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Court of Appeal of New Zealand |
Last Updated: 27 September 2016
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IN THE COURT OF APPEAL OF NEW ZEALAND
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BETWEEN
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Appellants |
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AND
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Respondents |
JUDGMENT OF THE COURT
____________________________________________________________________
REASONS OF THE COURT
(Given by Mallon J)
Introduction
[1] The appellants appeal against an interim judgment of the High Court.[1] Following the hearing, we raised whether there was jurisdiction to determine the appeal. We provided an opportunity for the parties to obtain consent orders from the High Court which could then provide a jurisdictional basis for the appeal we had heard.
[2] The parties were not able to reach agreement on the terms of any such consent order. Accordingly, the parties were advised that we would proceed to determine the issue of jurisdiction following any submissions they wished to make on that issue. The appellants took advantage of that opportunity, maintaining there is jurisdiction to determine the appeal. The respondents abide the Court’s decision while noting that from a practical perspective it would be preferable to have a substantive determination from this Court on the appeal.
[3] While we understand that practical preference, we have concluded we have no jurisdiction and that the appeal must be dismissed for want of jurisdiction. We set our reasons below.
Background
[4] The appellants are a small number of the owners in a 97 unit title development in New Lynn, Auckland. The development was subject to weathertightness issues. Repairs to the development were funded from settlement proceeds obtained following proceedings commenced in the Weathertight Homes Tribunal. These proceeds were exhausted before the repairs were completed.
[5] The Body Corporate and one of the unit holders applied to the High Court for an order under s 74 of the Unit Titles Act 2010 to settle a scheme to manage the balance of the repair project. They filed a draft scheme with the High Court. Most of the unit holders consented to the scheme. Several unit holders did not, including the six named appellants. Following a hearing in the High Court, and before delivery of a judgment, an amended draft scheme was filed for the Court’s approval. The unit holders who initially opposed the original draft scheme remained opposed to the amended draft scheme. However, the issues in dispute had narrowed to three issues.
[6] The issues in dispute were:
- (a) how the costs to complete the repair works were to be allocated between the unit holders, in particular that:
- (i) the costs of repair were to be allocated by unit type rather than ownership interest; and
- (ii) contributory negligence assessments were to be taken into account in allocating each unit holder’s share of the settlement funds;
- (b) the delegation of powers and duties under the scheme to the Body Corporate;
- (c) how GST refunds received by the Body Corporate should be allocated between users.
[7] Wylie J delivered an interim judgment. He rejected the arguments raised by the opposing unit holders regarding the second two issues. He also rejected a number of the arguments raised by the opposing unit holders regarding the first issue. However, the Judge was not prepared to approve the draft scheme the subject of the application.[2] This was for three reasons:
- (a) First, the draft scheme allocated repair costs for each unit regardless of whether any common property was involved.[3] This created an imbalance for unit holders with significant damage to the exterior of their units (the exterior being common property).
- (b) Secondly, the draft scheme allocated contributory negligence percentages in accordance with a letter issued to the unit holders by the Body Corporate’s lawyers, whereas the Judge considered it was appropriate that such percentages be allocated in accordance with an earlier agreement (the Remedial Works Agreement) signed by the unit holders.
- (c) Thirdly, the draft scheme provided for disputes to be referred directly to the Court, whereas the Judge considered mediation and arbitration provisions were more appropriate.
[8] The Judge concluded his judgment as follows:
[124] As noted above, I am issuing this judgment as an interim judgment. I anticipate that the parties will be able to come back to the Court with a scheme which all support. If so, they can request consent orders. If not, they should file memoranda setting out their respective positions. It may be necessary to reconvene the hearing.
Costs
[125] I will deal with costs (if any) when the scheme has been finally settled.
[9] The Judge made no formal orders. He neither dismissed nor granted the application for approval of the scheme. He made findings on issues which the opposing unit holders had raised. He also made findings on two other issues which had not been raised by the parties, but which he considered meant that the scheme could not be approved in its current form. Rather than dismissing the application he provided the applicant with the opportunity to amend the scheme. He anticipated the amended scheme might then be approved by consent or, if not, the subject of further consideration by the Court.
[10] The opposing unit holders filed an appeal in this Court. At this time the parties had not submitted an amended draft scheme for the High Court’s approval nor filed memoranda in that Court setting out their respective positions. There was, therefore, no formal order made by the High Court at the time of the appeal. Nor was there any sealed order from the Court of the interim judgment.
