Court of Appeal Judgments of Public Interest

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Case number
[2022] NZCA 353
Date of Judgment
04 August 2022
Appeals allowed.  Costs orders in the High Court set aside.  Respondent must pay the appellant costs on a 2B basis and usual disbursements in the High Court.  Respondent must pay the appellant costs for a standard appeal on a band A basis and usual disbursements in this Court. 

In September 2015 the appellant, Soft Technology JR Ltd (Soft Tech), signed an agency agreement with Jones Lang Lasalle Ltd (JLL).  The agreement gave JLL authority to seek out leasing opportunities for property owned by Soft Tech.  JLL did not sign the agreement until late December 2015.  Despite this, a signed copy of the agreement was never provided to Soft Tech.

JLL worked together with another agency to market Soft Tech’s property to Auckland Tourism, Events and Economic Development Ltd (ATEED), which was looking to attract international film production projects to Auckland.  On 15 December 2015, Soft Tech entered into a short-term lease with Manu One Ltd, a subsidiary of Warner Brothers.  JLL invoiced Soft Tech for its commission on this lease, which Soft Tech duly paid. 

Discussions about future use of the property took place between Soft Tech and ATEED directly in March 2016.  In November they entered into a memorandum of understanding reflecting Soft Tech’s preparedness to commit capital to build additional film facilities and ATEED’s preparedness to lease the property to enable sequential use of the property for film production projects.  Soft Tech and ATEED thereafter entered into two leases in February 2017 (the first ATEED lease) and May 2018 (the second ATEED lease). 

JLL became aware of these subsequent leases.  In April 2017 it claimed commission from Soft Tech in respect of the first ATEED lease.  When Soft Tech refused, JLL commenced proceedings in the High Court claiming commissions in respect of both leases.

In three different judgments, the High Court found that:  JLL was entitled to commissions in respect of both ATEED leases; JLL’s commissions could include amounts calculated on turnover rents; and JLL was entitled to interest from the dates of demand for payment, and indemnity costs. 

Soft Tech appeals against all three High Court judgments. 

Real estate agents — agency agreements — commission.  Should the appeals be allowed? 

Held:  Yes.  JLL was not entitled to commission in respect of the first and second ATEED leases unless the agency agreement it entered into with Soft Tech complied with the requirements of s 126 of the Real Estate Agents Act 2008.  Section 126 relevantly required JLL to have provided Soft Tech with a copy of the agency agreement signed by JLL within 48 hours of Soft Tech signing it, before performing the work for which JLL would eventually claim a commission. 

The plain meaning of s 126, the purpose of the Real Estate Agents Act (to protect the interests of consumers of real estate services), the surrounding context and relevant secondary legislation all support this interpretation.  Given the agency agreement was not signed by JLL until late December 2015, and a copy of it was never provided to Soft Tech, JLL was not entitled to commissions for the agency work it undertook in respect of the first and second ATEED leases. 

Alternatively, the omission by JLL to provide a copy of the agreement to Soft Tech could not be considered to be inadvertent, such that the omission could be saved by s 126(2) and (3) of the Real Estate Agents Act.  “Inadvertence” in the context of s 126 is limited to a minor administrative slip or unforeseen disruption caused by third parties or sources.  It does not capture the situation on appeal, in which there were reasonable opportunities for JLL to sign the agreement at the same meeting in which it was signed by Soft Tech, or in the period after JLL became aware the agreement had never been signed by it or provided to Soft Tech.  Instead, the signed copy of the agreement was only provided to Soft Tech during discovery in the High Court proceedings.
Case number
[2022] NZCA 325
Date of Judgment
20 July 2022
The appeal is allowed and the decision of the High Court is set aside. The Council's decisions granting consents CRC 180728 and CRC 180729 to Rapaki and CRC 182812 to Cloud Ocean are set aside with the consequence that the consents granted subsequently in reliance on the grant of those specified consents were unlawful.

Aotearoa Water Action Inc (AWA) challenges the granting of certain resource consents by the Canterbury Regional Council (the Council) to Rapaki Natural Resources Ltd (Rapaki) and Cloud Ocean Water Ltd (Cloud Ocean). Rapaki and Cloud Ocean had been transferred consents that were historically granted to take and use water for the purposes of a freezing works and a wool scour, respectively. They seek to take water in reliance on the rights previously granted, not for the purposes of the freezing works and wool scour, but for the purposes of bottling the water and selling it. In allowing this to proceed via a non-notified process, the Council granted consent applications made by Rapaki and Cloud Ocean to change the use to which the water could be put, in reliance on the existing rights to take the water that had been transferred. The High Court held that the Council had acted lawfully in granting the consents and doing so on a non-notified basis. AWA now appeals.

Resource management -resource consent -consents to use water -regional plan. Should the appeal be allowed?

Held: Yes. While, bottling water constitutes a "use" under s 14(2) of the Resource Management Act 1991 (RMA) -which follows from a plain reading of that section together with the definition of "water" in s 2 -whether the Council was able to grant separate consents for the use of water relying on existing consents to take water granted for different uses in this case depended on the terms of the regional plan.

Here, the relevant regional plan treated take and use together for the purposes of regulating groundwater consents. The various relevant conditions and considerations contemplated that take and use would be considered as one activity, otherwise some would be rendered irrelevant or inapplicable. It was open for the drafters to clarify that separate consents were possible for taking and using, but the plan consistently treated the two together. By contrast, other rules in the plan use the expression "taking or use" and there was no reason to regard that difference as unintentional.

There was nothing in ss 14 or 30 of the RMA to prevent a regional council from exercising control by treating taking and use as matters which are linked for the purposes of its regional plan.

The Council was not entitled to proceed on the basis that because there was no rule specifically governing a stand-alone use of water, the application was covered by a "catch-all" rule in the plan as a discretionary activity. As the plan consistently treated take and use together, neither element could be separated out so as to circumvent a plain reading resulting from the drafting pattern.

Consequently, the Council did not have the ability to grant resource consents limited to the use of the water for bottling purposes separately to consents to take the water to be used for that purpose. The impugned consents and those granted in reliance on them were therefore unlawful.
Case name
Case number
[2022] NZCA 311
Date of Judgment
13 July 2022
Appeal against sentence dismissed.
Criminal Law — mitigation, starting point. 

