Cases & Publications Archive
Section 92A revisited - Kevin Glover
Kevin Glover discussed the controversy over s 92A of the Copyright Act in his article "Section 92A revisited" published in the NZ Lawyer Issue 121 (18 September 2009).
Section 92A was enacted in April last year but has not come into force yet. Kevin briefly describes and reviews the policy proposal released for public consultation by the Ministry of Economic Development. The proposal describes the proposed s 92 process for rights holders to follow if they suspect that internet users have infringed their rights.
Kevin's comments include the appropriateness of the Copyright Tribunal assuming jurisdiction and the lack of appropriate safeguards for users who are accused of infringement under the proposed procedure.
Kevin concludes that the proposed policy would provide a lower-cost alternative to court proceedings for rights holders in copyright infringement cases. However, Kevin warns that such expediency could come at the expense of the rights of those accused of copyright infringement. While the framework set out in the consultation paper appears broadly acceptable, he notes that a proper assessment of the fairness of the procedure can only be made after the details in the proposal have been worked out.
(Anna Zhou, Editor, 29/10/09)
Don't Be Lost: Different Conceptions of Loss In Insurance
In his recent paper “Don’t Be Lost: Different Conceptions of Loss in Insurance”, delivered to the AILA National Conference on Hamilton Island, 18 September 2008, Neil Campbell goes back to basics to demonstrate how, in recent case law, the courts have lost sight of them.
The paper sets out the law’s basic understanding of indemnity insurance and the two conceptions of loss – loss that is an aspect of insured event and financial loss suffered as a consequence of the insured event.
Mr Campbell proceeds to analyse three cases in which “insufficient attention was paid to the distinction between an insured event, and the financial loss that flowed from the insured event”.
The paper argues that in E J Hampson & Others Syndicate 1204 v Mining Technologies Australia Pty Ltd (1998) 10 ANZ Ins Cas 74, 114; [1999] 1 Qd R 60 (CA) the Queensland Court of Appeal failed to be alive to the possibility that despite the fact that the insured was able to recover property lost during an insured event, the property itself may have been initially lost.
In Bridgeman v Allied Mutual Insurance Ltd (1999) 10 ANZ Ins Cas 75,125, Mr Campbell asserts that New Zealand’s High Court became infatuated with the doctrine of “imminent peril” and as a result failed to distinguish between loss as an insured event and the financial loss flowing from that insured event.
Finally, in its analysis of Walker Civil Engineering Pty Ltd v Sun Alliance & London Insurance plc (1996) 9 ANZ Ins Cas 76,446 (SCNSW); affirmed (1999) 10 ANZ Cas 74,681 (NSWCA) the paper argues that the Supreme Court of New South Wales confused the insured event (property damage) and the proper measure of indemnity (cost of repair). Mr Campbell approves of Mason P’s observation in AXA Global Risks (UK) Ltd v Haskins Contractors Pty Ltd (2004) 13 ANZ Ins Cas 77,401 that “physical damage may have a cost impact that goes beyond addressing merely the integer of property that is physically marred”.
The paper will be published soon: (2009) 20(1) ILJ 40.
(David Dickinson, Editor, 24/04/09)
Developments in the Approach to the Duty of Care - Andrew Barker, ADLS Continuing Legal Education Programme, Heritage Hotel, 23 October 2008
Andrew Barker discussed how the three-stage test set out in South Pacific Manufacturing Co Ltd v NZ Security Consultants and Investigations Ltd [1992] 2 NZLR 282 (CA), focussing on proximity, policy and “fairness”, had been accepted as a general approach to all claims involving a novel duty of care. In particular, it was now accepted as the correct approach for claims of personal injury, negligent misstatement, and the negligence of public authorities. He then addressed another of the themes of his previous reviews, which was the increasingly conservative approach of the Court of Appeal to any extension of negligence liability. He analysed the recent decisions in Attorney-General v Body Corporate 200200 [2007] 1 NZLR 95 (CA) and Couch v Attorney-General [2008] NZSC 45.
Body Corporate 200200 raised the concept of a “situational duty of care”, which involves the formulation of a duty by reference to what actually happened between the parties, rather than the more abstract question of the “over-arching” nature of the relationship between the parties, and whether that relationship is of a type which could support a duty. William Young J (as he then was), delivering the judgment of a full bench of the Court of Appeal, he described the “situational duty of care” analysis as being likely to favour a plaintiff. He emphasised that the situational analysis may be appropriate in some cases, and had often been used by the courts, but warned that the courts should ensure that their focus remains on the broader implications – including policy considerations – of recognising a duty in the case before them, rather than get too caught up in the errors made in the particular case.
The Supreme Court had cause to consider this situational analysis in the decision of Couch v Attorney-General [2008] NZSC 45. Couch is the well-known case, arising from the Panmure RSA robbery, in which William Bell murdered three of his fellow employees and attempted to murder the appellant, Mrs Couch, leaving her seriously and permanently injured. Heath J struck out the plaintiffs’ claims in negligence and breach of statutory duty in Hobson v Attorney-General [2005] 2 NZLR 220. The Court of Appeal dismissed the plaintiffs’ appeal: Hobson v Attorney-General [2007] 1 NZLR 374. The decision of the Court of Appeal is a good illustration of the approach developed in the Body Corporate 200200 case. William Young P reproduced his discussion from the earlier case, and Chambers J endorsed his approach.
