New Zealand Law Society - Courts roundup 16 February - 22 February 2023

Courts roundup 16 February - 22 February 2023

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

court of appeal

New Zealand Court of Appeal


Māori land, appeal, house, Māori freehold land, Western Urewera Mountains

Nicholas v Te Amo [2023] NZCA 22

The Māori Land Court accepted that the house, which was on a concrete foundation and cannot be moved, was part of the land and the house was owned by the trustees, subject to any equitable interest Nicholas could prove – Nicholas had an equitable interest (described as ownership of the house) by reason of her financial contribution to the construction of the house and its ongoing upkeep, the Judge held that an order under s18(1)(a) Te Ture Whenua Māori Act 1993 determining ownership rights did not in itself carry a right of possession or occupation unless, as a result of the trustee’s actions – The trustees obtained an injunction prohibiting Nicholas from occupying the house and requiring her to remove it – HELD: – Determination under s18(1)(a) Te Ture Whenua Māori Act 1993 that Nicholas had a right to possession of the house built by her on the block of land which entitled her to occupy the house and its curtilage until 31 May 2066 – The matter was remitted to the Māori Land Court for reconsideration of the injunction and if necessary, the specific area constituting the curtilage.

Practice and procedure, Resource Management Act 1991, leave to bring second appeal, leave to adduce fresh evidence

Page v Greater Wellington Regional Council [2023] NZCA 20

Page and Crosbie were found guilty in the District Court of 35 offences under the Resource Management Act 1991 – The offences were comprised of 25 operational offences, nine abatement notice offences, and one enforcement order offence – Page was sentenced to 3 months imprisonment and Crosbie was fined $118,742 – HELD: – The proposed evidence highlighted the outcome of the trial was affected by the lack of expert evidence challenging the respondents’ principal ecology witness – The fresh evidence, combined with late disclosure of the respondents’ evidence at trial, created a real risk that a miscarriage of justice may have occurred.

Appeal against conviction for murder committed in 1992, allegation of trial counsel incompetence, conviction as evidence in criminal proceedings under s49 Evidence Act 2006 – Login Required

Rewa v R [2023] NZCA 1

Rewa complained that his trial counsel, performed so poorly as to cause an unfair trial and that the trial Judge erred by allowing the jury to consider his rape conviction against the murder victim at the same time and place and by allowing another man, D, whom Rewa accused of the murder, to invoke the privilege against self-incrimination when asked about D’s relationship with the victim – HELD: The closing address adequately presented the defence case and came nowhere near fundamental error the conviction not being permitted evidence of rape meant its significance was very limited – It served the purpose of forestalling jury speculation about what happened at the previous trials and why no charge of rape was before them – The admission of the conviction could not amount to fundamental error – There was a question about the application of s8 Evidence Act 2006 to the admission of convictions under s49 – It might have called for answer had the conviction been treated as conclusive evidence – On the assumption that s8 applied, no unfair prejudice resulted from the use made of the conviction – Appeal dismissed.

Appeals against sentences of life imprisonment for murder, young offenders, profound social and cultural deprivation and psychological issues, manifestly unjust sentences, Sentencing Act 2002

Dickey v R [2023] NZCA 2

Appeals by Dickey (“D”), Brown (“B”) and Epiha (“E”) against their sentences imposed for murder committed when they were teenagers – HELD: Considerations pointed towards the need for a more flexible approach to manifest injustice in the context of youth murderers – D's appeal was allowed – She was young at the time of the offending, had significant potential for early and complete rehabilitation and could point to a number of substantial mitigating features in addition to her youth, including that she accepted responsibility at an early juncture, pleaded guilty and provided valuable assistance to the authorities – A sentence of 15 years imprisonment was appropriate, even though discounts following the orthodox sentencing methodology would have resulted in a lesser sentence – An MPI of 7 years and 6 months was imposed – B played a peripheral role in the murder compared to D – He also had more significant mitigating personal circumstances – A sentence of 12 years imprisonment taking into account personal mitigating factors, MPI of 6 years imprisonment – It was manifestly unjust to impose a sentence of life imprisonment on E especially given her age, her profound social and cultural deprivation, her psychological issues and the fact she accepted responsibility for her acts by pleading guilty – Sentence of 13 years imprisonment and MPI of 7 years imprisonment was imposed.

