New Zealand Law Society - Courts roundup 16 May - 22 May 2024

Courts roundup 16 May - 22 May 2024

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

High court sign with beehive reflection 1

New Zealand Supreme Court

Non-party costs, statutory demand

Haines and ors v Bassett-Burr [2024] NZSC 57 (15 May 2024)

Unsuccessful leave application – Concerns costs ordered against non-party – CA concluded should not have been ordered – Appeal from HC decision awarding costs against B-B as non-party to proceeding in which statutory demands issued under s 289 Companies Act 1993 set aside – H sought leave to appeal –

SC said leave criteria was not met - The principles relating to non-party costs were clear – There was no need for the SC  to reconsider them - Nor did the judgment create “confusion” as to when a statutory demand would be lawfully in issue - SC said proposed appeal turned almost wholly on its own facts – The application for leave to appeal was dismissed.

Manslaughter, reasons judgment

Burke v R [2024] NZSC 59 (16 May 2024)

Reasons judgment following successful appeal against a conviction for manslaughter – Burke had completed his sentence of five years and two months imprisonment – As such, the Crown had not suggested a retrial was appropriate, it accepted a conviction under s189(2) Crimes Act 1961 can and should be substituted, with a sentence in the vicinity of three years imprisonment – Burke’s conviction for manslaughter was quashed -  An order was made under the Criminal Procedure Act 2011 substituting a conviction for injuring with intent to injure under s189(2) -  An order was made substituting a sentence of three years’ imprisonment.

New Zealand Court of Appeal

Judicial Review, Waitangi Tribunal, Inquiry, Summons, Oranga Tamariki Act

Skerret-White & Ors v Minister for Children & Ors [2024] NZCA 160

Issues before the Court arose out of an urgent inquiry (the Inquiry) on which the Waitangi Tribunal embarked into the repeal of s7AA Oranga Tamariki Act 1989 which sets out the duties of the Chief Executive of Oranga Tamariki in relation to the Treaty of Waitangi | te Tiriti o Waitangi - Hearing was scheduled to be on 12 April - Judge Doogan issued a memorandum directing the Crown to respond to a set of questions through the “responsible minister” (the Minister for Children) - The Crown notified the Tribunal that it did not intend to call the Minister as a witness, that the Cabinet papers would be produced as part of the Crown evidence instead - The Tribunal maintained, despite the Crown’s contention that evidence from the Minister was “not necessary to inform the tribunal of the relevant information”, that it would greatly assist its inquiry if the Minister provided evidence as to the basis for the opinions recorded in the Cabinet paper - The Tribunal issued a summons for the Minister to appear before the Tribunal on 26 April for the purpose of providing evidence - On 15 April, the Minister commenced a proceeding against the Waitangi Tribunal in the HC - The HC granted the application for judicial review and set aside the summons - Whether it is within the scope of the Waitangi Tribunal’s power to issue summonses to witnesses - Whether the Tribunal’s issue of the summons to the was Minister lawful – Whether the principle of comity operates to prevent the Tribunal asking for information that would, in its view, assist it to carry out the inquiry - After the Tribunal issued the summons - the Minister provided a letter to the Tribunal responding to the questions it asked; officials gave evidence related to those matters; and the Tribunal issued both an interim and full report - The introduction of a Bill is imminent - These changed circumstances give rise to issues of mootness - However, even if the appeal were moot, that would not preclude the Court from deciding the appeal and issuing a fully reasoned decision, given the issues of public importance involved - HELD: Appeals are formally allowed - No other order having regard to the changed circumstances since the summons was issued.

