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Supreme courts roundup, 13 to 19 March 2020

19 March 2020

Decisions, proceedings and news from the highest courts in some common law jurisdictions in the last week are as follows:

Supreme Court of New Zealand

Southern Response Earthquake Services Ltd v Ross and Anor [2020] NZSC 20 (16 March 2020) Successful application by LPF Group Ltd to intervene.

The Court was scheduled to hear an appeal by Southern Response Earthquake Services Ltd (Southern Response) on 23 and 24 March 2020 - LPF Group Ltd (LPF), a litigation funder, applied for leave to intervene - The Court said issues raised would have implications beyond the instant case - It would be assisted by the practical perspective LPF could provide - LPF was not a representative body - The Court would already benefit from a range of submissions on the issues - But the issues raised were still novel ones, particularly in the New Zealand context, and the law was in its early stages of development - Leave to intervene granted.

Momoisea v R [2020] NZSC 19 (13 March 2020) Unsuccessful application for leave to appeal.

M was convicted of the murder of her former partner and the attempted murder of his wife - She pleaded guilty. On the murder charge, the trial Judge sentenced her to life imprisonment with a minimum period of imprisonment (MPI) of 14 and a half years - The Court of Appeal dismissed her appeal against sentence - She sought leave to appeal to the Supreme Court on two grounds: (a) The Court of Appeal was wrong to uphold the 18-month discount the trial Judge gave as a discount for her guilty plea; and (b) The Court should have treated the actions of the deceased victim as a mitigating factor under s 9(2)(c) of the Sentencing Act 2002 - The Court said It might be that at some point it might wish to consider the approach to s 104 of the Sentencing Act and the 17-year MPI - But this case was not one suitable for a grant of leave.

Minister of Justice and anor v Kim [2020] NZSC 18 (12 March 2020) Order made declaring that the Court has determined there is no impediment to Arnold J sitting on the panel to hear the substantive appeal.

The Court had given leave to hear an appeal and cross-appeal relating to the decision of the Court of Appeal in Kim v Minister of Justice of New Zealand (the appeal) - In the lead up, an issue arose about the composition of the panel to hear the appeal - A hearing took place on this aspect - The Court said there was no impediment to Arnold J sitting on the panel to hear the appeal - Arnold J was an acting Judge of the Court - He also was chairperson of the Government Inquiry into Operation Burnham and Related Matters - The Court said there was no general bar on a judge who has been appointed to a commission or inquiry from sitting. Order made declaring that the Court has determined there is no impediment to Arnold J sitting on the panel to hear the substantive appeal.

High Court of Australia

BHP Billiton Ltd v Commissioner of Taxation [2020] HCA 5 (11 March 2020) Unsuccessful appeal from Full Court of the Federal Court.

Associate companies for tax purposes - The High Court unanimously held that, under the Income Tax Assessment Act 1936 (Cth) ("the Act"), income derived by BHP Billiton Marketing AG ("BMAG") from the sale of commodities purchased by BMAG from BHP Billiton Plc's ("Plc") Australian entities was to be included in the assessable income of BHP Billiton Ltd ("Ltd"), because Plc's Australian entities were "associates" of BMAG - The appellant, Ltd, an Australian resident taxpayer, was part of a dual-listed company arrangement with Plc - Under this arrangement, Ltd and Plc were required to operate "as if they were a single unified economic entity" through common boards of directors and "a unified senior executive management" - BMAG was a Swiss company which was a controlled foreign company (“CFC”) of Ltd. BMAG purchased commodities from Ltd's Australian subsidiaries and Plc's Australian entities for sale - The question was whether BMAG's income from the sale of commodities it purchased from Plc's Australian entities was to be included in the assessable income of Ltd under Part X of the Act - That depended on whether Plc's Australian entities were "associates" of BMAG - The High Court unanimously held that Plc's Australian entities were "associates" of BMAG, and that "effective control" was not required to establish that a company was "sufficiently influenced" by an entity - The High Court found that Ltd and Plc "sufficiently influenced" each other because they were required to operate as "combined businesses" and a "single unified economic entity".

