New Zealand Law Society - Courts roundup 27 April - 3 May 2023

Courts roundup 27 April - 3 May 2023

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

Supreme Court NZLS 2013 06 10 3

New Zealand Supreme Court

Insurance, declaration, policy wording

JDA Co Ltd and ors v AIG Insurance New Zealand Ltd and ors [2023] NZSC 41 (27 April 2023)

Unsuccessful leave application – JDA and others (insured) exporters of cars from Japan who claimed under marine open cover insurance policy AIG and others (insurers) issued for typhoon damage in 2018 – Under policy insured required to declare “the number of units/Motor Vehicles received into the Assured’s control at the specified Pre Shipment Holding Yards … during the preceding month” – Insureds gave notice to intermediary, ATL, providing spreadsheets or completing schedules on ATL’s website – ATL compiled monthly declarations for broker, SPL, which calculated and invoiced  premiums – Accepted insurer temporarily on risk for as-yet-unidentified cars received into yards in immediately preceding month before declaration –

Typhoons struck Japan on 23 August and 4 September 2018 – Unusually large vehicle numbers nominated in declarations for those months – Insurers declined cover for certain claims, subject of this proceeding – JDA sought declarations in HC that insurers were liable for damage to vehicles and, by declining cover, breached insurance contracts –

HC said policy required insured to evince intention to take insurance – Notifying ATL insufficient as not insurers’ agent – Secondly, HC said premium clause (requiring monthly declaration to insurer) promissory warranty for s 34 Marine Insurance Act 1908 purposes, requiring exact compliance (failing which liability discharged) – HC said warranty breached when vehicle not included in declaration in month following month it entered pre-shipment holding yard – Said insurers’ liability arose only on declaration compliant with policy terms –

CA upheld HC conclusions, apart from reserved position on non-agency question which it did not have to decide –

Insured applied to SC for leave to appeal – SC said leave criteria not met – Case turned on particular, unusual facts – Also, critical policy wording here bespoke, distinctly negotiated and agreed – Construction gave no rise to question of general or public importance or general commercial significance – Application declined.

GP, Medical Centre liability

Ryan v Health and Disability Commissioner [2023] NZSC 42 (28 April 2023)

Unsuccessful appeal – R GP at Moore Street Medical Centre (Medical Centre) – In 2016, another GP, S, saw one of R’s patients while R on leave – S prescribed patient medication from class for which had documented allergy – Patient suffered allergic reaction and admitted to hospital –

Patient complained to Health and Disability Commissioner (Commissioner) against S – Commissioner said S breached Code of Health and Disability Services Consumers’ Rights (Code) – Commissioner also said Centre (R and S trading as Medical Centre) did not directly breach Code but liable for S’s breaches under s 72 of Health and Disability Commissioner Act 1994 (HDC Act) – R began judicial review proceedings Commissioner’s decision on Medical Centre –

HC said S Medical Centre agent – Acted within Medical Centre’s implied authority when breached Code – Therefore liable under s 72(3) HDC Act – On appeal, CA said holding Medical Centre liable under s 72(3) (for agent actions) problematic here – Nevertheless, S acting as Medical Centre member when breached Code and liable under s 72(4) –

SC granted R leave to appeal – 4 to 1 majority dismissed appeal – Said Medical Centre liable under s 72(4) which said: “Anything done or omitted by a person as agent of an employing authority shall, for the purposes of this Act, be treated as done or omitted by that employing authority as well as by the first-mentioned person, unless it is done or omitted without that employing authority’s express or implied authority, precedent or subsequent.”

SC unanimously said Medical Centre was partnership – Said to act as agent of employing authority,  person had to carry out, on behalf of employing authority, work that satisfied employing authority obligation to provide relevant service – Additionally or alternatively, where person said to be agent employing authority partner, person acting as agent if satisfied s 8 Partnership Act 1908 (law in force at time of prescription error) –

Applying non-technical definition majority said S, when consulting with complainant, satisfied Medical Centre obligation to provide medical services to complainant – Applying Partnership Act analysis, majority said S, when consulting, carried on usual partnership business – On either analysis, S acting as Medical Centre agent for s 72(3) purposes when breached Code – Appeal dismissed.

