Nga Uri Whakatipurunga O Ngarae (Inc) v Marac Finance Limited HC AK CIV 2008-404-6180 [2009] NZHC 2269 (9 December 2009)

Last Updated: 8 January 2010

IN THE HIGH COURT OF NEW ZEALAND

AUCKLAND REGISTRY

_{CIV-2008-404-6180}

IN THE MATTER OF section 145A of the Land Transfer Act

1952 and the Te Ture Whenua Maori Act

₁₉₉₃

AND

IN THE MATTER OF an application by Nga Uri Whakatipurunga

O Ngarae (Inc)

BETWEEN NGA URI WHAKATIPURUNGA O NGARAE (INC)

Applicant

AND MARAC FINANCE LIMITED Respondent

IN THE MATTER OF an application by the non-party S T Fonua

to review a costs order against him

Hearing: 10 November 2009

Appearances: T J Allan and J Tiang for Marac Finance Ltd

T J Darby for Mr Fonua

Judgment: 9 December 2009

_{JUDGMENT OF CLIFFORD J}

Introduction

[1] On 9 December 2008 Associate Judge Abbott dismissed an application by the plaintiff, Nga Uri Whakatipurunga o Ngarae Inc (Nga Uri), that a caveat – lodged against the title of a property over which the respondent, Marac Finance Ltd (Marac), had a first mortgage – not lapse. His Honour invited submissions on costs.

_{On 29 July 2009, His Honour ordered indemnity costs in Marac’s favour against Nga}

NGA URI WHAKATIPURUNGA O NGARAE (INC) V MARAC FINANCE LIMITED HC AK CIV-2008-

404-6180 9 December 2009

Uri’s solicitor in that matter, Mr Fonua, and the barrister who appeared on Mr

Fonua’s instructions, Mr Dorbu, personally. Mr Fonua has applied to the High Court

to review Associate Judge Abbott’s costs decision.

[2] Marac now seeks an order transferring Mr Fonua’s review application to the Court of Appeal. Mr Fonua opposes that application. This judgment deals with that application by Marac, and the prior issue (which arose before me) as to whether the High Court has jurisdiction to review the Associate Judge’s costs decision in any event.

Background

[3] Mr Fonua lodged the caveat at issue in these proceedings on behalf of Nga

Uri on 1 July 2008.

[4] Marac subsequently wrote to the District Land Registrar requesting that a notice under s 145A of the Land Transfer Act 1952 be issued against Nga Uri. On 5

September the District Land Registrar wrote accordingly to Nga Uri, care of Mr Fonua. As a result, Nga Uri’s caveat would lapse within 14 days unless Nga Uri made a contrary application. Nga Uri made such an application on 18 September

2008. Mr Fonua was solicitor on the record, Mr Dorbu counsel.

[5] Associate Judge Abbott dismissed Nga Uri’s claim that its caveat not lapse because:

1. Nga Uri was not an incorporated society and so there was no legal person identified as having a beneficial interest under the sale and purchase agreement.
   

b) In any event, Nga Uri could not take steps to prevent Marac enforcing

its interest under its prior mortgage.

[6] In his 9 December decision, Associate Judge Abbott noted that Mr Fonua had been warned that Marac would seek costs against him personally if he persisted with

Nga Uri’s claim. Associate Judge Abbott invited submissions on costs. The parties made submissions, which the Judge considered on the papers.

[7] On 29 July 2009 Associate Judge Abbott delivered a judgment ordering indemnity costs of $9,113.25 against Mr Fonua and Mr Dorbu in favour of Marac.

In doing so Associate Judge Abbott first held that Marac had made out a case for indemnity costs. Nga Uri’s application “was hopeless in the form it was brought”. That should have been apparent from the outset. As for an order of costs against Mr Fonua, the Judge found that Marac had drawn Mr Fonua’s attention to the fundamental problems Nga Uri’s application faced. It had, in fact, done so on three separate occasions, including the day prior to the hearing when its intention to seek costs against him personally had been noted. Given that express notice, the Judge did not accept Mr Fonua’s submission that he had no reason to second guess whether Nga Uri – which had instructed him on letterheaded paper – was an entity capable of entering into the agreement for sale and purchase, owning property and therefore sustaining the caveat. He said that if Mr Fonua had not picked up on the point, he should have. The Judge expressed similar sentiments as regards Mr Dorbu.

