D & J Haldane Limited v Disputes Tribunal
[2017] NZHC 1526
•4 July 2017
IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY
CIV-2017-442-27 [2017] NZHC 1526
UNDER the Judicial Review Act 2016 IN THE MATTER
of an Application for Judicial Review of a
Decision of the Dispute TribunalBETWEEN
D & J HALDANE LIMITED First Applicant
AND
DAVID ROY HALDANE AND JOANNE MAREN HALDANE
Second Applicants
AND
THE DISPUTES TRIBUNAL First Respondent
AND
FIONA PROUT AND RAYMOND HARRIS TRADING AS FOOTHILLS FARMING
Second Respondents
Hearing: 30 June 2017 Appearances:
M J Logan for the Applicants
F J Prout self-representing the Second RespondentsJudgment:
4 July 2017
JUDGMENT OF CULL J
[1] The Disputes Tribunal (the Tribunal) has granted a rehearing of a claim arising from a farm purchase. The Haldanes challenge that decision because, they say, the referee did not answer the right question as to the relevance of her mistake
and should not have granted a rehearing.
D & J HALDANE LIMITED v THE DISPUTES TRIBUNAL [2017] NZHC 1526 [4 July 2017]
[2] The applicants (the Haldanes) seek judicial review of the Tribunal’s decision to grant the second respondents a rehearing of their unsuccessful application.1 The applicants argue that the rehearing decision was wrong, as the referee needed to ask whether an evidential mistake she made would have changed the outcome of the original hearing, had the mistake not been made.
[3] The grounds of challenge are error of law, taking into account irrelevant considerations, breach of natural justice and unreasonableness.
[4] The first respondent, the Tribunal, abides by the decision of the Court in this proceeding and has not defended the claims. The second respondents dispute the applicants’ claims.
[5] The key issues for this proceeding are:
(a) Did the tribunal err in law in determining that the evidential mistake was a sufficient ground to grant a rehearing under s 49 of the Disputes Tribunal Act 1988 (the Act)? (the error of law ground)
(b)Did the tribunal take into account an irrelevant consideration in determining a rehearing was required, when the Tribunal only had to determine whether the evidential mistake made a difference to the outcome?
(c) Was the absence of the opportunity for the Haldanes to file further submissions on the mistake a breach of natural justice?
(d)Did the Tribunal reach an unreasonable decision in deciding to grant a rehearing as a result of the mistake?
Factual background
[6] The claim arises from a farm purchase. The first applicant, D & J Haldane
Ltd (Haldane Ltd), sold a farm to the second respondents, Foothills Farming
(Foothills). The second applicants, David and Joanne Haldane are directors and shareholders of Haldane Ltd, which owned and managed the farm before the sale. Within the agreement for sale and purchase, cl 20 provided that:
The vendor will continue to farm the property between the date of this agreement and the possession date in accordance with good farming practice and husbandry of the district.
[7] Up until settlement, the Haldanes grazed 140 head of cattle on the farm property. They say that they were following the same practice they had always used on the property and that this was good farming practice in compliance with cl 20. Foothills claimed that cl 20 had been breached because the property could not support this number of cattle.
[8] On 3 October 2016, Foothills lodged a claim against the applicants seeking damages of $12,000. The claim was heard before the Tribunal on 18 November
2016 and all parties appeared. At the hearing, the primary focus was on compliance with cl 20, with a particular focus on whether this number of cattle could have maintained their weight over winter. Evidence was produced by both parties as to the farming practices employed by the Haldanes and whether they amounted to good practice and husbandry of the district.
[9] The Tribunal dismissed the Foothills application for damages in a decision on
24 November 2016 (the damages decision).2 The damages decision discussed two key issues:
(a) whether the Haldanes breached cl 20 of the sale and purchase agreement; and
(b) if so, what reasonable losses flowed from that breach?
[10] The Tribunal was not satisfied that the Haldanes’ usual farming practice, in relation to the amount of feed available on the farm at settlement, was inconsistent with good farming practice and husbandry of the district.
[11] On 5 January 2017, Foothills filed an application for a rehearing pursuant to s 49 of the Act. That application indicated that they had been unprepared for the hearing and they had not referred to additional material in the hearing as “we wanted to pick our battles.” The Haldanes objected to the application for rehearing as they stated the Foothills were trying to re-litigate the matter by calling further irrelevant evidence.
[12] On 20 March 2017, the Tribunal granted the application for a rehearing. The
Haldanes now seek to judicially review this decision (the rehearing decision).
