New Zealand Law Society - Courts roundup 20 October - 26 October 2022
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Decisions, proceedings and news from the courts in some common law jurisdictions in the past week.
Genge v Visiting Justice, Christchurch Men’s Prison and ors [2022] NZSC 118 (17 October 2022)
Unsuccessful leave applications – Self-represented G sought leave to appeal CA decision dismissing two judicial review applications - Applications concern Visiting Justices’ decisions upholding disciplinary charges brought for breaches of prison rules – HC reached same conclusion –
SC said most grounds intensely fact-specific – No questions of general or public importance – Applications dismissed.
Stevens v R [2022] NZSC 120 (18 October 2022)
Unsuccessful leave application – S applied for leave to appeal against CA decision dismissing his appeal against conviction and sentence - Convicted after HC jury trial of sexual violation by unlawful sexual connection and attempted unlawful sexual connection with boy under 12 years - S was 27 at time of offending; complainant was 11 –
S wanted to raise three appeal grounds if leave granted: two relating to conviction and one relating to sentence - Said in each case, criteria for leave to appeal met because matter of public importance arose and/or miscarriage of justice would arise if leave not given – SC did not agree – Application dismissed.
Smith v Plowman and ors [2022] NZSC 121 (18 October 2022)
Unsuccessful recall application – Self-represented S applied to recall SC judgment declining leave to appeal – Did not articulate basis for recall – Court inferred he relied on ground of very special reason that justice required judgment be recalled – SC disagreed – Application dismissed.
Jindal v Jarden Securities Limited (Formerly Om Financial Ltd) and ors [2022] NZSC 122 (19 October 2022)
Unsuccessful leave application - In 2019 J issued proceedings in DC against JSL alleging negligence and breach of contract - Claim related to JSL’s foreign exchange trading on his behalf – Damages of $148,346 sought - Claim had not been heard – Instead J pursued interlocutory application (and then appeals) seeking to debar third respondent from acting for both other respondents on separate (as yet undetermined) application for non-party discovery from second respondent –
SC did not consider it necessary in interests of justice to grant leave to appeal - Proposed appeal concerned interlocutory DC application to debar third respondent from acting on further, as-yet unresolved, interlocutory application concerning non-party discovery - Section 74(4) Senior Courts Act 2016 applied – Application dismissed.
Staite and ors v Kusabs and ors [2022] NZSC 123 (20 October 2022)
Unsuccessful leave application - Applicants trustees of Whaoa Trust, an ahu whenua trust, which owns Māori freehold land at Reporoa - On 16 February 1994 Whaoa Trust executed lease of land to another ahu whenua trust, Tumunui Trust - Respondents trustees of Tumunui Trust –
In proceedings commenced in 2009 Whaoa Trust sought lease rescission because M involved in negotiation - M trustee of both trusts - Whaoa Trust alleged lease terms unfavourable to Whaoa Trust both because of lease duration and rental being significantly below market value –
HC said M breached fiduciary duty of loyalty to Whaoa Trust acting on both sides of lease transaction and his involvement materially assisted Tumunui Trust in lease negotiation - However, HC said M not responsible for what Judge considered error in rental provision - Declined to order lease rescission but instead ordered lease rectification –
CA allowed Tumunui Trust appeal against rectification - Not satisfied parties had common intention lease rental provision should have been in revised form HC proposed – Regarding breach of fiduciary duty, CA said “[t]aking a robust approach to the standard, Mr Moke’s interests in the two blocks may be described as de minimis” – CA said wider context supported this approach –
Leave to appeal against CA judgment primarily sought on grounds that finding no conflict of interest wrong – Also sought leave to appeal against finding that, if there had been conflict of interest, there should be no remedy –
SC said while proposed appeal might have commercial significance to parties, did not concern issues of general or public importance - Nothing raised suggested CA misunderstood relevant principles or erred in their application - No risk of miscarriage of justice – Application declined.
Burke v R [2022] NZSC 124 (21 October 2022)
Successful leave application - Approved question of whether CA correctly interpreted and applied s 66(2) Crimes Act 1961 (parties to an offence) - Given nature of issues appeal raised, might be that Criminal Bar Association of New Zealand and/or Defence Lawyers Association New Zealand | Te Matakahi wish to seek leave to intervene to present submissions at hearing or file written submissions – Application allowed.