The decision of the Supreme Court was the Court’s first major discussion of the general approach to duty of care in novel fact situations. It raised the question of whether the conservative approach to the expansion of liability in negligence, so evident in decisions of the Court of Appeal over the past decade, would continue, and whether the pendulum may be about to swing back in favour of plaintiffs. The Court was unanimous in holding that Mrs Couch might be able to establish at trial a relationship of proximity between herself and the Probation Service, and that the policy reasons relevant to the existence of a duty of care could not be properly formulated at the strike-out stage. The majority (Blanchard, Tipping and McGrath JJ) held that a relationship of proximity would only exist if Mrs Couch could show “either as an individual or as a member of an identifiable and sufficiently delineated class” that she was or should have been known by the defendants to be subject to a “special risk” of suffering harm of the kind she sustained. Elias CJ and Anderson J, on the other hand, considered that the appellant may be able to establish a relationship of proximity regardless of whether she was exposed to any special risk, and that it might be enough for her to have been simply a member of the general public.
Significantly, the minority judgment rejected the Body Corporate 200200 approach, while the majority said little to support it. The minority favoured a less restrictive and more fact-specific enquiry into duty of care: essentially the exact opposite of that applied by the Court of Appeal in Body Corporate 200200. Only “high-level and generalised legal policies” relating to the duty of care would be suitable for strike-out.
The decision of the Supreme Court in Couch, especially in terms of the minority judgment, has a tendency to expand liability. While it is impossible at this stage to know whether Couch is the dawn of a new era in negligence liability in New Zealand, it is a clear indication that at least some members of the Court consider that the New Zealand approach has become too restrictive.
Developments in the Approach to the Duty of Care - Andrew Barker, ADLS Continuing Legal Education Programme, 23 October 2008
(James Morrison, Editor, 22/04/09)
Domain name dispute resolution - Kevin Glover
In “Domain name dispute resolution” [2009] NZLJ 35, Kevin Glover offers an analysis of a recent development in the law relating to the internet and websites.
In 2006, New Zealand’s Domain Name Commissioner’s Dispute Resolution Services (DRS) was launched. DRS provides an alternative process to litigation for resolving disputes relating to the ownership of New Zealand domain names.
Kevin’s article discusses the theoretical basis for DRS, how domain names were traditionally protected and how the New Zealand system functions. Its key features are that the decisions of the DRS act in rem and it does not have the power to award costs. Some problems have arisen with self-represented litigants.
The article reviews DRS’s leading decisions and concludes that it is “generally functioning well and is attractive for complainants compared with litigation in the High Court” because it is low cost and expedient.
(David Dickinson, Editor, 24/04/09)
Auckland Regional Council v Rodney District Council and Parihoa Farms Ltd [2007] NZRMA 535
In this case, Stephen Mills QC acted for Parihoa Farms Ltd (‘Parihoa’) in successfully defending judicial review proceedings brought by the Auckland Regional Council (‘the ARC’). The ARC sought an order to set aside a resource consent which was granted in relation to the building of a house overlooking a walkway along the Tasman Sea on Auckland’s west coast. The ARC further sought related orders in the Environment Court for the demolition of the partly built house.
The owners and directors of Parihoa were husband and wife and were building the home to be a family dwelling for themselves and their children. When purchasing the property, the owners knew that its three titles were subject to an encumbrance that required written approval from Rodney District Council (‘RDC’) and the Department of Conservation (‘DOC’) for any subdivision of the titles in the future. The resource consent was granted on a non-notified basis in April 2005. However when Parihoa sought subdivision consent pursuant to the encumbrance, RDC and DOC subsequently refused to grant its approval - a process in which ARC was directly involved.
ARC’s application was based on several purported errors committed by RDC in granting the initial resource consent. The central issue concerned whether or not RDC’s decision not to notify the public and potentially affected parties of the application, regardless of the status of the activity, and to grant it, were correct.
Harrison J discussed new sections of the Resource Management Act 1991 and their effect on the leading Supreme Court decision of Discount Brands Ltd v Westfield (New Zealand) Ltd [2005] 2 NZLR 597. His Honour differed with his learned brother Baragwanath J who held in Progressive Enterprises Ltd v North Shore City Council [2006] NZRMA 72 that the new sections signalled a significant change in approach than that articulated in Discount Brands. This discussion merits close attention.
Ultimately, Harrison J found that the ARC had failed by a ‘considerable margin’ to show that RDC’s decision was unreasonable or one that no reasonable decision-maker could have made. He did however find that RDC had erred in not taking into account certain matters as provided by the legislation and by not notifying certain affected groups. Nevertheless, remedies on judicial review are discretionary and Harrison J adopted the proportionality principle formulated by Asher J in Diagnostic Medlab Ltd v Auckland District Health Board [2007] 2 NZLR 832.
His Honour turned to consider ARC’s knowledge and conduct in DOC and RDC’s refusal to grant subdivisional consent - a point which was the central focus of Mr Mills’ submissions. Harrison J agreed with Mr Mills that the ARC had adopted a strategy whereby pressure was put on RDC and DOC to withhold consent, under the misapprehension that this would force Parihoa to reapply for a new consent on a different title. Therefore, ARC had known for some time of the granting of the consent yet sought to impede it by other means.
Ultimately, it was held that the consequences for Parihoa of granting any relief to ARC “would be grossly disproportionate to the seriousness of RDC’s error or errors, either in deciding not to notify or to grant consent” (para 192).
ARC’s application for relief was consequently dismissed.