New Zealand Court of Appeal

Damages, real estate misrepresentation

PGG Wrightson Real Estate Ltd v Routhan [2023] NZCA 123

Successful appeal from award of $1,697,600 in damages – Sale and purchase of dairy farm in 2010 – Real estate agent misrepresentation of the production levels relied on by purchaser – Proper level of damages – HC found recoverable losses were loss of equity in the farm and the run-off property through forced sale in 2020, and loss of investment in capital improvement, less 20 percent contributory negligence – HELD: disclaimer did not protect PGG from liability for misrepresenting historical production – PGG liable both in negligence and for breach of the Fair Trading Act 1986 – Purchaser would not have entered into the agreement had it not been misled about the historical production levels – Losses caused by the forced sale of the properties in 2020 were the consequence of decisions made by the Purchaser post-purchase, and fell outside the scope of PGG’s duty – Loss assessed at date of transaction – Recoverable loss assessed as $300,000 (supported by calculating proportionate reduction in the purchase price based on the difference between actual production in the year prior to purchase and the figure supplied) – Appeal allowed – HC judgment set aside and replaced with judgment for respondents in the sum of $300,000 plus interest.

Insanity, conviction appeal

Yad-Elohim v R [2023] NZCA 136

Unsuccessful appeal against conviction on murder charge – Y had pleaded not guilty by reason of insanity – Primary ground of appeal that there was no real contest at trial between Crown and defence psychiatrists because of the late discovery of relevant evidence and the consequential significant time pressure on defence psychiatrist to prepare his report – History of mental illness – HELD: nothing in Dr C’s reports suggested that the defence could, with more time, have presented a materially stronger argument supporting an insanity defence at trial – The late information did not materially affect the ability of the experts to give evidence about Y’s state of mind as relevant at the time of the fatal assault – What really mattered were the consistent accounts Y gave close to the time, and subsequently, about his motivations for the assault – Defence not unfairly disadvantaged in any material respect by not having more time to consider and address the new evidence – No miscarriage of justice – Appeal against conviction dismissed.

New Zealand High Court

Sentencing, manslaughter

R v Irving [2023] NZHC 946 (27 April 2023) Brewer J

Sentencing – I guilty of manslaughter after jury trial – "Fright response" manslaughter – Defendant pursued deceased intending to extort valuable jewellery from him – Deceased twice jumped into harbour, eventually drowning – Starting point five years six months – 15 per cent discount for s 27 report – No discounts for youth or remorse – End sentence four years eight months' imprisonment.

Supreme Court of Canada

Stay of proceedings, police misconduct allegations, manifestly frivolous

R v Haevischer [2023] SCC 11 (28 April 2022)

Unsuccessful appeal from British Columbia CA – H and J members of criminal organisation Red Scorpions – In 2014, tried together and found guilty of six counts of first-degree murder and one count of conspiracy to commit murder – Flowed from drug trade dispute –

Before convictions entered into court record, accused applied for stay of proceedings alleging systemic police misconduct by investigating officers – Also claimed were deliberately and punitively kept in solitary confinement in harsh and inhumane conditions following arrest –

Crown asked trial judge to dismiss stay applications, without considering them at full hearing –Judge agreed to hear Crown request – Permitted accused to present arguments and some evidence, but record did not represent full evidence – Would have been submitted at full hearing and included cross-examinations of police officers involved –

Judge summarily dismissed stay applications and ordered convictions – Concluded that even if believed everything accused claimed, and even though alleged police misconduct very serious, crimes so shocking that stay would not be appropriate remedy – Said no reason to further consider applications in full hearing –

CA allowed appeal – Said trial judge had not taken correct approach – Had not assumed all allegations true – If all allegations were believed to be true, some chance trial could be stayed – Meant necessary to hear all accused evidence – Crown appealed to SC –

SC unanimously dismissed appeal – Said application in criminal proceeding should only be summarily dismissed if application “manifestly frivolous” – Adopting this rigorous standard, judge might dismiss applications that would never succeed and which would, by definition, waste court time – However, also protected fair trial rights by ensuring applications which might succeed were decided on merits –

Seriousness of alleged state misconduct in this case meant applications not manifestly frivolous and should not have been dismissed summarily – Appeal dismissed but trial court ordered to conduct evidentiary hearing on H’s application as J had died after application argued before SC – Appeal dismissed.

