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Court of Appeal of New Zealand |
Last Updated: 9 October 2013
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IN THE COURT OF APPEAL OF NEW ZEALAND
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BETWEEN
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First Applicant
PETERSON PORTABLE SAWING SYSTEMS LTD (IN LIQUIDATION)
Second Applicant |
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AND
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Second Respondent |
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Hearing: |
16 September 2013 |
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Court: |
O’Regan P, Ellen France and Wild JJ |
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Counsel: |
Applicant in person
T J Walker and J C Dickson for Respondents |
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Judgment: |
JUDGMENT OF THE COURT
____________________________________________________________________
REASONS OF THE COURT
(Given by Ellen France
J)
Introduction
[1] The applicant, Carl Peterson, applies for special leave to appeal against a decision of Gilbert J.[1] The Judge declined Mr Peterson’s application for review of a decision of Associate Judge Bell. The Associate Judge dealt with an application by the respondents, the Lucas parties, to strike out Mr Peterson’s claims in a copyright proceeding on the basis the parties had reached an agreement to settle their outstanding litigation.[2] The Associate Judge decided that the settlement agreement was binding on the parties. The strike-out application was adjourned so that the settlement could be implemented. Gilbert J agreed the settlement agreement was enforceable and struck out the copyright and related proceedings. Subsequently, Gilbert J declined Mr Peterson leave to appeal to this Court.[3]
Background
[2] The background is complicated as litigation between the parties over the intellectual property rights to various sawmills has been ongoing for over 13 years. The relevant history is set out more fully in the substantive judgment of Gilbert J which we adopt in the summary which follows.[4]
[3] Litigation between the parties was ongoing when, on 3 October 2011, Mr Warren Lucas telephoned Mr Peterson to see if he could persuade him to bring proceedings to an end. During the course of that conversation, as Gilbert J explained:
[12] ... Mr Lucas advised Mr Peterson that Lucas interests had recently acquired the worldwide copyrights associated with the “Stubbe” sawmill which is in some respects similar to the “Turbosawmill” manufactured by Mr Peterson’s son’s company. According to Mr Peterson, Mr Lucas threatened to bring copyright infringement proceedings against his son’s company in relation to the Turbosawmill unless Mr Peterson dropped all of his claims. Mr Peterson says that he was “shocked and dismayed” at the prospect of his son’s business being destroyed by the same Court processes that he believed had destroyed his own business. He says that he “panicked” and entered “spur-of-the-moment” discussions in which he tentatively agreed to abandon his claims in return for the payment of a sum, which the parties have agreed should be kept confidential, and a commitment by the Lucas parties not to pursue any copyright infringement claims against his son. Mr Lucas said that he would consult with his family and reply the following day.
[4] On 4 October 2011 Warren Lucas called Mr Peterson and accepted his settlement offer. There was debate about whether the settlement was to be in Australian or New Zealand dollars. The parties agreed on this and Mr Lucas said he would arrange for his solicitors to send an email setting out the terms of settlement for Mr Peterson’s approval. The email was duly sent. Mr Peterson responded with a minor amendment relating to the mechanics of settlement stating that “everything else seems in good order”. A further email from the Lucas’ solicitors was forthcoming and Mr Peterson signed and returned a memorandum for filing with the Court saying he accepted all the terms as written.
[5] Mr Peterson subsequently proposed a further variation to the agreement which the Lucas parties accepted although their solicitors noted the parties had already reached a binding agreement. After getting some advice from a Citizens Advice Bureau the following week, Mr Peterson says it was only then he realised that the record of the settlement agreement from the Lucas’ solicitors did not include the promise by the Lucas parties not to make a claim based on the Stubbe patent. Mr Peterson said he was not bound by any settlement agreement and told the Lucas’ solicitors he did not now intend to settle. The Lucas’ solicitors responded on 13 October 2011 saying that the Lucas parties intended to enforce the settlement agreement. They duly applied to strike out the copyright proceeding on the basis of the settlement agreement.
[6] Before the Associate Judge, Mr Peterson opposed the strike-out on the basis that no settlement agreement had been reached and on the further ground that he was under duress during the negotiations. The Associate Judge concluded that there was a binding agreement “not vitiated by any factor going against Mr Peterson’s consent”.[5] When the matter came before Gilbert J on review, Mr Peterson accepted that a binding settlement agreement was reached. His case was that the agreement was not enforceable because it was “an unconscionable bargain procured in bad faith by misrepresentation and duress and in circumstances amounting to undue influence”.[6] Gilbert J rejected these arguments.