Other proceedings

[8] Of particular relevance to Marac’s application to transfer Mr Fonua’s review

to the Court of Appeal are proceedings in respect of other caveats lodged by Mr Fonua on behalf of Nga Uri. Mr Fonua had acted for Nga Uri in signing as Nga Uri’s authorised agent caveats over two properties mortgaged to Westpac Banking Corporation. Westpac applied successfully to have those caveats removed, and subsequently sought category 2B costs, otherwise payable by Nga Uri, to also be payable by Mr Fonua. It did not seek increased or indemnity costs.

[9] In a costs judgment delivered on 21 August 2009, Associate Judge Christiansen declined to order costs against Mr Fonua personally. The Associate Judge reviewed the circumstances in which Mr Fonua had received instructions to register the caveats in question and Mr Fonua’s involvement in subsequent proceedings relating to those caveats. He also considered expert evidence as regards relevant duties of a solicitor. The Associate Judge concluded that he did not

consider that, by any standard, Mr Fonua had breached his professional obligations

to an extent he should be accountable by an award of costs against him. Whilst he noted that Mr Fonua had been involved with Marac as regards similar issues, and referred to Associate Judge Abbott’s substantive decision of 9 December 2008, Associate Judge Christiansen did not refer to Associate Judge Abbott’s subsequent costs decision.

[10] Westpac has appealed Associate Judge Christiansen’s costs decision to the

Court of Appeal.

The law

[11] Mr Fonua applies to the High Court to review Associate Judge Abbott’s costs decision in reliance on s 26P(1) of the Judicature Act 1908, which provides as follows:

26P Review of, or appeals against, decisions of Associate Judges

(1) Any party to any proceedings who is affected by any order or decision made by an Associate Judge in Chambers may apply to the court to review that order or decision and, where a party so applies in accordance with the High Court Rules, the Court─

(a) Must review the order or decision in accordance with the High

Court Rules; and

(b) May make such order as may be just.

[12] Marac makes its application to transfer Mr Fonua’s review of Judge Abbott’s costs decision to the Court of Appeal in reliance on s 64 of the Judicature Act, which, as relevant, provides:

64 Transfer of civil proceedings from High Court to Court of Appeal

(1) If the circumstances of a civil proceeding pending before the High Court are exceptional, the High Court may order that the proceeding be transferred to the Court of Appeal.

(2) Without limiting the generality of subsection (1), the circumstances of a proceeding may be exceptional if—

(a) A party to the proceeding intends to submit that a relevant decision

of the Court of Appeal should be overruled by the Court of Appeal:

(b) The proceeding raises 1 or more issues of considerable public importance that need to be determined urgently, and those issues are unlikely to be determined urgently if the proceeding is heard and determined by both the High Court and the Court of Appeal:

(c) The proceeding does not raise any question of fact or any significant question of fact, but does raise 1 or more questions of law that are the subject of conflicting decisions of the High Court.

(3) In deciding whether to transfer a proceeding under subsection (1), a

Judge must have regard to the following matters:

(a) The primary purpose of the Court of Appeal as an appellate court:

(b) The desirability of obtaining a determination at first instance and a review of that determination on appeal:

(c) Whether a Full Court of the High Court could effectively determine the question in issue:

(d) Whether the proceeding raises any question of fact or any significant question of fact:

(e) Whether the parties have agreed to the transfer of the proceeding to the Court of Appeal:

(f) Any other matter that the Judge considers that he or she should have regard to in the public interest.

The parties’ positions

[13] Marac applies to have Mr Fonua’s review application transferred to the Court

on the basis that:

1. Associate Judge Christiansen’s decision addresses an identical consideration to that considered by Associate Judge Abbott, namely the duties of a solicitor as regards the identity and/or existence of a person seeking to lodge a caveat. On the basis of very similar or identical facts, Associate Judge Christiansen reached a different view

to Associate Judge Abbott.

b) The question of duties of solicitors in such circumstances is a matter

of some public importance, as it affects the efficient operation of the

Torrens system.

c) Westpac has appealed Associate Judge Christiansen’s decision to the

Court of Appeal.

