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You are here: NZLII >> Databases >> Court of Appeal of New Zealand >> 2005 >> [2005] NZCA 45

Securities Commission v Midavia Rail Investments BVBA & Ors [2005] NZCA 45 (14 March 2005)

Last Updated: 20 April 2005

IN THE COURT OF APPEAL OF NEW ZEALAND

CA28/05

BETWEEN SECURITIES COMMISSION
Appellant

AND MIDAVIA RAIL INVESTMENTS BVBA
First Respondent

AND BERKSHIRE FUND III, A LIMITED PARTNERSHIP
Second Respondent

AND M J BEARD
Third Respondent

AND M A L BLOOMER
Fourth Respondent

AND C FERENBACH
Fifth Respondent

AND D M RICHWHITE
Sixth Respondent

Hearing: 2 March 2005

Court: Anderson P, William Young and Chambers JJ

Counsel: R A Dobson QC, B J Hunt and J S McHerron for Appellant
A R Galbraith QC, R J C Partridge and J S Cooper for First and Sixth Respondents

Judgment: 14 March 2005

JUDGMENT OF THE COURT

A The appellant’s appeal is allowed in part.

B The first and sixth respondents’ cross-appeal is dismissed.

C The appellant’s proceeding commenced in the High Court at Wellington under CIV-2004-485-2174 remains in that registry and its purported entry on the commercial list at Auckland is declared invalid.
D The proceeding is an eligible proceeding for the purposes of s 24B of the Judicature Act 1908.
E Any respondent intending to defend the proceeding who has not so far filed relevant documents in the Wellington registry of the High Court must do so forthwith.
F The first and sixth respondents are jointly and severally liable for costs to the appellant in the sum of $6,000, together with reasonable disbursements. If the disbursements cannot be agreed, they are to be fixed by the Registrar.

REASONS

(Given by Chambers J)

Table of Contents
Para No
Auckland vs Wellington [1]
Issues on this appeal [10]
Classification of the proceeding [15]
The structure of Part 3A
Introduction [33]
Plaintiff keen on commercial list entry [42]
Defendant keen on commercial list entry [48]
Analysis of Williams J’s reasoning [52]
Result [64]

Auckland vs Wellington

[1] This preliminary skirmish between the Securities Commission and the respondents has received a degree of publicity in the popular and financial press. It has been portrayed as a dispute between Auckland and Wellington, with an Auckland-based judge saying the proceeding should be determined in Auckland while a Wellington-based judge has held that the proceeding was correctly commenced in Wellington. Despite the impression, it is not a turf war between New Zealand’s commercial centre and capital at all. Rather this round in what threatens to be a fifteen-rounder is concerned with whether or not the Commission’s proceeding is eligible for the High Court’s commercial list and, if so, the correct way procedurally for it to be entered on that list. The answer turns on one section of the Judicature Act 1908 on some rather arcane provisions in the High Court Rules.
[2] The background to the procedural imbroglio which has developed is this. On 13 October last year, the Securities Commission issued proceedings against the respondents, claiming that they had variously traded with inside information or were guilty of tipping contrary to the Securities Markets Act 1988. The Commission chose to file the proceedings in the Wellington registry of the High Court, as it was entitled to do under r 107(1)(b) of the High Court Rules.
[3] The respondents were duly served. As required by the rules, each received, in addition to the statement of claim, a notice of proceeding, which informed it or him that any statement of defence had to be filed in the Wellington registry. Those notices, in requiring that any statement of defence be filed in that registry, were in conformity with the requirements of r 129(1).
[4] On 15 December last year, Midavia Rail Investments BVBA and David Richwhite, the first and sixth respondents, filed their statement of defence to the proceeding in the Auckland registry of the High Court, having endorsed it with the heading "Commercial List". At the same time, they also filed in the Auckland registry certain other documents.
[5] Berkshire Fund III, Mark Bloomer, and Carl Ferenbach, the second, fourth, and fifth respondents, have all filed protests to jurisdiction pursuant to r 131. All were filed in the Auckland registry. Berkshire Fund’s and Mr Ferenbach’s protests to jurisdiction were endorsed "Commercial List". Mr Bloomer’s, while filed in the Auckland registry, bore the Wellington registry intituling. These respondents also filed copies of their documents in the Wellington registry.
[6] Michael Beard, the third respondent, has settled with the Commission. Wild J approved that settlement on 23 December last year. Under that settlement, Wild J granted the Commission leave to discontinue the proceeding as against Mr Beard once the proposed settlement had been effected. We do not know whether that discontinuance has yet taken effect. In any event, Mr Beard has taken no part in this registry dispute. When we refer to "the respondents" hereafter in this judgment, we are referring to the respondents other than Mr Beard.
[7] The proceeding having got into the procedural muddle above described, Williams J, a judge assigned to the commercial list, took charge. On 10 February, he conducted a hearing to determine whether or not the respondents, or some of them, had by their actions documented above successfully effected a transfer of this proceeding from the Wellington registry of the High Court to the Auckland registry, and more particularly to entry on the commercial list at Auckland. The Commission argued that the case remained a Wellington case and that the respondents had not by their actions effected a transfer of the proceeding to Auckland’s commercial list. The argument to the contrary was advanced by Mr Galbraith QC and Ms Cooper on behalf of Midavia and Mr Richwhite.
[8] Williams J delivered a reserved decision on 18 February. He held that Midavia and Mr Richwhite had acted in accordance with the High Court Rules, had effected a transfer of the proceeding from the Wellington registry to the Auckland registry, and had entered the proceeding on the commercial list by endorsing their statement of defence in accordance with r 446C of the High Court Rules. His Honour further held that, subject to any application by the Commission to remove the proceeding from the commercial list or to change the venue, all future interlocutory matters in relation to this case must accordingly occur in the commercial list.
[9] The Commission sought leave to appeal to this court against that decision. Williams J granted such leave on 24 February.

Issues on this appeal

[10] Three issues are raised on this appeal.
[11] The first is whether this proceeding is eligible for entry on a commercial list at all. That question turns on an interpretation of s 24B of the Judicature Act 1908. The Commission argues that this proceeding is not eligible for entry on a commercial list. If the Commission is right about that, then that will immediately resolve the dispute, as obviously in that event everyone accepts that the proceeding should remain in Wellington, at least for the present. Williams J held that this proceeding was eligible for entry on a commercial list, being a proceeding "arising out of or otherwise relating to the ordinary transactions of persons engaged in commerce or trade": see s 24B(1)(a)(i).
[12] The second issue which arises is whether the respondents were entitled to file their statements of defence or protests to jurisdiction in the Auckland registry. Williams J found that they were, pursuant to r 446C of the High Court Rules. The Commission disputes that. This issue involves an interpretation of r 446C in its context, namely Part 3A of the rules.
[13] The third issue arises if it is held that the respondents were not entitled to file their statements of defence or protests to jurisdiction in the Auckland registry. In that event, of course, the respondents would be obliged to file in Wellington. But are they entitled to apply to have the proceeding transferred to the commercial list at Auckland? This issue raises a question as to the proper interpretation of r 446L. The Commission contends that the r 446L transfer procedure is not available in this particular case. Mr Dobson QC, for the Commission, contends there is a category of cases which, although eligible for entry onto the commercial list, cannot utilise the commercial list transfer procedure – and this case is in that category.
[14] We shall deal with the second and third issues together, as the interpretation of r 446C depends in part on the interpretation of r 446L and both rules need to be considered in the context of Part 3A viewed as a whole.

