Harmoney Limited v Commerce Commission
[2019] NZCA 355
•7 August 2019 at 11.30 am
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| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA322/2018 [2019] NZCA 355 |
| BETWEEN | HARMONEY LIMITED |
| AND | COMMERCE COMMISSION |
| Hearing: | 26 March 2019 |
Court: | French, Miller and Williams JJ |
Counsel: | A R Galbraith QC, A M Callinan and S A Comber for Appellant |
Judgment: | 7 August 2019 at 11.30 am |
JUDGMENT OF THE COURT
AThe application for strike-out is dismissed.
BThe respondent must pay costs to the appellant for a standard appeal on a Band A basis with usual disbursements. We certify for second counsel.
____________________________________________________________________
REASONS OF THE COURT
(Given by Miller J)
This judgment answers a preliminary question in an appeal brought by Harmoney Ltd.[1] The question is whether we have jurisdiction to entertain the appeal.
[1]The preliminary hearing was ordered in a minute issued on 10 July 2018.
The decision appealed from was an opinion of the High Court on a case stated under s 100A of the Commerce Act 1986, which provides:
100A Commission may state case for opinion of High Court
(1) The Commission may at any time state a case for the opinion of the court on any question of law arising in any matter before it.
(2) The court may order the removal into the Court of Appeal of any case stated for the opinion of the court under this section.
(3) The court or the Court of Appeal, as the case may be, shall hear and determine the question, and shall remit the case with its opinion to the Commission.
The Commerce Commission says that no right of appeal lies from the High Court’s opinion, either under the Commerce Act or under this Court’s general appellate jurisdiction. Harmoney responds that an appeal lies in this case, because it was a party below and the decision appealed from had a practical effect on its rights sufficient to sustain a right of appeal.
Narrative
Harmoney is a peer-to-peer lender which matches borrowers with investors on a web-based platform. It is licensed by the Financial Markets Authority under the Financial Markets Conduct Act 2013.
Harmoney charges borrowers a “platform fee”. It says the fee is for a service akin to brokerage. The Commission says the fee is an “establishment fee” as defined under the Credit Contracts and Consumer Finance Act 2003 (CCCFA).[2] If the Commission is correct the fee must be set at a level that is reasonable, gauged by reference to the costs incurred in establishing and administering the loan.[3] It is plausible that a fee set as a percentage of the loan, as Harmoney’s is, may sometimes exceed these costs.
[2]Section 5. An establishment fee is a “credit fee” for purposes of s 41 of the Act, which prohibits unreasonable credit or default fees.
[3]Sportzone Motorcycles Ltd (in liq) v Commerce Commission [2016] NZSC 53, [2016] 1 NZLR 1024 at [113]−[115].
The Commission has issued two proceedings. The first in time is the case stated brought under s 100A, which as noted allows the Commission to state a case for the opinion of the High Court on any question of law arising in any matter before the Commission.[4] It says that it used the case stated procedure to ascertain the extent to which the CCCFA applies to peer-to-peer lending.
[4]CIV-2016-404-2125.
The Commission appears to have chosen Harmoney, the largest peer-to-peer lender, as an exemplar. It used Harmoney’s documents and practices to frame the case stated. We were told that the Commission joined Harmoney to “assist the Court through the presentation of a contrary view” and that Harmoney consented to this.[5] All of the decisions below are intituled as judgments naming Harmoney as the defendant or respondent.
[5]Memorandum of counsel for the Commission dated 29 June 2018.
Harmoney’s consent to joinder was evidently given not because it saw the case stated as an expedient way to resolve the legal issues once and for all but because it wanted to put a stop to the proceeding. The case stated has produced three judgments in the High Court. The first two dismissed Harmoney’s successive interlocutory applications to strike it out.[6] The third was a substantive answer, given by Courtney J, to questions of law posed by the Commission.[7] The last of these judgments is formally the subject of this appeal, though as will be seen the argument covers some of the same ground as the strike-out judgments.