Negligence, Limitation, Fraudulent concealment 

Whangarei District Council v Daisley [2024] NZCA 161

Partially successful appeal against finding of liability for misfeasance of officers in public office - In 2004 the respondent purchased a property near Whangārei that included a long-established quarry - When he began to work the quarry the appellant asserted that he needed a resource consent to do so and issued abatement and enforcement notices to the respondent and his company , eventually seeking an enforcement order against him in the Environment Court – The appellant asserted that the quarry enjoyed existing use rights - In 2009 the appellant located in its records a resource consent issued for the quarry in 1988 - The appellant admits that it was negligent - The HC also made a finding of misfeasance in public office, which the appellant denies – The respondent did not commence this proceeding until August 2009, just inside six years from when the 1988 land use consent was discovered - The main issue in this case was therefore whether the respondent’s claim is barred by the Limitation Act 1950 - The HC found that the limitation defence failed because the cause of action accrued on a continuing basis or, in the alternative, the cause of action had been concealed by fraud within the meaning of s28(b) Limitation Act 1950 - The appellant was therefore found liable and ordered to pay damages – HELD:  While there were periods in which this case could be analysed in terms of continuing breach, nothing turned on it because there was no allegation of repeated breach of duty after August 2009 - Losses from earlier breaches of duty continued to accrue after that date but for the most part they were not distinct losses from those suffered outside the limitation period - The only loss that was within time for limitation period was the loss on the sale of the property - The Court considers that subjective recklessness as to the existence of facts compromising a cause of action is sufficient to meet the test for fraudulent concealment - The finding that the appellant is liable for the misfeasance of its officers in public office is set aside, along with the award of exemplary damages - Appeal is otherwise dismissed.

Judicial review, New Zealand Bill of Rights Act 1990, Human Rights Act 1993, Ultra vires, Discrimination

Smith v Prison Director at Rolleston Prison [2024] NZCA 163

Unsuccessful appeal against HC decision declining application for judicial review – Successful application to adduce evidence – Appellant is a sentenced prisoner and was transferred in 2020 to the Kia Marama Unit at Rolleston Prison - The Kia Marama Unit is a special treatment unit for prisoners held in men’s prisons who have been convicted of child sex offences - The Totara Unit is another specialist treatment unit at Rolleston Prison for similar offenders - The Prison Director at Rolleston Prison made a rule under s33(1) Corrections Act 2004 that applies to prisoners in the Kia Marama and Totara Special Treatment Units - The rule provides that prisoners in those units must not participate in sexual activity, or encourage, pressure or threaten other prisoners to participate in sexual activity – The appellant claims the rule is ultra vires s19 New Zealand Bill of Rights Act 1990, which protects the right to be free from discrimination – The appellant says that the rule means prisoners in the Kia Marama and Totara Units are treated differently from other prisoners, particularly from prisoners held in another specialist treatment unit for child sex offenders at Auckland Regional Prison - the Te Piriti Unit - He also argues that in a practical sense, the rule only applies to prisoners of homosexual or bisexual orientation – Whether leave to adduce additional evidence be granted by the Director should be granted – Whether appeal should be allowed – HELD: Director sought to adduce evidence of a rule made by the Director of Auckland Prison providing that a prisoner must not enter any cell that he is not allocated to and that any prisoner breaching the rule commits an offence against discipline - The Director sought to argue that this rule narrowed the point of difference between prisoners in the Kia Marama and Totora Units and prisoners in the Te Piriti Unit - It was in the interests of justice to allow the Director to put the additional rule before the Court - Leave granted – Rule not inconsistent with various statutes liberalising the law in relation to homosexual and/or bisexual orientation - It does not single out prisoners of any particular sexual orientation, but rather applies to all prisoners in the Kia Marama and Totara Units - The rule does not impose a blanket prohibition on all prisoners at Rolleston Prison, it only applies to prisoners who volunteer to go into the Kia Marama or Totara Units - Any differential treatment arises not on the basis of a prohibited ground but as a result of voluntary participation in the treatment programmes offered in the Units - Appeal dismissed.