This case involves the first successful “stealthing” prosecution in New Zealand. Stealthing describes the deliberate act of removing a condom during sex where the consent to sex by one partner is conditional on the other wearing a condom throughout. The District Court Judge considered that the appellant’s offending fell within band one of the tariff sentencing case of R v AM and adopted a starting point of six years and six months’ imprisonment. The Judge arrived at an end sentence of three years and nine months’ imprisonment after applying some 42.5 per cent of discounts to recognise time spent on EM bail, previous good character, disproportionate effect of imprisonment on foreign nationals and other personal circumstances. 

The appellant had engaged the services of the complainant, a sex worker. The appellant did not want to wear a condom but was explicitly told on numerous occasions that it was a condition of any sexual activity that he was to wear a condom throughout. The pair initially engaged in consensual sexual intercourse with the use of a condom. After a period, the appellant requested  a second bout of intercourse in the “doggy style” position — which put the complainant on alert that he might intend to remove the condom. However as the complainant was able to see him in a mirror she thought this would be fine. The appellant did remove the condom and the complainant immediately remonstrated with him again telling him he must wear a condom. Protected consensual sex resumed but after a short while the appellant again removed the condom, and before the complainant could take evasive action, the appellant restrained her hips and ejaculated inside her. The complainant threw a cushion at the appellant and immediately went to her manager’s office and the police were called. 

The appellant appeals his sentence contending the Judge adopted a starting point that was too high and that the Judge gave an insufficient discount for personal circumstances. 

Was the starting point too high? Held: no. The case of Crump v R, which the appellant relies on, is not analogous. Crump was a case of withdrawn consent, here, there was never any consent to the particular act which constituted rape — the victim only ever consented to protected sex. The appellant’s act of taking the condom off, not once, but twice, and continuing sexual intercourse to the point of ejaculation was a deliberate, even cynical, breach of the parties’ understanding of the basis on which consent was given. The offending in this case is also appropriately within band one of R v AM given there was a degree of premeditation and the mental harm to the complainant. There is no requirement that the risks associated with unprotected sex must eventuate before it can be treated as an aggravating factor. 

Did the Judge give an insufficient discount for personal mitigating circumstances? Held: no. The appellant’s argument that there is a nexus between his offending and his societal (and sexual) isolation and cultural attitudes is without merit. The appellant could have satisfied his sexual desires with a consenting sexual partner and his dislocation from his wife and his attitudes do not mitigate his culpability for raping someone in pursuit of sexual gratification. In any event, the appellant received inarguably generous discounts totalling 35 per cent for previous good character, the disproportionate effect of imprisonment on a foreign national and his remaining personal circumstances.
Case name
Case number
[2022] NZCA 307
Date of Judgment
12 July 2022
Appeal dismissed. Criminal Law — discharge without conviction. 

The appellant, Mr Doyle, joined the New Zealand Defence Force when he was 17 years old and has served in the army for some seven years with the rank of private. Towards the end of that period, he discovered that his long-term partner was having an affair with his commanding officer. To cope with the distress, Mr Doyle started drinking heavily and using MDMA. He also began dealing MDMA to friends to fund his habit, including to members of the armed forces. Following a search of his home, police located quantities of the drug, electronic scales and around $2000 in cash. He pleaded guilty to one charge of possession of MDMA for supply and applied for a discharge without conviction. The application for discharge was refused and he was later sentenced to five months’ community detention and nine months’ supervision. 

If a person pleads guilty to an offence, the court may, instead of imposing a sentence, direct that the offender be discharged. The court must not do so unless the consequences of a conviction would be out of all proportion to the gravity of the offence. Mr Doyle, therefore, appeals the refusal to discharge him, contending the Judge overstated the gravity of his offending and understated the consequences a conviction would have on his employment prospects. The consequences of a conviction, he says, are out of all proportion to the gravity of his offending. 

Did the Judge overstate the gravity of Mr Doyle’s offending? Held: no. There was a degree of commerciality to Mr Doyle’s offending which involved a Class B drug. While it is impossible not to feel some sympathy for Mr Doyle given his personal circumstances, he is not the first person to use drugs to escape emotional issues. The additional step into dealing in quantities and manner as he did, means the nexus between his emotional trauma and his drug abuse is more remote. The Court accepts there were other relevant mitigating personal circumstances such as Mr Doyle’s previous good character, commendable service and relative youth — but given the commercial nature of the drug dealing, the Judge was correct to classify the gravity of his offending as moderate. 

Did the Judge understate the consequences a conviction would have on his employment prospects? Held: no. Mr Doyle argues that his life’s goal was to serve in the armed forces and the conviction resulted in him being discharged with no transferrable skills. It became apparent on appeal, that Mr Doyle’s discharge was not a result of the conviction but rather, as a result of the offending which underlies it. His discharge from the armed forces was final and will not be reversed even if he was discharged without conviction. The focus then, has to be on the consequences of conviction on Mr Doyle’s civilian employment prospects. Mr Doyle has found meaningful civilian work and has transferrable skills which will assist him in maintaining employment. Any remaining consequences are those which naturally flow from convictions of this nature.

Are the consequences of a conviction out of all proportion to the gravity of Mr Doyle’s offending? Held: no. The indicia of commerciality, particularly the quantity of MDMA, and the finality of Mr Doyle’s discharge from the armed forces operate against a discharge without conviction. He has reasonable employment prospects as evidenced by his current employment. It follows the consequences of a conviction are not out of all proportion to the gravity of his offending.
Case name
Case number
[2022] NZCA 306
Date of Judgment
12 July 2022
Appeal against conviction dismissed. Appeal against sentence dismissed. 
Evidence — identification evidence
Criminal practice and procedure — lies direction, unreliability warning
Sentence — manifestly excessive 

The appellant, Mr Pink, was found guilty by jury of one count of wounding with intent to cause grievous bodily harm. He  was  sentenced  to  seven  years  and  four  months’ imprisonment. Mr Pink appeals both against his conviction and sentence. 

