Court of Appeal Judgments of Public Interest

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Case number
[2020] NZCA 395
Date of Judgment
07 September 2020
Summary
Appeal allowed in part.  Damages awarded to the respondents in the High Court reduced by $10,656.44.  Appeal otherwise dismissed.  Cross-appeal dismissed. 

Insurance Law —Earthquake insurance — Liability of insurer. 

Mr and Mrs Dodds’ house was insured under a policy with Southern Response Earthquake Services Ltd (Southern Response).  The house was damaged beyond repair in the 2010/2011 Canterbury earthquakes.  Under their policy, the Dodds chose the Buy Another House option under which they would be paid the cost of buying another house, capped at the cost of rebuilding their house on its present site.  The Dodds entered into a Settlement Agreement on the basis of a report (the Abridged DRA) which showed an estimated cost of rebuilding their house of $895,937.78.  Later, the Dodds discovered another report had been provided to Southern Response by its advisers (the Complete DRA) in which the full cost of rebuilding their house, including contingencies and certain other items, was estimated to be $1,186,920.75. 

In the High Court, the Dodds claimed damages for misrepresentation under s 35 of the Contract and Commercial Law Act 2017 (CCLA), damages for misleading and deceptive conduct under s 43 of the Fair Trading Act 1986 (FTA) , and damages as a result of a breach of a duty of good faith.  They sought to recover the difference between the amount they were paid on settlement and the estimated cost of rebuilding in the Complete DRA, and general damages for inconvenience and stress.  The Dodds succeeded in their claims under the CCLA and FTA and were awarded approximately $205,000 in damages.  Their claim for general damages was unsuccessful.  Southern Response appealed to this Court in relation to the findings of misrepresentation and misleading conduct.  The Dodds cross-appealed on the issue of general damages. 

Did Southern Response make misrepresentations which induced the Dodds to enter into the Settlement Agreement?
Held: Yes — Southern Response made representations of fact to the effect that the cost of rebuilding the Dodds’ house on its present site as assessed by Southern Response’s advisers was $895,937, and that the Abridged DRA was the only relevant estimate of rebuild costs Southern Response had received from those advisers.  These were false.  Southern Response also made a representation as to policy entitlement — that the Dodds’ maximum entitlement under the Buy Another House option was approximately $895,000.  That representation was an unqualified and definite statement about policy entitlement that was incorrect.  The Dodds were induced to enter into the Settlement Agreement by these misrepresentations, which were a material factor in their decision. 

Did Southern Response engage in misleading and deceptive conduct in breach of s 9 of the FTA?
Held: Yes — Southern Response’s conduct in making those misrepresentations amounted to a breach of s 9 and was an effective cause of the Dodds’ loss when entering into the Settlement Agreement.  

Was the High Court correct in its approach to damages under the CCLA and FTA?
Held: Yes — Although the usual approach to assessing compensation under the FTA is the tort measure of damages, and the usual approach under the CCLA is the contractual measure of damages, the amount that should be awarded as damages under both approaches in this case is the difference between the actual value of their entitlement under the policy less the amount the Dodds received.  However, the sum awarded in the High Court should be decreased by $10,656.44 as the High Court award was inflated by $10,656.44 due to calculation errors by the parties that were reflected in the judgment. 

Are the Dodds entitled to general damages?
Held: No — The evidence does not establish a causal link between the breach complained of and any inconvenience or stress suffered by the Dodds. 

Did Southern Response owe the Dodds an implied duty of good faith and, if so, was this duty breached?
Held: Because the Dodds succeeded under the CCLA and FTA, there was no need to consider this basis for claiming the same amount.
Case number
[2020] NZCA 383
Date of Judgment
03 September 2020
Summary
TAXATION - Tax avoidance - Tax advantage - Shortfall penalties. 

Appeal allowed.  Orders made in the High Court set aside.  Shortfall penalties do not apply. 

Frucor Suntory New Zealand Ltd entered into a funding arrangement, whereby Deutsche Bank advanced $204m to Frucor in exchange for a convertible note redeemable at maturity in five years’ time by the issue of 1,025 non-voting shares in Frucor.  The $204m advance by Deutsche Bank was funded as to $149m from Frucor’s parent DAP under a forward purchase agreement for the shares and $55m from Deutsche Bank itself.  Over the life of the note, Frucor claimed $66m in deductible interest payments.   

The Commissioner contends that the funding arrangement was a tax avoidance arrangement and invoked s BG 1 of the Income Tax Act 2004.  She claims that, as a matter of commercial and economic reality, the $66m interest payments comprised $55m in repayment of principal to Deutsche Bank and only $11m in legitimate interest expense.  The Commissioner reconstructed Frucor’s tax liability under s GB 1, counteracting the tax advantage by reducing the deductible expense accordingly. 

Frucor contends the entire deduction is a legitimate interest cost because the full $204m was advanced by Deutsche Bank and interest on that amount totalling $66m was paid over the life of the note.  It appealed to the High Court, which found that the funding arrangement was not a tax avoidance arrangement.   

The Commissioner now appeals to this Court, arguing that the High Court erred in its assessment. 

Issue:  Was this a tax avoidance arrangement?
Held:  Yes.  The primary purpose of the funding arrangement was to provide a tax advantage to Frucor through the interest deductions it claimed.  The funding arrangement was in many respects artificial and contrived, the purpose of the arrangement being to dress up a subscription for equity as an interest only loan to achieve this tax advantage.  As a matter of commercial and economic reality, the payment of $149m by DAP did not carry any interest liability for Frucor or Deutsche Bank.  The only amount that did attract interest was the $55m advanced by Deutsche Bank under the note, for which Frucor paid $11m in deductible interest expenditure. 

Issue:  Did the Commissioner correctly counteract the tax advantage under s GB 1 of the Act?
Held:  Yes.  The tax advantage gained under the arrangement was not the entire interest deductions but only those on the principal repayment of $55m.  The Commissioner was entitled to reconstruct by allowing the base level of permissible deductions totalling $11m but disallowing the balance.  She was not required to consider other arrangements the taxpayer might have entered into had it not chosen the particular funding arrangement. 

Issue:  Did the High Court err in finding that shortfall penalties should not be imposed in any event?
Held:  No.  Shortfall penalties only apply if a taxpayer takes an unacceptable tax position that fails to meet the standard of being “about as likely as not to be correct”.  Viewed objectively, Frucor’s argument that this was not tax avoidance must be regarded as one capable of being reasonably adopted and having substantial merit given it was found to be correct by the High Court.
Case name
Case number
[2020] NZCA 386
Date of Judgment
02 September 2020
Summary
Fresh evidence application declined. Extension of time application declined. Criminal law: appeal out of time, fresh evidenceIn 2009, Mr Walker was convicted of murder after he and two co-offenders, Mr Sullivan and  Mr Kupa-Caudwell, beat another man to death. Mr Walker was sentenced to life imprisonment with a minimum period of imprisonment of 11 years. He now appeals his conviction primarily on the grounds that Mr Sullivan has recently claimed he was solely responsible for the murder: namely, he returned by himself to commit a further assault on the victim. Alternatively, there  has been a miscarriage of justice because the trial Judge failed to give the jury an intoxication direction or a direction to consider Mr Walker’s state of mind having regard to his youth.