[6]Commerce Commission v Harmoney Ltd [2017] NZHC 1167, (2017) 23 PRNZ 644 [Courtney J strike-out]; and Commerce Commission v Harmoney Ltd [2017] NZHC 2421 [Venning J strike‑out].
[7]Commerce Commission v Harmoney Ltd [2018] NZHC 1107, [2019] 2 NZLR 81 [HC opinion].
The second proceeding is a civil enforcement action brought against Harmoney in the High Court under the CCCFA.[8] The Commission pleads that the platform fee is excessive and seeks a declaration that the fee contravenes the CCCFA. It also seeks orders that the fee be reduced to a reasonable level or affected borrowers compensated to the extent that they have overpaid. That proceeding is still pending in the High Court. Whether it will be prosecuted depends on the result of the case stated appeal.
The first strike-out judgment
[8]CIV-2017-404-1970.
Harmoney sought to strike out the case stated proceeding on the ground that it fell outside the scope of s 100A.[9] The Commission resisted, saying among other things that only in the exercise of inherent jurisdiction could the High Court strike the proceeding out.
[9]Courtney J strike-out, above n 6.
Harmoney’s application succeeded in part. The Commission had posed five questions. Two were struck out because they were held to raise questions of fact: they were whether there was a transaction that was in substance or effect a credit contract, and whether the Harmoney platform fee was an establishment fee for purposes of the CCCFA. Courtney J otherwise declined the application.[10] She invited submissions as to costs while indicating that they might lie where they fell since both sides had enjoyed some success. It does not appear that either side applied.
The second strike-out judgment
[10]At [67].
Harmoney moved again to strike out the case stated, this time as an abuse of process. It did so because the Commission had filed the enforcement proceeding which Harmoney argued would determine all the relevant issues anyway.[11] The strike‑out application was dismissed by Venning J in a judgment delivered on 3 October 2017.[12]
[11]It was filed on 25 August 2017.
[12]Venning J strike-out, above n 6.
Overlap between the two proceedings explains Venning J’s refusal to strike the case stated out for prejudice or delay.[13] He reasoned that the answers to the questions in the case stated would largely dispose of the enforcement proceeding, which raised the same issues, and the hearing of the case stated was imminent. (It was argued on 25 October 2017.) His was a practical analysis resting on the assumption that the case stated questions would not be relitigated in the enforcement proceeding. He did not hold that the parties would be estopped if they tried to do so. So far as abuse of process was concerned, he observed that the Commission had brought the enforcement proceeding for a proper reason — to stop time running — and was content to stay it until the case stated had been answered. Venning J awarded costs to the Commission.
The answers to the case stated
[13]High Court Rules 2016, r 15.1(1)(b).
In the third decision, which was delivered on 18 May 2018 and like the others intituled as a judgment inter partes, Courtney J answered the three questions of law that had survived her first strike-out judgment. The questions and her answers were:[14]
(a)Question 1: Is the “credit contract” as defined in s 7 of the CCCFA, comprised of a number of the Documents operating together or just the Loan Contract?
Answer: The credit contract comprises the Loan Contract and Loan Disclosure.
(b)Question 2: On the basis of the Documents and the factual summary, which entity or entities are the “creditor(s)” for the purposes of the CCCFA, as defined in s 5 of the CCCFA?
Answer: the investors, Harmoney and [Harmoney Investor Trustee Ltd] are all creditors for the purposes of s 5 of the CCCFA.
(c)Question 3: On the basis of the Documents and the factual summary, is the Harmoney Platform Fee a “credit fee” as defined in s 5 of the CCCFA?
Answer: Yes.
The answers were all adverse to Harmoney. Its case depended on the credit contract comprising just the standard loan contract, to which Harmoney itself is not a party.
[14]HC opinion, above n 7, at [94].
The Judge invited submissions on costs. It appears the parties agreed to let costs lie where they fell.
What remains of the enforcement proceeding?
The Commission has advised that, with benefit of Courtney J’s decision, it now intends to pursue the enforcement proceeding against Harmoney.[15] Until her appointment to this Court, Courtney J was assigned to try that proceeding.