Mr Pink has been the President of the Tribal Huks gang for twenty years, he has a very high profile in his local community and has attracted national publicity for his “sandwiches in schools” programme. The victim was a patched member of the gang who was attacked by a group of men which included Mr Pink, the jury accepting the Crown’s evidence that Mr Pink used the blunt end of a splitter axe to attack the victim’s legs in what was described by Crown as a “de-patching”. 

On appeal, Mr Pink says there were material inadequacies in the Judge’s identification evidence direction under s 126 of the Evidence Act 2006 (the Act) and his treatment of the identification evidence generally. Mr Pink also argues the Judge’s failure to give a specific lies direction  under s 124 of the Act resulted in a miscarriage. To support its allegations, the Crown called three civilian witnesses who said they knew Mr Pink and saw him at the scene. Two of them, a mother and her adult daughter, said they saw him swinging an axe and bringing it down using the blunt end on a man lying on the ground. The victim did not give evidence. 

Was an identification warning required? Held: yes. The type of identification evidence given by the mother and daughter is known as “recognition evidence”. They identified Mr Pink because they already knew him. Recognition evidence usually requires an identification warning the same as in a situation where the witness and the defendant they identify are strangers. There  was an added complication in this case however because Mr Pink admitted being present at the scene of the attack and so there to be seen. What he denied was any personal wrongdoing. Where a defendant admits being present, the evidence of people who say they saw him there has sometimes been called “observation evidence”. There is an apparent conflict in the caselaw whether observation evidence requires a s 126 warning. However, it can be safely concluded that there is no bright line distinction between visual identification evidence in the strict sense and observation evidence. That is to say, it is wrong to suggest that an identification warning is only required when the defendant denies being at the scene. A warning may still be required where the defendant admits being present and it is a live issue as to whether he or someone else present was the perpetrator. 

Mr Pink testified that although he was there and at one point briefly held the axe it was for the
purposes of taking it off someone else to prevent further injury to the victim. He suggested in evidence that the two witnesses may easily have misinterpreted his actions with the axe. On that basis, the only alleged mistake made by the witnesses was not as to his identity but as to his actions with the axe. If matters rested there, then there would have been a strong argument saying no identification warning was required. However, there was also the possibility  advanced implicitly by defence counsel in cross-examination and in closing that the two witnesses may have come onto the scene before Mr Pink confiscated the axe and seen someone else using it — therefore the possibility of a mistaken identification was in issue and an identification warning was required. 

Did the identification warning that was given comply with s 126 of the Evidence Act? Held: yes. Section 126 stipulates that the warning need not be in any particular words. The Judge’s omission of the phrase “serious miscarriage of justice” did not mean the Judge failed to comply with s 126(2)(a). If one examines the words used, what was conveyed was that the jury needed to exercise special care when relying on identification evidence, that mistakes can be made with identification and that mistakes have in fact led to wrongful convictions. The direction, in substance, also complied with the other requirements in s 126 — the jury was sufficiently alerted that even if the mother and daughter were convincing, there was still the possibility of mistake, and that there was also a possibility that both of them were mistaken. 

Another criticism raised, was that the Judge did not himself identify the strengths and weaknesses of the identification evidence but simply summarised the competing submissions from defence and Crown. The Supreme Court however held in Fukofuka that such an approach would suffice if done succinctly and in an orderly way which was the case here. A specific criticism that the Judge over-emphasised the daughter’s evidence is also misplaced. Any problems with her testimony and her prior statement and the fact she did not want to give evidence were plain for the jury to see for themselves — any direction against speculating about the reason for her reluctance would not have served a useful propose. It would be wrong to exclude her evidence due to her conduct in the witness box. 

Did the Judge err by failing to give a lies direction? Held: no. Crown adduced two out of court statements made by Mr Pink to police, there were inconsistencies between those statements as well as between those statements and the evidence he gave in court. The prosecutor suggested that Mr Pink had lied and was offering ludicrous explanations for the inconsistencies. Despite the fact that evidence was offered suggesting Mr Pink had lied, s 124 of the Act makes clear there is no requirement to give a lies direction unless the Judge is of the opinion that the jury may place undue weight on the evidence of a lie or if the defendant requests such a direction.  Mr Pink’s trial counsel did not request a lies direction and in the circumstances it is reasonable to assume this was a tactical decision designed to avoid highlighting the statements. Further although the Crown would have been entitled to rely on alleged lies told out of Court as probative of guilt, it chose not to and instead told the jury that if they did not accept Mr Pink’s statements, they should ignore them completely and focus instead on the other evidence called by the Crown. In all those circumstances, the Judge was not required to give a lies direction and had he done so it may well have been counterproductive for the defence. 

Was the sentence manifestly excessive? Held: no. Even allowing for the potential for double counting between some of the aggravating features, the Court is not persuaded the Judge erred in placing the offending at the lower end of band three of Taueki. The description of a band three serious concerted street attack is a better fit for this case than the description of a band two concerted street attack — as, contrary to Mr Pink’s submissions — this was not a single blow with a weapon but one of repeated blows with undoubtedly very serious injuries resulting. 

While some judges may not have imposed a six-month uplift for 25 violence-related prior convictions, the Court is not persuaded it was an error warranting appellate intervention.
Case name
Case number
[2022] NZCA 299
Date of Judgment
07 July 2022
Appeal dismissed.

The appellant was convicted of one charge each of strangulation, injuring with intent, and male assaults female, and two charges of breaching a protection order.  The charges arose from an incident in 2015 in which the appellant punched the complainant in the face, and a more serious incident in 2019.  The 2019 incident involved the appellant refusing to leave the complainant’s residence after visiting with her permission.  The appellant grabbed the complainant’s neck with one hand and squeezed tightly for around half a minute.  He maintained his hold as he pushed the complainant onto a bed, obstructing her breathing.  The complainant pushed the appellant backwards and rolled onto her stomach, at which point the appellant punched her to the back of the head and to the face.  The incident left the complainant with visible physical injuries and ongoing psychological difficulties. 

The appellant was sentenced to two years and three months’ imprisonment on the strangulation charge, with lesser concurrent sentences on the other charges. 

He appeals against his sentence, arguing it is manifestly excessive.

Criminal law — Sentence — Strangulation — Aggravating factors — Starting point — Personal mitigating factors.  Should the appeal be allowed?