Australian Securities and Investments Commission v King and anor [2020] HCA 4 (11 March 2020) Successful appeal from Court of Appeal of the Supreme Court of Queensland concerning the construction of the word "officer" as defined in s 9 of the Corporations Act 2001 (Cth).

Definition of "officer" - The first respondent, King, was the Chief Executive Officer and an executive director of MFS Ltd, the parent company of the MFS Group of companies ("the MFS Group") - The MFS Group was involved in funds management and financial services - Premium Income Fund ("PIF") was the largest registered managed investment scheme in the MFS Group, and MFS Investment Management Pty Ltd ("MFSIM"), the second respondent, was its responsible entity - The Australian Securities and Investments Commission ("ASIC") contended that Mr King breached his duties as an "officer" of MFSIM under s 601FD of the Corporations Act, despite ceasing to be a director of MFSIM on 27 February 2007 - ASIC submitted that Mr King was an "officer" of MFSIM under the Corporations Act because he fell within para (b)(ii) of the definition of "officer of a corporation" in s 9 of the Act, being "a person ... who has the capacity to affect significantly the corporation's financial standing" - The Court of Appeal held that Mr King did not fall within that definition because any capacity he had to affect the financial standing of MFSIM did not derive from his occupation of an "office" within MFSIM in the sense of a "recognised position with rights and duties attached to it" - ASIC appealed to the High Court - The Court unanimously held that para (b)(ii) of the definition of "officer of a corporation" in s 9 of the Corporations Act was not limited to those who hold or occupy a named office in a corporation or a recognised position with rights and duties attached to it - The factual findings made by the primary judge, including that Mr King acted as the "overall boss of the MFS Group" and assumed "overall responsibility for MFSIM", were sufficient to establish that Mr King had the capacity to affect significantly the financial standing of MFSIM.

Supreme Court of Canada

MacDonald v Canada [2020] SCC 6 (13 March 2020) Unsuccessful appeal from Federal Court of Appeal.

Speculation or hedging? - MacDonald had worked in finance and owned a large number of shares. He started a business. He got a loan from his bank - He used some shares to “secure” part of the loan. If he could not pay back what he borrowed, the bank could take the shares as “security.” - He could borrow up to 95% of the value of the shares - This was over $10 million - MacDonald and his bank also signed a “forward contract” covering the shares - A forward contract was an agreement to buy (or sell) something at a specific price on a future date - It was a kind of “derivative contract,” a contract based on an “underlying asset” (in this case, the shares) - These kinds of contracts were common in the financial world - Forward contracts could be for “speculation” or for “hedging.” “Speculation” was when someone invested in something that increased their risk, hoping for a high return - It was more like gambling - “Hedging” was when someone invested in something to reduce risks of price changes in something else - It was more like insurance - The price of the shares increased. MacDonald paid his bank about $10 million - These payments were “cash settlement payments” under the forward contract. MacDonald said he was using the forward contract to speculate - This meant the payments he made should be deducted from his business income. Canada Revenue Agency said he was using the forward contract to hedge - This meant the payments were capital losses - The Tax Court said the forward contract was speculation - The Federal Court of Appeal said it was a hedge - The majority of Supreme Court Judges said the purpose of a derivative contract determined whether it was a hedge or speculation - They said the purpose of MacDonald’s contract was hedging - This meant the payments were capital losses - To find the purpose of the forward contract, the majority looked at how closely it was tied to the shares (the “underlying asset”) - The more closely a derivative contract was tied to the underlying asset, and the better it was at lowering risk, the more likely it was to be a hedge - Otherwise, it was more likely to be speculation - The loan agreement and the agreement to use the shares as security were not part of the forward contract - But the majority said they were important context for determining the purpose of the forward contract - MacDonald had to provide the bank with shares and with any payments from the forward contract as security for the loan.

