Macsmith's Tires Limited v George Stock and Company Limited

[2022] NZHC 438

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-001813

[2022] NZHC 438

BETWEEN

MACSMITH’S TIRES LIMITED

Appellant

AND

GEORGE STOCK AND COMPANY LIMITED

Respondent

Hearing:	11 March 2022
Appearances:	Appellant in Person (by VMR) J Suyker for Respondent
Judgment:	11 March 2022

JUDGMENT OF VENNING J

This judgment was delivered by me on 11 March 2022 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:           SBM Legal, Auckland Counsel:       S Lowery/J Suyker, Auckland Copy to: Appellant

MACSMITH’S TIRES LIMITED v GEORGE STOCK AND COMPANY LIMITED [2022] NZHC 438 [11

March 2022]

[1]                 Macsmith’s Tires Limited (MTL) seeks leave to appeal a decision of the District Court dismissing its appeal from a decision of the Disputes Tribunal.1

[2]                 MTL carries on the business of a motor vehicle tyre repairs, upgrades and alignments from a workshop in Gordonton. George Stock and Company Limited (GSC) supplies automotive equipment parts and repair equipment. During 2018 MTL purchased a Hunter Pro-Align laser wheel alignment machine from GSC. MTL says it was delivered unpacked, and then later installed and commissioned by an employee of GSC in September 2018. From 8 October 2018 MTL commenced using the alignment machine for its customers. MTL carried out a number of alignments between 8 October 2018 and 25 January 2019 which resulted in misalignment of customers’ wheels. The misalignment caused the tyres to wear excessively. MTL had to replace them at its cost.

[3]                 When MTL drew the problem to GSC’s attention in late January 2019, a representative of GSC recalibrated the machine in early February. The machine has worked satisfactorily since.

[4]                 MTL refused to pay the balance of $9,000 owing to GSC for the alignment machine. It took proceedings against GSC in the Disputes Tribunal claiming $30,000 for its losses. GSC cross-claimed for the balance of the purchase price of the machine from MTL.

[5]                 In a decision delivered on 16 June 2020 the Disputes Tribunal dismissed MTL’s claim and made an award in GSC’s favour directing MTL to pay the balance of the purchase price of $9,000.2

[6]                 MTL successfully applied to have that decision set aside and was granted a rehearing.

[7]                 The rehearing was held on 2 April 2020. At that rehearing Mr Smith and his partner Bridget represented MTL and attended by telephone. Tony Simpson and

1      MacSmith’s Tires Ltd v George Stock and Company Ltd [2021] NZDC 7188.

2      MacSmith’s Tires Ltd v George Stock and Company Ltd DC Auckland CIV-2020-094-000385, 16 June 2020.

Ayzaaz Ahamad appeared for GSC in person. The hearing lasted for some time. During the course of the hearing the Referee viewed a video Mr Smith had taken of the machine in operation. The transcript of the hearing runs to some 44 pages.

[8]                 The Tribunal Referee concluded that the problem with MTL’s claim was that, even if it was proved that GSC had breached the contract by not calibrating the machine MTL was aware of a possible problem with the machine from an early stage but did nothing until late January. When GSC was contacted in late January and the machine was inspected in early February 2019, whatever the problem was, was immediately resolved. Had MTL contacted GSC when it was first aware of the possible problem MTL’s loss would have been mitigated immediately. By continuing to carry out alignments knowing of the issue MTL had contributed to its loss. The Referee considered MTL’s loss would have been minimal, if not non-existent, if MTL had contacted GSC immediately.

[9]                 For that reason, even if MTL proved the problem was because GSC had not initially calibrated or set up the machine correctly, the Referee considered MTL’s claim must fail because any loss to MTL suffered was most likely because of its own decision not to act when it was aware of the potential problem. The Tribunal Referee rejected MTL’s claim and confirmed the award in GSC’s favour for the balance of the purchase price of $9,000.

[10]              MTL then sought to appeal that decision to the District Court. Ultimately, and after a number of procedural issues, the substantive appeal came before Judge G M Harrison on 14 April 2021. On 21 April 2021 Judge Harrison delivered a reserved judgment declining the appeal.3 In his judgment Judge Harrison noted that there was no general right of appeal to the District Court. The appeal right from a decision of the Disputes Tribunal under the Disputes Tribunal Act 1988 was limited. An appellant had to show that:4

the proceedings were conducted by the Referee … in a manner that was unfair to the appellant and prejudicially affected the results of the proceedings.

