[1] This is an appeal against a decision of Ellen France J which is recorded in a minute of a telephone conference with counsel which describes itself as “Directions for Expert”. The Judge noted that an expert appointed by the High Court to value the parties’ interests in a company called Business Emphasys Limited (BEL) had asked the Court for directions in relation to a legal issue which the Expert did not think he could decide. She recorded that neither party considered she had jurisdiction to give such a direction. She recorded that she considered she did have jurisdiction, and made procedural directions.
[2] The appellant, Ms Cassin, appealed against the Judge’s observation that she had jurisdiction to deal with the matter. It is a truly curious appeal for a number of reasons. Firstly, both parties contend that the Judge was wrong, and that the Expert should make a decision on the legal issue. But that is all they agree on: their views on the legal issue itself are diametrically opposed. Secondly, there is a real issue as to whether there is a right of appeal to this Court against a “decision” of this character. Thirdly, it is the second time this case has come before this Court.
[3] In order to understand the context of the appeal, it is necessary to traverse the history of the litigation and its factual background.

Background

[4] Ms Cassin and the respondent, Mr Richardson lived together from 1990 to 1999. At the time of their separation they owned various residential properties as tenants in common.
[5] They also had a business venture called Kiwi Slippers, which was conducted through BEL. This was a mail order business supplying sheepskin slippers in the United Kingdom. The parties made trips to the United Kingdom during the Northern Hemisphere winter to run the business. They were assisted by Mr Colin Richardson, Mr Richardson’s father, who lived in the United Kingdom. To avoid confusion we will call Colin Richardson “Mr Richardson Snr”.

The High Court judgment of 3 February 2003

[6] Mr Richardson (then the plaintiff) sought by declaration in the High Court a division of the assets of himself and Ms Cassin (then the defendant). Ms Cassin counterclaimed.
[7] On 3 February 2003, Ellen France J delivered judgment in favour of Ms Cassin: Richardson v Cassin HC WN CP275/00 3 February 2003. Her Honour considered that the Property (Relationships) Act 1976 did not apply to the parties’ relationship. Thus the case had to be decided on common law principles, specifically pursuant to the principles enunciated by this Court in Lankow v Rose [1995] 1 NZLR 277.
[8] Only the part of the judgment concerning BEL is relevant to the present appeal. We will not therefore refer to other aspects of the judgment.
[9] Ellen France J considered it was arguable there was a common intention that the value of BEL was to be shared equally between the parties. However, even if there were no express common intention, Her Honour held that Ms Cassin had demonstrated a reasonable expectation of an interest in BEL of the kind referred to in Lankow v Rose, to which Mr Richardson was reasonably expected to yield. She concluded that the parties shared in BEL on a 50/50 basis, notwithstanding the fact that Mr Richardson owned 100% of the shares in BEL. Her Honour remarked that there was a need for an independent process to ascertain the value of the shareholding in BEL.

This Court’s judgment of 27 November 2003

[10] Mr Richardson appealed to this Court, and Ms Cassin cross-appealed. This Court dismissed the appeal and allowed the cross-appeal: Richardson v Cassin CA24/03 27 November 2003. This Court expressly approved Ellen France J’s analysis of Ms Cassin’s role in the development of BEL (and Kiwi Slippers).
[11] At the conclusion of this Court’s judgment, Tipping J said: “All outstanding issues of detail or implementation are to be dealt with in the High Court, where any further formal orders are to be sought if they are required” (at [26]).

Implementation orders of Ellen France J

[12] A hearing was convened before Ellen France J on 7 October 2004 to determine the manner in which the High Court judgment would be implemented. It became apparent the parties did not agree on the process for ascertaining the value of BEL. Ms Cassin submitted the assessment of the value ought to be undertaken by an expert chartered accountant. Conversely, Mr Richardson’s proposal entailed each party instructing an accountant with a view to those accountants agreeing on a value based on the liquidation of BEL as at the date on which the parties separated, 3 November 1999. Any dispute between the parties’ accountants would be referred to an independent accountant nominated by the New Zealand Institute of Chartered Accountants (NZICA), whose decision would be final. Each party would bear the costs of his or her own accountant.
[13] Ellen France J delivered implementation orders in respect of the High Court’s judgment of 3 February 2003: Richardson v Cassin HC WN CIV-2000-485-813 CP 275/00 15 October 2004. Ellen France J preferred Ms Cassin’s approach to valuation. Her Honour ordered that the assessment of BEL’s value should be on a notional liquidation basis, i.e. the sum that shareholders would expect to receive if the company were placed into voluntary liquidation on the separation date.
[14] Full implementation orders were annexed to the orders of 15 October 2004. These relevantly provided:

