Hampton v District Court at Christchurch
[2014] NZHC 1750
•25 July 2014
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
CIV 2011-409-002682 [2014] NZHC 1750
BETWEEN DAVID JOHN HAMPTON
Applicant
AND
THE DISTRICT COURT AT CHRISTCHURCH Respondent
Hearing: 5 May 2014 Appearances:
D J Hampton (Applicant in person) D Lester as Amicus Curiae
Judgment:
25 July 2014
JUDGMENT OF WHATA J
[1] Mr Hampton was a witness in Hornby Finance Limited v Shirley Hampton.1
He says that there are various statements made by the Judge in that case which are adverse to him and in particular implicate him in the dishonesty of another person, Mr Roberts.
[2] The key issue before me is whether or not the criticisms made by a District Court Judge in relation to a witness in a proceeding are judicially reviewable on natural justice grounds. I am not required at this stage to adjudicate on the merits of the review, assuming there is requisite jurisdiction.
Background
[3] Mr Hampton was a witness in a case concerning a loan and security deed of agreement guarantee and disclosure of terms. The plaintiff argued that the
defendant, Mr Hampton’s mother, was bound by this agreement and entitled the
1 Hornby Finance Limited v Shirley Hampton [2012] DCR 229 (DC).
HAMPTON v THE DISTRICT COURT AT CHRISTCHURCH [2014] NZHC 1750 [25 July 2014]
plaintiff to judgment in the sum of $233,121.26. Judge MacAskill rejected the
plaintiff’s claim because:2
… in breach of the loan agreement and the form signed by the defendant, the plaintiff paid the loan advance to entities not entitled to receive it. The plaintiff’s claim also fails because the transaction was unconscionable, to the plaintiff’s actual and imputed knowledge, and is consequently unenforceable. The defendant is entitled to judgment.
[4] In the course of making that decision, Mr Hampton alleges the Judge also made findings of misconduct against him, namely:3
(a) “Mr Hampton had a motive [sic] mislead”.
(b) “Mr Hampton’s assertion that he did not believe that his mother got any of the advance is disingenuous when, I find, he knew that the advance was to be for his benefit.”
(c) “I find that Mr Diggs accepted Mr Hampton’s assurances as to repayment because he knew that Mr Hampton was primarily responsible for them.”
(d) “When the plaintiff made demand on the defendant in 2009, Mr Hampton made enquiries into the matter, ostensibly on the defendant’s behalf. Insofar as these enquiries might suggest that he was ignorant of the loan advance and its use, I doubt that these enquiries were genuine and conclude that his letters were probably a self-serving attempt to distance himself from the transaction.”
(e) “I do not accept that Mr Roberts acted alone, at least to the point where the loan agreement had been signed.”
(f) “I think it possible that Mr Hampton avoided being present at the
signing of the loan agreement by his mother for reasons of his own.”
(g) I do not accept that Mr Roberts was acting on his own when he
approached the defendant.”
(h) “The transaction is easily explained by Mr Hampton’s inability to obtain finance in his own name and by his inability to provide security for further funding.”
(i) “The documents were not in the conventional form of a loan agreement and guarantee because Mr Hampton was precluded from entering into the transaction by order of the High Court.”
(j) “there was a serious risk of exploitation, by her son. ...”
2 At [133].
3 At [14], [15], [61], [67], [68], [69], [70](c) and [116].
[5] Mr Hampton says that the adverse findings and inferences individually and/or cumulatively are tantamount to an allegation that the applicant acted unconscionably against the interests of his mother in concert with Mr Roberts that in the circumstances amounted to contempt of Court in not seeking prior High Court consent for a loan he allegedly knew that Mr Roberts had arranged with his mother for his benefit and on his behalf.
