New Zealand Tamil Society Incorporated v Caisley [2012] NZCA 105 (23 March 2012)

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New Zealand Tamil Society Incorporated v Caisley [2012] NZCA 105 (23 March 2012)

Last Updated: 30 March 2012

IN THE COURT OF APPEAL OF NEW ZEALAND

CA847/2011 [2012] NZCA 105

BETWEEN THE NEW ZEALAND TAMIL SOCIETY INCORPORATED Applicant

AND KIELY THOMPSON CAISLEY First Respondent

AND CHARUKESI RAJAKUMAR Second Respondent

AND RANGANATHAN AKULA Third Respondent

AND VICKY GNANAKUMAR Fourth Respondent

AND MALINI SIVANANTHAN Fifth Respondent

AND THARMALINGAM THARMAKUMAR Sixth Respondent

AND NIRMALAN SIVANANTHAN Seventh Respondent

AND G. LACELLES GNANAKUMAR Eighth Respondent

AND NATHAN SAMINATHAN Ninth Respondent

AND YOGESWARAN INTHIRAN Tenth Respondent

AND PARHMANATHAN ARVINTHAN Eleventh Respondent

Hearing: 6 March 2012

Court: O'Regan P, Randerson and Stevens JJ

Counsel: C S Henry for Applicant M MacNab for First Respondent G B Presland for Second to Eleventh Respondents

Judgment: 23 March 2012 at 11.00 am

JUDGMENT OF THE COURT

1. The application for leave to appeal is dismissed.
2. The application for stay is dismissed.

100. The applicant must pay the first respondent costs for a standard application on a band A basis plus usual disbursements and must also pay the second to eleventh respondents (collectively) costs for a standard application on a band A basis plus usual disbursements.

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REASONS OF THE COURT

(Given by O’Regan P)

Introduction

[1] This is an application for leave to appeal against a decision of Courtney J,[1] in which she dismissed an appeal by the applicant, The New Zealand Tamil Society Incorporated (the Society) against a decision of Judge Gittos[2] and allowed a cross-appeal by the first respondent, Kiely Thompson Caisley (KTC) against one aspect of the District Court judgment. An application for summary judgment in the District Court failed.[3] The Society sought leave to appeal from the High Court but this was refused by Courtney J.[4] The Society also seeks a stay of the orders made against it in the Courts below pending the outcome of the proposed appeal.

Background

[2] The background to the litigation is a dispute which occurred within the Society. At a meeting of the executive committee of the Society a decision was made to consult a barrister, Mr Andrew Gilchrist. Mr Gilchrist was duly instructed and he arranged for KTC to be his instructing solicitors. The faction that had been in dispute with those who instructed Mr Gilchrist subsequently gained control of the Society. The nub of the dispute is that Mr Gilchrist says that he acted throughout for the Society and that the Society is therefore liable to KTC for the fees relating to Mr Gilchrist’s work. The Society says Mr Gilchrist was instructed by the individuals then in control of the Society in their personal capacity and that they should be responsible for the fees. A number of issues arose in the District Court hearing about the basis on which Mr Gilchrist was instructed and the legitimacy of meetings of the executive committee and of the members of the Society at which decisions relating to Mr Gilchrist’s involvement were made. A further issue was whether Mr Gilchrist was entitled to rely on the apparent authority of those from whom he received instructions.
[3] The claim by the Society was also directed at the second to eleventh respondents, whom the Society said should be required to indemnify it in relation to any amounts it was required to pay to KTC. The second to eleventh respondents were those associated with the faction in control of the Society at the time Mr Gilchrist was instructed and at a later point when instructions to Mr Gilchrist were confirmed.
[4] In the District Court Judge Gittos found that the Society was liable for fees incurred up to 22 August 2007, which amounted to $41,445.40, plus interest. He found the Society was not liable for fees incurred after that date, which was the date on which certain consent orders were made in the High Court as to the conduct of the affairs of the Society and, in particular, the payment of liabilities from the Society’s bank account. He found therefore that the remaining fees of $19,605.38 claimed by KTC were not payable by the Society. Judge Gittos found that the second to eleventh respondents were not liable for any of the fees payable to KTC.
[5] In the High Court, Courtney J dismissed the appeal against the finding that the fees relating to the period prior to 22 August 2007 were payable by the Society and allowed the cross-appeal, which meant that the Society was also liable for costs incurred after 22 August 2007. The total amount involved was $61,050.78. The Society was therefore liable for that sum plus interest. The Judge upheld the finding that the second to eleventh respondents were not liable for any fees.