Share Value Assessment – Business Emphasys Limited (BEL)

That [Mr Richardson] shall pay to [Ms Cassin] a sum equivalent to 50 percent of the value of the plaintiff’s 100 percent shareholding in BEL as at the third day of November 1999 (“the Value”) and that Value:

(a) Shall be assessed by a chartered accountant being the nominee of the Wellington Division of the Institute of Chartered Accountants (“the expert”) with the anticipation that the expert shall use his or her best endeavours to assess the Value by 17 December 2004;

(b) The value shall be assessed on the basis of a notional liquidation of BEL as at 3 November 1999;

(d) There should be no right of appeal by either party against the determination made by the expert;

(g) Each party shall provide to the Expert such records and documents and answers to questions as the expert requires for the purpose of his or her valuation assessment;

(h) That each of the parties shall bear one half of the share of the costs of the expert undertaking this valuation...

(i) The Registrar of this Court shall be entitled to seal judgment for the defendant against the plaintiff for the Value upon receipt of a certificate of the Values shown by the Expert.

[15] Implementation orders were also made with respect to the residential properties and other business interests not relevant to the present appeal. Relevantly, however, Ellen France J reserved leave for the solicitor in charge of the sale of the properties to apply to the High Court for further directions on three days notice to the parties’ solicitors (at [14]). There was no express reservation of leave for the valuer of BEL.

The appointment of Mr Coleman and Mr Richardson’s claim

[16] Mr Michael Coleman, a partner in the firm KPMG, was nominated by the Wellington Division of the NZICA to value the shares in BEL.
[17] In accordance with Ellen France J’s implementation order, the parties provided Mr Coleman with relevant documents, including BEL’s accounting records. Mr Coleman also questioned the parties in person.
[18] On 21 February 2005, Mr Coleman circulated a copy of his draft valuation report to the parties giving them the opportunity to comment on its factual accuracy. In response, Mr Richardson advised Mr Coleman that prior to 3 November 1999, a company owned by Mr Richardson Snr, called Richardson Electronic Products and Services (REPS), had entered into an agreement with BEL to split the sale proceeds of Kiwi Slippers on a 50/50 basis. Thus when REPS arranged the sale of Kiwi Slippers in May 2000, BEL received only 50% of the proceeds. As the agreement to split proceeds was said to have been entered into prior to the date as at which the BEL valuation was to be made, it was clear that it would have a material impact on Mr Coleman’s assessment of the value of the shares in BEL.
[19] On 3 March 2005, Mr Coleman wrote to the parties calling for submissions on the issue. The responses received did not clarify the matter.
[20] On 23 March 2005, Mr Coleman wrote to the parties advising that he had no jurisdiction to determine the matter because the issue was a legal one that an expert valuer was not qualified or entitled to determine.
[21] Mr Coleman invited the parties to apply to the Court for directions. Responses were received from counsel for both parties. Mr Toebes, for Ms Cassin, suggested Mr Coleman could instruct legal counsel to give advice on the issue raised by Mr Richardson. Mr Toebes explicitly rejected Mr Coleman’s right to refer the question to the Court. Ms Levy, for Mr Richardson, told Mr Coleman that he must complete his valuation on the basis that the agreement between Mr Richardson and his father was entered into prior to 3 November 1999 and was a liability at that date. Ms Levy said that if Ms Cassin wished to maintain her contention that the agreement in fact never existed, or that it was made with the intent to defeat her (at that point unmade) claim to a share in BEL, she was free to do so in separate proceedings. Ms Levy further said to Mr Coleman:

[F]or you to reject the evidence of the commission agreement would be to act as arbitrator rather than as an expert. Mr Richardson’s remedies would be against you for exceeding the scope of your appointment.

[22] Understandably, Mr Coleman was concerned he might be exceeding the scope of his engagement thereby risking being sued by Mr Richardson. Mr Coleman instructed counsel. On 13 April 2005, counsel for Mr Coleman requested the convening of a telephone conference between Ellen France J and the parties so as to provide Mr Coleman with directions as to how he ought to proceed.