[14] Marac argues that, in these exceptional circumstances, it is appropriate that the Court of Appeal also consider Mr Fonua’s challenge to Associate Judge Abbott’s costs decision, as the facts and legal issues are very closely related.

[15] Mr Fonua opposes Marac’s application on the basis, first, that his application

for review is not a proceeding which is capable of being transferred to the Court of Appeal in terms of s 64 of the Judicature Act. He further argues that, even if he is wrong on that point and his proceeding is capable of such transfer, the exceptional circumstances which are required to exist before the High Court may make such an order do not exist here. Rather, this is a matter that should be considered by the High Court.

Discussion

Introduction

[16] Mr Fonua has applied under s 26P(1) of the Judicature Act to review Associate Judge Abbott’s costs decision on the basis that that decision was made by him as “an Associate Judge in Chambers”. At the hearing of Marac’s application, and although not an issue addressed by the written submissions I had received from counsel before the hearing, I raised the issue of whether, as a matter of law, Mr Fonua was correct to challenge Associate Judge Abbot’s costs decision in that way. The reasons why I raised that issue are reflected in my minute of 10 November:

[1] During the course of today’s hearing I raised with counsel the question

of whether Mr Fonua’s review application should, as a matter of law, have been commenced as an appeal. I raised this issue by reference to:

1. Section 26I(1)(c) of the Judicature Act 1908, which provides that an Associate Judge shall have and may exercise all the jurisdiction and powers of the High Court in relation to various sections of the Land Transfer Act 1952 relating to caveats, including s 145A in respect of which Judge Abbot made his substantive decision;
   

b) Section 26I(3) of that Act which similarly provides that an

Associate Judge shall have and may exercise all the jurisdiction

and powers of the High Court to deal with costs and other matters incidental to the matters in respect of which an Associate Judge has jurisdiction pursuant to subsection (1); and

c) Authority such as Talyanich v Index Developments Ltd [1992] 3

NZLR 28 which provides that where an Associate Judge exercises jurisdiction pursuant to s 26I then his decisions are to be appealed and not reviewed.

[17] I add, by way of explanation, that my attention had been drawn to this possible issue by the fact that Associate Judge Christiansen’s costs decision had, in fact, been appealed to the Court of Appeal.

[18] In that minute I sought further submissions on that issue, which I have now received and considered. Accordingly, before considering the issues raised by Marac’s application to transfer those proceedings to the Court of Appeal, I need first

to consider whether, as a matter of law, Mr Fonua was correct to challenge Associate

Judge Abbott’s costs decision under s 26P(1).

Can Mr Fonua “review” Associate Judge Abbott’s costs decision?

[19] As noted, s 26P(1) of the Judicature Act provides for the review by the High

Court of decisions “made by an Associate Judge in Chambers”. At the same time,

s 26P(2) provides for a right of appeal to the Court of Appeal in the following terms:

Any party to any proceedings may appeal to the Court of Appeal against any order or decision of an Associate Judge in those proceedings (other than an order or decision made in Chambers).

[20] Those review and appeal rights are to be seen in the context of the earlier provisions of ss 26J and 26I of the Judicature Act, which create or provide for the jurisdiction and powers of Associate Judges.

[21] Section 26I gives to an Associate Judge all the jurisdiction and powers of the High Court in relation to various matters including, in subsection (1)(c), any proceedings under which relief is claimed under various provisions of the Land Transfer Act (including s 145A) relating to caveats. That was the section under which Nga Uri opposed the lapse of its caveat. Pursuant to s 26I(3), an Associate Judge shall have and may exercise all the jurisdiction and powers of the High Court

to deal with costs and other matters incidental to the matters over which an Associate

Judge has jurisdiction pursuant to subsection (1) of s 26I.

[22] Pursuant to s 26J, rules made under s 51C, or under any other Act, may confer on Associate Judges such of the jurisdiction and powers of a Judge sitting in Chambers conferred by the Judicature Act or any other Act, as may be specified in those rules. The High Court Rules are rules made under s 51C. Rule 2.1 of the High Court Rules provides that an “Associate Judge has the jurisdiction and powers of a Judge in chambers conferred [i.e. conferred on a Judge in chambers] by the Act [i.e. the Judicature Act], or these rules or another enactment”. Rule 2.2 confirms that the jurisdiction and powers referred to in r 2.1 are in addition to the jurisdiction and powers conferred by s 26I of the Judicature Act. Rule 2.3 then excludes from the general conferral of r 2.1 the matters referred to in s 26P(1) and s 26J(3) and (4) of the Judicature Act, which preclude Associate Judges personally exercising certain elements of the jurisdiction of the High Court.

