Moldauer v Constellation Brands Inc - [2009] NZCA 324

IN THE COURT OF APPEAL OF NEW ZEALAND
CA262/2009
[2009] NZCA 324
BETWEENEDWIN MOLDAUER

Applicant

ANDCONSTELLATION BRANDS INC

First Respondent
ANDCANANDAIGUA WINE COMPANY

Second Respondent

Hearing:21 July 2009

Court:Hammond, Robertson and Baragwanath JJ
Counsel:G J Thwaite for Applicant

M S Cole and W J R Kiewik for Respondents

Judgment:24 July 2009 at 11 am

JUDGMENT OF THE COURT

A The application for leave to appeal is dismissed.
BThe respondent will have standard costs on a band A basis, and usual disbursements.

REASONS OF THE COURT
(Given by Hammond J)
Introduction
[1]       Mr Moldauer worked for a wine company in California, USA. His employment came to an end. A settlement was reached between him and his former employer. Mr Moldauer then sought to advance other issues to arbitration. Ultimately, his attempt to have his former employer submit to arbitration was stayed by order of a New York Court.
[2]       Mr Moldauer then issued proceedings in the Auckland District Court in New Zealand. Without seeking the leave of the Court, he served the respondent companies in the United States.
[3]       In passing, we were not provided with a copy of the statement of claim in the District Court, but it appears from the early portion of the District Court Judge’s judgment that not only were employment benefits being sought, but also (unspecified) punitive damages. There may be a query therefore as to whether the claim was even within the jurisdictional limit of the District Court. Mr Thwaite said that, if necessary, the excess amount over the District Court jurisdiction would be abandoned.
[4]       The respondents protested the jurisdiction of the District Court. They applied to the Court to dismiss the proceeding, under r 139 of the District Courts Rules 1992. Judge R Joyce QC upheld the protest and dismissed the proceedings: DC AK CIV-2005-004-001686 10 August 2007.
[5]       Mr Moldauer appealed against that decision to the High Court. Rodney Hansen J dismissed the appeal: HC AK CIV 2007-404-005589 16 December 2008.
[6]       Mr Moldauer then applied for leave to appeal against the judgment of Rodney Hansen J, to this Court. On 8 April 2009, Rodney Hansen J dismissed that application.
[7]       Mr Moldauer now applies for leave from this Court to appeal against the judgment of Rodney Hansen J by way of a second appeal, under s 67 of the Judicature Act 1908. The application is therefore one in which the applicant must raise some question of law or fact capable of bona fide and serious argument in a case involving some interest, public or private, of sufficient importance to outweigh the costs and delay of the further appeal: Waller v Hider [1998] 1 NZLR 412 (CA); Snee v Snee (1999) 13 PRNZ 609 (CA).
The service out rule
[8]       Rule 242 of the District Courts Rules provides that in certain circumstances a plaintiff in a District Court proceeding in New Zealand can serve a statement of claim out of New Zealand without leave. Without going into unnecessary detail, the grounds relied…

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.

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Details

Case: [2009] NZCA 324
Decision Date: 24 July 2009

CaseChat Overview and Summary

The applicant, Mr Moldauer, sought to appeal the High Court's decision dismissing his application to appeal the Auckland District Court's dismissal of his claim. Mr Moldauer's employment with a Californian wine company ended, and after a settlement, he attempted to arbitrate other issues with his former employer. This attempt was stayed by a New York court, so Mr Moldauer commenced proceedings in the Auckland District Court. He sought employment benefits and punitive damages. The respondents contested the jurisdiction of the District Court, which was upheld, and the appeal to the High Court was dismissed. Mr Moldauer now seeks leave to appeal to the Court of Appeal.
The primary issue before the Court of Appeal was whether Mr Moldauer had the right to serve the respondents outside New Zealand without leave under rule 242 of the District Courts Rules 1992. The Court of Appeal needed to determine if the District Court was correct in dismissing Mr Moldauer's claim due to improper service and lack of jurisdiction. Additionally, the Court had to assess if Mr Moldauer's arguments raised questions of law or fact that merited a further appeal.
The Court of Appeal found that Mr Moldauer's attempt to serve the respondents outside New Zealand without leave was not authorised under rule 242. The Court concluded that there was no sufficient presence of the respondents' interests in New Zealand to amount to residence, which is a necessary condition for service without leave. The Court of Appeal also found no error in the High Court's factual determination or its application of the law. The Court did not see it as necessary or appropriate to review the established principle regarding the test of "residence" for a corporation. Therefore, the application for leave to appeal was dismissed, and the respondents were awarded standard costs on a band A basis, and usual disbursements.
The Court of Appeal dismissed Mr Moldauer's application for leave to appeal the High Court's decision. The Court found that Mr Moldauer's attempt to serve the respondents outside New Zealand without leave was not authorised under rule 242 of the District Courts Rules 1992. The Court upheld the High Court's decision and found no basis to review the established principle regarding the test of "residence" for a corporation. Consequently, the respondents were awarded standard costs on a band A basis, and usual disbursements.

Orders