ALAN LINDSAY SHANNON v CHRISTINE ROBYN SHANNON [2003] NZCA 282 (4 December 2003)

IN THE COURT OF APPEAL OF NEW ZEALAND

CA202/03

BETWEEN ALAN LINDSAY SHANNON

Appellant

AND CHRISTINE ROBYN SHANNON

Respondent

Hearing: 2 December 2003

Coram: Glazebrook J

William Young J

Heath J

Appearances: A P Duffy QC and H Janes for Appellant

F B Bolwell for Respondent and Stack Shelf Company No. 1 Ltd and Isabel Olson (both non parties)

Judgment: 4 December 2003

JUDGMENT OF THE COURT DELIVERED BY HEATH J

Introduction

[1] A number of consolidated civil proceedings involving Mr and Mrs Shannon are presently before the High Court at Auckland.The first proceeding was filed as long ago as 1997.A matrimonial property dispute has already occupied eight days of the High Court’s time on a preliminary question as to the date of separation.Issues arising out of that judgment were subsequently ventilated both in this Court and the Privy Council.In addition to the extant matrimonial property proceedings, Mr Shannon has brought proceedings for fraud, a claim for money had and received, claims based upon a constructive or a resulting trust and a claim for compensation arising from an allegation that a caveat was unlawfully lodged against a title to real property.

[2] Mr and Mrs Shannon were married on 22 June 1974.They have one child.He was born in 1977.They separated in either 1985 or 1986.There was a dispute as to whether they subsequently reconciled.The issue before Cartwright J was whether the parties separated in 1985/86 or in 1997.She held that they separated on 27 March 1997.

[3] The marriage was described as “unusual” by Cartwright J.In an affidavit sworn in support of the various applications in the High Court with which we are now concerned, Mr Shannon deposed that from late 1987 to March 1997 he and his wife spent approximately 35 days in each other’s company.During part of that time Mr Shannon worked overseas and remitted moneys to New Zealand.Some of the claims involve alleged misapplication of remitted funds by Mrs Shannon.

[4] In late 2002 Mr Shannon made an application for further and better discovery against Mrs Shannon.He also sought non-party discovery against Westpac Banking Corporation, Bank of New Zealand, Isabel Olson, Stack Shelf Company No. 1 Limited, Longley Insurance Brokers Ltd and Telecom New Zealand Ltd.

[5] Those applications, along with other interlocutory applications, were called before Potter J, the Judge assigned to the consolidated proceedings, on 17 June 2003.The applications before Potter J were resolved by agreement, without the need for her to embark upon a consideration on the merits.In a Minute issued on 17 June 2003, the Judge recorded the orders made and those parts of the applications which were “not pursued”.

[6] On 9 September 2003 Mr Shannon made a fresh application for further and better discovery against Mrs Shannon and non-party discovery against Mrs Olson and the companies mentioned in para [4] above.The fresh applications sought orders in similar terms to those “not pursued” before Potter J and some additional orders arising out of a consideration of documents inspected in consequence of Potter J’s orders.

[7] The new applications came before Venning J on 25 September 2003 in Potter J’s absence.In a judgment delivered the following day His Honour, with one or two exceptions to which we shall refer later, dismissed those parts of the applications which were recorded as “not pursued” by Potter J.Mr Shannon appeals against his decision to dismiss those aspects of his fresh application.

The issue

[8] The appeal, shorn to its essentials, raises two questions.The first is whether Mr Shannon’s failure to pursue similar applications before Potter J on 17 June 2003 created a jurisdictional bar to further applications of that type being made. If there is no jurisdictional bar, the second question is whether the orders ought properly to be made as a matter of discretion.

[9] With respect, it is not altogether clear from Venning J’s judgment whether he regarded the fresh applications as subject to a jurisdictional bar or inappropriately made having regard to the high threshold required to bring a second interlocutory application.At paras [11] and [12] of his judgment Venning J said:

[11] ... [Potter J dealt with the earlier applications] in accordance with the orders made in her minute of [17] June 2003. Those orders were made by consent. The Court will not permit a party to resile from concessions made to the Court at an earlier date and incorporated in earlier consent orders. To allow that to occur would effectively be to permit a review of the earlier orders which is only permitted in limited circumstances, and not where the orders are made by consent: r 264.

