C & S Kelly Properties Limited v Earthquake Commission

[2018] NZHC 157

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2013-409-1273

[2018] NZHC 157

BETWEEN

C & S KELLY PROPERTIES LIMITED

Plaintiff

AND

EARTHQUAKE COMMISSION

First Defendant

SOUTHERN RESPONSE EARTHQUAKE SERVICES LIMITED

Second Defendant

Hearing:

14 February 2018

(By way of telephone conference)

Appearances:

G Shand for the Plaintiff

J Moran for the First Defendant

R Johnstone for the Second Defendant A Powell as Interested Party

Judgment:

15 February 2018

JUDGMENT OF MANDER J

[1]    The plaintiff, C & S Kelly Properties Limited, has sought to review interlocutory directions I made without notice on the final sitting day of last year.1 Those directions concerned a dispute that had arisen between the plaintiff and the first defendant, the Earthquake Commission (EQC), regarding the enforcement of a judgment debt.2

1      C & S Kelly Properties Ltd v EQC HC Christchurch CIV-2013-409-1273, 19 December 2017.

2      High Court Rules 2016, r 7.49.

C & S KELLY PROPERTIES LIMITED v EQC [2018] NZHC 157 [15 February 2018]

Background

[2]    It is convenient to set out the content of my minute of 19 December 2017, which contained the directions the plaintiff seeks to review:3

[1]        A sale order was issued on 9 November 2017 to enforce the judgment amounts awarded against the Earthquake Commission on 22 July 2015 and 10 July 2017. An apparent issue has arisen between the parties regarding the enforcement of the judgments for the total sum of $134,746.95 which is yet to be paid by EQC.

[2]        Having regard to the Christmas vacation and pending the opportunity for the parties to be heard when the Court resumes sitting in the new year, as an interim measure, I make the following directions:

(a)The first defendant (EQC) will make a payment of

$134,746.95, being the amount owing under the Sale Order dated 9 November 2017, into the Ministry of Justice Law Trust Account;

(b)The payment will be held on trust pending the release of the cost decision.

(c)No enforcement steps will be taken in respect of the sale order once the payment has been made into the trust account.

[3]       The actions of the Registrar and Sheriff of the Christchurch High Court relating to the execution of the sale order is the subject of a separate proceeding filed by the plaintiff. A copy of the statement of claim relating to that proceeding was attached to the plaintiff’s application to review my interlocutory orders, which was filed on 21 December 2017.

[4]       On 22 December 2017, the  registry allocated  a  telephone  conference  for 14 February 2018 to hear the plaintiff’s application to review the interlocutory orders. In the interim, on 7 February 2018, I delivered a costs decision relating to the substantive proceeding between the parties.4 The result of that decision was that the parties were to bear their own costs.

3      C & S Kelly Properties Ltd v EQC HC Christchurch CIV-2013-409-1273, 19 December 2017.

4      C & S Kelly Properties Ltd v EQC [2018] NZHC 56.

Grounds for review

[5]       The plaintiff submitted that in the absence of an application by EQC for a stay of enforcement of the judgment on the ground that a substantial miscarriage of justice would be likely to result if the judgment was enforced, the interlocutory direction should not have been made. Mr Shand on behalf of the plaintiff submitted the orders had been made without a sufficient evidential basis, and without an opportunity being provided to the parties affected to be heard. He submitted, by reference to the proceedings against the Registrar and Sheriff, that she had inappropriately been involved in the process by which the directions had been made, and that the plaintiff had been prejudiced by not being able to execute the judgment. Mr Shand submitted the plaintiff was entitled to an award of costs which should be paid by the Crown as, in his submission, it was responsible for “the situation”.

Decision

[6]       Rule 7.43 High Court Rules provides that a Judge may make an interlocutory order on his or her own initiative, although, before doing so, he or she must give the parties an opportunity to be heard. A difficulty that arose in the present case was that the matter was placed before me on the last sitting day of the year. As as is apparent from the content of the minute itself, the objective of the directions was to regulate the situation by requiring EQC to pay the judgment debt, albeit into the Court, pending the opportunity to hear from the parties. Because of the exigencies of the last sitting day, the intention was to protect the respective positions of the parties, including that of the plaintiff, pending the opportunity to hear from them on the issue. However, that course did result in directions being made without first hearing from the parties.

[7]       That irregularity may well provide a proper basis to revisit the directions notwithstanding that the need to hear from the parties was the very purpose of having the matter recalled when the Court resumed sitting in the new year. In the event, it is not necessary to come to any conclusion as to whether in those circumstances my directions of 19 December should be rescinded because the matter is now moot.

[8]       The funds paid by EQC into the Ministry of Justice Law Trust Account were required to be held on trust pending the release of my costs decision. Upon delivery

of that judgment on 7 February 2018, my directions were of no further effect. At the telephone hearing there was some confusion as to whether the monies had been disbursed from the Ministry’s trust account. However, inquiries made by the registry have clarified the position.

