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Unison Networks Limited v/s The Commerce Commission

    CA No. 284 of 2005

    Decided On, 07 March 2007

    At, Court of Appeal of New Zealand

    By, THE HONOURABLE MR. JUSTICE HAMMOND
    By, THE HONOURABLE MR. JUSTICE O'REGAN & THE HONOURABLE MR. JUSTICE ELLEN FRANCE

    For the Appellant: D J Goddard QC, L Theron, Advocates. For the Respondent: R A Dobson QC, J S McHerron, Advocates.



Judgment Text

Ellen France, J.

Introduction

[1] The applicant, Unison Networks Limited, applies for the recall of the judgement which this Court gave on 19 December 2006 dismissing an appeal against a judgment of Wild J: HC WN CIV-2004-485-960, 28 November 2005. Wild J had dismissed Unison’s application for judicial review in proceedings concerning the thresholds set by the Commerce Commission under Part 4A of the Commerce Act 1986 for the possible regulation of large electricity lines businesses like Unison.

[2] The central issue on the appeal was whether the Commission had acted consistently with the Commerce Act in setting the two, initial and revised, thresholds. That required a determination about the purpose of the thresholds and whether the thresholds met that purpose.

[3] We held that the initial threshold was not lawful as it was inconsistent with the Commerce Act, but that the revised threshold was lawful. By a majority, O’Regan J dissenting on this issue, the Court decided not to grant any relief despite the breach in relation to the initial threshold.

The recall application

[4] Unison raises four grounds in support of the recall application.

[5] The first ground is that the judgment does not discuss arguments made by the applicant. In particular, it is said there is no discussion of the argument that the Commission misdirected itself in law and asked the wrong question; nor of the argument that the Commission did not have regard to relevant considerations. Unison argues that if the Commission misdirected itself, that is a distinct ground on which the Commission’s decision should be set aside.

[6] Second, Unison says the judgment should be recalled because the judgment does not consider the appropriateness of granting declaratory relief, even if no order is made setting the thresholds aside. This ground and the next are advanced as alternatives to the first ground.

[7] The third ground is that the Court was not referred by counsel to s 4(5) - (5C) of the Judicature Amendment Act 1972.

[8] Finally, the applicant seeks recall because the judgment did not deal with costs at first instance.

[9] The Commission opposes the application for recall.

Principles for recall

[10] The principles governing recall of a judgment are well settled and are set out in Horowhenua County v Nash (No 2) [1968] NZLR 632. Wild CJ said at 633:

Generally speaking, a judgment once delivered must stand for better or worse subject, of course, to appeal. Were it otherwise there would be great inconvenience and uncertainty. There are, I think, three categories of cases in which a judgment not perfected may be recalled – first, where since the hearing there has been an amendment to a relevant statute or regulation or a new judicial decision of relevance and high authority; secondly, where counsel have failed to direct the Court’s attention to a legislative provision or authoritative decision of plain relevance; and thirdly, where for some other very special reason justice requires that the judgment be recalled.

These have been applied by this Court in Rainbow Corporation Ltd v Ryde Holdings Ltd (1992) 5 PRNZ 493 (CA).

[11] In terms of counsel’s omission of a reference to s 4(5) - (5C) of the Judicature Amendment Act, that ground relates to the second category identified by Wild CJ. Overall, though, the submission is that this is a case where justice requires that the judgment be recalled in terms of the third limb in Horowhenua v Nash.

[12] Argument at the recall hearing proceeded on the basis that the judgment was unsealed. It subsequently transpired that the Court registry staff had issued under seal a document purporting to be a notice of the outcome of the judgment under r 50 of the Court of Appeal (Civil) Rules 2005. The parties were given the opportunity to make further submissions on the effect of this document.

[13] Unison’s position is that the document was not a sealed judgment as envisaged by r 51 of this Court’s Rules and nor did it have the effect of "perfecting" the judgment. The Commission’s submission is that the document constitutes a sealed judgment and has had the effect of "perfecting" it.

[14] In Payne v Payne [2005] NZCA 12; (2005) 17 PRNZ 518 (CA), this Court treated a certificate made under seal in exactly the same form as the certificate in issue in this case as having the effect of perfecting the judgment. The rules in force at that time made no express provision for this Court to seal a judgment. The effect of "perfecting" was that there was no jurisdiction to recall. However, the Court went on to say that this was not necessarily the end of the matter. It recognised authority to the effect that there is a general residual discretion to reopen an appeal to avoid injustice: Taylor v Lawrence [2002] UKPC 30; [2003] QB 528 (CA) and R v Smith [2003] 3 NZLR 617 (CA). In Smith at [34], Elias CJ said this power "is derived from the Court’s necessary implicit powers to suppress abuses of its process and control its own practice".