Auckland Regional Council v Rodney District Council and Parihoa Farms Ltd [2007] NZRMA 535
(Sinead McLaughlin, Editor, 11/02/08)
Television New Zealand v Gloss Cosmetic Supplies Ltd (In Liq)
Clive Elliott successfully represented TVNZ in what is possibly the longest-running intellectual property case in New Zealand history. TVNZ had initiated proceedings for breach of its trade mark "Gloss" in 1989, and was granted an interim injunction pending trial. The matter did not, however, progress to trial, and in 1997 the defendant successfully applied to have the plaintiff's claim struck out and an inquiry made into the damages suffered by the defendant as a result of the injunction. The defendant took no action to enforce the order for inquiry until 2003 and the plaintiff applied to have the order struck out on the grounds of prejudice resulting from inordinate and inexcusable delay. Almost 18 years after its beginning the Court granted the plaintiff's application and put an end to the proceedings.
Television New Zealand v Gloss Cosmetic Supplies Ltd (In Liq)
(Sam Carey, Editor)
Costs Issue
Debate continues to rage between the pro-scale costs Court of Appeal, and the pro-realistic contribution to actual costs in the High Court. In Holdfast NZ Ltd v Selleys Pty Ltd (CA 200/04, 6th December 2005), the Court of Appeal held the latter approach to be “fundamentally wrong”. Chambers J held that a “percentage of actual” approach should not be sanctioned because judges were not qualified to assess reasonableness and the approach must be uniform. Actual costs were $93,103.00, scale costs $15,940.00, or 17%.
Now reported: Holdfast NZ Ltd v Selleys Pty Ltd 17 PRNZ 897.
(Sam Carey, Editor)
Arbitration v Litigation - Comparative Costs Recovery Issues
Stephen Mills considers whether the differing bases for costs awards under the High and District Court Rules and the Arbitration Act 1996 might be a relevant factor in a party's choice between litigation and arbitration. A review of cases under the current High Court Rules in which information about actual costs was revealed indicated that costs awards ranged between 19% and 100% of actual costs. The situation was put in stark relief by the award in Glaister v Amalgamated Dairies Ltd, in which costs amounting only to one-third of the actual costs of $2.5m were awarded. In arbitrations, where costs awards are at the arbitrator's discretion, a range of 75% - 85% of actual costs was found not to be unusual, with an acknowledgement that an award of 100% of actual costs was within the arbitrator's power. The paper concludes that the likelihood of a significantly higher proportionate costs award in arbitration makes costs a relevant consideration in choosing the best method of resolving a dispute.
Arbitration v Litigation - Comparative Costs Recovery Issues
(Sam Carey, Editor)
Ilion Technology Corp v Johannink
John Billington QC successfully acted for venture capital/technology company, Ilion Technology Corporation against J, its co-founder and former director. The High Court held that J had breached his fiduciary duty to Ilion by selling shares in the company during a period of capital-raising. It was held that in so doing J had received personal profit from an opportunity that arose directly from his relationship with the plaintiff, in conflict with the duty owed by J to the plaintiff. The Court also found against the second defendant trustees for the knowing receipt of profits obtained in breach of J's duty. An important feature of the case was the relationship between damages and loss for a breach of equitable obligations.
Ilion Technology Corp v Johannink
(Sam Carey, Editor)
Journalists Compelled to be Witnesses - Time for a Re-Evaluation
Following the recent decision of the High Court in R v Patel, Bruce Gray QC considers the compellability of journalists to give evidence and disclose information relating to sources, and asks whether the New Zealand courts are doing enough to protect journalists in such situations. The tension between the confidentiality of a journalist's researches and the interests of a party to a fair trial is examined. It is suggested that the New Zealand courts tend to regard the right to a fair trial as being greater than the right to free speech, and that this view of a 'hierarchy of rights' is out of step with the approach in other jurisdictions with 'quasi constitutions', such as Canada and the United Kingdom, and is inconsistent with the New Zealand Bill of Rights Act 1990.
This paper was presented to the Legal Research Foundation Media Law Seminar on 15 June 2006.
Journalists Compelled to be Witnesses - Time for a Re-Evaluation
(Sam Carey, Editor)
Specific Performance: Sale of Land
In Landco Albany Ltd v Fu Hao Construction Ltd [2006] 2 NZLR 174, the Court of Appeal departed from the conventional view in stating that damages would be an adequate remedy for the breach of a contract for the sale of land, where the plaintiff’s interest was commercial and the purpose of the contract was financial gain. It is likely that this view was influenced by the approach of the Canadian courts and in this paper Stephen Mills examines the Canadian approach. He notes that, beginning with an obiter statement of the Supreme Court in Semelhago v Paramadevan [1996] 2 SCR 415, the Canadian courts have moved away from the traditional view that specific performance is necessarily the primary remedy in cases concerning the breach of a contract for the sale of land, and that damages are necessarily an inadequate remedy, instead drawing a distinction between the sale of land for commercial purposes and for residential purposes. In a further break from tradition, the Canadian courts have imposed upon purchasers an on-going duty to mitigate by establishing that a decision to seek performance rather than damages is, and remains, a reasonable one.
This paper was published at [2006] NZLJ 196.