Classification of the proceeding

[15] Williams J, in the judgment under review (HC WN CIV2004-485-2174 18 February 2005) held that this proceeding was eligible for entry on a commercial list under s 24B(1)(a)(i). On appeal, Mr Galbraith, for Midavia and Richwhite, supported Williams J’s conclusion. Mr Dobson did not. For reasons we shall give shortly, we agree with Williams J’s conclusion that this is an eligible proceeding (as we shall term a proceeding eligible for entry on a commercial list) under s 24B(1)(a)(i).
[16] We shall discuss shortly Williams J’s reasoning and why we support it and why we reject Mr Dobson’s argument to the contrary. Before doing that, however, we wish to discuss another way in which we consider this to be an eligible proceeding. This argument was developed by the bench during the course of oral argument. It was as a consequence at that time not completely thought through, but counsel did get a chance to make submissions on it. If this were the sole ground on which we were to find this an eligible proceeding, we would have given counsel the chance to file supplementary submissions. But as it is only one of two grounds, we have not felt that necessary.
[17] Under s 24B(1)(e), cases stated by the Securities Commission and civil proceedings under the Securities Act 1978 are classified as eligible proceedings. At first sight, this proceeding may not seem to come within that category, being neither a case stated nor, at least on its face, a civil proceeding under the Securities Act 1978. Indeed, Mr Dobson placed much emphasis on the fact that the Securities Markets Act 1988 under which this proceeding is brought was not one of the statutes listed in paras (b)-(f) of s 24B(1). He advanced that argument in the course of a submission that s 24B(1)(a)(i) was concerned with disputes between persons engaged in commerce or trade, as distinct from statutory actions brought by regulators, such as the Commerce Commission (paras (c) and (d)) and the Securities Commission (para (e)). But, Mr Dobson submitted, it was noteworthy that only proceedings brought by the Securities Commission under the Securities Act 1978 were caught, not proceedings brought by it under the Securities Markets Act 1988.
[18] After close analysis, however, we are satisfied that the reference to the Securities Act 1978 in para (e) includes a reference to the Securities Markets Act. These are the reasons.
[19] In 1988, Parliament passed the Securities Amendment Act 1988. By s 1(1) of that Act, Parliament decreed that that Act was to "be read together with and deemed part of the Securities Act 1978". From the date, therefore, on which that 1988 Act came into force, it was part of the Securities Act 1978, and any civil proceedings under the 1988 Act would be caught by s 24B(1)(e) of the Judicature Act. It is noteworthy that Parliament these days when passing amending Acts does not include a provision such as s 1(1) of the Securities Amendment Act 1988. It is unnecessary to do that now because s 23 of the Interpretation Act 1999 provides that "an amending enactment is part of the enactment that it amends". The effect of s 1(1) of the 1988 Act and s 23 of the Interpretation Act is that the reference to the Securities Act 1978 in s 24B(1)(e) of the Judicature Act must be construed as a reference to not only the Securities Act 1978 itself but also all its amending Acts, including the Securities Amendment Act 1988. The Securities Amendment Act 1988 provided for civil proceedings relating to insider trading. There can be no doubt that such proceedings would have been eligible for entry on a commercial list under s 24B(1)(e).
[20] In 2002, Parliament passed the Securities Markets Amendment Act 2002. By ss 1(2), 3, and 4 of the Securities Markets Amendment Act 2002:

(a) The Securities Amendment Act 1988 was renamed the Securities Markets Act 1988;

(b) The Securities Amendment Act 1988 ceased to be an amending act of the Securities Act 1978 and became a "principal Act" in its own right.

[21] Section 31 of the 2002 Act provided that every reference to the Securities Amendment Act 1988 in any enactment must be read as if the word "Amendment" were omitted and the word "Markets" substituted. As described above, the Securities Amendment Act 1988 was inferentially referred to in s 24B(1)(e) of the Judicature Act. As a consequence of s 31 of the Securities Market Amendment Act 2002, s 24B(1)(e) of the Judicature Act should now be read as follows:

Cases stated by the Securities Commission and civil proceedings under the Securities Act 1978 [as amended] and under the Securities Markets Act 1988 [as amended].

[22] This interpretation accords with common sense. There could be no possible reason why Parliament would have wanted to remove "insider trading" proceedings from the commercial list when passing the Securities Markets Amendment Act 2002. There also could be no logical reason why the public issuer’s claim (if brought) would be on the commercial list but not the same claim brought by the Securities Commission.
[23] We therefore hold that the proceeding under review is a civil proceeding within s 24B(1)(e) of the Judicature Act.
[24] We also consider, however, that the proceeding is an eligible proceeding under s 24B(1)(a)(i), as Williams J found. It is not surprising that a proceeding may come within more than one of the categories in s 24B(1). The categories are not exclusive; there is significant overlap between them.
[25] Williams J’s reasoning as to why the proceeding came within s 24B(1)(a)(i) was as follows:

[48] As remarked during the hearing, when any person, particularly directors or senior management of a public issuer, are involved in share transactions of the public issuer by which they are employed or on whose board they sit, they must necessarily always have in the back of their minds whether the transaction in which they are engaged might possibly infringe the Securities Markets Act 1988. The rules are strict, the penalties substantial, the definitions broad and no conscientious director or senior manger would wish to run the risk of infraction. That said, such persons are undeniably engaged in commerce or trade and, having regard to the number of public issuers and directors and senior managers who might come within the extended definitions in the Securities Markets Act 1988 and the fact that a high proportion of directors and senior managers of public issuers hold shares in their companies, the transactions at the heart of this proceeding must be regarded as ordinary transactions even if the penal and other consequences which the Commission seeks in this case are uncommon in New Zealand corporate life.

[26] Mr Galbraith supported Williams J’s reasoning and advanced further argument as to why this case should be seen as coming within s 24B(1)(a)(i). He referred us in particular to C-C Bottlers Limited v Lion Nathan Limited (1991) 4 PRNZ 484, where, at 486, Henry J held that proceedings brought in respect of share sales, which included causes of action under the Fair Trading Act 1986, for non-disclosure, and for breach of warranty fell within s 24B(1)(a)(i). Henry J looked to the underlying transaction, namely the sale of shareholdings, and held that the transaction was an ordinary transaction between commercial entities. Mr Galbraith said that, if Henry J’s approach were applied in the present case, the proceeding would qualify under s24B(1)(a)(i) because the underlying transaction is the trading in shares of a publicly listed company.
[27] We accept the reasoning of Williams J and the additional argument submitted by Mr Galbraith.
[28] We deal briefly with the contrary arguments advanced by Mr Dobson. First, he submitted that proceedings brought by a regulatory body do not fall within s 24B(1)(a), but rather must be specifically mentioned if they are to be considered an eligible class. Mr Dobson submitted that while cases stated in civil proceedings under the Securities Act 1978, appeals against determinations of the Commerce Commission, and proceedings under ss 80, 81, 82, and 89 of the Commerce Act 1986 were included specifically as eligible proceedings, proceedings brought by the Securities Commission under various parts of the Securities Markets Act were not specifically included. For the reasons given above, we do not agree with Mr Dobson’s submission that proceedings brought by the Securities Commission under the Securities Markets Act are not included within para (e). But, quite apart from that, we do not accept that a proceeding brought by a regulator must come within a specific paragraph relating to that regulator if it is to be caught by s 24B(1).
[29] In any event, the proceeding being brought in this case is in many respects different from a normal regulatory proceeding. The Securities Commission is bringing its action against the respondents under s 18A of the Securities Markets Act. The Commission is in fact exercising the public issuer’s right of action. It is acting rather as an insurer does when exercising a right of subrogation to bring an action vested in its insured. The Commission is standing in the place of Toll NZ. We accept Mr Galbraith’s rejoinder to Mr Dobson’s argument. Mr Galbraith submitted:

The appellant has no cause of action in its own right. Therefore, the underlying cause of action is a claim between private commercial parties namely, Toll NZ Limited, a public issuer, and certain of its former shareholders. The fact that the claim is being exercised in this instance by the appellant, a regulatory body, cannot alter the fundamental nature of the claim.

