DOUG HOOD LIMITED v GOLD AND RESOURCE DEVELOPMENTS (NZ) LIMITED [1999] NZCA 158 (25 August 1999)

IN THE COURT OF APPEAL OF NEW ZEALAND

ca 142/99

	between	DOUG HOOD LIMITED
		Appellant

	AND	GOLD AND RESOURCE DEVELOPMENTS (NZ) LIMITED
		Respondent

Hearing:	25 August 1999
Coram:	Henry J Doogue J Panckhurst J
Appearances:	E.D. Wylie with W.J. Palmer for appellant M.R. Camp, Q.C., with T.G. Stapleton for respondent
Judgment:	25 August 1999
Reasons for Judgment:	26 August 1999

REASONS FOR THE judgment of the court delivered by DOOGUE J

Introduction

[1] Doug Hood Ltd ("DHL") sought to appeal from a judgment of Gallen J of 11 June 1999 dismissing an application by DHL for an order dismissing the proceeding under Rule 131 of the High Court Rules.The "proceeding" was an application by Macraes Mining Company Limited, now Gold and Resource Developments (NZ) Ltd ("GRDL") for an order granting GRDL leave to appeal to the High Court from the whole of an interim award made at Wellington on 16 February 1999 in an arbitration between the parties arising out of a contract dated 23 December 1992.DHL entered an appearance under protest in respect of that application by GRDL.DHL's application to dismiss the "proceeding" under Rule 131 of the High Court Rules was upon the grounds that GRDL had not properly commenced the proceeding either by way of notice of proceeding or originating application and that the Court had no power to make the order sought by the appellant because the contract between the parties containing the arbitration agreement under which the interim award was made contained a provision:

The award in the arbitration shall be final and binding on the parties.

[2] Gallen J rejected the procedural point and held that the contractual provision was not of itself sufficient to oust the jurisdiction of the Court. DHL sought to appeal in reliance solely upon the contractual provision, although in argument the procedural point was traversed.GRDL submitted that DHL had no right of appeal and that in any event the decision of Gallen J was well founded.

The Statutory Provisions

[3] GRDL sought leave to appeal to the High Court under clause 5 of the Second Schedule to the Arbitration Act 1996 ("the Act"), which, so far as it is relevant, provides:

(1) Notwithstanding anything in articles 5 or 34 of the First Schedule, any party may appeal to the High Court on any question of law arising out of an award -

(a) If the parties have so agreed before the making of that award; or

(b) With the consent of every other party given after the making of that award; or

(c) With the leave of the High Court.

(2) The High Court shall not grant leave under subclause (1) (c) unless it considers that, having regard to all the circumstances, the determination of the question of law concerned could substantially affect the rights of one or more of the parties.

(3) The High Court may grant leave under subclause (1) (c) on such conditions as it sees fit.

(4) On the determination of an appeal under this clause, the High Court may, by order, -

(a) Confirm, vary, or set aside the award; or

(b) Remit the award, together with the High Court's opinion on the question of law which was the subject of the appeal, to the arbitral tribunal for reconsideration or, where a new arbitral tribunal has been appointed, to that arbitral tribunal for consideration, -

and, where the award is remitted under paragraph (b), the arbitral tribunal shall, unless the order otherwise directs, make the award not later than 3 months after the date of the order.

(5) With the leave of the High Court, any party may appeal to the Court of Appeal from any refusal of the High Court to grant leave or from any determination of the High Court under this clause.

(6) If the High Court refuses to grant leave to appeal under subclause (5), the Court of Appeal may grant special leave to appeal.

(7) ...

(8) ...

(9) ...

[4] The effect of that provision for present purposes was that GRDL needed the leave of the High Court to appeal [(1)(c)] and that the leave of the High Court was required to appeal in respect of the decision of the High Court [(5)] or the special leave of this Court if the High Court refused to grant leave [(6)].

[5] In support of its argument DHL relied upon s. 6(2)(b) of the Act, which provides:

(2) A provision of the Second Schedule applies -

(b) To every other arbitration ..., unless the parties agree otherwise.

[6] The effect of this provision for present purposes was that the provisions of clause 5 of the Second Schedule to the Act applied unless the parties agreed otherwise.It was not suggested for DHL there was specific agreement.The argument for DHL was that by necessary implication the contractual provision that the award should be final and binding constituted such an agreement.

The High Court Rules

[7] There are at present no special rules dealing with applications or appeals under the Act.The High Court Rules as they stand must therefore be applied in respect of any application for leave to appeal and any appeal under the provisions of clause 5 of the Second Schedule to the Act.It is unnecessary to traverse earlier decisions of the High Court on the appropriate procedure. Rule 701 of the High Court Rules makes plain that Part X of the Rules "shall apply to all appeals to the [High] Court under any enactment" other than certain appeals not relevant here and subject to any specific provision contained in the Act conferring a right of appeal.Here there is the need to obtain leave to appeal.

[8] GRDL sought leave to appeal by way of interlocutory application.Rule 3(1) provides that "unless the context otherwise requires":

"Interlocutory application"

(a) Means any application to the Court in any proceeding or intended proceeding for an order or a direction relating to a matter of procedure or for some relief ancillary to that claimed in a pleading; and

(b) ...

