New Zealand Law Society - Courts roundup 21 September - 27 September 2023
Decisions, proceedings and news from the courts in some common law jurisdictions in the past week.
Cancian v Tauranga City Council [2023] NZSC 125 (19 September 2023)
Unsuccessful leave application – Self-represented C convicted in DC on three charges of carrying out building work otherwise than in accordance with building consent, contrary to s 40 Building Act 2004, $60,000 fine imposed –
C appealed conviction and sentence to HC – Allowed conviction appeal on one charge but upheld remaining two – Sentence imposed reduced to $36,000 – C sought leave in CA to bring second appeal against conviction – Also sought leave to adduce further evidence – CA declined both applications – Said proposed appeal neither involved matter of general or public importance nor would miscarriage of justice occur if appeal not heard –
Sought leave to third appeal – SC treated application as appeal decision directly to SC from HC – SC said criterion for leave in s 74(2)(a) Senior Courts Act 2016 not met here – Proposed appeal turned entirely on particular facts – Did not raise matter of general or public importance – Leave criterion in s 74(2)(b) not met either – No risk of substantial miscarriage of justice – Heightened threshold for direct appeal also not met – Application declined.
Routhan and anor as Trustees of The Kaniere Family Trust v PGG Wrightson Real Estate Ltd [2023] NZSC 127 (22 September 2023)
Partly successful leave applications – Approved question whether CA correct to vary HC damages award – Applications for leave to appeal and cross-appeal otherwise dismissed –
Focus of approved question is on CA application of so-called SAAMCO principle limiting liability in case of provision of information to ceiling based on difference in value – However, question permitted at secondary level and in order to ensure quantum may be resolved in SC, either party to pursue other arguments relating to measure of damages awarded, as advanced in leave to appeal and cross-appeal submissions – Application partly granted.
Signal v R [2023] NZCA 459
Partially successful appeal by Signal (S) against a conviction for participating in an organised criminal group and manslaughter charge based on jury misdirection – Whether the juror's email, sent to the Judge following the trial, was open to consideration – HELD: the email was part of the formal trial record made by the Judge, provided to the Court by the Registrar under s323(2) Criminal Procedure Act 2011 and therefore properly included in the case on appeal – Court can refer to the email for the purposes of considering whether it should cause it to make further inquiry about the jury deliberations – The Judge's omission to poll the jury after the first communication from the juror had not caused a miscarriage of justice – The first communication of the juror should not be construed as an indication that the verdict was not unanimous – Rather, it was consistent with the fact that the juror accepted that S was guilty in accordance with the verdicts then delivered on the jury's behalf, although it was her view that the other offenders should bear a greater responsibility for the events that took place – The email communication of the juror following the trial, asserting misconduct on the part of Juror 9, had not caused a miscarriage of justice – The terms of the letter suggested that the juror had agreed with the guilty verdicts at the time they were given, but subsequently regretted she did so – The only basis upon which evidence of Juror 9's conduct could be given would be if s76(3) Evidence Act applied – A miscarriage of justice with respect to the charge for participation in an organised group arose from a jury misdirection by the Judge – The Crown accepted that the actus reus for party liability, to form a common purpose with a group, was the same as that for participation in an organised criminal group, to participate in that group's shared objective – For all three changes, S’s conduct was the same, and the mens rea for the charge for participating in an organised criminal group was necessarily included in that for the other charges – The conviction for participation in an organised criminal group was quashed – The Court reserved its judgment on the manslaughter appeal pending the delivery of the Supreme Court's decision in R v Burke.
Brill v Auckland Standards Committee 2 [2023] NZCA 465
Unsuccessful application for leave for a second appeal – Brill (B) was found guilty of misconduct by the Lawyers and Conveyancers Disciplinary Tribunal – He had provided regulated services to the public other than in the course of his employment as an in-house counsel, contrary to s9(1) Lawyers and Conveyancers Act 2006 (LCA) by acting in litigation for his wife and neighbours – The High Court dismissed the liability appeal but allowed the penalty appeal – HELD: the application for leave to appeal was declined – It was not seriously arguable that B complied with s9(1) LCA – B provided regulated services otherwise than in the course of his employment – The public for those purposes plainly included the neighbours – The Court expressed some hesitation about whether B’s wife was “the public” but had considered it was not an appropriate case to decide that issue – The issue of whether B was entitled to practise on his own account under s31(1) LCA did not warrant the attention of the Court – At no relevant time had B sought to practise on his own account or met all the necessary requirements to do so.