[23] The Judicature Act contains no definition of the term “in Chambers”, nor any elaboration of the “in Chambers” jurisdiction of a Judge. Sections 16 to 19 of the Judicature Act, which continue and confirm the jurisdiction of the High Court, make

no mention of any in Chambers jurisdiction.

[24] The High Court Rules do not themselves define the “in chambers” jurisdiction of a Judge conferred by r 2.1 on Associate Judges, nor do they positively require that jurisdiction to be exercised by an Associate Judge in Chambers.

[25] I note, in passing, that there is nothing in the use of the capitalised term “Chambers” in the Judicature Act, and the term “chambers” in the High Court Rules. Former r 61A, in fact, referred to “Chambers”. The capital letter would appear to have been dropped in the most recent revision of those rules. I will use, as does the Judicature Act, the word “Chambers”, except where I am referring directly to a provision of the High Court Rules.

[26] The High Court Rules do, now, define the term “hearing in chambers” (in

r 1.3) as meaning:

a hearing that takes place in circumstances in which the general public is not admitted, except with the leave of the Judge, and includes any conference under these rules.

[27] It is not, therefore, a straightforward matter to describe the boundary between the jurisdiction conferred on Associate Judges by s 26I and that conferred on them

by r 2.1, so as to be able easily to determine matters that are, under s 26P(1), to be reviewed in the High Court, or under s 26P(2), to be appealed to the Court of Appeal.

[28] The commentary in McGechan on Procedure at para J26P.01 is helpful:

(1) Appeal

Where an Associate Judge is exercising the jurisdiction of the Court under

s 26I, the Associate Judge must do so in Court, and not in Chambers, and an appeal from the decision lies to the Court of Appeal under s 26P(2):

Talyancich v Index Developments Ltd [1992] 3 NZLR 28; (1992) 4 PRNZ

509 (CA), at p 36; p 517.

(2) Review

Where an Associate Judge is exercising the powers of a Judge sitting in Chambers pursuant to s 26J, the matter should be dealt with in Chambers, and the decision will then be subject to review under s 26P(1). If such a matter is in fact dealt with by an Associate Judge sitting robed in open Court, the Associate Judge is still exercising a personal jurisdiction conferred on Associate Judges by s 26J, being a jurisdiction of a Judge sitting in Chambers, and is not exercising a jurisdiction or power of Court under s 26I. The order is, therefore, an order made in Chambers for the purposes of s 26P, regardless of matters of form such as the use of a courtroom, the wearing of robes, or the allowing of access to the public. Redress is only by application to the High Court (in accordance with the High Court Rules) to

review the Associate Judge’s order under s 26P(1); Nottingham v Registered

Securities Ltd (in liq) (1998) 12 PRNZ 625. If, instead of dealing with the matter in Chambers, the Associate Judge directs pursuant to r 7.34 that it be dealt with in Court, the effect of the direction will be that the matter is to be dealt with in Court by a Judge: Talyancich v Index Developments Ltd (above) (decided under former r 234).

[29] In Talyancich the Court of Appeal acknowledged the difficulty that is sometimes associated with distinguishing between orders made in Chambers and orders made in Court. In that context, the Court referred to the view expressed by Tompkins J in Re Profcom Systems Limited [1989] 2 NZLR 63 at 65-66 with approval:

I do not consider that this issue should be determined solely by matters of form such as the dress of the Master and counsel, or whether or not the public had access to the hearing. Nor do I consider that the issue is determined by the absence of any formal direction, pursuant to R 234. I consider it should be determined by having regard to the nature of the jurisdiction that the Master was exercising.

[30] Although Talyancich was decided some time go (as Mr Darby emphasised),

it has not been overturned. Thus it has been followed recently – and since the introduction of the current High Court Rules – in, for example, Nathan v Smith HC Auckland CIV 2007-404-253, 16 November 2009 at [31]; and Balzat v Zhang HC Auckland CIV 2008-404-6062, 22 September 2009 at [44] and [45].