New Zealand High Court

Code compliance, construction contract, breach of contract, negligence

Goodman-Jones and anor v Hughey and ors [2023] NZHC 180 (13 February 2023) Nation J

Unsuccessful breach of contract, negligence claims – G-J contracted builder to complete architecturally designed home – To be clad with vertical cedar cladding – G-J contracted PlaceMakers to build framework for external walls – Consented plans required dwangs between studs to be 400 mm apart – PlaceMakers supplied framework generally 480 mm apart, consistent with normal building code and cladding manufacturer's specifications – Vertical cedar cladding had to be installed with 2 mm vertical gaps – G-J contended boards installed with either no gap or gap too great so as to create weathertightness issues –

Main issues were whether: builder negligent and/or in breach of contract in installing framework with gaps between dwangs that did not comply with consented plans; G-J suffered loss from framework as installed; framework met Building Code requirements; G-J’s duty to mitigate any loss required them to seek modification to consent terms so Council could issue Code Compliance certificate for house as built; builder liable for $465,427 claimed cost for removal of all existing cedar cladding, battens and backing plywood barrier, alteration to framing and recladding; PlaceMakers negligent or in breach of contract for manufacturing framework with 480 mm dwang spacing; G-J had suffered any loss with framework as constructed –

G-Js’ claim for $162,043 for excessive costs and unreasonable time taken for build abandoned during trial – Both defendants successful.

CPMIP Act, judicial review, declaration applications

Maaka-Wanahi v Attorney-General and anor [2023] NZHC 187 (14 February 2023) McQueen J

M-W and Te Whatu Ora Health New Zealand – Waikato applied for declarations regarding s 38 Criminal Procedure (Mentally Impaired Persons) Act 2003 (CPMIP Act) – Attorney-General opposed in part – New Zealand Law Society, New Zealand Bar Association, New Zealand Criminal Bar Association Intervenors – Court addressed issues regarding time In which reports ordered under s 38 provided and other issues parties raised – Following conclusions on issues, Court made various declarations on interpreting CPMIP Act.

Judicial review, Crown Forest land, Waitangi Tribunal approach

Attorney-General v Waitangi Tribunal and ors [2023] NZHC 132 (17 February 2023) Grice J

Partially successful judicial review of Waitangi Tribunal recommendations (binding after 90 days) to return 7,676.8 ha of Mangatū Crown Forest licensed land to Māori ownership in three Māori claimant groups, plus associated compensation – HC said: 1) Tribunal undertook correct approach, considered relevant tikanga and did not misconstrue or exceed jurisdiction and powers; 2) Tribunal erred in analysis of "real value" period for calculating compensation; 3) Tribunal did not err in considering purpose and scope of statutory compensation; 4) Tribunal entitled to make all terms and conditions proposed – Counterclaim by Te Whānau a Kai over 14% allocation share unsuccessful and dismissed in entirety.

High Court of Australia

Corporations Act, unfair preference, set off against another debt

Metal Manufactures Pty Ltd v Morton, Liquidator of MJ Woodman Electrical Contractors Pty Ltd (In Liq) and Anor [2023] HCA 1 (8 February 2023)

Unsuccessful appeal from Full Court, Federal Court concerning whether creditor entitled, under s 553C(1) Corporations Act 2001 (Cth) (Act), to set off amount equivalent to that received as unfair preference against another debt creditor could prove in company winding up –

MMPL paid $50,000 and $140,000 by MJ Woodman Electrical Contractors Pty Ltd (MJ), company subsequently in liquidation – Payments made within six-month period prior to MJ’s winding up – MJ’s liquidator (liquidator) sought to recover payments from MMPL under s 588FF(1)(a) claiming each unfair preference under s 588FA – MMPL sought to set off its potential liability to repay alleged unfair preferences against separate and distinct debt MJ owed to it –

Primary judge reserved following question for Full Court, Federal Court: "Is statutory set-off, under s 553C(1) of [Act], available to the [MMPL] in this proceeding against the [liquidator’s] claim as liquidator for the recovery of an unfair preference under s 588FA of the Act?" Full Court answered "No" –

Before HC, MMPL said entitled to set off potential liability under s 588FF(1)(a) against amounts MJ owed because there had been mutual dealing between MMPL and MJ – MMPL said its future liability under s 588FF(1)(a) no different to any other claim owed to company because company would be entitled to receive that amount beneficially –

HC said any liability arising from making order under s 588FF(1)(a) not eligible to be set off against debt owed to MMPL – Construed in context of statutory scheme of liquidation, s 553C(1) required mutual credits, mutual debts or other mutual dealings be credits, debts or dealings arising from circumstances that subsisted in some way or form before winding up commenced – Here, immediately before winding up, nothing to set off as between MMPL and MJ – Contingent right liquidator held to sue for order under s 588FF could not and did not exist before then – No mutual dealing within s 553C(1) meaning; no dealing between same persons and there was no mutuality of interest – Appeal dismissed.

