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Court of Appeal Judgments of Public Interest

This page provides access to judgments of the Court of Appeal in the last 90 days deemed to be of particular public interest.

More information about finding court judgments is available on the judgments section of this website.

It is the responsibility of users of the information contained in these decisions to ensure compliance with conditions or other legal obligations governing access, release, storage and re-publication. See also the guide on statutory provisions that prohibit publication of certain information in certain circumstances. If in doubt you should consult the court that issued the decision(s).  Judicial Decisions are presented in PDF format to preserve the integrity of the documents.

Sami v R
29 July 2019
[2019] NZCA 340
Pulemoana v R
09 July 2019
[2019] NZCA 293

Appeal dismissed.
Evidence - admissibility.
Criminal practice and procedure -juries. Criminal law - inconsistent verdicts

Mr Pulemoana was found guilty of the murder of James Fleet and the manslaughter of Raymond Fleet. He appealed his convictions.

Did a Crown witness give evidence that resulted in a miscarriage of justice?
Held, no. Evidence given of what a co-offender had told witness about Mr Pulemoana's involvement, in particular that he had placed James Fleet in a headlock shortly before he was killed, regrettable but no miscarriage of justice caused. Nothing deliberate or improper in way evidence introduced; while "headlock" was uttered it was indistinct; even if the jury did hear it, significance unlikely to be fully appreciated and jury given clear directions it was inadmissible.

Did the Judge err in refusing to discharge a juror (Mr X)?
Held, no. Mr X attended two antenatal classes run by James Fleet's mother (Ms Fleet) approximately 14 years ago; Ms Fleet and the juror's wife had been Facebook friends and had limited online interactions six to seven years ago. Mr X was unaware of the Facebook contact, had no other interactions with Ms Fleet or the Fleet family, and confirmed he could approach task with an open and unbiased mind. Nothing which might lead a reasonably informed and fair minded observer to apprehend or suspect he might not have discharged his duty in an impartial manner.

Was Mr Pulemoana's murder conviction unreasonable because it was inconsistent with the manslaughter verdict for Mr Hora?
Held, no. Factual inconsistency arises where given the evidence two verdicts cannot stand together. There is no inconsistency where verdicts are reconcilable because of differences in the nature and quality of the admissible evidence. Verdicts reconcilable; differences founded in nature and quality of evidence relative to Mr Hura's and Mr Pulemoana's respective cases.

Bushline Trustees Limited v ANZ Bank New Zealand Limited
24 June 2019
[2019] NZCA 245

Appeal allowed.  Question of damages remitted to High Court for consideration.
Contract – Misrepresentation – Breach – Entire agreement clause – Remedies.
The appellants (Bill and Sharon Coomey, through their trusts, Bushline) are Taranaki dairy farmers.  They were for many years customers of the first respondent, ANZ and, before it, the National Bank.  The first respondent funded both working capital and development (fixed) capital as the appellants grew their farming business.  That business was cashflow negative at times, reflecting the long-term investments being made.

From 2005 onwards, the parties entered into a series of financial arrangements, including fixed and floating rate loans and interest rate swaps, designed to fix the appellants’ interest obligations.  The swaps were marketed to the appellants as an attractive means of fixing interest rate obligations while providing greater flexibility than fixed-term loans, as well as providing the ability to profit by exiting the swaps early if market conditions were favourable.

In April 2008, by which time the appellants’ funding from the first respondent totalled $11.97 million, the first respondent agreed to fund the $7.25 million purchase price of a new property.  The appellants’ existing and new debt was refinanced as a single floating rate loan of some $19.47 million.  These fixed rate swaps between the appellants and the first respondent hedged that debt.

After April 2008 the appellants’ financial position deteriorated.  Their farming business encountered difficulties while the global financial crisis caused the floating rate to drop, meaning the swaps were less advantageous.  In addition, the first respondent increased the margin applicable to the floating rate loans underlying the swaps several times, further increasing the appellants’ borrowing costs.  In the face of considerable financial pressure, the appellants sold assets and progressively refinanced their debt on less favourable terms as the swaps expired.  They eventually stopped banking with the first respondent and refinanced elsewhere.
The appellants contended in the High Court that the first respondent had mischaracterised the benefits of the swaps and breached promises made during negotiations that it would fix the margin on the floating rate loans underlying the swaps for five years and monitor the swaps to ensure they were working to the appellants’ advantage.  The appellants claimed damages ranging up to $6.29 million based on a variety of legal theories and calculations, including negligence; breach of contract; misrepresentation under s 6 of the Contractual Remedies Act 1979; oppressive conduct under s 120 of the Credit Contracts and Consumer Finance Act 2003; and misleading and deceptive conduct under s 43 of the Fair Trading Act 1986.  

In its defence, the first respondent denied any misrepresentation, suggested the claims were barred by statutory limitation periods and relied upon a series of acknowledgment and disclaimer clauses in the parties’ written agreements to exclude liability.  