Held:  No.  This is a conventional sentence appeal under ss 244 and 250 of the Criminal Procedure Act 2011, but as it is the first occasion this Court has dealt with s 189A sentencing the Court will provide a broader measure of guidance than usual on starting points for this offending. 

The relevant aggravating factors for strangulation offending are:  (1)  premeditation, (2) history of strangulation or prior very serious domestic violence, (3) vulnerability of the victim, (4) home invasion/breach of protection order, (5) aggravated violence (repeated or extended strangulation, in particular where loss of consciousness arises, and loss of control of bodily functions), (6) threats to kill, (7) enduring harm to the victim, and (8) harm to associated persons, such as children.

Much strangulation offending will involve all or most of the above factors.  When present, it is the intensity of the factor that requires careful assessment. 

Highest level s 189A offending

The example the Law Commission gave in its 2016 report as exemplary of the “worst class” or band of offending under s 189A is instructive:  see [26] of the judgment.  It involves six of the eight aggravating factors.  Assuming all these factors apply, a starting point of five and a half years’ imprisonment would be appropriate.  If factor (2), history of strangulation or very serious domestic violence, had been engaged as well, the appropriate starting point would be six years’ imprisonment.  The need for qualitative assessment is emphasised over factor-counting.  A very bad case, albeit with a more limited number of individual aggravating factors, might still command a more condign sentence than five and a half to six years’ imprisonment.

Moderate level s 189A offending

The present case is an example of moderate level s 189A offending.  It engages four aggravating factors of the eight identified.  In contrast to the Law Commission’s example, the present case would compel a starting point of three years (36 months), some eight months longer than the starting point adopted by the Judge.  Had home invasion been involved, and the attack had resulted in unconsciousness, a starting point of four years or more would have been justified.

Lower level s 189A offending

This category will need to be developed on a case-by-case basis in future decisions, and by reference to the higher levels analysed above.  The present offending does not fall within this category.  If the strangulation had been more transitory, and the harm less enduring, a lesser sentence would have applied, perhaps as low as two years’ imprisonment.

This appeal

Adopting a starting point of 36 months for the present offending, two adjustments are made to the Judge’s uplifts.  The two breaches of the protection order for which the appellant was being sentenced were taken into account as an aggravating factor in setting the starting point.  To avoid double-counting, the relevant uplift is reduced from 12 to nine months.  But the starting point is uplifted by three months for the appellant’s prior offending.  That takes the appropriate uplifted starting point to four years’ (48 months’) imprisonment. 

No challenge was mounted to the 30% discount afforded by the Judge for the appellant’s dysfunctional upbringing and rehabilitative efforts.  That reduces the sentence to 33 months, as against the 32 months reached by the Judge.

Finally, a discount of 30% for the 19 months the appellant spent on EM bail is appropriate, taking into account the gradual relaxation of EM-bail conditions.  That discount equates to six months, as against the five months given by the Judge.  

The same end sentence is arrived at.  The sentence was not manifestly excessive.
Case name
Case number
[2022] NZCA 276
Date of Judgment
30 June 2022
Applications to adduce fresh evidence granted.  Appeals allowed.  Sentences imposed in the High Court quashed and substituted with the following: 17 years and 8 months’ imprisonment (Mr Cavallo); 23 years and 4 months’ imprisonment (Mr Habulin); and 20 years and 5 months’ imprisonment (Mr Scott). 

The appellants are a group of foreign nationals who were part of an international, organised criminal group that imported cocaine from South America through the Port of Tauranga in three shipments in June, July and October 2017.  Mr Habulin, a Croatian national, imported a total of 76 kg of cocaine, supplied 25 kg from the first two shipments and transferred $1,498,500 to a money-laundering ring.  Mr Scott, an Australian national, assisted Mr Habulin to supply the first two shipments and transferred $1,192,000 to the money-laundering ring.  Both Messrs Scott and Cavallo assisted Mr Habulin to import the third shipment of 46 kg. 

The appellants were charged with drug-related and money-laundering offences.  They pleaded guilty at the beginning of trial.  In the High Court, the sentencing judge applied the guidelines in this Court’s tariff decision for methamphetamine offending, Zhang v R ([2019] NZCA 507, [2019] 3 NZLR 648), and sentenced the appellants to: 23 years’ imprisonment (Mr Cavallo), 27 years and 6 months’ imprisonment (Mr Habulin) and 24 years’ imprisonment (Mr Scott) respectively.

The appellants appeal against their sentences, arguing they were manifestly excessive in light of the lesser harm of cocaine compared to that of methamphetamine, and that the sentencing judge should have granted them higher discounts for their personal mitigating circumstances. 

Criminal law — fresh evidence.  Should the applications to adduce fresh evidence on appeal be granted?
Held:  Yes.  The expert opinions the appellants sought to be adduced on appeal contained cogent information on the comparative harm and toxicity of cocaine and methamphetamine.  The Crown also did not oppose their receipt.

Criminal law — sentence — starting point — Class A drug offending — discounts.  Should the appeals be allowed?  Held:  Yes.  This Court’s decision in R v Ingram ([2018] NZCA 252, [2018] 3 NZLR 783), which examined the sentencing levels for another Class A drug, MDA, is relevant.  It was concluded in that case that both the Misuse of Drugs Act 1975 and the Sentencing Act 2002 referenced harm as a core factor in the exercise of the respective discretions each contained.  Risk of harm was the focal point of the Misuse of Drugs Act, and actual harm was the focal point of the Sentencing Act.  It follows that intra-class differentiation in sentencing offending for drugs of the same class is appropriate and necessary where the scientific evidence shows that one drug is not as harmful as the other.  Moreover, cross-checking between methamphetamine sentencing levels and sentencing of other drugs for the same quantity is a useful methodology to ensure that sentences imposed for offending for other drugs does not exceed that appropriate for a drug of greater harmfulness.

The evidence here demonstrated that cocaine powder, the substance imported, is less toxic and harmful than methamphetamine.  The evidence also showed that cocaine powder is capable of being converted into crack cocaine, a more harmful substance, so the comparative harm assessment must also allow for that potentiality.  Therefore, sentencing for like quantities should not, in the case of cocaine, exceed that for methamphetamine, and cocaine offending should generally be sentenced slightly below (around 5%) comparable methamphetamine starting points. 