Spark New Zealand Trading Limited v Bryan [2023] NZCA 464
Successful appeal by Spark New Zealand Trading Ltd (Spark) to appeal a refusal to grant summary judgment based on an arbitral award in Spark’s favour – Bryan (B) was the sole shareholder and director of Victory IT Ltd – The company was in liquidation and formerly provided services to Spark – Victory had been recommended to Spark by Lester (L) and his company, Spud Consulting Ltd – Spark terminated its contracts with Spud, L and Victory after becoming aware of irregularities in L’s performance of his responsibilities and substantial payments from Victory to Spud – Spark brought arbitration proceedings against the three – The arbitrator found Victory, Spud and L liable to pay compensation of $3,578,365 to Spark – The arbitrator found Victory liable to Spark in claims for the tort of conspiracy and for dishonestly assisting Spud and L to breach fiduciary duties they owed to Spark – Victory was entitled to set off against that sum an amount it was owed of $1,242,402.50 – Spark brought proceedings in the High Court against B, alleging the causes of action upheld against Victory in the arbitration, conspiracy by unlawful means and dishonest assistance in breaches of fiduciary duty – Spark applied for summary judgment on the basis of the findings in the arbitral award – Spark argued that B was bound by the findings as the privy of Victory – The application for summary judgment was declined – HELD: it was in the interests of justice to grant leave to appeal – Spark has identified arguable errors of law in the High Court judgment – It was arguable that there were no outstanding disputes of fact relevant to the determination of whether B was a privy of Victory for the purposes of the arbitral award – If there were no unresolved questions of fact, determining whether B was Victory’s privy was a question of law which appeared likely to be capable of determination in the context of a summary judgment application – The proposed appeal raises issues of wider commercial significance and substantial private importance to both parties.
Carter v R [2023] NZCA 454
Unsuccessful appeal by Carter (C) against his conviction on a representative charge of blackmail – C had tried to persuade his former partner to pay him money by threatening to send explicit images of her to her new partner and her work colleagues – The images were eventually sent – C also pleaded guilty to a charge of cannabis cultivation and of possession of a Class B drug (fantasy) – C was sentenced to 23 months’ imprisonment – Whether the starting point was too high, the discount for time spent on EM bail was inadequate, and whether the Judge gave insufficient consideration to commuting his sentence to home detention – HELD: starting point of 2.5 years, while at the high end of the available range, was open to the Judge – There was no error in the uplift of 2 months imposed for cannabis cultivation – There was little merit in the submission that a discount should be given for his guilty pleas on the drug charges – Discount of 8 months for the time spent on EM bail was generous considering C’s numerous bail breaches – The Judge properly considered whether a sentence of imprisonment should have been commuted to a sentence of home detention.
Foley v R [2023] NZCA 456
Successful appeal by Foley (F) against his sentence of 2 years 8 months for aiding and abetting withholding of PAYE tax under s143A(1)(d) and s148 Tax Administration Act 1994 – F was convicted of 28 charges of aiding and abetting two companies to withhold PAYE tax – F said that the 3 year starting point adopted was excessive and the Judge erred in declining to apply a discount for the factors outlined in the cultural report under s27 of the Sentencing Act 2002 and for prior good character – Effect of F’s employment opportunities, reparation offer and health conditions – HELD: the Judge erred in his approach to setting the starting point – The Judge appeared to have taken into account F’s previous conduct as a director of insolvent companies that failed to meet tax liabilities, and his disqualification as a director – F’s previous conduct should not have been taken into account when assessing the starting point – The focus should have been solely on the offending, not on previous conduct – F’s disqualification from being a company director also appeared to have been taken into account when the Judge considered F’s character, creating the risk of inappropriate double counting – The Judge also erred in proceeding on the basis that F’s employees were directly harmed by his offending – A starting point of 2 years and 6 months would have been appropriate – The information in the s27 report had not explained his offending in some rational way as to why he has come to offend – It may be that genuine cultural drivers such as whanaungatanga could provide some form of mitigation in terms of moral culpability – But other concepts such as mana, utu and ea must also be considered – No discount should be given for Mr Foley’s background – The sentence imposed was set aside – The proceeding was remitted to the District Court for sentencing.
