Enright v Southern Lakes Holdings Limited [2021] NZCA 157 (3 May 2021)

Last Updated: 11 May 2021

IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA

CA284/2019 [2021] NZCA 157

	BETWEEN	SHANE ANTHONY ENRIGHT First Appellant SOUTHERN LAKES HOLDINGS LIMITED Second Appellant
	AND	CATHERINE ANN NEWTON, WILLIAM JAMES YOUNG, WAYNE MICHAEL ENRIGHT, GENE HERSCHEL ENRIGHT First Respondents/First Cross-Appellants SHANE ANTHONY ENRIGHT AS SOLE ADMINISTRATOR AND TRUSTEE OF THE ESTATE OF JOHN JAMES ENRIGHT Second Respondent ERIC JOHN THOMSON Third Respondent TERRENCE JOHN ENRIGHT Second Cross-Appellant

Court:	Courtney, Ellis and Brewer JJ
Counsel:	S L Robertson QC for First and Second Appellants T M Molloy for Second Cross-Appellant
Judgment: (On the papers)	3 May 2021 at 3.30 pm

JUDGMENT OF THE COURT

1. The application to correct the judgment under r 8 of the Court of Appeal (Civil) Rules 2005 is granted.
2. The costs order made in the High Court is set aside and the issue of costs in relation to Terrence Enright is remitted to the High Court for reassessment in light of this Court’s substantive decision.

100. Terrence Enright is entitled to costs on the present application on a band A basis plus usual disbursements.

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REASONS OF THE COURT

(Given by Courtney J)

Introduction

• [1] Palmer J determined claims by Terrence Enright (Terry)^[1] and four of his siblings and cross-claims by Shane Anthony Enright (Tony) and Southern Lakes Holdings Ltd (SLH) relating to the administration of a family trust.^[2] Terry’s claim was dismissed on the ground that it was time-barred. Palmer J dealt with costs in a separate judgment.^[3] Among the orders made was that Terry was to pay one-fifth of the defendants’ costs and disbursements, which totalled $37,289.68.
• [2] This Court allowed, in part, appeals by Tony and SLH and cross-appeals by Terry and the other siblings.^[4] The finding that Terry’s claim was time-barred was overturned. As a result, Terry benefited from the outcome of the other cross-appeals. However, Terry did not appeal the costs judgment. It was not referred to in the appeal against the substantive judgment. No submissions were made to us about the effect allowing Terry’s cross-appeal might have on costs in the High Court.
• [3] Now, however, Terry has applied for orders that we either correct our judgment under r 8 of the Court of Appeal (Civil) Rules 2005 (the slip rule) or recall the judgment under r 8A. He seeks an order setting aside the costs and disbursements order made by Palmer J and directing that the issue be reassessed by the High Court in light of our decision in the appeal.
• [4] The application is opposed on grounds that neither r 8 nor r 8A is engaged, given that the question of Terry’s costs in the High Court was not in issue in the appeal.

Application

• [5] The rules governing how appeals are determined appear in pt 4 of the Court of Appeal (Civil) Rules. They include r 48(4) under which the Court “may give any judgment and make any order which ought to have been given or made, and make any further or other orders that the case may require”. The rules relating to costs are set out at pt 4A, rr 53–53I. But those rules do not affect the power conferred by r 48(4); r 53J provides that:

Nothing in rules 53 to 53I affects the Court’s powers with respect to quashing or varying any orders for costs made in the court appealed from.

• [6] Because costs in the High Court are often dealt with separately from the substantive matter, the question of costs does not necessarily arise in an appeal against a substantive judgment. In Parsot v Greig Developments Ltd this Court explained the correct approach to be taken where the outcome of an appeal might affect the costs decision in the lower court:^[5]

... Obviously, if the appeal had been allowed, costs in the High Court would have been amenable to reassessment, the winning party having changed ... If a party wishes to challenge a costs judgment in the absence of success on the substantive judgment, it must:

(a) include the grounds of challenge in its substantive appeal, if that appeal is not already filed; or

(b) seek to amend the notice of appeal to incorporate a challenge to the costs judgment, with the grounds of appeal; or

(c) commence a new appeal against the costs judgment, which appeal will be heard at the same time as the substantive appeal.

• [7] Counsel for Terry submits, in reliance on Parsot, that since Terry’s appeal was allowed costs were amenable to reassessment under r 48(4). In Parsot, however, the issue was raised in supplementary submissions shortly before the hearing. In this case counsel did not seek to have this Court consider the issue of costs and did not seek any order quashing or varying the costs judgment in the High Court.
• [8] Rule 8(1) permits the Court or the Registrar to correct a judgment or order or the reasons for a judgment or order if:

(a) any judgment or order contains, or the reasons for any judgment or order contain, a clerical mistake or any error arising from an accidental slip or omission, whether or not made by an officer of the Court; or

(b) any judgment or order is drawn up in way that does not express what was actually decided and intended.

