Kung v Fitton - [2017] NZHC 670

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2016-404-1358 [2017] NZHC 670

UNDER the District Courts Act 1947

BETWEEN

ALLAN KUNG Appellant

AND

DAVID ARTHUR FITTON Respondent

Hearing: (On the papers)

Counsel:

G J Thwaite for Appellant
D W Grove for Respondent

Judgment:

7 April 2017

JUDGMENT OF BREWER J

This judgment was delivered by me on 7 April 2017 at 2:30 pm pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

Solicitors: Gregory J Thwaite (Auckland) for Appellant
Foy & Halse (Auckland) for Respondent

KUNG v FITTON [2017] NZHC 670 [7 April 2017]

Introduction

[1] On 21 November 2016, I heard appeals from the District Court relating to a dispute between Mr Kung and Mr Fitton. The substantive dispute centred on the extent to which Mr Fitton was liable to Mr Kung under a deed of indemnity and guarantee for payments Mr Kung had made pursuant to his obligations under a term loan agreement and mortgage. The District Court held that a number of set-offs were available to Mr Fitton which resulted in a nil balance owing to Mr Kung. I found the District Court judgment to be flawed but unfortunately the state of the evidence did not allow me to reach a decision as to the amount properly owing.

[2] Accordingly, on 21 November 2016 I delivered a judgment in which I allowed Mr Kung’s appeal in part but remitted the substantive matter to the District Court for a determination as to quantum.1 I also quashed the District Court’s decision as to costs and remitted that matter for re-determination in light of my judgment and the result of the substantive proceeding.

[3] Mr Kung now applies to this Court for:

(a) an order under r 20.20 of the High Court Rules that Mr Fitton pay to Mr Kung some or all of the amount of costs awarded in the District Court and paid by Mr Kung, along with appropriate interest; or alternatively;

(b) a recall of my judgment and a judgment issued addressing the

payments made pursuant to the District Court’s costs decision; and

(c) Leave to appeal my judgment to the Court of Appeal.

[4] Both parties have also filed costs memoranda having failed to agree costs in relation to the High Court appeal.

Should I make an order under r 20.20?

[5] Rule 20.20 of the High Court Rules provides:

20.20 Repayment of judgment sum and interest

(1) Subclause (2) applies when—

(a) a party to proceedings before a decision-maker (party A) has, in accordance with a judgment or order of the decision- maker, paid an amount to another party to the proceedings (party B); and

(b) on appeal to the court, the effect of the court’s determination
is that some or all of the amount did not need to be paid.

(2) When this subclause applies, the court—

(a) may order party B to repay to party A some or all of the amount paid by party A; and

(b)…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Kung v Fitton

Details

AGLC: Kung v Fitton [2017] NZHC 670
Case: [2017] NZHC 670
Decision Date: 7 April 2017

CaseChat Overview and Summary

In the High Court of New Zealand, Allan Kung, the appellant, and David Arthur Fitton, the respondent, were involved in a dispute that originated from a deed of indemnity and guarantee. The substantive issue was the extent of Mr Fitton's liability to Mr Kung for payments made under a term loan agreement and mortgage. The District Court ruled that Mr Fitton could apply several set-offs, resulting in no balance owing to Mr Kung. However, the High Court found the District Court's judgment flawed but could not determine the exact amount owing due to the state of the evidence. The High Court allowed Mr Kung's appeal in part, remitted the matter to the District Court for a determination of the quantum, and quashed the District Court's decision on costs, remitting that matter for re-determination.

Mr Kung applied for an order under rule 20.20 of the High Court Rules for Mr Fitton to repay the costs he had already paid, or alternatively, for a recall of the judgment and a new judgment addressing the payments made pursuant to the District Court's costs decision. Mr Kung also sought leave to appeal the High Court's judgment to the Court of Appeal. The High Court found that the jurisdictional requirements of rule 20.20 were met, and it was not improper to raise the issue at this stage of the proceedings. The Court exercised its discretion under rule 20.20 to order Mr Fitton to repay Mr Kung the amount he had paid, along with interest. Mr Kung's application to recall the judgment fell away as a result.

As for the costs of the High Court decision, the Court directed that costs lie where they fall, as there was no successful party at least at that stage. The District Court was yet to make a final determination on the quantum. The Court declined Mr Kung's application for leave to appeal to the Court of Appeal, as the principles established in relation to second appeals require the issues to be of sufficient importance to warrant further litigation. The Court found that the issues raised related to well-settled principles of procedure, evidence, and contractual interpretation and that the relatively small amounts at issue did not justify the costs of further litigation.

In summary, the High Court granted Mr Kung's application for a refund of costs and the payment of interest, directed that costs on the appeal heard by the Court lie where they fall, and declined Mr Kung's application for leave to appeal to the Court of Appeal. The costs of these applications also lie where they fall.

Orders