Specific Performance: Sale of Land
(Sam Carey, Editor)
The Pragmatic Approach to Claim Construction in New Zealand
Following the recent decision of Lucas v Peterson Portable Sawing Systems Ltd [2006] 3 NZLR 721, Julian Miles QC and Jeremy Blum consider claim construction in New Zealand patent law in this paper. Peterson was the first patent case to come before the Supreme Court and it dealt with the issue of claim construction explicitly. Mr Miles and Blum praise the Supreme Court for "[recognising] the benefit of international jurisprudence over New Zealand creativity". This is to say that the Supreme Court maintained New Zealand's adherence to the purposive approach to claim construction adopted in the United Kingdom - and by extension the paramount importance of the international nature of patent law - without venturing into a hybridised form of indigenous claim construction as favoured in Australia. The paper discusses several aspects of the decision and the areas of patent law and claim construction confirmed in the decision.
The paper was delivered to the 20th Annual Conference of the Intellectual Property Society of New Zealand and Australia (IPSANZ) held at the Surfers Paradise Marriot Resort in Queensland, Australia, in August 2006.
The Pragmatic Approach to Claim Construction in New Zealand
(David Dickinson, Editor, 13/4/07
Peterson Portable Sawing Systems v Lucas
Clive Elliott acted for the appellants and Julian Miles QC for the respondents before the Supreme Court in Peterson Portable Sawing Systems Ltd (in liq) v Lucas [2006] 3 NZLR 721. The appellants alleged that a particular claim of the respondents' patent for a portable sawmill was invalid for a lack of novelty and for obviousness. In allowing the appeal, the Supreme Court held that the High Court's view of the relationship between novelty and obviousness (that the distinction was one of degree rather than of classification) was incorrect and that the two were better treated as clearly distinct concepts. The Supreme Court found that, although the particular claim of the Lucas patent was not anticipated by the appellants' design, it was anticipated by the "Lewis sawmill", an American patent published in New Zealand before the priority date of the Lucas patent, and therefore was not novel. The Court also found that the claim in issue was invalid for obviousness and in particular - applying the decision of the House of Lords in Sabaf SpA v MFI Furniture Centres - that the combination of known features performing their known functions does not create a new invention.
Peterson Portable Sawing Systems v Lucas
(Sam Carey, Editor, 24/4/07)
TVNZ v Haines
Julian Miles QC recently appeared for the respondent in Television New Zealand Limited v Haines (CA96/06, 6 September 2006) in which the Court of Appeal upheld the High Court’s decision to grant a judge alone trial in defamation proceedings under s 19A(5) of the Judicarture Act 1908.
Two aspects of the judgment are noteworthy in relation to a judge’s discretion under s 19A(5).
First, the Court of Appeal upheld the High Court’s finding that to split a trial between liability and quantum is unjustified if the sole reason to do so is to retain the involvement of a jury. The Court added however that had the appellant not succeeded on both limbs of s 19A(5) such a finding would be less secure. The Court equally rejected as impractical the idea of splitting the trial in a hybridised manner with the judge deciding questions of law and outlining the relevant facts for the jury’s subsequent consideration.
Second, the Court preferred a narrow interpretation of Rothermere v Times Newspapers Ltd in which Lord Denning ordered a trial by jury despite the overwhelming number of complicated documents it would have to consider. Glazebrook J rejected TVNZ’s submission that Rothmere stood for the proposition that jury trials must be ordered when a defendant’s integrity has been challenged despite the volume and complexity of documents. Rather, the Court maintained that a challenge to integrity is a strong factor in favour of a jury trial but is not determinative. The Court also noted that appellate courts in New Zealand had not whole-heartedly embraced Rothmere in past decisions.
(David Dickinson, Editor, 30/4/07)
More Effective Management of Defamation Cases
In More Effective Management of Defamation Cases [2006] NZ Law Review 525, Stephen Mills QC argues that the reinvigoration of three areas in the law of defamation would improve case management. These are an early determination of defamatory meaning, a more rigorous application of sections 24 - 27 and 35 of the Defamation Act 1992 and the increased use of r418 of the High Court Rules. Importantly, this could be achieved without the need for further reform as these tools are all provided for in our existing substantive and procedural law. In discussing these three areas the paper touches on a range of interconnected issues in defamation law: comparisons with overseas reform, the early appointment of trial judges, judge alone trials, determination of meaning before the filing of a defence, qualified privilege, retractions, corrections and rights of reply. The paper canvasses and examines several contemporary cases from New Zealand, Australia and the United Kingdom and should be required reading for practitioners, academics and students alike.
(David Dickinson, Editor, 29/5/07)
Gayhurst Properties Ltd v Wong (HC, Auckland, CIV-2004-404-4550, 22 September 2006, Frater J)
Ian Williams successfully appeared for the defendant in Gayhurst Properties Ltd v Wong. The issue in the case was the justification of cancellation based on delay in performance and notice making time of the essence.
The central issue for the Court’s consideration was the parties’ conduct and the lapse of time in relation to the cancellation. Counsel for the plaintiff argued that inasmuch as a giver of notice making time of the essence can remain inactive for a reasonable period after the expiry of the notice without waiving the essentiality of time, a decision must nevertheless be made.
Mr Williams submitted that the defendant had the right to refrain from making an election and that mere inaction, once the right to rescind arises, will not constitute an election. As a result, Frater J was left to determine whether through his behaviour the defendant did anything to affirm the continued existence of the contract or whether such behaviour could be imputed.
Frater J canvassed two authorities on point: Buckland v Farmer and Moody [1978] 3 All ER 929 and Kauri Developments Ltd v Nicholson (1986) 2 NZCPR 352. There was some indication that the defendant had taken steps to affirm and his subsequent inaction could have amounted to waiver. However, in the final analysis, his Honour was satisfied that the plaintiff’s delays had been inordinate and its false assurances had the result of causing uncertainty over the right to cancel and the defendant to be dependent on the plaintiff for accurate information. This explained his delay which in the end secured him no benefit than that for which he had already paid under the contract. The agreement, therefore, was lawfully cancelled as essentiality of time remained in place.