[6] Mr Hampton then identifies what he says are a number of errors of fact and/or errors of law. He goes on to claim that Judge MacAskill’s decision was made in excess of jurisdiction and/or in breach of natural justice, and that:
(a) in the exercise of the Judge’s jurisdiction, the matters set out in paragraph 15, above, did not provide evidence of a probative value to support a basis for the findings of unconscionable conduct and inference of conduct in Contempt of Court;
(b) the allegations of unconscionable conduct and inference of Contempt of Court were not determinative of the substantive reasons for judgment against HFL, namely:
(i) HFL paid the loan advance to entities not entitled to receive it;
(ii) The HFL transaction was unconscionable, and in particular Mrs Hampton had not been provided with an opportunity to obtain independant [sic] legal advice prior to executing the loan agreement;
(c) The Applicant was not represented at the hearing, and was not given an adequate hearing, being confined in his presence at the hearing to the role of witness to give evidence within the constraints of the usual adversarial tactics and matters, questions and inquiries that the plaintiff’s and defendant’s legal representatives considered appropriate within the cost constraints and in the sole interests of their clients;
(d) The evidence on which the Applicant was condemned lacked or had insufficient probative value;
(e) The Applicant had insufficient prior notice that Mr Diggs intended to give evidence that he relied on alleged multiple verbal assurances for repayment of the loan that he claimed had allegedly been made to him by the Applicant during 2008, after he paid the loan advance to Mr Roberts on or about 19 November 2007;
(f) The Judge made mistakes of fact and failed to listen fairly to any relevant evidence, conflating with the allegations of unconscionable conduct and inferences of Contempt of Court, and any rational argument against the findings and inferences that the Applicant if
represented at the hearing, whose interests (including in that term career or reputation) may be adversely affected by them, may have wished to place before him or would have so wished if he had been aware of the risk of the allegations of unconscionable conduct and inferences of Contempt of Court being made.
[7] He thus seeks a declaration that the allegations of unconscionable conduct and contempt of Court were invalid, or made in circumstances involving unfairness or breach of natural justice. An order is also sought setting aside the adverse findings and inferences.
The debate
[8] Mr Hampton submits that the jurisdiction of the High Court arises in this case to affirm his rights to natural justice. He specifically relies on observations made by Tipping J in O’Regan v Lousich4 and repeated in his subsequent judgment in Peters v
Davison.5 In finding that statements made by a Judge about a witness are
reviewable, Tipping J said:6
[I]f a decision maker goes wrong in law, acts unfairly, or makes an unreasonable decision he will have acted ultra vires and in excess of jurisdiction.
[9] And further:7
The public are entitled to take the view, and do take the view, that if a Judge criticises someone in a judgment the Judge has carefully weighed the evidence after given the person criticised an opportunity to be heard. Thus comments such as that which the Judge made in the present case carry considerable weight. The greater the apparent authority of the person making the finding the greater is the harm likely to ensue to the person criticised; the greater therefore is the responsibility of the person making the comment or finding not to do so without observing the rules of procedural fairness. In my judgment those rules were not followed in the present case and Sir Stephen has reason to feel aggrieved. The present point is not whether the Judge’s comments are correct. Sir Stephen, of course, says they are not. The point is that he has never had an opportunity which should have been afforded to him to put his position. In my judgment the Judge’s finding was made in breach of the rules of natural justice.
4 O’Regan v Lousich [1995] 2 NZLR 620 (HC).
5 Peters v Davison [1999] 2 NZLR 164 (CA).
6 O’Regan v Lousich, above n 4, at 627.
7 At 631-632.
[10] Tipping J found that the applicant had an interest in not having his reputation wrongly impeached and thus the Judge’s words affected his rights in the relevant sense. His Honour also placed some significance on the fact that the Judge enjoyed absolute privilege, and that:8
[u]nless there were a remedy a wrong would have been committed without the capacity for redress.
[11] Tipping J concluded that the applicant should have been given notice that he may be criticised and given the opportunity to comment. He found that the Judge’s finding was made in breach of natural justice. The relevant passage was quashed.
[12] By contrast, Panckhurst J in Quantum Laboratory Ltd v Dunedin District Court9 did not support a general rule of procedural fairness in favour of non-parties in an adversarial process. He endorsed the view that a requirement upon a decision maker to afford the non-party an opportunity to be heard would be incompatible with the dynamics of the adversarial process. He agreed that the adversarial system in its normal operation was not inflicting widespread abuse and only rarely do the available safeguards inherent in the adversary process fail to deliver a less than satisfactory outcome.
[13] Mr Lester, amicus curiae, endorsed the approach taken by Panckhurst J.
Resolution
[14] Tipping J in O’Regan v Lousich approached the central issue applying the presumption that an exercise of statutory power10 must be amenable to review unless
8 At 630.
9 Quantum Laboratory Ltd v Dunedin District Court [2008] 2 NZLR 541 (HC).
10 Tipping J was not reviewing the exercise of a statutory power of decision in terms of the Judicature Amendment Act 1972. He observed however that he should not be taken to accept that criticism of a witness did not amount to such an exercise. There may in fact be some debate about whether observations in a judgment qualify as reviewable statutory powers of decision per se, bearing in mind that it is only the orders of the Court that have binding legal effect. As the
Supreme Court in Arbuthnot v Chief Executive of Department of Work and Income [2007] NZSC
55, [2008] 1 NZLR 13 said at [25]: “In short there is no right of appeal against the reasons for a judgment, only against the judgment itself.” I have not considered this issue in depth, preferring to address whether natural justice per se provides a basis for review. I am also mindful that whether an observation in fact affects a substantive right is better determined at the substantive proceeding.
