HG Metal Manufacturing Ltd v Navaratnam

[2021] NZHC 2701

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-1955

[2021] NZHC 2701

BETWEEN

HG METAL MANUFACTURING LTD

Applicant

AND

VASHIHARAN NAVARATNAM

First Respondent

SHERINE SANGEETHA NAVARATNAM

Second Respondent

CIV-2020-404-2230

BETWEEN

VASHIHARAN NAVARATNAM

Applicant

AND

HG METAL MANUFACTURING LTD

Respondent

Hearing:	On the papers
Counsel:	T B Fitzgerald for plaintiff V Navaratnam in person
Judgment:	8 October 2021

JUDGMENT OF KATZ J

[Recall application No. 2]

This judgment was delivered by me on 8 October 2021 at 3.00 pm pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Solicitors:           Belly Gully, Barristers and Solicitors, Auckland Copy to:  Vashiharan Navaratnam

HG METAL MANUFACTURING LTD v NAVARATNAM [2021] NZHC 2701 [8 October 2021]

Introduction

[1]    On 28 July 2021, following a contested hearing, I delivered a decision in which I directed the Registrar to enter a Singaporean arbitral award (“the Award”) as a judgment against Vashiharan Navaratnam (“the Enforcement Judgment”).1

[2]    Mr Navaratnam, who is self-represented, subsequently sought recall of the Enforcement Judgment. I determined that application on the papers. On 22 September 2021, I found that the Enforcement Judgment had been sealed and therefore could not be recalled (“the Recall Judgment”).2

[3]    On the same date I delivered a costs judgment. I found that HG Metal was entitled to indemnity costs, pursuant to a deed of guarantee (“the Costs Judgment”).3

[4]    Mr Navaratnam then filed a further application, seeking that I recall both the Enforcement Judgment and the Recall Judgment (“the Second Recall Application”). Mr Navaratnam requested an oral hearing of that application and it was scheduled to be heard at 10 am on 7 October 2021. Shortly before the hearing Mr Navaratnam filed:

(a)a memorandum seeking that I recuse myself from hearing the Second Recall Application (“the Recusal Application”); and

(b)a memorandum seeking an adjournment of the hearing (“the Adjournment Application”).

[5]    Mr Navaratnam failed to appear at the 7 October hearing. He did not offer any apology or excuse for his non-attendance. Counsel for HG Metal appeared to oppose the various applications.

[6]    I declined the Adjournment Application, with reasons to follow. The hearing then proceeded. It was very brief, however, as Mr Navaratnam (who had requested

1      HG Metal Manufacturing Ltd v Navaratnam [2021] NZHC 1920.

2      HG Metal Manufacturing Ltd v Navaratnam [2021] NZHC 2497.

3      HG Metal Manufacturing Ltd v Navaratnam [2021] NZHC 2498.

the hearing) did not attend, and I did not require oral submissions from HG Metal on any substantive issues. I reserved my decisions on both the Recusal Application and the Second Recall Application.

[7]    Accordingly, in this judgment I set out my reasons for declining the Adjournment Application, as well as my decisions in respect of the Recusal Application and the Second Recall Application. I also make a final order in respect of the quantum of costs payable in relation to the Enforcement Judgment.

Adjournment Application

[8]    The hearing of the Second Recall Application was scheduled at relatively short notice (effectively one full working day), due to my limited availability over the next couple of months and the need for finality. Mr Navaratnam had already filed his written submissions and I anticipated that HG Metal, which is represented by a large and well-resourced law firm, would not be unduly prejudiced by the short notice.

[9]    At 5 pm on 6 October 2021 (the evening before the hearing) HG Metal’s solicitors served the following documents on Mr Navaratnam:

(a)a notice of opposition to the Second Recall Application;

(b)a six page memorandum of counsel in support of that notice of opposition; and

(c)a memorandum in response to Mr Navaratnam’s Recusal Application.

[10]   The Registry forwarded those documents to me the next morning, shortly before the hearing. I did not have an opportunity to review them prior to the commencement of the hearing.

[11]   I also received a memorandum from Mr Navaratnam seeking an adjournment, shortly before the hearing. The basis of Mr Navaratnam’s Adjournment Application was that he had only received the documents from HG Metal’s solicitors at 5 pm the

previous evening and had not had sufficient time to prepare to address the matters raised.

