Ratzapper Australasia Ltd v Noe - [2017] NZHC 2931

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-1323 [2017] NZHC 2931

IN THE MATTER of the Arbitration Act 1996

UNDER

Part 19 High Court Rules

BETWEEN

RATZAPPER AUSTRALASIA LIMITED Plaintiff

AND

ROBERT NOE First Defendant

ATRAP INC Second Defendant

Hearing:
2 November 2017

Further submissions 17 and 24 November 2017

Appearances:

W McCartney for the Plaintiff
G M Illingworth QC and S Round for the First Defendant

Judgment:

28 November 2017

JUDGMENT OF MUIR J

This judgment was delivered by me on Tuesday 28 November 2017 at 4.00 pm
Pursuant to Rule 11.5 of the High court Rules.
Registrar/Deputy Registrar
Date:…………………………

Solicitors/Counsel:
W McCartney, Barrister, Auckland. Email: William.mccartney.nz@gmail.com
G M Illingworth QC, Barrister, Auckland. Email: gmi@illingworthqc.com
S Round, Rennie Cox, Auckland. Email: sround@renniecox.co.nz

RATZAPPER AUSTRALASIA LTD v NOE [2017] NZHC 2931 [28 November 2017]

Introduction

[1] In these proceedings the plaintiff (Ratzapper) seeks enforcement of an arbitral award of the Hon Rodney Hansen CNZM QC under art 35 of the First Schedule of the Arbitration Act 1996 (the Act).1 The first defendant opposes the application on the basis that to grant it would be contrary to the public policy of New Zealand and in particular would amount to a breach of natural justice (arts 36(1)(b)(ii) and 36(3)(b)(i) of the First Schedule).

[2] The first defendant (Mr Noe) was debarred from defending the proceedings on the basis of what the arbitrator identified as persistent and deliberate failures to provide adequate discovery. There can be no criticism of the arbitrator having done so on the material available to him. If anything he was indulgent in terms of the time allowed for compliance, and the order debarring Mr Noe was itself made after a hearing where counsel were present. However, Mr Noe says that there was such substantial default on the part of his counsel (and possibly instructing solicitors) in terms of provision to Ratzapper of discovered materials he had earlier made available, such an absence of communication between counsel and Mr Noe in terms of the peril Mr Noe faced, and such inadequacy of information (or misinformation) in exchanges between counsel and arbitrator, that he was in substance not heard and/or the arbitrator proceeded on a mistaken view of the facts. He says that to recognise the award would therefore be a breach of natural justice or otherwise contrary to public policy.

[3] There is no evidence before me from the counsel or instructing solicitors concerned. Were I of the view that Mr Noe’s argument was potentially available then I would call on such parties as officers of the Court to provide affidavits in response. I have decided, however, that such argument is not available, that in the context of a private law dispute Mr Noe is bound by the so-called “surrogacy” principle and that
his remedy is against his former legal advisors. Because such advisors have not been

1 Ratzapper Australasia Ltd v Noe Hon Rodney Hansen QC, 7 June…

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: [2017] NZHC 2931
Decision Date: 28 November 2017

CaseChat Overview and Summary

In this case, the plaintiff, Ratzapper Australasia Limited, sought enforcement of an arbitral award against the first defendant, Robert Noe, under the Arbitration Act 1996. The award was made by the Hon Rodney Hansen CNZM QC and related to a dispute between Ratzapper and Mr Noe over the distribution of electronic rat eradication devices in New Zealand. The first defendant opposed the enforcement of the award, arguing that it would be contrary to the public policy of New Zealand and would amount to a breach of natural justice. The court considered the arguments of both parties and ultimately found that the award should be enforced.

The court first considered the legal issues surrounding the enforcement of the arbitral award. The court noted that the award should be enforced under the Arbitration Act 1996, unless there were grounds for refusing recognition or enforcement under art 36. The court then considered the argument that the award should not be enforced because it would be contrary to the public policy of New Zealand and would amount to a breach of natural justice. The court noted that New Zealand authority on the construction of this provision indicates that it is to be interpreted narrowly and that the integrity of the Court's processes and powers will thereby be abused.

The court then considered the arguments of both parties and ultimately found that the award should be enforced. The court found that Mr Noe was bound by the so-called "surrogacy" principle and that his remedy was against his former legal advisors. The court found that at least in cases such as the present, involving a monetary claim and where there is no suggestion of incompensable loss, it is not in the Court's view contrary to the requirements of justice for the Court to recognise an arbitral award under art 35 despite arguable counsel error or breach in the process by which that award was reached.

The court granted orders enforcing by entry as a judgment of this Court the Award of the Hon Rodney Hansen CNZM QC dated 7 June 2017. The court noted that if any issue as to costs arose, memoranda may be filed. The plaintiff's application did not include any such claim.

Orders