Cummins v Body Corporate 172108 [2022] NZCA 153 (29 April 2022)

Last Updated: 3 May 2022

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

CA234/2021 [2022] NZCA 153

	BETWEEN	ROBERT JAMES CUMMINS Applicant
	AND	BODY CORPORATE 172108 First Respondent MANCHESTER SECURITIES LIMITED (IN LIQUIDATION) Second Respondent JOANNE MONICA MEADER AND OTHERS Third to Forty-Ninth Respondents

Court:	Goddard, Woolford and Mander JJ
Counsel:	K P Sullivan for Applicant J B Orpin-Dowell and T J G Allan for First Respondent No appearance for Third to Forty-Ninth Respondents
Judgment: (On the papers)	29 April 2022 at 2.00 pm

JUDGMENT OF THE COURT

1. The application for recall of this Court’s judgment dated 22 March 2022 is declined.
2. The applicant must pay the first respondent’s actual and reasonable costs. Counsel must attempt to agree costs. In the event that they cannot, leave is reserved for the parties to apply to the Court to determine the amount payable.

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REASONS OF THE COURT

(Given by Goddard J)

• [1] Mr Cummins seeks recall of the judgment of this Court dismissing his appeal.^[1] The application for recall lacks merit. We held that the appeal was an abuse of process. The recall application perpetuates that abuse of process.

Background

• [2] Manchester Securities Ltd (Manchester) is the registered proprietor of Unit 12A of the Hobson Apartments. There is a long running dispute between Manchester and the respondent Body Corporate, which has been before this Court on four occasions before the most recent appeal determined by the judgment that Mr Cummins seeks to have recalled.^[2] Manchester was placed into liquidation by the High Court on 19 February 2020 on the application of the Body Corporate.^[3]
• [3] Mr Cummins applied under rr 4.50 and 4.52 of the High Court Rules 2016 to be joined as a party in two sets of proceedings before the High Court, either in substitution for or in addition to Manchester. Mr Cummins said Manchester held Unit 12A on trust, and he was the successor trustee, though he had not taken legal title to Unit 12A. He said that Manchester was not expected to play an active role in the continuing proceedings, so the interests of the beneficial owners of Unit 12A would have been unrepresented unless he was able to participate in the proceedings in place of Manchester. He said that he was the party with a direct interest in the proceedings who could have presented arguments in opposition to various applications made by the Body Corporate.
• [4] In the High Court Powell J concluded that Mr Cummins should be permitted to become a party to the proceedings in place of Manchester, provided that within 14 days of the High Court judgment he:

(a) registered a transfer or transmission of the title to Unit 12A from Manchester to himself; and

(b) paid the Body Corporate all of the amounts owed by Manchester to the Body Corporate at the time of its liquidation, without deduction or set‑off.

• [5] In the event that Mr Cummins did not complete the steps set out above, the application for joinder would be dismissed.^[4]
• [6] Mr Cummins did not make any payment to the Body Corporate, and did not register a transfer of the legal title in Unit 12A to himself. His application was therefore dismissed.

The judgment of this Court that Mr Cummins seeks to have recalled

• [7] Mr Cummins appealed to this Court from the High Court joinder decision. We dismissed the appeal. We summarised our conclusions as follows:^[5]

[7] It is in our view clear that joinder of Mr Cummins as a party would be appropriate if, and only if, the conditions imposed in the High Court were complied with. The attempt by Mr Cummins to be joined to the proceeding, and be heard in opposition to the applications made by the Body Corporate, represents a continuing attempt on his part to exercise the rights of a proprietor of a unit while avoiding the obligations of a proprietor. He cannot have it both ways. His attempt to do so represents an abuse of the processes of the court.

[8] The appeal must therefore be dismissed. Because the appeal is an abuse of process, the Body Corporate is entitled to costs on an indemnity basis. We set out our reasons for making those orders in more detail below.

The recall application

• [8] A recall application is determined on the papers, unless the Court directs otherwise.^[6] Mr Cummins sought an oral hearing of his recall application. That request was opposed by the Body Corporate. We do not consider that an oral hearing is required: it is in the interests of justice that the application be determined on the papers in order to avoid unnecessary cost and delay.
• [9] Mr Cummins’ application for recall is made in reliance on the third limb of the well-known principles in Horowhenua County v Nash (No 2): a judgment may be recalled where for some “very special reason” justice requires that it be recalled.^[7] More specifically, Mr Cummins relies on the following passage from the decision of this Court in Unison Networks Ltd v Commerce Commission:^[8]

... [T]he Court’s reasons and the issues it chooses to address are within the discretion of the Court. It will often be unnecessary to deal with all of the submissions presented because of the way in which a case is finally resolved. The Court plainly is able to address submissions in the manner it chooses. While a decision may be recalled where a material issue properly put before the Court is not addressed, excluding a slip or minor error, the cases in which justice will require a recall on this basis are likely to be rare.

