KI Commercial Ltd v Christchurch City Council
[2019] NZCA 645
•13 December 2019 at 11 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA330/2017 [2019] NZCA 645 |
| BETWEEN | KI COMMERCIAL LIMITED |
| AND | CHRISTCHURCH CITY COUNCIL |
| Court: | Kós P and Gilbert J |
Counsel: | J E Hodder QC, S W H Fletcher and J S Angland for Applicant |
Judgment: | 13 December 2019 at 11 am |
JUDGMENT OF THE COURT
AThe application for recall is declined.
BThe application for further leave to appeal is declined.
____________________________________________________________________
REASONS OF THE COURT
(Given by Kós P)
The applicant, KIC, owns two commercial buildings in Bernard Street, Addington, Christchurch. Pursuant to the Canterbury Earthquake (Christchurch Replacement District Plan) Order 2014, the respondent Council promulgated a proposed district plan. Submissions on the proposed plan were heard by an independent hearings panel chaired by the Hon Sir John Hansen. KIC sought site‑specific exemptions, rezoning the properties “Commercial Core” rather than “Industrial General”. Ultimately the panel issued a decision declining that relief.
KIC then appealed to the High Court. By cl 19(3) of the 2014 Order, appeals lay to the High Court only on an error of law. In its appeal, KIC alleged nine errors of law. That appeal was heard by Dunningham J in February 2017. In May 2017, she dismissed the appeal.[1]
[1]KI Commercial Ltd v Christchurch City Council [2017] NZHC 1076 [High Court judgment].
A second appeal, to this Court, depended on the grant of leave.[2] Leave could not be given unless this Court was satisfied that the appeal involved a matter of general or public importance, or a miscarriage of justice would occur if the appeal was not heard.[3]
[2]Canterbury Earthquake (Christchurch Replacement District Plan) Order 2014, cl 19(7); Resource Management Act 1991, s 308; and Criminal Procedure Act 2011, s 303.
[3]Criminal Procedure Act, s 303(2).
KIC advanced only two of the original nine alleged errors of law in its leave application. That application was heard by a panel comprising Kós P, Harrison and Gilbert JJ, and dismissed, in October 2017.[4]
[4]K I Commercial Ltd v Christchurch City Council [2017] NZCA 480 [Court of Appeal judgment]. Harrison J has since retired as a judge of this Court.
KIC now applies to recall this Court’s judgment, and to “resume” its application for leave to appeal against the judgment of Dunningham J. A single ground is advanced, namely that the original High Court judgment should be set aside because of a reasonable apprehension of bias “resulting from Her Honour’s former firm’s acrimonious relationship with Mr Seng Bou (Paul) Keung (and entities associated with Mr Keung), a principal stakeholder in [KIC]”.
We consider that, properly viewed, this is a combined application for recall of this Court’s judgment denying leave to appeal and an application for further leave to appeal (out of time) on a new ground (being apprehended bias by the High Court Judge).[5]
[5]See Saxmere Co Ltd v Wool Board Disestablishment Co Ltd [2008] NZSC 94, (2008) 19 PRNZ 132.
The underlying proceeding having been commenced in the High Court after 1 March 2016, these applications fall to be determined in accordance with the provisions of s 49 of the Senior Courts Act 2016. By s 49(2)(a), any two or more judges of this Court may determine any contested application for leave to appeal. We treat the application for recall of this Court’s leave judgment in 2017 as falling naturally within that provision also. The two applications are to be determined on the papers.[6]
Chronology of events
[6]Senior Courts Act 2016, s 49(7).
A chronology of events may be extracted from the affidavit evidence before us:
(a)In 1995 the Judge joined Buddle Findlay as an employed solicitor in its Christchurch office.
(b)In 2004 KIC was formed. It was controlled by Mr Keung until 2009 or 2010.
(c)Partners in Buddle Findlay’s Christchurch office acted for Mr Keung, KIC and associated entities in 2004. There is no suggestion the Judge acted for the Keung interests. Or, subsequently, against them.
(d)In 2005 Buddle Findlay sued an associated company, Keung Investments Ltd (the parent company of KIC) for unpaid fees. The company in response sought a costs review from the Canterbury District Law Society. The fee dispute was settled in mid-2005. In the same year the Judge became a partner in Buddle Findlay.