Parliament clearly expresses otherwise. I agree. To borrow Lord Steyn’s statement
of principle:11
Unless there is the clearest provision to the contrary, Parliament must be presumed not to legislate contrary to the rule of law. And the rule of law enforces minimum standards of fairness, both substantive and procedural.
[15] Furthermore, rights to reputation are protected by common law.12 Ordinarily persons exercising statutory powers that might infringe common law rights must do so in accordance with the rule of law.13
[16] The right to natural justice at common law has a powerful heritage, exemplified by their Lordships in Re Erebus Royal Commission; Air New Zealand Ltd v Mahon.14 Their Lordships asseverated:15
... The first rule is that the person making a finding in the exercise of such a jurisdiction must base his decision upon evidence that has some probative value in the sense described below. The second rule is that he must listen fairly to any relevant evidence conflicting with the finding and any rational argument against the finding that a person represented at the inquiry, whose interests (including in that term career or reputation) may be adversely affected by it, may wish to place before him or would have so wished if he had been aware of the risk of the finding being made.
[17] But as Professor Philip Joseph opines, also borrowing from English jurisprudence:16
The requirements of natural justice must depend upon the circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject-matter that is being dealt with, and so forth.
11 R v Secretary of State for the Home Department ex parte Pierson [1998] AC 539 (HL) at 591.
12 Vickery v McLean [2006] NZAR 481 (CA) at [15]; Siemer v Stiassny [2011] NZCA 106, [2011]
2 NZLR 361 at [48]; Reynolds v Times Newspapers Ltd [2001] 2 AC 127 (HL) at 201; Hill v
Church of Scientology of Toronto [1995] 2 SCR 1130 at [121].
13 Hamed v R [2011] NZSC 101, [2012] 2 NZLR 305 at [24] per Elias CJ. In saying this I am not wading into the debate about the concept of the residual freedom of the executive which, if applicable, does not affect the basic proposition that persons exercising statutory powers of decision making must do so in accordance with the rule of law. See also The Minister For
Canterbury Earthquake Recovery v Fowler Developments Ltd [2013] NZCA 588, [2014]
2 NZLR 587 at [75]-[85].
14 Re Erebus Royal Commission; Air New Zealand Ltd v Mahon [1983] NZLR 662 (PC).
15 At 671.
16 Philip A Joseph Constitutional and Administrative Law in New Zealand (2nd ed, Brookers, Wellington, 2001) at 848.
[18] The civil jurisdiction of the District Court is bound by the rules of evidence set out in the Evidence Act 2006. The purpose of that Act includes the following objective:
6 Purpose
The purpose of this Act is to help secure the just determination of proceedings by-
…
(b) providing rules of evidence that recognise the importance of the rights affirmed by the New Zealand Bill of rights Act
1990; and
(c) promoting fairness to parties and witnesses; and
…
[19] The Act, in furtherance of these objective (among others), then prescribes a detailed scheme for the admissibility of evidence and the conduct of the proceedings, and for present purposes, specifically as it relates to the questioning of witnesses.17
While the scheme marked a departure in the law of evidence,18 as the authors of The
Evidence Act 2006: Act and Analysis observe:19
…s 83 actually codifies important and longstanding traditions of the
common law adversarial system of justice.
[20] Subpart 4 of Part 3 of the Act thus contemplates that the normal procedure for giving witness testimony will be way of evidence in chief without leading questions,20 cross-examination by all parties except the party calling the witness,21
and then re-examination without leading questions.22 A party must cross-examine a
witness on significant matters that are relevant and in issue and contradict the evidence of a witness, if the witness could reasonably be expected to give admissible evidence on those matters.23 A Judge may, among other things, grant permission to
recall the witness about contradictory evidence, admit it subject to consideration of
17 See Evidence Act 2006, Part 3, subpart 4.
18 Wi v R [2009] NZSC 121, [2010] 2 NZLR 11 at [26].
19 Richard Mahoney and others The Evidence Act 2006: Act and Analysis (2nd ed, Brookers, Wellington, 2010) at 347.
20 Evidence Act 2006, ss 84(1)(a) and 89.
21 Section 84(1)(b).
22 Sections 84(1)(c) and 89.
23 Section 92(1).
the weight to be afforded to it, or exclude the contradictory evidence.24 A party may not cross-examine their own witness unless the witness is hostile and only to the extent authorised by the Judge. Re-examination is limited to matters arising out of cross-examination, except with the permission of the Judge, and if given the other parties must be allowed to cross-examine on the new evidence.25
[21] Section 98 also provides:
98 Further evidence after closure of case
(1) In any proceeding, a party may not offer further evidence after
closing that party’s case, except with the permission of the Judge.