[11] The notice of appeal was brought “against the decisions of Justice Wylie” that “[t]he scheme proposed was broadly in line with what the body corporate has undertaken in the past” and that “[t]he scheme departs only where reasonably necessary from the scheme of [the Act] in order to achieve fairness between the owners”. Those were the findings the Judge made in reaching his conclusion that a scheme, which took into account contributory negligence assessments in allocating each unit holder’s share of the settlement funds, could be approved.
[12] The hearing on the appeal proceeded in this Court on 16 June 2016. The appellants contended the High Court was wrong to find that the contributory negligence percentages in the Remedial Works Agreement should be taken into account in assessing the allocation of repair costs as between the owners. No party raised any question about whether this Court had jurisdiction to consider the appeal when no formal order had been made in the High Court.
[13] As referred to above, we subsequently raised the issue. We gave the parties the opportunity to agree and obtain consent orders for the approval of a scheme by the High Court. Once approved, we would then treat the appeal as being against that scheme and determine the issues raised by the appellants in their appeal against the interim judgment.
[14] The parties did not, however, agree on the consent orders which the High Court should make. The Body Corporate proposed a scheme based on the High Court’s interim judgment. The appellants did not accept that the scheme reflected the interim judgment. They proposed a timetable for the parties to make submissions on an alternative scheme which they proposed to file. The High Court Judge issued a minute dated 21 July 2016.[4] The Judge advised that, as nothing had been agreed, no consent orders could be made. He declined to set a timetable for submissions on the scheme for which approval would be sought pending this Court’s determination of the appeal, noting the indication this Court had already given that it was likely to be dismissed for want of jurisdiction.
This Court’s jurisdiction
[15] The Court of Appeal’s jurisdiction must be conferred by an enactment. Section 66 of the Judicature Act 1908 sets out the Court’s jurisdiction to hear appeals in it civil jurisdiction. It is in these terms:
- Court may hear appeals from judgments and orders of the High Court
The Court of Appeal shall have jurisdiction and power to hear and determine appeals from any judgment, decree, or order save as hereinafter mentioned, of the High Court, subject to the provisions of this Act and to such rules and orders for regulating the terms and conditions on which such appeals shall be allowed as may be made pursuant to this Act.
[16] The jurisdiction therefore arises for any judgment, decree, or order and subject to such rules for regulating the terms and conditions on which such appeal shall be allowed. The High Court Rules and the Court of Appeal (Civil) Rules 2005 provide such rules. The jurisdiction conferred by s 66 operates alongside those rules.
[17] As set out above, the appeal is brought against some of the findings which the High Court made about issues raised by those opposing the application.[5] It is not brought against any decree or order. The question is, therefore, whether it is appealable under s 66 as a “judgment” even though no order or relief has yet been granted. The definition of “judgment” does not particularly assist for present purposes. It simply provides that a judgment includes a decree.[6] The High Court and the Court of Appeal (Civil) Rules do, however, assist.
[18] The High Court Rules distinguish between a judgment and the reasons for a judgment by defining them separately.[7] A “judgment” is defined as “includ[ing] a decree or order of the court”. The “reasons for judgment” is defined as meaning “the written reasons given by a Judge for his or her decision”. This distinction is reinforced by the rule that a “judgment is given orally when the Judge pronounces it, with or without reasons”.[8]
[19] The Court of Appeal (Civil) Rules make a similar distinction, although they refer to a “decision” rather than a “judgment”. Appeals and cross-appeals are brought against a “decision” or “part of a decision”.[9] A decision can be supported “on a ground other than the one upon which it was based” in which case a memorandum is to be filed “setting out the ground upon which the respondent intends to support the decision appealed against”.[10]
[20] That an appeal is brought against a judgment (or decision), and not the reasons for the judgment (or the grounds for the decision), is made plain by the Supreme Court in Arbuthnot v Chief Executive of the Department of Work and Income, in the following passage:[11]
[25] It is fundamental that an appeal must be against the result to which a decision-maker has come, namely the order or declaration made or other relief given, not directly against the conclusions reached by the decisionmaker which led to that result, although of course any flaws in those conclusions may provide the means of impeaching the result. A litigant cannot therefore, save perhaps in very exceptional circumstances, bring an appeal when they have been entirely successful and do not wish to alter the result. The successful litigant cannot seek to have the appeal body overturn unfavourable factual or legal conclusions made on the journey to that result which have had no significant impact on where the decisionmaker ultimately arrived. In short, there is no right of appeal against the reasons for a judgment, only against the judgment itself.