(e)From 2007 Buddle Findlay acted against the Keung interests over investments in a joint venture at Goose Bay. Buddle Findlay acted for interests associated with the Koulanov family. From that point Mr Keung deposes, “the relationship soured”. The deposition is a singular one. Buddle Findlay had not acted for the Keung interests since 2004, and had had to sue for its fee in 2005, so it is unclear exactly what relationship there now was to sour. Mr Keung also says that Buddle Findlay acted with “animosity” against him while acting for the Koulanovs.
(f)In 2009 Buddle Findlay acted for the Koulanovs in bankrupting Mr Keung. At or about this time Mr Keung challenged Buddle Findlay acting, without success. In the course of that he made allegations that the firm had engaged in money laundering for the Koulanovs. There is no evidence before us suggesting any substance to those allegations.
(g)In 2012 Buddle Findlay acted for the Council on issues concerning building consents on the two properties owned by KIC in Bernard Street.
(h)In 2014 the Judge was appointed a judge of the High Court, sitting at Christchurch.
(i)As we have already noted, in 2017 the Judge heard KIC’s plan challenge, and dismissed that appeal in May 2017.[7] In October 2017 this Court declined leave to appeal.[8]
(j)In April 2018 Mr Keung applied to set aside his bankruptcy on the basis it had been improperly obtained. That application was placed before the Judge. She however recused herself, as Buddle Findlay had acted for the Koulanovs in bringing the application to adjudicate Mr Keung bankrupt.[9]
(k)In May 2019 the Judge also recused herself in a case brought by a Keung company, Ballantyne Trustees Ltd, against the liquidators of Goose Bay Ranch Holdings Ltd, the vehicle for the ill-fated Goose Bay joint venture undertaken by the Keungs and the Koulanovs.
Discussion
[7]High Court judgment, above n 1.
[8]Court of Appeal judgment, above n 4.
[9]Keung v Official Assignee HC Christchurch CIV-2010-409-835, 16 April 2018 (Minute of Dunningham J).
The circumstances in which the Judge first recused herself concerned a challenge to the bankruptcy of Mr Keung arising from the failed Goose Bay venture. The basis of the challenge was that the bankruptcy was improperly obtained. As Buddle Findlay had acted for the creditor in obtaining that adjudication, and as the Judge was then a partner in that firm, her decision to recuse herself was appropriate and inevitable. The decision was recorded in a minute from the Judge dated 16 April 2018. The second recusal, in the Ballantyne proceeding, is less clear-cut. But the proceedings arose from the same essential course of events, resulting in the liquidation of Goose Bay Ranch Holdings Ltd, on which Buddle Findlay had acted for the Koulanovs. Recusal was merely advised by a deputy registrar on 17 May 2019. No reasoned minute issued, so we do not know the basis for that decision. Both recusals were, of course, long after the Judge had determined the planning appeal at the heart of these proceedings.
We do not think the same concerns apply in relation to the Judge sitting on the planning appeal concerning the zoning of the two buildings in Bernard Street, Addington. Apparent bias must be considered on a case-by-case basis.[10] To state the obvious, the fact the Judge had been a partner in a law firm did not mean she was disqualified from hearing a case brought by someone her firm had previously acted against. Indeed, it does not follow that a judge is disqualified from hearing a case brought by someone she has herself acted against. It all depends. But here there was no suggestion on the evidence that the Judge had had anything to do with the Keungs, or the Koulanovs.
[10]Russell v Taxation Review Authority [2011] NZCA 158, [2011] NZAR 310 at [23], citing Locabail (UK) Ltd v Bayfield Properties Ltd [2000] QB 451 (CA).
The Bernard Street properties, the subject of the present proceedings, were never part of the troubled Goose Bay venture on which Buddle Findlay had acted for the Koulanovs against the Keungs. The planning appeal involved discrete questions of law. It is unclear from the judgment whether the Judge actually appreciated the association between KIC and Mr Keung. If so, plainly she did not think it material.
We do not consider a fair-minded lay observer aware of these essential facts could reasonably apprehend that the Judge might not bring an impartial mind to the resolution of the nine questions of law the Judge was required to decide in these proceedings.[11] The contrary proposition requires the observer to disregard the distinction between the 2017 hearing (concerning Bernard Street) and the 2018 and 2019 ones (concerning Buddle Findlay’s handling of interests adverse to the Keungs on an entirely different project). It would also require that observer to infer that the Judge (who had never had anything to do with the Keungs herself) might bring to the hearing of a planning appeal concerning the unrelated Bernard Street properties, based on discrete questions of law, some sort of ill-defined ill will based on litigation that had been conducted by other members of the firm for the Koulanovs. Or, even more remotely, that because the firm had had to sue one of Mr Keung’s companies for an unpaid fee at about the time the Judge entered the partnership, some ill-will might exist. This is tenuous stuff indeed.
