Haines v Herd

[2016] NZHC 3193

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

CIV 2014-488-187 [2016] NZHC 3193

BETWEEN

RODNEY DAVID HAINES AND

KATHLEEN ANNE NORMAN Plaintiffs

AND

ROBERT JOHN HERD First Defendant

RHUMBA HOLDINGS LIMITED Second Defendants

Hearing:	7 December 2016
Counsel:	N Gedye QC for plaintiffs D Bigio QC & M Singh for first and second defendants
Judgment:	22 December 2016

JUDGMENT OF DUFFY J

This judgment was delivered by me on 22 December 2016 at 11.30 am pursuant to

Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar

Solicitors / Counsel: Glaister Ennor, Auckland

D R Bigio QC, Barrister, Auckland

Richard Mark, Kerikeri

Nathan Gedye QC, Barrister, Auckland

HAINES AND NORMAN v HERD & RHUMBA HOLDINGS LTD [2016] NZHC 3193 [22 December 2016]

[1]      The first and second defendants in this proceeding (the defendants) seek leave to appeal to the Court of Appeal against a judgment I delivered, which allowed a review of a decision of Bell AJ dismissing the proceeding on the ground Vanuatu was the appropriate forum conveniens.

[2]      I found New Zealand was the appropriate forum conveniens because at the hearing before me the plaintiffs informed me that they proposed to amend their statement of claim.  I was satisfied that the proposed amendment (which was before me in draft form) brought the plaintiffs’ claims within the jurisdiction of this Court. Since delivery of my judgment, the plaintiffs have filed their amended statement of claim.

[3]      The defendants contend that I erred in law in the following instances:

(a)      In finding that, in the context of a review of an Associate Judge’s discretionary decision on a protest to jurisdiction, the reviewing court may set aside that decision where a material change of circumstance following the decision of the court of first instance is alleged by the plaintiffs;

(b)In the context of a review of a decision on whether New Zealand was the forum conveniens, taking into account an unfiled draft amended statement of claim annexed to the plaintiffs’ submissions (served 10 working days before the review hearing) which had not been before the first instance court, and therefore was not the subject of the decision being reviewed;

(c)      In  finding  that  the  decision  of  the  Associate  Judge,  which  was otherwise found to be a correct exercise of his discretion in relation to the statement of claim actually filed and served in the proceeding, was  plainly  wrong  because  it  did  not  take  into  account  a  draft amended claim which was not and could not have been before him at first instance;

(d)In failing to dismiss the application for review having found that the Associate Judge committed no reviewable error of law in relation to the claim which was before him; and

(e)      In  failing  to  adequately  take  into  account  the  extent  of  defences available to the defendants that relate to Vanuatu and land law, and whether Vanuatu would be the most appropriate forum for the conduct of the proceeding.

[4]      The defendants contend that the errors they identify raise questions of law which relate to fundamental principles regarding the proper approach on a review of discretionary decisions, which are therefore capable of bona fide and serious argument, and which are of sufficient importance to outweigh the cost and delay associated with a second level appeal.

[5]      The parties agree that in the context of a review of an Associate Judge’s decision pursuant to ss 26P(1AA) of the Judicature Act 1908, the legal principles for the grant of leave are the same as those applicable to a second appeal under s 67 of the Judicature Act. Those principles are well settled:

(a)      the appeal must raise some question of law or fact capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the cost and delay of the further appeal;

(b)on a second appeal the court is not engaged in the general correction of error.   Its primary function is then to clarify the law and to determine whether it has been properly construed and applied by the court below; and

(c)      it is not every alleged error of law that is of such importance either generally or to the parties as to justify further pursuit of litigation which has already been twice considered and ruled upon by the court.

[6]      The  core  of  the  defendants’ argument  is  that  this  Court  on  review  of  a decision on forum conveniens cannot take account of any new material that bears on the appropriate forum for the subject claim.  Instead the defendants would have the plaintiffs  discontinue  the  proceeding  and  file  a  fresh  proceeding  based  on  the changes they seek to make.

[7]      The defendants’ opposition to the plaintiffs’ review of Bell AJ’s decision sought to uphold his decision on the merits.  No argument was raised as to whether or not this Court could entertain a review of a decision that it was not the appropriate forum for the proceeding.   To this extent the defendants accepted this Court has jurisdiction to deal with a challenge to Bell AJ’s decision.

[8]      I see no reason to treat the review of Bell AJ’s decision on forum conveniens any differently from other interlocutory decisions that can have the effect of dismissing a proceeding as, for example, a decision on a summary judgment application, a strike-out application or a stay of proceedings.