Clancy v R [2022] NZCA 494
C found guilty of murder of his stepdaughter (SL) aged 17 months – C did not give evidence – Appeal against conviction on grounds trial counsel failed to follow instructions, and did not adequately advance defences that SL’s mother (G) might have been responsible, the Crown could not exclude accident, and the injuries did not sustain an inference of murderous intent – Ultimate question whether there had been a miscarriage of justice – HELD: finely balance case with injuries that had to have been inflicted by one of two people, with evidence tending to inculpate both – In the circumstances was necessary to direct the jury that they must acquit if there was a reasonable possibility that G inflicted the injuries – Without direction, not able to exclude reasonable possibility the jury took it upon themselves to decide which of C and G was more likely to be responsible for SL’s injuries and failed to apply the criminal standard of proof – While not reaching the level of counsel error, miscarriage of justice nevertheless established – Verdict unsafe – Appeal allowed, conviction set aside and retrial ordered.
M (CA 486-2022) v R [2022] NZCA 502
N found guilty on 45 charges of dishonesty – Application for continued name suppression until sentencing was unsuccessful – N had been employed by appellants (the employers) as their land development manager since 2017 – Employers had unsuccessfully sought permanent suppression of their names and N’s name – Judge found undue hardship threshold met but concluded balance between open justice and suppression did not favour suppression – Whether grounds for appeal made out – HELD: publication of employers’ names would cause them undue hardship (linking the employers to N’s wrongdoing or suggesting that they condoned that wrongdoing would be inaccurate and unfair) – Potential to cause the employers unjustified reputational harm – No public interest in publication of employers’ names in connection with the reporting of the trial – Balance favoured suppression of their names – Public interest in reporting N’s trial had to prevail – Not futile to suppress names of the employers but not of N – Appeal allowed in part – Order prohibiting publication of the names and identifying particulars of appellants.
Grant v Montgomerie [2022] NZCA 483
Appellant receiver wrote to respondent (M) on a number of occasions seeking information about the property and affairs of Bassett 43 Ltd (the company) – At the time M was the sole director of the company – Receiver applied to High Court for order under s12(2) Receiverships Act 1993 (the Act) – Before application made, M had been adjudicated bankrupt so automatically ceased to hold office as a director of the company – At issue was whether High Court had jurisdiction to make the order sought – Noted the High Court did not have jurisdiction under s34 to make an order against any person requiring that person to produce books, record and information of the company – HELD: term “director” included both current and former directors, otherwise would undermine the purpose of s12 and of the Act more generally – Clear that the purpose and context of s12 required a broader reading of the term “director” that extended to former directors – Appeal allowed.
Solicitor-General v Meyer [2022] NZHC 2692 (18 October 2022) Fitzgerald J
Solicitor-General proposed to appeal against sentence of 9 months' home detention for serious sexual offending - Appeal filed six weeks out of time - Crown endorsed home detention sentence in lower courts - Strong merits for proposed appeal - However, Crown's late change in stance significant, particularly where offender young person, possibility of imprisonment not raised until well after statutory period for appealing had passed and young person's mental health fragile – Substituting sentence of imprisonment also carried real risk of undermining rehabilitative progress to date - Application for leave to appeal out of time declined.
BHP Group Limited V Impiombato and anor [2022] HCA 33 (12 October 2022)
Unsuccessful appeal from Full Court FCA - Sole issue whether Pt IVA Federal Court of Australia Act 1976 (Cth) permitted representative proceedings to be brought on behalf of group members not resident in Australia –
BHP Group Limited (BHP) respondent in representative proceeding (also known as class action) commenced in FCA relating to Fundão Dam failure in Brazil in 2015 - Representative proceeding Group members people who, during specified period before Dam failure, contracted to acquire interest in fully paid-up ordinary BHP shares on Australian Stock Exchange (ASX), BHP Billiton Plc (BHP Plc) on London Stock Exchange, and/or BHP Plc on Johannesburg Stock Exchange, and who were alleged to have suffered loss from BHP's contravening continuous disclosure obligations under ASX Listing Rules and Corporations Act 2001 (Cth). Group members also alleged to have suffered loss from BHP engaging in misleading or deceptive conduct contrary to Australian Securities and Investments Commission Act 2001 (Cth) and Corporations Act 2001 - Appeal heard at interlocutory stage of representative proceeding –
Part IVA Federal Court of Australia Act 1976 contained no express geographic or territorial restriction on "persons" who could be group members in representative proceeding - BHP said s 21(1)(b) Acts Interpretation Act 1901 (Cth) and common law presumption against extraterritoriality applied meaning Pt IVA had to be interpreted as not permitting inclusion of group members not resident in Australia –
HC unanimously rejected argument – Said Pt IVA allowed people who had "claims" as described in s 33C(1) of Federal Court of Australia Act 1976 within FCA jurisdiction to be group members irrespective of whether they were Australian residents - Part IVA concerned with FCA powers and procedures relating to exercise of jurisdiction vested in FCA by other Commonwealth laws enacted under s 77(i) Constitution - Territorial connection of Pt IVA to Australia direct and specific: it concerned FCA jurisdiction of Federal Court of Australia - No basis to infer any further territorial limitation into Pt IVA – Appeal dismissed.