(2) In a civil proceeding, the Judge may not grant permission under subsection (1) if any unfairness caused to any other party by the granting of permission cannot be remedied by an adjournment or an award of costs, or both.
…
[22] The Judge then has the general power to question a witness in the following terms:
100 Questioning of witnesses by Judge
(1) In any proceeding, the Judge may ask a witness any questions that, in the opinion of the Judge, justice requires.
(2) If the Judge questions a witness,—
(a) every party, other than the party who called the witness, may cross-examine the witness on any matter raised by the Judge’s questions; and
(b) the party who called the witness may re-examine the witness.
[23] In a civil hearing, as compared to a criminal trial by jury, the scope for questioning may be broader. But a fundament of the adversarial process is that the
Judge may not take over the role of counsel.26
24 Section 92(2) – this is not an absolute duty to cross-examine on all matters adverse to the witness’s testimony or credibility – Mahoney, above n 19, at 382, citing R v Soutar [2009] NZCA 227 at [27].
25 Section 97.
26 Refer Mahoney, above n 19, at 415-416 and cases cited therein.
[24] In summary, subpart 4 of Part 3 of the Evidence Act envisages an adversarial process and does not contemplate that a Judge will invite a witness to comment on potentially adverse findings, except as expressly afforded by s 100. Any decision to depart from the normal adversarial procedures must be fair, just and in the interests of justice. Plainly, the rights and interests of the parties to the litigation are central to the assessment of what is fair and just, after all the purpose of the Act is to help secure the “just determination of proceedings”. Therefore any opportunity afforded to a witness to comment cannot derogate from those rights and the fundamental tenet of an adversarial process that the Judge must be and be seen to be impartial. A corollary of this is that the Judge must take great care not to trespass into the territory of the litigants, and must allow the evidence to unfold as the litigants would have it revealed to the Judge.
[25] I am mindful that their Lordships in Re Erebus Royal Commission stated that rules of evidence do not govern the application of natural justice principles.27 But I think they were referring to the content of natural justice, rather than addressing its availability. In any event where, as here, Parliament has circumscribed the function of the Judge to a defined procedure, natural justice principles must be applied in a way that does not derogate from that procedure.
[26] I do not think s 27 of the New Zealand Bill of Rights Act 1990 (NZBORA
1990) advances the position for witnesses beyond the propositions just mentioned. The rules of engagement set out in the Evidence Act 2006 are designed in fact to affirm rights to a fair hearing and natural justice under s 27 NZBORA 1990.28
[27] I am therefore unable to agree with Tipping J to the extent he may have been postulating a general principle that witnesses have a general right to be heard in relation to criticisms that a District Court Judge might be going to make about that witness in a civil case. A District Court Judge may only afford such an opportunity strictly in accordance with subpart 4 of Part 3 of the Evidence Act. Notably however, Tipping J was dealing with an application for declaration and certiorari in
relation to comments made by a witness in the Maori Land Court, under the then
27 Re Erebus Royal Commission, above n 14, at 671.
28 Evidence Act 2006, s 6.
applicable legislation. Unlike the general jurisdiction of the District Court in this case, the Maori Land Court was not subject to the ordinary rules of evidence as regards admissibility of evidence, and certainly not subject to the Evidence Act 2006 or equivalent legislation.
[28] I was initially minded to adopt the outcome in Quantum and for the reasons essayed in that judgment to maintain comity on the issue of reviewability of judicial comments about non-parties. But unlike the non-party in Quantum, a witness is subject to the Court’s jurisdiction and promoting fairness to witnesses is inextricably linked to the purpose of the Evidence Act to help secure just determination of proceedings. It would seem odd then to preclude altogether the right of an alleged defamed witness to seek redress by way of review on natural justice grounds. It is also difficult to say that affording an opportunity to a witness to comment on potentially defamatory findings under s 100 is presumptively incompatible with the adversarial process, though a Judge may well decide that it is in the circumstances of the particular case.