[12]   As noted above, Mr Navaratnam then failed to appear at the hearing. Counsel for HG Metal did, however, attend. They advised that HG Metal opposed the Adjournment Application. They expressed the view that it was simply a further delaying tactic by Mr Navaratnam. In the interests of resolving matters expeditiously, Mr Fitzgerald, counsel for HG Metal, advised that HG Metal would be willing to withdraw its two memoranda (one relating to recusal and one relating to the second recall application). Mr Fitzgerald noted that they had simply been filed, at short notice, to assist the Court. They covered matters that HG Metal could otherwise have raised orally.

[13]   It is my view that there can be no prejudice to Mr Navaratnam in the Court considering HG Metal’s recusal memorandum. Mr Navaratnam advised in his memorandum of 7 October 2021 (which was filed after he had received HG Metal’s recusal memorandum) that he did not wish to make oral submissions on the recusal issue. The filing of HG Metal’s memorandum on the recusal issue cannot therefore justify an adjournment, and I will therefore consider it.

[14]   The key issue, therefore, is whether an adjournment should be granted on the basis that Mr Navaratnam requires further time to consider and respond to the remaining two documents (a one-page notice of opposition and the six page recall memorandum).

[15]   Given HG Metal’s offer to withdraw its recall memorandum, there can be no prejudice to Mr Navaratnam arising out of that document. I have not read it, and direct that it be removed from the Court file.  As for  the one page notice of  opposition,  Mr Navaratnam must clearly have been aware that the Second Recall Application would be opposed. The contents of that document cannot have taken him by surprise. They certainly do not warrant an adjournment of the hearing.

[16]   Given HG Metal’s willingness to withdraw its recall memorandum and, in effect, allow the Court to determine the application solely on the basis of the material

filed by Mr Navaratnam and HG Metal’s brief notice of opposition, I concluded that there was no need for the hearing to be adjourned. Of course, it would have been preferable if Mr Navaratnam had attended the hearing so that he could make any further submissions he wished to make in support of his applications. He elected, however, not to attend the hearing. A party cannot “force” an adjournment, however, by simply failing to show up in Court.

[17]In conclusion, these are my reasons for declining to adjourn the hearing.

Should I recuse myself from determining the Second Recall Application?

[18]   Mr Navaratnam has filed a memorandum seeking that I recuse myself from hearing the Second Recall Application. He advances the following key reasons for recusal:

(a)That I misapprehended or failed to determine some of the issues raised by Mr Navaratnam as certain documents filed by him were only forwarded to me by the Registry after I had delivered the Recall Judgment.

(b)That I have an interest in the outcome of the Second Recall Application, given that the question raised by the application is whether I am biased.

(c)That I am now a witness to the proceedings because I am functus officio and therefore simply a witness to what transpired. Further, although I am personally functus officio, the High Court itself is not functus officio.

[19]   The test for apparent bias is well-established. A Judge will be disqualified from acting “if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide”.4

4      Saxmere Company Ltd v Wool Board Disestablishment Company Ltd  [2009] NZSC 72, [2010] 1 NZLR 35 at [3], [85] and [127]. See also Saxmere Company Ltd v Wool Board Disestablishment Company Ltd [2009] NZSC 122, [2010] 1 NZLR 76 at [4].

[20]   Applying that test to the facts of this case, I am satisfied that a fair-minded lay observer would not have had a reasonable apprehension of bias on my part.

[21]   In relation to Mr Navaratnam’s first point, a fair-minded observer would not consider a Judge to be biased because they did not have regard to documents that had not been provided to them at the time of their decision. Further, as I have noted in an earlier minute, there is nothing in those documents that could have reasonably impacted my decision on the First Recall Application, as my decision was founded on the narrow ground that the Court did not have jurisdiction to recall the Enforcement Judgment as it had already been sealed. The further documents did not engage with that issue.