United Kingdom Supreme Court

Vicarious liability, rape

Trustees of the Barry Congregation of Jehovah's Witnesses v BXB [2023] UKSC 15 (26 April 2023)

Successful appeal from CA – SC asked to decide whether Jehovah's Witness organisation vicariously liable for rape committed by S, former elder –

In 1984, Mr and Mrs B began attending services at Barry Congregation – Made friends with S, his wife, and their children – Families became close, visiting each other's houses for tea and going on holidays and days out together – Mrs B considered S her best friend –

Towards end of 1989, S's behaviour changed – Began abusing alcohol and appeared depressed –Began flirting with Mrs B, including hugging her, holding hands and kissing her – Also confided in her – Concerned, Mrs B spoke to S's father, T, who like S was elder – T explained S suffering from depression and needed love and support – Accepted at trial that, had it not been for fact that S elder and Mrs B had received this instruction from T, their friendship would have ended – Mr and Mrs B continued supporting S –

On 30 April 1990, Mr and Mrs B and Mr and Mrs S taking part in door-to-door evangelising – Afterwards went for lunch, where Mr and Mrs S argued – Families returned to S’s house – S went into back room – Mrs S asked Mrs B if she could talk some sense into S – Mrs B decided to speak to S to try to convince him that he should go to elders about his depression – Conversation ensued during which S pushed Mrs B to floor, held her down and raped her –

On 2 July 2014, S convicted of raping Mrs B and seven counts of indecently assaulting two other individuals – Sentenced to 14 years' imprisonment – By this time S had been expelled from Jehovah’s Witnesses for unrelated conduct – Mrs B had ceased her association with Jehovah's Witnesses –

Mrs B commenced action for damages for personal injury, including psychiatric harm, against Watch Tower and Bible Tract Society of Pennsylvania (charitable corporation that supports worldwide religious activities of Jehovah's Witnesses) and Trustees of Barry Congregation, alleging they were vicariously liable for rape S committed – Trial judge found them vicariously liable for rape and awarded Mrs B general damages of £62,000 – CA upheld judge's decision – Barry Congregation Trustees appealed to SC –

SC unanimously allowed appeal, saying Jehovah’s Witnesses organisation not vicariously liable – Said vicarious liability unusual form of liability by which defendant is held liable for tort (civil wrong) committed by third party – Two stages of inquiry, both of which had to be satisfied to find vicarious liability – Same two tests applied to cases of sexual abuse as to vicarious liability cases other cases –

SC said in vast majority of cases tests could be applied without considering underlying policy justification for vicarious liability – In difficult cases it could be useful final check on justice of outcome to stand back and consider whether outcome is consistent with underlying policy –

Stage one concerned with relationship between defendant and tortfeasor (third party, here S, who committed tort) – Test whether relationship one of employment or akin to employment – Applying  "akin to employment" aspect, court needed to consider features of relationship similar to, or different from, contract of employment –  SC agreed with lower courts relationship between Jehovah's Witness organisation and S akin to employment –

Stage two test asked, whether wrongful conduct was so closely connected acts that tortfeasor authorised to do that could fairly and properly be regarded as done by tortfeasor while acting in course of tortfeasor's employment or quasi-employment – Test required court to consider carefully on facts link between wrongful conduct and tortfeasor's authorised activities – SC said at second stage lower courts erred by failing to set out correct "close connection" test and took into account incorrect factors –

SC said claimant failed to satisfy stage two test: (i) Rape not committed while S carrying out any activities as elder; (ii) Primary reason offence took place was S abusing position as Mrs B’s close friend when she was trying to help him –

As final check, considering policy of enterprise liability or risk that might be said to underpin vicarious liability, confirmed no convincing justification for Jehovah's Witness organisation to bear cost or risk of rape S committed – Having deeper pockets not justification for extending vicarious liability beyond principled boundaries – Appeal allowed.

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