• [10] Mr Cummins says that there are three significant errors in this Court’s judgment that this Court should be prepared to correct. He submits that:

(a) This Court did not deal with his submission that the proceedings he seeks to join do not involve the pursuit of Manchester’s cross-claims. He says that if the Court had addressed this issue, it would have concluded there was no abuse of process.

(b) This Court’s summary^[9] of Fogarty J’s 2017 judgment amending the scheme is inaccurate, and risks pre-judging the underlying dispute between the parties.

(c) This Court failed to consider an Australian decision which contradicts our conclusion that Mr Cummins had “neither legal title, nor any form of beneficial ownership” in Unit 12A.^[10]

• [11] We deal with each of these in turn. Before we do so, however, we will set out briefly the principles governing recall applications.

Principles governing recall applications

• [12] Recall is an exception to the principle of finality in litigation. There is a high threshold to recall a judgment. The authorities recognise three categories in which a judgment that is not perfected may be recalled:^[11]

(a) Where, since the hearing, there has been an amendment to a relevant statute or regulation or a new judicial decision of relevance and high authority.

(b) Where counsel have failed to direct the court’s attention to a legislative provision or authoritative decision of plain relevance.

(c) Where for some other “very special reason” justice requires that the judgment be recalled.

• [13] Plainly the first and second limbs do not apply in this case. As noted above, Mr Cummins’ application relies on the third limb. It is well established that the discretion to recall under this limb must be exercised with circumspection. It is not a substitute for an appeal. This limb does not extend to allowing a party to challenge substantive findings of fact or law in the judgment. Recall is for demonstrable, material defects that speak for themselves. Where complex matters of fact are contested, an appeal is the appropriate route.^[12]
• [14] As this Court said in the passage from Unison Networks Ltd v Commerce Commission set out at [8] above, a decision may be recalled where a material issue properly put before the Court is not addressed. But the cases in which justice will require recall on this basis are likely to be rare. In a case where the Court has misunderstood (or arguably misunderstood) a party’s submission, that is a matter that is properly addressed on appeal. It would be an error, not a matter to be dealt with by wa[13]of recall.¹³

First ground: the nature of the proceedings that Mr Cummins seeks to join

• [15] Mr Cummins says that this Court erred in proceeding on the basis that the proceedings in which he seeks to be joined as a party involve the pursuit of Manchester’s cross-claims. Rather, he says, the proceedings involve an attempt by the Body Corporate to retrospectively vary the remediation scheme so that the cross‑claims can never be pursued.
• [16] Our judgment proceeded on the basis that the proceedings to which Mr Cummins seeks to become a party do involve the pursuit of Manchester’s cross‑claims. Even if Mr Cummins’ characterisation of the proceedings is correct, an attempt to prevent the cross-claims being extinguished is an attempt to preserve, in order to pursue, those cross-claims. We remain of that view. If Mr Cummins considers that is wrong, he may seek leave to appeal to the Supreme Court.
• [17] We add that our findings that the appeal should be dismissed, and that the appeal was an abuse of process, did not depend on the precise characterisation of the High Court proceedings. Rather, the fundamental point was the one we made at [7] of our judgment, set out at [7] above: the attempt by Mr Cummins to be joined to the proceeding, and be heard in opposition to the applications made by the Body Corporate, represented a continuing attempt on his part to exercise the rights of a proprietor of a unit while avoiding the obligations of a proprietor. The attempt to do so represented an abuse of the process of the Court.

Suggested error in paragraph [16]

• [18] Mr Cummins says that there is an error in the first sentence of paragraph [16] of our judgment, which read:

[16] The scheme was amended to provide for Manchester to pay the full cost of repairing its separate property on level 12. The cost to repair the common property on level 12 would be met by all unitholders (Manchester included) in proportion to their unit entitlements. And Manchester would be liable for its proportionate share of the repair costs for the levels 1 to 11 common property.

• [19] Mr Cummins submits that the scheme was not amended in the manner set out in the first sentence of that paragraph. Rather, the Body Corporate now seeks to further amend the scheme to achieve that outcome.
• [20] It is clear from the submissions we have received from the parties that they disagree about the accuracy of this summary of the effect of Fogarty J’s decision varying the scheme.^[14] The short point for present purposes is that if our summary was wrong — an issue of some complexity, which it would not be appropriate to engage with in this judgment — then either:

(a) The misdescription is immaterial, in the sense that it had no effect on the reasoning or result of our judgment. That appears to us to be the position. In that scenario, plainly our judgment should not be recalled; or

(b) The misdescription was material to the result arrived at in our judgment. If that is the case, then this is an appeal point, not an issue suitable for correction by way of recall.