Hong Kong Court of Final Appeal

Cheng Wing Kin v HKSAR [2020] HKCFA 3 (11 March 2020) Appeal from Court of Appeal dismissed.

Meaning of "corruptly" - The appellant offered money to people associated with localist political organizations to induce them either to stand themselves, or to get others to stand, as candidates in the 2015 Hong Kong District Council Election - He was convicted before the District Court of offences relating to corrupt conduct at an election, contrary to sections 6 and 7(1) of the Elections (Corrupt and Illegal Conduct) Ordinance, Cap 554 (“ECICO”). Section 7(1) of the ECICO (“s7(1)”) said that a person engaged in corrupt conduct at an election if he/she “corruptly” did specified acts - Such specified acts included the offer, solicitation or acceptance of an advantage as an inducement for a person to, or to get a third person to, stand or not stand as a candidate at an election - The sole issue before the Court of Final Appeal was the meaning of the word “corruptly” in s7(1), on which the Trial Judge and the Court of Appeal (“CA”) differed in their interpretations - The Trial Judge held that “corruptly” meant that a defendant must intend not only to do a specified act under s7(1), but also to prevent a fair, open and honest election - The CA held that it required only that a defendant intentionally does a specified act which results in personal gain - The Court of Final Appeal said neither interpretation was correct - It said section 3 of the ECICO laid down the legislative objectives of promoting fair, open and honest elections, and prohibiting corrupt and illegal conduct in relation to elections - Therefore, conduct that was “corrupt” was conduct inconsistent with the attainment of fair, open and honest elections - Because of this legislative purpose, the Court held that the word “corruptly” in s7(1) was not a mental element. It did not require proof of a specific intent on the part of a defendant to prevent a fair, open and honest election - Instead, it defined “corrupt conduct at an election” by confining the specified acts in s7(1), which involve the offer, solicitation or receipt of “an advantage”, only to those acts which carried an objective tendency to undermine a fair, open and honest election - A defendant was not necessarily guilty under s7(1) by engaging in any of the specified acts if the act did not have the requisite tendency - The Court said the Appellant was guilty as charged because he intentionally engaged in specified acts under s7(1) “corruptly” - The defendant’s conduct involved inducing his co-defendants to stand for election for personal gain in order to divert votes away from targeted candidates with a view to manipulating the election results against them in a way which tended to undermine a fair, open and honest election - The Court unanimously dismissed the appeal.

Judicial Committee of the Privy Council

Blackburn v LIAT (1974) Ltd [2020] UKPC 9 (16 March 2020) Partially successful appeal by an employer against a decision of the Eastern Caribbean Court of Appeal (“the Court of Appeal”) in unfair dismissal proceedings.

Wrongful dismissal - The principal issues were (a) whether the Industrial Court of Antigua and Barbuda (“the Industrial Court”) applied the correct legal test for unfair dismissal, (b) the consequences if it did not do so and (c) whether the Industrial Court erred in obtaining relevant evidence more than a year after the trial but before giving judgment - The employer was LIAT (I974) Ltd, an airline (“LIAT”) - The employee was Blackburn, an aircraft pilot - LIAT operated in the Caribbean region - Mr Blackburn was a senior pilot employed by LIAT for 33 years with an unblemished record until his dismissal on 5 December 2011 - Mr Blackburn was also the chairman of the Leeward Islands Airline Pilots Association (“LIALPA”) - On 6 and 20 November 2011 Mr Blackburn appeared on a local radio programme in which he made comments about LIAT’s management and safety matters - LIAT took exception to those comments and decided to dismiss Mr Blackburn summarily. Blackburn was aggrieved by his dismissal - After unsuccessful attempts to resolve the matter by mediation, he commenced proceedings in the Industrial Court of Antigua and Barbuda - Blackburn claimed compensation and damages against LIAT for unfair dismissal - He said his remarks on the radio did not amount to misconduct. He further said the summary dismissal, without any prior warning, was a breach of good industrial relations practice and a breach of the collective agreement between LIAT and LIALPA - On 13 June 2017 the court, by a majority of 3 to 1, said the dismissal was unfair, but compensation should be reduced by 65% because of Blackburn’s contribution to his dismissal - One member dissented because in his view the dismissal was fair - Both parties appealed to the Court of Appeal. It allowed Blackburn’s appeal and dismissed LIAT’s cross-appeal - The Court of Appeal quashed the 65% contribution finding.

