THE
CAPITAL
POPULISM AND THE
JUDICIARY
- 11 February 2020
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ISSN 0110-5655
LETTER
A weekly review of administration, legislation & law
The Queen's Speech following Boris Johnson's emphatic victory in the UK
December election, included an intention to overhaul the UK's
constitution, democratic institutions and justice system. Commentators
have interpreted this as Boris Johnson seeking revenge on the UK Supreme
Court following its ruling that his suspension of parliament in
September was "unlawful, void and of no effect" (42 TCL 37/1). An
article in the UK Prospect (March 2020) Judges in the Dock, by Tom Clark
and Alex Dean, asks if the judiciary has overplayed its hand?
The article relates how Lady Hale, president of the Supreme Court at the
time of the decision, suddenly became "Britain's first judicial
superstar." This contrasts with the United States Supreme Court, where
"there's no clear line between law and politics" and occasions where the
"personality of a judge cuts through to public consciousness" are common
enough. Was the reason Lady Hale became a media favourite just "the
constitutional convulsions of Brexit, which should soon pass? Or has the
interface between politics and the law become fraught for more enduring
reasons?" These are, the authors say, urgent questions as "the court is
under unprecedented attack" with the proposal in the Queen's speech for
a 'Constitution, Democracy and Rights Commission' "plainly a vehicle
designed to rein in what critics call 'activist' judges."
Conceding that they may be "getting ahead of ourselves in assuming any
'reform' is merely an ugly power grab by the mop-topped Caesar in
No.10", the authors note that while "judges were politically marginal, a
government with a majority in parliament could do as it pleased because
it was for the elected parliament alone to settle the law." The
"supposed line between making the law and interpreting it" has, however,
"always been hazy", "made fuzzier" by the "intricacies of modern life
and governance." No modern statute can deal with every contingency and
it fell to the judges "to fill in the many blank or grey areas." Three
more specific developments over the past 50 years have reinforced the
trend - the growth of judicial review of decisions by public
authorities; the development of a "rights culture" since the early
post-war world; and the inclusion of EU law in fields of European
competence, such as workers' rights and the environment (with supremacy
over UK law meaning that where there was conflict, British judges could
set aside laws Parliament passed). "Right now ... the judges are
vulnerable to actual or potential reversals on all three of these fronts
[and having] traipsed into political battle late last year, a political
pushback against the judges was probably inevitable."
The article discusses the concerns of "plenty of lawyers and judges" who
worry that the Supreme Court has strayed from its proper position in
[Britain's] constitutional landscape". However, there is almost
universal opposition to the idea of a more political appointments
process. Judges will need to manage their public profiles more carefully
but it "isn't desirable to turn back the clock to a time when lawfulness
barely intruded on public administration." The authors conclude that the
"sovereignty of parliament is not in dispute, but it is perfectly
compatible with the government being bound by the laws that it passes in
the same way as everyone else." The "real threat to our democratic
system comes not from 'celebrity judges' making unusual rulings, but
from an unruly executive that has shown unusual contempt for its norms."
43 TCL 4 (2004)
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CAPITAL
THE COURTS LETTER

ANTI-MONEY LAUNDERING In R v FU, CHE & JIAXIN FINANCE LTD [2019] NZHC 3058 per Walker J
- AND COUNTERING OF (22/11/2019) verdicts and reasons were given in this judge-alone trial
FINANCING OF where the defendants (a money remittance company and two individual
TERRORISM parties) were successfully prosecuted under the Anti-Money Laundering
- FAILING TO MEET and Countering of Financing of Terrorism Act 2009 for failing to meet
REGULATORY regulatory obligations under the AML/CFT reporting regime. The
OBLIGATIONS defendants were charged with failing to conduct customer due diligence,
- SUSPICIOUS report a suspicious transaction and retain adequate records relating to
TRANSACTIONS a suspicious transaction in respect of transactions relating to the
- OBJECTIVE TEST remittance of approximately $53M over nearly 13 months for one seam of
- JUDGE ALONE TRIAL business in an otherwise AML/CFT compliant business. One defendant faced
- VERDICTS AND REASON an additional charge of structuring a business to avoid requirements
under the reporting regime in respect of depositing $700k cash in 14
tranches over a few days. The HC held that the test under ss 92 and 95
for failing to report and keep adequate records about a suspicious
transaction is objective, not subjective. (249 paras)

CARE OF CHILDREN The relocation case of GF v EF [2019] NZHC 3140 per Fitzgerald J
- RELOCATION OF FIVE (29/11/2019) can be noted for the HC finding that the FC erred in
YEAR OLD failing to take into account the views of the parties' five year old
- VIEWS OF THE CHILD child where the child's views had not been obtained prior to the FC
NOT OBTAINED hearing. There was no indication the child was incapable of expressing
- REMEDIED FOR APPEAL her views so she should have been given a reasonable opportunity to do
HEARING so. The weight to be given to those views, particularly given her age,
would be a separate question. The breach was cured by the time of the HC
appeal hearing as the child had since been spoken to and her views
obtained. (54 paras) NB: Publication restrictions

COMPANIES In NZ NATURAL THERAPY LTD (IN LIQ) v LITTLE [2019] NZHC 3132 per Brewer
- LIQUIDATION J (29/11/2019) the HC had, in [2018] NZHC 2164, 41 TCL 36/2, held that L
- DIRECTOR DEBT TO owed NZNT $323,148 on an overdrawn current account (Companies Act 993, s
COMPANY 301), but did not determine L's affirmative defence that the
- LIQUIDATORS' COSTS liquidators' actions had greatly increased the costs of the liquidation
- SET-OFF and so what he owed should be reduced or fully offset by the amount of
their excessive costs. On appeal, L ceased to dispute the amount he owed
but still claimed the set-off. The CA adjourned the appeal and remitted
L's affirmative defence to the HC to decide. The present judgment
dismissed L's positive defence: damages for breach of a director's
duties and the appropriate remuneration of liquidators are two distinct
matters which cannot be set-off against each other: the overdrawn
account and payment of the liquidators' remuneration were in two
different causes of action and the affirmative defence was pleaded in
respect of the remuneration cause of action, not the overdrawn account
one. There can be judgment under s 301 for a sum greater than the total
claims filed in the liquidation (Morgenstern [2014] NZCA 449, 11 NZCLC
98024, 37 TCL 37/2). A director's liability to pay liquidators' costs
extends only to the costs associated with his or her breaches
(Madsen-Ries v Petera [2016] NZCA 103, 11 NZCLC 98043, 39 TCL 15/2). In
this case, the claimed excessive costs were not affected by the
overdrawn account breach. (48 paras)

