exceptions applied - Fixing limit based on sum payable for two children reflected that average UK family contained 1.7 dependent children - SC and CB (adults), SC’s three youngest children and CB’s five children (children), brought proceedings against Secretary of State for Work and Pensions, the Lords Commissioners of HM Treasury, and the Commissioners for HM Revenue and Customs (Officials) - Said two child limit incompatible with the European Convention on Human Rights (Convention), given effect by Human Rights Act 1998 – HC dismissed claim – CA dismissed appeal – Appealed to SC – SC unanimously dismissed appeal – Rejected argument that  two child limit intended to discourage women receiving child benefit from having more than two children, therefore violates their right to respect for their private and family life, as guaranteed by article 8, Convention – SC said two child limit not intended to affect women’s reproductive choices, and did not have such an effect on either of the adults here -  Also rejected argument two child limit had damaging effect on integrating third and subsequent children into their families, and therefore violating their article 8 rights – Said no evidence to support that assertion, and no reason to believe it true – SC rejected argument that two child limit violated article 12, Convention - Article protected right to marry and found a family within marriage – Did  not apply here – SC said  two child limit gave rise to a relevant difference in treatment between children living in households with more than two children, as compared with children living in households with that number of children or fewer, contrary to Convention article 14, read together with article 8 – SC also clarified that low intensity of review generally appropriate, other things being equal, in cases concerned with judgments of social and economic policy in the field of welfare benefits and pensions -  In other words, courts would generally accept legislative or executive judgment that  difference of treatment appropriate in that field, unless manifestly unreasonable - Not a mechanical rule - Intensity of court scrutiny could be influenced by a wide range of factors, depending on the circumstances of the case - In particular, "very weighty reasons" would usually be needed to justify a difference in treatment on so-called "suspect" grounds, such as sex, gender or race –  Applying those principles to the facts of this case, SC said two child limit had objective and reasonable justification, notwithstanding its greater impact on women - Measure pursued a  legitimate aim: to protect the economic wellbeing of the country by achieving savings in public expenditure and thus contributing to reducing the fiscal deficit - Inevitable that, if that aim was to be achieved, there would be a disproportionate impact on women, since women were disproportionately represented among parents responsible for bringing up children - Parliament decided that disproportionate impact of two child limit on women outweighed by importance of achieving its aims - No basis for Court to take a different view – Appeal dismissed.

Criminal injuries compensation, exclusionary rule, ECHR

A and B v Criminal Injuries Compensation Authority and anor [2021] UKSC 27 (9 July 2021)

Unsuccessful appeal from CA – A and B (Brothers), twin brothers and Lithuanian nationals - Lithuanian court convicted A of burglary in June 2010 - Sentenced to a three-year custodial sentence - Lithuanian court convicted B of theft in December 2011 - Sentenced to 11-month custodial sentence - In 2013, brothers trafficked from Lithuania to the United Kingdom and subjected to labour exploitation and abuse - Treatment constituted criminal offences - On 22 January 2016, traffickers responsible convicted and were each sentenced to a custodial term of three and a half years - On 16 June 2016, brothers applied to Criminal Injuries Compensation Authority (CICA), for compensation under Criminal Injuries Compensation Scheme (CICS) On 6 July 2016, their applications were refused exclusionary rule which precluded compensation to people who had received custodial sentence – Brothers applied for judicial review against CICA and the Secretary of State (Secretary) - said, amongst other things, exclusionary rule was discriminatory and therefore not compatible with the United Kingdom’s obligations under the European Convention on Human Rights (ECHR) - HC dismissed their claim - CA dismissed their appeal – Brothers appealed to SC – SC unanimously dismissed appeal – Said Article 14 ECHR did not impose freestanding prohibition on discriminatory treatment - Prohibited discrimination only in context of rights and freedoms set out in ECHR – Consequently, brothers needed to establish that exclusionary rule sufficiently closely connected with one of the substantive ECHR rights to bring article 14 into play SC said brothers could -  Applying the CICS to victims of trafficking, meant UK chose to confer a degree of protection to promote their interests -  In doing so, applied a measure with sufficient connection to core value of protecting trafficking victims under article 4 ECHR, which prohibited slavery and forced labour - Rights voluntarily conferred under CICS therefore available without discrimination – Differential treatment would not breach article 14 ECHR if it could be justified - Test to be applied here was whether decision to adopt the measure under challenge was "manifestly without reasonable foundation" - Followed from a number of features here, including that CICS operates in the field of social welfare policy, where courts should normally be slow to substitute their view for that of the decision-maker, and Parliament approved CICS - The status brothers relied on also not within the range of suspect reasons, such as sex and race, where discrimination particularly difficult to justify –Applying test here, CICS not manifestly without reasonable foundation - Pursued legitimate objective of limiting eligibility to compensation to those deserving of it - Also proportionate - An area in which considerable degree of latitude accorded to legislator and appropriate to adopt bright line rules, in order to promote clarity and consistency - CICS took graduated approach to withholding or reducing compensation, reflecting in various ways both the seriousness and the age of a claimant’s previous conviction - Clear measure no more intrusive than it needed to be and struck fair balance between the competing interests at stake – Appeal dismissed.

Young person, detention, Convention breaches

R (on application of AB) v Secretary of State for Justice [2021] UKSC 28 (9 July 2021)

Unsuccessful appeal from CA - On 10 December 2016, AB pleaded guilty to offences of indecent exposure and sexual assault, and was remanded in custody at Feltham Young Offenders’ Institution (Feltham)  - AB at that time was fifteen years old - Between 10 December 2016 and 2 February 2017, AB placed on "single unlock" at Feltham, meaning that he could not leave his cell when any other detainees were out of their cells, apart from some time in "three-officer unlock", which involved three officers being present whenever he left his cell – Initially paced on this regime initially to protect officers, and later for his own safety - Received no education or training during this period - Given gym induction but no access to gym - Had limited social contact, including occasional table tennis matches with an officer - Visited by the chaplain, mental health professionals and social workers - No contact with other detainees - On 16 February 2017, AB applied for judicial review against Secretary of State for Justice (Secretary) - His claim partly successful in- HC said Secretary failed to comply with the Young Offender Institution Rules 2000 and breached article 8, European Convention on Human Rights (Convention) – HC  did not accept that between 10 December 2016 and 2 February 2017 AB had suffered inhuman and degrading treatment in breach of article 3,  Convention - AB appealed against that latter part of the decision to CA – CA dismissed appeal - AB appeals to SC – Two arguments on his behalf: first, that the solitary confinement of any person under 18 automatically violates article 3 of the Convention; or, alternatively,  such treatment could only be regarded as compatible with article 3 of the Convention if there were exceptional circumstances which rendered the treatment strictly necessary – SC unanimously dismissed appeal – Said, among other things, When questions arise regarding Convention rights, section 2(1) of the Human Rights Act required domestic courts to take into account relevant judgments and decisions of the European Court of Human Rights ( European Court) - Where there was a clear and consistent line of relevant European Court case law, domestic courts should follow it unless there were exceptional circumstances which justified a different approach – That did not mean domestic courts could or should substantially develop the European Court’s case law - Parliament’s purpose, enacting the Human Rights Act, to ensure correspondence between rights enforced domestically and those available before the European Court, not to provide for rights which were more generous than those available before the European Court – Appeal dismissed.

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