Test for leave

[6] There was no dispute as to the test which must be applied in relation to applications of this kind. In summary, the proposed appeal must raise a question of fact or law that is capable of bona fide and serious argument in a case involving some interest (whether public or private) that is sufficiently important to outweigh the cost and delay of a further appeal.[5]

Intended points of appeal

[7] Counsel for the Society, Mr Henry, raised a number of possible points of appeal, all of which he said met the above standard. We will consider each of these in turn.

Improperly constituted meeting

[8] The meeting of the executive committee at which a decision was made to instruct Mr Gilchrist was convened without giving notice to one of the members of the executive committee who was part of the opposing factions. There were concurrent findings in the District Court and the High Court that this irregularity did not invalidate the decision made at the meeting, which was made unanimously by the other members of the committee. Mr Henry seeks to renew an argument rejected in those Courts that failure to give notice meant that everything that happened at the meeting was void and of no effect, and that therefore no valid instruction had been given to Mr Gilchrist. He wishes to argue that the District Court and High Court incorrectly applied the indoor management rule.
[9] We do not consider that this issue is seriously arguable on the facts of the case. Nor do we see that it raises any matter of general importance, given that the outcome is in great measure dependent on the factual findings of the Courts below.

Personal responsibility for actions taken in bad faith

[10] Mr Henry wishes to argue on appeal that the actions of the members of the executive committee who resolved to instruct Mr Gilchrist and of a subsequent executive committee which resolved to continue those instructions were in bad faith. Consequently, the members of those committees should be personally liable for the fees payable in respect of Mr Gilchrist’s work.
[11] In essence, Mr Henry asks this Court on a second appeal to make findings of fact that the members of those executive committees acted in bad faith, contrary to concurrent findings in the District Court and High Court that they acted in good faith. We do not consider that a factual issue of that kind is appropriate for a second appeal, applying the Waller v Hider test.

Assertion of legal professional privilege

[12] In correspondence between Mr Gilchrist and the Society, Mr Gilchrist said that he was bound by legal professional privilege which meant that he could not reveal the nature of discussions between him and those who had instructed him on the Society’s behalf. Mr Henry said this was inconsistent with Mr Gilchrist’s claim that his instructions came from the Society because, if that were so, then no privilege could apply. From that he asked us to deduce that Mr Gilchrist’s claim of privilege amounted to an admission that the instructions given to him had been given by the individuals in control of the Society and not given on behalf of the Society.
[13] In the District Court Mr Gilchrist accepted that he should have referred to an obligation of confidentiality rather than privilege. Neither Judge Gittos nor Courtney J engaged with this point.
[14] We do not see how this aspect of the case can be properly engaged at the stage of a second appeal under the Waller v Hider test. What the barrister said in correspondence some time after the completion of the litigation is of only peripheral interest in the determination of the nature of the resolutions and correspondence at the time that he was instructed. We see this issue as involving no matter of legal significance and as being essentially a factual matter that is not appropriate for a second appeal.

The rule in Turquand’s case

[15] Mr Henry wishes to argue on appeal that both the District Court and the High Court had been wrong to find that, even if there had been a lack of authority on the part of the executive committee to engage Mr Gilchrist, Mr Gilchrist was entitled to assume, as he said he did, that the members of the executive committee who instructed him did so with the authority of the Society. Mr Henry accepted that the Judge had correctly articulated the rule in Turquand’s case[6] but argued that on the facts of the case Mr Gilchrist was on notice of the irregularities or wilfully shut his eyes to them.
[16] This question is a question of fact on which the Courts below have reached concurrent findings and is not an appropriate question for a second appeal. It does not give rise to any issue of significance in terms of the Waller v Hider test.