[31] Here, Associate Judge Abbott made his costs decision following his substantive decision as to whether or not Nga Uri’s application that its caveat not lapse would succeed. That substantive decision was, in my judgment, one made pursuant to the jurisdiction conferred by s 26I. It is sufficient to simply refer again

to the terms of s 26I(1)(c). That Associate Judge Abbott’s subsequent costs decision was made on the papers is not, in my judgment, determinative that it was made in Chambers. Rather, it would appear that the Judge was exercising the jurisdiction conferred on him by s 26I(3), namely the jurisdiction that gave him all the jurisdiction and power of the Court to deal with costs incidental to the matters over which he had jurisdiction pursuant to subsection (1)(c).

[32] Following my request referred to at [18], Mr Darby filed extensive submissions to support the reviewability by the High Court under s 26P(1) of Associate Judge Abbott’s costs decision. Mr Darby subsequently sought leave to file yet further submissions. I declined that application, as it simply invited a further response from Marac. I consider the opportunity I had already provided sufficient.

In that subsequent request, Mr Darby did refer me to subsequent decisions of the High Court and Court of Appeal commenting on the review/appeal issue, and I will refer to those decisions.

[33] Questions of the proper interpretation of the Rules aside, Mr Darby’s substantive concern appears to have been that Mr Fonua had not had a “hearing” before Associate Judge Abbott. Mr Darby – who did not represent Mr Fonua before

Associate Judge Abbott – would appear to want to use the review hearing in the High Court to introduce affidavit evidence, no doubt of the type that, on Mr Fonua’s behalf, he successfully put before associate Judge Christiansen. I understand those concerns. Having said that, the jurisdictional question remains.

[34] Mr Darby, for Mr Fonua, first argued that s 26I provides Associate Judges with both an in Court and a chambers jurisdiction. This was argued on the basis of the section’s reference to the “jurisdiction and powers of the Court”, rather than the narrower “jurisdiction and powers in Court”. Conversely, s 26J refers specifically to “the jurisdiction and powers of a Judge sitting in Chambers”. The reviewability of

an Associate Judge’s decision under s 26P did not , therefore, depend upon whether a

s 26I or s 26J power was being exercised, but rather whether that power was exercised in Court or in Chambers. Here, on the basis that the Associate Judge had decided the matter on the papers, he had done so in Chambers. Therefore, review under s 26P was available.

[35] I am not persuaded by that argument. Mr Darby’s interpretation would result

in an overlap between ss 26I and 26J. Moreover, that interpretation would be contrary to the statement of the Court of Appeal in Talyancich, by which I am bound, that “where a Master is exercising the jurisdiction of the Court under s 26I of the Judicature Act 1908, the Master must do so in Court and not in Chambers” (my emphasis).

[36] I have considered whether the Court in Talyancich might have intended, in the quote in the preceding paragraph, to refer to s 26I(1) and (2) alone, and not “costs and other matters incidental to the matters” in those subsections under subsection (3). I have not been persuaded, however, that there is any need or reason to distinguish those subsections.

[37] Mr Darby further relied on B F Mudgway Ltd v The Window Company (2003) Ltd HC Auckland CIV 20080404-5818, 1 July 2009. In that case Keane J indicated that the costs order made by the Associate Judge in that instance was an interlocutory order in the terms of r 1.3(1). In reliance on Mudgway Mr Darby argued that

Associate Judge Abbott’s costs decision was also an interlocutory order and, in terms

of r 7.34, therefore made in Chambers.

[38] Under r 7.34(1) interlocutory applications for which a hearing is required must be heard in Chambers unless a Judge otherwise directs. Rule 1.3(1) defines “interlocutory order”, as relevant, as follows:

(a) means an order or a direction of the court that—

(i) is made or given for the purposes of a proceeding or an intended proceeding; and

(ii) concerns a matter of procedure or grants some relief ancillary to that claimed in a pleading; ...

[39] Keane J in Mudgway held:

[19] An award of costs is certainly ‘made or given for the purposes of a proceeding’. And there is no express need it to flow from an interlocutory application, which r 1.3(1) also defines. Such an application is defined only as to form. If made in writing it must conform with r 7.19. But it may be made orally: r 7.41. That can be by consent. It can also be where the rules do not require the filing of an application on notice, and they do not as to costs, and where there will not be any undue prejudice. Costs are commonly applied for and given orally.