COMPANIES In CULLEN GROUP LTD v COMMISSIONER OF INLAND REVENUE (NO 3) [2019] NZHC
- LIQUIDATION 3110 per Palmer J (29/11/2019) CGL had failed in the HC and was held to
- STAY owe $112,659,029.08 for tax avoidance and interest. It appealed, but
- STATUTORY DEMAND $505,399.55 costs in the HC had been awarded by consent. CIR served a
FOR CONSENT COSTS statutory demand, and CGL applied to set aside the SD and stay
AWARD enforcement of the costs award but did not seek an extension of time to
- STAY pay. The CIR commenced liquidation proceedings on 8/8/2019. The HC has
- SETTING ASIDE dismissed CGL's application to stay enforcement and the liquidation
- SUBSTANTIAL DISPUTE application and to set aside the statutory demand: if CGL can pay the
"relatively minor" costs it should do so, if it cannot then it should be
liquidated. Financial statements for CGL and subsidiary CIL showed net
assets of over $73 million and operating expenses in the multi-millions
so there was no argument that paying the costs would render CGL's appeal
nugatory: "It appears only to be nugatory if [CGL] wishes it to be. A
43 TCL 4 2
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LETTER

party owing costs under a judgment cannot force a stay of the judgment
by effectively threatening its own liquidation." There is no "genuine
dispute" justifying setting aside a statutory demand for a judgment debt
because the judgment was under appeal but not stayed (Bristol Forestry
Venture [2013] NZHC 2387, 26 NZTC 21031, Joint Action Funding [2016]
NZHC 2919, Remote Camps [2012] FCA 130). In dismissing the application
to stay liquidation, the HC commented that timeframes were deliberately
short to avoid delay, that CGL had failed to file a statement of defence
(r 31.20) on time, and so it required leave to appear. It then declined
to stay the liquidation. (34 paras)

COMPANIES Applying for judicial review of a Construction Contracts Act 2002

- LIQUIDATION adjudication will not support an application to stay liquidation
- STAY proceedings, or advertising of them unless the grounds of judicial
- CONSTRUCTION review put in doubt the existence of the debt leading to a liquidation
CONTRACTS application, which was not the situation here (the jurisdiction of the
- CHALLENGE TO AWARD CCA adjudicator was challenged). See OMID CONSTRUCTION MANAGEMENT GROUP
- JUDICIAL REVIEW LTD v TARGET PAINTERS AND DECORATORS LTD [2019] NZHC 3189 per Sargisson
AJ (5/12/2019). (28 paras)

COMPANIES In WYATT v REAL ESTATE AGENTS AUTHORITY [2019] NZHC 3291 per Gault J
- NAME (13/12/2019), W had reserved the name "Real Estate Authority" for a
- RESERVATION company he was preparing to incorporate (Companies Act 1993, s 22(1)).
- CROWN ENTITY The Real Estate Agents Authority complained to the Registrar of
- OPERATING NAME Companies that, although it was not its official name, "Real Estate
- FLAGS, EMBLEMS, AND Authority" was its "operating name", so W's company needed to change its
NAMES PROTECTION name for breach of the Flags, Emblems, and Names Protection Act 1981, s
- "PATRONAGE" 14(3)(c)(vi) ("any other word or statement that claims or implies the
- STATUTORY patronage of ... (f) any government department")). It could not lawfully
INTERPRETATION be reserved (CA, s 22(2)(a)). The RoC agreed with the REAA and directed
- EXPRESSIO UNIUS W to change his company's name (CA, s 24(1)). W appealed to the HC (CA,
EXCLUSIO ALTERIUS s 370(1)) unsuccessfully. "Government department" included a Crown
Entity (FENPA, s 2 definition) and therefore included the REAA. The
ordinary meaning of "patronage" involved "support, protection, custom or
control". FENPA, s 14, was not limited by FENPA, s 15, to supplying
goods or services to, or carrying out work for a government department.
Rather, FENPA, s 14(3), extended to a "claim or implication" that an
entity is a government entity. The question in each case was whether,
assessed objectively, the word or statement used claimed or implied
"patronage" in that sense. "REAL" did imply the patronage of the REAA:
the similarity of names would be understood as a reference to the REAA,
"even more so" following REAA's use of the shorter operating name (W's
submission that a Crown entity could not use an operating or shorthand
name unless expressly provided for by Parliament - invoking the maxim
expressio unius exclusio alterius, based on express provision in NZ
Public Health and Disability Act 2000, s 19(5), rejected). (43 paras)

CONSTRUCTION While (1) there is no exception to the exclusion of counterclaims from

CONTRACTS Construction Contracts adjudications (Construction Contracts Act 2002, s
- COUNTERCLAIM 79) where, as here, a party has refused to pay the first stage of a
- AVAILABILITY construction contract based on a claim (still before a Construction
- COMPANIES Contracts adjudicator) that the payee on the first stage has repudiated
- LIQUIDATION the construction contract at the second stage, and (2) the "pay now
- STATUTORY DEMAND argue later" philosophy of the CCA also excludes such a counterclaim in
- SETTING ASIDE seeking to set aside a statutory demand arising from a CCA dispute
- VARIABLE REMEDIES (Laywood [2009] NZCA 35, [2009] 2 NZLR 234 applied, Kariiti Ltd [2010]
NZHC 2146 held not to support an exception), nevertheless (3) there may
be room for a remedy at other points of the liquidation process (such as
in Keriiti: interim CCA adjudication, current application in DC for
final determination, application for stay on advertising granted). See
ALPINE PRIME PROPERTIES LTD v HASKELL CONSTRUCTION LTD [2019] NZHC 3223
per Johnston AJ (9/12/2019) (reissued 13/12/2019). (27 paras)