Turning first to the starting points, Mr Habulin imported 76 kg of cocaine.  The Judge did not err in considering him to have played a “leading” role given the scale of the importation and the actual or prospective financial reward.  This offending involved a greater leading role and a significantly higher quantity than Mr Yip in Zhang v R, who imported 60.9 kg of methamphetamine, resulting in a starting point of 23 years’ imprisonment.  If the substance imported here had been methamphetamine, a starting point of 29 years would have been appropriate.  Making the 5% allowance for cocaine, we fix a starting point of 27 years and six months’ imprisonment.

The Judge also did not err in considering Mr Scott to have played a “leading” role, albeit one slightly below that of Mr Habulin.  A starting point of 27 years would have been appropriate if the substance was methamphetamine, and we fix a starting point of 25 years and 7 months’ imprisonment.

Nor did the Judge err in considering Mr Cavallo had occupied a high-level “significant”, rather than “leading”, role in importing 46 kg of cocaine.  A starting point of 22 years would have been appropriate if the substance was methamphetamine, and we fix a starting point of 20 years and 10 months’ imprisonment.

Turning next to the appellant’s personal mitigating circumstances, the Judge did not err in refusing to give discounts for cultural and background factors.  In Mr Scott’s case, he overcame his early difficulties to become a successful adult, and did not suffer from a systemic inability to discern right from wrong so much as he was tempted to gain quick wealth by serious criminal offending.  There was also very modest cogency between the offending and the backgrounds of Messrs Habulin and Cavallo. 

Nor did the Judge err in affording a 5% discount for Messrs Habulin and Cavallo for their foreign national status, or a 3% discount for Mr Scott on the same basis.  The Judge bore in mind that the appellants had chosen to come to New Zealand to offend seriously and profit substantially.  This mitigates the required response to the hardship they will otherwise face.

However, the Judge did err in refusing to give a discount for Mr Scott’s rehabilitative prospects, given the evidence shows his capacity to make good in adult life after the adversity of his childhood.  An allowance of 7% is appropriate.

Finally, the Judge did not err in discounting the appellants’ sentences by 10% for their guilty pleas, which were entered on the eve of the trial in the face of an overwhelming Crown case.

It follows that the starting points for each appellant must be discounted in each case: by 15% (Mr Cavallo), 15% (Mr Habulin) and 20% (Mr Scott). 

The final sentences are:  17 years and 8 months’ imprisonment (Mr Cavallo); 23 years and four months’ imprisonment (Mr Habulin); and 20 years and 5 months’ imprisonment (Mr Scott).
Case number
[2022] NZCA 248
Date of Judgment
15 June 2022
Appeal allowed.  There is a declaration that Financial Services Complaints Ltd is entitled to the Chief Ombudsman’s consent to use the ombudsman name in connection with its dispute resolution scheme.

Civil.  Judicial review.  Substantive remedy.

In 2015 Financial Services Complaints Ltd sought permission from the Chief Ombudsman to use the name “ombudsman” in connection with its dispute resolution scheme pursuant to s 28A of the Ombudsmen Act 1975.  Permission was initially refused.  The decision was reconsidered in 2016, following Peter Boshier’s appointment as Chief Ombudsman.  Permission was again refused.  Financial Services Complaints Ltd successfully applied for judicial review.  This Court set aside the Chief Ombudsman’s decision and directed him to reconsider the application.  The Chief Ombudsman issued three provisional decisions, each indicating that the application would be declined.  The Chief Ombudsman made his final decision in June 2019, again declining permission.

Financial Complaints Services Ltd sought judicial review.  Grice J set aside the Chief Ombudsman’s decision, finding that it had been predetermined.  The Judge ordered that the decision be reconsidered by an ombudsman appointed for that purpose or under delegation from the Chief Ombudsman. 

Financial Services Complaints Ltd appeals on two grounds.  First, that the Judge failed to adjudicate on two grounds relied upon in the High Court: the Chief Ombudsman’s failure to treat like applicants alike; and whether refusing permission was a justifiable limitation of Financial Services Complaints Ltd’s right to freedom of expression under s 14 of the New Zealand Bill of Rights Act 1990.  Secondly, the Judge erred by not granting substantive relief in the form of a declaration that entitles Financial Services Complaints Ltd to use the name “ombudsman”.  It submits this relief was available by way of there only being one lawful decision available to the Chief Ombudsman.  It seeks substantive relief on appeal.

The issues on appeal were therefore:

Whether the Judge failed to determine two grounds?  Held: yes.  While the Judge briefly recorded the other grounds of review, only the issue of predetermination was subject to analysis.  Merely recording the Chief Ombudsman’s statements about treating like applicants alike did not amount to adjudication.  It was not open to the Judge to proceed on the basis that a finding of predetermination precluded consideration of whether the right to freedom of expression had been breached, because Financial Services Complaints Ltd explicitly submitted that this ground stood independently of the other grounds of review.

Whether granting permission to use the name was the only lawful decision available to the Chief Ombudsman?  Held: yes.  Although s 28A of the Ombudsmen Act involves the exercise of a discretion, it was open to Financial Services Complaints Ltd to submit that none of the Chief Ombudsman’s reasons for refusing permission were supportable and that, as a result, the only decision he could lawfully make was to grant the permission.  First, the primary reason the Chief Ombudsman refused the application was that it might increase confusion about the role and undermine the office of the Parliamentary Ombudsman.  Held that there is no objectively supportable basis to support this view.  Secondly, the Chief Ombudsman failed to treat like applicants alike.  Thirdly, the limitation on freedom of expression under s 14 New Zealand Bill of Rights Act was not justified due to the lack of evidence supporting the decision to refuse permission.
As there were no factors that objectively justified refusing the application, the discretion to refuse permission was only residual.  The only lawful decision the Chief Ombudsman could have made was to grant Financial Services Complaints Ltd the permission it sought.

Whether the Judge erred in referring the decision for reconsideration?  Held: yes.  The Judge proposed a process for reconsideration: under s 8(1) of the Ombudsmen Act an ombudsman is appointed for a temporary purpose and the Chief Ombudsman may then delegate his power to make a decision under s 28A to that temporary ombudsman, per s 28.  Held that there were a number of concerns with this proposed process, namely that it would not be genuinely independent of the Chief Ombudsman would be contrary to the interests of justice.