Is the evidence of Mr Sullivan admissible on appeal? Held: no.  The evidence is fresh, but it is not credible. It has all the hallmarks of a story that has been concocted by the two co-offenders.  The  account  of  the  alleged  later  attack  is   itself  inherently  implausible.   The account is also inconsistent with evidence given at trial. 

Should an extension of time be granted to hear the appeal on the alternative grounds? Held: no. The delay was long and has not been sufficiently explained. The proposed grounds of appeal lack merit. Thus, it would not be in the interests of justice to grant an extension of time.
Case number
[2020] NZCA 366
Date of Judgment
27 August 2020
Summary
Family First appeals against a judgment of the High Court dismissing its appeal from a decision of the Board to deregister it as a charity.  The High Court considered that Family First did not qualify for registration as its core purpose was to promote its conception of the traditional family.  This could not be said to be in the public benefit in the charitable sense required under the Charities Act.  Because a charity must be established and maintained for exclusively charitable purposes, this was fatal to registration. 

Family First submits on appeal that the Judge erred in finding that its purposes were not charitable in light of Re Greenpeace in which the Supreme Court overturned the political purpose exclusion that had previously operated to prevent political advocacy entities from obtaining charitable status.  It contends that, post-Greenpeace, its two charitable purposes qualify for registration under the second head of charity - advancement of education - and the fourth head of charity - supporting families and marriage. 

What are Family First’s main purposes?
Held: (Gilbert J dissenting) 

Clifford and Stevens JJ
The objects in Family First’s trust deed evidence two main purposes.  First, the objects promote the advancement of education: that is education by facilitating research on, and public understanding of, the importance of the roles of marriage and the family in society.  Secondly, the objects show a broader purpose of supporting marriage and families as foundational to a strong and enduring society.

Gilbert J
Whether or not Family First has an additional object of advancing education, it is clear that at least one of its main purposes is advocacy to promote its views on various social issues pertaining to families.  It follows that unless its advocacy is a charitable purpose, it will not be entitled to registration irrespective of whether it has an additional charitable purpose of advancing education. 

Did the High Court err in finding that Family First’s purposes were not charitable?
Held:  Yes (Gilbert J dissenting) 

Clifford and Stevens JJ
Family First’s objects meet the threshold for charitable purpose, thereby allowing it to qualify for registration under the Charities Act.  In respect of the second head of charity (the advancement of education), Family First published reports that met the minimum quality threshold required in Re Collier for charitable educational material.  There is no evidence to displace the presumption of public benefit under the second head of charity.  

Family First is also a charity under the fourth head as regards its purposes of promoting, supporting and advocating for the institutions of family and marriage, which are self-evident public goods.  Following Greenpeace, the fact that Family First argues for particular positions within the penumbra of those public goods is not a bar, in itself, to charitable status.  That said, it may be difficult to bring issues such as divorce, alternative forms of marriage and abortion within the ambit of family and marriage in the necessary way and Family First will need to bear that in mind as it determines it priorities in the future. 

Gilbert J
Family First’s cause advocacy is not of self-evident public benefit such that it qualifies under the fourth head of charity.  If the Society in Molloy v CIR would not qualify even after Greenpeace, it is hard to see how Family First could do so.  Family First’s advocacy on issues of the day cannot be categorised as merely ancillary to some other charitable purpose.  Rather, its engagement on these topics forms an important part of its core purpose.
Case number
[2020] NZCA 357
Date of Judgment
25 August 2020
Summary
Criminal Law — sentence, totality, starting point, cultural report 

Mr Carr was sentenced to 16 years’ imprisonment with an MPI of eight years, comprising cumulative sentence of 10 and six years.  He had committed multiple offences, including four counts of aggravated robbery, two counts of robbery and five counts of unlawful using or taking of a motor vehicle.  He was also convicted of dishonest use of a document, demanding with menaces and theft.  Mr Anderson was sentenced to five years and 10 months’ imprisonment after being convicted of two counts of robbery and one count of aggravated assault.   

Mr Carr appealed against sentence on the basis that the starting point of 18 years’ imprisonment adopted by the Judge was too high and did not appropriately account for the totality principle.  He further contended that the Judge placed unnecessary focus on the potential consequences as opposed to what in fact occurred.  Finally, he submitted that a further discount of 20 per cent should have been given for matters raised in the cultural report prepared under s 27 of the Sentencing Act 2002.  Mr Anderson appealed against sentence on the basis that a discount, namely 20 per cent, should have been given for matters raised in the cultural report. 

Held — appeals allowed.  In relation to Mr Carr, the starting point of 18 years’ imprisonment was too high.  Having regard to the seriousness of the lead charge of aggravated robbery and other cases in which multiple aggravated robberies were committed, a starting point of 14 years’ imprisonment would have adequately accounted for the gravity of the overall offending.  As to the cultural report, the Judge erred by not allowing a discount for the issues it raised.  The report gave a credible account of matters that might be considered to have impaired Mr Carr’s decision-making and contributed to his offending, and a discount should have been given.  While Mr Carr’s offending was serious, the focus of s 27 of the Sentencing Act is on matters personal to the offender and it is not correct that a discount is not available where the offending is serious, although that may temper the quantum of discount available.  Considering the cultural report and the matters it raised, the appropriate discount was 15 per cent.  When added to the 10 per cent discount for Mr Carr’s guilty plea given by the Judge this resulted in an end sentence of 10 years and six months’ imprisonment, with an MPI of five years and three months. 

As for Mr Anderson, the cultural report also gave a credible account of matters which might be considered to have impaired his choices and diminished moral culpability, with a causative link to the offending.  A 15 per cent discount was appropriate to reflect the effect that anti-social relationships had on him.  Combined with the 10 per cent discount for his guilty plea given by the Judge this reduced his sentence to four years and 10 months’ imprisonment.  As a stage-2 offender Mr Anderson must serve that sentence without parole.
Case name
Case number
[2020] NZCA 355
Date of Judgment
19 August 2020
Case number
[2020] NZCA 354
Date of Judgment
19 August 2020
Summary
Appeal allowed in part. Application for leave to adduce further evidence on appeal declined. No order as to costs. 

Insurance — Life insurance. 

Mr Taylor took out an income protection insurance policy (the Policy) with Asteron Life Ltd (Asteron). Payments under the Policy were made to Mr Taylor from January 2010 until September 2014 when payments were suspended. In 2015 Mr Taylor brought proceedings in the High Court seeking a declaration that he was entitled to continuing benefits under the Policy and seeking arrears of payments. Asteron counterclaimed for repayment of all sums previously paid to Mr Taylor under the Policy. Mr Taylor’s claim in the High Court was unsuccessful and Asteron’s counterclaim succeeded. Asteron was awarded $371,286.70 plus interest and costs.Mr Taylor appealed to this Court. 

Held: Mr Taylor’s claim must fail. He has not established that he was “Totally Disabled” between September 2014 (when Asteron suspended payment) and April 2016 (when Asteron cancelled the Policy). Nor does the evidence establish that Mr Taylor would be entitled to any payment in that period even if he were Totally Disabled. 

Held: Asteron is entitled to succeed on its counterclaim but Asteron is only entitled to recover payments made in respect of periods in which Mr Taylor was found to have dishonestly provided false information. Because the Judge did not find that the initial claim made in July 2010 involved dishonest statements, Asteron’s claim, which was founded solely on the allegation that Mr Taylor had dishonestly understated the hours he was working in his business, could not succeed in respect of the initial period of January 2010 to 22 July 2010. Judgment in the High Court on Asteron’s counterclaim must therefore be reduced by $51,835.64 with flow on effects for the calculation of interest. 