Gayhurst Properties Ltd v Wong (HC, Auckland, CIV-2004-404-4550, 22 September 2006, Frater J)
(David Dickinson, Editor, 20/6/07)
Deterring breach of contract: are equitable remedies the answer?, NZ Lawyer, Issue 63, 27 April 2007, p 20
In this recent piece for NZ Lawyer, Stephen Mills QC considers the use of account of profits - a creature of equity - as a deterrent to breach of contract, the underlying issue being the extent to which gain-based remedies are appropriate outside the realm of equitable wrongs.
Starting with the landmark case of Attorney-General v Blake [2001] 1 AC 268, Mills canvasses the issues raised by a range of cases - including the leading New Zealand authorities of Cook v Evatt (No. 2) [1992] 1 NZLR 673, Astra Pharmaceuticals (NZ) Ltd v Pharmaceutical Management Ltd [2001] 1 NZLR 415 (CA), Attorney-General for England and Wales v R [2002] 2 NZLR 91, Paper Reclaim Ltd v Aotearoa International Ltd [2006] 3 NZLR 188 (CA) as well as the Supreme Court decision of Chirnside v Fay [2007] 1 NZLR 433.
(David Dickinson, Editor, 11/7/07)
Southbourne Investments Ltd v Greenmount Manufacturing Ltd [2007] NZSC 62
This case relates to an appeal from an order of summary judgment made in the Court of Appeal in relation to an option to purchase land.
Julian Miles QC and Sandra Grant contended on behalf of the appellant that failure to tender a bank cheque with an option was non-compliant with the terms of the option as those terms required delivery of the deposit with the agreement. The respondent had tendered a company cheque only.
In the Supreme Court's judgment, delivered on 3 August 2007, the appeal was allowed on the ground that the tender was non-compliant.
An argument raised by the respondent to the effect that as the appellant did not object to the form of payment promptly, (which was due to the appellant director's father's ill-health) the appellant was deemed to have accepted the company cheque, or estopped from raising the form of payment as an issue, was remitted back to the High Court for determination on the facts.
The essential question on the facts was whether the appellant knew of the form of tender, it being decided by the Supreme Court that the appellant's solicitor (who received the agreement and cheque) did not have authority to accept a form of payment that was non-compliant with the terms of the option unless the authority had been expressly conferred on him.
The key significance for property lawyers is that tendering of anything other than a bank cheque when exercising an option to purchase an interest in land is very risky, and the reinforcement of the principle that a vendor must object to a form of payment promptly on receipt of knowledge of the form of payment in order to avoid the risk that they are deemed to have accepted a non-compliant form of payment, or are estopped from contending that the payment was non-compliant.
Southbourne Investments Ltd v Greenmount Manufacturing Ltd [2007] NZSC 62
(Sandra Grant, Editor, 8/8/07)
Waikato Environmental Protection Society Inc v Waikato Regional Council, (Environment Court, Hamilton, 23 July 2007, W 060/2007 per Judge Dwyer)
Paul Cavanagh QC acted for the first and second appellants in this case in which the Environment Court (‘EC’) had to grapple the issue of how to assess the elusive effects of odour discharges.
The second appellants, the Grays, whose property bordered the mushroom factory owned by the applicant, New Zealand Mushrooms Ltd (‘NZ Mushrooms’), and the Waikato Environmental Protection Society Inc appealed against the decision of the Waikato Regional Council and the Matamata Piako District Council. The councils had recently granted a series of resource consents to NZ Mushrooms in respect of its compost production site in Morrinsville. The new consents sought to authorise an expansion in order to allow for up to an additional four compost production bunkers.
The primary issues on appeal were the odour effects of the proposal and the resource management issues arising from them. The production of mushrooms has several stages. One step in the process involves the use of compost containing chicken manure which is kept under cover to avoid wetting. Straw bales are then wet and left to stand. After this, the bales are blended with several ingredients, including the chicken manure, and then moved with front-end loaders into the concrete production bunkers. Once in the bunkers, air is forced through the compost to break the material down which generates temperatures of 70 to 80 degrees centigrade.
The EC maintains at para [34] that the test for whether an odour is objectionable is whether or not an ordinary reasonable person would find the odour offensive or objectionable: Zdrahal v Wellington City Council [1995] NZLR 700. Further, in relation to the neighbours, the EC was required to determine whether chronic odour effects could be offensive or objectionable.
NZ Mushrooms did not dispute that the composting created odours off-site. However, it maintained that the odours were not offensive or objectionable, were rural in nature and only occurred at limited intervals. The appellants disagreed with this assessment.
After canvassing the evidence and the criticisms leveled by NZ Mushrooms, the EC, on a broad view of the evidence, concluded that the site continues to have significant adverse odour effects at a chronic level on the neighbours of the site.
In applying the law, the EC was satisfied that different people react differently to chronic smells over a period of time and that the standard was therefore the effect on an ordinary reasonable person exposed to such smells on a recurring basis in their home. The EC also rejected the applicant’s submission - in regard to whether a chronic order can be offensive or objectionable - that the effects of the odour cannot be viewed cumulatively as they are only temporary in occurrence. The EC maintains at para [166] of the decision that whether a series of individual chronic odour discharges can be cumulative thus increasing their overall effect is a question of fact and that the effects of odour discharges do increase in combination with other preceding odour discharges.