[20] Equally, an award of costs is a grant of relief ancillary in character, at least in the usual almost invariable case, where it flows from or is related to substantive relief given or declined. It is not in that normal event a remedy in its own right. That it is final as to costs to that point, subject to recall, review or appeal, is not expressly made material.

[40] With respect to the learned Judge, I do not agree that costs orders necessarily grant some relief “ancillary to that claimed in a pleading”. In most cases costs themselves are relief expressly claimed in a party’s pleading. Thus, although they are perhaps additional to the substantive relief claimed (whether damages or any other remedy or order), they are not ancillary to the relief “claimed in a pleading”. I also note the different terminology used in s 26I(3), which refers to “costs and other matters incidental to the matters over which an Associate Judge has jurisdiction”.

[41] In this I have also had reference to the comments of Associate Judge Abbott

in EIT Movers Limited v Global Machine Tools Limited HC Auckland CIV 2006-404-7306, 24 April 2007:

[17] The governing consideration, in my view, is whether the order precedes a final determination of the proceeding, was made for the purposes of the proceeding and either concerns a matter of procedure or grants some relief ancillary to that claimed, but still with a view to advancing to a final determination.

[18] The order in the present case was made as a consequence of a final determination of the proceeding (by the plaintiff’s discontinuance). It cannot

be regarded as relief ancillary to a matter still being claimed. The Court’s power to award costs under this head arises only after a final determination.

[42] For these reasons, it is my view that the costs order here is not an interlocutory order as defined in r 1.3(1).

[43] As regards Mudgway, I note further that Keane J did not decide whether the order was made in Chambers or in open Court, nor did he refer to Talyancich. It would also appear that the cases cited by Keane J as involving the review of costs orders by Associate Judges did not involve costs orders in relation to underlying s 26I proceedings – i.e. costs orders made under s 26I(3).

[44] In Gilbert v Robertson HC Auckland CIV 2007-404-7449, 9 February 2009, the order for costs related to an application seeking an order that a bankruptcy notice

be set aside in circumstances where the bankruptcy notice had ultimately been withdrawn. The Chambers/open Court distinction was not referred to.

[45] In Wallace Corporation Ltd v International Marketing Corp Ltd HC Auckland CIV 2003-404-7227, 28 February 2005, although the underlying application was for summary judgment – required to be heard in open Court by r 7.36 and heard by Associate Judges exercising the High Court’s jurisdiction under s 26I(1)(a) in open Court – Justice Heath relied on Miller Design Ltd v P W Hotel Ltd HC Auckland CP872-IM02, 6 June 2003 in finding that the order for costs was dealt with in Chambers and amenable to review. In Miller Design Venning J noted that Associate Judges (then Masters) did not have jurisdiction in relation to the substantive application. However, the substantive application had been withdrawn and the application for costs was dealt with (separately) as a decision on an interlocutory application. Similarly, Heath J held that “[a]s the costs application in this case was made subsequent to withdrawal of the summary judgment application, I find that there is jurisdiction to entertain the present application” (at [13]).

[46] In Commercial Finance & Securities Ltd v McKay Hill & Co Solicitors Nominee Company Ltd & Ors HC Napier CIV 2003-441-884, 30 September 2005, also relied on by Mr Darby, the underlying matters related to questions of discovery.

[47] As such, in my view these cases do not stand for the principle that costs orders made as regards an application heard in open Court under s 26I are Chambers matters and are therefore to be reviewed pursuant to s 26P(1).

[48] I am therefore of the view that Associate Judge Abbott’s costs decision was one made under s 26I(3), in relation to the substantive application not to discharge the caveat that had been heard by the Associate Judge under s 26I in open Court. In my judgment, the fact that that costs decision was one made on the papers does not mean it was made in Chambers. Rather, the Judge invited the parties to resolve the question of costs on the papers, and they accepted that invitation. If either party had asked for a hearing, no doubt one would have been available to them. The decision made on the papers was not an in Chambers decision.