3      MacSmith’s Tires Ltd v George Stock and Co Ltd [2021] NZDC 7188.

4 At [5].

[11]              The Judge did not consider the evidence established the proceedings had been conducted in an unfair manner. He reviewed the record of the hearing and the issues raised before the Tribunal. He noted that MTL’s principal submission was that the goods supplied were not fit for purpose and the Referee had failed to take into account that proposition. However, the Judge concluded that the Referee did take that into account but decided that, essentially because MTL brought its losses on itself, there was no need to determine the question of whether the machine as supplied was not fit for purpose because MTL’s loss arose from its failure to take steps to address the issue when it became aware of it. It had caused its own loss.

[12]              Even if the Referee had made an error in his findings of fact or law, as the Judge noted, there could be no appeal to the District Court on that basis, citing NZI Insurance v Auckland District Court and Inland Holdings Ltd v District Court at Whangarei.5 For those reasons Judge Harrison dismissed the appeal.

[13]              This application for leave/appeal was originally scheduled for hearing on Tuesday, 8 March 2022. However, Mr Smith suffered an injury that morning and was unable to attend. The hearing was rescheduled to 10.00 am, Friday, 11 March 2022.

[14]              As the Court has advised Mr Smith in the past, there are a number of issues for MTL with its purported appeal to this Court. First, the appellant, MTL, is a company. It is not represented by counsel. When the matter was first before this Court in callover last year Gault J drew Mr Smith’s attention to the general rule, which is only departed from in exceptional circumstances, that a company can only present a case in the High Court through a lawyer. Exceptional circumstances are primarily reserved for emergency situations where counsel is not available or in straightforward matters where the assistance of counsel is not needed by the Court or where it would be unduly technical or burdensome to insist on counsel. As Gault J observed this is not such a case.6

5      NZI Insurance v Auckland District Court [1993] 3 NZLR 453; and Inland Holdings Ltd v District Court at Whangarei (1999) 13 PRNZ 661.

6      Minute of Gault J, dated 19 October 2021.

[15]              Next, the purported appeal is out of time. Leave is required. The judgment of Judge Harrison was delivered on 21 April 2021. The first document filed in this Court was a notice of general appeal which, although dated 8 June 2021 was not emailed and received by the Court on 17 June 2021 at 1.00 pm. The appeal is approximately six weeks out of time.

[16]              An extension of time is an indulgence. The Court will consider the length of the delay, the reasons for it, the parties’ conduct, the extent of the prejudice caused by delay, the prospective merits of the appeal and whether the appeal raises any issues of public importance. Mr Smith explained the delay in lodging the appeal on the basis that he had been suffering from mental health issues.

[17]              In the present case the appeal does not raise any issue of public importance. The prospective merits of the appeal do no support grant of leave, even taking account of Mr Smith’s explanation for the delay.

[18]              However, even putting that issue to one side, there is a further and fundamental barrier to MTL’s purported appeal in this case as the Court advised Mr Smith. This Court does not have jurisdiction to consider the appeal even if otherwise it would have been appropriate to grant leave to bring the appeal.

[19]              Rights to appeal are created by statute.7 The right to appeal from a decision of the District Court to this Court is provided for in s 124 of the District Court Act 2016:

124     General right of appeal

(1)This Part applies to a decision of the court, other than a decision of a kind in respect of which an enactment other than this Act—

(a)expressly confers a right of appeal; or

(b)expressly provides that there is no right of appeal.

(2)A party to a proceeding in the District Court may appeal to the High Court against the whole or a part of a decision made by the District Court in or in relation to the proceeding.

7      Attorney-General v Sillem (1864) 11 ER 1200 (HL).

[20]              Section 124(1) excludes from the general right of appeal to this Court where an enactment other than the District Court Act expressly provides for a right of appeal.

[21]              The Disputes Tribunal Act 1988 provides for a right of appeal from decisions of that Tribunal.

[22]Section 50 of the Act provides:

50       Appeals

(1)Any party to proceedings before the Tribunal may appeal to the District Court against an order made by the Tribunal under section 18(8) or section 46(2) or section 47(3)(b), or against the approval by the Tribunal of an agreed settlement under section 18(3), or against the variation of a term of an agreed settlement under section 47(3)(a), on the grounds that—

(a)the proceedings were conducted by the Referee; or

(b)an inquiry was carried out by an Investigator—

in a manner that was unfair to the appellant and prejudicially affected the result of the proceedings.