Held: The fraudulent claims rule can and should be accommodated within the general principles of contract law. The rule should be seen as an implied term to the effect that the insured must act honestly in connection with making the claim and, if the insured fails to do so and dishonestly makes a claim that is false in some material respect, the whole of the fraudulent claim will be disallowed. This implied term may be modified or excluded by the express terms of the policy. Cancellation of an insurance policy for breach of a term (express or implied) in relation to the making of claims is governed by the Contract and Commercial Law Act 2017.The implied term is essential, so breach entitles the insurer to cancel the insurance policy. Such cancellation operates prospectively only (unless the policy expressly provides otherwise), and does not affect the validity of earlier claims. There is no separate regime governing the cancellation of insurance contracts.
Case name
Case number
[2020] NZCA 313
Date of Judgment
31 July 2020
Summary
Leave to amend the appellants' claim is  denied.  Appeal dismissed . Respondents entitled to costs for a standard appeal on a band A basis and usual disbursements . 

Messrs Dold, Jacobs and Murphy owned a tourism business, Cruise Whitsundays. Messrs Dold and Jacobs each owned (beneficially) 46.9 percent of the  company,  Mr  Murphy  6.2  per  cent. The three shareholders were subject to a shareholders ' agreement. The three were interested in selling Cruise Whitsundays. A third party, Quadrant Private Equity, made an exceptionally lucrative offer of AUD 110 million for the whole shareholding  in Cruise Whitsundays.  This was for more than the three shareholders expected and they were keen to sell.  They managed to increase Quadrant's offer to AUD 112 million in return for agreeing to sign a memorandum of understanding within five days . Following the meeting, Mr Murphy  told  Messrs  Dold  and  Jacobs that he would not sell his shares to Quadrant unless they  together paid him  AUD  5 million. Mr Murphy subsequently dropped his demand to a payment of AUD 2 million from each of Messrs Dold and Murphy. The day before the memorandum of understanding was to be signed, Messrs Dold and Jacobs agreed to make the payments to Mr Murphy.  The memorandum and subsequent agreement for sale and purchase of shares in Cruise Whitsundays was signed, settlement completed and the payments from Messrs Dold and Jacobs to Mr Murphy made. 

Mr Dold appeals a decision in the High Court finding the AUD 2 million payment Mr Murphy demanded was not in breach of the shareholders' agreement, not in breach of a fiduciary obligation owed by Mr Murphy to Mr Dold and did not amount to duress. 

Contract - Interpretation. Did Mr Murphy's demand breach the terms of the shareholders' agreement. 

Held: No. A bar on a minority shareholder seeking a premium for his or her shares cannot be inferred from a combination of cls 1.1.5 (singular includes plural), 3.1.1 (primary objective of company to maximise shareholders returns) and 3.3.1 (shareholders not to conduct their affairs inconsistently with operating objectives of the company). The starting point is one of shareholder autonomy and that was not constrained by any collateral agreement to sell or a promissory estoppel enforceable against Mr Murphy. Clause 3.3.1, read in the context of cl 3.3.2, serves simply to constrain conduct of a shareholder's affairs in a way that does not derogate from the activities of Cruise Whitsundays. These clauses cannot be read as a "drag-along " clause. Such clauses are relatively common, but not provided for in the shareholders ' agreement.

Leave to amend the appellants ' claim to include a claim for breach of cl 18.1 (use of confidential information) is denied. The willingness of Mr Dold to sell to Quadrant was not confidential information, and cl 18 raises questions of fact rather than simply questions of law.

Equity - Fiduciary relationship. Did the demand breach a fiduciary duty owed to Mr Dold. 

Held: No. Some fiduciary relationships are inherently fiduciary, whereas others are only likely to be inferred where the relationship between the parties involves: (1) the conferral of powers in favour of the alleged fiduciary; (2) the apparent assumption of a representative or protective responsibility by the alleged fiduciary for the beneficiary; and (3) the implied subordination of the alleged fiduciary's own self-interest. Primacy should be given to the shareholders' agreement. While the shareholders' agreement contains an obligation to maximise shareholder returns, the no partnership clause and clause requiring unanimity when selling the company's undertakings indicate an absence of fiduciary obligations. No particular power is conferred on Mr Murphy. This is not a special facts relationship which justifies the departure from the general rule that a shareholder-shareholder relationship is not inherently fiduciary. There was no assumption of fiduciary responsibilities beyond the shareholders' agreement. 

Contract - Duress. Did the demand (and payment) amount to economic duress. 

Held: No. A lawful act should not normally be converted to an unlawful act via the mechanism of duress. Caselaw hints at duress being made out where an individually lawful threat and demand become unlawful in combination but to date there appear to be no instances of this. A threat to not enter into a contract is most unlikely to be an unlawful or illegitimate act. The Times Travel (UK) Ltd v Pakistan International Airlines C01p decision may be more easily explained as an example of unlawful act duress. The genuineness of Mr Murphy's belief in his entitlement to make the demand is irrelevant, though that belief does appear to be genuine. The threat here, or pressure, was not illegitimate. It is unnecessary to consider the issue of coercion.
Case number
[2020] NZCA 310
Date of Judgment
27 July 2020
Summary
Leave to appeal granted in CA59/2020 and CA62/2020. The Commission's appeal in CA59/2020 is dismissed and Bunnings' appeal in CA62/2020 is allowed. The 30 October 2017 statement of Murray Snowden is inadmissible. Bunnings appeal in CA61/2020 is dismissed. The summons issued by the District Court is valid.

Bunnings' is charged under ss 10 and 13 of the Fair Trading Act 1986 with misleading advertising in claiming it offers the " lowest prices". The Commerce Commission has summonsed a Mr Snowden, who is employed by Mitre 10, under s 159 of the Criminal Procedure Act 2011. In his 30 October 2017 statement Mr Snowden gives evidence of an automated price comparison system developed by Mitre 10. The statement includes a summary of how many products Mitre 10 sold at a cheaper price than Bunnings between June 2015 and May 2016, but it does not disclose the underlying data of the product matches. Following a pre-trial admissibility hearing, the summons was amended, and the October 2017 statement was held admissible. Bunnings appealed the admissibility issue to the High Court and sought judicial review of the summons. The High Court dismissed Bunnings' challenge to the summons and formally to the admissibility of Mr Snowden's statement. But the Court held that in the form tendered, Mr Snowden's statement would be inadmissible hearsay and opinion evidence, in the absence of disclosure of the underlying price comparison data.

The Commission appeals the admissibility of the statement on the grounds it is not inadmissible hearsay or opinion evidence (CA59/2020). Bunnings appeals against the admissibility of the statement on the grounds of relevance (CA62/2020). Bunnings also appeals against the validity of the summons (CA61/2020).

Criminal Law - Leave to appeal. Whether admissibility appeals raise matters of general or public importance.

Held: Yes. The appeals raise a matter of general or public importance, namely the admissibility of automated electronic price comparison survey evidence.

Evidence - Relevance. Whether Mr Snowden's statement is irrelevant and inadmissible.