[15]Memorandum of counsel for the Commission dated 9 July 2018.
The Commission’s stance is that all issues remain at large in the enforcement proceeding; put another way, the answers given to the case stated guide the Commission but do not bind the parties, by issue estoppel or otherwise.
We observe that the answers were given on facts that were accepted as correct. Transactions are effected through Harmoney’s website and are fully documented, and the agreed facts are largely descriptive of the documents and what happens as individuals navigate the website.[16] We cannot exclude the possibility that different facts might be found at trial, and if so those facts presumably might bear on the question whether the platform fee is correctly characterised as a credit fee. But Venning J plainly did not think that likely and counsel gave us no reason to suppose that it would be.
[16]See HC opinion, above n 7, at [6].
However, the case stated proceeding did not address the reasonableness of the fee. A declaration that it is unreasonable is the first form of relief sought in the enforcement proceeding. Nor did it settle the remaining relief sought: what fee ought to be charged and what compensation (if any) ought to be paid to affected borrowers.
The appeal and the preliminary hearing
The notice of appeal challenges Courtney J’s decision of 18 May 2018 on a number of grounds, all pertaining to the specific questions and answers. Generally, Harmoney says that the Judge misinterpreted the documents.
The Commission responded by filing a memorandum in which it invited the Court to dismiss the appeal for want of jurisdiction.[17] Presumably it did not bring an application because its stance is that the appeal is a nullity and ought not to have been accepted for filing. We will treat the memorandum as an application to strike out.[18]
Sources of appellate jurisdiction
[17]Memorandum of counsel for the Commission dated 29 June 2018.
[18]Court of Appeal (Civil) Rules 2005, r 5(4).
We have set out s 100A above. It allows the High Court to remove a case stated into this Court for answer but confers no express appeal right.
This Court’s general jurisdiction is found in s 66 of the Judicature Act 1908 (which applies as the proceeding commenced before the Senior Courts Act 2016 came into force):
66Court may hear appeals from judgments and orders of the High Court
The Court of Appeal shall have jurisdiction and power to hear and determine appeals from any judgment, decree, or order save as hereinafter mentioned, of the High Court, subject to the provisions of this Act and to such rules and orders for regulating the terms and conditions on which such appeals shall be allowed as may be made pursuant to this Act.
It will be seen that s 66 confers jurisdiction to hear an appeal from a “judgment, decree, or order”. We record that the jurisdiction extends to interlocutory decisions in the absence of an express limitation,[19] and it is usually possible to delay an appeal against an interlocutory decision until the final decision has been delivered.[20]
Determining jurisdiction
[19]Siemer v Heron [2011] NZSC 133, [2012] 1 NZLR 309.
[20]Paper Reclaim Ltd v Aotearoa International Ltd (No 1) [2006] NZSC 59, [2007] 2 NZLR 1 at [14].
The question whether an appeal lies from the opinion of a lower court or tribunal has arisen from time to time in a variety of settings. The answer always turns on the context. Generally, the appellate court inquires whether the legislation from which the lower court’s jurisdiction to give an opinion is derived confers or excludes a right of appeal. Where empowering legislation does not clearly confer or exclude a right of appeal, attention turns to the nature of the lower court’s decision; specifically, whether it is a judgment, decree or order. The overlapping indicia that emerge from the cases are:
(a)whether the decision fully and finally determines a contentious issue between parties;[21]
(b)whether the decision affects a party’s rights or obligations:
(i)in law (in the sense that it is binding or final);[22] or
(ii)in practical terms;[23]
(c)whether the lower court is answering a case stated on an abstract point of law divorced from any attempt to administer that law;[24] and
(d)whether the court’s opinion was sought in consultation prior to a final decision, or to assess the correctness of that final decision (only the latter being appealable).[25]
Does the legislation preclude an appeal from an opinion given under s 100A?