[15] This Court in Payne at [14] went on to record the "important cautionary note" in Taylor v Lawrence as to how the residual power to re-open should be exercised:

The Court acknowledged the need for finality in litigation, pointing out that the reopening of proceedings after the ordinary appellate process has been concluded can also create injustice. Accordingly, the Court’s approach to the exercise of its discretion must ensure proceedings are only opened where "there is a real requirement for that to happen" (at para 54). To that end the discretion concerned should only be exercised with the permission of the Court to be given on a prior written application. The Court would decide on the papers whether the application should proceed, and do so without an oral hearing unless it so directed.

[16] In Payne the Court decided there was no basis for a reopening of proceedings and so it did not decide whether or not to follow the United Kingdom procedure. We note that the rules in force at the time Payne was delivered made no express provision for this Court to seal a judgment and so the Court’s approach as to perfecting a judgment has to be read in light of the current rules. As noted, those rules provide for both a certificate as to the result and for sealing (rr 50 and 51).

[17] In terms of the present case, there is an argument that the certificate, unintentionally, has had the effect of perfecting the judgment. That is because, as the Commission points out, it has all of the attributes of a judgment sealed under r 51. Further, as the Commission notes, there is some support for the view that the effect of a certificate from the Registrar under Rule 718C (the equivalent for appeals in the High Court Rules to r 50) as to the determination of the appeal is to perfect the judgment: Walsh-Wrightson v Walsh-Wrightson (1998) 12 PRNZ 104 (HC) and Lopdell v Deli Holdings Ltd (2002) 16 PRNZ 551 (HC).

[18] However, we do not need to resolve the matter because we are satisfied that the application does not satisfy the test in Horowhenua v Nash for the recall of an unperfected judgment, let alone the more stringent test for the reopening of a perfected judgment in Taylor v Lawrence. In the reasons which follow we will explain why we consider that Unison has not made out a case for recall under the Horowhenua v Nash test.

[19] We add that the form of the document intended to operate as a r 50 certificate presently adopted by the Registry staff goes beyond what is necessary in terms of r 50 and has the potential to create confusion about the effect of the document. The matter having now come to the Court’s attention, changes are being made to the form of the r 50 certificate, which should avoid this problem in the future and make it clear that a judgement of this court in a civil appeal will not be perfected until sealed as contemplated by r 51.

[20] As this case turns primarily on the application of the third limb in Horowhenua v Nash, we discuss briefly the applicable principles where the special reason advanced is based on how the Court has addressed an issue.

[21] Unison relies on the principle in Brake v Boote (1991) 4 PRNZ 86 (HC). In Brake v Boote, judgment was given with interest up to the date of settlement of the transaction in issue. The Judge did not consider the question of interest from the date of settlement to the date of judgment although that had been sought by the applicants. Holland J acknowledged that he had not applied his mind to this matter before entering judgment. Holland J stated at 87:

I am satisfied that within the words of Wild CJ this is a case where for [a] "very special reason justice requires that the judgment be recalled". One would hope that it would be a very special occasion when a Judge failed to determine an issue that was properly put before him. I am satisfied that it is, and I am satisfied that justice requires that error to be corrected.

[22] In that case, Holland J was influenced by the fact that counsel for the defendants had not been able to present any persuasive argument as to why interest would not have been awarded as the applicants had sought if the matter had been considered.

[23] Our view is that this basis for recall as articulated in Brake v Boot is intended to be a narrow one. Brake v Boote was relied on in Works Civil Construction Ltd v Does Not Compute Corporation Ltd HC WN CP 46/92 19 November 1992 and Pine Tree Park Limited v North Shore City Council (No 2) HC AK HC26/96 12 August 1996. However, in our view there are differences between what happened in these cases and that in Brake v Boote.

[24] In Works Civil Construction, the plaintiff pleaded two causes of action but applied for the same relief under each. Master Williams QC, as he then was, dealt with both causes of action in the reasons but gave orders only on the basis of the second cause of action. As the Judge had found in favour of the plaintiff on the first cause of action but against it on the second, the error led to the plaintiff’s summary judgment application being dismissed in its entirety. Master Williams held that in the circumstances there were very special reasons along the lines of Brake v Boote for recalling the earlier judgment. The original orders made were recalled and substituted for orders that the plaintiff was entitled to summary judgment on the first course of action and dismissing the second.