The High Court found that some misleading representations were made as to the benefit of the swaps, but the first respondent was entitled to rely upon the disclaimer clauses and statutory limitation period to exclude liability for misrepresentations.  The first respondent did not undertake to fix the margin on the floating rate loans for five years, and to the extent that there was a promise to monitor the swaps, the first respondent had lived up to that promise.  The remaining causes of action were time-barred or not made out and the entire claim was dismissed accordingly.  

The appellants appealed.
Had the first respondent breached an undertaking or made a misrepresentation?  Held: Yes.  Some of what the appellants termed “misrepresentations” were in fact undertakings, that is, contractual terms not reduced to writing in the refinancing agreements.  That being said, two breaches of undertakings and one misrepresentation were evident.  First, the first respondent had misled the appellants by overstating the benefits of the swaps.  Second, the evidence showed that, judged objectively, the parties had agreed to fix the margin applicable to the floating rate loans for five years.  The first respondent had, therefore, breached that agreement.  Third, the first respondent had agreed to monitor the appellants’ borrowing strategy but had failed to respond to the appellants’ enquiries about the possibility of breaking the swaps early and failed to communicate its view as to the likelihood of reductions in the prevailing floating rate and the commensurate impact on the appellants.
Could the first respondent rely upon the disclaimer clauses to preclude liability despite s 4 of the Contractual Remedies Act?  Held: No.  Considering the policy underlying the Contractual Remedies Act and the particular circumstances of and relationship between the parties, it would not be fair and reasonable to allow the first respondent to rely upon those disclaimers.  Although the appellants had received legal advice it was of a formal, mechanical nature and did not resolve the point that the swap product had been incorrectly explained to the appellants by the first respondent.
The first respondent was therefore liable for enforceable breaches of two undertakings and one misrepresentation.  It was not necessary in those circumstances for the Court to consider the remaining collateral contract, negligence and Fair Trading Act submissions.  Furthermore, there was insufficient evidence of oppression to establish that Credit Contracts and Consumer Finance Act claim.  

Turning to the first respondent’s substantive defences, the exclusion clauses did not reach far enough to exclude liability for the breaches found and the claim was not time-barred as the misrepresentations and breaches had recurred several times after the statutory cut off.  Accordingly, the claims were made out.
As requested by the parties, the matter was remitted to the High Court for the assessment of damages.

Parangi v R
18 June 2019
[2019] NZCA 229
Kim v Minister of Justice of New Zealand
11 June 2019
[2019] NZCA 209


Minister of Justice's decision to surrender the appellant under s 30 of the Extradition Act is quashed.  The Minister must reconsider whether Mr Kim, as murder accused, is to be surrendered in accordance with the matters identified at [278] of the judgment.

Criminal practice and procedure — Extradition

In 2011, New Zealand received a request from the People’s Republic of China (the PRC) seeking the extradition of Mr Kim on one count of intentional homicide.  In response, the Minister of Justice sought and received various assurances from the PRC to meet concerns identified by Mr Kim and Ministry officials in connection to the risk of torture, extra-judicial killing and Mr Kim’s right to a fair trial under international law.  The Minister was satisfied that these assurances addressed the risks identified and determined that Mr Kim be surrendered under s 30 of the Extradition Act 1999.

Mr Kim successfully applied to judicially review that decision.  The Minister obtained further assurances in light of the High Court’s findings and reconsidered her decision, determining again that Mr Kim be surrendered to face trial in the PRC.  The Judge refused Mr Kim’s second application for judicial review.  Mr Kim appealed that decision to this Court.    

Issue One: Is reliance upon diplomatic assurances consistent with New Zealand’s international obligations?

Held: Yes.  New Zealand is not prohibited by international law from accepting or relying on diplomatic assurances when assessing whether there is a substantial risk a person will be tortured or otherwise subjected to breaches of human rights.  The Judge correctly held that before relying on assurances, the Minister must address the preliminary question of whether the general human rights situations in the requesting state was such that assurances could be relied upon, however erred in finding the Minister explicitly addressed this question.

Issue Two: Did the Minister take into account a consideration irrelevant to the surrender decision, namely helping the PRC establish credibility in the international community?

Held: No.  There was no evidence before the Court that the Minister intended to secure outcomes for the PRC through the extradition of Mr Kim; the evidence that the PRC would likely be motivated to honour assurances was relevant to the Minister’s assessment of whether the PRC would likely comply with undertakings.

Issue Three: Did the Minister err in accepting assurances in relation to torture as adequate to protect Mr Kim on return to the PRC?