[30] We agree. If Toll NZ had brought the action, surely its proceeding would have been eligible under s 24B: Haylock v Southern Petroleum NL [2002] 3 NZLR 518. Why should it make any difference if the proceeding is instead brought by the Commission?
[31] Mr Dobson further submitted that, even if the proceedings arose out of transactions of persons engaged in commerce, the transactions could not be termed "ordinary". Indeed, he submitted, "one would hope that instances of such illegal conduct remain extraordinary, and infrequent". With respect, that submission is misconceived. In substance, the Commission is submitting that, if its allegations are proven, then the conduct is to be categorised as insider trading, which is, so it is said, infrequent, and therefore the proceeding does not relate to or arise out of ordinary transactions of persons engaged in commerce. But what must be looked at is the nature of the underlying transaction. In the present case, the impugned share trades are, on their face, entirely ordinary transactions by persons in commerce. Whether they amount to insider trading remains to be proved: that is the issue in the proceeding. One cannot at this stage assume that the Commission will be able to substantiate its allegation and on that assumption rule the proceeding ineligible for entry.
[32] We agree with Williams J that this proceeding was a class of proceeding eligible for entry on a commercial list under s 24B(1)(a)(i).

The structure of Part 3A

Introduction

[33] Williams J held that r 446C permitted a defendant in an eligible proceeding to file his or her statement of defence in the Auckland registry, regardless of the registry in which the proceeding had been filed. This was permitted, he held, under r 446C, which overrode the general rules, rr 106, 107, and 129, as to the proper office of the Court for filing statements of claim and defence. Williams J did not need to consider r 446L, because, on his interpretation of r 446C, the transfer of the proceedings from the Wellington registry to the Auckland registry had been effected by simply endorsing the statement of defence "commercial list" and filing that statement of defence in the Auckland registry.
[34] Mr Dobson attacked the judge’s interpretation of r 446C and submitted that the "endorsement" procedure was not available to a defendant where a proceeding had been filed in a registry other than Auckland’s. Midavia and Mr Richwhite, in their written submissions, supported the judge’s reasoning.
[35] During the course of the oral argument, we put to Mr Dobson our preliminary analysis of Part 3A of the High Court rules. We indicated that our preliminary view was that Williams J was wrong in holding that the respondent’s actions were in accordance with the High Court Rules. We indicated that we provisionally considered that the respondents should have filed their statements of defence or their protests to jurisdiction in the Wellington registry. They had no right to file them in the Auckland registry or to endorse them with a "commercial list" intituling. We further advised that we thought the respondents would be entitled to apply for transfer to the commercial list under r 446L. We explained in brief the reasons why we had reached that preliminary view.
[36] Understandably, Mr Dobson accepted with alacrity that part of our analysis which accorded with his argument! He strongly supported our view that the respondents should have filed their statements of defence or protests to jurisdiction in the Wellington registry and that they had no right to automatic entry on the commercial list by endorsement under r 446C. The only part of our analysis he did not accept was our view that the respondents would be able to apply under r 446L for entry on Auckland’s commercial list.
[37] Mr Galbraith, when it came to his turn, jettisoned his side’s written submissions and accepted our analysis in full. The consequence of that is that the respondents now accept that they were duty bound to file in the Wellington registry and further accept that, if this proceeding is to be entered on the commercial list, the respondents must make an application under r 446L.
[38] Notwithstanding the fact that, by the end of the oral hearing, there was substantial agreement between counsel as to the correct interpretation of Part 3A, we need to explain our reasons for differing from Williams J’s conclusion, partly out of deference to him, and partly so that other litigants can know why we consider, with respect, Williams J’s judgment to be wrong.
[39] Under s 24B(3) of the Judicature Act, the Governor-General in Council, with the concurrence of the Rules Committee, was empowered to make rules making provision for:

(a) The manner in which proceedings eligible for entry on a commercial list are to be entered on a commercial list;

(b) Orders for the removal of proceedings entered on a commercial list; and

[40] Pursuant to that power, Part 3A was inserted into the High Court Rules. It can be taken as a given that the framers of the rules intended that every eligible proceeding should be able to be entered on a list and, if appropriate, removed from it. There is nothing to suggest that the Rules Committee ever intended that some eligible proceedings should not be able to be entered on the list, even though that is the effect of Mr Dobson’s interpretation of r 446L, to which we shall come shortly. Any interpretation of Part 3A which leaves some eligible proceedings unable to be entered on a commercial list is bound to be wrong.
[41] In our view, the scheme of Part 3A is clear. The rules deal with situations where a plaintiff is keen to have an eligible proceeding entered on a commercial list and situations where it is the defendant who is keen. We shall discuss both situations in turn. We remark immediately that one would expect the two situations to mirror each other, as it would be highly unlikely that the Rules Committee would have intended to favour either plaintiff or defendant insofar as entry on or removal from a commercial list was concerned. As will be seen, on a proper analysis, the relevant rules are neutral as between parties and the defendant’s position does in fact mirror the plaintiff’s.