CONTRACT AND In MITCHELL v MURPHY [2019] NZHC 2019 per Gordon J (11/12/2019)
COMMERCIAL LAW purchasers, the Ms, obtained judgment on their claim against vendor CM
43 TCL 4 3
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- SALE AND PURCHASE arising out of statements made by the real estate agent "the owner says
OF LEAKY UNIT it is not a leaky home" and that it was "built with extra care". CM was
- MISREPRESENTATION liable for misrepresentation (Contract and Commercial Law Act 2017, s
IT WAS NOT LEAKY 35) and accessory liability to the agent's misleading and deceptive
- PRE-PURCHASE conduct (Fair Trading Act 1981, s 43(1)). The claim that CM herself was
INSPECTION acting "in trade" as the unit had been rented for a period of time was
OBTAINED rejected. CM's liability was not absolved by the fact the Ms had
- FAIR TRADING ACT obtained a pre-purchase building report nor a "purchaser acknowledgment"
- ACCESSORY LIABILITY and limitation of representations and warranties on weathertightness
contained in the special conditions. CM was liable for the cost of
repairs $433,070, consequential costs $68,742, general damages $25,000
and interest (less an amount already received in settlement). Formal
proof judgment was entered against pre-purchase inspector K (as employee
of his company) on claims under the FTA, s 9 for false statements in his
report (liability apportioned to 20 per cent). An exclusion of liability
clause in the company standard form documentation was not effective to
exclude his personal liability (nor the company's). (375 paras)

CONTRACT In MONTGOMERIE v MONTGOMERIE [2020] NZCA 3 per Goddard, Brewer and

- INTERPRETATION Gendall JJ (28/1/2020) AM, property developer, appealed unsuccessfully
- LOAN from a HC decision [2019] NZHC 989, 42 TCL 21/2, entering summary
- FRUSTRATION judgment against him in favour of his brother JM, who had lent him money
- APPEAL when he fell into financial difficulty as a result of the Global
Financial Crisis. The CA held that it agreed with the HC interpretation
of the agreement and found no arguable defence based on the doctrine of
frustration (AM arguing the agreement was frustrated by default of the
main building contractor that prevented sale of the property
development). The parties contemplated and made provision for the
possibility of non-payment and the difficulties encountered in
completing the development did not significantly change the nature of
the parties' contractual rights and obligations from those that could
have been reasonably contemplated at the time the agreement was entered
into. It would be unjust to deny JM the ability to call up the full
debt. The argument that the agreement was frustrated in part failed for
the same reasons. There is no provision in the agreement where the test
for frustration is arguably met. The argument also faced the further
insurmountable hurdle identified in Burrows, Finn and Todd on the Law of
Contract in New Zealand Contract that "frustration operates in an
all-or-nothing fashion". The Contracts and Commercial Law Act 2017, s 68
appears to limit operation of the common law principle, that stand-alone
parts of a contract may be able to be frustrated although the balance
remains enforceable, to cases where a severable part has been performed
before the frustrating event occurs. Payment of indemnity costs in
accordance with the agreement was ordered. (53 paras)

CRIMINAL PROCEDURE In VECTOR LTD v H CONSTRUCTION NORTH ISLAND LTD (IN REC & LIQ) [2019]
- PRIVATE PROSECUTION NZHC 3071 per Jagose J (25/1/2019) the defendants, M and S, applied
- COMMENCEMENT unsuccessfully under the Criminal Procedure Act 2011, s 167, for
- INTERPRETATION adjournment of a trial (due to commence on 21/9/2020) in a private
- TRIAL ADJOURNMENT prosecution against them by Vector, where the SC had, [2019] NZSC 97,
granted the defendants leave to appeal on the question whether the CA,
{2019] NZCA 215, 41 TCL 23/3, 26/4, was correct in its interpretation of
s 26(3)(a) (Judge's discretion to direct charging documents not be
accepted for filing if evidence provided by the private prosecutor is
insufficient to justify a trial), when finding the DCJ was correct in
accepting the charging documents for filing. The defendants argue they
should not be required to expend time and resources preparing for trial
if it will be unnecessary by a prospective SC decision in their favour.
The HC held that the private prosecution nature of the proceeding does
not diminish the public interest in the expeditious disposal of criminal
proceedings. Regardless of the final appeal decision, continued trial
preparation will ensure constructive engagement on resolution. "It is
the defendants' choice to have reduced or suspended preparation, which
may not be wise." (10 paras)

43 TCL 4 4
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CUSTOMS AND EXCISE In CHIEF EXECUTIVE OF THE NEW ZEALAND CUSTOMS SERVICE v HUTCHINSON
- OUTSTANDING DUTY TRADERS [2019] NZHC 3174 per Cull J (4/12/2019) the CE of Customs
- THIRD PARTY FRAUD unsuccessfully appealed the Customs Appeal Authority's decision
- APPEAL AUTHORITY directing the CE to reconsider whether to assess the appellants for
- AMENDED ASSESSMENT outstanding duty and GST owed (of $44,663), in light of the finding HT
INVALID had paid the amount to a fraudulent third party (a customs broker hired
- JURISDICTION ON by HT's agent without its knowledge, and which underdeclared the value
APPEAL of the imported motorhomes). Customs had reassessed HT under s 89(1) and
required it to pay the outstanding amount of duty and the Authority had
found the amended assessment invalid as there was no existing assessment
made for HT so the amendment procedure could not apply (the Authority
declining to use its power to make an initial assessment due to its
findings including that there was no evidence to support Customs' view
that HT was in any respect responsible for a lack of care contributing
to it, and Customs, being defrauded). The HC held that the Authority did
not err in finding that because the entry itself was falsified and not
authorised by HT, there was no "assessment" by HT as to the duty payable
and as a result, the CE needed to assess the duty afresh under s 88(2).
Neither did the Authority err by exceeding its jurisdiction on appeal. A
narrow technical role which limits the Authority's consideration on
appeal to whether an appeal is correct or valid only, is inconsistent
with legislation giving the Authority broad powers. Further, the HC
agreed with the Authority that the CE must, in accord with the
principles in ss 109 and 110 (CE to use best endeavours to protect the
integrity of the system for assessing and collecting duty) at least
consider whether to pursue the third party before pursuing innocent
owners of the goods. (66 paras)