[49] On that basis, in my view Associate Judge Abbott’s costs decision was one which Mr Fonua can only challenge by way of appeal, and not by way of review to the High Court. That being said, there is no basis for Marac’s application to transfer those review proceedings to the Court of Appeal. Rather, if Mr Fonua wishes to pursue his challenge he should now file an application for leave to appeal out of time

to the Court of Appeal. Referring to the position that Mr Fonua now finds himself

in, and my inference that Mr Darby is particularly concerned that the expert evidence

he put before Associate Judge Christiansen should be before the Court which considers Mr Fonua’s challenge to Associate Judge Abbott’s decision, that would then be a matter for the Court of Appeal.

[50] I acknowledge that this question of the distinction between circumstances where a decision of an Associate Judge may be reviewed in the High Court as opposed to being appealed to the Court of Appeal is somewhat obtuse and unhelpful.

In Kerridge v Kerridge & Ors HC Auckland CIV 2006-404-1393, 29 October 2008, Heath J said in his oral judgment that the dichotomy between rights of review and rights of appeal “is unsatisfactory and unsustainable in a case such as this. There is

an urgent need for amendments to permit matters heard in tandem to be appealed in tandem”. The Court of Appeal, in a related proceeding, noted the dichotomy as demanding “amendment to harmonise the appellate path” (Kerridge v Kerridge

[2009] 2 NZLR 763 at [3]).

[51] I finally acknowledge that I raised with counsel this jurisdictional point and that Mr Allan, for Marac, had not himself raised the point before. Having identified the point, I did not consider it was appropriate for me not to draw it to counsel’s attention nor to fail to give it substantive consideration. That that may have resulted

in my taking a different view to this matter than other Judges who have previously considered this proceeding is not, in my view, a substantive point in Mr Fonua’s favour.

[52] As a result of the views expressed above, it is not necessary for me to reach a decision on Marac’s application. Having said that, and in light of the full argument I heard, I think it is nevertheless appropriate to indicate, at least to some extent, my views. I do so by reference to the basis upon which Mr Fonua opposed that application.

Is a s 26P(1) review application a proceeding to which s 64 applies?

[53] Mr Fonua first argued that an application under s 26P(1) to review an

Associate Judge’s decision was not a civil proceeding to which s 64 could apply.

[54] Section 64(1) provides for the transfer of “civil proceedings”. The term “civil proceedings” is defined in s 2 of the Judicature Act as meaning “any proceedings in the Court, other than criminal proceedings”. On that basis, a review application would appear to be a civil proceeding, and amenable to transfer.

[55] Notwithstanding that, Mr Darby, for Mr Fonua, argued that:

1. The term “proceeding”, as defined in the High Court Rules (r 1.3), means an application to the Court for the exercise of the civil jurisdiction of the Court, other than an interlocutory application.

2. Rule 2.3(1) requires an application for review under s 26P(1) to be commenced by way of interlocutory application.
   

100. A review application was therefore, not a “proceeding”. Accordingly, neither was it a “civil proceeding” to which s 64(1) applied.
     

[56] Moreover, Mr Darby argued, where an Associate Judge’s decision was not made “following a defended hearing” but instead on the papers, such a review would proceed “as a full re-hearing” pursuant to r 2.3(4) and (5) of the High Court Rules:

(4) If the order or decision being reviewed was made following a defended hearing and is supported by documented reasons,─

(a) the review proceeds as a re-hearing; and

(b) the Judge may, if he or she thinks it is in the interests of justice, rehear the whole or part of the evidence or receive further evidence.

(5) In all other cases,─

(a) a review proceeds as a full re-hearing; and

(b) the Judge may give the order or decision the weight he or she thinks appropriate.

[57] The fact that such a re-hearing was required, and in Mr Darby’s view would

be required if the proceeding was transferred to the Court of Appeal, also counted against the transferability of such proceedings as a matter of jurisdiction under s 64.

[58] Mr Darby also relied on s 34 of the Interpretation Act 1999. Section 34 provides, as relevant, that a word used in a rule made under an enactment has the same meaning as it has in the enactment under which it is made. As I understood the submission, Mr Darby relied on s 34 to argue that the meaning of the term “proceeding” in the High Court Rules imported the same meaning to that term in the Judicature Act.

[59] I do not think these arguments could have assisted Mr Fonua – if he had properly engaged s 26P(1) – to resist Marac’s application for transfer.