Telephone conference of 26 April 2005

[23] Ellen France J held a telephone conference with the parties on 26 April 2005. On the same day, Her Honour issued the minute referred to at [1] above.
[24] The Judge said she considered she had jurisdiction because Mr Coleman was involved in the process solely by reason of a Court order. Thus the issue was a matter of implementation which, in accordance with this Court’s decision of 27 November 2003, had to be dealt with by the High Court.
[25] Ellen France J directed that Ms Cassin had to advise the Court by 29 April 2005 if she wished to challenge Mr Richardson’s claim that there was a verbal agreement with Mr Richardson Snr to split the proceeds of sale of Kiwi Slippers. In the event of a challenge, Ellen France J directed that the matter would be set down for a hearing to determine the validity or otherwise of the verbal agreement. In the event of no challenge, Mr Coleman was to proceed with his valuation on the basis of the verbal agreement’s existence.
[26] On 28 April 2005, Ms Cassin gave notice of her challenge to Mr Richardson’s claim of the verbal agreement.

Jurisdiction

[27] We raised with counsel at the hearing the question of this Court’s jurisdiction to entertain the appeal in this case, given that Ellen France J has done no more than set a fixture to deal with the issue raised by Mr Coleman. Both counsel submitted that there was jurisdiction. We are not convinced. It is difficult to see how Ellen France J’s minute of 26 April 2005 is a “judgment, decree or order” for the purposes of s 66 of the Judicature Act 1908, and as such susceptible to an appeal to this Court. But as we did not hear considered argument on the point and we have a clear view on the merits, we will proceed on the basis that we have jurisdiction without actually deciding the point. The Court followed a similar approach in R v Mahanga [2000] 1 NZLR 641.

Submissions for Ms Cassin

[28] Mr Toebes argued that the High Court had no jurisdiction to rule as it did on 26 April 2005 because:

(a) No application for a fixture was made by any of Ms Cassin, Mr Richardson or Mr Coleman. At the time, both parties opposed the allocation of a fixture on the grounds of want of jurisdiction and that the expert ought to make the decision on the value of BEL shares.

(b) The expert is not party to the present proceedings and has no locus standi to apply for a fixture.

[29] He said the Court’s implementation order of 15 October 2004 already provided the method by which Mr Coleman’s valuation ought to proceed. The Court did not reserve leave for any party (and certainly not Mr Coleman) to apply for a fixture on the basis that subsequent might raise a legal issue.
[30] He argued that the decision led to a de facto appeal of the implementation orders. Such an appeal could not occur given Mr Richardson never gave evidence of the verbal agreement with his father at trial. This was all the more unacceptable given the High Court expressly ordered that no right of appeal lay from Mr Coleman’s valuation of BEL.
[31] Leave was not reserved by the parties for Mr Coleman to approach the Court. This can be compared with the leave granted by the Court to the solicitor appointed to conduct the sale of the jointly owned properties to apply to the Court for further directions.
[32] When questioned by the Bench during oral argument, Mr Toebes accepted that the determination as to whether there was or was not an oral agreement would require assessment of evidence and the making of credibility findings. He suggested that if the High Court were to determine the issue the hearing may take several days. Nevertheless he maintained the view that the decision was one which the expert was required to make.

Submissions for Mr Richardson

[33] Ms Levy said there was evidence of the agreement between BEL and REPS before the High Court at the hearing of the substantive dispute. No questions about the agreement were asked by counsel or Ellen France J.
[34] Ms Levy said the Court had jurisdiction to state the legal effect of Mr Richardson’s evidence of the oral agreement. Mr Coleman could have brought his own proceedings seeking a declaratory judgment as to the legal effect of the evidence. These two measures are equivalents.
[35] Ms Levy submitted that the Court’s jurisdiction was limited to clarifying the legal effect of the circumstances in which Mr Coleman found himself. Thus, it could have stated the legal effect of the material Mr Coleman held and the limits of his discretion. The High Court did not have jurisdiction to fix a hearing on the matter.
[36] Ms Levy complained that the parties were not invited to file submissions on the manner in which Ellen France J should exercise the jurisdiction she ruled she had to deal with the question raised by Mr Coleman. If the opportunity were given, Mr Richardson would have submitted:

(a) Ms Cassin was aware of the retention of proceeds by REPS. Evidence of this was discovered at the very first hearing in this litigation, starting on 21 October 2002.