[29] Having said that, it seems to me that review on natural justice grounds could only arise in limited circumstances where the omission by the judge to question the witness about potentially defamatory comments was plainly wrong or egregious. Bearing in mind the overarching duty of a judge to be and to appear to be impartial, the prospect of this Court finding that the judge erred in this way must be limited to cases where there was no evidence at all (circumstantial or otherwise) supporting a
defamatory observation.29 Any wider basis for review could imperil the integrity of
the adversarial process by placing a burden on the Judge to inquire on matters properly left to the litigant parties.
[30] It is also necessary to limit the potential for review to avoid abuse of process. Any review by a witness must not have the effect of collaterally challenging the outcome of the litigation or pre-empting any right of appeal by a party, as this would undermine the integrity of the adversarial process so carefully affirmed by the
Evidence Act and derogate from the rights of the parties to the litigation. This is no
29 It is not surprising that there have been very few appeals based on s 100, and none as far as I can tell on a decision not to question a witness.
small problem. In an adversarial setting, the force of a judgment should not be contested by side route and nor should litigants be expected to defend collateral challenges to the literal or symbolic value of those judgments. In Mr Hampton’s case neither party has sought to appear. But the point of principle nevertheless remains apposite. A successful litigant concerned to maintain the integrity of a judgment should not be required to re-litigate in part or in whole the underlying proceedings. Furthermore, substantive procedural error would normally result in a
decision being set aside and or referred back for reconsideration.30 Any claim for
review by a witness cannot include relief with this prospective effect. It seems to me that in most, if not all, cases the best the witness could hope for is a declaration that there was no evidence upon which the judge could make the criticism.
[31] Turning then to Mr Hampton’s claim, he raises various allegations of improper findings by the Judge. He says he should have been afforded the opportunity to comment on them. I have examined the pleadings to consider whether allegations, if accepted as true, fall within the limited basis upon which the Judge’s decision might be reviewable. It will be obvious that Mr Hampton has not pleaded in terms of the failure to exercise discretion to question him under s 100. That is a minor pleading point.
[32] But there is a more fundamental problem with the pleadings. They are not framed in terms of a egregious failure to put specific matters to Mr Hampton, but rather, as set out at [4]-[7] above, on the broader grounds that the Judge did not have a proper basis to make his decision, did not give the applicant an adequate hearing with the assistance of counsel (which cannot be an actionable basis for review given my conclusions about procedure), the evidence against the applicant lacked or had insufficient probative value, mistake of fact and failure to listen carefully. While he might be right about all of those allegations, they fall well short of the limited basis upon which the Judge’s criticisms might be reviewable. The contentions that there was “insufficient” evidence of probative value or “mistake of fact” and “failure to listen carefully” cannot possibly succeed. Moreover, there is nothing to suggest on the face of the pleadings that Mr Hampton was not questioned about the matters of
concern to him, or that if not questioned, that the Judge’s passivity was plainly
30 Air Nelson Ltd v Minister of Transport [2008] NZCA 26 at [74].
wrong in the circumstances. As currently framed the pleadings have no prospect of success.
[33] I do not propose simply to strike out the proceedings, because I was mandated only to consider jurisdiction at this point. Rather, I invite Mr Hampton to reframe the pleadings, if possible, to conform to the threshold tests I have identified. He will have 15 working days to do so. I should reiterate however for completeness the difficulties confronted by Mr Hampton. The exercise of discretion by a Judge not to question a witness involves a complex matrix of considerations which are not ordinarily amenable to review. Having been warned, Mr Hampton should not be surprised if a substantial costs award is made against him should he pursue a meritless claim.
[34] I wish to record my appreciation to both Mr Hampton and Mr Lester for the careful and helpful way they presented their submissions to me. I acknowledge that my own consideration of these issues has moved more widely than their submissions given the significance of the issue. Nevertheless they provided the platform for the evaluation.
Outcome
[35] The answer to the key issue has three parts. First a witness has no general right to be heard about prospective criticisms in a judgement. The scheme of the Evidence Act 2006 precludes the existence of such a right in a civil hearing. Second, a witness make seek to review defamatory comments made by a Judge only in circumstances where the Judge did not ask questions about matters relating to the comments and where the omission was plainly wrong. Bearing in mind the overarching duty of a judge to be and to appear to be impartial, the prospect of this Court finding that the judge erred in this way must be limited to cases where there was no evidence at all (circumstantial or otherwise) supporting a defamatory observation. Third, the review proceeding must not seek to collaterally challenge the outcomes of the judgment. A corollary of this is that in most, if not all cases, the only relief will be by way of declaration that the defamatory comments had no proper basis in the evidence.
[36] Mr Hampton’s proceeding must now be substantively determined, subject my directions at [33]. If the Crown Law does not wish to appear, Mr Lester is to be retained as amicus.
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