[9] "Proceeding" is defined in the same rule as meaning:

any application to the Court for the exercise of the civil jurisdiction of the Court other than an interlocutory application

[10] Rule 4 provides:

These rules shall be so construed as to secure the just, speedy, and inexpensive determination of any proceeding or interlocutory application.

[11] Rule 9 provides:

If any case arises for which no form of procedure is prescribed by any Act or rule or regulation or by these Rules, the Court shall dispose of the case as nearly as may be practicable in accordance with the provisions of these rules affecting any similar case, or, if there are no such rules, in such manner as the Court thinks best calculated to promote the ends of justice.

[12] Rule 131 enables a defendant who objects to the jurisdiction of the High Court to hear and determine "the proceeding" to file and serve an appearance stating the objection.Rule 131(3) provides:

A defendant who has filed an appearance under subclause (1) may apply to the Court to dismiss the proceeding on the ground that the Court has no jurisdiction to hear and determine it.

[13] Section 16 Judicature Act 1908 provides:

The [High] Court shall continue to have all the jurisdiction which it had on the coming into operation of this Act and all judicial jurisdiction which may be necessary to administer the laws of New Zealand.

Did High Court Rule 131 Apply?

[14] The issue of whether Rule 131 could apply to the application for leave to appeal was not raised before Gallen J.It was said for DHL that the High Court had no jurisdiction to hear and determine GRDL's application to it under clause 5 of the Second Schedule to the Act because that Schedule does not apply as the parties had agreed otherwise (s. 6(2)(b) of the Act).

[15] DHL's case is that GRDL has no legal entitlement to invoke the provisions of the Arbitration Act.It contends that clause 5 has no application to this award because it is excluded by the provisions of the contract between the parties.The argument for the appellant confuses the jurisdiction of the Court to grant relief with its jurisdiction to entertain and decide a claim for relief.The obvious flaw in that argument is that the Legislature has vested in the High Court the jurisdiction to determine whether GRDL should be granted leave to appeal under the Act.The High Court has jurisdiction to determine that question.There is no suggestion the jurisdiction is reserved to some other court or tribunal within or without New Zealand.

[16] The High Court can no doubt determine on the application for leave whether it has jurisdiction to grant it, depending on whether the Second Schedule to the Act applies.There is, however, no basis for saying the High Court has no jurisdiction to determine that question.The parties by their contract may choose a different jurisdiction from the High Court of New Zealand.Then there may be room for a protest to jurisdiction in respect of that Court.There is no room for a protest to jurisdiction under Rule 131 where the High Court of New Zealand is the only appropriate forum in respect of any dispute arising out of the contract.The High Court cannot uphold an application under Rule 131 that is not directed to the appropriate judicial forum for the dispute but to whether there is jurisdiction to grant the relief sought.That latter question can be dealt with by the High Court on the application to it for leave to appeal.

[17] DHL's case also faces other procedural difficulties not raised before Gallen J.It was accepted by DHL that GRDL's application by way of interlocutory application for leave to appeal was not a "proceeding" within the High Court Rules.Therefore Rule 131 did not apply.However, it was submitted that the context of the rule required it to be treated as such.It was further submitted that as Gallen J had regarded GRDL's form of application for leave to appeal as being appropriate by reason of Rule 9 it was equally appropriate for GRDL's application to be said to be a proceeding for the purposes of Rule 131. It was also said that if the policy contained in Rule 4 were applied the Rule 131 procedure should be supported.

[18] Those arguments may have some attraction if DHL were raising a forum argument in its protest to jurisdiction.They can have none here.In any event the Legislature has put in place a method of determining whether there should be leave to appeal to the High Court.It has limited the appeal rights from the decision of that Court.To uphold the process urged upon us for DHL would simply further complicate the litigation process in an area where the whole thrust of the legislation is to restrict and not extend litigation.

[19] The application by GRDL for leave to appeal was made in reliance on clause 5 of the Second Schedule to the Act.The application was in the form of an interlocutory application.It fell within the spirit of the definition of an "interlocutory application" as it was for the purposes of the intended appeal.For present purposes it does not matter whether an appeal under Part X of the High Court Rules is a "proceeding" or not.If it is, the application was in respect of an intended proceeding.If it was not, it was an application in respect of an intended appeal akin to an intended proceeding.It was understandable Gallen J should reject the procedural attack upon the application for leave to appeal.

[20] As the application by DHL to the High Court under HCR 131 was misconceived, there was no basis upon which the relief sought under it could have been granted in the High Court.There was equally no basis upon which this Court could consider the appeal from the decision of Gallen J.

[21] There was, as a result, no basis upon which Gallen J could determine the issue which has led to this appeal, namely whether the "final and binding" award provision of the contract excludes the application of the Second Schedule to the Act.As Mr Camp properly accepted, that issue must be determined on GRDL's application for leave to appeal when Gallen J's views will no doubt be entitled to respect but will not be binding on the Judge hearing the application.

Result

[22] As a result, the appeal was dismissed with costs to GRDL in the sum of $3,000.00 together with its reasonable disbursements, which in the event of any dispute were to be fixed by the Registrar.

Solicitors

Buddle Findlay, Christchurch, for appellant

Stapleton Stevens, Wellington, for respondent