[7] In declining leave to appeal, Gilbert J said that both his decision and that of the Associate Judge involved the application of settled legal principles to the facts as disclosed by the affidavits. While important to the parties, the Judge noted the amount “realistically” in issue was comparatively modest.[7] He said the copyright proceeding had stalled at a preliminary stage because of non-payment of security for costs.[8] The Judge also said it was necessary to weigh in the balance the interests of finality for the Lucas parties and the wider public interest in ensuring court resources are “not wasted on appeals with no realistic prospect of appreciable benefit”.[9]
The approach to be adopted
[8] The principles applicable to the present application (brought under s 26P(1AA) of the Judicature Act 1908) are those applied under s 67 of the Judicature Act. As this Court has explained:[10]
[11] ... The proposed appeal must raise some question of law or fact capable of bona fide and serious argument. In addition, the case must involve some interest, public or private, which is of sufficient importance to outweigh the costs and delay of a further appeal.
[9] In Waller v Hider, the Court also noted that on a second appeal:[11]
... this Court is not engaged in the general correction of error. Its primary function is then to clarify the law and to determine whether it has been properly construed and applied by the Court below. It is not every alleged error of law that is of such importance, either generally or to the parties, as to justify further pursuit of litigation which has already been twice considered and ruled upon by a Court.
Discussion
[10] We agree with Gilbert J that leave to appeal should not be granted for the reasons the Judge gave. In addition, the proposed appeal does not raise any point capable of serious argument. We explain our reasons under headings which capture the central points Mr Peterson wishes to raise on appeal.[12]
Duress
[11] Mr Peterson contends that the principles of duress are not settled in New Zealand.[13] He wishes to argue that the courts below were wrong not to consider the legitimacy of Mr Lucas’ threat to bring civil proceedings by examining the merits of the threatened claim.
[12] We see no merit in this proposed ground. The relevant legal principles are settled[14] and were applied by Gilbert J. Further, Gilbert J’s starting point was favourable to Mr Peterson. The Judge accepted that it was not legitimate to threaten to bring such proceedings to force a settlement. However, the Judge said that Mr Peterson’s argument that this is what had occurred failed on the facts. First, Mr Peterson’s own evidence supported Mr Lucas’ contention he was entitled to bring the proceeding. Secondly, even if the threat was illegitimate, Gilbert J found that it had not coerced Mr Peterson into settling. The Judge said that the uncontested facts made Mr Peterson’s assertion he was coerced simply “untenable”.[15]
[13] Mr Peterson also complains that Gilbert J refused to let him correct one of the affidavits filed in the High Court. Mr Peterson wanted to insert the word “later” to make the point that it was only later that he believed that Mr Lucas never intended to follow through with his threat. We see nothing in this. The point was not central to the Judge’s findings.
[14] Finally, Mr Peterson says the High Court has approached the strike-out application on the wrong basis. He says several clearly tenable defences were apparent. This is simply another way of seeking to challenge the factual findings. As we have noted, in relation to duress and undue influence, the finding was that the evidence does not support his claim.
Misrepresentation
[15] Mr Peterson maintains the argument advanced in the High Court that the terms of the agreement reached over the telephone on 4 October 2011 were misrepresented in the written record of settlement that followed. This is a reference to the fact that the written agreement did not record the agreement by the Lucas parties not to bring the Stubbe copyright infringement claim.
[16] The Judge must be right that the omission in the written agreement of the position on the Stubbe claim could not have induced the agreement to settle. That is because the written agreement followed after the telephone discussion in which settlement was reached. In any case, this question is not in the category of matters for which a second appeal would be warranted given Mr Lucas has confirmed in writing that the Lucas interests will not bring the Stubbe copyright infringement claim.
Effect of permission under s 41(3)(b) of the Patents Act 1953
[17] Mr Peterson argues he should be able to pursue the patent proceeding as an interested person acting in the public interest. The Attorney-General has granted consent to Mr Peterson’s application as required under s 41(3)(b) of the Patents Act. We agree with the Judge that this does not enable Mr Peterson to depart from his settlement agreement. Under that agreement, he promised not to pursue the claim in any subsequent proceeding.