Disputes Tribunal rehearing decision
[13] The Tribunal referee accepted that she had made a mistake in the reasons given for the Tribunal’s earlier damages decision. She had assumed that an acknowledgement made by Foothills was an acknowledgement and an agreement that the Haldanes’ cattle could have been grazed over winter with little or no weight gain. The mistake was summarised at paragraph [13] of the damages decision,
where the adjudicator said:3
Everyone agrees that there was enough grass on the property to graze 140 rising 2 year old cattle through winter. It is agreed that there would be no or little weight gain for those cattle during winter.
[14] In the rehearing decision, the referee recorded that the Haldanes agreed with the above statement, but the evidence provided by Mr Sheppard, who was an independent expert called by Foothills, did not agree with this statement. Nevertheless, the referee had wrongly taken the evidence of Mr Harris for Foothills, as an acknowledgement from them, that the cattle could have been grazed over winter with little or no weight gain.
[15] The referee, having checked the tape recording of the hearing and realised that she had made a wrong assumption, concluded that the understanding she had in coming to her decision was incorrect in respect of the Foothills evidence. The referee then considered whether or not this incorrect understanding would have affected the outcome and concluded that “However, justice must not only be done
but be seen to be done.”4 The referee decided to grant the application for rehearing so that the parties can be sure that the final outcome has not been influenced in any way by a mistaken understanding.
Haldanes’ position
[16] The principal ground of review advanced by the Haldanes was that the referee had made an error of law. Although the referee had acknowledged her mistake, the Haldanes argue that this was not a sufficient ground for granting a rehearing under s 49 of the Act. What the referee asked, but did not answer, was whether her mistaken understanding of the evidence would have changed the outcome of the decision.
[17] For the Haldanes, Mr Logan submits that the proper legal test of balancing the effect their mistake would have on the decision, was a matter which the referee should answer, rather than granting a rehearing and allowing the matter to be re- litigated.
[18] The same argument was raised in respect of the irrelevant considerations ground. In addition, the Haldanes allege a breach of natural justice, in that the referee did not give the Haldanes’ notice that she was considering granting the application to rehear because of her mistake and both parties were denied the opportunity to make submissions.
[19] Lastly, the Haldanes’ claim that the decision was unreasonable, because the Tribunal was allowing the Foothills to call new evidence and re-argue evidence previously provided. As the Tribunal’s mistake was not substantive, they argue, it would not have made any difference to the outcome of the previous hearing.
[20] The Haldanes seek that the matter is remitted back to the Tribunal to determine the relevance of the mistake and that the parties are given the opportunity to make submissions on this point.
Foothills’ position
[21] Foothills submit that they identified the evidential mistake at the oral hearing for the rehearing application. They state that the Haldanes had a fair opportunity to answer this claim and were specifically asked for comment. At the hearing, the Adjudicator asked the Haldanes directly if they wanted to make any comment and they replied that the matters were adequately covered at the original hearing.
[22] Further, Foothills submit that the mistake in understanding the evidence was highly relevant to the damages decision as it related directly to cl 20 and to good farming practices. The Foothills state that a rehearing is the only reasonable course for the matters to be “judged by a fresh perspective”.
Relevant law
[23] There is no power under the Disputes Tribunals Act to appeal a decision relating to a rehearing application. However, the High Court has the power to judicially review decisions of Disputes Tribunals even where there is no right of appeal. This extends to reviewing decisions on pre-hearing applications.5
[24] Judicial review is part of the supervisory function of the Court, which ensures public power is exercised according to the law.6 It is primarily concerned with examining procedural compliance, not the substance of the decision itself, when assessing whether a decision should be allowed to stand.7 In X v Bovey, MacKenzie J reiterated the difference between a judicial review and an appeal:8
An application for judicial review is not an appeal against the challenged decision. The function of the Court is to review the lawfulness of the decision making process, not the merits of the decision itself. In reviewing the lawfulness of the decision making process, the Court operates within a framework of quite well developed but flexible principles about categories of situations in which the Court may intervene.
[25] The grounds relied on by the Haldanes in this application are error of law, taking into account irrelevant considerations, breach of natural justice and
unreasonableness.