Significance of lawyer’s knowledge of Court orders

[17] In the course of the litigation involving the rival factions, consent orders were made by the High Court on 23 July 2007, one of which was that no assets of the Society were to be disposed of pending further order of the Court, other than the payment of usual trade creditors.[7] Further orders were made on 22 August 2007, including one that required authorisation from both sides in the litigation for any payments to be made on the Society’s behalf.[8]
[18] In the District Court, Judge Gittos said that, knowing of these orders, Mr Gilchrist could not properly have held the view that the then incumbent executive committee had the power to bind the Society in respect of ongoing costs for work he was undertaking. Courtney J disagreed. She concluded that, given the circumstances, it was obvious that neither the Court nor the parties intended that ongoing legal costs would fall within the scope of these orders. Mr Henry seeks to argue on appeal that the High Court Judge was wrong in that regard and that the correct answer is that the orders applied also to Mr Gilchrist as a legal adviser involved in the litigation in which the orders were made.
[19] Again, this is a question of fact and the conclusion reached by Courtney J was well open to her on the facts. It does not give rise to any matter of importance and is not an appropriate issue for a second appeal.

Barrister arranging instruction of solicitor

[20] In the District Court and High Court, Mr Henry argued that there was no contract of retainer between KTC and the Society because the Society had approached Mr Gilchrist directly (and independently of KTC) and that KTC’s instructions had been given by Mr Gilchrist as agent for the Society. There was some dispute about the factual background but the point which Mr Henry now raises is a legal point that a barrister cannot act as an agent for a person in the engagement of a solicitor. He did not develop the point and we do not see it as a matter which would be appropriate for a second appeal, particularly as it does not appear to have been raised earlier.

Other matters

[21] Mr Henry submitted that the High Court Judge had pre-judged the appeal and had relied on incorrect factual findings. There was no basis for the former allegation and it should not have been made. The allegedly incorrect factual findings were dealt with as part of the specific points considered above or were immaterial.

Conclusion: leave to appeal

[22] None of the proposed questions in respect of which leave is sought meets the test for the granting of leave for a second appeal. We therefore dismiss the application for leave.

Application for stay

[23] It was accepted by all parties that, if leave were given, then a stay would be appropriate. It was also accepted that if leave were not granted then there would be no basis for a stay. In light of our conclusion that leave should not be granted, we formally dismiss the application for stay.

Costs

[24] The parties were agreed that costs should follow the event. We award costs to both the first respondent and to the second to eleventh respondents for a standard application on a band A basis plus usual disbursements.
[25] Counsel for KTC, Ms MacNab, indicated at the hearing that KTC would seek costs against counsel and the solicitor on the record for the Society personally. After discussion with the bench she withdrew that application. It was appropriate that she did so.

Solicitors:
Witten-Hannah Howard, Auckland for Applicant
Kiely Thompson Caisley, Auckland for First Respondent
Presland & Co, Auckland for Second to Eleventh Respondents

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[1] The New Zealand Tamil Society Inc v Kiely Thompson Caisley [2011] NZHC 958; [2011] NZAR 722 (HC).

[2] Kiely Thompson Caisley v New Zealand Tamil Society Inc DC Auckland CIV-2009-004-868, 2 December 2010.

[3] Kiely Thompson Caisley v New Zealand Tamil Society Inc DC Auckland CIV-2009-004-868, 25 August 2009.

[4] The New Zealand Tamil Society Inc v Kiely Thompson Caisley HC Auckland CIV-2011-404-160, 11 November 2011.
[5] Waller v Hider [1988] 1 NZLR 412 (CA).
[6] Royal Britsh Bank v Turquand [1856] EngR 470; (1856) 6 E&B 327, 119 ER 886 (Exch Ch).

[7] New Zealand Tamil Society Inc v Thevarajan HC Auckland CIV-2007-404-4295, 23 July 2007 (interim orders of Randerson J). There was no objection by any party to Randerson J sitting on the present application for leave to appeal.

[8] New Zealand Tamil Society Inc v Thevarajan HC Auckland CIV-2007-404-4295, 22 August 2007 (minute of Baragwanath J).