EVIDENCE In R v BROADLEY [2019] NZHC 3120 per Dunningham J (28/11/2019), where

- PROPENSITY six defendants are jointly charged with participating in an organised
- INADMISSIBLE criminal group, Crimes Act 1961, s 98A, (Operation Block) the Crown
- PARTICIPATING IN applied unsuccessfully to adduce evidence of drugs found in a vehicle
ORGANISED CRIMINAL stop undertaken during another investigation (Operation Terrier) around
GROUP the same time, where the driver B (the sole common defendant in both
- DRUGS FOUND IN matters) and four occupants were charged with possession but the charge
VEHICLE STOP IN against B was later dismissed under the Criminal Procedure Act 2011, s
DIFFERENT OPERATION 147 for insufficient evidence. The HC held that the vehicle stop drug
evidence, which does not involve any other member of the named group,
and where the evidence to connect B to the methamphetamine in the car
was determined insufficient to justify an inference of possession or
aiding and abetting, is not probative of showing that B shared the
objective of obtaining material benefits by selling methamphetamine with
the other Operation Block defendants. Neither can that evidence be
probative of showing B participated in an organised criminal group. The
dismissal of the charges against B means it would be unsafe to allow it
in as propensity evidence that he was prepared to assist in drug dealing
activities. The proposed evidence is not probative of an issue in
dispute, Evidence Act 2006, s 7, and admission would be unduly
prejudicial, not just to B, but the other defendants. (43 paras)
NB: Publication restrictions

EXCLUSIVE ECONOMIC KLINK v ENVIRONMENTAL PROTECTION AUTHORITY [2019] NZHC 3161 per Cull J
ZONE AND (3/12/2019) is the judgment on an appeal from and an application for
CONTINENTAL SHELF judicial review of the decision by the decision-making committee of the
(ENVIRONMENTAL Environmental Protection Authority authorising the dumping off Aotea
EFFECTS) Great Barrier Island of material dredged from the seabed elsewhere
- DUMPING OF DREDGED (Exclusive Economic Zone and Continental Shelf (Environmental Effects)
MATERIAL Act 2012, s 20G). Both were brought on the same grounds. The applicant
- STANDING for judicial review was the Society for the Protection of the Aotea
- TREATY OF WAITANGI Community and Ecology Ltd. The appellant was a kaumatua of Ngati Rehua
PRINCIPLES Ngatiwai ki Aotea whose standing in the appeal was by consent (NRN had
- "MĀORI PERSPECTIVE" made a submission, K had not; only submitters had standing to appeal -
- "HAVE REGARD TO" EEZ Act, s 105). The HC held that the EPA had failed to fulfil the
- CONSULTATION specific recognition of the principles of the Treaty of Waitangi (EEZ
- SELECTED MAORI ONLY Act, ss 12 ff) including s 18 (EPA's Māori Advisory Committee to advise
43 TCL 4 5
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- HEARING VENUE, decision-makers to the end that decisions are informed by a Māori
AUDIO CONNECTIONS perspective; EPA to "have regard" to the MAC's advice). The HC
- JUDICIAL REVIEW rejected the submission that s 18 meant that the EPA had to consider
MAC's advice but did not need to give effect to it (Christchurch Medical
Officer of Health v J & G Vaudrey Ltd [2015] NZHC 2749, [2016] 2 NZLR
382, 38 TCL 44/1, distinguished; EPA needed to "fully understand"
the cultural values and perspectives of Māori). EPA failed to do that
when (1) the applicant for consent (CRL) engaged with only five of the
85 iwi notified of its application including only one part of NRN, ie, a
person from Auckland not Aotea who had no mandate from NRN, and (2) EPA
did not heed MAC's advice that this was inadequate (it restricted itself
to those with "existing interests" as defined in EEZ Act, s 4). The EPA
further failed to heed the MAC's advice when it (a) held its sole
hearing in Auckland despite 60% of submissions coming from Aotea Great
Barrier Island (EPA mistakenly thought that 36 of 76 submissions were
from Auckland, 31 from Aotea and ten from elsewhere, whereas the figures
were 45 from Aotea and 31 for Auckland and elsewhere), and (b) provided
for telephone communication to the hearing from Aotea but failed to
recognise the poor quality and spread of telephone reception on Aotea).
It was no substitute for these failings that the EPA required CRL to
convene an iwi liaison group at least annually but allowed CRL to choose
the membership and limit it to two representatives of NRN and two of
CRL. The judgment also includes brief discussion of the definition of
"existing interests", the UN Declaration on the Rights of Indigenous
Peoples, and adaptive management. (102 paras)

LAND TRANSFER In MOEKE v RAUKAWA IWI DEVELOPMENT LTD [2019] NZHC 3166 per Sargisson AJ
- SALE AND PURCHASE (4/12/2019) vendor RID failed to settle the sale of land to M and
AGREEMENT instead sold the land to South Waikato District Council who claimed to
- USE AS GANG PAD intervene to buy the land for the public good as it had suspicions M was
SUSPECTED going to develop the land as a gang pad for the Head Hunters. RID and
- COUNCIL the Council acknowledged there had been a breach of contract but claimed
INTERVENTION the Council was fulfilling a public and civic duty for the greater good
- "PUBLIC INTEREST" in preventing the acquisition of the property. The HC held acting in the
NO DEFENCE TO LAND "public interest" was not a defence to land transfer fraud under the
TRANSFER FRAUD Land Transfer Act 2017, s 6 and that "land transfer fraud" could amount
- TORT to "unlawful means" for the purposes of tortious conspiracy. This would
- CONSPIRACY TO be dependent upon the facts of each case rather than representing a
DEFRAUD general rule, but in this case conspiracy to defraud by unlawful means
- CONTRACT was established and summary judgment entered for liability against both
defendants. (59 paras)