Corporations Act, unfair preferences, running account principle, “peak indebtedness” rule

Bryant and ors v Badenoch Integrated Logging Pty Ltd [2023] HCA 2 (8 February 2023)

Unsuccessful appeal, cross-appeal from Full Court, Federal Court – Case concerned voidable transactions under Pt 5.7B of Corporations Act 2001 (Cth) – Within Pt 5.7B, s 588FA(3) statutory embodiment of the "running account principle" – Section 588FA(3) effect is if "a transaction is, for commercial purposes, integral part of continuing business relationship (for example, a running account)" between company as debtor and creditor, then all transactions forming part of that relationship are to be treated as if they together constituted a single transaction in determining if transaction an unfair preference, voidable on liquidator’s application –

Bryant and others were Gunns liquidators (liquidators) – Badenoch entered into agreement to supply services to Gunns for harvesting and hauling timber – From 2010, Gunns suffered significant declines in revenue – Badenoch continued to provide services to Gunns, despite Gunns frequently being late paying or only making partial payments – In August 2012, Badenoch agreed with Gunns to terminate agreement on basis that it would continue to supply some services for further short period – On 25 September 2012, Gunns appointed liquidators – Liquidators applied under s 588FF(1) to have Gunns payments to Badenoch within six-month period ending on 25 September 2012 declared to be voidable transactions as unfair preferences – Liquidators said if there was "continuing business relationship" so as to engage s 588FA(3), they were entitled by "peak indebtedness rule" to choose starting date within that six-month period to prove an unfair preference from Gunns to Badenoch –

Primary judge said "peak indebtedness rule" applied under s 588FA(3) – Also said only two payments (3 and 4) were integral part of continuing business relationship involving running account; and remaining payments (1 and 2 and 5 to 11) were not – On appeal, Full Court said "peak indebtedness rule" did not apply under s 588FA(3), and that payments 1 and 2 also part of relationship –

HC dismissed appeal – Said Pt 5.7B Corporations Act did not incorporate "peak indebtedness rule" – Further, whether "transaction is, for commercial purposes, an integral part of a continuing business relationship" under s 588FA(3)(a) involved objective factual inquiry about "business character" of relevant transaction – On that basis, payments 1 and 2 formed part of continuing business relationship, but payments 5 to 11 (which occurred after continuing business relationship had ceased in August 2012) did not – To be unfair preference, deemed single transaction under s 588FA(3), being all transactions forming part of relationship during relevant period, was required to reduce indebtedness of Gunns to Badenoch over that period – Because Gunns net indebtedness to Badenoch increased over relevant period, could be no unfair preference – Appeal dismissed.

Supreme Court of Canada

Search and seizure, military investigators, foreign country, Canadian Charter

R v McGregor [2023] SCC 4 (17 February 2023)

Unsuccessful appeal from Court Martial Appeal Court of Canada – Retired Corporal (Cpl.) McG posted to Canadian Defence Liaison Staff at Canada’s embassy in Washington, D.C. – Given position in the United States (USA), McG had diplomatic immunity for his person, property and residence under Vienna Convention on Diplomatic Relations –

In 2017, Canadian Armed Forces colleague posted to USA discovered two audio recording devices in home – Believed McG placed them there – Reported discovery to her senior officer – Canadian Forces National Investigation Service found reasonable grounds to believe McG committed voyeurism and possession of device to surreptitiously record private communications –

Investigation Service could not search his residence in Alexandria, Virginia because it was not on Canadian Armed Forces property – Consequently, lead investigator asked Canadian Embassy to waive McGregor’s Vienna Convention immunity – When immunity waived, Alexandria Police Department obtained warrant that authorized search of McG’s residence, and any electronic devices found there – Police entered McG’s residence and invited Investigation Service to conduct search – Officers seized electronic devices and searched some of them while in residence – Discovered evidence of suspected offences as well as others – Electronic devices removed to Canada and searched further, in line with Canadian warrants –

Military judge dismissed McG’s motion to exclude evidence for breaching s 8 Canadian Charter of Rights and Freedoms (Charter), which protected people from “unreasonable search or seizure” – Military judge convicted him of voyeurism, possession of device for surreptitious interception of private communications, sexual assault, and disgraceful conduct – Court Martial Appeal Court affirmed decision –

McG appealed to SC – Both parties relied on previous SC case about whether Charter applied to searches and seizures Canadian police conducted in other countries – McG said Charter applied to Investigation Service – Crown argued opposite –

SC unanimously dismissed appeal and affirmed his convictions – Majority found it unnecessary to deal with extraterritoriality issue, because Investigation Service did not violate Charter – Working within constraints of authority in Virginia, Investigation Service asked local authorities to obtain and execute warrant under Virginia law – Warrant expressly authorized search, seizure and analysis of electronic devices – Sexual assault evidence discovered inadvertently while triaging devices at search scene – Incriminating nature immediately apparent – Although warrant did not foresee such evidence, digital files fell into “plain view” –

Plain view doctrine requirements both met: (1) Investigators had legitimate prior justification for intrusion in form of warrant; and (2) Incriminating evidence in plain view, as was immediately obvious and discovered inadvertently –

Also, Investigation Service obtained Canadian warrants before further searching devices any further – Difficult to see how investigators could have acted differently to attain legitimate investigative objectives – Appeal dismissed.

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