Merj Holdings Ltd v Sipka Holdings Ltd
| Jurisdiction | New Zealand |
| Judge | Wild,French,Miller JJ |
| Judgment Date | 04 November 2016 |
| Neutral Citation | [2016] NZCA 521 |
| Docket Number | CA217/2016 |
| Court | Court of Appeal |
| Date | 04 November 2016 |
[2016] NZCA 521
Wild, French and Miller JJ
CA217/2016
IN THE COURT OF APPEAL OF NEW ZELAND
Appeal against a decision by the High Court (HC) under s76(1)(b) District Courts Act 1947 (DCA) (Powers of High Court on appeal — directions) to remit the question of damages to the District Court (DC) for a rehearing involving the calling of further evidence — the HC had upheld a DC decision on liability for misrepresentation but overturned it on the amount of damages that should be awarded — it said that it was conceivable that damages could be awarded on a basis on which the HC had no evidence and it therefore directed that the matter be remitted and further evidence be called — the appellant argued that the power under s76(1)(b) and the power of any appellate court to remit a case back for rehearing had to be circumscribed by the principle of finality of litigation — it said that by allowing the respondents to improve their case after trial, the HC had arrogated to itself a power it did not have and the order was outside the scope of the sort of rehearings contemplated by s76(1)(b) — the appellant had been refused leave for a second appeal by the HC but argued that leave was not required as this was in fact a first appeal — whether an appeal against the decision to remit the case was a first appeal so that leave was not required — whether the HC did not have jurisdiction under s76 to direct further evidence following remittance as it would offend against the principles of finality.
J A Farmer QC and S R G Juddfor Applicant
T J Rainey For Respondent
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A The application for leave to appeal under's 67 of the Judicature Act 1908 is declined.
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B The applicant must pay one set of costs to the respondents for the application on a band A basis together with usual disbursements.
REASONS OF THE COURT
(Given by French J)
Merj Holdings Ltd (Merj) wishes to appeal a decision of Wylie J in the High Court at Auckland. 1 In the decision Wylie J purported to exercise his powers under's 76(1)(b) of the District Courts Act 1947 and remit the question of damages to the District Court for a rehearing involving the calling of further evidence. Merj contends the Judge had no jurisdiction to do that.
The issues for consideration are:
(a) Does Merj require leave in order to be able to bring the appeal?
(b) If leave is required, should it be granted?
(c) What is the scope of the High Court's power to direct a rehearing under's 76 of the District Courts Act?
Merj sold a commercial property to the respondents. During the sale negotiations Merj represented that the property was not earthquake prone because its structure was rated at 43 per cent of the new building standard. Merj did not disclose it had obtained an engineering report stating the building was rated below 33 per cent and required strengthening.
The respondents issued a proceeding in the District Court alleging misrepresentation under the Contractual Remedies Act 1979 and misleading and deceptive conduct under the Fair Trading Act 1986. They sought damages of $191,300 being the cost they had incurred of bringing the building up to 100 per cent of the new building standard and the loss of rental income. 2
Judge Blackie found the representation was a misrepresentation actionable under both statutes. 3 He was not, however, prepared to award the respondents the full amount of the damages sought. In his view, all the respondents were entitled to was the cost of bringing the building up to 43 per cent, which (relying on evidence from an engineer called by Merj) he fixed at $37,000. To award the full amount sought would, he considered, constitute betterment. 4
The respondents appealed to the High Court against the damages award. Merj cross—appealed against Judge Blackie's finding of liability. In the alternative, Merj contended the damages award should be “varied” to an award of no damages, for want of a causal link between the alleged misrepresentation and the loss claimed by the respondents.
Justice Wylie upheld the District Court's findings of liability but disagreed with the approach Judge Blackie had taken to quantum. 5 In Wylie J's view, the cost of upgrading the building was not the correct measure of damages. That was because the costs were not attributable to the misrepresentation. Rather, they were, he found, attributable to a decision the respondents themselves had made after buying the property to change the use of the building. That decision triggered s 115 of the Building Act 2004, which required the respondents to upgrade to 100 per cent compliance with the building code. In other words, the costs would have been incurred anyway, regardless of any misrepresentation. 6 There was no evidence that the cost of earthquake strengthening would have been less had the starting point been higher (that is, 43 per cent instead of below 33 per cent). 7
Justice Wylie accepted the respondents might have been entitled to recover damages on the basis they had paid too much for the building. However, although there was evidence the respondents were induced to pay the price they did because of the representation and considered that in its true state it was worth much less, they
On the other hand, the Judge did not consider it would be just to award the respondents only nominal damages given the blatant nature of Merj's misrepresentation and deceptive conduct. 9 In all the circumstances, Wylie J considered the most just outcome was to vacate the damages award but remit the matter back to the District Court for the issue of quantum to be retried on proper evidence.
Merj does not now challenge the findings on liability. It does, however, wish to challenge the Judge's decision to remit the matter back to the District Court to allow the respondents to call further evidence. Merj submits the power of the High Court to remit matters to the District Court for rehearing is subject to the same limitations that apply to the District Court's own powers to order a rehearing. Under the District Court Rules 2014 the District Court can only order a rehearing if satisfied there has been a miscarriage of justice. 10
Merj sought leave from Wylie J to appeal to this Court. But the Judge declined to grant leave. 11 Merj then filed an application for leave in this Court but since then has also raised an argument that leave is not required. We therefore address this latter argument first.
Under's 67 of the Judicature Act 1908 leave is required to bring a second appeal. Merj submits that although this proceeding commenced in the District Court, nevertheless leave may not be required because the appeal is not against Wylie J's findings on the issues that were appealed from the District Court. What Merj is appealing is a matter determined for the first time in the High Court and that could only be determined by the High Court; that is, the decision to remit
We do not accept that submission. It is necessary in every appeal brought under's 72 of the District Courts Act for the High Court to make a disposition of some sort, exercising the powers conferred on it by s 76. To suggest that the exercise of that dispositive power somehow constitutes a separate judgment distinct from the rest of the appeal is unsustainable. There is no authority for such a proposition and it would undermine the policy reasons for having a leave requirement in relation to second appeals.
We conclude it is necessary for Merj to obtain leave.
This Court will only grant leave to bring a second appeal if the proposed appeal raises a question of law or fact capable of bona fide and...
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