Held: Yes. Mr Snowden's evidence is directed at the Commission's hypothesis that a substantial proportion of identical products are priced more cheaply at Mitre 10 than at Bunnings. The statement directly asserts the price comparison outputs are reliable: all else is scene-setting. The statement also impliedly asserts the automated process reliably matches and compares products and prices. Each assertion requires foundation to have a tendency to prove a fact in issue, be it from observation or a permissible combination of opinion and observation.  As to the second, implied assertion, Mr Snowden's evidence is not that he developed the programme and  is not an expert in it. Nor does the statement offer ex-post non-expert evidence of Mr Snowden's observations of checking the accuracy of the matches.  The first, direct assertion is parasitic on the second assertion. In the absence of foundation, the statement is simply conjecture based on an unproved automated process. It has no probative value and is irrelevant.

Evidence - Hearsay. Whether Mr Snowden's statement is hearsay. 

Mitre IO's price comparison process is novel and bespoke. No statutory or common law presumption of accuracy applies to it. The implied assertion as to the reliability of matches is the implied statement of the programmer who developed and tested the automated system. It is offered to prove the truth of its contents and is hearsay. The direct assertion as to results is the product of the programmer of the automated system. It is also hearsay. The Commission does not attempt to argue the statement is an admissible business record. The statement is inadmissible hearsay.

Judicial Review - Criminal Law - Summons.  Whether the Commission's summons is valid.

Held: Yes. The summons was a material step in the investigation and Mitre 10 would not have volunteered the information without it to protect confidentiality. Mitre 10 did not volunteer the evidence. But the Commission was entitled to continue investigating despite laying charges. The difference in drafting between the Commerce Act 1986 and Fair Trading Act may or may not be a deliberate distinction but it is unnecessary to decide in this appeal. The relevant source of power here is s 159 of the Criminal Procedure Act. Section 159 is intended to require the attendance of a witness (with documents) at a hearing. This is a different purpose to the Criminal Disclosure Act 2008, which enables a defendant to obtain non-party disclosure. The summons was issued to meet a challenge to the relevance and admissibility of Mr Snowden's statement, to be dealt with pre-trial. The use of the power in s 159 was authorised and orthodox in that context.
Case number
[2020] NZCA 305
Date of Judgment
23 July 2020
Summary
Appeal allowed in part. Appellant entitled to costs in this Court. Damages and costs therein remitted for redetermination in the High Court. 

Mr Craig was the leader of the Conservative Party from 2011 to 2015. Ms MacGregor was the press secretary for Mr Craig and the Party. Ms MacGregor resigned prior to the 2014 general election, alleging that Mr Craig had sexually harassed her. A mediated confidential settlement was reached between Mr Craig and Ms MacGregor. Information about Mr Craig’s conduct towards Ms MacGregor and the Party Board was passed to Mr Slater by Mr Stringer and Mr Williams. Following Mr Craig’s resignation as Party leader, Mr Slater made a series of  allegations about Mr Craig on his Whaleoil blog, NewsTalk ZB and the One News Now website. In response, Mr Craig held a press conference and published a pamphlet entitled “Dirty Politics and Hidden Agendas”. 

Mr Craig filed defamation proceedings against Mr Slater and an associated company, Social Media Consultants Ltd. Mr Slater counterclaimed on the basis the pamphlet defamed him. 

In a decision of the High Court, Mr Slater was held liable for two defamatory statements:  that   Mr Craig had placed Ms MacGregor under financial pressure to sleep with him, and that he had sexually harassed at least one other victim. Mr Slater’s other publications were either not defamatory or protected by defences of truth, honest opinion or responsible public interest communication. The Judge declined to award Mr Craig damages: his reputational loss was  caused almost entirely by his own actions and a declaration would be adequate vindication. Mr Slater’s counterclaim was dismissed on the basis that Mr Craig’s pamphlet was a justifiable response protected by qualified privilege. 

In a separate decision of the High Court, costs were awarded to Mr Slater for the primary claim on a reduced basis because Mr Craig’s claim largely failed. Costs lay where they fell on the counterclaim because both parties had succeeded or failed in more or less equal measure. 

Mr Craig appeals both High Court decisions. 

Defamation – Cause of action. Did the High Court err in finding five publications did not bear the meanings alleged by Mr Craig. 

Held: Yes, in part.  Whether a statement is capable of bearing a particular meaning is a question  of law and it is open for this Court in this general appeal to reach its own conclusion on whether the statements can bear the pleaded meaning.

The Judge correctly held an ordinary reader would not take the narrowly pleaded meaning that  Mr Craig had tricked, misled and deceived the Board in relation to loans and GST rebates from publication 4. 

The Judge erred in finding an ordinary reader would not take the meaning that Mr Craig is a danger to women from publication 10. That meaning is the natural extension of the meanings the Judge accepted and implied by the description of Mr Craig as a “ticking timebomb”. 

The Judge erred in finding an ordinary reader would not take the meaning that there were reasonable grounds to suspect Mr Craig of being dishonest in filing his electoral returns and lying about the amounts spent on his electoral campaign and that his spending exceeded the legal limits from publication 14. Tiers of meaning analysis is a convenient method to identify the sting imputed, but in context the publication shifted the imputation from one tier to the tier of meaning alleged. 

The Judge correctly held that a reasonable reader would not draw the meaning from publication 17 that Mr Slater repeated all his previous defamatory statements. It was too disconnected in content and somewhat disconnected in time. 

But the Judge erred in finding an ordinary reader would not take the meaning from publication 15 that Mr Slater repeated his previous allegations regarding sexual harassment. That publication expressly referred to the allegations of sexual harassment and that Mr Slater had not withdrawn them. 

Defamation – Cause of action. Did the High Court err in finding certain meanings not defamatory. 

Held: Yes. For a meaning to be defamatory, it must tend to affect the claimant’s reputation adversely in a more than minor way. The more than minor harm requirement is  approved. Damage to reputation is an essential element of the cause of action of defamation. The threshold is a necessary consequence of s 14 of the New Zealand Bill of Rights 1990. The more than minor threshold is preferred to a higher standard of serious harm. 

The Judge erred in finding the pleaded meaning that Mr Craig lied to the media about why Mr Baldock and Mr Baker left the Party and its Board in publication 14 was not defamatory. The pleaded meaning presumes Mr Craig lied to the media. Ordinary New Zealanders would not expect political leaders to lie and would think less of them if they did. 

The Judge erred in finding the pleaded meaning that Mr Craig abused his power and manipulated the resources of the Party to pursue a relentless and driven witch-hunt against Mr Baldock without any reasonable cause in publication 16 was not defamatory. The expression “witch-hunt” imputes that Mr Craig used his position to unfairly and  vindictively target Mr Baldock which damages  Mr Craig’s reputation for good judgment and fairness. 

Defamation – Defences – Truth. Did the High Court apply the correct approach to determining whether publications were true, or not materially different from the truth. 

Held: Yes, in part. The Judge was correct to find the allegations Mr Craig sent Ms MacGregor “sexts” in publications 1, 4, 6, 7 and 11 not materially different from the truth. Mr Craig sent Ms MacGregor sexually suggestive if not explicit letters as well as texts of the same  ilk.  The essential sting of the publications was that messages suggesting sexualised contact had been transmitted. The fact Mr Slater misstated the medium Mr Craig used made no difference to the injury to reputation.