[21]Re an Arbitration between Knight and the Tabernacle Permanent Building Society [1892] 2 QB 613 (CA) at 619 per Bowen LJ; Fidelitas Shipping Co Ltd v V/O Exportchleb [1966] 1 QB 630 (CA) at 640 and 644; O’Toole v Charles David Pty Ltd (1991) 171 CLR 232 at 245 per Mason CJ; and John G McGregor (Contractors) Ltd v Grampian Regional Council [1991] SLT 365 (HL).
[22]Gao v Body Corporate 183930 [2016] NZCA 458, [2016] NZAR 1313 at [34]; Fisher v Fisher (1986) 161 CLR 438 at 450; and Saffron v The Queen, (1953) 88 CLR 523 at 528; O’Toole v Charles David, above n 21, at 268 per Brennan J. The High Court of Australia in Mellifont v Attorney-General (1991) 173 CLR 289 at 304 characterised Swiss Aluminium Australia Ltd v Federal Commissioner of Taxation (1987) 163 CLR 421 as (incorrectly) holding that there must be a final determination of rights.
[23]Commissioner of Stamps v Peat (1912) 32 NZLR 457 (CA) at 470 per Williams J; O’Toole v Charles David, above n 21, at 282–283 per Deane, Gaudron, and McHugh JJ; and Mellifont v Attorney-General, above n 22, per Mason CJ, Deane, Dawson, Gaudron, McHugh and Toohey JJ. In Swiss Aluminium, above n 22, the Court stated that determination of rights must be resolved in a “practical way”: at 426.
[24]Re The Judiciary Act and Re The Navigation Act (1921) 29 CLR 257 at 266−267.
[25]Ex parte The County Council of Kent [1891] 1 QB 725 (CA) at 729; Re Knight, above n 21, at 618–619 per Bowen LJ; and Fidelitas Shipping, above n 21, at 639.
We begin with a short overview of the Commission’s functions and powers. The Commission’s objective is that of enhancing competition in New Zealand markets with an ultimate aim of protecting consumers.[26] Its powers are statutory, stemming from the Commerce Act 1986 and the Fair Trading Act 1986, which operate through other regulatory legislation such as the CCCFA,[27] the Dairy Industry Restructuring Act 2001,[28] and, formerly, the Electricity Industry Reform Act 1998.[29] The Commission plays five key roles under these Acts. First, it acts as a ‘watchdog’ to monitor trade practices and anti-competitive behaviour.[30] It can also make recommendations for the regulation of goods and services to stimulate competition,[31] as has occurred with utility and airport services, and dairy trade.[32] Second, it enforces obligations under specified Acts through prosecution and civil proceedings.[33] Third, it authorises and gives clearance for restrictive trade practices, mergers, and takeovers, and the variation of price-controlled goods.[34] These determinations are quasi-judicial in nature. Fourth, it investigates possible infringements of the Acts.[35] Finally, it disseminates information to promote adherence to those Acts.[36]
[26]Commerce Act 1986, s 1A; Fair Trading Act 1986, s 1A; and Credit Contracts and Consumer Finance Act 2003 [CCCFA], s 3.
[27]Section 113.
[28]Sections 145 and 150V.
[29]Sections 58 and 82.
[30]Commerce Act, pt 3A; CCCFA, s 111(2)(a); and Telecommunications Act 2001, s 9A(1).
[31]Commerce Act, pt 4.
[32]Commerce Act, ss 54−57CA; Telecommunications Act, sch 3; and Dairy Industry Restructuring Act 2001.
[33]Commerce Act, ss 75−97; Fair Trading Act, ss 40−46M (in conjunction with the Financial Markets Authority); and CCCFA, s 111(2)(b) and (c). The Commission could also adjudicate under the Electricity Industry Reform Act 1998 (now repealed), pt 3. It did not retain this power under the replacement Electricity Industry Act 2010.
[34]Commerce Act, ss 58, 66, and 67.
[35]Commerce Act, ss 98−100; Fair Trading Act, ss 47−47L; Dairy Industry Restructuring Act, ss 145 and 150V; CCCFA, ss 111(1)(ab) and (ac); and Telecommunications Act, ss 16, 25 and 35.
