Navaratnam v HG Metal Manufacturing Limited
[2023] NZCA 10
•14 February 2023 at 10 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA692/2020 [2023] NZCA 10 |
| BETWEEN | VASHIHARAN NAVARATNAM |
| AND | HG METAL MANUFACTURING LIMITED |
| CA152/2022 | ||
| BETWEEN | VASHIHARAN NAVARATNAM | |
| AND | HIGH COURT AT AUCKLAND | |
| Court: | Courtney, Thomas and Peters JJ |
Counsel: | First Appellant in Person for CA692/2020 and CA152/2022 |
Judgment: | 14 February 2023 at 10 am |
JUDGMENT OF THE COURT
AThe application to recall [2022] NZCA 425 is declined.
BHG Metal is entitled to indemnity costs of $6,590.75 against Mr and Mrs Navaratnam jointly and severally.
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REASONS OF THE COURT
(Given by Courtney J)
On 8 September 2022, on the application of HG Metal Manufacturing (HG Metal), this Court struck out two appeals brought by Mr and Mrs Navaratnam.[1] Mr and Mrs Navaratnam have applied to have the judgment recalled. HG Metal opposes recall and seeks indemnity costs.
Application for recall
[1]Navaratnam v HG Metal Manufacturing Ltd [2022] NZCA 425 [Court of Appeal strike out decision].
The appeals that were struck out arose from proceedings brought by HG Metal to enforce an arbitral award obtained against Mr and Mrs Navaratnam in Singapore in 2020, which had resulted in judgment being entered against both Mr and Mrs Navaratnam.
The appeal under CA152/2022 related to judicial review proceedings brought to challenge Katz J’s decision entering judgment against Mr Navaratnam.[2] Mr Navaratnam had filed his appeal against Katz J’s judgment out of time. Having been refused an extension of time to appeal, he brought judicial review proceedings. Jagose J struck out the judicial review proceedings as an abuse of process because judicial review is not available to challenge decisions of the High Court.[3] This Court struck out the appeal against Jagose J’s decision as being an abuse of process, for the same reason.[4]
[2]HG Metal Manufacturing Ltd v Navaratnam [2021] NZHC 1920.
[3]Navaratnam v High Court of Auckland [2022] NZHC 371.
[4]Court of Appeal strike out decision, above n 1, at [26].
The appeal under CA692/2020 related to Woolford J’s decision entering judgment against Mrs Navaratnam by default.[5] This appeal was struck out for the appellants’ failure to comply with court directions.[6]
[5]HG Metal Manufacturing Ltd v Navaratnam HC Auckland CIV-2020-404-1955, 22 October 2020 [Minute of Woolford J].
[6]Court of Appeal strike out decision, above n 1 at [48].
In both appeals Mr and Mrs Navaratnam sought to raise an argument that had been determined by Katz J, namely that HG Metal had failed to satisfy the statutory requirements for recognition and enforcement of the award under art 35(2) of the Arbitration Act 1996 because it had not provided a properly authenticated copy of the award. Mr and Mrs Navaratnam maintained that, as a result of this failure, they themselves were not obliged to take any steps. In striking out the appeals we considered that seeking to revisit this issue was an abuse of process because it sought to circumvent the principle of finality by relitigating an issue that had already been determined.[7]
[7]Court of Appeal strike out decision, above n 1, at [25]–[26].
Mr and Mrs Navaratnam’s positions differ and we address each separately.
As to Mr Navaratnam, in a decision delivered on 30 August 2022, Associate Judge Gardiner made an order adjudicating Mr Navaratnam bankrupt.[8] Upon adjudication Mr Navaratnam’s rights in the litigation vested in the Official Assignee under the Insolvency Act 2006.[9] This includes the power to discontinue the proceedings.[10] The Official Assignee has elected to do so and has filed a Notice of Discontinuance in respect of both proceedings. Mr Navaratnam does not accept the Official Assignee’s right to discontinue. However, there is no doubt that the Official Assignee has that power and Mr Navaratnam has no standing in the proceedings. His application for recall must fail.
[8]HG Metal Manufacturing Ltd v Navaratnam [2022] NZHC 2183.
[9]Insolvency Act 2006, s 64.
[10]Schedule 1(b).