LAND TRANSFER In THE PROPRIETORS OF POTIKIRUA BLOCK INCORPORATION v TE KANI [2019]

- UNLAWFUL NZHC 3200 per Mallon J (5/12/2019), TK's whanau amalgamated a block of
SUBDIVISION OF MĀORI land with PBI land in the mid 1960s in return for incorporation shares.
FREEHOLD LAND TO In the 1980s TK sought the return of the land which PBI's committee
GENERAL LAND essentially agreed to in consideration for a reduction of TK's
- INDEFEASIBILITY OF shareholding in PBI. As matters transpired the land was subdivided in
TITLE the 1990s into general land in breach of statutory requirements for
- ROLE OF REGISTRAR dealing with Maori freehold land and without consideration of the
TO CHECK VALIDITY surrender of the shares (the transfer had been done without the
OF SHAREHOLDER'S necessary partition application, the subdivision failed to comply with
RESOLUTION the Maori Affairs Act 1953, s 432, the necessary shareholders'
resolution was not obtained and the common seal was not correctly
affixed to the memorandum of transfer as required by s 42 of the 1967
Amendment Act - although the HC seemed to reject any argument that it
was part of the Deputy Land Registrar's role to check the lawfulness of
the resolution and the affixing of the seal). The failure to adjust the
shares was noted by the PBI committee following TK's death in 1999 and
in 2010 it sought the return of the land with proceedings filed in 2013.
The HC held that while the transfer of land did not comply with
statutory requirements and no consideration was paid, the transfer
should not be unwound. Pursuant to the LTA 1952, s 17, TK had obtained
an indefeasible title and the exceptions did not apply. PBI had simply
failed to exercise its rights to receive the consideration it was due.
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Despite the defects in the transaction, there was no basis to find TK

had notice of such defects. She had instructed surveyors and lawyers who
had also sought advice from the DLR and all had acted conscientiously
and transparently. The proceedings were out of time under the Limitation
Act 1950, ss 7(2), 8 and 10(1) but it was still open for PBI to make the
necessary adjustment to the shareholding and claim back overpaid
dividends. (176 paras)

LOCAL GOVERNMENT In EVANS v CLUTHA DISTRICT COUNCIL [2019] NZCA 5 per Miller, Simon
- REMOVAL OF TREES France and Hinton JJ (4/4/2020) the CA dismissed E's appeal from the HC
- CONSULTATION decision [2018] NZHC 3355, 42 TCL 7/7, for largely the same reasons as
- NATURAL JUSTICE given by the HC. There was no breach of the consultation provisions of
- RESERVES the Local Government Act 2002, ss 76-79 as a decision to remove trees
- "NECESSARY" that were not protected trees was not a significant decision in terms of
- JUDICIAL REVIEW the LGA (such decisions are normally taken by council officers; ss 76-79
confer a wide discretion whether to consult - Minotaur Custodians [2017]
NZCA 302, [2017] 3 NZLR 464, 40 TCL 28/6; CDC had adequately
informed itself about the situation, the issues and local views). There
was no breach of common law natural justice by failure to consult (the
wide discretion in the LGA meant that a common law duty would arise only
is a truly exceptional case such as Pascoe Properties [2012] NZRMA 232,
35 TCL 19/4). CDC did not breach Reserves Act 1977, s 42 (trees or bush
on reserves not to be cut or destroyed unless necessary for the
management of the reserve or other trees or bush, safety of persons or
property, or harvesting for revenue): the evidence showed that the
decision was taken for the second stated reason, and the fact that the
CDC decision did not state that removal was regarded as necessary did
not make the decision unlawful. (45 paras)

ORANGA TAMARIKI In CHIEF EXECUTIVE OF ORANGA TAMARIKI - MINISTRY FOR CHILDREN v TE HEI
- CARE OR PROTECTION [2019] NZHC 3011 per Powell J (6/12/2019) the HC overturned the FC
ORDERS decision declining to make a determination pursuant to Oranga Tamariki
- NO REALISTIC Act 1989, s 83(2A) that there was no realistic possibility that child X
POSSIBILITY CHILD would be returned to the care of his parents. In declining to make a
WOULD BE RETURNED finding, the FCJ noted the statutory provision as "unnecessary" and
TO PARENTS "odd", that while a s18B declaration seemed a straight forward
- FAMILY COURT assessment "in the Maori world this is not so" and that while the intent
DECLINING TO MAKE A of the section was worthy it was "difficult to reconcile the essential
FINDING OVERTURNED element that 'a child is unlikely to be returned to the care of their
- CULTURAL CONTEXT OF parents', particularly in the cultural context of Māori children'". The
MĀORI CHILD HC held the section did not give the FC an unfettered discretion whether
to make the order. An evaluative assessment of the available evidence
was required so as to conclude whether or not there was "no realistic
possibility" of return. The sole purpose of establishing whether a
person fell within the category identified in s 18B(1)(b) was to inform
the CE as to whether a s 18A assessment was required in the event that a
particular person had a subsequent child. It did not give rights in
respect of the child and did not provide any sort of authorisation for
the child or any subsequent child to be uplifted. (26 paras)
NB: Publication restrictions