The Judge erred in finding the allegations in publications 1, 7 and 9 that Mr Craig sexually harassed Ms MacGregor so seriously that he settled her sexual harassment claim by paying her a large sum of money running into six figures were not materially different from the truth. An ordinary listener and reader would measure the seriousness of Mr Craig’s conduct against the six- figure quantifier, but at most $19,000 was exchanged because or in part because of Mr Craig’s conduct. This is not a distinction without a difference. But the Judge was correct in finding the allegations of a large payment in publication 14 and payment tens of thousands more than Mr Craig told the Board about in publication 6 were not materially different from the truth. 

The Judge was correct to find the allegations in publications 1, 6, 7, 9 and 14 that Mr Craig lied to the Board about his conduct towards Ms MacGregor by claiming he had paid her substantially less than six figures to settle an employment claim when in fact he paid her to settle a sexual harassment claim were not materially different from the truth. The settlement agreement between Mr Craig and Ms MacGregor did not prevent Mr Craig disclosing the nature of his conduct towards Ms MacGregor. The relevant sting is the act of lying to the Board. That Mr Craig was partly truthful in denying the payment was six figures does not make the sting materially different from the truth. 

The Judge was correct to find the allegations in publications 1, 6, 7, 9, 10 and 12 that Mr Craig seriously sexually harassed Ms MacGregor were not materially different from the truth.  The Judge was sensitive to the possibility that since publication in 2015 the meaning of sexual harassment may have expanded due to the #MeToo movement. Mr Craig’s conduct was intentional, sexualised and directed at a subordinate, in circumstances where it was reasonable to draw a rebuttable inference that it was unwelcome whether objected to or not. Ms MacGregor did not make it known that Mr Craig’s advances were unwanted but the Judge was correct to find on the evidence that this was due to fears of losing her job. 

It is unnecessary to address truth as a defence to Mr Slater’s counterclaim as Mr Craig prevailed in his defence on other grounds. 

Defamation – Defences – Honest opinion. Did the High Court err in finding the defence of honest opinion applied to publication 16. 

Held: Yes. The defence of honest opinion cannot be founded on another opinion. Mr Slater did  not use the fact of Mr Stringer’s opinion as the basis of his opinion. Mr Slater recycled Mr Stringer’s opinion, adding his own comments to the same effect. 

Defamation – Defences – Responsible public interest communication defence. Did the High Court err in finding the responsible public interest communication defence applied to publications 1, 6, 7, 9 and 16. 

Held: Yes. The public interest in Mr Slater’s statements is uncontested and the availability of the defence turns on whether Mr Slater communicated those statements with sufficient responsibility. All publications involved incorrect enlargement by Mr Slater from verifiable facts. The six figure payment allegation in publication 1 was made despite Mr Slater not knowing the size of the payment. The republishing of Mr Stringer’s allegations in publications 6, 7, 9 and 16 was not responsible as Mr Slater did not consider Mr Stringer a reliable source. Mr Slater took no steps to verify the five publications. Reportage, a subset of the responsible public interest communication defence, is unavailable for publications 6, 7 and 16. Those publications were not neutral and the public interest in the fact of Mr Stringer’s allegations was not compelling. Mr Slater should have sought comment from Mr Craig. 

Defamation – Damages. Did the High Court err by failing to award Mr Craig damages. 

Yes. A nil damages award where defamation has been established is a defective verdict.  Mr  Craig sought damages and did not disclaim what would otherwise be his right to a measure of
damages, even if nominal, if his claims were upheld. The Judge also erred by finding the untrue allegations would not cause additional reputational harm to Mr Craig. The Judge did not err by having regard to the Human Rights Tribunal report. Though not produced in evidence by omission, it was put to witnesses without objection and was the subject of cross-examination. However, the report added nothing to the existing evidence that Mr Craig had sexually harassed Ms MacGregor which was admissible to show bad character and diminish the reputational harm suffered by him. This Court cannot reassess damages as the parties did not consent to this. The verdict on relief is set aside and remitted for determination in the High Court. 

Defamation – Costs. Did the High Court err in its costs judgment. 

Held: Yes. In light of the findings on appeal costs on the primary claim must be set aside and redetermined in the High Court. The High Court should consider whether a more appropriate award would be to award costs to Mr Craig on a reduced basis to recognise he achieved some success. The Judge erred in his costs order as to the counterclaim. The award is inconsistent with the costs award on the primary claim, and there is no basis to displace the rule that costs should follow the result: Mr Craig succeeded entirely. Costs on the counterclaim are remitted for determination to the High Court.
Case name
Case number
[2020] NZCA 287
Date of Judgment
17 July 2020
Summary
Appeal against conviction dismissed. Appeal against sentence allowed.  Sentence of two years and nine months ' imprisonment quashed and a sentence of 18 months' imprisonment substituted . 

The appellant was convicted of one charge of sexual violation by rape following a jury trial (at which he was acquitted of other charges).  At trial, the Crown's case was presented in the alternative: either the complainant never consented to intercourse with the appellant,  or she initially consented to intercourse but then withdrew that consent. On the appellant's evidence, the complainant initiated intercourse with him, then said "Oh, I don't want  it" followed by "no" multiple times. The appellant claimed this did not register with him and he finished not long after that when he realised the complainant no longer wanted to have intercourse. In his summing up, the trial Judge issued a question trial but did not tie the steps to the relevant competing narratives. The jury subsequently advised the Judge that they could not agree on one charge. The Judge gave the full Papadopoulos direction and the standard majority verdict direction. The  jury subsequently requested a definition of rape which the Judge declined to give, directing them back to the question trail. The jury then returned a guilty verdict on the rape charge. The appellant was subsequently sentenced to two years and nine months' imprisonment. 

The appellant appeals his conviction on the basis that a miscarriage of justice occurred because the trial Judge failed to give the jury directions tailored to the evidence on withdrawal of consent and that true consent can be hesitant, reluctant or regretful. He contends these errors were exacerbated by the failure to assist the jury when they asked questions during their deliberations. 

The appellant appeals his sentence on the basis that it is manifestly excessive. 

Criminal Law - Summing up. Whether the Judge misdirected the jury by failing to give a tailored direction as to withdrawn consent. 

Held (Kós P and Mallon J by majority): Yes. The Judge needed to identify the two alternative theories of the case to the jury and explain how to work through them. In terms of the withdrawn consent theory of the case, the jury needed to be directed that they must be sure that the appellant continued with the penetration knowing the complainant was no longer consenting or when a reasonable person would not believe the complainant was still consenting. In other words, to convict a juror needed to identify a point in time when there was, or should  have been, appreciation that consent had been withdrawn, and then the failure to cease penetration. The jury should not be directed  to take a "realistic" approach  to delay:  that direction  is inherently  vague and invites invalid stereotyped reasoning which overrides complainant autonomy.

Held (Venning J dissenting): No. The Judge's directions and question trail were orthodox and accurately dealt with the issue of withdrawn consent. The Jude dealt with the issues in his summing up, albeit briefly. A direction to approach the issue of withdrawal in a realistic way is inappropriate. 

Criminal Law -Jury direction. Whether the Judge's responses to the jury's questions exacerbated the deficiencies in his directions to the jury. 

Held (Kós P and Mallon J by majority): Yes. The Judge should not have given a standard majority verdict direction and Papadopoulos direction at the same time. In response to the request for a definition of rape, directing the jury back to the question trial likely left the jury unsure about how to assess belief in consent on reasonable grounds in circumstances of withdrawn consent. 

