Kidd v Equity Realty (1995) Ltd

[2008] NZCA 545

IN THE COURT OF APPEAL OF NEW ZEALAND

CA648/2008
[2008] NZCA 545

BETWEENANTHONY JAMES KIDD

Appellant

ANDEQUITY REALTY (1995) LIMITED

First Respondent

ANDPHILLIP PURNELL ANDREWS

Second Respondent

Hearing:2 December 2008

Court:Chambers, Ellen France and Baragwanath JJ

Counsel:C T Patterson for Appellant

R J Katz QC for Respondents

Judgment:10 December 2008 at 4 pm

JUDGMENT OF THE COURT

A        Leave to appeal is granted on the following questions of law:

(a)Was the Employment Court right to join the appellant as a party?

(b)Did the Employment Court properly exercise its discretion in relation to the quantum of costs it ordered the appellant to pay?

B        Costs are reserved. 

REASONS OF THE COURT

(Given by Chambers J)

[1]       We have granted leave to appeal on two of the questions of law Anthony Kidd seeks to argue in this court.  We intend the first question to cover the sub-questions to which Mr Patterson, for Mr Kidd, referred, namely:

(a)Whether the Employment Court had power to join Mr Kidd solely for costs purposes;

(b)Whether it had power to join him with retrospective effect; and

(c)Whether, if it did have such power, it properly exercised that power.

[2]       We have not granted leave with respect to the Employment Court’s decision to join Equity Realty (1995) Limited, the first respondent, as a party.  That decision seems to us unquestionably right. 

[3]       Mr Katz QC, for Equity and Phillip Andrews, the second respondent, submitted that, if we decided to grant leave, a condition of such leave should be that Mr Kidd pay into court the sum the Employment Court held he was liable to pay by way of costs.  We decline to make such an order.  Mr Kidd will have to pay security for costs with respect to this appeal in the normal way.  There is nothing to prevent Equity and Mr Andrews from seeking to enforce the Employment Court’s costs orders in their favour.  No stay is in place. 

[4]       Mr Katz raised with us whether Mr Kidd should have paid security for costs on his application for leave.  He drew our attention to reg 69 of the Employment Court Regulations 2000.  That regulation provides:

Security for costs

(1)This regulation applies in any case where a party to any proceedings that have been decided by the Court (not being proceedings in respect of an offence) applies, in accordance with section 214 of the Act, for leave to appeal against the decision of the Court.

(2)In any such case, rule 11 of the Court of Appeal (Civil) Rules 1997 applies, with all necessary modifications, in relation to the application for leave to appeal as if it were an appeal. 

[5]       At the time those regulations were made, the Court of Appeal (Civil) Rules 1997 were in force.  Those rules, unlike their successor rules, the Court of Appeal (Civil) Rules 2005, did not expressly set out a procedure for the handling of applications for leave to appeal and applications for special leave to appeal.  That is because, more often than not, it was this court’s then practice not to hear applications for leave in advance of the appeals to which they related.  Rather, the court, at one hearing, heard the application for leave and the appeal itself.  If the prospective appeal had merit, the court granted leave to appeal and allowed the appeal.  If the appeal did not have merit, the court either dismissed the application for leave to appeal or allowed it but dismissed the appeal itself. 

[6]       An unfortunate side effect of this de facto procedure was that some appeals were heard without security for costs ever being paid.  That was because security was not payable until the appeal had been brought: see the 1997 Rules, r 11(1).  It seems the Executive considered that outcome was undesirable in the employment context.  For that reason, reg 69 was made, effectively requiring security for costs to be paid within 14 days after the application for leave to appeal was filed.  Court of Appeal registry practice thereafter was to insist on security for costs being paid on applications for leave to appeal in employment cases; in other cases involving leave or special leave to appeal, no security was required (if it ever was) until the application had been granted and the appeal brought. 

[7]       The 2005 Rules introduced a completely new procedure.  Under these rules, any application for leave to appeal is always heard in advance of the appeal itself.  Only if leave is granted can an appeal be brought.  Security for costs is now always payable (unless dispensed with), but only once the application for leave has been granted and the appeal has then been brought.  The concern which led to the making of reg 69, namely that a party to an employment appeal could effectively have its appeal heard without paying security because of this court’s then de facto practices, has been completely removed by the 2005 Rules.  Since those rules came into force, the Court of Appeal registry has never required security to be paid under reg 69; it has treated applications for leave in employment cases just like all other civil applications for leave and has required security to be paid only if the application for leave to appeal is granted and the appeal is then brought. 

[8]       The fact the registry has so acted is not, of course, decisive: after all, it may have misinterpreted the law.  But we are satisfied the registry’s practice, which has until now not been challenged in any of the employment appeals we have had since 2005, has been legally correct. 

[9] Mr Katz argued that the reference in reg 69(2) to r 11 of the 1997 Rules should now be read, pursuant to s 22(2) of the Interpretation Act 1999, as a reference to r 35 of the 2005 Rules. That is now the principal rule dealing with security for costs under the new procedural regime.

[10] Section 22(2) of the Interpretation Act would normally apply to reg 69, but, in this case, we have determined it should not apply because “the context of the enactment [reg 69] requires a different interpretation”: see the Interpretation Act, s 4(1). We are satisfied that reg 69 should be interpreted as continuing to refer to r 11 of the 1997 Rules, with the consequence that it has now become redundant.

[11]     The “context” which has driven us to apply “a different interpretation” is that the mischief with which reg 69 was concerned – as explained above – has now been resolved by the 2005 Rules and the changed procedure which was ushered in by them.  No longer can appellants in employment cases get their appeals heard without providing security.  There is no reason to suppose now that the Executive would have intended appellants and prospective appellants in employment cases to be treated any differently from appellants and prospective appellants in all other civil appeals. 

[12]     It follows that Mr Kidd is not out of time in paying security for costs.  He becomes liable to pay security only if he elects to bring an appeal within 20 working days after this decision giving him leave: see the 2005 Rules, r 29(1)(b). 

[13]     It is clearly desirable that reg 69 should now be revoked.  We direct the registrar to refer this judgment to the Ministry of Justice and the Department of Labour for their consideration. 

Solicitors:
Lovegroves, Auckland, for Appellant
Callaghan & Co, Auckland, for Respondents