100 Investments Ltd v PVG Securities Trustee Ltd
[2020] NZCA 458
•29 September 2020 at 11 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA172/2019 [2020] NZCA 458 |
| BETWEEN | 100 INVESTMENTS LIMITED |
| AND | PVG SECURITIES TRUSTEE LIMITED |
| Hearing: | On the papers |
Court: | Miller, Cooper and Gilbert JJ |
Counsel: | P Michalik for Applicant |
Judgment: | 29 September 2020 at 11 am |
JUDGMENT OF THE COURT
AThe proceedings are to be stayed on the present appeal unless or until leave is granted or declined in the High Court. If leave is granted, the present appeal may then continue. If leave is declined, an application for leave should be made to proceed with the present appeal under s 56(5) of the Senior Courts Act 2016.
BThe respondent is entitled to costs for a standard application on a Band A basis with usual disbursements.
____________________________________________________________________
REASONS OF THE COURT
(Given by Cooper J)
The respondent, PVG Securities Trustee Ltd (PVG), applies to strike out this appeal on the basis that leave should have been sought from the High Court to file the appeal. The applicant, 100 Investments Ltd (100 Investments) contends that leave was not necessary.
The judgment of the High Court which 100 Investments wishes to challenge was given on an application it made seeking to enforce an undertaking as to damages which was provided by PVG in the context of an application for an interim injunction issued on 21 December 2018.[1] The interim injunction restrained an insurance pay out to 100 Investments for earthquake damage to a building in central Christchurch.
[1]PVG Securities Trustee Ltd v 100 Investments Ltd [2020] NZHC 328 [High Court damages judgment].
In the substantive proceeding, PVG sought a declaration that it was entitled to a substantial part of the settlement payment. It also sought declarations that it had an equitable charge over the settlement payment to secure sums owed to it. However, when the substantive proceeding was determined the declarations sought were declined.[2]
[2]PVG Securities Trustee Ltd v 100 Investments Ltd [2019] NZHC 1847 [High Court substantive judgment].
100 Investments then sought to enforce the undertaking as to damages. However, the Judge was not satisfied that it had proved any loss as a result of PVG having obtained the interim injunction.[3] The application to enforce the undertaking as to damages was therefore dismissed.
[3]High Court damages judgment, above n 1, at [28].
100 Investments wishes to appeal against the High Court damages judgment. Its ability to do so without leave depends upon the proper interpretation and application of s 56(3) of the Senior Courts Act 2016 (the Act). Under s 56(1)(a) of the Act, this Court is empowered to hear and determine appeals from any judgment, decree or order of the High Court. However, s 56(2) provides that subs (1) is subject to subss (3) and (5). Those provisions are relevant to the present issue, as is subs (4). They read as follows:
56 Jurisdiction
…
(3)No appeal, except an appeal under subsection (4), lies from any order or decision of the High Court made on an interlocutory application in respect of any civil proceeding unless leave to appeal to the Court of Appeal is given by the High Court on application made within 20 working days after the date of that order or decision or within any further time that the High Court may allow.
(4) Any party to any proceedings may appeal without leave to the Court of Appeal against any order or decision of the High Court—
(a) striking out or dismissing the whole or part of a proceeding, claim, or defence; or
(b) granting summary judgment.
(5) If the High Court refuses leave to appeal under subsection (3), the Court of Appeal may grant that leave on application made to the Court of Appeal within 20 working days after the date of the refusal of leave by the High Court.
As can be seen, except where subs (4) applies, there can be no appeal from any order or decision of the High Court made on an “interlocutory application” without leave. In the first instance, the application for leave must be made to the High Court within 20 working days after the date of the order or decision or such further time as that Court might allow.
Under subs (5) leave can be sought from this Court, but only where the High Court has first refused leave. Subsection (4) constitutes an exception to the leave requirement. No leave is necessary where the decision of the High Court was one striking out or dismissing the whole or part of a proceeding, claim or defence, or granting summary judgment. It seems clear from the drafting that subs (4) creates an exception for orders that would otherwise have been treated as interlocutory thus requiring leave under subs (3).