• [9] Terry submits that the failure to put the costs issue before this Court in the appeal was an error arising from an accidental omission by either his counsel or this Court, which engages r 8 and allows the judgment to be corrected to reflect what the outcome would have been had such an order been sought.
• [10] The appellants (Tony and SLH) do not accept that r 8 is engaged. Their counsel submit that the rule can only apply in respect of a matter that was put before the Court by the affected party; a matter that is raised for the first time following the judgment being delivered cannot amount to an error or omission for the purposes of r 8. They distinguish one of the cases relied on by Terry, Tak Ming Co Ltd v Yee Sang Metal Supplies Co, on the basis that the omission in that case concerned matters that had been raised in pleadings.^[6]
• [11] In Tak Ming interest was sought on the amount said to be owing under a construction contract. The first instance Judge determined liability and awarded costs but made no mention of interest. The Judge appointed an expert to determine the amount owing. The plaintiff indicated that interest would be sought. The expert did not address the question of interest. The plaintiff applied for interest. The application was determined by a different Judge who considered that there was no jurisdiction to grant interest. The plaintiff applied to have the first instance judgment corrected under the slip rule. That application was granted. The issue on appeal was whether the first instance Judge was precluded from correcting the judgment, given the decision by the other Judge determining that there was no jurisdiction.
• [12] We agree that, factually, Tak Ming was different from the present case. But we do not agree that r 8 is limited to cases where the subject of the order sought by way of correction was already before the Court. Other cases suggest that this is not necessary.
• [13] In In re Inchcape, a case brought to determine the domicil of a testator, counsel sought payment of all costs out of the estate in relation to the proceeding but omitted to seek costs incurred before the proceedings had commenced.^[7] On an application for correction under the slip rule allowing those costs, Morton J said:^[8]

It is true that when the case was before me, I made the order which I intended to make in regard to the costs for which I was asked to make provision, but there was an accidental omission on the part of counsel, and I did not make the order which I would have made if that accidental omission had not occurred. I am glad to find it possible to give this construction to the rule, as I think it is a rule of great convenience, and in the present case real hardship would have resulted if I had not felt able to make the order asked for on this motion.

• [14] In Gould v Vaggelas, counsel, through oversight, failed to seek interest on a judgment debt in the context of an appeal (the question of interest having been determined in lower courts).^[9] The successful appellants sought to have the judgment corrected under the slip rule to include an order for interest at the rate allowed in the lower court (as opposed to the statutory rate). Allowing the application, the High Court of Australia observed that:^[10]

Recent decisions of this Court provide illustrations of the injustice that may be caused to litigants by the inadvertence of counsel and the willingness of the court in appropriate circumstances to grant a remedy ... Nevertheless, the jurisdiction is one to be exercised sparingly, lest it encourage carelessness by a party’s legal representative and expose to risk the public interest in finality of litigation.

• [15] The purpose of r 8 is avoid hardship to litigants caused by inadvertent errors and omissions, whether by the court or by counsel. The rule is not intended to allow the litigation of a new issue that would engage the court in consideration of the merits. But nor is there any basis on which to limit the scope of the rule to matters that were already before the court in some form. Such a limitation would undermine the purpose of the rule.
• [16] In this case, Terry’s success on appeal meant that the costs order against him ought not to have been left in place. Had the matter been raised there is no doubt that the costs order would have been set aside. The appellants do not suggest otherwise. We accept that the failure to raise the issue was the result of oversight by counsel; in his memorandum accompanying the application Terry’s counsel says that there was an accidental omission by counsel to seek an explicit order quashing Palmer J’s costs order. In these circumstances r 8 responds to avoid unnecessary hardship for Terry and to ensure that the interests of justice generally are served.
• [17] We accordingly grant the application under r 8. We order that the costs and disbursements order against Terry made by Palmer J is set aside and direct that the issue be reassessed by the High Court in light of our decision in the appeal.
• [18] Our conclusion that r 8 applies means that we do not need to consider recalling the judgment under r 8A(1) and we do not intend to do so. The circumstances in which a judgment might be recalled are limited.^[11] Recalling a judgment is a serious step and one to be taken with great caution. For this reason, even if we were to conclude that recall was possible under r 8A, we would have regarded correction under r 8 as the more appropriate course.

Result

• [19] The application to correct the judgment under r 8 of the Court of Appeal (Civil) Rules is granted.
• [20] The costs order made in the High Court is set aside and the issue of costs in relation to Terry is remitted to the High Court for reassessment in light of our substantive decision.
• [21] Terry is entitled to costs on the present application on a band A basis plus usual disbursements.

Solicitors:
LeeSalmonLong, Auckland for First and Second Appellants
Spencer Legal, Auckland for Second Cross-Appellant

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^[1] In the substantive decision we used the parties’ first names to avoid confusion and do so here as well.

^[2] Enright v Enright [2019] NZHC 1124.

^[3] Enright v Enright [2019] NZHC 1937.

^[4] Enright v Newton [2020] NZCA 529. We are advised that the judgment has not yet been sealed.

^[5] Parsot v Greig Developments Ltd [2009] NZCA 241, (2009) 10 NZCPR 308 at [33].

^[6] Tak Ming Co Ltd v Yee Sang Metal Supplies Co [1973] 1 WLR 300 (PC).

^[7] In Re Inchcape [1942] Ch 394.

^[8] At 399.

^[9] Gould v Vaggelas (1985) 157 CLR 215 at 274–275.

^[10] At 274–275.

^[11] Horowhenua County v Nash (No 2) [1968] NZLR 632 (SC) at 633. See also Opua Coastal Preservation Inc v Far North District Council [2018] NZCA 510 at [5]; and Faloon v Commissioner of Inland Revenue [2006] NZHC 303; [2006] 22 NZTC 19,832 (HC) at [13].