5 Moeke v Drinkwater (1991) 5 PRNZ 28 (HC).
6 Mercury Energy Ltd v Electricity Corporation of New Zealand Ltd [1994] 2 NZLR 385 (PC).
7 Aorangi School Board of Trustees v Ministry of Education [2010] NZAR 132 (HC) at [8].
8 X v Bovey [2014] NZHC 1103 at [4].
[26] Any error of law must be material, that is, “one which may well have altered the ultimate decision”.9 This can arise, for example, where a decision maker has applied a gloss to a statutory test, or asked him or herself the wrong question.10
[27] Mallon J in Berryman explained the approach taken to claims a decision maker failed to take into account relevant considerations as follows:11
A person with a statutory power must exercise that power within perimeters set by the statute. The statute may require or permit (expressly or by implication) that the decision maker take into account certain considerations (these are referred to as “the relevant considerations”). The weight the decision maker places on a relevant consideration is a matter for the decision maker. This means that failing to take into account the required (or mandatory) relevant considerations is a ground of judicial review but failing to have “sufficient regard” to relevant factors is not.
[28] The requirement of natural justice involves a duty on the decision maker to act in good faith and fairly listen to both sides, including that the parties be given adequate notice and opportunity to be heard.12
[29] A finding of unreasonableness, based on Wednesbury principles, will be made where a decision is so unreasonable that no sensible person could have made it.13
Something must be overwhelmingly wrong with the decision.
[30] The grounds for granting a re-hearing are set out in s 49 of the Act. That section gives a wide discretion to the Tribunal to order a rehearing. Of relevance, s 49 provides:
49 Rehearings
(1) Subject to subsection (2), the Tribunal may, upon the application of a party to any proceedings, order the rehearing of a claim, to be had upon such terms as it thinks fit.
(2) A rehearing may be ordered under subsection (1) only—
(a) where an order has been made under section 18(8); or
9 Astrazeneca Ltd v Pharmaceutical Management Agency HC Wellington CIV-2011-485-2314,
22 December 2011.
10 Matthew Smith New Zealand Judicial Review Handbook (Brookers, Wellington, 2011) at 709.
11 Berryman v Solicitor-General [2008] 2 NZLR 772 (HC) at [84].
12 Laws of New Zealand Administrative Law (online ed) at [58].
13 Associated Provincial Picture Houses Ltd v Wednesbury Corp [1948] 1 KB 223 (CA).
(b) where an order has been made under section 46(2) or section
47(3)(b), or a term of an agreed settlement has been varied under section 47(3)(a), and, in all such cases, shall be limited
to rehearing the enforcement proceedings taken under those
sections; or
(c) where an agreed settlement has been approved by the Tribunal under section 18(3) and, after the hearing, a party to the settlement discovers facts directly relevant to the dispute that could not, with reasonable diligence, have been obtained before the hearing and that, if known at the time, would have had a bearing on whether that party agreed to the settlement.
Analysis
[31] The critical issue for determination is whether the Tribunal erred in law in determining that the evidential mistake made by the referee was a sufficient ground to grant a rehearing under s 49 of the Act.
[32] Section 49 of the Act is set out above. The Tribunal has a wide discretion to order the rehearing of a claim on such terms as it thinks fit. Here, the referee candidly acknowledged that during the hearing, she made an assumption about what Mr Harris meant when he acknowledged he was changing the use of the pasture by grazing dairy cows for others, where there is an expectation of weight gain, compared to the Haldanes, who had been grazing their own beef cattle with no expectation of weight gain over winter. The referee wrongly took this as an acknowledgement that Mr Harris agreed the Haldanes’ cattle could have been grazed
over winter with little or no weight gain.14
[33] The referee concludes that the understanding she had in coming to a decision on damages was incorrect in respect of the Foothills’ evidence.
[34] It is the next paragraph in the judgment, that relates to whether the mistake would have affected the outcome of the decision, which has raised the legal issue on appeal. The referee found:15
I have considered whether or not this incorrect understanding would have affected the outcome. However, justice must not only be done but be seen to be done. I have decided to grant the Application for Rehearing so [the]
14 Rehearing decision, above n 1, at [12].
15 At [14].
parties can be sure that the final outcome has not been influenced in any way by a mistaken understanding.
[35] Mr Logan submits that the referee has applied the wrong legal “test”. He relies on the commentary from Westlaw New Zealand in support of his submission that the referee should have answered the question she posed, namely whether her mistake would have affected the outcome, rather than granting a rehearing.