Plaintiff keen on commercial list entry

[42] We consider first, therefore, the case of a plaintiff who wishes his or her case to be entered on a commercial list. Although the relevant part of the Judicature Act and Part 3A of the High Court Rules are drafted on an assumption that there may be a number of commercial lists, in fact only one commercial list has ever been Gazetted, namely the commercial list in the Auckland registry. So in practice, if a plaintiff wants his or her case to be entered on a commercial list, there is no option but to seek entry on the commercial list at Auckland. Whether the plaintiff’s proceeding can be automatically filed in Auckland and entered on Auckland’s commercial list depends on what is "the proper office of the Court", as defined in rr 106 and 107. If the proper office of the Court for filing is Auckland, then the plaintiff, by endorsing the words "Commercial list" on the statement of claim, will effect automatic entry on the commercial list without any order for entry: r 446C(1).
[43] Often a plaintiff keen to have his or her proceeding on the commercial list will be able to "assist" that desired outcome by adroit use of r 107. For instance, the normal rule is that "the proper office of the Court" for filing statements of claim and defence is "the office of the Court nearest to the residence or principal place of business of the defendant": r 107(1)(a). Where, however, there are two or more defendants, that office is determined by reference to the first named defendant who is resident or has his principal place of business in New Zealand. Where, for instance, there are two defendants, one based in Auckland and the other in Christchurch, the plaintiff keen on commercial list entry could achieve that as of right by making the Auckland defendant the first defendant.
[44] Another example is provided by r 107(1)(b), the paragraph which has particular relevance to the present case. Under para (b), "where no defendant is resident or has his principal place of business in New Zealand, [the proper office of the Court] shall be such office as the plaintiff selects". It would have been open here for the Commission to have selected Auckland as the registry in which statements of claim and defence had to be filed. Presumably, if the Commission had been keen on commercial list entry, it would have so selected. But it is not so keen, which is presumably one reason why it selected a registry where there is not a commercial list.
[45] If the case is properly "an Auckland case" and has been entered by the plaintiff on the commercial list, then, if the defendant wishes to have it removed from the commercial list, the defendant must apply under r 446K for its removal from the list. Whether that occurs is a matter for determination by a commercial list judge.
[46] If, however, the "proper office of the Court" for the purposes of rr 106 and 107 is not the Auckland registry (and cannot, by "manipulation" of r 107, be made the registry), then the plaintiff has no choice, under the rules, but to file the statement of claim in the appropriate registry as defined by r 107. (We shall explain the reason for putting the phrase "under the rules" in italics shortly.) The plaintiff nonetheless desirous of having that case entered on the commercial list must then apply under r 446L for an order that the proceeding be entered on "a commercial list established at any office of this Court". Since there is only one commercial list, the application would be for an order that the proceeding be entered on a commercial list at Auckland. If the defendant was also keen that the proceeding be dealt with on a commercial list, presumably the defendant would consent to a transfer under r 446L. If the defendant did not wish the proceeding transferred to Auckland’s commercial list, presumably he or she would oppose the r 446L application.
[47] In the previous paragraph, we stressed the words "under the rules" as r 446L has purportedly been qualified by para 3B of the Commercial List Practice Note: see McGechan on Procedure at p 8-29. We express no view as to the validity of para 3B, as it is not relevant to the current proceeding. It is also not relevant to the structure of Part 3A of the High Court Rules, which is all important in determining the meaning of r 446C, which was at the heart of the dispute presented to Williams J and originally to us.

Defendant keen on commercial list entry

[48] We now turn to consider the position where an eligible case has not been entered on the commercial list by the plaintiff but where the defendant is keen that it should be.
[49] If the proceeding has properly been filed in the Auckland registry, then the defendant can have the proceeding automatically entered on the commercial list by endorsing the statement of defence with the words "Commercial list". The authority for that is once again r 446C. If the plaintiff does not wish the proceeding to be on the commercial list, he or she can apply to have it removed, again utilising r 446K. It will be immediately apparent that this is the mirror image of the position where the plaintiff wants an eligible Auckland case entered on the commercial list.
[50] If, however, the proceeding has been filed in a registry other than Auckland’s, the defendant must file in that other registry, as specified in the notice of proceeding and by r 129(1). The defendant can then apply to transfer the proceeding to the commercial list under r 446L. If the plaintiff is not keen on the proceeding being transferred to Auckland or to the commercial list, no doubt the plaintiff would oppose the r 446L application.
[51] Viewed in this way, Part 3A has a perfect symmetry. There is no conflict with the general rules. Every eligible case is able to get onto the commercial list, either by right or by application.

Analysis of Williams J’s reasoning

[52] This is not, however, the interpretation to which Williams J came. His Honour, with respect, came to an interpretation which was asymmetrical in its conclusion and which involved inconsistencies with the general rules. It led to a situation whereby there were effectively two rules potentially able to effect transfers between registries, rr 446C and 446L. The simplicity and symmetry of Part 3A were lost.
[53] It would seem that Williams J was led to his conclusion as to the meaning of r 446C, which we, with respect, consider erroneous, as a result of an apparent agreement of counsel before him that r 446L was "inapplicable" in this case: at [32]. Rule 446L, which is headed "Proceedings in other Registries", begins as follows:

(1) Any party to a proceeding to which section 24B(2) of the Act applies and which, by virtue of the operation of rule 106, may not be filed in an office of this Court at which a commercial list is established, may apply to a Commercial list Judge for an order that the proceeding be entered on a commercial list established at any office of this Court.

[54] Counsel apparently agreed that r 446L was inapplicable because this proceeding, while not filed in Auckland, could have been. Because it could have been filed in Auckland, r 446L did not apply. Rule 446L applied only if a plaintiff was forbidden from filing in Auckland. That is wrong, but it is what set His Honour down the wrong track. His Honour appreciated there had to be some way in which the respondents could get this eligible proceeding onto a commercial list: if r 446L did not apply, then entry would have to be effected through r 446C.
[55] Rule 446L as drafted makes perfect sense in the case of a plaintiff who is keen to have his or her proceeding on a commercial list but who cannot achieve that as of right under r 446C because "the proper office of the Court" under r 106 is a non-commercial list registry. His proceeding comes within r 446L because he "may not file" in Auckland; if he could, he would. The rule is less felicitously drafted when it comes to defendants. It is clear, in our view, that the drafter of the rule has overlooked that, in some circumstances, the plaintiff has a discretion under r 106 as to the registry in which the proceeding is brought. From a defendant’s perspective, subcl (1) must be interpreted as applying to an eligible proceeding which, by virtue of the operation of r 106, may not be or has not been filed in Auckland. There is no conceivable reason why the defendant to an eligible proceeding filed out of Auckland should not be able to avail himself or herself of the right to apply for commercial list entry under r 446L. This is a classic case where a court is justified in inserting words to correct an obvious drafting error: Inco Europe Limited v First Choice Distribution (a firm) [2000] 1 WLR 586 (HL) at 592. That is mandated by the purposive approach to interpretation: Interpretation Act, s 5(1).
[56] The Commission before us has continued to assert that r 446L is unavailable, even if this is an eligible proceeding. We invited Mr Dobson to explain why the Rules Committee would have selected a group of eligible proceedings which could not be entered on a commercial list. Mr Dobson could give no satisfactory rationale for this group’s exclusion. Indeed, it is arguable that it would not have been within the Rules Committee’s power to exclude a group of eligible proceedings from entry to a commercial list. Section 24B(3) of the Judicature Act after all required rules to be made making provision for the manner in which eligible proceedings were to be entered on a commercial list. It is distinctly arguable that it would not have been open to the Rules Committee to say that only some of them could be entered. In any event, there is nothing to suggest that the Rules Committee contemplated such an absurd and arbitrary "partial entry" policy.
[57] When we put this to Mr Dobson, he felt unable to support our suggestion that there was no way in which these excluded eligible proceedings could be entered on the commercial list. We asked him to explain how, given his interpretation of r 446C (on which he was right) and r 446L, the excluded eligible proceedings could be entered. He explained there was a way, provided a defendant strictly followed this procedure:

(1) The defendant must not file a statement of defence.
(2) Instead, the defendant must immediately apply under r 107(4) for an order directing that the statement of claim be transferred to the Auckland office, on the grounds that such office "would be more convenient to the parties".
(3) Having got the proceeding transferred, the defendant could then file its statement of defence in the Auckland registry, with a "commercial list" endorsement.