Held (Venning J dissenting): No. It would have been preferable if the Judge had not dealt with the question about inability to reach a verdict by going immediately to a combined Papadopoulos and majority verdict direction . But the jury continued to deliberate for a further two hours. In response to the request for a definition of rape, by referring the jury to the question trail the Judge correctly emphasised that the jury had to be satisfied as to each of the elements of the offence, including the appellant's belief in the complainant's consent. 

Criminal Law - Summing up. Whether the Judge misdirected the jury by failing to give a direction that regret or reluctance does not amount to a lack of consent. 

Held (unanimously): No. The Judge's question trail included that consent that is given can be regretted. This was sufficient in circumstances where defence counsel accepted in closing that consent was withdrawn meaning it was not a live issue. 

Criminal Law - Unsafe verdict. Whether there is a real risk that the verdict is unsafe causing the appellant to suffer a miscarriage of justice. 

Held (Kós P and Venning J by majority): No. On the appellant 's own evidence, the complainant indicated she no longer wanted to have intercourse. The appellant appreciated this but continued intercourse with her despite her then saying "no" multiple times.  The appellant  admitted  that he felt entitled to continue to have intercourse with her because she had initiated sexual activity with him. In these circumstances, the jury could, and should, be sure that the appellant continued with penetration either knowing the complainant was no longer consenting, or that he continued penetration when a reasonable person would not believe the complainant was still consenting. There was no reasonable possibility therefore that a duly-directed jury would have entered a verdict of acquittal. 

Held (Mallon J dissenting):  Yes.  The appellant 's evidence was that it did not register with him that the complainant no longer consented. When it did register, he ceased intercourse. A properly directed jury may have considered this evidence of the appellant 's subjective belief credible and delivered an acquittal as they had on the other charges against the appellant. 

Criminal Law - Sentence - Starting point. Whether the sentence starting point of three years and 10 months' imprisonment was too high. 

Held (unanimously): Yes. The guideline judgment in R v AM expressly permits a sentencing starting point for low-culpability offenders below band one's six years . Following Orchard v R, focus should be on the examples given in guideline judgements. Here, the offending falls below band one and below the sub-band one example (R v Greaves): the appellant belatedly ceased intercourse after reaching an appreciation that he should not continue. The intercourse was normal for the couple and there was no material age disparity.  The evidence and victim impact statement does not demonstrate harm sufficient to elevate this offending. A conviction for rape carries its own serious stigma, which may not be erased under the Clean Slate legislation. An inevitable sentence of imprisonment would be manifestly excessive.  Given discounts for personal factors, a non-custodial sentence  is appropriate.  A starting point of two years and three months' is appropriate, with a five month uplift for the appellant's other offending. Discounts proportionate to those applied by the sentencing Judge give an end sentence of 18 months' imprisonment.
Case name
Case number
[2020] NZCA 296
Date of Judgment
15 July 2020
Summary
Leave to adduce evidence granted. Appeal allowed. Sentence quashed and substituted for sentence of seven years and five months imprisonment. 

Criminal Practice and Procedure – Sentence Appeal
Sentence – Personal Mitigation – Guilty Plea – Sentencing Methodology
Sentence – Starting Point
Sentence – Personal Mitigation – Cultural Report 

Valentine Moses was convicted of one representative charge of possessing methamphetamine  for supply. She appealed her sentence of 8 years 4 months imprisonment on the basis that the starting point was too high, the judge erred in refusing to adjourn to receive a cultural report (under s 27 of the Sentencing Act 2002), and that a two-stage sentencing methodology, taking her guilty plea discount as a proportion of the adjusted starting point, would have resulted in a lower sentence. 

Should this Court change the three-step sentencing methodology created by the Court of Appeal in its judgment in Hessell v R [2009] NZCA 450, [2010] 2 NZLR 298?
Held: Yes. 

In R v Taueki [2005] 3 NZLR 372 this Court established a two-step methodology founded on the idea of a starting point. At the first step the sentencing judge establishes a provisional sentence or starting point based on the circumstances of the offending. We use the term “adjusted starting point” to signify that it incorporates all aggravating and mitigating features of the offending. At the second step the judge tailors the adjusted starting point to the offender, incorporating their personal aggravating and mitigating circumstances to reach the appropriate end sentence. 

This Court in Hessell v R added a third step, which provides for a guilty plea discount calculated as a percentage of the sentence that would otherwise have been passed (that is, after making allowances for aggravating and mitigating factors personal to the offender). 

On appeal, the Supreme Court in Hessell v R [2010] NZSC 135, [2011] 1 NZLR 607 cautiously accepted the three-step methodology: at [73]. It did not endorse the practice of fixing the guilty plea discount as a percentage of the notional sentence calculated at step 2; accordingly, this Court is at liberty to change it. 

Under the three-step methodology uplifts or discounts for personal circumstances at step 2 affect the amount of the guilty plea discount. The greater the step 2 discounts for personal mitigating factors the lower the resulting multiplicand and the fewer units of time deducted for the same percentage guilty plea discount. There is no principled justification for this difference, which  did not arise in Hessell.

The following sentencing methodology replaces the three-step methodology established in this Court’s judgment in Hessell v R at [14].  It  also replaces the Court’s  subsequent restatement in R v Clifford [2011] NZCA 360, [2012] 1 NZLR 23 at [60]. 

A two-step methodology should be used: 
(a) the first step, following R v Taueki, calculates the adjusted starting point, incorporating aggravating and mitigating features of the offence; (b) the second step incorporates all aggravating and mitigating factors personal to the offender, together with any guilty plea discount, which should be calculated as a percentage of the adjusted starting point.

The guilty plea discount does not exceed the maximum of 25 per cent of the adjusted starting point, as established by the Supreme Court in Hessell

Is an allowance for remorse separate to the discount for a guilty plea?
Held: Yes. 

Benefits to the judicial system and participants in it supply the principal justification for the guilty plea discount. Remorse is a personal mitigating factor that may justify a discount separately from any guilty plea discount. It is a question of fact and judgement. The defendant bears the onus of showing that it is genuine, meaning that it qualifies as remorse and he or she actually experiences it. Remorse need not be extraordinary to earn a discount, but it does require something more than the bare acceptance of responsibility inherent in the plea. Courts look for tangible evidence, such as engagement in restorative justice processes. A guilty plea is not synonymous with remorse but may evidence it. 

Does the new methamphetamine tariff case Zhang v R [2019] NZCA 507, [2019] 3 NZLR 648 materially alter Ms Moses’s sentence?
Held: Yes. 

We are not persuaded the starting point was wrong. The offending falls into Zhang band four and the quantity involved places Ms Moses at the midpoint. Although she worked for another, it is not accurate to characterise hers as a lesser role. We admit the cultural report for purposes of the appeal. The report’s account of Ms Moses’s economically and socially deprived background point to a connection between them and her offending. It is sufficiently proximate to mitigate culpability to a degree. The report also points to prospects of rehabilitation which merit recognition. The discount for personal mitigation is increased to 15 per cent. Applying the two-step methodology, the end sentence is seven years and five months imprisonment.
Case number
[2020] NZCA 292
Date of Judgment
15 July 2020
Summary
In Fitzgerald v R the Court of Appeal considered whether a discharge without conviction was available on a "third strike" offence , as an alternative to sentencing an offender to the maximum term of imprisonment  for that offence  as required  by the three strikes regime. The Court unanimously held that the sentence of seven years' imprisonment that the court was required to impose on this mentally unwell offender, for offending that would not normally result in a prison sentence, was manifestly unjust. It amounted to "disproportionately severe punishment" that breached Mr Fitzgerald's rights under s 9 of the New Zealand Bill of Rights Act 1990 (NZBORA).