(b) Documentation referring to the verbal agreement was discovered.

(c) Ms Cassin claimed an equal shareholding in BEL knowing at the time that REPS would retain a 50% share of the proceeds of the sale of Kiwi Slippers. No challenge was made to this retention.

(d) The High Court was not asked in October 2002 to determine that the retention by REPS was a device to defeat her interest or that payment should be reversed for the purpose of valuation of the shares.

(e) Accordingly, given Ms Cassin failed to challenge the retention in the entitlement to de facto relationship property proceedings, it would be an abuse of process for the Court to allow Ms Cassin to challenge the transaction disclosed in those proceedings.

[37] Ms Levy said that, although the High Court had no jurisdiction to consider the request for directions, the legal position stated by the High Court is correct: namely, the default position ought to be that the verbal agreement should be treated as valid by Mr Coleman.

Discussion

[38] We do not think the Judge’s direction to the expert to determine the valuation on the basis of the agreement if there was no challenge was a statement of a legal position, as Ms Levy characterised it. Rather, it noted the assumption which could be made by the expert if there was no challenge. And, as there was a challenge, the direction now has no practical significance.
[39] In our view, the High Court had jurisdiction not only to direct Mr Coleman as to the legal effect of the verbal agreement (as Ms Levy contended), but also to convene a fixture with a view to resolving the legal issue between the parties.
[40] The inherent jurisdiction in this case arises because, as Ellen France J correctly said, Mr Coleman has been involved in the litigation by virtue of a Court order. His position is analogous to that of an officer of the Court.
[41] Although not cited by either party, Re Securitibank Ltd (in liq) [1978] 1 NZLR 97 is relevant. In that case, the High Court ordered the winding up of some companies. The Official Assignee was appointed provisional liquidator. At the behest of creditors, the Court appointed a chartered accountant as liquidator of all the companies in place of the Official Assignee. The provisional liquidator had applied pursuant to s 241(3) of the Companies Act 1955, seeking the Court’s directions on a number of complicated matters. The accountant continued the provisional liquidator’s application. In deciding the Court had jurisdiction to give directions to the accountant, Barker J said (at 106):

I am satisfied that the court also has an inherent jurisdiction to give directions to its officer, the liquidator; such inherent jurisdiction is distinct from that conferred by s 241(3).

[42] In our view, the High Court has an inherent jurisdiction to give Mr Coleman directions, notwithstanding that no provision gives him the express right to apply for them, because he has been appointed by the Court and remains subject to the Court’s supervision.
[43] Once the jurisdiction to direct Mr Coleman is established, the jurisdiction to set a fixture calling for submissions is simply an adjunct of the jurisdiction to direct. In other words, Ellen France J is merely seeking assistance from counsel on the exercise of the first jurisdiction.
[44] In our view the position taken by Ms Cassin in relation to the agreement illustrates the necessity for the High Court to assert its jurisdiction. Mr Toebes suggested that an assessment of evidence and of the credibility of witnesses would be required to determine whether the verbal agreement existed. He said cross-examination of witnesses would be required. But he said all this could be done by the expert. It seems to us that that exercise would be outside the expert’s expertise. And it is not provided for in the current directions to the expert from the High Court.
[45] On the other hand, if the position advocated by Ms Levy is accepted, the expert must make a legal assessment as to whether there has been an issue estoppel or abuse of process on the part of Ms Cassin in challenging the agreement, if, as suggested, evidence of the agreement was before the Court at the initial hearing. That is also an issue which is far better left to a High Court Judge to decide than to an accounting and valuation expert.
[46] If the parties wish to have all outstanding matters between them determined on a “sudden death” basis by an independent party, it is always open to them to enter into an agreement to that effect, and to discontinue the High Court proceedings.
[47] We are satisfied that jurisdiction exists in this case. Counsel suggested to us that the directions made by the High Court Judge may need to be altered to meet the requirements of the present situation. If that is so, either party may request the High Court Judge to convene a further conference so that such matters can be raised if necessary.

Result

[48] We dismiss the appeal. In the curious circumstances of this appeal, we make no award of costs.

Solicitors:
Buddle Findlay, Wellington for Appellant
Sygrove Law Office, Wellington for Respondent

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