Gavigan v Eichelbaum

[2017] NZCA 442

IN THE COURT OF APPEAL OF NEW ZEALAND

CA237/2016
CA357/2016
[2017] NZCA 442

BETWEEN

ANTHONY JOHN GAVIGAN
First Appellant

JOINT ACTION FUNDING LIMITED
Second Appellant

AND

JOHN REVANS EICHELBAUM
Respondent

Court:

Kós P, French and Asher JJ

Counsel:

A R Gilchrist and G R Abdale-Weir for Appellants
Respondent in person

Judgment:

(On the papers)

6 October 2017 at 4.00 pm

JUDGMENT OF THE COURT

The applications for recall of judgment are declined.

____________________________________________________________________

REASONS OF THE COURT

(Given by Kós P)

1. This supplementary judgment deals with two matters:

   (a)an application by Mr Eichelbaum for recall of this Court’s substantive judgment of 19 September 2017;[1] and

   (b)a question relating to costs, which in effect is a further recall application.

Recall application

The relevant principles in relation to recall applications are set out in the judgment of this Court in Erwood v Maxted.[2]  There, this Court endorsed the following remarks of the High Court in Faloon v Commissioner of Inland Revenue:[3]

While the third category [of the judgment of Wild CJ in Horowhenua County v Nash (No 2)[4]] is not defined with particularity in the judgments, it is quite clear that the discretion to recall must be exercised with circumspection, and it must not in any way be seen as a substitute for appeal.  In particular there are some things that it can be said the power to recall does not extend to.  It does not extend to a challenge of any substantive findings of fact and law in the judgment.  It does not extend to a party recasting arguments previously given, and re-presenting them in a new form.  It does not extend to putting forward further arguments, that could have been raised at the earlier hearing but were not.

First ground for recall

[1]Gavigan v Eichelbaum [2017] NZCA 412.

[2]Erwood v Maxted [2010] NZCA 93 at [3]–[5] and [23].

[3]Faloon v Commissioner of Inland Revenue (2006) 22 NZTC 19, 832 (HC) at [13]; cited in Erwood v Maxted, above n 2, at [5].

[4]Horowhenua County v Nash (No 2) [1968] NZLR 632 at 633.

1. Mr Eichelbaum submits that he was not given the opportunity to argue a key point made in [58] of the substantive judgment that the High Court judgment was “wholly dependent” upon finding misleading conduct in trade.

2. There is nothing in that complaint.  The conclusion of this Court at [58] is an accurate account of the effect of [116], [131] and [147] of the High Court judgment.[5]  That is, that but for the judge’s conclusion that Mr Gavigan’s conduct was misleading and deceptive in terms of s 9 of the Fair Trading Act 1986, he would not have found his conduct oppressive in terms of s 174 of the Companies Act 1993. 

   [5]E v G [2015] NZHC 824.

3. Nor is there any natural justice issue: the basis on which the High Court judge found oppression was at the heart of the appeal.  It was the subject of extensive argument.  Mr Eichelbaum merely seeks now to recast his argument on an issue he did not prevail on. 

Second ground for recall

1. Mr Eichelbaum also submits that he was not given the opportunity to address a finding that he was not a shareholder or to be regarded as a shareholder until his request be registered as such in September 2012 and that there was no proof of oppression after that date.

2. Again there is nothing in this complaint.  This Court had found Whata J had erred in his analysis under the Fair Trading Act.  As just noted, but for his findings of misleading and deceptive conduct, the Judge would have found no oppression.  The appeal challenged the finding of oppression in terms of s 174 of the Companies Act.  Mr Eichelbaum sought to uphold the finding.  This Court was required to consider on what basis the finding of oppression might nonetheless be supported if the sole premise on which the High Court judge relied was struck aside.  Mr Eichelbaum’s interest to maintain oppression was addressed in submissions filed by the appellants.  It was open to Mr Eichelbaum to address it, but he confined his argument to upholding the first instance judgment.

3. If Mr Eichelbaum wishes to challenge these conclusions, and if his case meets the criteria for leave, the proper place to do so is by way of appeal rather than recall.

Costs

1. This Court directed at [90] of its substantive judgment that Mr Eichelbaum must pay the appellant — although it should read “appellants” — costs for a standard appeal on a band A basis and usual disbursements. 

2. Mr Eichelbaum has drawn attention to a “Calderbank offer” made to settle the proceeding on 10 November 2014 on a “drop hands” basis.  He says the offer was not accepted, but had it been the first appellant Mr Gavigan would have retained the shares ultimately held transferable to Mr Eichelbaum in a judgment of Thomas J in September 2015.[6]  Mr Eichelbaum submits that the shares are now worth at least $750,000 based on a memorandum filed by Mr Gavigan in the High Court on 18 May 2017.  As a consequence he submits costs should lie where they fall.

   [6]Eichelbaum v Joint Action Funding Ltd [2015] NZHC 2163.

3. We treat Mr Eichelbaum’s memorandum on this matter as a further recall application although it was not expressly couched as such.

4. The existence of a Calderbank offer was referred to in oral submissions before the Court.  The Court inadvertently omitted to seek submissions on that offer before making the order at paragraph [90] of the substantive judgment. 

5. The Court now has submissions from counsel on that point.  It is apparent that the so-called 10 November 2014 “Calderbank offer” was not an offer made in full and final settlement, but merely to discontinue proceedings.  Rejection of the offer five hours later was not unreasonable.  Ten minutes later again Mr Eichelbaum withdrew his offer.  All this was nine months before the fixture before Thomas J in August 2015.  There is no evidence the offer was renewed before the fixture before Whata J or more relevantly to the present costs order, before the appeal. 

6. In these circumstances we see no basis on which to recall our judgment in respect of the costs order. 

Result

1. The applications for recall of judgment are declined.

Solicitors:
Kiely Thompson Caisley for Appellants