[25] In Pine Tree Park, Williams J found that a condition of consent issued under the Resource Management Act 1991 should be re-considered by the Planning Tribunal. The condition was not invalid but was inappropriate because of events which had occurred since the original hearing. In order to allow for re-consideration, the appeal was allowed. When the Planning Tribunal reconvened to consider the condition again, no party wanted the Tribunal to reconsider the matter. Counsel before the Tribunal also raised concerns that the Tribunal was functus officio and so an application was made for recall. Williams J recalled the judgment, omitted the reference back to the Planning Tribunal, and dismissed the appeal.

[26] Hence, in Works Civil Construction the orders given had not reflected the Judge’s findings. In Pine Tree Park matters had changed subsequent to the issuing of the judgment which affected the outcome.

[27] In Matua Finance Ltd v Bank of New Zealand HC AK CP490/94 4 August 1995 earlier orders made by Smellie J had led to some uncertainty. The main reason for that uncertainty was that the Judge had overlooked the fact that the plaintiff had applied for and had been granted leave to amend the orders sought. The orders ultimately given were drafted on the basis of the unamended orders. This case is perhaps closer to Brake v Boote.

[28] Unison also relies on this Court’s decision in Hobson v Harding CA50/95 30 June 1997. However, the facts of that case are arguably closer to the present case. The substantive appeal challenged the High Court’s decision to strike out part of a statement of claim. This Court in its substantive judgment had upheld the decision to strike out a cause of action in conversion because, on the agreed facts and the case as it was pleaded, the claim was defeated by a statutory power. Common law issues of conversion had been argued before the Court but there was no ruling on them in the judgment. The second appellant sought recall on the grounds that the statutory power might not apply to all of the plaintiffs. In dismissing the application this Court said at 5:

The contention before us was that for some other very special reason justice required that the judgment be recalled. One such instance, identified for instance in Brake v Boote (1991) 4 PRNZ 86, is where judges fail to direct their minds to a matter. That was plainly not the case here. What happened here was that the Court decided not to decide the wider common law issues. Whether its judgment on that is wrong is not a ground for recall. This case does not begin to reach the standard required for upsetting a judgment which has been delivered following full argument and consideration of the issues by the Court. In any event, as we have endeavoured to make clear in the earlier part of this judgment, the ruling on the strike out is a confined one.

[29] There are helpful comments on the approach overall in R v Nakhla (No2) [1974] 1 NZLR 453 at 456 (CA). Wild CJ stated:

As to the complaints ...that the Court did not deal with certain submissions and attributed to counsel a submission he did not make it may be observed that a belief on the part of counsel, specially after a hard-fought case, that his argument had not been fully understood or adequately discussed is by no means uncommon. Nor, of course, can the reactions of counsel or the disappointment of his client in themselves afford ground for a rehearing. The Court is not obliged in giving its reasons for judgment to discuss every aspect of argument.

[30] A similar approach is adopted in overseas jurisdictions. In England and Wales in Re Barrell Enterprises [1973] 1 WLR 19 at 23 - 24 (CA) Russell LJ said that:

When oral judgments have been given, either in a court of first instance or on appeal, the successful party ought save in the most exceptional circumstances to be able to assume that the judgment is a valid and effective one. The cases to which we were referred in which judgments in civil courts have been varied after delivery (apart from the correction of slips) were all cases in which some most unusual element was present.

[31] The Court of Appeal confirmed in Stewart v Engel [2000] 1 WLR 2268 at 2274 that this jurisdiction applies to written judgments. The majority also emphasised that the jurisdiction was to be exercised cautiously and sparingly (at 2274, 2275-2276 and 2291).

[32] Sir Christopher Slade cited with approval at 2274 the following passage from Neuberger J’s decision in Re Blenheim Leisure (Restaurants) Ltd (No 3) The Times, 9 November 1999 as illustrating the situation where the jurisdiction might be exercised:

[A] plain mistake on the part of the courts; a failure of the parties to draw to the court’s attention a fact or point of law that was plainly relevant; or discovery of new facts subsequent to the judgment being given. Another good reason was if the applicant could argue that he was taken by surprise by a particular application from which the court ruled adversely to him and that he did not have a fair opportunity to consider.