In the present case, it is necessary to properly characterise the nature of the High Court damages judgment. If it was interlocutory leave is necessary, as the exception in subs (4) does not apply.
An interlocutory application is defined in s 4 of the Act. The definition reads as follows:
interlocutory application—
(a) means any application to the High Court in any civil proceedings or criminal proceedings, or intended civil proceedings or intended criminal proceedings, for—
(i) an order or a direction relating to a matter of procedure; or
(ii) in the case of civil proceedings, for some relief ancillary to that claimed in a pleading; and
(b) includes an application to review an order made, or a direction given, on any application to which paragraph (a) applies
For present purposes, we can concentrate on para (a) of the definition. Clearly, the application dealt with in the High Court damages judgment was an application to the High Court in civil proceedings. It is plainly not an application for an order or a direction relating to a “matter of procedure”. But is it an application “for some relief ancillary to that claimed in a pleading”? Counsel for PVG submit that it is. They note:
(a)100 Investments’ application was clearly styled as an “interlocutory application”, in respect of which costs and filing fees were calculated accordingly. Further, the application fell within the definition of “interlocutory application” in the High Court Rules 2016 in which interlocutory application means “an application made in accordance with r 7.19 or 7.41”.[4] In broad terms, these are applications made in the course of proceedings which have already been commenced by an appropriate originating process, whether by filing a statement of claim and notice of proceeding, or originating application.
(b)The application was an interlocutory application because it did not seek relief sought in the pleadings. Rather it sought relief which was clearly ancillary to (or related to) what was sought in the pleadings.
[4]High Court Rules 2016, r 1.3.
Counsel for 100 Investments submits to the contrary. Mr Michalik argues that notwithstanding the form of the application that had been made to the High Court the relief sought was not interlocutory in nature. He submits that the word “ancillary” used in (a)(ii) of the definition of “interlocutory application” in the Act has a narrower meaning than simply “related to”. He submits the words connote a connection “by way of support”, arguing that relief claimed in an application will be “ancillary” to the relief claimed in the pleading where the application is for relief that is subordinate or subservient to and supportive of the party’s case for some needed relief. Any application for relief other than the main relief pleaded in a proceeding would be seen as an application for ancillary relief where it supports or assists the party in its case to obtain that main relief.
On this basis, Mr Michalik argues that the High Court damages judgment was not a decision on an interlocutory application. The Judge refused the claim for damages that 100 Investments brought, and the application for damages under the undertaking was not brought in support of any claim to relief set out in the pleadings. Rather, it was brought once PVG’s claim had failed in the High Court and dealt with rights that arose consequentially on that failure.
Mr Michalik draws an analogy to appeals on costs determinations, which may be appealable without leave.[5] He contrasts such costs determinations with what he describes as “normal” interlocutory applications which are dealt with when there is an ongoing High Court proceeding. In respect of the latter, a leave requirement has a role to play by protecting the integrity of the ongoing High Court proceedings. The requirement for leave could operate to prevent a risk of delay or other interference in the progress to hearing of the substantive claim. Such considerations would not apply in relation to an appeal from a High Court decision on an application for damages under an undertaking.
Analysis
[5]Tower Insurance Ltd v Kilduff [2019] NZCA 82 at [17].
In Trotter v Telfer Electrical Nelson Ltd this Court had to consider the question of whether leave was required for an appeal against a judgment of the High Court refusing to uphold a protest to the jurisdiction of that Court in respect of a dispute which, it was argued, fell within the exclusive jurisdiction of the Employment Relations Authority or had already been finally settled.[6]
[6]Trotter v Telfer Electrical Nelson Ltd [2018] NZCA 231, [2019] NZAR 476.