Mrs Navaratnam has not been adjudicated bankrupt and we therefore consider her application for recall against the relevant principles. The circumstances in which a judgment can be recalled are very narrow. They were summarised in the decision in Horowhenua County v Nash (No 2):[11]
Generally speaking, a judgment once delivered must stand for better or worse subject, of course, to appeal. Were it otherwise there would be great inconvenience and uncertainty. There are, I think, three categories of cases in which a judgment not perfected may be recalled – first, where since the hearing there has been an amendment to a relevant statute or regulation or a new judicial decision of relevance and high authority; secondly, where counsel have failed to direct the Court’s attention to a legislative provision or authoritative decision of plain relevance; and thirdly, where for some other very special reason justice requires that the judgment be recalled.
[11]Horowhenua County v Nash (No 2) [1968] NZLR 632 (SC) at 633. See also Erwood v Maxted [2010] NZCA 93, (2010) 20 PRNZ 466 at [3].
It is well recognised that a judgment should not be recalled in order to recognise a challenge to substantive findings of fact or law, nor to allow a party to recast arguments previously made, nor to advance arguments that could have been raised earlier but were not.[12] However, the grounds on which Mrs Navaratnam seeks to recall the judgment are essentially the same as the grounds that have been advanced in previous litigation in this matter.
[12]Faloon v Commissioner of Inland Revenue (2006) 22 NZTC 19,832 (HC) at [13].
Mrs Navaratnam identifies the grounds for recall as the need to correct errors or omissions in the judgment, namely: failure to determine an issue properly advanced; procedural irregularity; misapprehension by the Court as to the grounds of appeal and submissions made; procedural irregularity of the orders previously sealed; and that the Court was not directed to an earlier decision about the guarantee that was the underlying debt in the proceeding. These grounds have, as their underlying theme, the same argument about the validity of the guarantee and the arbitral decision based on an assertion that HG Metal has not satisfied the statutory requirements for recognition and enforcement of the award under the Arbitration Act. This argument has been finally determined and cannot be reopened, no matter how it is recast.
This is not an appropriate case for the recall of the decision. Mrs Navaratnam’s application to recall is declined.
Costs
HG Metal seeks indemnity costs of $6,590.75 against Mr and Mrs Navaratnam. The Official Assignee has not expressed any view on the issue of costs. Mr and Mrs Navaratnam oppose the granting of indemnity costs. They say that it is premature to consider the question of indemnity costs until their argument regarding art 35(2) of the Arbitration Act has been determined.
HG Metal’s claim for indemnity costs is based on Mr and Mrs Navaratnam’s liability under the guarantee they both signed on 24 September 2013, which gave rise to the arbitral award against them. Clause 6 of the guarantee provides:
The Guarantor shall indemnify HG Metal against the full costs (including legal fees as between solicitor and client) of enforcing or attempting to enforce this Guarantee.
In the proceedings determined by Katz J, HG Metal had sought indemnity costs in reliance on cl 6. In a subsequent costs decision, Katz J reviewed the basis on which indemnity costs might be awarded pursuant to a contractual obligation.[13] She concluded that the costs HG Metal had incurred in applying to recognise and enforce the award in New Zealand were costs of “enforcing or attempting to enforce” the guarantee for the purposes of cl 6.[14] Katz J’s finding that Mr Navaratnam was liable for indemnity costs arising from the guarantee finally determined this issue and means that Mr Navaratnam is liable for indemnity costs in respect of the current appeal.
[13]HG Metal Manufacturing Ltd v Navaratnam [2021] NZHC 2498.
[14]At [21].
There is no basis on which to differentiate Mrs Navaratnam’s position from that of her husband on this point. She was a co-guarantor and subject to the same provisions, including cl 6.
We would add that, for the reasons canvassed, the application for recall was an abuse of process. Two factors — the clear attempt to raise unmeritorious arguments that have been finally determined in the High Court and Mr Navaratnam’s decision to bring the recall application knowing that he had already been bankrupted — would, in themselves, have justified indemnity costs, had they not been imposed under the guarantee.
Result
The application to recall [2022] NZCA 425 is declined.
There is an order that HG Metal is entitled to indemnity costs of $6,590.75 against Mr and Mrs Navaratnam jointly and severally.
Solicitors:
Bell Gully, Auckland for HG Metal Manufacturing Ltd
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