Judicial review, Errors of fact, Errors of law, Disciplinary proceedings

McGuire v Central Standards Committee 3 & Ors [2024] NZCA 165

Unsuccessful appeal against HC decision declining application for judicial review - Determinations were made against the appellant by the respondent Standards Committees, on review by the Legal Complaints Review Officer (LCRO) and by the Lawyers and Conveyancers Disciplinary Tribunal – The appellant sought judicial review of these decisions - Application for judicial review was dismissed – Appellant appeals decision in part - Argued that a determination made against him by the first respondent, the “caveat liability determination”, was not final because he had sought to review it and that as a result, the first respondent’s subsequent “consequential orders determination” was invalid - Sought review of both the caveat liability determination and the consequential orders determination, but that the “review decision” issued by the LCRO failed to review the consequential orders determination - Also argued that a decision by the second respondent, the “refund determination”, was ultra vires, because the contested amount fell beneath the minimum amount required before a costs complaint will be considered - Submitted that the refund determination was made in breach of the rules of natural justice because the determination was different to the complaint – Whether the appeal should be allowed – HELD: Consequential orders determination was not invalid - The fact the caveat liability determination was subject to review by the LCRO did not stay the determination - In respect of the LCRO’s review decision, the LCRO did err - Judge did not err when he declined to grant judicial review in respect of this error - The error by the LCRO as to whether the appellant had sought to review the consequential orders determination did not make a material difference to the LCRO’s decision - In respect of the refund determination, the matter was not treated by the second respondent as being a complaint about overcharging - Nor can it be said that the refund determination was different to the complaint – The appellant was notified of the issues that the second respondent would be considering, and invited to respond to the second respondents concerns but he did not do so – No breach of the rules of natural justice – Appeal dismissed.

Sexual assault, Pre-trial ruling, Pre-recorded evidence - Login Required

R v J (CA 171-2024) [2024] NZCA 166

New Zealand High Court

Disposition, detention type

R v Eteuati [224] NZHC 1204 (15 May 2024) Gault J

Disposition hearing – To determine whether E’s detention in hospital or security facility necessary –Following finding on murder charge of act proved but not criminally responsible on account of insanity – Having considered all circumstances from health assessor psychiatrists evidence, HC satisfied necessary, in public interests and defendant's longer term interests to order defendant detained in hospital as special patient under Mental Health (Compulsory Assessment and Treatment) Act 1992 – Order made.

Sentencing, murder

R v Hulbert and anor [2024] NZHC 1228 (16 May 2024) Cooke J

Sentencing – H and R convicted of murder after jury trial – Killed victim as vengeance for victim giving evidence against local chapter Mongrel Mob captain –

HC said would not be manifestly unjust to sentence to life imprisonment – MPI more than 17 years necessary because several aggravating factors in s 104 Sentencing Act 2002 present: murder involved calculated planning, unlawful entry into victim's home and retribution for giving honest evidence in Court – Although both stabbed victim, H more culpable than R because H patched Mongrel Mob member and R his prospect –

Personal circumstances each justified one-year discounts to MPI – H sentenced to life imprisonment with 18-year MPI – R sentenced to life imprisonment with 17-year MPI.

Supreme Court of Canada

Causation, unlawful act manslaughter

R v Lozada [2024] SCC 18 (17 May 2024)

Unsuccessful appeals from Ontario CA – Concerned whether trial judge made mistake instructing jury on establishing causation between accused’s unlawful acts and victim’s death following third person inflicting stabbing wounds –

L and R accused of unlawful act manslaughter after participating in fight in downtown Toronto, resulting in victim’s fatal stabbing – Never suggested either L or R stabbed victim – Third person convicted of second-degree murder for stabbing – L and R accused of acting as co-principals in fatal attack or aiders and abettors to stabber –

To convict L and R, Crown needed to establish causation between unlawful acts, participation in group assault and victim’s death – Had to prove unlawful acts significant contributing cause to death – Crown’s theory R fought with victim and punched or kicked him, while L fought with one of victim’s friends – Argued men’s assaults left victim vulnerable to being stabbed by third man – In their defence, L and R said stabbing not reasonably foreseeable consequence of their decision to join fight – Stabbing broke causation chain between their assaults and victim’s death and they could not be held criminally responsible –

Jury convicted L and R of unlawful act manslaughter – They appealed convictions to Ontario CA, saying trial judge made mistake when instructing jury on whether conduct significant contributing cause of victim’s death –

CA majority dismissed appeals – Said considered in isolation, two passages from trial judge’s instructions on reasonable foreseeability misstated law – However, read as whole, instructions accurate – L and R appealed to SC –

SC majority dismissed appeals – Said instructions and Judge’s answers to jury questions as whole conveyed proper causation test – Appeal dismissed.