[36]Commerce Act, s 25; Fair Trading Act, s 6; and CCCFA, s 111(2)(d).
Section 111 of the CCCFA sets out the Commission’s role and functions under the Act:
111 Role and functions of Commission under this Act
(1)The role of the Commission under this Act is to promote compliance with this Act.
(2) The functions of the Commission, in relation to this Act, are to—
(a)monitor trade practices in credit markets, consumer lease markets, and buy-back transaction markets; and
(ab)monitor the conduct of creditors and creditors’ agents in the exercise of their rights under Part 3A and under the relevant credit contract; and
(ac) issue infringement notices for infringement offences; and
(b) take prosecutions in relation to breaches of this Act; and
(c)take civil proceedings under this Act (including proceedings under Part 5); and
(d)make available appropriate information for the guidance of consumers, creditors, debtors, lessors, transferees, and other interested persons in relation to promoting compliance with this Act.
…
It will be seen that the Commission’s role under the CCCFA is that of a regulator and prosecutor. Unlike the Commerce Act, the CCCFA does not confer decision‑making powers on the Commission.[37]
[37]Section 111(2).
The CCCFA incorporates various provisions of the Commerce Act, mostly of an investigative or prosecutorial nature. The incorporated provisions include s 100A.[38]
[38]Through s 113.
The CCCFA does not incorporate s 91 of the Commerce Act, which creates a right of appeal to the High Court against any determination of the Commission.[39] Appeal to this Court lies from judgments of the High Court on appeal from the Commission’s determinations with leave of this Court.[40] There are also limited rights of appeal in other statutes under which the Commission has decision-making powers.[41]
[39]Subject to the exceptions set out in s 91(1), though these matters can be appealed on a question of law: s 91(1B). The appeal right has been described by the High Court as analogous to an appeal against a specialist tribunal’s decision: Fisher & Paykel Ltd v Commerce Commission [1990] 2 NZLR 731 (HC) at 757.
[40]Commerce Act, s 97.
[41]Dairy Industry Restructuring Act, s 132; and Telecommunications Act, ss 60, 100, 141, 147, 155ZK, 156I, 183, 224, 243.
The High Court has jurisdiction to hear appeals against both civil and criminal proceedings brought by the Commission as prosecutor.[42] Of relevance, the right of appeal under the CCCFA, modelled on the Fair Trading Act, is broad and allows appeals from any proceedings in the District Court brought under the Act.[43] The High Court is a forum for appeal from District Court decisions, as well as hearing applications for both orders and injunctions.[44] A right of further appeal lies to this Court from decisions of that kind under s 66 of the Judicature Act (now s 56 of the Senior Courts Act).
[42]This depends on the type of proceedings that can be brought under a given Act. Commerce Act, s 75; Fair Trading Act, s 37; CCCFA, s 85; and Dairy Industry Restructuring Act, s 140.
[43]CCCFA, s 85(a).
[44]CCCFA, ss 85(b) and (c).
For the Commission, Mr Mills QC argued that the scheme and purpose of s 100A strongly suggests that Parliament did not mean to create appeal rights. That is confirmed by s 100A(2), which provides for removal into this Court. Further, an opinion given under s 100A is advisory only and does not affect anyone’s legal rights; that being so, it is not a judgment, decree or order. The Commission is in charge of the procedure, deciding whether to initiate it and what to do with the Court’s opinion. The scope of s 100A is very wide; it may be employed at any time and in respect of any matter before the Commission. Counsel submitted that this tells against a right of appeal. Lastly, the efficacy of the procedure would be much reduced if appeals could be brought.
We do not accept that the legislation precludes an appeal, for several reasons. First, there is no provision ousting appeal rights. We do not accept that subs (2) and (3) should be taken to do so. A power of removal does not normally preclude a right of appeal. As in the Senior Courts Act, it may exist for reasons of expediency.[45]
[45]Senior Courts Act 2016, s 59(3).
Second, the very wide range of circumstances in which s 100A may be employed tells against the Commission’s argument that an appeal can never lie. The possibility cannot be excluded that the Commission may ask questions the answers to which do affect a person’s rights or liabilities.