(Emphasis added.)
[21] That observation was made in the context of an appellant contending that the respondent could not raise new issues on an appeal. The Supreme Court observed that a party which obtains a judgment in its favour is able, in the event of an appeal by the other party, to support the judgment or decision by relying on any relevant ground, including one on which the trial court may have found against it. It is only if it seeks to have the judgment or decision amended (as distinct from seeking to confirm the judgment or decision but on different reasoning) that it need bring a cross-appeal.[12]
[22] Where there has been no result (that is, no order, declaration or other relief given), there is no judgment against which a right to appeal is conferred under s 66 of the Judicature Act. An illustration of this point is provided by a decision of this Court in FB Duvall Ltd v Commissioner of Inland Revenue.[13] That case involved an application to appoint a liquidator under the Companies Act 1993. The Associate Judge delivered a reserved judgment dismissing the two arguments raised by the appellant in seeking to resist the appointment and which the appellant wished to challenge on appeal. However he did not appoint a liquidator. Instead he adjourned the proceeding to give the appellant the opportunity to pay the debt on which the application was based before any such order was made. In dismissing the appeal for want of jurisdiction, this Court said:
[3] It is a fundamental appellate principle that what has to be appealed is a judgment, decree or order of the High Court (see s 66 Judicature Act 1908). That is, a party appeals the judgment, not any observations in it, provisional findings of a Judge, or even the reasons of the Judge.
[23] Where there is no result (that is, no order, declaration or other relief given), there is the further difficulty of complying with the procedural requirement for an appeal that a judgment be sealed.[14] In FB Duvall Ltd this Court noted there had been non-compliance with that requirement and the reason for this was “likely that it would in any event have been impossible to seal a judgment, on the basis of what the Judge said”.[15]
[24] Despite these authorities, the appellants maintain there is jurisdiction to hear this appeal. They submit that there is an appealable interim judgment which has determined the substantive issues between the parties. In support of this submission they rely on Siemer v Heron in which the Supreme Court said that:[16]
[31] ... s 66 does give an appeal as of right against interlocutory decisions of all kinds made in the High Court unless the Judicature Act itself or a rule or order made pursuant to the Act creates a restriction. ...
[25] They further rely on the following passage from Association of Dispensing Opticians of New Zealand Inc v Opticians Board:[17]
[R]ulings made either in the course of the hearing of the proceeding (using that term in a broad sense, including for example an adjournment application), or as part of the trial conduct or management process would not ordinarily be susceptible to interlocutory appeal. On the other hand rulings which have some substantive effect on rights and liabilities in issue would be. Obviously the boundary lines will not be cut and dried and, as seen in Winstone, particular cases may fall into an exceptional category but that classification may be helpful at least as a matter of general approach.
(Emphasis added.)
[26] They submit that these decisions are consistent with Arbuthnot. They say that is because of the Court’s observation in Arbuthnot that an appeal cannot be to the conclusions reached by the decision-maker “on the journey to that result which have had no significant impact on where the decision-maker ultimately arrived”. [18] They contend that, because the interim judgment has finally determined issues of substance, an appeal is available.
[27] The appellants’ submission, however, takes the comments made in these cases out of their proper context. Siemer v Heron was concerned with when an interlocutory appeal should be entertained by the Court. It reviewed the Court of Appeal’s approach as to when it would hear appeals from interlocutory rulings.[19] That approach was to read down the scope of s 66 for interlocutory rulings on the basis that it could not have been intended to confer jurisdiction to appeal every High Court decision made in a proceeding before delivery of the substantive judgment. Rather, the Court of Appeal’s view was that only those that determined or affected the rights or liabilities at issue — that is, the merits — were within s 66. The above passage from Association of Dispensing Opticians of New Zealand Inc is one of the cases where this approach was taken by the Court of Appeal on an appeal from an interlocutory ruling.
[28] In Siemer v Heron the Supreme Court held this approach to appeals against interlocutory decisions was wrong.[20] Section 66 provided jurisdiction to appeal all interlocutory decisions, although the Court of Appeal retained discretion whether to entertain such an appeal pending determination of the substantive proceeding.[21] There is, however, nothing in Siemer v Heron (nor Association of Dispensing Opticians of New Zealand Inc under the Court of Appeal’s former approach) which purports to alter the fundamental principle that an appeal must be against the judgment, decree or order, not the reasons for the judgment or order made. It is the order made in relation to the interlocutory judgment which is appealable.