[22]   Similarly, there is nothing in Mr Navaratnam’s second point. Inevitably an application for recall (or indeed an application for leave to appeal) may call into question aspects of a Judge’s original decision. Judges are experienced at considering such matters fairly and impartially. Indeed, it is standard practice for recall applications to be considered by the Judge who made the original decision. As the learned authors of McGechan on Procedure observe, implicit in the three categories identified in Horowhenua County v Nash (No 2) (which set out the circumstances in which a judgment may be recalled) is that recall must be by the Judge who delivered the judgment.5 This is also confirmed in O’Neill v Toogood.6 The only possible exceptions I am aware of are where a Judge has retired, died or (possibly) where the parties consent to another Judge dealing with the matter.

[23]   Mr Navaratnam’s third point, which is that I am somehow now a witness to the proceeding, is simply misconceived.

[24]   There is accordingly no basis for recusal and Mr Navaratnam’s request that I recuse myself is declined.

5      Robert Osborne (ed) McGechan on Procedure (online looseleaf ed, Thomson Reuters) at [HR11.9.01(8)]; and Horowhenua County v Nash (No 2) [1968] NZLR 632 (SC) at 633.

6      O’Neill v Toogood [2017] NZHC 795 at [53].

Should the Recall Judgment be recalled?

[25]   Mr Navaratnam’s submissions are at times difficult to follow, which is not uncommon with self-represented litigants. His key arguments, however, appear to be that:

(a)an oral hearing of the recall application should have been held, rather than the application being determined on the papers; and

(b)the Recall Judgment failed to consider his arguments on their merits.

Applications for recall – the law

[26]   Rule 11.9 of the High Court Rules 2016 (“the Rules”) provides that a “Judge may recall a judgment given orally or in writing at any time before a formal record of it is drawn up and sealed”.

[27]   In Horowhenua County v Nash (No 2), Wild CJ set out the three categories of cases in which a judgment may be recalled:7

Generally speaking, a judgment once delivered must stand for better or worse subject, of course, to appeal. Were it otherwise there would be great inconvenience and uncertainty. There are, I think, three categories of cases in which a judgment not perfected [sealed] may be recalled — first, where since the hearing there has been an amendment to a relevant statute or regulation or a new judicial decision of relevance and high authority; secondly, where counsel have failed to direct the Court’s attention to a legislative provision or authoritative decision of plain relevance; and thirdly, where for some other very special reason justice requires that the judgment be recalled.

[28]   The jurisdiction to recall must be exercised with circumspection and must not be seen as a substitute for an appeal.8 It does not extend to a challenge of any substantive findings of fact and law in the judgment, to a party recasting arguments

7      Horowhenua County v Nash (No 2) [1968] NZLR 632 (SC) at 633. This passage has been cited in Saxmere Co Ltd v Wool Board Disestablishment Co Ltd [2009] NZSC 122, [2010] 1 NZLR 76 at [2]; Uhrle v R [2020] NZSC 62 at [22] and [29]; Rainbow Corp  v  Ryde Holdings (1992)  5 PRNZ 493 (CA); Unison Networks Ltd v Commerce Commission [2007] NZCA 49; and Erwood v Glasgow Harley [2007] NZCA 88.

8      Erwood v Maxted [2010] NZCA 93 at [5] citing Faloon v Commissioner of Inland Revenue (2006) 22 NZTC 19,832 (HC).

previously given and representing them in a new form, nor to a party putting forward further arguments that could have been raised at the earlier hearing but were not.9

Did Mr Navaratnam’s application for recall require an oral hearing?

[29]   Mr Navaratnam submitted that the recall application was an interlocutory application for which an oral hearing should have been set down. He submits that neither party consented to the disposal of the matter on the papers, and that he had a legitimate expectation that a hearing would take place.

[30]   In Erwood v Maxted, the Court of Appeal set out the process for dealing with recall applications in that Court:10

(c)Process

(i)Where a formal application is required in terms of these guidelines:

(a)it must be made on notice to all other parties;

(b)any party served with an application need not respond unless directed to do so by the Court;

(c)the Court will deal with the application on the papers or by oral hearing in terms of r 51(6);

(d)the Court will usually give only brief reasons for its decision on any application;

(e)any further application seeking to recall a decision refusing an application to recall will usually be dealt with summarily; and

(f)the Court will consider ordering increased or indemnity costs against parties and/or counsel bringing unmeritorious applications