Whether this Court should grant the relief sought?  Held: yes.  In all the circumstances, there is no reasonably viable alternative to the Court substituting its own view.
Case number
[2022] NZCA 208
Date of Judgment
25 May 2022
Contract — breach of contract, contractual interpretation.
Damages – compensation, assessment, interest. 

The appeal in CA659/2020 is allowed.
The respondent’s cross-appeal in CA659/2020 is allowed.
Leave is reserved to the parties in CA659/2020 to seek further orders in respect of quantum and the form of final judgment orders in light of this judgment in the event the parties are unable to agree on quantum.
Leave is reserved to the parties in CA659/2020 to seek orders as to costs in the event costs are unable to be agreed.
The appeal in CA156/2021 is allowed and the decision of the High Court awarding interest to the first respondents in quashed.
There is no award of costs in CA156/2021. 

This case concerned defective repairs to a home damaged in the Christchurch earthquakes of 2010 and 2011. The homeowners, the Sleights, sued their insurer (IAG New Zealand Ltd), the repairer, the project manager monitoring the repairs (Hawkins) and the project manager’s insurance company (QBE Insurance (Australia) Ltd). In the High Court, most of the Sleights’ claims against each of the four defendants were upheld and damages were awarded representing the cost, assessed at the date of judgment, of the necessary further remedial work. The Judge also upheld, in part, a cross-claim made by IAG against Hawkins under an indemnity clause in the contract (known as the RSMA) between those parties. In a later costs and interest judgment, the High Court Judge also awarded interest on the damages to the Sleights dating back to 2015. 

The High Court decision
It was common ground that there were numerous defects in the repair work, those defects being broadly classified by the Judge as “scoping defects”, “key defects” and “remaining/minor defects”. The total cost of remedying these defects amounted to $389,848. As regards liability between the various parties, the Judge held that the repairer was liable for the full amount in contract, negligence and under the Consumer Guarantees Act 1993 (Act). Hawkins (and hence its insurer QBE) was liable under the Act for the full amount because having held itself out to the Sleights as providing the services of a project manager, it had assumed an obligation to ensure that the repairer would only receive certified payments at various milestones if the work was carried out in tradesman like manner, an obligation which it had breached. IAG was liable under the Act for failing to appoint a suitable builder, ensuring the scope of works was appropriate, ensuring Hawkins adequately monitored the work and properly certified payments. The Judge also held that under IAG’s insurance policy, it was required to meet the costs of repairing the home to the policy standard “as when new”, an obligation which it breached when in 2015 it declined the Sleights’ claim to remedy the defective repairs. IAG was held liable for the full amount under the Act and under the policy. 

As regards, Hawkins’ liability to IAG, the Judge found that Hawkins had an obligation to IAG to satisfy itself that the relevant milestone had been completed before certifying a payment. The Judge found Hawkins failed to meet this obligation on at least three instances: two relating to payments for sub-floor and foundation work and one relating to certifying the final payments.In terms of quantum, the Judge held Hawkins was liable to IAG for a limited sum of$130,468.96.

Issues on appeal  In CA659/2020 IAG appeals against the Judge’s refusal to allow all of its indemnity claim against Hawkins. It also appeals against the Judge’s decision to award the Sleights interest in CA156/2021. QBE cross-appeals one aspect of the Judge’s finding upholding part of IAG’s indemnity claim against Hawkins, namely, that it was liable in relation to certifying the final payments. 

Should QBE’s cross-appeal be allowed?  Held: yes. Prior to the hearing IAG conceded the Judge had erred in finding that Hawkins was liable to IAG for certifying the final payments to the repairer knowing of the defects. IAG’s claim for indemnity was indemnification for the amount of its liability to the Sleights, not reimbursement of any overpayment to the repairer. Further, IAG itself also knew of the defects at the time of the final payments and had instructed Hawkins to make the payment. 

Should IAG’s appeal be allowed? Held: yes. This aspect of the appeal was effectively one of contractual interpretation — what exactly were Hawkins’ obligations to IAG under the RSMA. The concept of “completion” in the RMSA was held to be critical to the interpretation exercise. Both parties agreed that while the RSMA did not require Hawkins to underwrite or guarantee the repairer’s workmanship or carry out a painstaking audit of the work, it did nevertheless impose a limited quality obligation. Both parties also endorsed the Judge’s interpretation that Hawkins was only liable in respect of defects that were visible to the naked eye. However they differed as to whether that meant Hawkins was liable for every defect visible to the naked eye or whether there were other limitations. 

In the Court’s view, the wording in the RSMA and the circumstances in which it came into existence including pre-contract negotiations fully supported the conclusion that Hawkins was only to have a very limited quality assessment — its primary role was one of administration and co-ordination. This finding was further supported by differences between the RSMA and an earlier RSMA including the absence of an express term requiring Hawkins to monitor and ensure the quality of the builder’s workmanship and a significant reduction in the fees payable by IAG to Hawkins for its services. 

IAG’s operational documents which did contain references to quality could not assist IAG. The documents did not have contractual status and there was no basis on which they could be incorporated into the RSMA by reference. The Court also rejected an argument that shed light on the intentions of the contracting parties as a form of subsequent conduct because there was no evidence that the personnel who drafted them had any involvement in drafting the RSMA and knew of its background. Other arguments relating to promotional material and industry practice were also held not to assist IAG. 

The Court concluded that for the purposes of the RSMA “completion” turned not only on the visibility of the defect but also the nature of the defect, its significance in terms of the integrity of the building and the cost of rectifying it. Finishing details and minor defects would not be an impediment to work being considered complete and hence no impediment to certification. 

The “naked eye test” as applied by the High Court Judge failed to articulate the basis of the distinction between the foundations and other defects such as cladding and the windows as well as structural defects in a first floor balcony. Yet, these other defects were also classified as key defects and in fact cost more to remedy.

Applying its formulation of the naked eye test, the Court held there was no valid distinction and therefore Hawkins was liable in respect of all the key defects.
In respect of both the appeal and cross-appeal, leave was reserved to the parties should they not be able to agree on the monetary consequences of the Court’s decision. 