[58] One merely needs to set out the steps to realise immediately how unlikely it was that the Rules Committee intended such a tortuous transfer procedure for a particular group of eligible proceedings. The suggested procedure involves a most unusual use of r 107(4). Secondly, why would the Rules Committee have used part of the general rules to effect this transfer, when everything else to do with entry on and removal of eligible proceedings is dealt with where one would expect, in Part 3A of the rules?
[59] Williams J appreciated that the Commission’s argument led to an unprincipled lacuna whereby the respondents in this case had no means of bringing this eligible proceeding onto the commercial list. Williams J, to counter that, concluded that r 446C must be the means of achieving entry. With respect, it was not. Rule 446C is restricted to proceedings properly filed in registries where a commercial list exists; in the present circumstances, in Auckland. It is not the rule which permits transfer between registries. It permits transfer only within the Auckland registry, from the general list to the commercial list.
[60] Proof that r 446C cannot have been intended as a "registry transfer" mechanism is shown by considering what the position would be if commercial lists had been established in other High Court registries (as contemplated by both the Act and the rules). Suppose a commercial list had also been Gazetted in the Wellington registry. If an eligible proceeding were filed in Christchurch, it could not possibly be the case that defendant A could file his statement of defence on the commercial list in Auckland, defendant B his statement of defence on the commercial list in Wellington, and defendant C his in the Christchurch registry. Yet that would theoretically be possible if Williams J’s interpretation of r 446C were right.
[61] The answer to the second issue is, therefore, that the respondents were not entitled to file their statements of defence or protest to jurisdiction in the Auckland registry. They were required to file them in the Wellington registry. The answer to the third issue is that r 446L is available to the respondents if they wish to utilise it.
[62] Any application under r 446L(1) will need to be filed in the Wellington registry, but it will have to be determined by a commercial list judge. There may be a timing problem, given r 446L(2), which requires any application under r 446L(1) to be made "not later than 14 days after the day on which a statement of defence in the proceeding is filed". Here, however, statements of defence have not been filed in the proper registry. Presumably time will start to run for the purposes of r 446L(2) only when the statements of defence are filed in that registry. In any event, there is power to enlarge time, of course, under r 6.
[63] So that there is no confusion about the parties’ rights now, we mention one other matter. At the hearing before Williams J, Mr Galbraith apparently submitted, it seems as a fallback argument, that, if the endorsement on the statement of defence of the words "commercial list" had not effected a transfer of the proceeding to Auckland, then the proceeding should be transferred in any event under r 446L. The judge recorded him as making an "informal application under r 446L". Williams J rejected that application because of his interpretation of r 446L: at [35]. In a notice of cross-appeal, Midavia and Mr Richwhite argued that, if Williams J were wrong on his interpretation of r 446C, then he was wrong to decline the informal application for transfer to the commercial list under r 446L. We disagree. An application under r 446L must be, unless consented to, on proper notice, with supporting affidavits. The cross-appeal will, therefore, formally be dismissed. But there is nothing to stop the respondents now making a proper application under r 446L. The previous informal application will not be a bar, as Mr Dobson acknowledged.

Result

[64] We allow the appeal in part, in that we hold that the proceeding’s purported entry on the commercial list at Auckland was invalid. The proceeding is nonetheless an eligible proceeding for the purposes of s 24B of the Judicature Act. Any respondent intending to defend the proceeding must forthwith file its or his response in the High Court at Wellington. Any party may also apply to the commercial list judge under r 446L for an order that the proceeding be entered on the commercial list at Auckland.

Solicitors:
Crown Law Office, Wellington
Bell Gully, Auckland, for First and Sixth Respondents

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[1]	This preliminary skirmish between the Securities Commission and the respondents has received a degree of publicity in the popular and financial press. It has been portrayed as a dispute between Auckland and Wellington, with an Auckland-based judge saying the proceeding should be determined in Auckland while a Wellington-based judge has held that the proceeding was correctly commenced in Wellington. Despite the impression, it is not a turf war between New Zealand’s commercial centre and capital at all. Rather this round in what threatens to be a fifteen-rounder is concerned with whether or not the Commission’s proceeding is eligible for the High Court’s commercial list and, if so, the correct way procedurally for it to be entered on that list. The answer turns on one section of the Judicature Act 1908 on some rather arcane provisions in the High Court Rules.
[2]	The background to the procedural imbroglio which has developed is this. On 13 October last year, the Securities Commission issued proceedings against the respondents, claiming that they had variously traded with inside information or were guilty of tipping contrary to the Securities Markets Act 1988. The Commission chose to file the proceedings in the Wellington registry of the High Court, as it was entitled to do under r 107(1)(b) of the High Court Rules.
[3]	The respondents were duly served. As required by the rules, each received, in addition to the statement of claim, a notice of proceeding, which informed it or him that any statement of defence had to be filed in the Wellington registry. Those notices, in requiring that any statement of defence be filed in that registry, were in conformity with the requirements of r 129(1).
[4]	On 15 December last year, Midavia Rail Investments BVBA and David Richwhite, the first and sixth respondents, filed their statement of defence to the proceeding in the Auckland registry of the High Court, having endorsed it with the heading "Commercial List". At the same time, they also filed in the Auckland registry certain other documents.
[5]	Berkshire Fund III, Mark Bloomer, and Carl Ferenbach, the second, fourth, and fifth respondents, have all filed protests to jurisdiction pursuant to r 131. All were filed in the Auckland registry. Berkshire Fund’s and Mr Ferenbach’s protests to jurisdiction were endorsed "Commercial List". Mr Bloomer’s, while filed in the Auckland registry, bore the Wellington registry intituling. These respondents also filed copies of their documents in the Wellington registry.
[6]	Michael Beard, the third respondent, has settled with the Commission. Wild J approved that settlement on 23 December last year. Under that settlement, Wild J granted the Commission leave to discontinue the proceeding as against Mr Beard once the proposed settlement had been effected. We do not know whether that discontinuance has yet taken effect. In any event, Mr Beard has taken no part in this registry dispute. When we refer to "the respondents" hereafter in this judgment, we are referring to the respondents other than Mr Beard.
[7]	The proceeding having got into the procedural muddle above described, Williams J, a judge assigned to the commercial list, took charge. On 10 February, he conducted a hearing to determine whether or not the respondents, or some of them, had by their actions documented above successfully effected a transfer of this proceeding from the Wellington registry of the High Court to the Auckland registry, and more particularly to entry on the commercial list at Auckland. The Commission argued that the case remained a Wellington case and that the respondents had not by their actions effected a transfer of the proceeding to Auckland’s commercial list. The argument to the contrary was advanced by Mr Galbraith QC and Ms Cooper on behalf of Midavia and Mr Richwhite.
[8]	Williams J delivered a reserved decision on 18 February. He held that Midavia and Mr Richwhite had acted in accordance with the High Court Rules, had effected a transfer of the proceeding from the Wellington registry to the Auckland registry, and had entered the proceeding on the commercial list by endorsing their statement of defence in accordance with r 446C of the High Court Rules. His Honour further held that, subject to any application by the Commission to remove the proceeding from the commercial list or to change the venue, all future interlocutory matters in relation to this case must accordingly occur in the commercial list.
[9]	The Commission sought leave to appeal to this court against that decision. Williams J granted such leave on 24 February.