Having made these findings, the EC was required to find a resolution with the bottom line being that the composting facility could not continue to discharge offensive or objectionable odour. At para [189] the EC quotes Mr Cavanagh’s opening submissions in which he reminded the court that the essential issue was whether the odour could be avoided, remedied or mitigated and if not whether the adverse effects were sufficient to cause the Court to exercise its discretion not to grant the consents. In short, the purpose was not to shut the facility down.
In the final analysis, the EC held that that enclosure of the bunker transfer operation is necessary and that NZ Mushrooms has until 31 October 2007 to report back on its progress.
NZ Mushrooms Ltd has subsequently filed a notice of appeal to the High Court.
(David Dickinson, Editor, 3/9/07)
Upper Clutha Environmental Society Inc v Queenstown Lakes District Council (Environment Court, Wanaka, 22 August 2007 per Judge R G Whiting)
Crosshill Farm Limited (‘the applicant’) had succeeded in its application for resource consents at the initial hearing before the Council’s Commissioner and was successful in its opposition to the subsequent appeal from that decision. The applicant was represented throughout by Paul Cavanagh QC.
The central issue was the effects of a subdivision and development proposal on the landscape, and the ability of the proposal to be absorbed into the landscape.
The applicant owned 550 hectares of land near Lake Wanaka and was granted subdivision consent to divide the property into three lots, as well as a range of land use consents for the building of platforms on each lot and the construction of a lodge and a residence. The appellant’s argument was that the proposed development would result in significant adverse visual and amenity effects, and adverse effects on landscape values.
Environment Court Judge Whiting considered four issues, the most important of which was the application of the assessment matters contained in the Partially Operative District Plan to the proposal before the Court.
In regard to the Lodge, the applicant filed an amended landscaping plan to mitigate any adverse effects. In regard to the dwelling, the applicant filed a minute indicating a willingness to lower the residence’s roof by three metres.
In the final analysis, Judge Whiting holds at para [96] and [109] that:
"We are satisfied that the location of the proposed Lodge back from the edge of a shallow basin and small plateau, together with the proposed landscaping, will result in it being unlikely to be visually prominent. There is potential for the landscape to absorb the development. Further, the Lodge would be contained by the natural topography and vegetation (by present and proposed replacement vegetation). It will not, in our view, compromise the existing natural character of the landscape. Nor will it contribute effects of over-domestication to the landscape.We are satisfied that provided the roofline (disregarding the chimney) is lowered by three metres … then the proposed dwelling complex will not offend the landscape provisions of the partially operative plan. While it would be visible from the lake and some other vantage points, the lowering of the roofline by three metres, together with the other mitigation measures proposed, would enable it to be absorbed sensitively into the landscape."The application for the resource consent was therefore successful.
(David Dickinson, Editor, 8/10/07)
Golden Homes (1998) Limited & Anor v Blue Chip Construction Limited & Anor (HC, Auckland, CIV 2003-404-7090, 21 June 2005 per Allan J)
In this High Court decision, Ian Williams successfully represented Platinum Homes (NZ) Limited and Platinum Designs Limited against an application for an order extending an interlocutory injunction.
The first and second plaintiffs (‘Golden Homes’) were involved in the sale, marketing and design of houses. The second plaintiff, Golden Homes Holding Limited (‘GHH’) owned a bundle of intellectual property rights, including the copyright to certain plans, which it then sublicensed to the first plaintiff, Golden Homes (1998) Limited (‘GH’). GH then granted sub-licences related to seven major geographical areas in New Zealand. The second defendant, Westbury, had been GHs’ licensee for several areas around Auckland.
In December 2003, Golden Homes became aware that certain building consent applications had been lodged by Blue Chip Construction Limited (‘Blue Chip’) which appeared to be owned by GHH and licensed exclusively to GH. They appeared to resemble previous projects overseen by Westbury. A former Westbury manager had started Blue Chip as a new vehicle. Blue Chip traded under the name ‘Platinum Homes’ as a franchise holder of Platinum Homes (NZ) Limited (‘Platinum Homes’). Blue Chip supplied plans and planning support and sources building materials. Platinum Design offered design and drafting services and was owned by a former contractor and employee of GH.
Following this discovery of potential copyright infringement, Golden Homes commenced proceedings and secured an interlocutory relief against Blue Chip and Westbury. In its amended statement of claim, Golden Homes pleaded infringement against both plaintiffs and against Platinum Homes.
Allan J considered the relevant principles surrounding the granting of an interlocutory injunction and copyright infringement. As to copyright ownership, Justice Allan found that a serious question about ownership had been raised but that there were limitations in the plaintiffs’ evidence as to whether there was a seriously arguable case that copyright ownership subsisted with Golden Homes in terms of initial authorship. Similarly, a serious question as to infringement was made out but only by a very small margin. Thus, in considering the balance of convenience and ultimate discretion, his Honour noted that the original injunction was very wide and prohibited any infringement of any plans owned by GHH and licensed exclusively to GH. His Honour notes at para [77] - [80] that:
"The evidence is that Golden Homes holds a portfolio of about 300 plans. A few only of those plans are under direct consideration in this proceeding. An order couched in such wide terms is presumably based upon the assumption that the defendants, having arguably infringed certain copyright, are likely to infringe other copyright works in the future. That approach has been criticised: see EMI (Australia) ltd v Bay Imports Pty Ltd [1980] FSR 328.