[60] Section 64 of the Judicature Act is clear on its face, and provides for the transfer of “civil proceedings”. The fact that the High Court Rules require an application for review under s 26P(1) to be commenced by way of interlocutory application, and to be dealt with in Chambers, does not in my mind mean it is not a “civil proceeding” in terms of s 64. It may be that certain implications of the rule that such an application is to be commenced by way of an interlocutory application, and to be dealt with in Chambers unless the Judge orders otherwise, would be relevant first as to whether or not the necessary exceptional circumstances exist and, secondly, as to whether or not the Court should exercise its discretion to order a transfer. Similarly, that a review application, if available here, would proceed by way of a re-hearing is a possible relevant consideration in terms of the Court exercising its discretion to order a transfer, were it to find exceptional circumstances exist. Those considerations, however, are not jurisdictional matters which preclude such a proceeding being transferred.

[61] As to s 34 of the Interpretation Act, this clearly applied, not in the manner contended for by Mr Darby, but so that a term defined in an Act has the same meaning where it is used in a rule or regulation, and not vice versa. In my view, the definition of the term “proceeding” in the High Court Rules cannot limit the meaning of the term “civil proceedings” as defined in the Judicature Act.

[62] Lastly I note that the s 64 power has been considered in relation to review applications under s 26P(1) – albeit without expressly referring to this issue – in Peters v Television New Zealand HC Auckland CIV 2004-404-3311, 1 May 2007, and a review application transferred to the Court of Appeal under s 64 was at issue in Attorney-General v Davidson [1994] 3 NZLR 143.

[63] I therefore conclude that, in terms of s 64, a review application under

s 26P(1) is capable of being transferred to the Court of Appeal.

Exceptional circumstances and the Court’s discretion

[64] The final matter I would have considered if I had concluded that Mr Fonua had properly engaged s 26P(1), is the question of whether, in my view, this is properly a matter for the Court of Appeal.

[65] Here Marac relied principally on the different outcomes as between Associate Judge Christiansen and Associate Judge Abbott on the question of ordering costs against Mr Fonua personally.

[66] In that, Marac relied on s 64(2)(c) which provides that the circumstances of a proceeding may be exceptional if the proceeding does not raise any question of fact

or any significant question of fact, but does raise one or more questions of law that is

or are the subject of conflicting decisions of the High Court.

[67] Given that, in my view, the appropriate course of action for Mr Fonua is to appeal to the Court of Appeal, I do not think it is appropriate for me to express any substantive views on the different outcomes Marac sees as arising as between the decisions of Associate Judge Christiansen and Associate Judge Abbott. As also identified by Justice Courtney at an earlier stage in these proceedings, I do note however that whilst the decisions of Associate Judge Abbott and Associate Judge Christiansen both considered the duties of a solicitor when lodging a caveat, Associate Judge Abbott was also called upon to consider Mr Fonua’s actions in supporting Nga Uri’s application that its caveat not lapse. It was in the course of so doing that Mr Fonua was not only asked personally to confirm the existence of Nga Uri by Marac, but was also put on notice subsequently that Nga Uri would not appear to exist and, further, that given Marac’s prior indefeasible mortgage, Nga Uri could not resist Marac’s application to discharge its subsequently registered caveat

(to enable mortgagee sale proceedings to occur). Those were not matters considered

by Associate Judge Christiansen in terms of a personal order of costs against Mr Fonua, as in the Westpac proceeding Mr Fonua was no longer acting for Nga Uri at the time Westpac applied to discharge the caveat.

[68] Beyond that, I do not think it is necessary or appropriate that I comment further on the question of whether or not exceptional circumstances might otherwise have existed, or on the discretionary matters which would fall for consideration under s 64(3).

Outcome

[69] I have found that in order to challenge Associate Judge Abbott’s costs decision, Mr Fonua must exercise a right of appeal. On that basis his application under s 26P(1) must be dismissed. It would therefore appear necessary for Mr Fonua to apply to the Court of Appeal for special leave, his appeal otherwise being out of time.

[70] In those circumstances, Marac’s application to transfer Mr Fonua’s review application does not require further consideration.

[71] Finally, in the circumstances, I consider that the costs of this hearing should

lie where they fall.

“Clifford J”

Solicitors: Grove Darlow & Partners, P O Box 2882, Auckland for Marac Finance

T J Darby, P O Box 90959, Auckland for Mr Fonua