Failure to refer to Buckle

• [21] Mr Cummins argued before us that he had a beneficial interest in Unit 12A arising out of a right of indemnity as trustee out of the Trust property. He argued that this was an “estate or interest” in Unit 12A, and that he was therefore entitled to appear and be heard in the proceedings under s 48(4) of the Unit Titles Act 1972.
• [22] We did not accept that argument. As we recorded at [50] of our judgment, it was common ground that Mr Cummins did not have any legal estate or interest in the property, or any vested beneficial interest. At [59] we recorded that we were prepared to assume that Mr Cummins was right to submit that he had acquired some equitable interest in respect of Unit 12A as a result of the arrangements he had entered into with Manchester, including his appointment as a trustee. That is, we assumed the correctness of the proposition advanced in reliance on Buckle that a trustee’s right of indemnity out of trust assets is an equitable interest.^[15] But we concluded that this was not sufficient to make it necessary or desirable for Mr Cummins to be made a party. That is, we rejected the proposition that any equitable interest of this kind that Mr Cummins might have was sufficient to entitle him to be made a party by virtue of s 48(4) of the Unit Titles Act.
• [23] We add that it would be peculiar in the extreme if Mr Cummins could in effect exercise the rights of a proprietor of Unit 12A by subdividing still further the interests in the unit, and by relying on some lesser equitable interest in order to be heard in support of the rights of the proprietor. That would be a clear example of an abuse of process of the kind we referred to in the summary quoted at [7] above.
• [24] If Mr Cummins considers that this Court’s judgment in relation to the operation of s 48(4) of the Unit Titles Act is wrong, he can seek leave to appeal.

Costs

• [25] For the reasons set out above, the recall application must be dismissed. Plainly costs should follow the event in the normal way. We consider that indemnity costs are appropriate for two reasons. First, this is a further step in an appeal which was itself an abuse of process. The Body Corporate should be indemnified for the additional costs to which it has now been put in connection with an appeal that should not have been brought. Secondly, unmeritorious applications to recall judgments are in and of themselves an abuse of the process of the Court.^[16] This is such an application.

Result

• [26] The application for recall of this Court’s judgment dated 22 March 2022 is declined.
• [27] The applicant must pay the first respondent’s actual and reasonable costs. Counsel must attempt to agree costs. In the event that they cannot, leave is reserved for the parties to apply to the Court to determine the amount payable.

Solicitors:
Core Legal Ltd, Masterton for Applicant
Grove Darlow & Partners, Auckland for First Respondent

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^[1] Cummins v Body Corporate 172108 [2022] NZCA 68 [Joinder appeal].

^[2] Manchester Securities Ltd v Body Corporate 172108 [2017] NZCA 527, (2017) 19 NZCPR 65 [Variation appeal]; Manchester Securities Ltd v Body Corporate 172108 [2018] NZCA 190, [2018] 3 NZLR 455 [Statutory demand appeal]; Manchester Securities Ltd v Body Corporate 172108 [2019] NZCA 408 [Stay appeal]; Cummins v Body Corporate 172108 [2021] NZCA 145, [2021] 3 NZLR 17 [Liquidation appeal].

^[3] Body Corporate 172108 v Manchester Securities Ltd [2020] NZHC 198 [High Court liquidation decision], upheld in the Liquidation appeal.

^[4] Body Corporate 172108 v Manchester Securities Ltd [2021] NZHC 365 [High Court joinder decision].

^[5] Joinder appeal, above n 1.

^[6] Senior Courts Act 2016, s 49(7).

^[7] Horowhenua County v Nash (No 2) [1968] NZLR 632 (HC) at 633, approved in Saxmere Ltd v Wool Board Disestablishment Co Ltd (No 2) [2009] NZSC 122, [2010] 1 NZLR 76 at [2].

^[8] Unison Networks Ltd v Commerce Commission [2007] NZCA 49 at [34].

^[9] Joinder appeal, above n 1, at [16].

^[10] At [59]. The authority is Chief Commissioner of Stamp Duties for New South Wales v Buckle [1998] HCA 4; (1998) 192 CLR 226 [Buckle].

^[11] Horowhenua County v Nash (No 2), above n 7; and Saxmere Ltd v Wool Board Disestablishment Co Ltd, above n 7.

^[12] Erwood v Maxted [2010] NZCA 93, (2010) 20 PRNZ 466 at [5], citing Faloon v Commissioner of Inland Revenue [2006] NZHC 303; (2006) 22 NZTC 19,832 (HC) at [13]; and Erwood v Maxted [2020] NZCA 537 at [8].

^[13] Unison Networks Ltd v Commerce Commission, above n 8, at [40].

^[14] Body Corporate 172108 v Manchester Securities Ltd [2017] NZHC 329.

^[15] Buckle, above n 10, at 247.

^[16] Erwood v Maxted (2010), above n 12, at [23]; and Ngahuia Reihana Whanau Trust v Flight CA23/03, 26 July 2004 at [3].