[10]	Three issues are raised on this appeal.
[11]	The first is whether this proceeding is eligible for entry on a commercial list at all. That question turns on an interpretation of s 24B of the Judicature Act 1908. The Commission argues that this proceeding is not eligible for entry on a commercial list. If the Commission is right about that, then that will immediately resolve the dispute, as obviously in that event everyone accepts that the proceeding should remain in Wellington, at least for the present. Williams J held that this proceeding was eligible for entry on a commercial list, being a proceeding "arising out of or otherwise relating to the ordinary transactions of persons engaged in commerce or trade": see s 24B(1)(a)(i).
[12]	The second issue which arises is whether the respondents were entitled to file their statements of defence or protests to jurisdiction in the Auckland registry. Williams J found that they were, pursuant to r 446C of the High Court Rules. The Commission disputes that. This issue involves an interpretation of r 446C in its context, namely Part 3A of the rules.
[13]	The third issue arises if it is held that the respondents were not entitled to file their statements of defence or protests to jurisdiction in the Auckland registry. In that event, of course, the respondents would be obliged to file in Wellington. But are they entitled to apply to have the proceeding transferred to the commercial list at Auckland? This issue raises a question as to the proper interpretation of r 446L. The Commission contends that the r 446L transfer procedure is not available in this particular case. Mr Dobson QC, for the Commission, contends there is a category of cases which, although eligible for entry onto the commercial list, cannot utilise the commercial list transfer procedure – and this case is in that category.
[14]	We shall deal with the second and third issues together, as the interpretation of r 446C depends in part on the interpretation of r 446L and both rules need to be considered in the context of Part 3A viewed as a whole.

[15]	Williams J, in the judgment under review (HC WN CIV2004-485-2174 18 February 2005) held that this proceeding was eligible for entry on a commercial list under s 24B(1)(a)(i). On appeal, Mr Galbraith, for Midavia and Richwhite, supported Williams J’s conclusion. Mr Dobson did not. For reasons we shall give shortly, we agree with Williams J’s conclusion that this is an eligible proceeding (as we shall term a proceeding eligible for entry on a commercial list) under s 24B(1)(a)(i).
[16]	We shall discuss shortly Williams J’s reasoning and why we support it and why we reject Mr Dobson’s argument to the contrary. Before doing that, however, we wish to discuss another way in which we consider this to be an eligible proceeding. This argument was developed by the bench during the course of oral argument. It was as a consequence at that time not completely thought through, but counsel did get a chance to make submissions on it. If this were the sole ground on which we were to find this an eligible proceeding, we would have given counsel the chance to file supplementary submissions. But as it is only one of two grounds, we have not felt that necessary.
[17]	Under s 24B(1)(e), cases stated by the Securities Commission and civil proceedings under the Securities Act 1978 are classified as eligible proceedings. At first sight, this proceeding may not seem to come within that category, being neither a case stated nor, at least on its face, a civil proceeding under the Securities Act 1978. Indeed, Mr Dobson placed much emphasis on the fact that the Securities Markets Act 1988 under which this proceeding is brought was not one of the statutes listed in paras (b)-(f) of s 24B(1). He advanced that argument in the course of a submission that s 24B(1)(a)(i) was concerned with disputes between persons engaged in commerce or trade, as distinct from statutory actions brought by regulators, such as the Commerce Commission (paras (c) and (d)) and the Securities Commission (para (e)). But, Mr Dobson submitted, it was noteworthy that only proceedings brought by the Securities Commission under the Securities Act 1978 were caught, not proceedings brought by it under the Securities Markets Act 1988.
[18]	After close analysis, however, we are satisfied that the reference to the Securities Act 1978 in para (e) includes a reference to the Securities Markets Act. These are the reasons.
[19]	In 1988, Parliament passed the Securities Amendment Act 1988. By s 1(1) of that Act, Parliament decreed that that Act was to "be read together with and deemed part of the Securities Act 1978". From the date, therefore, on which that 1988 Act came into force, it was part of the Securities Act 1978, and any civil proceedings under the 1988 Act would be caught by s 24B(1)(e) of the Judicature Act. It is noteworthy that Parliament these days when passing amending Acts does not include a provision such as s 1(1) of the Securities Amendment Act 1988. It is unnecessary to do that now because s 23 of the Interpretation Act 1999 provides that "an amending enactment is part of the enactment that it amends". The effect of s 1(1) of the 1988 Act and s 23 of the Interpretation Act is that the reference to the Securities Act 1978 in s 24B(1)(e) of the Judicature Act must be construed as a reference to not only the Securities Act 1978 itself but also all its amending Acts, including the Securities Amendment Act 1988. The Securities Amendment Act 1988 provided for civil proceedings relating to insider trading. There can be no doubt that such proceedings would have been eligible for entry on a commercial list under s 24B(1)(e).
[20]	In 2002, Parliament passed the Securities Markets Amendment Act 2002. By ss 1(2), 3, and 4 of the Securities Markets Amendment Act 2002:

[22]	This interpretation accords with common sense. There could be no possible reason why Parliament would have wanted to remove "insider trading" proceedings from the commercial list when passing the Securities Markets Amendment Act 2002. There also could be no logical reason why the public issuer’s claim (if brought) would be on the commercial list but not the same claim brought by the Securities Commission.
[23]	We therefore hold that the proceeding under review is a civil proceeding within s 24B(1)(e) of the Judicature Act.
[24]	We also consider, however, that the proceeding is an eligible proceeding under s 24B(1)(a)(i), as Williams J found. It is not surprising that a proceeding may come within more than one of the categories in s 24B(1). The categories are not exclusive; there is significant overlap between them.
[25]	Williams J’s reasoning as to why the proceeding came within s 24B(1)(a)(i) was as follows:

[26]	Mr Galbraith supported Williams J’s reasoning and advanced further argument as to why this case should be seen as coming within s 24B(1)(a)(i). He referred us in particular to C-C Bottlers Limited v Lion Nathan Limited (1991) 4 PRNZ 484, where, at 486, Henry J held that proceedings brought in respect of share sales, which included causes of action under the Fair Trading Act 1986, for non-disclosure, and for breach of warranty fell within s 24B(1)(a)(i). Henry J looked to the underlying transaction, namely the sale of shareholdings, and held that the transaction was an ordinary transaction between commercial entities. Mr Galbraith said that, if Henry J’s approach were applied in the present case, the proceeding would qualify under s24B(1)(a)(i) because the underlying transaction is the trading in shares of a publicly listed company.
[27]	We accept the reasoning of Williams J and the additional argument submitted by Mr Galbraith.
[28]	We deal briefly with the contrary arguments advanced by Mr Dobson. First, he submitted that proceedings brought by a regulatory body do not fall within s 24B(1)(a), but rather must be specifically mentioned if they are to be considered an eligible class. Mr Dobson submitted that while cases stated in civil proceedings under the Securities Act 1978, appeals against determinations of the Commerce Commission, and proceedings under ss 80, 81, 82, and 89 of the Commerce Act 1986 were included specifically as eligible proceedings, proceedings brought by the Securities Commission under various parts of the Securities Markets Act were not specifically included. For the reasons given above, we do not agree with Mr Dobson’s submission that proceedings brought by the Securities Commission under the Securities Markets Act are not included within para (e). But, quite apart from that, we do not accept that a proceeding brought by a regulator must come within a specific paragraph relating to that regulator if it is to be caught by s 24B(1).
[29]	In any event, the proceeding being brought in this case is in many respects different from a normal regulatory proceeding. The Securities Commission is bringing its action against the respondents under s 18A of the Securities Markets Act. The Commission is in fact exercising the public issuer’s right of action. It is acting rather as an insurer does when exercising a right of subrogation to bring an action vested in its insured. The Commission is standing in the place of Toll NZ. We accept Mr Galbraith’s rejoinder to Mr Dobson’s argument. Mr Galbraith submitted:

[30]	We agree. If Toll NZ had brought the action, surely its proceeding would have been eligible under s 24B: Haylock v Southern Petroleum NL [2002] 3 NZLR 518. Why should it make any difference if the proceeding is instead brought by the Commission?
[31]	Mr Dobson further submitted that, even if the proceedings arose out of transactions of persons engaged in commerce, the transactions could not be termed "ordinary". Indeed, he submitted, "one would hope that instances of such illegal conduct remain extraordinary, and infrequent". With respect, that submission is misconceived. In substance, the Commission is submitting that, if its allegations are proven, then the conduct is to be categorised as insider trading, which is, so it is said, infrequent, and therefore the proceeding does not relate to or arise out of ordinary transactions of persons engaged in commerce. But what must be looked at is the nature of the underlying transaction. In the present case, the impugned share trades are, on their face, entirely ordinary transactions by persons in commerce. Whether they amount to insider trading remains to be proved: that is the issue in the proceeding. One cannot at this stage assume that the Commission will be able to substantiate its allegation and on that assumption rule the proceeding ineligible for entry.
[32]	We agree with Williams J that this proceeding was a class of proceeding eligible for entry on a commercial list under s 24B(1)(a)(i).

[33]	Williams J held that r 446C permitted a defendant in an eligible proceeding to file his or her statement of defence in the Auckland registry, regardless of the registry in which the proceeding had been filed. This was permitted, he held, under r 446C, which overrode the general rules, rr 106, 107, and 129, as to the proper office of the Court for filing statements of claim and defence. Williams J did not need to consider r 446L, because, on his interpretation of r 446C, the transfer of the proceedings from the Wellington registry to the Auckland registry had been effected by simply endorsing the statement of defence "commercial list" and filing that statement of defence in the Auckland registry.
[34]	Mr Dobson attacked the judge’s interpretation of r 446C and submitted that the "endorsement" procedure was not available to a defendant where a proceeding had been filed in a registry other than Auckland’s. Midavia and Mr Richwhite, in their written submissions, supported the judge’s reasoning.
[35]	During the course of the oral argument, we put to Mr Dobson our preliminary analysis of Part 3A of the High Court rules. We indicated that our preliminary view was that Williams J was wrong in holding that the respondent’s actions were in accordance with the High Court Rules. We indicated that we provisionally considered that the respondents should have filed their statements of defence or their protests to jurisdiction in the Wellington registry. They had no right to file them in the Auckland registry or to endorse them with a "commercial list" intituling. We further advised that we thought the respondents would be entitled to apply for transfer to the commercial list under r 446L. We explained in brief the reasons why we had reached that preliminary view.
[36]	Understandably, Mr Dobson accepted with alacrity that part of our analysis which accorded with his argument! He strongly supported our view that the respondents should have filed their statements of defence or protests to jurisdiction in the Wellington registry and that they had no right to automatic entry on the commercial list by endorsement under r 446C. The only part of our analysis he did not accept was our view that the respondents would be able to apply under r 446L for entry on Auckland’s commercial list.
[37]	Mr Galbraith, when it came to his turn, jettisoned his side’s written submissions and accepted our analysis in full. The consequence of that is that the respondents now accept that they were duty bound to file in the Wellington registry and further accept that, if this proceeding is to be entered on the commercial list, the respondents must make an application under r 446L.
[38]	Notwithstanding the fact that, by the end of the oral hearing, there was substantial agreement between counsel as to the correct interpretation of Part 3A, we need to explain our reasons for differing from Williams J’s conclusion, partly out of deference to him, and partly so that other litigants can know why we consider, with respect, Williams J’s judgment to be wrong.
[39]	Under s 24B(3) of the Judicature Act, the Governor-General in Council, with the concurrence of the Rules Committee, was empowered to make rules making provision for:

[42]	We consider first, therefore, the case of a plaintiff who wishes his or her case to be entered on a commercial list. Although the relevant part of the Judicature Act and Part 3A of the High Court Rules are drafted on an assumption that there may be a number of commercial lists, in fact only one commercial list has ever been Gazetted, namely the commercial list in the Auckland registry. So in practice, if a plaintiff wants his or her case to be entered on a commercial list, there is no option but to seek entry on the commercial list at Auckland. Whether the plaintiff’s proceeding can be automatically filed in Auckland and entered on Auckland’s commercial list depends on what is "the proper office of the Court", as defined in rr 106 and 107. If the proper office of the Court for filing is Auckland, then the plaintiff, by endorsing the words "Commercial list" on the statement of claim, will effect automatic entry on the commercial list without any order for entry: r 446C(1).
[43]	Often a plaintiff keen to have his or her proceeding on the commercial list will be able to "assist" that desired outcome by adroit use of r 107. For instance, the normal rule is that "the proper office of the Court" for filing statements of claim and defence is "the office of the Court nearest to the residence or principal place of business of the defendant": r 107(1)(a). Where, however, there are two or more defendants, that office is determined by reference to the first named defendant who is resident or has his principal place of business in New Zealand. Where, for instance, there are two defendants, one based in Auckland and the other in Christchurch, the plaintiff keen on commercial list entry could achieve that as of right by making the Auckland defendant the first defendant.
[44]	Another example is provided by r 107(1)(b), the paragraph which has particular relevance to the present case. Under para (b), "where no defendant is resident or has his principal place of business in New Zealand, [the proper office of the Court] shall be such office as the plaintiff selects". It would have been open here for the Commission to have selected Auckland as the registry in which statements of claim and defence had to be filed. Presumably, if the Commission had been keen on commercial list entry, it would have so selected. But it is not so keen, which is presumably one reason why it selected a registry where there is not a commercial list.
[45]	If the case is properly "an Auckland case" and has been entered by the plaintiff on the commercial list, then, if the defendant wishes to have it removed from the commercial list, the defendant must apply under r 446K for its removal from the list. Whether that occurs is a matter for determination by a commercial list judge.
[46]	If, however, the "proper office of the Court" for the purposes of rr 106 and 107 is not the Auckland registry (and cannot, by "manipulation" of r 107, be made the registry), then the plaintiff has no choice, under the rules, but to file the statement of claim in the appropriate registry as defined by r 107. (We shall explain the reason for putting the phrase "under the rules" in italics shortly.) The plaintiff nonetheless desirous of having that case entered on the commercial list must then apply under r 446L for an order that the proceeding be entered on "a commercial list established at any office of this Court". Since there is only one commercial list, the application would be for an order that the proceeding be entered on a commercial list at Auckland. If the defendant was also keen that the proceeding be dealt with on a commercial list, presumably the defendant would consent to a transfer under r 446L. If the defendant did not wish the proceeding transferred to Auckland’s commercial list, presumably he or she would oppose the r 446L application.
[47]	In the previous paragraph, we stressed the words "under the rules" as r 446L has purportedly been qualified by para 3B of the Commercial List Practice Note: see McGechan on Procedure at p 8-29. We express no view as to the validity of para 3B, as it is not relevant to the current proceeding. It is also not relevant to the structure of Part 3A of the High Court Rules, which is all important in determining the meaning of r 446C, which was at the heart of the dispute presented to Williams J and originally to us.