Harris v R [2023] NZCA 462
Unsuccessful appeal by Harris (H) against his sentence of 5 years and 10 months imprisonment for manslaughter and refusal to grant permanent name suppression – The offending occurred when H was aged 15 years old – Whether 9 year starting was too high, greater discounts for youth and guilty plea should have been given than 15 and 20 percent, and whether publication of H's name would cause extreme hardship because of the risk to his rehabilitation and reintegration – HELD: the sentence was not manifestly excessive – The starting point was not too high – The offending was more serious than cases where a lower starting point was given – It was open to the Judge to fix the guilty plea discount having regard to the strength of the Crown case, the Court was not persuaded that the Judge was in error in this regard – But for the intrinsic seriousness and aggravating features of the offending, a discount of more than 15 percent would be warranted to reflect H’s youth and immaturity, neuropsychological difficulties and prospects of rehabilitation – However, in the particular circumstances, the judge had not erred – There was no reason why H would be particularly vulnerable to publication nor was he serving a sentence which was primarily rehabilitative in purpose – He had good prospects of rehabilitation and had already made progress – There was nothing to show that publication would affect his rehabilitation or cause him hardship over and above that inherent in the sentence – Appeal dismissed.
R v Harris [2023] NZHC 2635 (21 September 2023) Robinson J
Reasons for not guilty verdicts for Messrs H and M CEO and CFO of CBL Insurance – Faced charges of theft by person in special relationship, obtaining by deception and false accounting following Serious Fraud Office investigation into matters relating to CBL Insurance – H faced five counts theft by person in special relationship, two counts obtaining by deception, and one count false accounting – M charged as secondary party to one count theft by person in special relationship, and as co-defendant to one count obtaining by deception and one count false accounting – Both not guilty on all counts.
FamilyMart China Holding Co Ltd v Ting Chuan (Cayman Islands) Holding Corporation [2023] UKPC 33 (20 September 2023)
Successful appeal from Cayman Islands CA – China CVS (Cayman Islands) Holding Corp (Company) operates convenience store business in People's Republic of China under "FamilyMart" brand – TC owned 59.65 percent of company shares and FMCH owned remaining 40.35 percent – Relationship between TC and FMCH governed by shareholders' agreement (SHA) – Cayman Islands law governed shareholders’ agreement but it contained agreement that any disputes in connection with or arising out SHA be submitted to arbitration under ICCA Rules in Beijing (arbitration agreement) –
On 12 October 2018 FMCH presented petition in Cayman Islands Grand Court Islands to wind up Company under Companies Act, on ground that it was just and equitable to do so – Based on TC’s alleged misconduct regarding Company management – While FMCH did not intend to wind up business, establishing that it was just and equitable to do so necessary step to enable FMCH to obtain court order for buy-out of TC’s shareholding –
TC applied to strike out or stay petition under s 4 Foreign Arbitral Awards Enforcement Act (FAAEA), or under court’s inherent jurisdiction, saying underlying disputes between shareholders should be resolved by arbitration – Grand Court struck out certain elements of FMCH's petition and granted stay of remainder under s 4 until underlying matters had been arbitrated – CA overturned this decision saying no part of winding up petition susceptible to arbitration – TC appealed to PC –
PC unanimously allowed appeal – Said parties agreed dispute fell within arbitration agreement scope of arbitration agreement – PC said central dispute between parties, then, whether FMCH's petition made matters raised in petition not susceptible to arbitration –
Said s 4 FAAEA provided, relevantly, that, if any party to arbitration agreement commenced legal proceedings against another party in respect of any "matter" agreed to be referred to arbitration, any party to proceedings could apply for stay, and court, unless satisfied arbitration agreement "inoperative", shall make order staying proceedings – As s 4 of FAAEA gave effect to Article II of UN Convention on Recognition and Enforcement of Foreign Arbitral Awards (1958) (New York Convention), Board PC said important to look to case law in other contracting states to promote legal certainty –
Following its review of several jurisdictions' case law, PC said general consensus among leading arbitration jurisdictions in common law world that, where country is New York Convention signatory, domestic courts would take pro-arbitration approach, giving priority to parties' agreement to arbitrate –
Also general consensus that, when determining which "matters" must be referred to arbitration, court adopted two-stage test: first, court determined what matters are which parties have raised, or foreseeably would raise, in court proceedings and, secondly, court determined in relation to each such matter whether it fell within scope of arbitration agreement –
PC said general consensus in common law world power to wind up company within exclusive jurisdiction of courts – Arbitral tribunal could, however, grant certain remedies, such as ordering share buy-out, where no third party had legal interest, and no public element – In application to wind up company could matters in dispute, such as allegations of breaches of shareholders' agreement, which could be referred to arbitral tribunal notwithstanding that only court can make winding up order –
PC said TC identified relevant matters which it argued were arbitrable: first and second concerned whether FMCH had lost trust and confidence in TC and Company management, and whether parties' relationship had irretrievably broken down – Third, fourth and fifth matters were whether it was just and equitable to wind up company, whether order should be made requiring TC to sell its shares to FMCH or whether winding up order should be made –
The parties agreed, correctly in PC’s view, that fifth matter, concerning whether or not order to wind up company should be made, was not arbitrable – Regarding third and fourth matters, PC said tribunal did not have power to rule on whether just and equitable that Company should be wound up or whether share buy-out should be ordered –
PC said first and second matters arbitrable: controversies relating to legal or equitable rights which were of substance, lying at heart of legal proceedings for winding up order, which parties agreed fell within scope of arbitration agreement – Stay relating to first and second matters granted – PC also granted discretionary stay of winding up petition under discretion given to it by s 95(1)(d) of Companies Act to make "any other order that it thinks fit"; determination of stayed matters essential precursor to assessment of whether just and equitable to wind up Company – Appeal allowed.