Did the Judge err in CA156/2021 in awarding the Sleights interest?  Held: yes. In a separate costs and interest judgment, the Judge awarded interest to the Sleights from the date IAG had rejected their claim in 2015 until the date of judgment on compensation representing current day repair costs. 

Held. As a matter of principle, damages for repair costs that are assessed at the date of judgment should not attract pre-judgment interest — that is because an award of interest would duplicate an allowance already built into the damages calculation. In so far as the Judge purported to justify the awarding of interest from 2015 on the grounds of losses sustained by the Sleights that had not been pleaded or supported by evidence, that was an error.
Case name
Case number
[2022] NZCA 204
Date of Judgment
25 May 2022
The proposed identification ground may be considered at the appeal.

In August 2020, under s 406(1)(a) of the Crimes Act 1961, the Governor-General referred to this Court the question of Scott Watson’s 1999 convictions for murder.  The reasons for the reference stated that evidence has become available since trial that may raise doubts about the reliability of an important aspect of the Crown’s case, namely the forensic evidence comprising hairs said to have belonged to one of the deceased, Ms Olivia Hope, which had been recovered from Mr Watson’s yacht.

In his appeal, Mr Watson wishes to pursue a ground additional to that contained in the reasons for reference.  The proposed ground is the admissibility of the identification evidence of the late Mr Guy Wallace, who had identified Mr Watson from a photo montage prepared by the police.  In May 2010 a report by the Independent Police Conduct Authority concluded the compilation of that photo montage “fell well short of best practice”.  This ground had not been raised in Mr Watson’s original appeal against conviction in 2000.

The question is whether this Court has jurisdiction to hear argument on a ground of appeal not expressed in the reasons for reference.

Criminal practice and procedure — Governor-General’s Reference — Jurisdiction.  Should the proposed identification ground be considered at the appeal?

Held:  Yes.

The legislative history of s 406(1)(a) of the Crimes Act provides no insight into the 1961 change in wording from the Governor-General’s power to refer “the whole case”, to “the question of the conviction or sentence,” to this Court.  The most likely rationale for the change is to distinguish between reference of the conviction, or sentence, or both.  What is not in the wording of either formulation is a warrant confining the reference to particular questions, thereby limiting the ability of the receiving court to control its own processes.  Although the contrary view had been taken by the Court of Criminal Appeal in England and Wales in R v Caborn-Waterfield [1956] 2 QB 379 (Crim App), that view was firmly repudiated by the House of Lords in R v Chard [1984] 1 AC 279 (HL), a decision that has since been applied by the High Court of Australia in Mickelberg v R (1989) 167 CLR 259.  If Parliament had intended to dilute the earlier procedure of referring “the whole case” to the appellate court, it would have done so expressly.  Rules and practices of the Court control potential abuse, e.g. an attempt to re-run a ground of appeal already adjudicated, without more.

There are four domestic authorities that are relevant to this question.  The first, R v Morgan [1963] NZLR 593 (CA), acknowledged that s 406(a) gave rise to a “general” reference, unlike s 406(b), under which the court merely provides advice to the Governor-General.  At the time Morgan was decided, it was not the executive’s practice to refer specific questions to this Court, so while it was thought that reasons were a good idea, Morgan did not suggest they were mandatory or defining.

Secondly, while the first of two Ellis decisions (Ellis v R [1998] 3 NZLR 555 (CA)) did consider the intention of the reference procedure was to confine the grounds to be considered, it concerned an application for bail.  The observations of the Court as to the scope of appeal upon a reference were not essential to the outcome.  Only the second Ellis decision (R v Ellis [2000] 1 NZLR 513 (CA)) concerned the substantive appeal, but the appellant did not challenge the circumscription of appellate scope suggested in the first Ellis decision.  It follows that where the Court repeated certain of its observations from the first Ellis decision, that was not determinative of the position. 

Thirdly, in R v Haig ((2006) 22 CRNZ 814 (CA)) William Young P stated the contemporaneous jurisprudence on s 406 “[was] not entirely unproblematical”.  However in the end this Court did not need to explore the question as the reference remained wide enough to entertain the appellant’s primary arguments. 

Fourthly, Uhrle v R ([2000] NZSC 62, [2000] 1 NZLR 286) permits an appellant to seek recall of a judgment on the basis that a further, tenable appeal ground ought to have been considered.  If this Court does not have the jurisdiction under s 406 to hear the proposed identification ground, Mr Watson would be free to apply to recall this Court’s 2000 judgment on the basis that a credible appeal ground was not advanced at the time.  If such an application is made, this Court would consider this to be a case in which the interests of justice require recall to enable the proposed ground to be advanced.  Therefore, on appeal, this Court would in any event be faced with that additional ground.

Finally, the interests of justice militate that the proposed identification ground be heard.  No good is done by the procedural suppression of a tenable ground of appeal which has not yet seen the light of day in an appellate court, while other grounds of appeal are nonetheless allowed to proceed.
Case number
[2022] NZCA 207
Date of Judgment
24 May 2022
Family law – Care of Children Act 2004 – Psychological reports – Judicial review – Pre-determination 

These appeals raise important questions about the process leading up to, and subsequent challenges of, Family Court decisions to make an order under s 133 of the Care of Children Act 2004 (COCA).  Section 133(5) of COCA provides the Family Court may request a psychological report about a child the subject of an application under COCA.  Such reports cover the child’s current care arrangements, their relationships with family members, and the advantages and disadvantages of different options for their care.   

In June 2017, the grandmother of two children applied under s 48 of COCA for a parenting order in respect of them.  That application was opposed by the children’s father and stepmother (the Newtons), with whom the children live.  The disputes involved in these appeals have meant that no progress has been made towards the substantive determinative of that application.   