[9]      The  defendants  were  unable  to  identify  any  authority  to  support  their proposition that this Court cannot take notice of a material change of circumstance that affects a first instance judgment to the extent that a Court on review is persuaded to interfere with the outcome.  The defendants did refer to Wilson v Neva Holdings Ltd1 as support for the proposition that a review of an Associate Judge’s decision is of an appellate nature, with the applicant for review bearing the burden of persuading the Court the first instance decision was wrong.   In Wilson v Neva Holdings Ltd Fisher J found that conventional appellate principles apply where the exercise of a

discretion is challenged such that the Court will only intervene if there has been:

(a)       an error of principle;

(b)the taking into account of irrelevant considerations or failure to take into account relevant considerations;

(c)       the introduction of significant new material on review; and

(d)      or if the decision is plainly wrong.

1      Wilson v Neva Holdings Ltd (1993) 6 PRNZ 654 (HC).

[10]     The defendants sought  to persuade me that  Wilson v Neva Holdings Ltd should discourage me from taking account of the plaintiffs’ proposed draft statement of claim.   I do not read Wilson v Neva Holdings Ltd as a constraint in that sense. Indeed, the judgment recognises that “the introduction of significant new evidence or argument on appeal” can be a further ground warranting the intervention of this

Court on review.2     The other cases cited by the defendants do not address this

particular point.3

[11]     The defendants  could  identify no  reason  for treating  an  application  of  a decision on forum conveniens any differently from any other decision of an interlocutory nature by an Associate Judge.  I can see no reason for taking a different and more restrictive approach simply because of the subject matter of the decision. Indeed, I consider it would be inefficient and wasteful of court resources if the plaintiffs were to be required to discontinue the present proceeding and commence a new proceeding.

[12]     The defendants argued that the decision of the Associate Judge could not be said  to  be  plainly wrong  when  it  did  not  take  into  account  the  draft  amended statement of claim, as that document was not before the Associate Judge.  This is to take an overly narrow view of what is meant by a decision being plainly wrong.  If the statement of claim is altered to the extent that it is now brought within the jurisdiction of this Court, then that necessarily makes it plainly wrong for the plaintiffs to be required to prosecute their claim in Vanuatu.

[13]     To the extent that the defendant’s submissions regarding leave to appeal address the correct forum conveniens in respect of this dispute, I do not consider that these submissions raise a question of law or fact capable of bona fide and serious argument  in  a  case  involving  some  interest,  public  or  private,  of  sufficient importance to outweigh the cost and delay of the further appeal.

[14]     The argument that there has been a failure to adequately take into account the extent of defences that relate to Vanuatan land law does not raise questions of law

2      At 659.

3      Bomac Laboratories v Life Medicals (MSDN BHD) [2012] NZHC 363; Alex Harvey Industries

Ltd v Commissioner of Inland Revenue (2001) 15 PRNZ 361 (CA).

that are capable of bona fide and serious argument or of sufficient importance to outweigh the cost and delay associated with a second level appeal.  In short, with the amendment to the statement of claim there is now no issue relating to Vanuatan land law.  The defendants’ own conduct has excluded any such issue arising.  As part of the purchase price for the payment of the yacht which the defendants had agreed to purchase from the plaintiffs, the defendants were to execute a mortgage security in favour of the plaintiffs over a parcel of land in Vanuatu.  The mortgage security was never executed.

[15]     As matters stand, the plaintiffs have no actionable claim in relation to a mortgage security over Vanuatan land, nor do they have an actionable claim in any other respect that relates to Vanuatan land.  At the hearing the defendants’ counsel submitted that there was in existence an agreement to mortgage which could be the subject of court proceedings to enforce, thereby leading to the plaintiffs acquiring a mortgage security over Vanuatan land.   On its face the argument reveals the remoteness of any claim the plaintiffs might attempt to make in relation to an as yet to be executed mortgage security.  The plaintiffs have reshaped their claim and now base it on a cancelled contract.  They have decided to confine their remedies to those that arise in contract following cancellation.  I cannot see how any issues regarding Vanuatan land law can now be relevant to the proceeding.  Accordingly, I do not consider this ground of appeal to be capable of bona fide and serious argument.

[16]     In their submissions, but not in their application for leave to appeal, the defendants  also  argued  that  I had  failed  to  place  proper  weight  on  the  parties’ intentions in respect of forum conveniens as evidenced by the non-exclusive jurisdiction and governing law clause in the contract of sale in favour of Vanuatu. This argument does not raise legal questions of the type that merit a second level appeal.

Conclusion

[17]     I am satisfied that none of the legal errors identified by the defendants meet the test for the granting of leave to appeal.

Result

[18]     The application for leave to appeal is dismissed.

[19]     The parties have leave to file memoranda on costs.

Duffy J