Republic of Mozambique (acting through its Attorney General) v Privinvest Shipbuilding SAL (Holding) and ors [2023] UKSC 32 (20 September 2023)
Successful appeal from CA – Between 2013 and 2014, three corporate vehicles (SPVs) wholly owned by Republic of Mozambique (Mozambique) entered into supply contracts (Contracts) with three of respondents (Privinvest companies) to develop Mozambique's exclusive economic zone – Swiss law governed Contracts – Two Contracts provided for dispute resolution by arbitration of "all disputes arising in connection with" relevant project governed by Contract – Third Contract provided for dispute resolution by arbitration of "any dispute, controversy or claim arising out of, or in relation to" relevant Contract (arbitration agreements) –
SPVs borrowed purchase funds from various banks, for which borrowing Mozambique granted sovereign guarantees (Guarantees) – Guarantees are governed by English law and provided for dispute resolution in courts of England and Wales –
Privinvest said Contracts essentially performed – Mozambique did not accept what Privinvest provided conformed to contract or was of material benefit to Mozambique – Privinvest said provided valuable goods and services and Mozambique squandered them and sabotaged project for internal political reasons –
While Mozambique not Contracts signatory, Privinvest said, as matter of Swiss law, Mozambique bound by arbitration agreements within them – On that basis, Privinvest sought stay of all Mozambique's claims under s 9 of Arbitration Act 1996 (1996 Act) – Section 9 said party to arbitration agreement (such as those in Contracts) against whom legal proceedings brought in respect of "matter", which under agreement to be referred to arbitration, could apply to court to stay proceedings so far as they concerned that matter – On such application court had to grant stay unless satisfied arbitration agreement null and void, inoperative, or incapable of being performed –
Preliminary question whether Mozambique's claims in legal proceedings were "matters" which fell within arbitration agreements’ scope under s 9 – At first instance, said claims were not – CA disagreed on appeal – Mozambique appealed to SC –
SC unanimously allowed appeal – Said, among other things, s 9 of 1996 Act gave effect to Article II(3) of UN Convention on Recognition and Enforcement of Foreign Arbitral Awards (1958) (New York Convention) – Meant appropriate to consider other countries' jurisprudence as guides to section 9's interpretation, to extent that they have similarly worded statutory provisions, and to adopt broad and generally accepted principles in interpreting 1996 Act –
When applying s 9 SC said, court would adopt two-stage test: first, court must identify matter or matters which parties have raised or foreseeably will raise in court proceedings, and, secondly, court must determine in relation to each such matter whether it fell within arbitration agreement scope – Court must ascertain substance of dispute(s) between parties, without being overly respectful to formulations in claimant's pleadings, and have regard to defences raised or reasonably foreseeable –
Here, Mozambique, seeking damages resulting from entering into Guarantees, asserted did not get value for monetary obligations it entered into – Substance of controversy whether transactions, including Contracts and Guarantees, were obtained through bribery, and whether Privinvest had knowledge at relevant time of alleged illegality of Guarantees –
Regarding each of Mozambique's allegations, SC said not necessary to examine Contracts validity – Also defence that Contracts valid and on commercial terms would not be relevant to question of Privinvest's liability: it would be relevant only regarding quantification of loss Mozambique – As validity and commerciality of Contracts not essential to any relevant defence, SC said not "matters" under s 9 regarding Privinvest's liability – Appeal allowed.