United Kingdom Supreme Court

Nuisance, liability

Davies v Bridgend County Borough Council [2024] UKSC 15 (8 May 2024)

Successful council appeal from CA – Concerned private nuisance – Here nuisance arose from encroachment of ‘Japanese knotweed’ – Well before D (claimant) purchased land in Bridgend in 2004, Japanese knotweed spread from land Bridgend County Borough Council (council) owned onto land claimant now owned – In 2004, Japanese knotweed encroachment onto neighbouring land not actionable private nuisance – Actionable private nuisance arose in 2013 when council was, or ought to have been, aware of risk of damage and loss of amenity to claimant’s land as result of publicly available information about Japanese knotweed at time and council failed to implement reasonable and effective treatment programme for Japanese knotweed – Did not until 2018 –

Claimant claimed damages against council in Swansea County Court – District judge said council continued breach between 2013 and 2018 but declined to award damages because said damages for diminution in value not recoverable – On first appeal, district judge’s ruling upheld – On further appeal, CA upheld continuing breach finding but said damages for residual diminution of land value (said to be £4,900) recoverable – Council appealed to SC –

SC unanimously allowed appeal – Said diminution in value of claimant’s land not caused by council’s defendant’s tortious conduct and no damages should be awarded – Appeal allowed.

Salvage, in personam claim, sovereign immunity

Argentum Exploration Ltd v Republic of South Africa [2024] UKSC 16 (8 May 2024)

Successful South Africa appeal from CA – On 23 November 1942, SS TILAWA (Vessel) sunk in Indian Ocean by enemy action – On board were 2,364 bars of silver being carried from Bombay to Durban (Silver) – Silver belonged to Union of South Africa, now Republic of South Africa – Purchased for predominantly for South African mint to be made into coin – At 2020, Silver had estimated value approximately US$ 43 million –

In 2017, specialist salvage vessel recovered Silver from seabed at depth of some 2½ kilometres – Carried to United Kingdom and declared to Receiver of Wreck –

Argentum claimed to be Silver salvor (rescuer) – Said entitled to claim for salvage, i.e. payment for recovering Silver from seabed – Under maritime law, possible to claim for voluntary salvage, meaning salvor could claim regardless of whether property owner requested or consented to salvage operation – Here, Argentum retrieved Silver without any prior agreement with South Africa, so claimed for voluntary salvage –

Salvage claim could be made in personam (against specific person: here, South Africa as Silver owner) or in rem (against thing itself: here Silver) – In rem claims had certain procedural advantages – For example, claim could be served by fixing claim form to property itself, rather than serving claim form on property’s owner – In rem proceedings also generally provided right to arrest property in question which could act as security for claim – Here Argentum brought claim for salvage in rem against Silver, rather than in personam against South Africa –

South Africa said HC had no power to hear Argentum’s claim because of state immunity principle, meaning could not be sued because of its sovereign status as foreign state – Argentum said South Africa not immune, because exception to immunity under s10(4)(a) State Immunity Act 1978 applied – Argument between parties primarily turned on whether Silver “in use or intended for use for commercial purposes” when being carried at sea in November 1942 – HC ruled for Argentum, holding Silver in use for commercial purposes, as did CA majority – South Africa appealed to SC –

SC unanimously allowed South Africa’s appeal – Said Silver not in use nor intended for use for commercial purposes at time when cause of action arose – Therefore, South Africa is entitled to immunity from Argentum’s in rem claim against Silver –

Common ground between parties Vessel in use for commercial purposes when carrying Silver – Also became common ground Silver’s predominant intended use sovereign purpose of minting currency – Resulting central issue in appeal whether Silver “in use… for commercial purposes” within s 10(4)(a) when being carried on board Vessel in 1942 – SC said not – Appeal allowed.

Trade mark infringement, director liability

Lifestyle Equities CV and anor v Ahmed and anor [2024] UKSC 17 (15 May 2024)

Unsuccessful appeal from CA – A and sister HS directors – HS arranged to manufacture clothing, footwear and headgear and sold to retailers – Over roughly 10 years, HS sold various items bearing logos with words ‘SANTA MONICA POLO CLUB’ and pictures of polo players on horses – LE companies owned trade marks featuring polo player on horse and words ‘BEVERLY HILLS POLO CLUB’ – LE sued HS alleging using ‘SANTA MONICA POLO CLUB’ signs infringed Lifestyle’s trade marks – Also sued A’s personally, claiming they were jointly liable with HS for infringements –