LIAT appealed both issues to the Privy Council - It said both courts below erred, because the Industrial Court applied the wrong test and the Court of Appeal approved that test - The Privy Council saw similarities between (a) the provisions of the Antigua and Barbuda legislation and (b) legislation in Great Britain on unfair dismissal - On the other hand, there were many differences in wording between the Antigua and Barbuda legislation and the British legislation - There was much Caribbean authority on the specific provisions of the Caribbean legislation, to which the Privy Council  had to have regard - The Privy Council dismissed LIAT’s appeal against the unfair dismissal ruling - However, it reinstated the Industrial Court’s finding on contribution.

Supreme Court of Ireland

No decisions released during this period.

Singapore Court of Appeal

No decisions released during this period

Supreme Court of the United Kingdom

R v Copeland [2020] UKSC 8 (11 March 2020) Successful appeal from Court of Appeal.

Copeland was 22 years old and before this case had no convictions - He was diagnosed with Autism Spectrum Disorder as a child and, in 2018, he was living with his mother. He began purchasing quantities of chemicals online - He said this was because he had an obsessive interest in military matters, including bomb disposal - He claimed he had acquired the chemicals because he wished to understand how explosives worked and to experiment with them - A search warrant was executed at his home on 24 April 2018, where it was found that he had managed to make a small quantity (about 10 grams or less) of a sensitive primary explosive, Hexamethylene Triperoxide Diamine (“HMTD”) - He also possessed manuals for making explosives, notes on making HMTD and a video on his mobile phone demonstrating the making of HMTD - He was charged with various offences, including two counts under section 4(1) of the Explosive Substances Act 1883 (“1883 Act”) - These counts were that the appellant knowingly had HMTD in his possession or under his control, in such circumstances as to give rise to a reasonable suspicion that he did not possess or control it for a lawful object - There was a defence if the accused could show that, in fact, he had the explosive substance in his possession or control for a lawful object - In his defence statement, Copeland said he had made the HMTD for a lawful object, namely “interest, education and experimentation” - The appellant said that he had made other explosives and used them to create small explosions in the garden of his house without causing harm, and he intended to do the same with the HMTD - At a preparatory hearing in the Crown Court at Birmingham, the judge said he was bound by Court of Appeal authority that experimentation and self-education did not amount to a lawful object for the purpose of section 4(1) - The judge ruled in advance of trial that the appellant’s proposed defence was bad in law - He appealed unsuccessfully to the Court of Appeal, who considered themselves similarly bound. Copeland appealed to the Supreme Court - By a majority, the Supreme Court allowed the appeal - It said under section 4(1), a defendant had to prove on the balance of probabilities that he had possession or control of an explosive substance for a lawful object - In English law, a purpose was lawful unless it was made unlawful by statute or the common law - A lawful object might, however, be tainted by an ulterior, unlawful purpose, including by knowledge or recklessness of a risk of injury or damage; but these would be matters to be explored on the evidence at trial - As there was nothing unlawful about experimentation and self-education as objects in themselves, they were capable of being lawful objects - There was no requirement in law that a defence statement relating to a charge under section 4(1) had to give a more detailed account of the proposed use of the explosive substance than that Copeland had provided -  He ought to have been permitted to present his defence at trial.

Supreme Court of the United States

No decisions released during this period.

Last updated on the 19th March 2020