We recognise that the jurisdiction is not entirely within the Commission’s control. The High Court may refuse to give an opinion on the ground that the question posed is really one of fact or too dependent on facts yet to be proved, as Dobson J held in Securities Commission v Contributory Mortgage Investments Ltd:[46]
[9] The terms of s 69O(3) [which was in identical terms to s 100A] appear to be mandatory. However, the Court is not required to determine questions of fact wrongly characterised as a question of law. The Court must always remain in control of its own processes, and a contention on behalf of the Commission that a question of law has been posed cannot bind the Court to treat it as such. Nor can the section require the Court to answer a question where factual uncertainty or complexity is likely to render an answer conducive to confusion rather than clarification of the law.
[46]Securities Commission v Contributory Mortgage Investments Ltd HC Wellington CIV-2008-485-792, 19 November 2008; in respect of Securities Act 1978, s 69O.
By way of illustration, in this case Courtney J declined in her first judgment to answer two questions posed by the Commission, reasoning that they required that facts be found before the questions could be answered. One of those questions might be thought dispositive of liability in the enforcement proceeding: it was whether Harmoney’s platform fee was an establishment fee as defined in s 5 of the CCCFA. Harmoney would have had no right of appeal in the proceeding had Courtney J acceded to its request and answered that question affirmatively.
Third, we do not find the term “opinion” dispositive. The question whether the Court’s answer to the question posed disposes of anyone’s rights is one of substance. Put another way, a court’s opinion may amount to a judgment, decree or order. As Lord Halsbury held in ex parte The County Council of Kent, “… perhaps something which may fill the character of a judgment or order, decree or rule, although not known by those names, may be subject to appeal as being practically within the words by which a right of appeal is given, although the words themselves be not used”.[47]
[47]Above n 25, at 728.
There are cases in which it has been held that “opinion” signifies that the court’s role is consultative and its decision does not amount to a judgment or order.[48] Some of these involve arbitral proceedings where an opinion is sought but the arbitrator remains the final judge of law and fact; in such cases the court’s opinion is consultative in nature because the court does not have power to make the award. As Mason CJ explained in O’Toole v Charles David Pty Ltd:[49]
Courts answering questions stated by arbitrators have no jurisdiction to make an award in the arbitration. So it is natural to speak of the answers to such questions as being “advisory or consultative only”.
[48]Notably, Re Knight, above n 21, at 617 per Lord Escher MR and 619 per Bowen LJ; John G McGregor, above n 21, at 367; Fisher v Fisher, above n 22, at 450; Saffron v R, above n 22, at 528; and Fidelitas Shipping, above n 21, at 639 per Lord Denning MR. See also Apollo Engineering Ltd v James Scott Ltd [2013] UKSC 37 at [15].
[49]Above n 21, at 244 (citations omitted).
There are also cases in which an opinion has been held to be dispositive of rights. Notably, this Court held in Commissioner of Stamps v Peat that the (then) Supreme Court’s opinion effectively determined the parties’ rights because the Commissioner would be duty-bound to follow it.[50]
Not necessary to decide whether an appeal lies in every case
[50]Above n 23, at 470 per Williams J and at 474 per Edwards J.
For Harmoney, Mr Galbraith QC invited us to follow the Supreme Court’s judgment in Siemer v Heron and that of the High Court of Australia in Mellifont v Attorney-General.[51] In short, he submitted, s 66 confers a wide jurisdiction that ought not be read down by reference to historic distinctions between consultative decisions and decisions that determine rights. An opinion under s 100A is an exercise of judicial power and as such should be appealable.
[51]Siemer v Heron, above n 19; and Mellifont v Attorney-General, above n 22.
The question in Siemer v Heron was whether an appeal lay to this Court from an interlocutory decision of the High Court. This Court had drawn distinctions based on the substantive nature of the decision as opposed to decisions affecting trial management. The Supreme Court held:[52]
The Court [of Appeal] has no doubt been troubled by the broad language (“judgment, decree or order”) of s 66 and the absence of any rules or orders controlling when and how interlocutory appeals may be brought. So it has endeavoured to provide its own solution by reading down the words of the section. The Court’s attempt to put interlocutory decisions into various classes has not, however, led to a stable jurisprudence.