[36] The passage from Westlaw states:16
The referee has wide discretion in deciding on re-hearing applications: s 49(1) of the Act. The overriding consideration is whether there has been a miscarriage of justice that justifies a re-hearing. The Referee has to balance out possible injustice to the applicant on the one hand and prejudice to the other party and the need for an end to litigation on the other: Park v Emm- Jay Trust.17
[37] Although attributed to the Park decision, the quote is not taken from the decision. Mr Logan submits that, nevertheless, the commentary is an appropriate summation of the law and provides the relevant legal test to be applied to the grant of a rehearing. On that basis, the Haldanes ask that the matter be referred back to the Tribunal with a requirement that the referee answer the question as to the relevance of the mistake and the parties be given the opportunity to make submissions on the point.
[38] I am unable to uphold Mr Logan’s submission. Section 49 of the Act provides the Tribunal with a wide discretion to order the rehearing of a claim, where the Tribunal thinks fit.
[39] In this case, the referee has carefully reconsidered her substantive decision and recognised that she has made a wrong assumption about the evidence. She has frankly acknowledged that she understood the Foothills accepted that the Haldanes’ cattle could gain little or no weight over winter. In light of the fact that the referee preferred the Haldanes’ evidence over Mr Sheppard’s answer to a question during the
hearing as to whether cattle maintained or gained weight over winter and mistakenly
16 Stephen Blakeley (ed) Civil Procedure: District Courts and Tribunals (online looseleaf ed, Westlaw NZ) at [DT32.02(a)].
17 Park v Emm-Jay Trust DC Hamilton CIV-2004-109-1466, 17 February 2006.
believed Foothills had agreed that the cattle would not gain weight, this concerned her sufficiently to decide to grant the application for rehearing.
[40] In doing so, the referee asked herself the specific question which Mr Logan says she has not answered, and that is whether her incorrect understanding would have affected the outcome. Plainly, she has felt some discomfort in whether her wrong assumption did affect the outcome. I do not accept that her statement: “However, justice must not only be done but be seen to be done”, as Mr Logan suggests, indicates that she has failed to answer the question and is simply defaulting
to granting a rehearing, in the absence of answering the question she posed.18
[41] It is apparent from the substantive decision that if everyone agrees there would be no or little weight gain for cattle during winter, the evidence of Mr Sheppard becomes irrelevant to the consideration of the issue as to whether there is an expectation of weight gain for cattle over winter according to good farming practices. On a critical finding, therefore, the expert’s evidence has been discounted, because of a misunderstanding.
[42] Rather than the referee having made an error of law or taken into account an irrelevant consideration, the referee has discharged her obligation as a judicial officer to ensure that a hearing is fairly conducted. She has carefully reviewed whether her acknowledged mistake about the evidence should be rectified by a fresh hearing of the evidence. I consider that to be a commendable and highly principled approach for a judicial officer and I do not accept there has been an error of law, or that an irrelevant consideration has been taken into account or that the decision is unreasonable.
[43] I turn then to whether there has been a breach of natural justice, by the Haldanes not being given an opportunity to address the issue of the mistaken evidence at the oral hearing for the rehearing application.
[44] The Haldanes received the Foothills application prior to the hearing, alluding to a mistake in cl 13 of the reasons for the damages decision. Clause 13 contained
the referee’s wrong assumption about the evidence on weight gain for cattle during
18 Rehearing decision, above n 1, at [14].
winter. Further, the Haldanes were present during the hearing when the matter was raised with the referee.
[45] It is clear that at the oral hearing in advance of the rehearing decision, the Tribunal Adjudicator provided the Haldanes the opportunity to respond to this issue. Foothills had commented: “We just disagree with the main point that you had suggested that all three of us had said that animals wouldn’t lose weight and that was
the main thing.”19 When the Adjudicator gave the Haldanes the opportunity to
comment on this point, Joanne Haldane replied “No we feel that it was adequately covered off and at the original hearing.” The Haldanes were given the opportunity to respond to this point and chose not to elaborate further.
[46] I do not consider there has been a breach of natural justice, as the matter was raised both before and during the hearing, with the Haldanes’ involvement and response.
Result
[47] The application for judicial review is dismissed.
[48] The Foothills seek costs. The Foothills are unrepresented and scale costs are not awarded to litigants in person. However, reasonable expenses are recoverable and the Foothills can claim reasonable expenses, subject to the Registrar’s approval.
Cull J
19 See Harris v D J Haldane Ltd DC Nelson CIV-2016-042-385, 13 March 2017, Transcript of
Proceedings before Adjudicator J Tunnicliffe at 33.
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