At a Family Court issues conference in November 2017, Judge de Jong directed a s 133 report to be obtained in respect of the children.  The Judge prepared a brief for the psychologist in the course of the hearing, which in total lasted approximately 25 minutes.  Whilst the grandmother was comfortable, and the LFC endorsed, the Judge’s direction, the Newtons’ position at that point was unclear.  However, the Newtons subsequently sought judicial review of the Judge’s decision.  The High Court set aside the s 133 direction (first High Court judgment).  The High Court found a fair-minded lay observer would have concluded the Judge had predetermined the s 133 issue and prepared the psychologist’s brief ahead of the conference.  It also found the Judge failed to address mandatory considerations in s 133(6) and (7) including, in particular, failing to obtain and consider the children’s views as to whether such a report should be obtained.  The first High Court judgment is the subject of the appeal in CA50/2021.  The Family Court at Auckland submits the High Court’s conclusions were wrong and, in particular, that a child’s views do not need to be ascertained before deciding whether to obtain a s 133 report.   

Following the first High Court judgment, Judge de Jong issued a minute which set out the background to the proceedings and the November 2017 conference.  He said he did not pre-determine the orders or brief he made at that conference.  The Newtons applied for the Judge to recall that minute on the basis it would taint future judges’ perception of them.  Judge de Jong accepted there was a slight risk of that occurring and recalled and reissued a minute in different terms (the challenged documents).  Those actions were the subject of further judicial review proceedings, described below, in which the Newtons argued (among other things) that the challenged documents should be removed from the court file.   

A further Family Court hearing took place in December 2018, this time before Judge Burns and with a new LFC.  In advance of that hearing, the LFC filed a report which summarised the background to the grandmother’s s 48 application and the discussions the LFC had had with the children, their paediatrician, and one of the children’s teachers.  The memorandum submitted that, contrary to the view expressed in the first High Court judgment, the Family Court was not required to ascertain the children’s views as to whether a s 133 report should be obtained.  The Newtons submitted the LFC’s report was incorrect.  Judge Burns considered he was not bound by the first High Court judgment to obtain the children’s views, as he considered that the High Court’s observations on that issue were obiter dicta.  He ordered a s 133 report to be obtained.  He declined to deal with the Newtons’ recall application of Judge de Jong’s minute: that, in his view, was more appropriately a matter for Judge de Jong.   

The Newtons filed further judicial review proceedings seeking to set aside that second s 133 order, advancing three causes of action.  (1) Judge Burns had failed to obtain and consider the children’s views as he was bound to do by COCA and the first High Court judgment.  (2) The Judge had relied on an irrelevant consideration – namely, the LFC’s report, which was ultra vires.  (3) The Judge also breached the principles of natural justice by failing to deal with the recall application of Judge de Jong’s minute.  The challenged documents should have been removed from the court file. 

The first of those causes of action was dealt with by the High Court separately from the other two.  The High Court considered Judge Burns was bound by the first High Court judgment and set aside the s 133 order he made (the second High Court judgment).  In a subsequent judgment, the High Court dismissed the second and third causes of action (the third High Court judgment).  The LFC’s report could not be an irrelevant consideration simply because of its quality or content.  In addition, there was no basis to order the removal of the challenged documents from the court file as their presence could not found concerns of apparent bias on the part of future Judges dealing with the proceeding. In CA19/2021, the Newtons appeal the dismissal of the two causes of action in the third High Court judgment

Held: Appeal allowed in CA50/2021 against first High Court judgment — the proceeding is remitted to the Family Court to determine whether a s 133 report should be obtained.  Appeal dismissed in CA19/2021 against third High Court judgment. 

(1) Appropriateness of judicial review of s 133 orders: Having regard to the statutory scheme and, in particular, the prohibition in s 143(3A) against appeals from s 133 orders and the requirement in s 4 to deal with applications in a timely manner, the Court held it will only be appropriate for the High Court to exercise its jurisdiction to review s 133 decisions where something fundamental has gone wrong with the decision, and the decision would have significant consequences that could not be remedied by an appeal from the ultimate decision made by the Family Court.  That threshold is not met merely because the High Court considers the criteria in s 133(6) and (7) are not satisfied, but would be met if the decision was affected by apparent bias or, possibly, pre-determination. 
(2) Ascertaining children’s views in obtaining s 133 report: The Court recognised that one of the fundamental values of the United Nations Convention of the Rights of the Child is that children are to be heard and taken seriously.  That principle is reflected in the statutory scheme.  However, there is no blanket requirement that a child’s views are to be sought on any procedural step in proceedings.  The statutory wording in s 6(2) is that the child must be provided with “reasonable opportunities” to express their views on matters that affect them.  What amounts to a reasonable opportunity will turn on the significance of the decision for the child, the timeframe within which the decision is to be made, the child’s age and maturity, and all other circumstances.  Whether it is appropriate to ascertain the child’s views is a matter of judgment for the Family Court having regard to ss 4 and 6 of COCA. 
(3) Pre-determination: The Court agreed with the High Court that, where it is claimed a judicial decision-maker has pre-determined a decision, the “fair-minded lay observer” test is the correct one.  However, Judge de Jong had not pre-determined his decision.  In the Court’s view, having reviewed the hearing’s transcript and audio recording and the Judge’s report to the High Court, as the hearing proceeded the Judge formed the view a s 133 report was essential and that an order needed to be made at that hearing given the long delays in obtaining such reports.  That the Judge did not work systematically through each of the s 133(6) and (7) criteria in his reasons did not indicate pre-determination.  The Judge would have been well familiar with those criteria.  His careful approach was beyond reproach.  
(4) Reviewability of LFC reports: The Newtons’ attempt to seek judicial review of the LFC report provided to Judge Burns was, in the Court’s view, wholly misconceived.  Whilst the LFC is appointed under statutory provisions, they do not exercise statutory powers as defined in the Judicial Review Procedure Act 2016.  Their reports are therefore not amenable to review on that basis, nor are they reviewable  at common law.  Such reports are merely submissions to the Court which ultimately makes the relevant decisions.  If the Judge accepts incorrect propositions contained in such a report, and decides an issue on that basis, it is the Judge’s decision that should be challenged. 
(5) Removal of documents from the court file: The Court accepted Judge de Jong’s minute was inappropriate.  It is not appropriate for a first instance Judge to respond to an appellate court or to the High Court exercising its judicial review jurisdiction by issuing a minute challenging the views expressed and conclusions reached.  The Court understood the Newtons’ concern about the potential for the documents to have an intangible influence on decision-makers.  But there was no real risk of such an outcome.  If future Judges read those documents, they will do so in light of the findings of this Court and the High Court.  No regard is to be had to Judge de Jong’s minute.