PAROLE In CHORD v CHIEF EXECUTIVE, DEPARTMENT OF CORRECTIONS [2020] NZCA 4 per

- EXTENDED Collins, Brewer and Gendall JJ (4/2/2020) the CA allowed C's appeal
SUPERVISION ORDER (Parole Act 2002, s 107R) from the DC decision dismissing his
- CANCELLATION application for an extended supervision order against him to be
- RISK ASSESSMENT cancelled (for failure to satisfy all the assessment criteria in Parole
CRITERIA Act 2002 s 107M(4)). One of two experts was of the view that all
- DEPARTURE FROM criteria for cancellation were met but the other considered that one
EXPERT EVIDENCE criterion (demonstrating "intact and effective self-regulatory
- NATURAL JUSTICE capacity") was uncertain because C had yet to spend time since his
sentence ended not under supervision so that the DC could not be certain
that C could avoid high risk situations; both considered that C's risk
of reoffending was medium-high. The DCJ decided that C's risk was
medium-high only because he had been under supervision and that when
supervision ceased this would increase: C therefore had only limited
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self-regulatory capability, was at high risk of offending, and did not

satisfy the statutory criteria. The CA rejected the submission that the
DC decision lacked a factual foundation. It held that the DCJ was not
bound by the experts' reports but could depart from them. However, the
experts had been excused from court before C's application was heard. As
the DCJ was differing from the experts' reports he ought to have had
them available and ask them questions exploring the basis on which he
differed from them by holding that C's risk was high not their
medium-high. "[W]here a Judge has relied upon expert reports as heavily
as [here], it is appropriate that any concerns or limitations the Judge
sees in those reports be put to the experts before a decision is
reached." The matter was remitted to the DC for reconsideration.
(59 paras)

PROCEDURE In EASTLIGHT ASSET TRADING NO. 5 LTD v RIBBLE LIMITED (IN REC) [2019]
- COSTS NZHC 3172 per Johnston AJ (4/12/2019), the costs decision following an
- NON-PARTY SOLICITOR unsuccessful application by Eastlight to sustain caveats over the
- REGISTERING CAVEAT property of the respondent (in rec), the HC ordered costs on a 2B basis
WHERE NO PROPER of $10,927 but, on the more difficult issue, declined to make a costs
CAVEATABLE INTEREST award against the non-party solicitor sought on the basis she ought not
- PAINSTAKING to have facilitated registration of the caveat when there was no proper
ENQUIRIES NOT caveatable interest. There was no evidence of the solicitor having any
EXPECTED actual knowledge that the caveat was bad and it "would be going to far
to expect a solicitor engaged simply for the purpose of registering a
caveat to make painstaking enquiries and go into the level of analysis
and detail that was necessary to resolve this case". (8 paras)

PROCEDURE In COMMISSIONER OF INLAND REVENUE v LIVINGSPACE PROPERTIES LTD [2019]

- COSTS NZHC 3208 per Osborne J (5/12/2019), yet another judgment in this
- WASTED COSTS application to liquidate LPL (a David Henderson company) the HC has
- ISSUES awarded wasted costs in favour of LPL's director (B) where a case
- CAUSATION NOT FAULT management hearing to set a fixture had had to be adjourned when the
solicitor for LPL's liquidator (W), gave notice of an intention to
withdraw and there was some delay in the change of solicitor notice
being filed and served. In awarding costs for B's solicitor's memorandum
and hearing preparation, the HC said that (1) wasted costs orders are
made when costs have been truly wasted and (2) the test is the
consequence of events not their blameworthiness (Bligh [2017] NZHC 2179,
adopted). (17 paras) [Ed: The judgment does not indicate whether or not
the hearing has since been held.]

PROCEDURE BODY CORPORATE 368533 v NAPIER CITY COUNCIL [2019] NZHC 3270 per Grice J
- TRIAL (12/12/2019) was a defective building case with the ten-week trial
- ADJOURNMENT scheduled to commence on 11/5/2020 (fixture set in 5/2018, timetable set
- LATE EXPERT 5/2019). NCC (supported by 35 of the 38 other defendants) has applied
EVIDENCE successfully for an adjournment because BC had caused the timetable to
- DEFECTIVE DOCUMENT slip by not completing its obligations in time, making it "extremely
NUMBERING difficult, if not impossible" for NCC to be properly prepared by May.
- PARTY BC's expert evidence was to have been provided by 18/10/2019 but was
RESPONSIBILITY provided only on 2/12/2019. More plaintiff briefs were likely still to
be received. Conveyancing evidence had still not all been received.
Documents referred to in evidence already provided had not been properly
discovered. The HC held that, despite BC's explanations, there had been
errors in the documents. It was for BC to ensure that any documents
referred to in evidence were easily located. "Even minor errors in
document numbering can lead to delays while documents are sifted in an
attempt to find the correct document." One NCC expert deposed that there
were so many documents he had not been able to locate there is "no point
in even making a start at this point in time." The HC concluded that NCC
had been "materially affected" by BC's deficiencies in its ability to be
prepared for trial. It anticipated a "last minute scramble" before trial
which will disrupt the trial and lead to further costs if it were not
adjourned. The fixture was adjourned to commence on 21/9/2020.
(63 paras)

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PUBLIC SAFETY (PUBLIC In CHIEF EXECUTIVE, DEPARTMENT OF CORRECTIONS v R (NO 4) [2019] NZHC
PROTECTION ORDERS) 3165 per Whata J (4/12/2019) R had previously (a) (No 1) been found to
- APPLICATION FOR qualify for a PPO (Public Safety (Public Protection Order) Act 2014, s
ORDER 13, but been subjected to assessment under the Intellectual Disability
- COMMITTAL TO MENTAL (Compulsory Care and Rehabilitation) Act 2003, s 29, (b) (Jmt 2) been
HOSPITAL subjected to an extension to an interim protection order ((IPO):
- EFFECT ON (PS(PPO)A, s 107), (c) had the interim protection order set aside by the
APPLICATION CA, (d) been charged with threatening to kill and returned to custody,
(e) (No 3) had a fresh IPO made, (f) been found unfit to stand trial in
the DC on the charges in (d) but responsible for the acts underlying the
charges, and (g) been committed to a mental hospital in secure care. On
the CE's application for an order that the original application for a
PPO be held to be suspended while R was in the mental hospital which was
submitted to be the cumulative effect of the PS(PPO)A, ss 12, 107 and
111, the HC held that "for present purposes" the effect of s 12(2) and
(3) was that the direction for a mental health assessment triggered the
requirement to make an IPO which then continued in effect until the
matter was finally determined or discontinued (s 107(4)) with the
process remaining suspended while R was detained under the ID(CCR)A, at
which point the HC determined whether the (suspended) process is to be
determined by making or refusing to make a PPO, or the CE withdrew the
application for a PPO (removal by Select committee of a provision that a
PPO application is discontinued upon its subject being committed under
the ID(CCR)A or the Mental Health (Compulsory Assessment and Treatment)
Act 1992, noted). R was awarded 2B costs (to be fixed) on the IPO based
on item (c) above, but no order was made in respect of the remainder of
the proceeding. (23 paras)