[31]In McQueen v Penn, Woodhouse J commented that:11

[27]   The Court of Appeal in Erwood v Maxted, in addition to a statement  of basic principles for recall applications, outlined a process to be applied in the Court of Appeal. It is equally applicable to recall of a High Court judgment on an appeal. The Court of Appeal recorded, amongst other things, that applications would be dealt with either on the papers or by oral hearing. It is a matter that requires assessment depending on the nature of the application. In this case I received a detailed memorandum in support from Mr Jefferson. All matters requiring consideration were clear. It is for that reason I was

9 At [5]. See also Nottingham v Real Estate Agents Authority [2017] NZCA 145 at [9].

10     At [23(c)].

11     McQueen v Penn [2016] NZHC 2700.

satisfied that this is not a case where a further oral hearing was required. The appellant has, of course, had a hearing through the filing of substantial submissions. An added consideration in this regard is that in the Erwood v Maxted case the Court of Appeal said that the Court would usually give only brief reasons for its decision on any application for recall. In this case the parties have now received detailed reasons.

[32]   It is not unusual for recall applications to be considered on the papers in this Court.  A further  example is  Nottingham v Ardern, where Peters J  considered that  a recall application could be dealt with on the papers despite the fact that the applicant sought a hearing.12    It was accordingly open to the Court to determine    Mr Navaratnam’s recall application on the papers.

[33]   Mr Navaratnam filed comprehensive submissions in support of his application. The difficulty faced by Mr Navaratnam, however, was that the Enforcement Judgment was sealed on 12 August 2021. A judgment takes effect when it is given.13 The judgment is then sealed with the seal of the court.14 At this point, subject to very limited exceptions which do not apply here, the Judgment can no longer be recalled. This is reflected in r 11.9 of the Rules which provides that a “Judge may recall a judgment given orally or in writing at any time before a formal record of it is drawn up and sealed.”

[34]   Accordingly, the fact that Mr Navaratnam’s recall application was not filed until after the Enforcement Judgment had been sealed was an insurmountable obstacle to the First Recall Application. Even now, despite the extensive further submissions Mr Navaratnam has advanced since the Recall Judgment was delivered, he has failed to engage with this fundamental issue. It follows that, even if (contrary to my view) an oral hearing was required, there has been no miscarriage of justice. The outcome would have been the same.

Should the Recall Judgment have considered the merits of Mr Navaratnam’s arguments?

[35]   Mr Navaratnam submitted that the Recall Judgment is deficient because it failed to consider the merits of his arguments. Given that the Enforcement Judgment

12     Nottingham v Ardern [2020] NZHC 1013 at [3].

13     High Court Rules 2016, r 11.12.

14     Rule 11.11(1).

could not be recalled as it had already been sealed, however, it would not have been appropriate to engage with the merits of Mr Navaratnam’s arguments. To the extent appropriate, they are matters for the Court of Appeal. I note that Mr Navaratnam has already indicated that he will be filing an appeal, and may have already done so.

[36]   In this context I note that it is generally inappropriate for a trial court to recall its judgment once appeals have been lodged.15 In Russell v Klinac, O’Regan J commented that:16

[15]   It is clear that a common law rule exists that once a Court has made   an order, and an appeal has been lodged against that order, the Court becomes functus officio and is therefore unable to take further action in relation to the matter.

[37]   Similarly, in White v New Zealand Stock Exchange, the Court of Appeal commented that:17

It is repugnant in both theory and practice that a High Court Judge should be called upon to determine an application to recall his or her judgment at a time when a notice of appeal against that judgment is extant.

[38]   Should Mr Navaratnam wish to challenge the merits of the Enforcement Judgment, he must do so on appeal. He cannot do so in the context of a recall application.

Should the Costs Judgment be recalled?

[39]   Mr Navaratnam seeks recall of the Costs Judgment on the following key grounds:

(a)counsel for HG Metal failed to direct the Court to relevant statutory provisions applicable to the recognition and enforcement of foreign arbitral awards;

15     Robert Osborne(ed) McGechan on Procedure (online looseleaf ed, Thomson Reuters) at [11.9.01(7)].

16     Russell v Klinac HC Whangarei AP18/01, 11 December  2001.  See  also  Fitzgerald  v  IAG New Zealand Ltd [2019] NZHC 632 at [33].