[29] The appellants have also taken the quote from Arbuthnot out of context. As noted above, the fundamental principle stated in that case is that it is the result and not the reasons for the judgment which are appealable. The comment relied on by the appellants is concerned with a successful party seeking to appeal a finding in the judgment which is not critical to the result. It is made in the context of the fundamental point that an appeal is against the judgment itself and not the reasons.
[30] Lastly the appellants rely on Bayly v Hicks.[22] That case concerned an application seeking division of property under the Property Law Act 2007. The High Court Judge issued an interim judgment declining to direct division of the property as proposed by either party. Instead the Judge proposed a different division and gave directions for further reports, evidence, submissions and a further hearing. One of the parties appealed to the Court of Appeal.[23] She contended there was no jurisdiction for the Judge to have made directions for a proposal which neither of the parties had put forward. The Court of Appeal disagreed and dismissed the appeal.
[31] The case is similar to the present in that it was an appeal from an interim judgment and the Judge had neither dismissed nor granted the application. However the issue of whether the Court of Appeal had jurisdiction to entertain the appeal appears not to have been raised. The basis on which the Court accepted jurisdiction is not explained.
[32] We have considered whether the above line of authorities takes into account that, since 1 February 2009, the High Court Rules have provided for interim judgments as a type of judgment.[24] Specifically:
11.2 Types of judgment
A judgment may—
(a) be interim; or
(b) be final; or
(c) deal with any question or issue; or
(d) order any accounts, inquiries, acts, or steps that the court considers necessary.
[33] This contrasts with the former rule, which provided that:
531 Final judgment or judgment directing accounts
(1) A judgment may be either –
(a) A final judgment; or
(b) A judgment directing such accounts to be taken, inquiries made or other acts done, and steps instituted under rules 384 to 404, as the Court giving judgment considers necessary.
(2) The court may give the conduct of the proceeding after judgment to such party to the proceeding as the Court thinks proper.
[34] However we note that FB Duvall Ltd was decided after the 1 February 2009 amendment.[25] We consider that any intended amendment to the fundamental principle (that an appeal is against the result not the reasons) would need to have been made clear. An interim judgment is, of course, potentially appealable. But the appeal must be against the result of the judgment not the reasons. Where there is no result, as is the case here, the appeal right does not arise until the result is given.
[35] We conclude that Wylie J did not issue, or intend to issue, an appealable decision. As the Judge said, in the absence of a request for consent orders, the parties were required to file further submissions and it may have been necessary to reconvene the hearing.[26] The Judge could not have contemplated such a course if he was making an appealable decision.
Result
[36] The appeal is dismissed for want of jurisdiction. Costs for a standard appeal on a band A basis are ordered in favour of the respondents.
Postscript
[37] Independent of the parties our attention was drawn to a sealed judgment obtained by the appellants on 6 September 2016. It is in these terms:
(a) The draft scheme is not approved.
(b) The draft scheme is amended in the following respects:
(i) it should provide for common property and require owners to meet the costs of repairing common property in accordance with their unit entitlements;
(ii) contributory negligence percentages should be in accordance with Schedule 3 to the Remedial Works Agreement; and
(iii) the draft scheme should include mediation and arbitration provisions and not allow disputes to come directly to the Court.
(c) The judgment is issued as an interim judgment.
(d) The assumption is that the parties will be able to come back to the Court with a scheme which all support. If so, they can request consent orders. If not, they should file memoranda setting out their respective positions. It may be necessary to reconvene the hearing.
(e) Costs (if any) will be dealt with when the scheme is settled.
[38] The basis on which the appellants persuaded the High Court Registry to seal a judgment, after the hearing of the appeal and more than two months after we had questioned its jurisdictional basis, is not clear. We do not know if it was done with the consent of the respondents. However it does not make any difference to our view on jurisdiction. That is because the judgment as sealed is not the “result to which the decision-maker has come, namely the order or declaration made or other relief given” against which the appeal could be brought.[27]
[39] We note:
- (a) The sealed judgment first states “the draft order is not approved”. That is the position (and in that sense it is the respondents which were the unsuccessful party) but it is not an order, declaration or other form of relief. It is a temporary position pending receipt of an amended draft scheme. If an amended draft scheme is prepared which addresses the matters the Judge has raised, and does not raise any new concerns, approval is anticipated.