[12] Ms Duffy submitted that in a number of instances particular aspects of the plaintiff's application that were before the Court in June were not pursued. That is recorded in the Judge's minute. Ms Duffy submitted that there should be no bar to the plaintiff now revisiting those particular aspects of the application and referred to the further affidavits filed in support of the application, in particular the affidavits of Ms Bingham, the plaintiff's accounting expert and the affidavit of Mr Hale. I am unable to accept that submission. The applications that were before the Court as at [17] June were dealt with by the Court on that day and in accordance with the directions set out in the minute. To the extent that certain aspects of the application were not pursued that was recorded and confirmed as part of the consent orders made on that day. There was no reservation of position in relation to the matters not pursued. The matters were not pursued as part of the agreement between the parties that led to the consent orders. The applications, including those aspects that were not pursued in argument before the Judge were dealt with.

[10] The language employed by Venning J suggests to us that he had jurisdictional considerations in mind: this is reinforced by his reference, in para [11], to r 264 of the High Court Rules 1985.That rule forbids the Court from reviewing an interlocutory order made by consent.While we cannot rule out completely the possibility that the Judge intended to dismiss the relevant parts of the application on discretionary grounds, the fact that the Judge did not, in the course of his judgment, discuss factors customarily considered when the Court is asked to make a discretionary decision of that type militates against the view that he intended to dismiss those parts of the application on purely discretionary grounds.

Competing submissions

[11] While it is common ground that the parties had the capacity to enter into an enforceable agreement that no further interlocutory applications of the type before Potter J would be brought, Ms Duffy QC submits that the evidence does not disclose an underlying agreement of that type in this case.She submits that by not pursuing the applications before Potter J Mr Shannon, in effect, reserved his position in respect of those aspects of the applications.

[12] Ms Duffy argues that the judgment of Venning J, read as a whole, does not indicate that the Judge dismissed the applications on discretionary grounds.Ms Duffy was alive to the difficulty of challenging a discretionary decision of that nature.

[13] Ms Bolwell submits that Venning J declined to make orders on the subsequent application on discretionary grounds.She submits his judgment ought not to be gainsaid.

[14] In particular, Ms Bolwell draws our attention to the fact that Venning J did make an order for further and better discovery against Mrs Shannon in respect of an issue involving her passport.Further, she refers us to a passage later in the judgment in which the Judge both made additional orders against Westpac Banking Corporation and declined to make further orders on the grounds that the expert evidence tendered to the Court by Mr Shannon had not been before Potter J in June 2003.She submits that those factors make it clear that Venning J determined the application on discretionary rather than jurisdictional grounds.She submits there is no basis on which we can interfere with the Judge’s discretionary decision.

[15] Further, Ms Bolwell submits that it was open to the Judge to regard the fresh applications as abuses of process.For that reason she submits that we ought to regard the observations made in paras [11] and [12] of the judgment (set out in para [9] above) as referable to discretionary considerations arising from abuse of process as opposed to jurisdictional issues.

Jurisdiction

[16] The first question is whether the relevant aspects of the applications were barred on jurisdictional grounds.

[17] The evidence before us is equivocal as to whether there was an agreement sufficient to oust the jurisdiction of the Court to entertain a further application for discovery.It is clear from the authorities cited by counsel (Siebe Gorman & Co Ltd v Pneupac Ltd [1982] 1 All ER 377 (CA) at 380 and Stead v The Ship Ocean Quest of Arne [1995] 3 NZLR 415 at 418-419), that a distinction is drawn between a consent order giving effect to a real agreement between the parties and one which reflects the absence of objection to an order made.Further, in West v Firestone Tire and Rubber Co of New Zealand Ltd [1992] 2 NZLR 23 (CA) at 30, Cooke P, delivering the judgment of this Court, noted that the question was whether an interlocutory consent order could be elevated into a warranty that no such question would arise in the future.His Honour noted that, if the respondent in that case remained entitled to change its stance, to do so could not be an abuse of process.

