The Gama Foundation v Fletcher Steel Limited

The Gama Foundation (Gama) applied to the High Court for leave to appeal the decision of Osborne J which dismissed an application for leave to appeal the arbitral award made by Tómas Kennedy-Grant QC. The application proceeded on four questions of law. The primary focus of Gama's appeal was on the ambit and application of the rule in Joyner v Weeks. Gama also sought leave in relation to the ambit and application of the interest clauses under the lease (cls 5.1 and 14.1). Finally, Gama sought leave in relation to a question as to whether the High Court erred in its assessment of whether leave to appeal should be granted. Fletcher Steel opposed the granting of leave. It asserted that none of the putative questions of law posed by Gama were capable of bona fide and serious argument. It also asserted that the questions, in the context of this dispute, were not of sufficient importance either generally or to the parties to justify further litigation. It referred to the parties' choice of arbitration as their means of settling disputes under the lease.

The Court of Appeal considered the test for leave to appeal under sch 2, cl 5(5) of the Arbitration Act in Downer Construction (New Zealand) Ltd v Silverfield Developments Ltd (Downer Construction). In Downer Construction the Court of Appeal endorsed the principles identified by Randerson J in Cooper v Symes: (a) The appeal 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 cost and delay of the further appeal. (b) Upon a second appeal, the Court of Appeal is not engaged in the general correction of error. Its primary function is then to clarify the law and to determine whether it has been properly construed and applied by the Court below. (c) Not every alleged error of law is of such importance either generally or to the parties, as to justify further pursuit of litigation which has already been twice considered and ruled upon by a Court.

The submissions of counsel for Gama in relation to the rule in Joyner v Weeks amounted to a substantial revisiting of the detailed arguments presented on the leave application to this Court as to why the law in New Zealand is not settled in the way found by the arbitrator, and then again by this Court. For the reasons expressed in the judgment, the Court found each of the questions in relation to the rule in Joyner v Weeks to either be not seriously arguable or moot. The Court's opinion has not changed in light of the detailed, further submissions now presented. The position concerning the two proposed questions relating to interest was similar. In relation to the matter under cl 14.1 the leave application failed primarily due to the arbitrator's factual finding that the costs being claimed by Gama had not been incurred under the cl 14.1 procedure. The Court's opinion has not changed in relation to these two questions. That being the case, it follows that Gama's proposed final question as to whether the test for granting leave was made out is not seriously arguable.

Leave to appeal is declined. The plaintiff is to pay to the defendant the costs of the application on a 2B basis, together with disbursements to be fixed by the Registrar.