This Court held that the protest to jurisdiction of the High Court, based upon the jurisdiction of the Employment Relations Authority, related to a matter of procedure in the sense that it concerned the proper mode of conducting a legal proceeding to determine the issues between the parties.[7] However, the Court also held that the relief sought in the protest jurisdiction was “ancillary” to the relief sought in the statement of claim, for the purposes of sub-para (a)(ii) of the definition of interlocutory application.[8] The Court said:
[21] In respect of the second limb, we also consider that the relief sought in the protest was “ancillary” to the relief sought in the Statement of Claim. The definition of “ancillary” in the Shorter Oxford Dictionary is subservient or subordinate. In the rules context, the word “ancillary” is used to mean collateral to but flowing out of the relief claimed in the pleadings (for example, r 5.50 — appearance for ancillary matter), or necessary to support or respond to the relief claimed in the pleadings (for example, s 20 of the Senior Courts Act — ancillary powers of Associate Judge).
[22] The relief sought in the application can be seen as ancillary to that sought in the pleading. It responds to the relief sought but is collateral to it — the application for stay (or dismissal) does not engage directly with the relief sought, but rather responds that it is relief which should be pursued in another forum.
(Footnotes omitted).
[7]At [20].
[8]At [22].
It was also determined that the application to stay or dismiss proceeding dealt with in the High Court was not within the categories of decision referred to in s 56(4) of the Act.[9] The Judge had not entered summary judgment, nor had he struck out or dismissed the whole or part of a claim or defence. He had simply made an order staying one of the claims. The Court acknowledged the position would have been different if the Judge had upheld the protest to jurisdiction and dismissed Telfer Electrical’s claim.[10] In that case, an appeal could have been brought as of right, as it would have fallen within s 56(4).
[9]At [24].
[10]At [25].
If anything the present is a clearer case. The relief sought by PVG in the High Court proceeding was a declaration that it was entitled to the insurance monies. The Court granted an interim injunction restraining the payment of the insurance money otherwise payable to 100 Investments but the injunction was granted on terms which included an undertaking as to damages. 100 Investments’ claim to enforce PVG’s undertaking as to damages was not a claim made in a “pleading”. The definition of that term in the High Court Rules is inclusive: the word is said to include a statement of claim, statement of defence, a reply and a counter-claim.[11] The word has also been used with reference to an originating application.[12] But this was not an originating application. The relief sought was the payment of damages pursuant to the undertaking. The only way in which this could be described as relief ancillary to that claimed in a pleading, is if the application to enforce the undertaking is itself characterised as an application for relief in a pleading. We do not consider the application should be so described.
[11]High Court Rules, r 1.3.
[12]Group Rentals NZ Ltd v Pramb Wong Enterprises Ltd [1995] 1 NZLR 763 (HC) at 767.
In our view, the application to enforce the undertaking as to damages was clearly ancillary in the sense discussed in Trotter. It was “collateral to but flowing out of the relief claimed in the pleadings” and for that reason it was an interlocutory application.[13]
[13]Trotter v Telfer Electrical Nelson Ltd, above n 6, at [21].
It does not matter that if the High Court judgment is allowed to stand that will effectively bring the proceeding to an end. Section 56(4) of the Act amounts to a form of statutory recognition that an interlocutory application may have that effect. But it is only certain kinds of interlocutory applications which are referred to in that subsection. The implication is that appeals from other kinds of interlocutory applications which require leave might be the final procedural event in a proceeding.
Result
For the reasons we have given, we are satisfied that the leave of the High Court should have been sought before the present appeal was filed. We understand that leave may have been sought in that Court subsequent to the filing of this appeal.
Whether or not that is the case, the appropriate course for us now to adopt is to stay proceedings on the present appeal unless or until leave is granted or declined in the High Court. If leave is granted, the present appeal may then continue. If leave is declined, an application for leave to proceed with the present appeal should be made under s 56(5).
The respondent is entitled to costs for a standard application on a Band A with usual disbursements.
Solicitors:
Canterbury Legal, Christchurch for Applicant
Meredith Connell, Auckland for Respondent
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