REAL ESTATE AGENTS EDWARDS v BRIDGE [2019] NZHC 3138 per Doogue J (29/11/2019) is the costs
- DISCIPLINE decision following judgment, [2019] NZHC 2286, 42 TCL 40/7, allowing E's
- COSTS ON SUCCESSFUL appeal from an order of the Real Estate Agents Disciplinary Tribunal
REMEDIES APPEAL that E (agent), against whom the Tribunal made a finding of
unsatisfactory conduct, pay $10,000 to B (under the Real Estate Agents
Act 2008, s 93(1)(f)(ii) as contribution towards relief from the
consequences of her errors and omissions (B purchasing a defective
house) and dismissing B's cross-appeal seeking an increase in quantum).
The HC had found the Tribunal erred in its application of s
93(1)(f)(ii). The HC ordered B to pay E costs and disbursements on 2B
basis totalling $16,619, and declined to make a costs order against the
REAA (despite being a named party, it appeared in the same capacity as
the NZLS in Keene v Legal Complaints Review Officer [2019] NZCA 559, to
assist the Court). (38 paras)

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LEGISLATION LETTER

The House resumed on 11/2/2020.

SELECT COMMITTEES As at 10/2/2020, there remained time for submissions to be made on the
- BILL SUBMISSION following bills before select committees: Asia Pacific Economic
DATES Co-operation (APEC 2021), Protection for First Responders and Prison
Officers, 12/2/2020, Education and Training, Holidays (Bereavement Leave
for Miscarriage) Amendment (No 2), Urban Development, 14/2/2020,
Secondary Legislation, Taumata Arowai - the Water Services Regulator,
4/3/2020, and Infrastructure Funding Financing, 5/3/2020.

COURTS (CONTINUED)
SOCIAL SECURITY In CHIEF EXECUTIVE, MINISTRY OF SOCIAL DEVELOPMENT v CV [2019] NZHC 3135
- NZ SUPERANNUATION per Muir J (29/11/2019) the HC dismissed by consent the CE's appeal by
- BACKDATING way of case stated (Social Security Act 1964, s 12Q) from the SSAA
- DUTY TO ADVISE decision which had reversed the CE's decision, as delegate of the MoSD,
IMMIGRANTS refusing to backdate CV's NZ Superannuation to the day he had turned 65
- NZ SUPER UNIVERSAL (Social Security Act 1964, s 80AA(2)(a)(i)). By consent the HC quashed
BENEFIT the SSAA decision and remitted the matter to the SSAA for
- ERROR OF LAW reconsideration. The letter CV received, on the basis of which he had
- FACT-FINDING argued that he had not been informed that he could receive NZSuper even
though he was still working, did in fact so advise him (the SSAA had not
seen the letter and had accepted CV's evidence about what it said).
Consequently, the SSAA had proceeded on the basis of a factual finding
that was demonstrably incorrect, and of such magnitude that it would
constitute an error of law in terms of Edwards [1956] AC 14 (HL). "The
Court cannot assume that, if the facts were correctly before the [SSAA]
the same result would follow. Moreover, even if it were to do so, the
[SSAA]'s reasoning would necessarily be different." The HC issued three
directions to the SSAA in reconsidering the matter: (in summary) (a)
before the CE has a duty of active assistance CV must have brought
his/her needs, including his/her understanding to the CE's attention,
(b) failure to communicate with CV at all would not appear to be
"erroneous inaction", and (c) the issue was whether the "voluntary"
letter sent to CV could qualify as "erroneous action" or "inaction"
based on a deficiency in its wording. (24 paras)

UNIT TITLES In WHITE v VXJ HOLDINGS LTD [2019] NZHC 3095 per Gendall J (26/11/2019)
- PLAN CANCELLATION the Body Corporate and its Committee chairman were granted orders for
- SCHEME TO settlement of a scheme under the Unit Titles Act 2010, s 74 to
DISTRIBUTE distribute the remaining insurance proceeds for the residential and
INSURANCE AND OTHER commercial building complex following earthquake damage, and for
PROCEEDS cancellation of the Unit Plan under s 188(2). Four of the 50 unit
- JUST AND EQUITABLE holders disputed how the funds are to be distributed. The HC held that
on the valuation evidence it would be just and equitable that on
cancellation of the plan the proceeds to be divided on the basis of the
registered and reassessed ownership interests rather than (as those
opposing sought) the original unit entitlement interests fixed in 1998
when the development occurred. (Dominion Finance Group v Body Corporate
382902 [2012] NZHC 3325, 36 TCL 5/7 referred to). A consent order was
made under the Property Law Act 2007 for sale of the remaining
development interests to a third party under an existing contract.
(87 paras)

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AUDITOR-GENERAL The Auditor-General's report, Using 'functional leadership' to improve

- GOVERNMENT government procurement (November 2019, 40 pp, www.oag.govt.nz) is an
PROCUREMENT audit of New Zealand Government Procurement (NZGP), a business unit in
- LEADERSHIP the Ministry of Business, Innovation and Employment, has responsibility
for leading improvements in government procurement. In his overview,
Auditor-General John Ryan, estimates that public organisations spend
about $42 billion each year on procurement. The report finds that NZGP
has successfully laid the foundations for effective procurement
functional leadership, introducing rules, guidance and activities that
have helped public organisations improve their procurement practices and
take a more consistent approach than previously. It has also worked to
increase the number, and improve the quality of, procurement
professionals in the public sector. NZGP has shown that having a single
public organisation lead improvements to government procurement has
benefits, but "public organisations now have higher expectations of
NZGP's leadership which NZGP is not yet meeting ... NZGP needs to be
clearer about how it is going to influence public organisations to see
procurement as a strategic activity focused on achieving public value,
rather than as a set of requirements to comply with." The
Auditor-General adds that although "cost savings are important, the
public organisations we spoke to consider that NZGP has focused too much
on making savings and not enough on improving public sector procurement
capability." The State Services Commission needs to clarify its role in
setting expectations for procurement functional leadership and reviewing
NZGP's performance.