[18] For the purposes of argument we assume, without deciding the point, that counsel who appeared for Mr Shannon before Potter J had ostensible authority to bind Mr Shannon on matters agreed: see, for example, Thompson v Howley [1977] 1 NZLR 16 at 24 and Re Archer [1990] 3 NZLR 737 at 751.

[19] Even on that assumption, we are satisfied that the evidence is insufficient to prove a contract between the parties by which they agreed that those matters not pursued before Potter J on 17 June 2003 would not be pursued in the future.

[20] For that reason, there was no basis on which the Court could refuse to entertain the fresh application brought by Mr Shannon on jurisdictional grounds.

[21] We add that we are not persuaded that the terms of r 264 of the High Court Rules was an appropriate analogy for the Judge to draw in the circumstances of this case.The Judge was being asked to entertain a second application; not to review a consent order.With respect, it seems to us that the issue raised by the fresh application was more nearly analogous to the circumstances contemplated by r 265 rather than r 264.Rule 265 emphasises the high threshold an applicant must cross in order to succeed on a second application of the type mentioned in that rule.

Discretionary issues

[22] It is possible, as Ms Bolwell submits, that Venning J refused to make the orders sought on discretionary rather than jurisdictional grounds.But, we cannot be sure that that was his intention.Our doubts, in that regard, are reinforced by the lack of any analysis in the judgment of those factors which would be brought to account in determining whether the orders ought to be made as a matter of discretion.Among other things, those factors include the need for leave to bring the application (as the proceeding had been set down for hearing), the importance of the orders sought having regard to the claims made in the proceedings, whether the application amounted to “fishing” or could operate, otherwise, oppressively against Mrs Shannon, any change of circumstances, any prejudice to Mrs Shannon or non-parties which could not be cured by an order for costs and questions of delay.

[23] It is true, as Ms Bolwell submits, that the Judge did make an order in respect of Mrs Shannon’s passport and that he made some and refused to make other orders against Westpac Banking Corporation.But those issues were adequately explained, in reply, by Ms Duffy.In the first instance it is clear that the Judge was endeavouring to correct a misapprehension under which Mr Shannon may have laboured in relation to the passport information being available from another source.In relation to the Westpac discovery, questions of clarification arose.We note, however, that it does seem surprising that an application for further discovery, arising out of consideration of information supplied after the hearing before Potter J, was refused on the grounds that the expert evidence suggesting the existence of that additional material had not been put before Potter J.

[24] We have considered whether it is appropriate for us to exercise the jurisdiction reposed in the High Court on the application in issue.On balance, we are not prepared to do so.The proceedings in the High Court are complicated in nature.We, having conducted a one-half day hearing on appeal, cannot be in as good a position to assess competing discretionary considerations as the assigned Judge.

[25] We propose to remit the applications to the High Court for determination.In doing so, however, we should not be taken as suggesting that the applications will necessarily succeed.There are a number of significant hurdles that Mr Shannon must overcome in order to persuade the Court to exercise its discretion in his favour.

Result

[26] As there is no jurisdictional bar to the bringing of the further application and the Judge did not embark upon a proper consideration of discretionary factors to be considered, the appeal must be allowed.The orders dismissing those aspects of the application before the Court based on failure to pursue the earlier applications before Potter J are set aside.

[27] We remit those parts of the application for hearing before the High Court at the earliest convenient time.It may be possible for the High Court to deal with the applications on two days allocated for interlocutory issues next week; alternatively, timetabling orders could be made at that time.

[28] A separate application for leave to adduce further evidence on appeal was made by Mr Shannon.We have determined Mr Shannon’s appeal without the need to refer to that additional evidence.Accordingly, that application is dismissed.

[29] Mr Shannon, having been successful on appeal, is entitled to costs.We award costs in his favour against Mrs Shannon in the sum of $3000 plus disbursements to be fixed by the Registrar.Disbursements shall include the reasonable travelling and accommodation expenses of one counsel.

Solicitors:

Wendy Galvin & Associates, Takapuna for Appellant

Nola Dangen & Associates, Auckland for Respondent