- (b) The sealed judgment then states that “the draft scheme is amended in the following respects”. That is an incorrect statement of the interim judgment. The Judge has said that the draft scheme will need to provide for the three matters stated. The Judge does not purport to amend the draft scheme and has left it to the parties to prepare a revised scheme which gives effect to these matters.
- (c) The sealed judgment next states that it is “issued as an interim judgment”. That is not an order against which this appeal purports to be brought.
- (d) This is also the case for the last two matters set out in the sealed judgment; namely, the directions as to the next steps and the reservation on the issue of costs. The appeal is not brought against those directions and that reservation.
[40] All of this therefore confirms our view that there is no appealable judgment at this point. The matters which the appellants wish to raise will be appealable once a scheme has been approved, should the appellants remain committed to doing so once a final scheme has been approved.
Solicitors:
Rainey Law, Auckland for
Appellants
Pidgeon Law, Auckland for Respondents
[1] Body Corporate 183930 v Chua [2015] NZHC 2122 [Interim judgment].
[2] At [123].
[3] Under ss 54, 79(b) and 138(1)(a) of the Unit Titles Act 2010 a body corporate is required to repair and maintain common property and each owner’s share in the common property is proportional to his or her ownership interest.
[4] Body Corporate 183930 v Chua HC Auckland CIV-2015-404-73, 21 July 2016.
[5] See [9] and [11] of this judgment.
[6] Judicature Act 1908, s 2.
[7] High Court Rules, r 11.1.
[8] Rule 11.4.
[9] See, for example, rr 29(1)(a) and 32(4) of the Court of Appeal (Civil) Rules 2005.
[10] Rule 33(1).
[11] Arbuthnot v Chief Executive of Department of Work and Income [2007] NZSC 55, [2008] 1 NZLR 13.
[12] At [16].
[13] FB Duvall Ltd v Commissioner of Inland Revenue [2009] NZCA 413, (2009) 20 PRNZ 3. A further illustration of this point is provided by Right to Life New Zealand Inc v Abortion Supervisory Committee [2008] NZHC 865; [2008] 2 NZLR 825 (HC). The High Court Judge found in favour of the applicant for judicial review but considered the requested remedy of mandamus was not appropriate. He reserved the question of whether declaratory relief should be granted for the parties to make further submissions on that issue. An appeal and cross-appeal to this Court were dismissed for want of jurisdiction: Abortion Supervisory Committee v Right to Life New Zealand Inc [2009] NZCA 181. The High Court then determined the issue of relief in Right to Life Inc v Abortion Supervisory Committee HC Wellington CIV-2005-485-999, 3 August 2009; the appeal and cross-appeal were again brought and were then determined by this Court in Abortion Supervisory Committee v Right To Life New Zealand Inc [2011] NZCA 246, [2012] 1 NZLR 176.
[14] Under the High Court Rules, a step may be taken on a judgment before it is sealed only with the leave of a Judge (r 11.13(1)) and a party may appeal under r 31 of the Court of Appeal (Civil) Rules against a judgment before it is sealed but must take steps to ensure the judgment is sealed without delay after the appeal is brought (r 11.13(2)).
[15] FB Duvall Ltd, above n 13, at [6].
[16] Siemer v Heron [2011] NZSC 133, [2012] 1 NZLR 309.
[17] Association of Dispensing Opticians of New Zealand Inc v Opticians Board [1999] NZCA 182; [2000] 1 NZLR 158 (CA) at [36], applying Winstone Pulp International Ltd v Attorney-General [1999] NZCA 164; (1999) 13 PRNZ 593 (CA).
[18] Arbuthnot, above n 11, at [25].
[19] Siemer v Heron, above n 16, at [19]–[29].
[20] At [30].
[21] At [31]–[34].
[22] Bayly v Hicks [2011] NZHC 920; (2011) 13 NZCPR 568 (HC).
[23] Bayly v Hicks [2012] NZCA 589, [2013] 2 NZLR 401.
[24] High Court Rules, r 11.2.
[25] So too was this Court’s decision to dismiss the appeal for want of jurisdiction in Abortion Supervisory Committee v Right to Life New Zealand Inc, above n 13.
[26] Interim judgment, above n 1, at [124].
[27] See [20] of this judgment.
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