Moreover, it must be seen as undesirable to frame an injunction in such fashion as to leave its application in doubt. A defendant faced with an injunction in respect of ‘any plans owned by…’ faces the real difficulty of determining whether any particular plan is owned by the plaintiffs.
On the face of it, an order in such wide terms as are currently sought against Platinum Homes and Platinum Design would appear not to be justified by the evidence. While the plaintiffs have produced evidence in respect of certain specified plans, there is little to suggest that unless restrained, Platinum Homes and Platinum Design are likely to breach the plaintiff’s copyright in the remaining 280 odd plans in which the plaintiffs claim copyright. Nor, in the light of the evidence adduced by the defendants, am I prepared to accept that any of them is engaged in a deliberate strategy aimed at usurping Golden Homes’ rights to copyright."
Ultimately, the plaintiffs failed to make out a case for the granting of a fresh injunction against Platinum Homes or Platinum Designs.
(Sinead McLaughlin, Editor, 15/02/08)
Maruha Corporation and Anor v Amaltal Corporation Limited [2007] NZSC 40
Julian Miles QC recently appeared in the Supreme Court for the successful appellants in Maruha Corporation v Amaltal Corporation Limited.
The appellants, a large Japanese fishing company, and the respondents, a New Zealand fishing company, had formed a joint venture company for which the respondents were responsible for the accounting and tax returns. However, the respondents inflated the level of certain payments that the appellants were required to pay and described claimable depreciations as not claimable. The respondents kept the overpayments and judgment was entered in the High Court for $6,120,446.
The primary issue on the appeal to the Supreme Court was whether the respondents were also liable for breach of fiduciary duty which had been found in the High Court but overturned in the Court of Appeal. The Court of Appeal had held that an undisclosed tax payment on the recovered depreciation by the respondents when the joint venture company was wound up amounted to a benefit to the appellants and reduced damages accordingly by $1,200,000. The secondary issue was therefore whether there was any benefit given in order to justify the reduction in damages.
Differing from the Court of Appeal, Blanchard J for the Supreme Court accepted Mr Miles' argument that the respondents owed the appellants an obligation of loyalty at least in relation to the accounting and tax functions for which the respondent's personnel were responsible. Citing the Privy Council decision of New Zealand Netherlands Society "Oranje" Inc v Kuys and The Windmill Post Ltd [1973] 2 NZLR 163 at p 166 his Honour noted that in non-fiduciary relationships, some elements of the relationship can still engage fiduciary obligations of loyalty and that one party can rely on the other for loyal performance of a specific function.
In regard to the tax payment benefit, Blanchard J accepted Mr Miles submission that the proper test is found in the Supreme Court of Canada case of Peel (Regional Municipality) v Canada [1992] 3 SCR 762 at 795 which holds that where a defaulting fiduciary seeks an offset against compensation payable for its default the benefit must be an `incontrovertible benefit'. Blanchard J further held, based on Bank of New Zealand v New Zealand Guardian Trust Co Ltd [1999] 1 NZLR 664 (CA) that the onus of proving this is on the defaulting fiduciary - an onus the respondents failed to satisfy.
Two other features of this case are noteworthy. First, in an obiter footnote at para [23], Blanchard J adopts the House of Lord's decision of Standard Chartered Bank v Pakistan National Shipping Corporation [2003] 1 AC 959 which holds that the carelessness of a victim to the intentional tort of deceit does not provide a defence of contributory negligence. Second, conspicuous by its absence is the Supreme Court's own recent decision on joint ventures and fiduciary obligations, Chirnside v Fay [2007] 1 NZLR 433 (SCNZ).
Maruha Corporation and Anor v Amaltal Corporation Limited [2007] NZSC 40
(David Dickinson, Editor, 17/10/07)
Tony Molloy QC recently discussed the need for a specialist trust bar in New Zealand (G Wear, QC says NZ needs specialist trust bar, LawTalk, issue 702, 18 Feb 2008, p 17).
Tony Molloy QC recently discussed the need for a specialist trust bar in New Zealand (G Wear, “QC says NZ needs specialist trust bar”, LawTalk, issue 702, 18 Feb 2008, p 17).
Pointing to other jurisdictions such as England and New South Wales that have specialist trust jurisdictions, he laments that despite having about 300,000 trusts in New Zealand there is a feeling that anyone can deal with trusts and that it is not an area in need of specialists.
Dr Molloy QC believes that enough interesting cases come up for New Zealand to develop an internationally recognised trust bar with specialist trust and equity High Court judges to hear them.
As the newly appointed joint editor of the prestigious Oxford University Press journal, Trusts and Trustees, Dr Molloy QC invites New Zealand lawyers with trust experience to contribute articles and case notes as a first step toward increasing New Zealand’s international exposure in the trust area. For further information, please email the commissioning editor, Fiona Mullen.
(Sinead McLaughlin, Editor, 23/06/08)
Leary v New Zealand Law Practitioners Disciplinary Tribunal (HC, Auckland, CIV 2006-404-7227, 21 August 2007, Full Court)
Before a full sitting on the High Court, Alan Galbraith QC and Ian Williams successfully represented Edward Leary in his appeal against a decision of the New Zealand Practitioners Disciplinary Tribunal (‘the Tribunal’) in which the Tribunal had dismissed his application under s 116 of the Law Practitioners Act 1982 to have his name restored to the roll of barristers and solicitors.
