New Zealand Law Society - Courts roundup 2 June - 8 June 2022

Courts roundup 2 June - 8 June 2022

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

New Zealand Supreme Court

Employment, settlement agreement, capacity

TUV v Chief of New Zealand Defence Force [2022] NZSC 69 (3 June 2022)

Unsuccessful appeal – TUV claimed bullied and harassed whilst employed by New Zealand Defence Force - Wanted to pursue unjustified dismissal claim - Accepted she agreed to settle claims but said settlement agreement should be set aside because lacked mental capacity – Mediator signed settlement agreement, at parties’ request, as s 149(1) Employment Relations Act 2000 (ERA) provided - Before signing agreement, mediator explained “final and binding” and was satisfied parties knew what meant - Mediator not required to advise about agreement content - Section 149(3) provided once mediator signed agreement terms “final and binding” –

Issue in SC whether TUV could set agreement aside because incapacitated when signed – SC majority dismissed appeal meaning agreement stood -Said s 108B Protection of Personal and Property Rights Act 1988 (PPPRA) did not apply where settlement agreement certified under s 149 - To apply s 108B would undercut ERA’s central concepts, institutional structures and dispute resolution processes - In particular, would be inconsistent with principle of good faith and protection provided for integrity of individual choice - Majority agreed with lower courts that “capacity test” applied - Defence Force unaware of TUV’s incapacity - CA correct not to set aside agreement – Appeal dismissed.

Companies, liquidation, orders requiring examination

Stewart v Keane and anor [2022] NZSC 70 (3 June 2022)

Unsuccessful leave application – S sole director and shareholder of Eversons International Ltd (Eversons), in liquidation – K and colleague liquidators - Obtained HC orders requiring S to submit to examination regarding business, accounts or affairs of Eversons; and to produce to liquidators books, records or documents in possession or control– CA dismissed S’s appeal against orders – Sought leave to appeal only against examination order –

CA agreed with HC Associate Judge’s approach to exercising discretion under s 266 Companies Act 1993 – S had been uncooperative - Reasonable to expect him as sole director to know what had happened to company assets - Claimed lack of knowledge implausible –

SC said although scope of HC s 266 jurisdiction might give rise to question of public importance and/or commercial significance, circumstances here did not justify ventilation - Rather, case essentially factual and more properly within Court’s discretion – Application dismissed.

New Zealand Court of Appeal

Land law – Caveats – Constructive trust

Green & McCahill Holdings Limited (GMHL) v Ara Weiti Development Limited (Ara Weiti parties) [2022] NZCA 218 (1 June 2022) Kos P, Cooper and Brown JJ

Successful appeal from decision declining orders that caveats not lapse – Proceeding by GMHL alleged breach of fiduciary duty and knowing receipt by Ara Weiti parties (W) - Parties engaged in sophisticated land development project in Weiti Bay – Development ceased when relationship broke down resulting in mortgagee sale to companies associated with W – GMHL alleged W and Ara Weiti parties breached fiduciary duties by procuring sales contrary to GMHL interests relying on broad allegations of unconscionability in Keech v Sandford and AG v Reid - Associate Judge declined orders that caveats not lapse on grounds it was reasonably arguable there was fiduciary relationship between W and GMHL but not reasonably arguable properties were acquired in knowing receipt of breach – CA found it improbable but not wholly inconceivable that GMHL could establish continuing fiduciary duty breached by the sale – Remitted proceeding to HC to re-impose caveats with conditions enabling development and sale of marketable lots

Judicial review – Appointment of Race Relations Commissioner (RRC)

Henry (H) v Minister of Justice [2022] NZCA 216 (31 May 2022) French, Clifford and Gilbert JJ

Unsuccessful appeal from decision declining to review selection process for appointment of new RRC  - H alleged process was unfair and irrational, breached statutory duty to account for diversity and NZBORA rights and frustrated legitimate expectations – Complaints concerned lack of ongoing advice about treatment of application, announcements concerning selection process and lack of record-keeping such that Court could not conclude Minister fulfilled duty to encourage diversity – CA considered the requirements to found legitimate expectation; Mansell in relation to changes in selection criteria; Panel reports to Minister in terms of record required for decision-making process - No breach of Crown Entities Act or NZBORA and no unfairness in decision-making process

Leave to intervene – Māori customary law

New Zealand Māori Council (Council) v Te Kāhui Takutai Moana o Ngā Whānui Me Ngā Hapū [2022] NZCA 224 (3 June 2022) Cooper P, Clifford and Gilbert JJ

Successful application for leave to intervene - Appeal against Re Edwards (Te Whakatohea No 2) concerned applications for customary marine titles (CMTs) and protected customary rights (PCRs) in waters of eastern Bay of Plenty – Council wished to be heard on correct legal test for recognition of CMTS or PCRS under Marine and Coastal Area (Takutai Moana) Act – Leave opposed by Te Kāhui Takutai Moana o Ngā Whānui Me Ngā Hapū – CA granted leave to provide pan-Māori perspective on legal issues such as what constituted holding specified areas “in accordance with tikanga” and “exclusive use and occupation” without substantial interruption from 1840  

Local government – Judicial review – Natural justice

Vandervis (V) v Dunedin City Council (Council) [2022] NZCA 219 (2 June 2022) Collins, Lang and Mallon JJ

Unsuccessful appeal from decision declining judicial review – V was elected councillor who was censured under Council Code of Conduct following confrontation with staff member about parking ticket – Decision to censure followed initial report by independent investigator which concluded staff member’s complaint was material and full investigation including interviewing V, staff member and witnesses – Council considered code of conduct report and unanimously passed motion to censure – Motion upheld by HC - On appeal V argued complaint was not made by authorised person and was invalid, and investigation breached natural justice – CA found there was no obligation to give opportunity to respond during low-level preliminary investigation - V had sufficient knowledge of complaint and was provided with opportunity to respond during full investigation and at Council meeting – Censure upheld

Supreme Court of Canada

Custody, grandmother instead of father, deference, review standard

BJT v JD [2022] SCC 24 (3 June 2022)

Successful appeal from Prince Edward Island CA – Father and mother separated when mother moved to Prince Edward Island (PEI) - Father did not know mother pregnant when  left - Shortly after child born in 2013, maternal grandmother went to reside with mother and child to support them - When child four years old, mother refused grandmother further contact - Director of Child Protection apprehended child as found to be needing protection - Eventually placed in grandmother’s care - Director subsequently alerted father of child’s existence - Father and grandmother applied for permanent custody separately from each other –

Hearing Judge said in child’s best interests for grandmother to have custody –CA gave father custody – Grandmother appealed to SC –

SC unanimously gave custody to grandmother – Said CA should have deferred to hearing judge’s view - Most important factor in child custody case was best interests of child - Judge’s ruling on child custody matter owed deference when appeal court reviewed - Appeal court could only change ruling if was material error, serious misapprehension of evidence, or error in law - Same standard applied in custody cases involving child protection, unless legislation contrary - Nothing in PEI Child Protection Act suggested different standard -

SC saw no error in hearing judge’s assessment of child’s best interests - Hearing judge based analysis on extensive evidence review - Not compelled to decide in father’s favour simply due to closer biological tie - Parent’s biological tie one factor among many that might be relevant to child’s best interest – Appeal allowed.