17     White v New Zealand Stock Exchange [2001] 1 NZLR 683 (CA) at [94].

(b)the Court had no jurisdiction to determine whether HG Metal was entitled to indemnity costs under the guarantee, given that the arbitral tribunal had jurisdiction in relation to the Award itself; and

(c)the judgment was delivered without consideration of the interests of Ms Navaratnam.

Alleged failure to consider relevant statutory provisions

[40]   Mr Navaratnam submitted that counsel for HG Metal failed to direct the Court to statutory provisions that were relevant to the Enforcement Judgment. He submits that he opposed HG Metal’s application on the grounds permitted under art 36 of sch 1 to the Arbitration Act 1996. Mr Navaratnam submitted that the Court “only has jurisdiction to hear and determine whether or not to enter and or enforce an award or set aside or refuse enforcement of an award based on the above legislative provisions.”

[41]   The recall jurisdiction extends to circumstances where counsel have failed to direct the Court’s attention to a legislative provision or authoritative decision of plain relevance. That did not occur, however. The Enforcement Judgment set out the grounds for refusing recognition or enforcement of the arbitral award under art 36 of sch 1 of the Act. Mr Navaratnam’s contention appears to be directed at the substance of the Enforcement Judgment, in that it found that none of those grounds were met. Challenges to the substance of the judgment are properly made on appeal, not on an application for recall.

[42]   In any event, it is the Costs Judgment that Mr Navaratnam now applies for the recall of. It is that decision that must ignore a relevant legislative provision of plain relevance, not the Enforcement Judgment. The grounds for refusing recognition or enforcement of arbitral award are not relevant to a costs decision. The alleged failure to consider a relevant statutory provision is without merit and does not provide a basis to recall the Costs Judgment.

Jurisdiction to order costs

[43]   Mr Navaratnam submitted that the Court had no jurisdiction to determine whether HG Metal was entitled to indemnity costs under the guarantee, given that the arbitral tribunal had jurisdiction in relation to the Award itself. He further submitted that whether the arbitral tribunal made a decision on the indemnity costs term is a question of fact which can be determined only by examining an authenticated and duly certified award. Mr Navaratnam submitted that this Court did not have an authenticated and duly certified copy of the Award before it.

[44]   This argument appears to, in effect, be a collateral attack on both the Award and the Enforcement Judgment. I have found the Award to be valid and enforceable in New Zealand. The costs associated with the High Court proceedings required to obtain the Enforcement Judgment are within this Court’s jurisdiction, not that of the arbitral tribunal. Further, this Court is entitled to consider Mr Navaratnam’s liability for costs in light of the contractual indemnity for costs included in the deed of guarantee (which has been found to be valid and enforceable).

[45]There is accordingly no merit to this argument.

Alleged failure to consider Mrs Navaratnam’s interests

[46]   Mr Navaratnam submitted that the Costs Judgment was given without consideration to the interests of an affected person, being Mrs Navaratnam.

[47]   There is nothing in this point. It was Mr Navaratnam who opposed the recognition and enforcement of the Award against him. The costs associated with the proceeding were therefore attributable to him. Judgment had already been entered against Mrs Navaratnam (although that was currently under appeal at the time of the Enforcement Judgment). Separate costs will be incurred in relation to that proceeding. There was no need for the Costs Judgment to consider Mrs Navaratnam’s interests.

Conclusion on recall of the Recall Judgment

[48]   Mr Navaratnam has failed to establish any basis for recall of the Costs Judgment.

Quantum of costs award

[49]   In the Costs Judgment I sought clarification from HG Metal as to whether costs should be awarded on a GST-inclusive or GST-exclusive basis. HG Metal has now provided that clarification, and I accordingly direct that the costs judgment be sealed for the GST-exclusive sum of $73,027.39.

Result

[50]The reasons for declining the Adjournment Application are set out above.

[51]I further order as follows:

(a)The Recusal Application is dismissed.

(b)The Second Recall Application (seeking recall of both the Recall Judgment and the Costs Judgment) is dismissed.

(c)The Costs Judgment is to be sealed for the GST-exclusive sum of

$73,027.39.

(d)Any costs memoranda in respect of the costs of the various matters dealt within this judgment are to be filed as follows:

(i)HG Metal’s memorandum is to be filed by 14 October 2021; and

(ii)Mr Navaratnam’s memorandum is to be filed 21 October 2021.

Katz J