Several submissions were advanced on Mr Leary’s behalf, principally that the Tribunal had approached the application retrospectively as opposed to prospectively and had not given due weight to the 81 testimonials filed in support of the application.
Mr Leary’s appeal was allowed and his name was ordered to be restored to the roll of barristers and solicitors.
(Sinead McLaughlin, Editor, 23/06/08)
Sintes & Anor v W H Harris Limited (High Court, Christchurch, CIV 2006-409-001402, 27 February 2008, Fogarty J)
In this case, Clive Elliott successfully represented W H Harris Limited in both defending a claim for patent infringement and counterclaiming for a declaration that two of the ten claims in the plaintiff’s patent were invalid.
The patent in question was for a low-emissions stove, patented by the plaintiff. The defendant sold a stove that the plaintiff claimed infringed his patent. The two claims that were declared invalid involved the use of a double vent flue and a metal casing around the stove fitted with heat dissipating fins.
The majority of the decision canvasses the law relating to obviousness and discusses many of the leading cases in this area, including Windsurfing International Inc v Tabur Marine (Great Britain) Ltd [1985] RPC 59 (CA) and Mölnlycke AB v Procter & Gamble Ltd (No 5) [1994] RPC 49 (CA) both having been approved in the Supreme Court’s Lucas v Peterson Portable Sawing Systems Ltd [2006] 3 NZLR 721.
Mr Elliott submitted for the defendants that, pursuant to s41(1)(f) of the Patents Act 1953, the two claims of the first plaintiff’s patent were obvious and did not involve any inventive step.
Counsel for the plaintiffs submitted that the inventive concept was the whole of the two claims as a particular combination of features, which was inventive and therefore an inventive step. However a difficulty in the case was that all of the elements of the stove interacted with each other in a synergistic fashion.
At para [98] of the decision, Fogarty J states that he did not see himself as obliged to “follow slavishly” the Windsurfing decision and as a result turned to the counterpart test in the United States in Graham v John Deere Co of Kansas City 383 US 1 (1966), recently restated by the Supreme Court in KSR International Co v Teleflex Inc 550 US 7 (2007).
In reliance on KSR International Co v Teleflex Inc, Mr Elliott argued that the synergies were predictable prompting Fogarty J at para [159] to hold that he was “satisfied that predictability is a useful subordinate standard to apply” to the facts of the case.
At paras [193] and [195], his Honour found that the “synergetic effect is broadly predictable” and as such “did not require a degree of invention. It was the result of trial and error.”
This could very well mark the first time a court in New Zealand has relied on a decision of the US Supreme Court in the intellectual property field.
The decision is currently under appeal.
(Sinead McLaughlin, Editor, 23/06/08)
The Liability of Public Authorities - Andrew Barker, ADLS Continuing Legal Education Programme, Heritage Hotel, 23 October 2008
Andrew Barker, in a conference for the Auckland District Law Society, discussed the approach of New Zealand courts to claims in negligence against public authorities. The most important recent statements of this approach are the decisions of the Court of Appeal in Attorney-General v Body Corporate 200200 [2007] 1 NZLR 95 and Bella Vista Resort Ltd v Western Bay of Plenty District Council [2007] 3 NZLR 429.
These decisions provide some reasonably clear direction from the Court of Appeal as to how courts should approach an alleged duty of care on the part of a public authority in a situation not covered by previous case law. In particular, they outline the policy considerations the court will consider in its analysis. These principles can be summarised as follows:
(a) If the alleged duty of care is inconsistent with the scheme and purpose of the relevant legislation, there can be no duty of care.
(b) If there is no clear restriction on a private law duty of care, then the statutory context will be considered within the general approach to novel duties of care as set out in South Pacific Manufacturing Co Ltd v New Zealand Security Consultants and Investigations Ltd [1992] 2 NZLR 282 (CA).
(c) A strong indicator against any duty of care will be whether the public authority has a “quasi-legislative” or “quasi-judicial” character.
(d) The more policy-oriented and less operational a decision is, the less likely it will be subject to a duty of care.
(e) Courts are concerned with the practical implications of the suggested duty of care for the public authority in carrying out its functions.
(f) The courts are similarly unlikely to recognise a duty if it could open the floodgates to a potentially broad range of liability for the public authority.
(g) If the plaintiff has other remedies it can pursue, the court will be less likely to impose a duty of care.
These principles are uncontroversial, except for the idea of “quasi-legislative” or “quasi-judicial” powers. Mr Barker suggests that it is not entirely clear what the Court of Appeal means by either of these terms and proposed instead the old concept of discretionary decisions in respect of policy matters.
Mr Barker also discussed the impact of the recent Supreme Court decision in Couch v Attorney-General [2008] NZSC 45. As he discussed, the overall trend in New Zealand towards the liability of public authorities has been rather conservative. However, the decision of the Supreme Court in Couch v Attorney-General [2008] NZSC 45 suggests that this narrow approach to such liability may be about to change. The Court unanimously refused to strike out the plaintiff’s claim at the proximity stage of the enquiry, when the exact policy issues raised by the claim were unclear. Because claims of negligence against public authorities involve particular policy considerations, the scope for successful strike-out of such claims must now be greatly diminished. This is likely to be the case from the reduced scope for successful strike-out applications suggested by the decision. It remains to be seen whether the courts will adopt some of the more provocative suggestion in the minority judgment of Elias CJ and Anderson J that there is often greater scope for liability on the part of public authorities than private individuals.
(James Morrison, Editor, 22/04/09)