[33] The position in Canada is broadly in line with that in New Zealand and in England and Wales. As an illustration, reference can be made to the position in British Columbia: Clayton v British American Securities Ltd (1934) 49 BCR 23 at [98] (CA); Sykes v Sykes (1995) 6 BCLR (3d) 296 (CA); and Robson v Maple Ridge (District) 2000 BCSC 1617.

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

[35] Finally, we add that in terms of the second Horowhenua v Nash limb, i.e., failure to draw a legislative provision to the attention of the Court, again, we envisage that the relevant statutory provision would be one central to the disposition of the case. There are also provisions which are so frequently before the courts that the failure to mention them will not be critical. This is the point made by Anderson J in Ashe v Tauranga Marina Society (1991) 4 PRNZ 89 at 90 (HC) in relation to an application for recall based on the failure to refer to s 87 of the Judicature Act 1908. Anderson J said he had difficulty accepting the submission that there should be recall given that s 87 "is constantly before the minds of Courts. It is not a new section."

[36] Applying these principles to the present application, we take each ground in turn.

Argument based on misdirection

[37] The applicant says Unison’s case involved two distinct arguments. One was that the Commission misdirected itself as to the test it was to apply when setting the thresholds. Unison submits that this was a separate argument from that based on the legality of the thresholds adopted. For these purposes, the focus is on the revised thresholds because this Court found that the initial thresholds were not lawful.

[38] Unison’s argument on the recall application is that if this Court had addressed the first, process, argument the inevitable conclusion would have been that the Commission misdirected itself and had it not done so would have come up with a different threshold. The effect of this finding, the applicant says, is that the Court would have concluded that the revised thresholds were unlawful. Both thresholds being unlawful, Unison would have been entitled to relief.

[39] The Commission says that in this case the issues the applicant would have the Court treat as distinct are sufficiently subsumed such that the Court can be satisfied revisiting is unnecessary. The submission is made that if the process criticised has not manifested itself in an error then a finding about the process alone would be an arid one.

[40] The applicant’s argument, on analysis, is a criticism that the Court has misunderstood Unison’s argument and so has conflated the two issues. Accepting for the purposes of argument (but without deciding) that the applicant is right about what has happened, any omission has arisen because there has been a misunderstanding and the process issue treated as a subset of the legality issue. If we were wrong in doing that, the matter is properly remedied on appeal. This is not an omission that should be dealt with by way of recall but rather would be an error.

Consideration of declaratory relief

[41] Putting to one side for these purposes the question of whether or not this aspect was disregarded, we consider that a substantive reason for making a declaration would be necessary to trigger a recall. In terms of that, the Court has made clear findings about the lawful purpose of the thresholds and the Commission accepts it is bound by those f

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indings. The argument now advanced for making a declaration is one of convenience. That is not a sufficient basis for recall especially where the matter can be corrected on appeal. Absence of reference to s 4(5) - (5C) [42] Even if these subsections had been drawn to our attention, the majority would have declined to grant relief for the reasons given by the majority. Costs at first instance [43] No order for costs was made by the High Court. As the unsuccessful party in the High Court, Unison paid the Commission its costs. In this situation, where there was no order in place, there was no good reason for this Court to deal with the matter. Nor were we asked to do so. [44] It is also relevant that the applicant is not left without an avenue to seek to redress the matter. The Commission takes the view that the High Court is not functus officio. In any event, given the involvement of senior counsel, we would be disappointed if the parties were unable to resolve this matter as between themselves. Other matters [45] For completeness, we address an argument raised but not developed by Mr Goddard based on s 19 of the Crown Entities Act 2004. Section 19 reads as follows: 19 Acts in breach of statute are invalid (1) An act of a statutory entity is invalid, unless section 20 applies, if it is - (a) an act that is contrary to, or outside the authority of, an Act; or (b) an act that is done otherwise than for the purpose of performing its functions. (2) Subsection (1) does not limit any discretion of a court to grant relief in respect of a minor or technical breach. [46] Mr Goddard accepted that this section could not have had any substantive effect in this case because it was not in force at the relevant time. We have not evaluated the matter in any depth but it appears unlikely the section was intended to fetter judicial discretion. Result and costs [47] For these reasons, we do not consider justice or any other basis requires recall. The application for recall is dismissed. The respondent will have costs of $3,000 together with usual disbursements.
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