[9]       On 9 February, a member of Mr Shand’s office, Mr Ferguson, provided details he had obtained from a director of the plaintiff, Mrs Kelly, of the account into which the payment should be made. Inquiries were made by the registry whether the funds including interest should be transferred electronically, or whether the plaintiff preferred a cheque be written that day and posted or made available for collection. Mr Ferguson advised that electronic payment was preferred despite advice that process may take longer.

[10]     Because of Mr Shand’s apparent understanding at the hearing that the funds were to be paid into his trust account and that his account had not received those funds, I asked for further inquiries to be made by the registry regarding the arrangements for payment. The registry contacted Mr Ferguson who confirmed the advice he had provided to the registry last week, that he had arranged for Mrs Kelly to have the company’s mortgagee, the ASB, advise where payment should be made. Further, that Mrs Kelly had forwarded to him an email from the ASB providing the account details for payment, which he confirmed he forwarded to the registry. Mr Ferguson noted this information had been provided by the ASB from its Earthquake Settlements Manager and that he understood the account belonged to the ASB, but that the plaintiff had an interest in the funds subject to the mortgage.

[11]     The information provided by Mr Ferguson confirms the arrangements made last week regarding the bank account into which the registry was advised payment should be made. The registry also took the opportunity of confirming to Mr Ferguson that the money had been disbursed out of the Ministry of Justice Law Trust Account to the High Court Christchurch Account, awaiting National Office’s approval to process the electronic payment to the nominated bank account. That payment was approved and paid into the nominated account overnight on 14 February 2018.

[12]     Because of the release of my costs judgment and the disbursement of funds paid by EQC into the Court’s trust account, my directions of 19 December 2017 no longer have any effect. It follows that the plaintiff’s application under r 7.49 is moot. It is well-established as a general principle that Courts will not determine appeals where there is no longer a live issue between the parties. The principle reflects the reluctance of Courts to consider academic or abstract questions when there is no longer any dispute between the parties to be resolved.5 While the present application is to review an interlocutory order for the purpose of obtaining its recision, the same principle applies. The Court will not normally exercise its jurisdiction under r 7.49 to rescind a spent interlocutory order.6

[13]     On occasions, an appellate authority will hear a moot appeal where an important question of public law arises notwithstanding there no longer being any live issue directly affecting the rights and obligations of the parties. Ordinarily, however, the Courts do not decide appeals or review earlier decisions that no longer have any practical effect on the rights of the parties before the Court.

[14]     Mr Shand submitted that at the time he filed and served his application for review my directions were in effect. However, that feature, which will commonly be the situation, does not affect the principle that the Court will not entertain an appeal or review concerning a dispute between private parties in private litigation which can have no practical effect on the rights of those parties unless it is in the public interest to do so. This will be so even where the issue has only become abstract after the filing of an appeal, and even after leave to appeal may have been given.7

[15]     No issue of public interest arises on the plaintiff’s application to review my earlier directions. The effect of those directions was limited to the parties to the proceeding. Their ambit extended only to a direction to EQC to make payment into the Court and the retention of the funds in the Court’s trust account pending an opportunity to hear from the parties regarding the enforcement of the judgment debt.

5      Hutchinson v A [2015] NZCA 214; Orlov v ANZA Distributing (NZ) Ltd (in liq) [2011] NZSC 28, [2011] 2 NZLR 721; Gordon-Smith v R [2008] NZSC 56, [2009] 1 NZLR 721.

6      Tean Clavel Motorsport v Neil Allport Motorsports Ltd HC Auckland CIV-2010-404-2823, 1 June 2010.

7      Gordon-Smith v R, above n 5, citing Borowski v Attorney-General of Canada [1989] 1 SCR 342 at 353.

[16]     The plaintiff has sought costs on its application  against the Crown, which  Mr Shand further particularised in his memorandum filed in support of the plaintiff’s application as being the Court itself. The issue of outstanding costs may be a reason to continue to hear an appeal which is moot. However, in the circumstances of the present case that does not provide a reason to keep the review application alive.

[17]     Mr Shand submitted that while my directions were in place the plaintiff lost the use of the funds paid into the Court which it was otherwise entitled to access. That submission fails to take into account that the money while deposited in the Ministry of Justice Law Trust Account was earning interest, which I understand has been disbursed in accordance with the plaintiff’s instructions together with the principal sum. Furthermore, any loss arising from the lack of access to the funds arises from the dispute between the parties regarding the enforcement of the judgment debt, and the related actions of the Registrar and Sheriff. Those issues are now the subject of a separate proceeding, and that litigation now supersedes any question of costs arising out of the now moot review application. Perhaps most fundamentally, the Crown or the Court was not a party to the application for review. While in exceptional circumstances orders can be made against non-parties, Mr Shand did not address that aspect of the plaintiff’s application.

Conclusion

[18]     Because my directions of 19 December 2017 are no longer of any effect, the review application is moot. I decline to hear the application, and it is accordingly dismissed. In the circumstances, costs shall lie where they fall.

Solicitors:

Grant Shand, Auckland Chapman Tripp, Wellington Wynn Williams, Christchurch Crown Law Office, Wellington