Held: Yes.  While it was relevant for the Minister to ascertain whether Mr Kim was in a class of defendants at “high risk” of torture in the PRC, it was not reasonably open to the Minister to conclude on the evidence before her that Mr Kim, as a murder accused, was not at high risk.  In upholding this the Judge erred.  The Judge also erred in finding no error in the Minister’s conclusion that certain factors, such as location of trial, reduced Mr Kim’s risk of torture because there was a lack of evidence on this point.  Finally the Judge erred in failing to identify deficiencies in the Minister’s consideration of the adequacy of assurances given the information that torture remains widespread in the PRC and that torture is difficult to detect.

Issue Four: Did the Minister err in relying upon diplomatic assurances as an adequate protection against the imposition of the death penalty?

Held: No.  The Minister was entitled to take into account evidence of prior compliance of the PRC in this regard.  The Judge was correct to find no error in this regard.

Issue Five: Did the Minister fail to address the risk of extra-judicial killing?

Held: No.  Although the Court agreed with Mr Kim that the risk of extra-judicial killing must be addressed separately to the risk of torture, there was no evidence before the Court that Mr Kim was at risk of extra‑judicial killing beyond that considered under torture.

Issue Six: Did the Minister apply an incorrect legal standard when determining whether Mr Kim’s right to a fair trial would be upheld?

Held: Yes.  This Court has reservations as to the Othman (Abu Qatada) v United Kingdom test of “flagrant denial of justice”, as it involves such a departure from standards so as to amount to a nullification or destruction of fair trial rights guaranteed by international law.  Rather, a more appropriate threshold is whether there is a “real risk of a departure from the standard such as to deprive the defendant of a key benefit of the right in question”.  One a person establishes a “real risk”, it is for the requesting state to dispel any doubts.

Issue Seven:  Did the Minister err in concluding that there was no risk of departure from fair trial standards justifying refusal of surrender?

Yes.  The assurance that Mr Kim would be tried in accordance with domestic law did not meet the concern that he would not be tried before an independent tribunal, a right guaranteed under international law.  The evidence before the Judge, and Minister, was that PRC’s criminal justice system prioritises stability and crime control over procedural rights, and is subject to political influence.  There was insufficient evidence before the Minister in relation to disclosure, the status of the defence bar and the right to examine prosecution witnesses for the Minister to reasonably conclude there was no real risk to a departure from fair trial standards in Mr Kim’s case.

Issue Eight: Did the Minister err in making the decision to surrender Mr Kim notwithstanding the absence of assurance addressing the risk of disproportionate punishment?

Held: Yes.  As a matter of sentencing methodology and considering international legal obligations, it would be a disproportionately severe, or cruel and degrading, punishment should time served in custody in the arresting state not be deducted from the finite sentence of imprisonment in the PRC.  There was evidence before the Minister of PRC officials previously providing assurances to this effect.  Against this background, the Court considered the Judge erred in finding no reviewable error.

Issue Nine:  Did the Minister err in relying on advice from PRC officials as to Mr Kim’s access to mental health care in custody in the PRC?

Held: Not appropriate to consider on the basis of material before the Court.

Chief Executive of the Ministry of Social Development v Broadbent
31 May 2019
[2019] NZCA 201

Appeal dismissed. Question of law. No order as to costs.

Statutes – interpretation.

Mrs Broadbent applied to the Chief Executive of the Ministry of Social Development (the Chief Executive) for an additional subsidy to reduce her contribution to the cost of her residential care. The Chief Executive conducted a means assessment and found that Mrs Broadbent did not qualify for this additional subsidy because, by transferring most of her and her late husband’s properties to trusts, she had deprived herself of income from those assets that would have been available to meet the costs of care. The Chief Executive considered he was entitled to disregard these transfers when calculating Mrs Broadbent’s income.

On appeal, the Social Security Appeal Authority (the Authority) upheld the Chief Executive’s assessment. On further appeal to the High Court on a question of law, Katz J reversed the Authority. The Chief Executive appealed to this Court.

Can the Chief Executive include any income capable of being derived from gifted assets valued below the permitted threshold in a person’s means assessment under ss 147 and 147A of the Social Security Act 1964 (the Act)? Held; no. The natural inference from the employment of “gift” in the Social Security (Long-term Care) Regulations 2005 is that if it relates to property capable of earning income, the gift will include its income earning potential. There is no particular reason to set that natural inference aside when applying s 147. Where, as in Mrs Broadbent’s case, the property is sold at fair value, there cannot have been a deprivation of its potential income because the income stream has also been sold for fair value as part of the price of the property.

Observation: The Authority proceeded on the premise that it was the assets formerly owned by Mrs Broadbent and her late husband that were gifted to the relevant trusts. In the High Court, Katz J was not called upon to answer that proposition. On the facts before this Court, the position is that the actual property Mrs Broadbent deprived herself of was in fact the principal of the forgiven loans used by the relevant trust to purchase those assets i.e. the right to repayment of that principal and not the trust’s assets themselves. This Court considered how to approach this issue and held that the best practical approach was to answer the question of law as posed. Issues of the status of the residual principal will need to be reconsidered.