(2)Without limiting the generality of subsection (1), a Referee shall be deemed to have conducted the proceedings in a manner that was unfair to the appellant and prejudicially affected the result if—

(a)the Referee fails to have regard to any provision of any enactment that is brought to the attention of the Referee at the hearing; and

(b)as a result of that failure, the result of the proceedings is unfair to the appellant.

…

[23]However, importantly, s 23 expressly provides:

23       Decisions of Tribunal to be final

Every … order made by the Tribunal under section 18(8) or section 46(2) or section 47(3)(b), … shall be final and binding on all parties to the proceedings in which … the order … is made, … and, except as provided in section 50, no appeal shall lie in respect of any such order … .

[24]As Keane J held in Mellow v Tsang:8

[24]      Section 23(1) must be understood as s 5(1) of the Interpretation Act 1999 requires, ‘from its text and in the light of its purpose.’ Understood in that way, s 23(1) does more, I consider, than limit recourse by way of appeal from the Disputes Tribunal to the s 50 right. Section 23(1) states unequivocally that ‘no appeal shall lie’ except by that right, and confirms, I consider, that s 50 confers not merely a single right of appeal, but a final right.

[25]      The alternative, that decisions of the Disputes Tribunal are capable of being appealed, not just under s 50, but from the District Court, and perhaps beyond this Court, cannot, I consider, be reconciled with s 23(1) itself, which deems the Tribunal’s decisions to be ‘final’. Nor does it square with the reasons why that should be so. As many cases say, the Tribunal is a forum for swift, inexpensive, fair and substantial justice, where lawyers have no place. Successive appeal rights only make sense when the forum under appeal is in a quite literal sense a court of law. That is not what the Tribunal is expected to be or can be.

[25]              To similar effect are the decisions of Menzies v North Shore Laser and Skin Care Centre Ltd and Edwards v The Photo Warehouse Ltd.9

[26]              The rationale behind limiting the right of appeal (and review) was set out by Fogarty J in Shepherd v Disputes Tribunal and Stuart Hendry Builders Ltd:10

[37]      It is even more appropriate that this aspect of the law of res judicata should be applied to proceedings under the Disputes Tribunals Act 1988. The goal of that statute is to provide for low cost speedy and final resolution of small disputes. To achieve that end Parliament was not interested in providing appeals on the merits of decisions.

[38]      That may result in what might be described as rough justice from time to time. That has to be balanced against the overall goal of the Act to enable persons who could not possibly afford the very expensive litigation costs in the District and High Courts, the opportunity of taking claims before referees and getting justice. Taking into account the goals of the Disputes Tribunals Act 1988 I am reinforced in my mind that it is entirely appropriate to apply the law of res judicata in all its rigour against the applicant in this case.

[27]              Those comments were made in the context of the applicant seeking to raise issues for the first time before the High Court. The Judge was not prepared to allow that, noting that:

8      Mellow v Tsang [2004] NZAR 537.

9      Menzies v North Shore Laser and Skin Care Centre Ltd [2018] NZHC 1035 and Edwards v The Photo Warehouse Ltd [2016] NZHC 582.

10     Shepherd v Disputes Tribunal [2004] NZAR 319 (HC).

[36]     This may seem hard on litigants. But the reason for the law taking this approach is that there is a greater public interest in decisions being final.

Otherwise litigation could go on and on and on. …

[28]              I agree with and adopt the reasoning of the above authorities. The short point is that the Disputes Tribunal Act does not provide a second appeal from a decision of the District Court on appeal. The absence of such a right, when read with ss 23 and 50, confirms Parliament’s clear intention was that there was to be only one level of appeal, namely to the District Court, and even that appeal was to be constrained.

[29]              For that reason, I find that this Court has no jurisdiction to hear an appeal from a decision of the District Court on appeal from an order of the Disputes Tribunal. The Court has no jurisdiction to consider MTL’s appeal.

[30]              Even if this Court had jurisdiction to engage with the appeal it would be on the basis of the record before the Disputes Tribunal and could only be on the same confined basis that the District Court approached the matter. I have considered the record of the hearing conducted by the Disputes Tribunal in this case at the rehearing. There is nothing unfair in the process the Referee adopted at the hearing.

[31]              Even if there was jurisdiction the appeal would have to be dismissed on its merits.

Result

[32]              For those reasons MTL’s purported appeal and application for leave to appeal to this Court are dismissed.

Costs

[33]The respondent is entitled to costs.

[34]              Mr Suyker suggested that in the circumstances costs could be reserved. Order accordingly.

Venning J