[48]	We now turn to consider the position where an eligible case has not been entered on the commercial list by the plaintiff but where the defendant is keen that it should be.
[49]	If the proceeding has properly been filed in the Auckland registry, then the defendant can have the proceeding automatically entered on the commercial list by endorsing the statement of defence with the words "Commercial list". The authority for that is once again r 446C. If the plaintiff does not wish the proceeding to be on the commercial list, he or she can apply to have it removed, again utilising r 446K. It will be immediately apparent that this is the mirror image of the position where the plaintiff wants an eligible Auckland case entered on the commercial list.
[50]	If, however, the proceeding has been filed in a registry other than Auckland’s, the defendant must file in that other registry, as specified in the notice of proceeding and by r 129(1). The defendant can then apply to transfer the proceeding to the commercial list under r 446L. If the plaintiff is not keen on the proceeding being transferred to Auckland or to the commercial list, no doubt the plaintiff would oppose the r 446L application.
[51]	Viewed in this way, Part 3A has a perfect symmetry. There is no conflict with the general rules. Every eligible case is able to get onto the commercial list, either by right or by application.

[54]	Counsel apparently agreed that r 446L was inapplicable because this proceeding, while not filed in Auckland, could have been. Because it could have been filed in Auckland, r 446L did not apply. Rule 446L applied only if a plaintiff was forbidden from filing in Auckland. That is wrong, but it is what set His Honour down the wrong track. His Honour appreciated there had to be some way in which the respondents could get this eligible proceeding onto a commercial list: if r 446L did not apply, then entry would have to be effected through r 446C.
[55]	Rule 446L as drafted makes perfect sense in the case of a plaintiff who is keen to have his or her proceeding on a commercial list but who cannot achieve that as of right under r 446C because "the proper office of the Court" under r 106 is a non-commercial list registry. His proceeding comes within r 446L because he "may not file" in Auckland; if he could, he would. The rule is less felicitously drafted when it comes to defendants. It is clear, in our view, that the drafter of the rule has overlooked that, in some circumstances, the plaintiff has a discretion under r 106 as to the registry in which the proceeding is brought. From a defendant’s perspective, subcl (1) must be interpreted as applying to an eligible proceeding which, by virtue of the operation of r 106, may not be or has not been filed in Auckland. There is no conceivable reason why the defendant to an eligible proceeding filed out of Auckland should not be able to avail himself or herself of the right to apply for commercial list entry under r 446L. This is a classic case where a court is justified in inserting words to correct an obvious drafting error: Inco Europe Limited v First Choice Distribution (a firm) [2000] 1 WLR 586 (HL) at 592. That is mandated by the purposive approach to interpretation: Interpretation Act, s 5(1).
[56]	The Commission before us has continued to assert that r 446L is unavailable, even if this is an eligible proceeding. We invited Mr Dobson to explain why the Rules Committee would have selected a group of eligible proceedings which could not be entered on a commercial list. Mr Dobson could give no satisfactory rationale for this group’s exclusion. Indeed, it is arguable that it would not have been within the Rules Committee’s power to exclude a group of eligible proceedings from entry to a commercial list. Section 24B(3) of the Judicature Act after all required rules to be made making provision for the manner in which eligible proceedings were to be entered on a commercial list. It is distinctly arguable that it would not have been open to the Rules Committee to say that only some of them could be entered. In any event, there is nothing to suggest that the Rules Committee contemplated such an absurd and arbitrary "partial entry" policy.
[57]	When we put this to Mr Dobson, he felt unable to support our suggestion that there was no way in which these excluded eligible proceedings could be entered on the commercial list. We asked him to explain how, given his interpretation of r 446C (on which he was right) and r 446L, the excluded eligible proceedings could be entered. He explained there was a way, provided a defendant strictly followed this procedure:

[58]	One merely needs to set out the steps to realise immediately how unlikely it was that the Rules Committee intended such a tortuous transfer procedure for a particular group of eligible proceedings. The suggested procedure involves a most unusual use of r 107(4). Secondly, why would the Rules Committee have used part of the general rules to effect this transfer, when everything else to do with entry on and removal of eligible proceedings is dealt with where one would expect, in Part 3A of the rules?
[59]	Williams J appreciated that the Commission’s argument led to an unprincipled lacuna whereby the respondents in this case had no means of bringing this eligible proceeding onto the commercial list. Williams J, to counter that, concluded that r 446C must be the means of achieving entry. With respect, it was not. Rule 446C is restricted to proceedings properly filed in registries where a commercial list exists; in the present circumstances, in Auckland. It is not the rule which permits transfer between registries. It permits transfer only within the Auckland registry, from the general list to the commercial list.
[60]	Proof that r 446C cannot have been intended as a "registry transfer" mechanism is shown by considering what the position would be if commercial lists had been established in other High Court registries (as contemplated by both the Act and the rules). Suppose a commercial list had also been Gazetted in the Wellington registry. If an eligible proceeding were filed in Christchurch, it could not possibly be the case that defendant A could file his statement of defence on the commercial list in Auckland, defendant B his statement of defence on the commercial list in Wellington, and defendant C his in the Christchurch registry. Yet that would theoretically be possible if Williams J’s interpretation of r 446C were right.
[61]	The answer to the second issue is, therefore, that the respondents were not entitled to file their statements of defence or protest to jurisdiction in the Auckland registry. They were required to file them in the Wellington registry. The answer to the third issue is that r 446L is available to the respondents if they wish to utilise it.
[62]	Any application under r 446L(1) will need to be filed in the Wellington registry, but it will have to be determined by a commercial list judge. There may be a timing problem, given r 446L(2), which requires any application under r 446L(1) to be made "not later than 14 days after the day on which a statement of defence in the proceeding is filed". Here, however, statements of defence have not been filed in the proper registry. Presumably time will start to run for the purposes of r 446L(2) only when the statements of defence are filed in that registry. In any event, there is power to enlarge time, of course, under r 6.
[63]	So that there is no confusion about the parties’ rights now, we mention one other matter. At the hearing before Williams J, Mr Galbraith apparently submitted, it seems as a fallback argument, that, if the endorsement on the statement of defence of the words "commercial list" had not effected a transfer of the proceeding to Auckland, then the proceeding should be transferred in any event under r 446L. The judge recorded him as making an "informal application under r 446L". Williams J rejected that application because of his interpretation of r 446L: at [35]. In a notice of cross-appeal, Midavia and Mr Richwhite argued that, if Williams J were wrong on his interpretation of r 446C, then he was wrong to decline the informal application for transfer to the commercial list under r 446L. We disagree. An application under r 446L must be, unless consented to, on proper notice, with supporting affidavits. The cross-appeal will, therefore, formally be dismissed. But there is nothing to stop the respondents now making a proper application under r 446L. The previous informal application will not be a bar, as Mr Dobson acknowledged.