We consider that the Court should not have embarked on this exercise and should instead have accepted that s 66 does give an appeal as of right against interlocutory decisions of all kinds made in the High Court unless the Judicature Act itself or a rule or order made pursuant to the Act creates a restriction. The words “any judgment, decree or order” must be held to mean what they say. The statutory language does not support any other interpretation.
[52]At [30]−[31].
In Mellifont the High Court of Australia held that the opinion of the Queensland Court of Criminal Appeal on a point of law referred for its opinion was a judgment, decree or order from which an appeal lay.[53] The majority reasoned that answers given to questions reserved for a court “in the course of proceedings in a matter pending” in that court are not advisory opinions or abstract declarations:[54]
Such answers are not given in circumstances divorced from an attempt to administer the law as stated by the answers; they are given as an integral part of the process of determining the rights and obligations of the parties which are at stake in the proceedings in which the questions are reserved. Once this is accepted, as indeed it must be, it follows inevitably that the giving of the answers is an exercise of judicial power because the seeking and the giving of the answers constitutes an important and influential, if not decisive, step in the judicial determination of the rights and liabilities in issue in the litigation. Viewed in this context, it matters not whether the giving of the answers is, as a matter of legal theory, a binding determination, that is, binding on the court at first instance and the parties … or influential, that is, binding in a practical sense or virtually so …
[53]Mellifont v Attorney-General, above n 22.
[54]At 303–304.
We do not find it necessary to decide whether a right of appeal would arise in every case. The Commission may choose to seek the Court’s opinion on questions of law arising in a very wide range of matters and circumstances. There need not be a respondent to a case stated, and the opinion given may be abstract in the sense that it does not directly engage someone’s substantive rights.
Mr Mills submitted that the case stated procedure is intended to provide an efficient summary process for obtaining judicial guidance. We agree. We do not accept his submission that it necessarily follows that there ought not be a right of appeal. The arbitration cases in which that point is made must be distinguished. For reasons of policy the law generally denies parties who have submitted to arbitration the right to litigate the same issues in a court. In s 100A the legislature has provided by contrast that a case stated may be removed into an appellate court for answer. It is true that an appeal will delay the answer to the case stated. However, the case stated remains a summary and efficient process where the alternative is a full trial with associated rights of appeal.
Decision in this case affects Harmoney’s substantive rights
We have concluded that the legislation does not preclude a right of appeal and it is not necessary to decide whether an appeal would lie in every case. We will approach the decision in this case by using the traditional tests, which we have summarised at [24] above.
The Commission argues that an answer given under s 100A is a mere opinion which does not fully and finally determine any issue between the Commission and Harmoney and does not affect Harmoney’s rights and obligations.
There is some force in this argument. The Commission is not obliged to seek the Court’s guidance. It has chosen to do so because it was in doubt about its powers or duties under the CCCFA with respect to peer-to-peer lending. It was not compelled to act on the Court’s opinion by bringing enforcement proceedings,[55] although it may be doubted whether it could bring such proceedings had the Court advised that the legislation did not apply to peer-to-peer lending. The opinion is not formally an answer to a preliminary question in the enforcement proceeding; the Commission has brought separate proceedings.
[55]CCCFA, s 111(3).
However, we are satisfied that the Commission did not engage the Court in a purely consultative or advisory capacity. In substance, though not in form, it asked the Court to decide issues of a preliminary or jurisdictional nature in an enforcement proceeding to be brought against Harmoney in the same jurisdiction. The answers given manifestly were not divorced from an attempt to administer the law.[56] There was nothing abstract or general about them. On the contrary, they rested on Harmoney’s documents and processes. Harmoney was chosen because it is the largest peer-to-peer lender and the case stated was aimed at its practices. Harmoney was also joined as a party to the case stated, and not by courtesy alone;[57] because the questions engaged its obligations under the CCCFA, the answers could not have been given without affording it an opportunity to be heard. The opinion is intituled as a judgment inter partes, suggesting on its face that it is susceptible to appeal under s 66.[58]
[56]Mellifont v Attorney-General, above n 22, at 303.