[11]Applying the test articulated in SaxmereCo Ltd v Wool Board Disestablishment Co Ltd [2009] NZSC 122, [2010] 1 NZLR 76 at [4].
That determines the present applications. The premise for the applications (necessity of disqualification by apparent bias) being unsustainable, the applications themselves will be declined.
For completeness we note that even if the Judge should have recused herself, we would not have granted these applications.
First, the consequence of disqualification for apprehended bias in the case of a court of record is not a nullity, but prospective invalidity.[12] Applying then a review standard, it does not follow (as the applicant’s submissions suggest) that recall, allowance of the appeal and remittal follow automatically. The remedy, also on a review standard, is discretionary rather than automatic. In a case of substantial injustice, the first instance judgment may be set aside ex debito justitiae, but even that response is not automatic.[13] In any case, for the reasons given, and about to be given, we do not find any arguable apprehended bias here to have caused substantial, or any, injustice.
[12]See, for example, Dimes v Proprietors of the Grand Junction Canal (1852) 3 HL Cas 759; Berowra Holdings Pty Ltd v Gordon [2006] HCA 32, (2006) 225 CLR 364 at 369–371; Attorney-General v Howard [2010] NZCA 58, [2011] 1 NZLR 58 at [114]–[115]; and Lyon v R [2019] NZCA 311 at [21].
[13]Taylor v Lawrence [2002] EWCA Civ 90, [2003] QB 528 at [55]; and Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue [2014] NZCA 350, (2014) 26 NZTC 21-086 at [46]–[47].
Secondly, after receiving the judgment of the High Court, KIC sought leave to appeal here, on all nine grounds raised in the High Court. Later it amended its application to press just two of those nine questions. Those two questions were dealt with by us in our leave decision. We held neither alleged error of law to be arguable. Nothing before us suggests those conclusions were reached on an incorrect basis, such as might justify recall under the long-established principles laid down in Horowhenua County v Nash (No 2).[14] What this application comes down to, then, is an attempt to leverage a previously unappreciated procedural defect in the High Court into an opportunity to re-open the original appeal, despite KIC accepting on its first visit here that only two of its nine points were arguable, and despite this Court holding they too were not.
[14]Horowhenua County v Nash (No 2) [1968] NZLR 632 (SC) at 633.
Thirdly, relevant to the question of relief is delay. In this case Mr Keung said he became aware of the Judge’s recusal in the bankruptcy matter, in August 2018. It may be noted that the recusal in fact occurred by a minute issued on 16 April 2018. On 3 August 2018 KIC filed an application for recall in the High Court, which was fairly swiftly dismissed on jurisdictional grounds.[15] It was not however until eight months later that it filed the present application. No explanation satisfactory or otherwise is offered for this delay. Alone it might not be disentitling, but in combination with other considerations noted here, we consider it would be.[16]
[15]KI Commercial Ltd v Christchurch City Council [2018] NZHC 2896. The Court concluded application had to be made in this Court.
[16]As to the effect of delay in cases of apprehended bias, see Russell v Taxation Review Authority, above n 10, at [35], citing Locabail (UK) Ltd v Bayfield Properties Ltd, above n 10, at [25]; and Vakauta v Kelly (1989) 167 CLR 568 at 572–573.
Finally, the proceedings sought to challenge the terms of the proposed district plan. The statutory process accompanying promulgation of the plan provided for challenges to be brought to the panel chaired by Sir John Hansen. That panel has completed its work and has been disbanded. KIC’s appeal cannot now be remitted to it. With revocation of the 2014 Order, on 18 March 2019, control of the district plan has reverted to the Council. The standard processes for plan provision challenges under the Resource Management Act 1991 have resumed. From that time KIC has been at liberty to initiate private plan change processes in the usual way. That remedy is available to it now and effectively supplants the remedy sought in these proceedings.
Result
The application for recall is declined.
The application for further leave to appeal is declined.
Solicitors:
Ronald W Angland & Son, Leeston for Applicant
Simpson Grierson, Christchurch for Respondent
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