Further grounds
[18] Mr Peterson seeks to raise a number of new grounds not previously advanced. We would be hesitant to give special leave on grounds not raised before because the Court would not have the benefit of a judgment below on these matters. We have, however, considered them as we now explain.
Electronic Transactions Act 2002
[19] Mr Peterson seeks to argue in reliance on this Act that there can be no settlement because it was not in writing. Apart from the fact that Mr Peterson agreed before the High Court Judge that there was an agreement, the Act sets out how a legal requirement in an enactment that information be recorded in writing may be met by electronic means. As the respondents submit, there is no basis to argue that a settlement agreement reached between Mr Peterson and the Lucas parties had to be in writing let alone signed. The Act is not applicable in this case.
Section 74 of the Copyright Act 1994
[20] Mr Peterson seeks to rely on this provision to argue that the threatened proceedings had no merit and were therefore illegitimate. Section 74 provides an exception to copyright protection for artistic or literary works contained in New Zealand patents which have lapsed. The section does not assist Mr Peterson because, as Ms Walker for the respondents submits, the Stubbe patent was a United States patent and not a New Zealand patent.
Breach by respondents permitting cancellation
[21] Mr Peterson wants to argue that on or about 13 February 2013 he cancelled the settlement agreement in response to an alleged breach or notified intention to breach by Mr Lucas in an email on 14 November 2011. The email of 14 November 2011 was a follow up to Mr Lucas’ offer to vary the settlement agreement by adding the provision relating to the Stubbe patent. The problem with this argument is that Mr Peterson was not willing to perform his obligations under the contract at the relevant time. This makes reliance on s 7 of the Contractual Remedies Act 1979 problematic, at best.[16]
Proposed new evidence
[22] Mr Peterson sought leave to adduce a further affidavit from himself and another from his daughter, Kerris Browne. Mr Peterson’s affidavit, amongst other matters, asserts that his earlier affidavit should have included the word “later”, the point we have dealt with above. Ms Browne’s affidavit refers to various exchanges between Warren Lucas and others relating to the threatened proceeding. Mr Peterson’s affidavit is a mix of factual material and submission and Ms Browne’s affidavit at first blush contains some hearsay. Both contain material that could have been advanced at trial. Putting those difficulties to one side, we have not found it necessary to rely on either affidavit and decline to admit them.
Result
[23] For these reasons, we do not consider the proposed appeal meets the test for a second appeal. The applications for leave to adduce new evidence and for special leave to appeal are dismissed.
[24] Costs should follow the event. The respondents sought costs reflecting “the manner in which Mr Peterson had conducted” the application. We treat that as an application for increased costs. However, while the application was something of a moving feast, we see no basis for an award of increased costs. We order the applicant to pay the respondents costs for a standard application on a band A basis and usual disbursements.
Solicitors:
Simpson Grierson,
Auckland for Respondents
[1] Peterson v Lucas Mill Pty Ltd [2012] NZHC 2398.
[2] Peterson v Lucas Mill Pty Ltd [2012] NZHC 1101.
[3] Peterson v Lucas Mill Pty Ltd [2012] NZHC 2830.
[4] At [8]–[27].
[5] Peterson v Lucas Mill Pty Ltd, above n 2, at [55].
[6] At [3].
[7] At [12].
[8] There is an appeal on this
aspect and there are other appeals in this Court but the consensus is that the
result of the present
application may effectively resolve them: Peterson v
Lucas CA40/2010, 20 December 2011; 21 June
2013.
[9] At [13].
[10] Sharma v Wati [2012] NZCA 195, (2012) 21 PRNZ 161 citing Waller v Hider [1998] 1 NZLR 412 (CA) and Snee v Snee [1999] NZCA 252; (1999) 13 PRNZ 609 (CA).
[11] At 413.
[12] Mr Peterson filed an application for special leave and then two amended applications. It is not necessary to address all of the detail in these applications.
[13] Mr Peterson contrasts the approach in Pharmacy Care Systems Ltd v Attorney-General (2002) 16 PRNZ 405 (CA) with that in McIntyre v Nemesis DBK Ltd [2009] NZCA 329, [2010] 1 NZLR 463.
[14] Pharmacy Care Systems Ltd v Attorney-General (2004) 17 PRNZ 308 (SC).
[15] At [42]. The argument based on undue influence failed because it relied on the same facts: at [45].
[16] See Ingram v Patcroft Properties Ltd [2011] NZSC 49, [2011] 3 NZLR 433.
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