[57]Compare Commissioner of Stamps v Peat, above n 23, at 473 per Edwards J in respect of specialist tribunal proceedings.
[58]Siemer v Heron, above n 19.
Courtney J’s answers to the questions posed also had a substantive effect on Harmoney’s rights. Indeed, in her first judgment the Judge recognised that the answers given could very well create an issue estoppel.[59] One of the reasons given by Venning J for refusing to strike out the s 100A application was that the answers to two of the questions posed were likely to be determinative of the same issues in the enforcement proceeding.[60] We observe that in Commerce Commission v Orion MacKenzie J also considered that the opinion he gave would bind the parties.[61]
[59]Courtney J strike-out, above n 6, at [27].
[60]Venning J strike-out, above n 6, at [26].
[61]Commerce Commission v Orion [2013] NZHC 1181, (2013) 13 TCLR 610 at [13].
Mr Mills resisted the conclusion that the opinion would bind Harmoney, saying that the Judges below were all in error, because the opinion did not finally determine the questions.[62] The questions can be relitigated at trial. He emphasised that the Commission will not contend in the enforcement proceeding that an issue estoppel arises. We make two points about that. The first is that the Commission’s concession cannot be determinative. It is ultimately a question for the Court. The second is that an issue estoppel may arise where the same questions are relitigated between the same parties in a subsequent proceeding, which is what will be happening in the enforcement proceeding.[63]
[62]Joseph Lynch Land Co Ltd v Lynch [1995] 1 NZLR 37 (CA) at 43.
[63]Fidelitas Shipping, above n 21, at 642 per Diplock LJ citing Thoday v Thoday [1964] P 181 (CA) at 198.
Ultimately, however, we need not decide whether the judgment was final. It suffices that, as the High Court of Australia put it in Mellifont, the High Court’s opinion was “binding in a practical sense, or virtually so”.[64] It is almost inconceivable that the same Judge (recalling that Courtney J was assigned to try the case) would decide the questions differently in the enforcement proceeding. We think it very unlikely that another Judge will do so. In company with Venning J, we see no reason to suppose that the facts proved at trial will change or will alter the meaning of Harmoney’s standard form documents in some material way. As noted at [18] above, transactions are fully documented via Harmoney’s web-based platform. In short, we accept Mr Galbraith’s submission that the answers given were practically dispositive of the same questions in the enforcement proceeding.
[64]Above n 22, at 304, from the passage cited at [40] above.
Mr Mills also pointed out that eventually Harmoney will get a right of appeal if and when judgment is entered against it in the enforcement proceeding. This point might assist the Commission were it not the law, as noted at [23] above, that an interlocutory judgment can be the subject of an appeal under s 66. It may be arguable that this Court should decline to hear the appeal before the substantive proceeding is tried, as the Supreme Court noted in Siemer v Heron, but that is a different point which does not assist the Commission; it rests on the existence of a right of appeal, and the Supreme Court added that where an interlocutory decision is practically dispositive of the case this Court should ordinarily hear the appeal before the substantive proceeding is tried.[65]
[65]Above n 19, at [33].
For these reasons, we are satisfied that the decision of Courtney J is a judgment for purposes of s 66 of the Judicature Act and is accordingly susceptible to appeal.
Result
We have treated the Commission’s informal invitation to dismiss the appeal for want of jurisdiction as an interlocutory application to strike the appeal out. The application is dismissed. We conclude that the Court has jurisdiction under s 66 of the Judicature Act to entertain the appeal.
Harmoney will have costs for a standard appeal on a band A basis with usual disbursements. We certify for two counsel.
Solicitors:
Simpson Grierson, Auckland for Appellant
Meredith Connell, Auckland for Respondent
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