Trial judge said “‘SANTA MONICA POLO CLUB’ signs infringed LEe’s trade marks, both because signs were sufficiently similar to LE’s ‘BEVERLY HILLS POLO CLUB’ to give rise to likelihood of confusion on part of public and because such use took unfair advantage of, and was detrimental to, distinctive character and reputation of LE’s trade marks – Also said A’s jointly liable with HS because they had procured infringements and infringements committed pursuant to common design – No findings that A’s knew or ought to have known likelihood of confusion or infringement – On judge’s view, absence of knowledge did not affect liability –

HS subsequently dissolved against A’s LE claimed account of profits – Judge said A’s not liable to account for HS profits from its infringements of Lifestyle’s trade marks but were liable to account for profits they themselves made from infringements – Apportioned 10% of salaries during relevant period to such profits and also said HS loan to Mr A a profit derived from infringements – Both parties appealed – CA upheld decision, except regarding to Mr A which said not profit – Both parties appealed to SC –

SC unanimously dismissed LE’s appeal (which argued A’s should have been ordered to account for HS profits) and allowed As’ appeal – A’s could not be liable either for procuring trade mark or on common design basis, when not aware of essential facts which made HS using ‘SANTA MONICA POLO CLUB’ signs wrongful – In any case, A’s could not be required to account for HS profits and on facts had not themselves made any profits from infringements – Appeals dismissed, allowed.

Force majeure clauses, reasonable endeavours

RTI Ltd v MUR Shipping BV [2024] UKSC 18 (15 May 2024)

Successful MUR appeal from CA – Concerns interpretation of force majeure clause in shipping contract between MUR Shipping BV (MUR) and RTI Ltd (RTI) – Force majeure clauses commonly included “reasonable endeavours” proviso, providing that party cannot rely on what would otherwise be force majeure event if party could avoid its effects by exercising reasonable endeavours –

Central issue in appeal whether reasonable endeavours might require party affected, if to be entitled to rely on force majeure clause, to accept offer of non-contractual performance from other contracting party in order to overcome effects of specified event – Although question arises for specific force majeure clause, had significant implications for interpreting reasonable endeavours provisos and force majeure clauses more generally –

On 9 June 2016, MUR and RTI entered affreightment contract based on amended Gencon standard form voyage charterparty – MUR (shipowner) agreed to make monthly shipments of bauxite from Conakry in Guinea to Dneprobugsky in Ukraine, between 1 July 2016 and 30 June 2018 – RTI agreed to monthly payments to MUR, in US dollars – Contract clause force majeure clause – Clause 36.3(d) reasonable endeavours proviso – Stipulated specified event would only be force majeure event if “it cannot be overcome by reasonable endeavors from the Party affected” –

On 6 April 2018, US government sanctioned RTI’s parent company – Parties accepted likely to create difficulties in RTI making timely contractual payments in US dollars – MUR claimed it constituted force majeure event and suspended bauxite shipments, relying on force majeure clause – RTI disputed this and offered: (i) to make payments to MUR in Euros, which could then be converted into US dollars by MUR’s bank on receipt; and (ii) to indemnify MUR for any loss it suffered as result – MUR rejected RTI’s offer –

RTI commenced arbitration against MUR for breach of contract – MUR said permitted to suspend performance under force majeure clause – RTI said MUR could not rely on clause, because in rejecting RTI’s offer, had not satisfied reasonable endeavours proviso – Arbitrators agreed with RTI and awarded it damages for MUR’s breach of contract – MUR appealed to HC – Judge allowed MUR’s appeal, saying reasonable endeavours proviso did not require MUR to accept offer of noncontractual performance before it could rely on force majeure clause –

RTI appealed CA – CA majority allowed appeal, saying event could have been “overcome” by accepting RTI’s offer as this would have achieved same result and would have involved no detriment to MUR – Would have constituted reasonable endeavours here – MUR appealed to SC –

SC unanimously allowed appeal – Said MUR rejecting RTI’s offer of non-contractual performance did not constitute failure to exercise reasonable endeavours and therefore reasonable endeavours proviso did not prevent MUR from relying on force majeure clause – Appeal allowed.