BROADCASTING "Cabinet has now given approval to complete a business case to examine
- NEW PUBLIC MEDIA the viability of establishing a new public media entity as an
ENTITY independent multiple-platform, multi-media operation. The Government
- WORK ON BUSINESS must ensure New Zealanders have a strong independent public media
CASE TO BEGIN service for decades to come, which means ensuring public media assets
are fit for the future and able to thrive amid the changing media
landscape. It's well known that New Zealand's media sector, both public
and private, is facing unprecedented challenges with competition from
the likes of Google and Facebook, declining revenue shares, and changes
in when and how audiences access their information and entertainment.
That presents risks for the future viability of New Zealand's public
broadcasting operators, RNZ and TVNZ, and the Government needs to
address those risks. Final decisions about the future of RNZ and TVNZ
will be made once the business case is completed." NZ On Air will
continue to have an important role to fund local content for both
commercial and non-commercial media outlets. Consultancy, PwC, will now
conduct the business case which the Minister expects to receive around
the middle of this year. (Minister of Broadcasting, Communications and
Digital Media Kris Faafoi, media statement, 7/2/2020.)

EDUCATION An extension programme for 17-25 year olds proficient in te reo Māori
- MAORI LEADERS and who show a strong desire to learn mātauranga Māori has been
- EXTENSION PROGRAMME launched. Te Kawa Matakura, known as Tauranga Kōtuku Rerenga Tahi for
its delivery in Te Tai Tokerau, is based on traditional models of
education where students will learn knowledge and tikanga including
mōteatea, hītori Māori, whaikōrero, karanga, navigation, weaving, and
whakapapa."Students will realise an in-depth level of mātauranga Māori,
a high level of te reo Māori and strong leadership skills." (Associate
Education Minister Kelvin Davis, media release, 4/2/2020.)

FINANCIAL ADVISERS The following have been appointed as members to the Disciplinary
DISCIPLINARY Committee under the Financial Advisers Act 2008: Sarah-Jane Ellen Weir
COMMITTEE and Daniel James Tulloch from 20/12/2019 for five years; and John Gordon
- APPOINTMENTS Matthews, from 1/8/2020 for five years. (NZ Gazette, 3/2/2020.)

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LI 2020/2 The IMMIGRATION (CARRIERS' INFORMATION OBLIGATIONS) AMENDMENT

REGULATIONS 2020 add a requirement for carriers, and persons in charge,
of a commercial craft (mainly airlines) to provide information about
persons who intend to travel to New Zealand and who have been in places
of concern with respect to the risk of spread of the novel coronavirus
(2019-nCoV) within 14 days of checking in. Commenced on 5/2/2020 and
will be revoked on 30/4/2020.

GENERAL REVIEW (CONTINUED)

RETIREMENT The three-yearly review of retirement income policy by interim
COMMISSIONER Retirement Commissioner, Peter Cordtz (available at www.cffc.org.nz) has
- INCOME POLICY been released by Kris Faafoi, Commerce and Consumer Affairs Minister
REVIEW (29/1/2020). The main recommendation made in the report is to value and
- REPORT ensure the ongoing provision of NZ Superannuation at its current
settings. It "is clear from the evidence that NZS is working effectively
to support New Zealanders in maintaining a foundational standard of
living, is affordable in the medium term and should be secured for
future generations". The Commissioner is concerned that the percentage
of NZers who are vulnerable to poorer outcomes in their future
retirement is growing and raising the age of eligibility in the next two
or three decades could significantly risk heightening equity issues for
those groups, including Maori and Pacific NZers with lower life
expectancies. The focus in the near to medium terms should first be on
lifting retirement outcomes through improved impact from the
pre-retirement system, by ensuring adequate employment and incomes to
enable savings and asset accumulation and housing support. The
uncertainty as to the future of NZS is "causing unnecessary stress ..
should be put to bed. It is enough for younger NZers to have to worry
about where they will live and how they will earn enough to support
their and their families' current and future wellbeing, without having
to face additional uncertainty as to whether they will lose an effective
government backstop." If the Government does not agree with this
assessment as to affordability of NZS in the medium term, other options
should be considered such as changing tax rates for all or some NZers
(such as to claw back more NZS from wealthier recipients, length of
residency for eligibility). Other recommendations include that
governance for the Retirement Commissioner and their office should be
provided jointly by the Ministries of Social Develoment and MBIE (NZ
superannuation and other benefits the Government provides through MSD
need to be carefully aligned and monitored alongside KiwiSaver); and the
regular review cycle should be amended to fall in the year after an
election, rather than prior. The Government is to respond to the review
by the middle of the year.

TRANSPORT The Government has signed a memorandum of understanding with urban air
- ELECTRIC, mobility company Wisk (the new trading name of Zephyr Airworks) to
SELF-FLYING TAXIS support a world-first passenger transport trial of the company's
all-electric, self-flying air taxi 'Cora' in Canterbury.Wisk have been
testing Cora in the Canterbury region since 2017, and a passenger
transport trial is a next step for the company on their journey towards
taking their world-leading technology to market. "The Government sees
great potential in the development of an innovative unmanned aircraft
sector in New Zealand and we are in a prime position to work with
globally-leading companies here to safely test and go-to-market ... we
also share Wisk's vision of a greener, emission-free way for Kiwis and
visitors to New Zealand to get around." (Research, Science and
Innovation Minister Megan Woods, media release, 4/2/2020.)

43 TCL 4 12