The Court went on to find that the third  strike provision  in s 86D(2)  of the Sentencing Act 2002 is inconsistent with NZBORA, because it does not contain a "safety valve" provision that enables a less severe sentence to be imposed in cases where the maximum sentence 1s disproportionately severe.

Clifford and Goddard JJ held that the Sentencing Act prevented the Court granting a discharge in these circumstances , and dismissed the sentence appeal. Collins J (dissenting) held that an alternative interpretation of the legislation allowed for a discharge to be granted, avoiding a breach of s 9 of NZBORA in this case. 

Background
In 2018 Mr Fitzgerald attempted to kiss a woman walking  along  Cuba  Street  in Wellington. She moved her face away but he managed to kiss her on the cheek.  He then grabbed and pushed the woman's friend who tried to stop him. He was charged with indecent assault and common assault.

The three strikes regime applied as Mr Fitzgerald had two previous convictions for " serious violent offences". Mr Fitzgerald's two previous strike offences were both indecent assault convictions for inappropriate interactions with women in public places. The three strikes legislation therefore required the court to sentence Mr Fitzgerald to the maximum term of imprisonment prescribed for indecent assault, which is seven years' imprisonment.

Mr Fitzgerald sought a discharge without conviction, which he submitted was  an  available  option that would avoid the need to impose a seven year sentence.

The sentencing Judge recognised that Mr Fitzgerald's  offending  was at a low level  that  would not usually result in a prison sentence, and that he has longstanding mental health issues and  needs constant mental health care. Nonetheless, the Judge held that the three strikes regime prevented him from entering a discharge without conviction. Mr Fitzgerald  appealed  to  the Court of Appeal. 

Unanimous:

The offending was not serious enough to warrant imprisonment, let alone imprisonment for a term of seven years. Mr Fitzgerald's ability to regulate his behaviour appropriately, and to understand and act on the warnings given under the three strikes regime, is severely compromised by his multiple mental health conditions. The rationale for imposing a more severe sentence after a final warning is not applicable in his case. His impaired mental health and vulnerability also make serving a lengthy sentence of imprisonment disproportionately severe for him.

The sentence of seven years' imprisonment infringes Mr Fitzgerald's right to not be subject to disproportionately severe punishment under s 9 of NZBORA. The sentence goes well beyond excessive punishment, and would shock the conscience of properly informed New Zealanders.

Section 86D(2) of the Sentencing Act, which  requires the maximum  sentence to be imposed  for  a third strike offence, and which does not contain a "safety valve"  permitting  the  court  to impose a less severe sentence where the maximum sentence would be manifestly unjust, is inconsistent with NZBORA. 

Clifford and Goddard JJ:

Section 106 of the Sentencing Act 2002 provides that a discharge without conviction cannot be granted if by "any enactment applicable to the offence the Court is required to  impose  a minimum sentence". By requiring  the Court to impose the maximum sentence,  the  three strikes  regime  sets  a  minimum  sentence for the offence committed by Mr Fitzgerald.

The Court therefore cannot discharge Mr Fitzgerald.The Court need not determine, on this occasion, whether  a formal  declaration  of inconsistency is available in criminal appeal proceedings. A formal declaration of inconsistency with NZBORA is not required in this case. The very clear indication of inconsistency  in  this judgment may be a relevant factor for the Parole Board in deciding whether, and when, Mr Fitzgerald is granted parole. It is also relevant to decisions about what support he is given to help him to obtain parole. 

Collins J (dissenting):

The  three strikes regime does not impose  a  minium sentence covered by s 106.   This interpretation is more consistent with NZBORA and should be adopted. Mr Fitzgerald can therefore be discharged without conviction. This interpretation is supported by the legislative history of the provision and is not an overly strained interpretation. Parliament intended for the three strikes regime to apply to serious violent offenders and would not capture offenders who would otherwise be eligible for discharges without conviction.
Media Release
Media Release (PDF, 154 KB)
Case number
[2020] NZCA 275
Date of Judgment
08 July 2020
Summary
The appeal is allowed in relation to Question 2(b): we agree with the parties' joint position that the investors were not creditors. The appeal is otherwise dismissed. The cross-appeal  is allowed. The appellant must pay the respondent costs for a standard appeal on a band A basis with usual disbursements. 

Harmoney operates a peer-to-peer lending website. The Harmoney lending model comprises various documents - including the Loan Contract, Loan Disclosure and Borrower Agreement in which the named creditor is Harmoney Investor Trustee Limited (HITL). Harmoney charges borrowers a Platform Fee for arranging the loans. The Commerce Commission contends that the Platform Fee is a credit fee under the Credit Contracts and Consumer Finance Act 2003 (the CCCFA) and thus subject to statutory controls. The Commission posed three questions in a case stated for the opinion of the High Court. The High Court's answers led to the ultimate conclusion that the Platform Fee was a credit fee. Harmoney appeals to this Court and the Commission cross-appeals the High Court's finding that the Borrower Agreement did not form part of the credit contract. The parties submitted six questions for the appeal.

Did the High Court err in finding that the credit contract comprised both the Loan Contract and the Loan Disclosure? Held: No. The terms of a contract may be contained in more than one document if one document expressly refers to the terms of the other or where, on an objective analysis of the agreement, a reasonable person in the position of the parties would have understood the terms to operate together. Both situations apply here. Key terms  of the  loan are found only in the Loan Disclosure which are the subject of express cross reference in the Loan Contract. As the Loan Contract lacks these key terms it would be impossible for it to exclusively comprise the credit contract. The two documents must have objectively been intended to operate together. 

Did the High Court err in finding that the credit contract did not also comprise the Borrower Agreement?
Held: Yes. The degree of inter-relationship between the three documents is such that objectively the reasonable observer would read them as operating together as one. General matters addressed in the Borrower Agreement do not preclude it from being part of the credit contract. The Borrower Agreement is a necessary prerequisite to any loan transaction. 

Did the High Court err in finding that Harmoney was a creditor? Held: No. A creditor under the CCCFA is a person who has provided or many provide credit under a credit contract. As principal, Harmoney vets borrowers, approves  borrowers' Loan Applications for listing on its website, assigns a credit grade for the proposed loan and notifies borrowers when the loan is Fully Funded. This comprises a significant part of the grant of a right to incur a debt. 

Did the High Court err in finding that the investors were creditors? Held: Yes. Neither party advanced this proposition in the High Court. The Judge was in  error  in  reaching  a different conclusion. 

Did the High Court err in finding that the Platform Fee was a credit fee on the basis that it was a "fee ... payable by the debtor under a credit contract"? Held: No.  The obligation  to  pay the Platform Fee is contained in the Borrower Agreement. The Loan Contract records that HITL advances the Loan Amount which the Loan Disclosure shows includes the Platform Fee. 

Did the High Court err in finding that the Platform Fee was not a credit  fee on the basis  that it was not a "fee .. . payable by the debtor ... for the benefit of ... the creditor in connection with the credit contract"? Held: No. Payments for the benefit of a creditor do not capture every payment that has a positive effect on a creditor. A creditor avoiding  a  cost  it  would otherwise bear is too indirect and remote in order to give HITL the  benefit  of  the  Platform Fee.