R v Tessier [2022] SCC 35 (14 October 2022)
Successful appeal from Alberta CA - In 2007, Alberta police questioned T about murder of his friend - Officers interviewed T twice police station without placing him under arrest - Did not advise him that he could choose not to speak to police and that what he said could be used as evidence in court - In 2015, police charged T with first degree murder after his DNA matched to cigarette butt found near crime scene –
At trial, Crown tried to introduce evidence from 2007 police interview - Under confessions rule, statements with police generally considered voluntary - and therefore admissible as evidence - if person had functioning mind at time and made statements without being threatened or tricked by police – T claimed statements involuntary - Said police had psychologically detained him - Triggered rights applying to people detained or arrested - For instance, s10(b) of the Canadian Charter of Rights and Freedoms provided “everyone has the right on arrest or detention to retain and instruct counsel without delay and to be informed of that right” – Trial judge said T had functioning mind and made statements without police threatening or tricking him - Judge also said T not detained when he spoke with police - Statements voluntary and admissible as evidence at trial - Jury convicted T of first degree murder – T appealed his conviction Alberta CA, saying statements to police should not have been admitted - CA found errors in trial judge’s analysis about whether statements voluntary and ordered new trial - Crown appealed to SC –
SC majority allowed Crown’s appeal and restored T’s conviction – Said despite absence of caution, T’s 2007 statements to police voluntary under the confessions rule and therefore admissible as evidence at trial – T exercised “a free or meaningful choice” to speak with police and “was not unfairly denied his right to silence” - Given there was reasonable basis to consider T suspect at the time of questioning, absence of caution could mean statements involuntary - However, Crown discharged its burden, proving absence of caution without consequence and statements were, beyond reasonable doubt and in view of the context as whole, voluntary - Majority also rejected T’s argument that he had been psychologically detained – Consequently, Charter rights applying to people detained or under arrest not applicable – Appeal allowed.
BTI 2014 LLC v Sequana SA and ors [2022] UKSC 25 (5 October 2020)
Unsuccessful appeal from CA - Appeal first opportunity for SC to consider existence, content and engagement of so-called “creditor duty” - Alleged duty of company directors to consider, or to act in accordance with, company creditors’ interests when company became insolvent, or when it approached, or at real risk of, insolvency –
In May 2009, AWA directors caused it to distribute dividend of €135 million (May dividend) to its only shareholder, Sequana SA (Sequana) - This extinguished almost all larger debt Sequana owed to AWA - May dividend complied with statutory scheme regulating dividend payment in Part 23 Companies Act 2006 (2006 Act) and with common law rules on capital maintenance - At time May dividend paid, AWA solvent on both balance sheet and commercial (or cash flow) basis - However, it had long-term pollution-related contingent liabilities of uncertain amount and insurance portfolio of uncertain value - Real risk that AWA might become insolvent in future, though insolvency not imminent, or even probable –
AWA went into insolvent administration almost ten years later, in October 2018 - BTI 2014 LLC (BTI) assignee of AWA’s claims - BTI sought to recover May dividend amount from AWA’s directors - Said directors’ decision to distribute May dividend in breach of creditor duty because directors had not considered or acted in interests of AWA’s creditors – Both HC and CA rejected creditor duty claim – CA said creditor duty did not arise until company either actually insolvent, on brink of insolvency or probably headed for insolvency - Said creditor duty became paramount as soon as company became insolvent - Since AWA not insolvent or on brink of insolvency in May 2009, BTI’s creditor duty claim failed - BTI appealed to SC –
SC unanimously dismissed BTI’s appeal - AWA’s directors not at relevant time under duty to consider, or to act in accordance with creditors interests –
All members of Court, among other things, agreed creditor duty should be affirmed - First, duty supported by long line of UK case law (as well as authority from Australia and New Zealand), which began in mid-1980s - Second, majority said duty affirmed or its possible existence preserved by s 172(3) 2006 Act – Made duty under s 172(1) “subject to any enactment or rule of law requiring directors, in certain circumstances, to consider or act in the interests of creditors of the company” - Third, duty had coherent and principled justification - Creditors always had economic interest in company’s assets, but relative importance of that economic interest increased where company insolvent or nearing insolvency - In those circumstances, directors should manage company’s affairs in way which took creditors’ interests into account and sought to avoid prejudicing them –
SC said creditor duty not engaged on facts of this case because, at time of May dividend, AWA not actually or imminently insolvent, nor was insolvency even probable - Duty did not apply merely because company at real and not remote risk of insolvency – Appeal dismissed.