Did the High Court err in finding that the Platform Fee was not a credit  fee on the basis  that it was not a "fee .. . payable by the debtor ... for the benefit of ... the creditor in connection with the credit contract"? Held: No. Payments for the benefit of a creditor do not capture every payment that has a positive effect on a creditor. A creditor avoiding a cost it  would otherwise bear is too indirect and remote in order to give HITL the  benefit of the  Platform Fee.
Case number
[2020] NZCA 274
Date of Judgment
07 July 2020
Summary
The appellant's application for leave to adduce affidavit evidence is granted. The respondent's application for leave to adduce affidavit evidence is granted in relation to Frances Matthews and declined in relation to Ruth Dyson. The appeal is allowed and the decision of the High Court quashed. The respondents ' claims are remitted to the District Court for reconsideration . 

Accident Compensation - Cover - Case Stated

The High Court heard three test cases which questioned the interpretation of "ordinary consequence" in s 32 of the Accident Compensation Act 2001 which states cover is not available for injuries caused by medical treatment when the injury was an ordinary consequence of the treatment. The High Court found this to mean more probable than not or a consequence that has a 50 per cent or greater chance of occurring. ACC was granted leave to appeal this decision by way of a case stated on a question of law. For the appeal, both parties applied for leave to adduce further evidence. 

Should leave be granted for the appellant to adduce further evidence?  Held:  yes.  The appellant sought leave for affidavits from four medical expe1ts that describe a 20 to 50 percent chance of significant adverse outcomes as a very  high  risk  that  doctors  will  avoid.  These provide the Court with substantially helpful insight into the context in which s 32 has to be construed. 

Should leave be granted for the respondent to  adduce  further  evidence?  Held:  yes  in relation to the affidavit of  Frances  Matthews,  no  in  relation  to  the  affidavit  of  Ruth  Dyson. Ms Matthews is a general practitioner and her affidavit comments on the way the medical community assesses risk. The majority of her affidavit is relevant and helpful. Ms Dyson was previously Minister for ACC and the purpose of her affidavit is to describe  what  was intended when drafting and enacting the relevant provisions . This is inadmissible.  A statute's meaning cannot be asce1tained by reference to the subjective intentions of the Minister responsible for the Bill. 

Was the High Court correct to conclude that the word "ordinary" in s 31(1)(c) of  the Accident Compensation Act referring to  "ordinary  consequence"  means  a  consequence that is more probably than not? Held: no. Considering the plain language  and  legislative purpose, the phrase "ordinary consequence" in s 32 is not capable  of  meaning  "a consequence more probably than not".  The 2005 amendment  to this section  intended  to increase cover,  but  not to cover almost all treatment injuries when the prior regime had not done so. The proper interpretation of "not an ordinary consequence"  is  something  out  of  the  ordinary  which occasions a measure of surprise. This would be assessed on a case-specific basis  taking  into account all the circumstances of the treatment and the particular claimant.
Case number
[2020] NZCA 268
Date of Judgment
01 July 2020
Case number
[2020] NZCA 249
Date of Judgment
24 June 2020
Summary
Public works - offer back to former owner.

The Crown purchased land from Aztek Ltd pursuant to s 40 of  the  Public  Works Act 1981 (the Act) for the purposes of intended roading work. Ms Prujean was Aztek's sole director and shareholder. After discovering that the roading work had been completed, but the land had not been used, the appellants sought to ascertain whether there was surplus land that might be offered back to Aztek. They were informed that the land had been exempted from the offer back requirements under s 40(2)(a) of the Act, on the basis that the company had been removed from the register of companies. Aztek had been struck off the register due to a failure to file annual returns under the Companies Act 1993 but was restored to the register in 2015. The appellants challenged the Chief Executive of Land Information New Zealand (LINZ)'s decision that it was impractical to offer the land back to Aztek under s 40 of the Act in the High Court. Muir J rejected the submission that the obligation to endeavour to sell the land back to Aztek under s 40(1) of the Act should be distinguished from the obligation in s 40(2) and should include an obligation to endeavour to sell the land back to Aztek by locating its former sole director and shareholder to ascertain whether she wanted to have Aztek restored to the register for that purpose. The appellants, Aztek and Ms Prujean, appealed that decision. 

Held - appeal allowed.  The purpose of s 40 of the Act was remedial and should be construed to reflect that purpose. Section 40(2) did not operate as a "prerequisite" to "endeavour to sell" obligation in s 40(1). Reasonable and appropriate inquiries to ascertain whether an offer back to the former owner is possible is required. Such inquiry in this case would have led to Ms Prujean who could readily have been found. Contacting her was part of the reasonable endeavours to sell the land in accordance with s 40(2). Nothing in the Companies Act precluded that interpretation of s 40 of the Act. Nor would that interpretation be onerous on the chief executive. As to the discretion to refuse relief, the Judge had referred to the fact Aztek had been removed due to its failure to file annual returns, tangata whenua interests in the land and Aztek's interest in the land, which he deemed as only commercial in nature. None of these factors justified a refusal to grant relief to the appellants. The Chief Executive's decision to exempt the land from offer back was set aside to be reconsidered in accordance with this judgment.
Case number
[2020] NZCA 245
Date of Judgment
23 June 2020
Summary
NZBORA-Access to a solicitor.

Mr Kerr was detained by the police at 9.45 pm on a Friday night and required to give a blood sample pursuant to the drink-driving scheme. He asked to speak to a lawyer. When his own lawyer could not be reached, he was referred to a list of lawyers participating in the Police Detention Legal Assistance (PDLA) scheme, who are able to give immediate advice over the telephone to persons detained or arrested by the police. Twelve PDLA lawyers were called but none answered the telephone. 

Mr Kerr refused to give a blood sample and was convicted of that offence in the District Court. The High Court dismissed an appeal against conviction. Mr Kerr appealed to this Court with leave. The Ministry of Justice, New Zealand Law Society and New Zealand Bar Association intervened in the appeal. 

Did the right to consult and instruct a lawyer, as affirmed by s 23(1)(b) of the New Zealand Bill of Rights Act 1990, imply an obligation on the state to facilitate the availability of legal advisers? Held: No. There was clearly no obligation to guarantee the availability of advisers, as this was not what the section required on its face and would require the Court to enlarge the s 23(1)(b) right beyond that provided by s 24(c) for individuals detained and facing trial. Nor was there an obligation to facilitate advisers' availability, as implying such a duty would amount to the Court determining how the s 23(l)(b) right should be upheld, when that was properly a matter for the executive. 

However, it remained incumbent on the executive to afford a detained motorist the facility to exercise the right in a real and practicable way. If the executive chose to do so through the PDLA, then it needed to ensure the scheme fulfilled its purpose of providing contact details of lawyers capable of and willing to provide legal advice to detained persons. 

Was there a breach of Mr Kerr's right under s 23(l)(b)?  Held: Yes. The evidence showed the PDLA in Canterbury was dysfunctional and that it was more likely than not that no lawyer could be reached, however many attempts were made. The act of providing the list of lawyers to detainees therefore provided little or no facilitation. 

Should the evidence be excluded? Held: Yes. The right breached was one of acknowledged importance and although the breach was no occasioned by deliberate carelessness, it resulted from known inadequacies in the PDLA. While the police's ability to administer the drink-driving scheme remained important, facilitation of the right was not difficult, particularly given the ease and speed of modern telecommunication methods.